Beach Energy closing in on Genesis Energy stake in Kupe gas project

Beach Energy chief executive Matt Kay. Picture: Tricia Watkinson

Acquisitions are understood to remain on the agenda for Beach Energy, and the first asset it appears to be closing in on is Genesis Energy’s stake in New Zealand’s Kupe gas project.

The stake in the project in the Taranaki Basin has been value at around $US230m.

However, Genesis paid $NZ168m for a 15 per cent interest a few years ago, which may suggest that it sells for far more.

Royal Bank of Canada is working on the sales process.

Beach Energy owns half of what is largely a gas asset, while Genesis Energy holds 46 per cent and New Zealand Oil and Gas the remainder.

Beach already has pre-emptive rights to buy the position after it inherited Kupe as part of its acquisition of the Lattice Energy business from Origin Energy in 2017 for $1.6bn.

With Kupe, it is considered a critical part of New Zealand’s energy infrastructure, and at its peak, gas produced from the Kupe field is predicted to meet about 15 per cent of the country’s annual natural gas demand and 50 per cent of New Zealand’s liquefied petroleum gas demand.

Analysts believe Beach Energy is in need of a portfolio refresh after the performance of its Cooper Basin projects disappointed investors.

Also on Beach Energy’s wish list is thought to be BHP’s oil and gas assets in Western Australia, although they are not currently thought to be on the market.

While some suggest that Senex would be a logical target for Beach, it is not currently thought to be a suitor.

Another logical candidate for an acquisition would be Cooper Energy.