Near-Term Maintenance and Field Decline to Cap Beach Volumes

Beach Energy produces oil, gas, and gas liquids from multiple wholly owned projects and joint ventures in the onshore Cooper, Perth, and Eromanga basins, and offshore in the Otway, Bass, and Taranaki basins. Beach merged with Cooper Basin joint-venture partner Drillsearch Energy in 2016, which increased equity production to about 10 million barrels of oil equivalent. This more than doubled to over 20 million barrels of oil equivalent following the purchase of Lattice from Origin Energy in 2018. Lattice’s scale-enhancing incorporation, expanding Beach’s footprint across multiple basins and production hubs, resulted in an increase in EBITDA margins. But even with Lattice, our no-moat rating stands. Despite Lattice’s advantages, Beach does not have sufficient resource life beyond 15 years.