Beach Energy Ltd (ASX: BPT) is selling 40% of its Victorian Otway stake for $344 million to OGOG (Otway) Pty Ltd and consequently reduced its FY19 guidance.

Beach Energy is one of Australia’s largest oil and gas businesses.

The Victorian Otway interest sale:

Beach Energy is selling the 40% interest of its nearshore and offshore Victorian Otway Basin to OGOG (Otway) Pty Ltd, but Beach will remain the operator of the Otway Gas plant, the existing gas fields and exploration prospects.

This transaction introduces a fully-aligned partner to support the rapid exploration and development of our offshore Victorian acreage,” said Beach CEO Matt Kay.

Securing an excellent development partner for the Otway gas fields is a pivotal step towards creating new supply to Australia’s East Cost gas market.”

FY19 guidance update:

As a consequence of the sale, Beach Energy has reduced its FY19 guidance, due to its lower ownership, by one million barrels of oil equivalent (MMboe) to a range of 25 to 27 MMboe.

Expected capital expenditure has also reduced, by $20 million to a range of $440 million to $520 million.

FY19 EBITDA (click here to learn what EBITDA is) is expected to be $50 million less, it’s projected to be between $1.05 billion to $1.15 billion.

The Beach Energy share price is down by 4.5% in early trade according to Google Finance, although it has benefited in recent weeks due to the rising oil price.

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