Beach Energy share price slips despite bumper quarter

A miner in visibility gear and hard hat looks seriously at an iPad device in a field where oil mining equipment is visible in the background.A miner in visibility gear and hard hat looks seriously at an iPad device in a field where oil mining equipment is visible in the background.

Shares in Beach Energy Ltd (ASX: BPT) have tumbled from the open on Tuesday following the release of its third quarter results and FY22 expenditure guidance update.

The Beach Energy share price closed out the previous trading week at $1.65 before slipping to a near-two week low of $1.60 early in the session today.

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Revenue up 15%, expense guidance lowered

Beach Energy printed Q3 sales revenue of $458 million, a 15% gain on the prior quarter. Production tightened by 3% to 5.2 MMboe whilst sales volume(s) reduced by 5%, offset by surging oil and gas markets.

In fact, the gain was mainly due to higher realised oil and gas prices, Beach says. It reported a realised oil price of $176.5 per barrel and a realised gas/ethane price of $8.4/GJ, up 51% and 10% respectively.

In the meantime, Western Flank oil is expected to report a 35% oil decline in FY22 “due to refined reservoir management strategies”.

Aside from that, growth initiatives such as the Thylacine West 1 and Waitsia Stage 2 Perth Basin development each progressed in drilling programs during the quarter.

Drilling at Thylacine is expected to be finalised in Q4 FY22, alongside an LNG supply and purchase agreement with BP, the company says.

Meanwhile, Beach also adjusted its capital expenditure (CAPEX) guidance down to $900 million–$1 billion, down from a previous $900 million–$1.1 billion.

It puts this down to “deferral of spend to FY23”. So the company hasn’t actually reduced its expenditure, just deferred it to a later date.

“The reduction is mainly due to revised timing of work programs with deferral of some spend to FY23.
Major capital programs remain on budget and on schedule,” Beach commented on the adjustment.

Speaking on the results, Beach Energy’s acting CEO, Morné Engelbrecht said:

The third quarter was highlighted by the achievement of major milestones as we continued to deliver
meaningful progress against our growth strategy. Quarterly production remained broadly stable despite weather challenges in the Cooper Basin and maintenance downtime in the Bass Basin.

Pleasingly, Western Flank oil production is performing better than. our beginning-of-year expectations, with a large inventory of workover activity and development well connections supporting the current production levels.

In the Otway Basin, Beach is now well placed to service higher customer nominations as seasonal gas demand increases during winter months. Connection of the Geographe wells has enabled the Otway Gas Plant to deliver average daily gas supply of 152 TJ per day since quarter-end.

In the last 12 months, Beach Energy’s share price has begun its recovery but is still down more than 4% in that time. This year to date however it has surged more than 27% amid a commodity market boom.

The post Beach Energy share price slips despite bumper quarter appeared first on The Motley Fool Australia.

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Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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