At a time when oil and gas prices were already low, millions of residents of China’s Hubei province are in a travel lockdown due to the virus, weighing on petrol demand, while airlines are trimming flights causing a glut of jet fuel.
But Mr Kay said Beach was fortunate to be in a “robust” position with its net cash balance sheet and a strong gas business funding the bulk of its operation costs and providing protection from oil price fluctuations
“In terms of any downturn we are really well-positioned to weather the storms if they come,” Mr Kay said. “We are also well-positioned to take opportunities if they come as well.”
In the wider Australian oil and gas industry, concerns have been deepening about the outlook for demand in China following reports that the China National Offshore Oil Corporation, the nation’s biggest LNG importer, would not accept some imports of the fuel due to the spread of coronavirus.
Graeme Bethune, of consultancy EnergyQuest, said Australian exports to China have been unaffected, “at least so far”.
“But as the largest supplier to China, any disruption to cargoes is likely to impact Australian projects,” Dr Bethune said.
Releasing Beach’s half-year results on Tuesday, Mr Kay said the six-month period had seen the biggest capital program and organic growth program in the company’s history.
“We’re incredibly pleased with the outcomes we’ve had to date — drilling 105 wells in the first half with an 83 per cent success rate,” he said. “And also some really key exploration discoveries.”
Beach also updated its full-year capital expenditure guidance to between $875 million and $950 million, up from a range of $750 million to $850 million.
Analysts on Tuesday said Beach’s revised guidance items were the “main takeaway” from the half-year results.
“Most notable is the increase to capex guidance, approximately $110 million at the midpoint,” Royal Bank of Canada analyst Ben Wilson said.
“It is not surprising to us that one of the main drivers of that is an infrastructure upgrade to its western flank oil facilities to support higher output beyond financial year 2020.”
Beach announced a fully franked interim dividend of 1¢ per share, to be paid on March 31.
Business reporter for The Age and Sydney Morning Herald.