AWE reported a statutory net loss after tax of $12.5 million for the financial year 2017 (HY17), a 95% improvement over the HY16 result, it says.
The group's underlying net loss after tax for HY17 was $11.5 million, and production totaled 1.52 MMboe for the half year which was in line with guidance.
Sales revenue of $54.2 million for the half was adversely impacted by a crude oil lifting at Tui being delayed until early January 2017. Approximately 64% of revenues, including contributions from discontinued operations, were derived from gas assets.
CEO and Managing Director David Biggs said that AWE was off to a good start in FY17, with assets performing as expected, and executing its growth strategy. “Now that we’ve concluded our divestment program with the sale of Tui, AWE is well positioned to deliver on its significant growth potential,” he said.
“The balance sheet is stronger, future funding commitments and liabilities have been substantially reduced, and the company has been streamlined and refocused to aggressively pursue the development of our high-value growth assets.”
Biggs added that the group’s near-term focus is on maximizing production and revenue growth from new and established gas assets that supply domestic markets, thereby removing substantial volatility from revenue base and eliminating the need for hedging.
The final stage of the BassGas MLE project which includes the installation of a compression, he said, is expected to come online in Q4 of FY17 and deliver improved rates of production and increased revenue. AWE also anticipates strong pricing improvement in both east and west coast gas markets over the next few years that aligns with its planned gas contracting strategies for Casino, BassGas and Waitsia.
“We have set ourselves an ambitious goal: to more than double production by FY21, and we will do this by transitioning to new, high-value growth assets,” Biggs said. “Chief among these is our excellent position in Western Australia’s onshore Perth basin, which includes the Waitsia Gas project where AWE is the operator.
“Stage 1A came online during the half and well performance has been excellent. Development of Stage 2 is making rapid progress and we are finalizing preparations to drill the final two appraisal wells in the second half of FY17 prior to reviewing our booked reserves,” he continued.
“Stage 2 will be capable of producing 100 TJ/d for at least 10 years. Interest in Waitsia gas has been extremely positive and we are negotiating gas sales arrangements with potential customers. Pre-FEED work is well under way, and we are on track to commence FEED in the June quarter.
“We are also looking at other options embedded in our Perth Basin assets to further increase production. The AAL oil project is also making good progress. Technical evaluation of the FPSO and WHP tenders is complete and the operator is preparing recommendations for Stage 2 commercial tenders,” he added.
“Data from the G Sand appraisal well is being used to update project economics, optimize field development and assess the feasibility of co-mingled production of K Sand and G Sand oil. AWE is working with the respective operators of the Casino and BassGas projects to evaluate the future development options that could significantly extend the life of each project.”
Image: AWE in Perth basin / AWE