BassGas brings AWE results down

by on July 31, 2012 5:28 am BST

The company’s June quarter report recorded full year revenue of $298 million (US$313.6 million), only slightly down from $304 million last year.

However, total output at the end of June reflected on 23% decrease on last year, mostly attributed to the BassGas project in South East Australia.

Condensate, liquefied petroleum gas and gas production figures at BassGas had dropped by more than half of its 2011 output levels.

In addition, delays on the project had increased costs and deferred the expected start up of gas production until September.

However, AWE managing director Bruce Clement said in a statement that the company was well positioned to move into the next financial year.

“Despite the disappointments associated with the cost increases and delays on the BassGas MLE project, AWE achieved its revenue target of $270 – $300 million and delivered a field EBITDAX (earnings before interest, taxes, depreciation, amortisations and exploration expenses) of $189 million for 2011-12,” he said.

“A new $300 million multi-currency loan facility has been established which, together with AWE’s net cash balance of $27 million and strong operational cash flow, provides the company with the financial capacity to pursue its growth initiatives,” Clement added.

The company recorded a year-on-year increase in condensate production at its Sugarloaf asset in Texas of more than half, up to 104,000 barrels.

Record levels of drilling activities occurred at the block during the June quarter, with a further 14 wells drilled.

By the end of the quarter, 36 Sugarloaf wells were on production, with a further 11 drilled wells awaiting completion, and two more wells being drilled.

AWE stated that the asset’s net oil and condensate production reached about 31,000 barrels and net gas production was at about 123 terajoules, reflecting an increase of 75% and 55% respectively on the March quarter.

Quarterly exploration spending had also increased from $5.9 million (in March) to $17 million, with higher expenditure levels relating to drilling activity in the Perth basin and offshore Indonesia.

“Key growth projects in the AAL development in Indonesia and the shale gas and tight gas exploration programme in Western Australia have been advanced,” Clement said.

“The company is targeting a final investment decision for the AAL project in early 2013 and hydraulic fracture stimulation work has commenced in Western Australia.”

Together with project partner Norwest Energy, AWE just announced that the Arrowsmith-2 well in the Perth basin was currently flowing gas to the surface during initial well test operations.