A delay in getting an offshore drilling rig to a site off Port Campbell has temporarily put the project on hold until next financial year.
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Beach Energy has plans to drill as many as nine offshore wells up to 80 kilometres from the coast but that project will now not begin until at least July, depending on contract negotiations.
The company has almost $1 billion worth of offshore gas exploration projects in the pipeline.
In a statement to the Australian Stock Exchange this week, Beach Energy said that because of the delay it had cancelled the contract, but all parties were now in discussions over the future operations of the Ocean Onyx rig and the Victorian Otway Basin offshore drilling campaign.
"This process will take into consideration executing the drilling campaign during the COVID-19 epidemic and associated restrictions," it said.
Beach Energy said offshore drilling was unlikely to commence until the next financial year.
The contract negotiations would have no impact on the company's production, it said.
Drilling of the onshore to offshore Black Watch-1 well at Nirranda was recently completed and results were inline with expectations.
"This will increase Otway Gas Plant output when it is tied in later this quarter," the company said.
The rig will be demobilised from the Nirranda site this weekend and moved to the new Enterprise site which closer to Port Campbell.
Drilling of that onshore to offshore exploration well is expected to begin in the second half of the 2020.
The drilling rig - which is 55 metres high - will be very visible from the Great Ocean Road, especially at night during the 24-hour-a-day drilling phase.
"The drill site location has been chosen to reach the offshore target, so it will be reasonably close to the Great Ocean Road," the company says.
It will be reasonably close to the Great Ocean Road.
- Beach Energy
Beach Energy on Wednesday posted strong third quarter results despite the unprecedented global environment as a result of COVID-19 and oil price volatility.
Production for the March quarter was up eight per cent, but in light of the pandemic the company was looking to defer 30 per cent of its planned capital expenditure next financial year.
Beach managing director and chief executive officer Matt Kay said the company's robust asset portfolio, operational capabilities combined and strong balance sheet meant the company was well positioned to navigate the turbulent times being experienced across the globe.
"Despite this position of strength, we will continue to make prudent decisions in the interests of our shareholders, and as such we are reviewing proposed FY21 activities and are targeting a deferral of up to 30 per cent of previously planned capital expenditure," he said.
Beach's domestic gas portfolio helped offset a 30 per cent decline in oil price, with total sales revenue only down eight per cent on the prior quarter at $431m.
Mr Kay said the successful drilling of the 7.2 kilometre Black Watch-1 well at Nirranda would increase gas supplies from the Otway Gas Plant once it was tied in over the coming weeks.
"Our onshore to offshore program moves to the Enterprise-1 exploration well, which is expected to commence drilling in the second half of calendar 2020," he said.
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