Beach share price falls despite solid FY22 revenue growth

sad looking petroleum worker standing next to oil drill

sad looking petroleum worker standing next to oil drillThe Beach Energy Ltd (ASX: BPT) share price is dropping on Wednesday following the release of the company’s quarterly update.

In morning trade, the energy company’s shares are down 2% to $1.74.

Beach share price lower on Q4 update

For the three months ended 30 June, Beach delivered a 9% increase in production to 5.6 MMboe. Management advised that this was driven by higher customer gas demand from the offshore Otway Basin.

This underpinned a 10% increase in quarterly revenue to $504 million. This comprises oil revenues of $195 million and gas and gas liquids revenue of $309 million.

Full year guidance achieved

For the full year, the company achieved its guidance with production of 21.8 MMBoe.

This led to total revenue coming in at $1,749 million, which represents a 15% increase year on year and was largely in line with consensus estimates for the year.

Another positive is that its unit field operation costs are expected to come in at the low end of its guidance range of $11.50 to $12.50 per boe. So, with the company commanding an average realised price of $78.2 per boe for all its products, it looks set to report strong free cash flow and earnings next month.

In fact, at the end of the quarter, the company had a net cash position of $165 million, which was up from $7 million three months earlier.

Management commentary

Beach Energy’s chief executive officer, Morné Engelbrecht, was pleased with the final quarter and full year. He commented:

A key plank of the Beach strategy is to continue investing in new gas supply to support the east coast market. Our results this quarter against the backdrop of the current energy crisis validate this strategy. This quarter Beach supplied an additional 3.5 PJ (0.6 MMboe) of gas from the Otway Gas Plant to Australian domestic retailers, thanks in part to recent commissioning of two Geographe development wells.

Engelbrecht appears confident on the company’s prospects for the year ahead. He said:

We enter FY23 with strong momentum as we complete our major development projects and deliver more new gas to the domestic market. In the Otway Basin, we will connect four offshore Thylacine development wells and the Enterprise discovery to the Otway Gas Plant to bring production rates back to full capacity. In the Perth Basin, Waitsia Stage 2 is developing material gas volumes for both domestic and global LNG markets.

Beach remains focused on delivering our major Otway and Perth Basin development projects. We are also planning for our next phase of growth, including exploration in the Perth, Otway, and Cooper basins, and we do so with a Balance Sheet capable of supporting our growth aspirations.

The post Beach share price falls despite solid FY22 revenue growth appeared first on The Motley Fool Australia.

“The worst thing you can do is nothing”

Motley Fool Chief Investment Officer says right now is not the time to sit on your hands…
As inflation eats away at cash balances Scott Phillips reveals three stocks for investors to consider that could help fight rising prices…
… And Beach Energy Ltd isn’t one of them.

Learn More
*Returns as of July 1 2022

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#FFF”, ‘color’, ‘#fff’);
})()

More reading

Motley Fool contributor James Mickleboro 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 Scott Phillips.

from The Motley Fool Australia https://ift.tt/XNM2u7G

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s