Beach Energy explores acquisitions in order to expand
With intentions of expanding and becoming a top-50 company in Australia, Beach Energy has focused on merging and acquisitions (M&A) to accelerating the company’s growth.
As our sister site Business Review Australia reported, the oil and gas company recently released a strategic review of its global operations that includes a plan for 15 percent corporate savings within the next financial year. Beach has taken a keen interest in acquisitions, and has even set up a corporate development team to search for new opportunities.
According to UBS analyst Nik Burns, PNG companies Horizon Oil and Kina Petroleum could be potential candidates to merge with Beach.
Recently, Beach signed a binding agreement to acquire a 40 percent operating interest in the ATP 1056 permit in Australia from a subsidiary of AGL Energy. ATP 1056 has long been identified as highly prospective for oil and is covered by 235 square miles of 3D seismic, with two small discoveries currently on extended production test.
RELATED TOPIC: Is Australia ready to make sustainable biofuel from algae?
However, managing director Rob Cole has gone on record saying that Beach feels the need to diversity outside of the area, and outlines a vision in annual production and reserves to propel it up the rankings.
Consolidation in the region has been viewed as probable by many, with Seven Group Holdings owning nearly 20 percent of both Beach and Drillsearch Energy. However, Cole insists the company will only pull the trigger if it makes sense for the company.
“We agree there is a potential for significant consolidation benefits, but consolidation only makes sense if it can be done on a basis that creates value for our shareholders,” said Cole. “A dedicated corporate development team has been established to enhance our acquisition capabilities. The team is actively screening and pursing a wide array of opportunities.”
While Beach has an interest in changing its infrastructure in its Cooper Basin headquarters, any agreement requires approval from its joint venture partners. The company is currently pondering a stand-alone infrastructure from a potential third party.
In addition, Beach is searching to replace Chevron in its Nappamerri Trough shale exploration project in the Cooper Basin. Meanwhile, Cole said Beach’s sale processes for its interests in the Browse and Carnarvon Basins have begun.
RELATED TOPIC: Tesla launches new taxi service in Australia
Beach owns a diverse variety of infrastructure that includes a 20 per cent stake in the South Australian Cooper Basin Joint Venture, which is a partnership with Santos and Origin Energy. The company is also searching for a joint venture partner to invest in its Otway Basin permits to assist with a conventional drilling program.
Ofwat allows retailers to raise prices from April
Retailers can recover a portion of excess bad debt by temporarily increasing prices from April 2022, according to an Ofwat statement.
The regulator confirmed its view that levels of bad debt costs across the business retail market are exceeding 2% of non-household revenue, thereby allowing "a temporary increase" in the maximum prices. Adjustments to price caps will apply for a minimum of two years to reduce the step changes in price that customers might experience.
Measures introduced since March 2020 to contain the spread of Covid-19 could lead to retailers facing higher levels of customer bad debt. Retailers’ abilities to respond to this are expected to be constrained by Ofwat strengthening protections for non-household customers during Covid-19 and the presence of price caps.
In April last year, Ofwat committed to provide additional regulatory protection if bad debt costs across the market exceeded 2% of non-household revenue.
Georgina Mills, Business Retail Market Director at Ofwat said: “These decisions aim to protect the interests of non-household customers in the short and longer term, including from the risk of systemic Retailer failure as the business retail market continues to feel the impacts of COVID-19. By implementing market-wide adjustments to price caps, we aim to minimise any additional costs for customers in the shorter term by promoting efficiency and supporting competition.”
There are also three areas where Ofwat has not reached definitive conclusions and is seeking further evidence and views from stakeholders:
- Pooling excess bad debt costs – Ofwat proposes that the recovery of excess bad debt costs is pooled across all non-household customers, via a uniform uplift to price caps.
- Keeping open the option of not pursuing a true up – For example if outturn bad debt costs are not materially higher than the 2% threshold.
- Undertaking the true up – If a 'true up' is required, Ofwat has set out how it expects this to work in practice.
Further consultation on the proposed adjustments to REC price caps can be expected by December.
"While it’s great that regulators are helping the industry deal with bad debt in the wake of the pandemic, raising prices only treats the symptoms. Instead, water companies should head upstream, using customer data to identify and rectify the causes of bad debt, stop it at source and help prevent it from occurring in the first place," she said.
"While recouping costs is a must, water companies shouldn’t just rely on the regulator. Data can help companies segment customers, identify and assist customers that are struggling financially, avoiding penalising the entire customer in tackling the cause of the issue."
United Utilities picks up pipeline award
A race-against-time plumbing job to connect four huge water pipes into the large Haweswater Aqueduct in Cumbria saw United Utilities awarded Utility Project of the Year by Pipeline Industries Guild.
The Hallbank project, near Kendal, was completed within a tight eight-day deadline, in a storm and during the second COVID lockdown last November – and with three hours to spare. Principal construction manager John Dawson said the project helped boost the resilience of water supplies across the North West.
“I think what made us stand out was the scale, the use of future technology and the fact that we were really just one team, working collaboratively for a common goal," he said.
Camus Energy secures $16m funding
Camus Energy, which provides advanced grid management technology, has secured $16 million in a Series A round, led by Park West Asset Management and joined by Congruent Ventures, Wave Capital and other investors, including an investor-owned utility. Camus will leverage the operating capital to expand its grid management software platform to meet growing demand from utilities across North America.
As local utilities look to save money and increase their use of clean energy by tapping into low-cost and low-carbon local resources, Camus' grid management platform provides connectivity between the utility's operations team, its grid-connected equipment and customer devices.