Offshore gas project sale a multimillion-dollar payday for SA giant
One of South Australia’s top companies has announced it will sell its stake in an offshore gas project, landing it a big payout and future earnings through royalty payments.
South Australian gas company Beach Energy this morning announced it had sold its 60 per cent stake in a Victorian offshore gas project, bagging it $70 million and future proceeds through royalty payments.
Beach Energy – based in Adelaide and ranked fourth in InDaily’s South Australian Business Index – will sell its stake in ‘VIC/L35’ to Australian natural gas producer Amplitude Energy and O.G. Otway.
The company will receive $70 million on completion of the deal that was expected in the first quarter of the next financial year along with production royalties equating to around $140 million over the life of the gas field.
Work on extraction on the gas field was expected to begin in 2028 and have an eight-year life.
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Alongside the sale, the company said in an ASX announcement that it had chosen not to proceed with drilling and completing the La Bella 2 development well in the Otway Basin off the coast of Victoria.
This will redirect more than $500 million of capital to “more value accretive opportunities”, according to the ASX announcement.
Beach managing director and CEO Brett Woods said the transaction “demonstrates Beach’s capital discipline, monetising Artisan while preserving exposure to future development through the production royalty”.
“It is also a positive outcome for Otway participants and domestic customers, with the gas still expected to be developed into the East Coast market through the Athena Gas Plant,” he said.
“Importantly, the optimisation of our Otway Basin portfolio unlocks more than $500 million of capital previously planned for FY26 to FY29 and enables us to redeploy the capital into opportunities with stronger returns and lower development costs.”
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