Beach produces first gas from Enterprise field

Beach Energy Ltd. connected Enterprise field to the operator’s Otway gas plant in Victoria, Australia, for supply to the Victorian gas market. First gas was delivered on June 12.

The Enterprise wellsite is onshore, 3.5 km from Port Campbell and 8 km from the onshore gas plant. The well was drilled directionally to target Enterprise gas field 2.5 km from the shoreline in the Victorian state offshore petroleum permit VIC/L00745(V) with a total vertical depth of 2.5 km.

Enterprise field was discovered in fiscal year 2021 and resulted in a 2P gas and associated liquids reserves booking of 34 MMboe gross (20 MMboe net to Beach), including 2P gas reserves of 161 PJ (gross). It is the first Victorian production license granted in 10 years.

On Jan. 25, Beach signed a gas sales agreement to supply gas to Origin Energy Ltd. until end-2026.

Upcoming impairment charges

News of the gas connection comes days after the company noted an expected non-cash impairment charge of $365-400 million (Aus.) before tax in its fiscal year 2024 full year results.

Key drivers of the impairment charge are related to certain Taranaki basin and Bass basin assets.

The Kupe South 9 development well in Taranaki basin was drilled to target gas in an eastern area of Kupe field. The well delivered at low gas flow rates after connection to the Kupe gas plant and well intervention activities did not improve the gas flow rate. The results confirmed that production from the existing wells has drained gas from the eastern area, leading to a reduction in expected recovery, and thus, an expected non-cash impairment charge of about $115-125 million (Aus.) before tax.

In Bass basin, following a strategic review, the company determined that development of basin discoveries Trefoil, Bass, White Ibis, and Yolla West will not use any optional slots as part of the company’s upcoming offshore gas Victoria drilling program because they do not meet minimum investment requirements. Development planning on these opportunities has ceased and Beach Energy expects to record a non-cash impairment charge to the carrying value of the assets of about $250-275 million (Aus.) before tax.