Some of the most interesting opportunities on the ASX tend to appear when confidence is low.

That does not mean every fallen share is a bargain. But I think the three shares in this article have been sold down heavily while still retaining strong long-term growth potential.

For patient investors, I think they are worth buying right now.

DroneShield Ltd (ASX: DRO)

DroneShield has been one of the more volatile ASX growth shares. Although its shares are up 150% over the past 12 months, they remain down by over 50% from their 52-week high.

That volatility is not surprising. The company operates in a fast-growing defence technology market, with expectations high and recent headlines adding uncertainty.

But I do not think it changes the long-term need for counter-drone technology.

Drones are now part of modern conflict, border security, critical infrastructure protection, airport planning, and public safety. They are cheap, flexible, and increasingly capable. That creates a growing need for systems that can detect, track, and respond to drone threats.

DroneShield is trying to solve that problem.

The road may stay bumpy, but I think the long-term defence theme is too powerful to ignore.

CSL Ltd (ASX: CSL)

CSL is a very different case. The healthcare giant has lost a lot of investor trust after a difficult period. Guidance downgrades, execution concerns, and weaker sentiment have pushed the shares far below where they once traded.

I think the sell-off has created a recovery opportunity.

CSL still owns valuable global healthcare businesses across plasma therapies, vaccines, and specialist medicines, which are linked to long-term medical demand.

The company clearly has work to do. It needs to restore confidence, improve consistency, and prove that its earnings can recover.

But the market now appears to be treating CSL as if its problems are permanent. I do not think they are.

The dividend yield has also become more appealing after the share price fall. That gives investors some income while they wait for the recovery to unfold.

WiseTech Global Ltd (ASX: WTC)

WiseTech is another fallen ASX share I would be happy to buy.

The company builds software for global trade and logistics, which is one of the most complex parts of the world economy.

Moving goods across borders involves customs, compliance, documents, tariffs, warehouses, carriers, and regulation. WiseTech’s software sits inside those workflows.

That creates a strong position if customers continue relying on the platform to manage more of their operations.

I also think artificial intelligence could make WiseTech more useful over time rather than disrupt it. Logistics involves repetitive documents, exception handling, classification, and workflow decisions. Smarter software could reduce manual work and increase customer value.

The stock has risks around valuation, acquisitions, and execution. But after such a large fall, I think the buying case looks far more interesting.

Foolish Takeaway

These shares are not without risk. DroneShield faces governance, disclosure, and regulatory uncertainty; CSL has damaged confidence; and WiseTech has questions to answer around execution and valuation.

But for investors willing to think in years rather than months, I think these three beaten-down ASX shares could be worth buying while sentiment remains weak.

The post Why I’d buy DroneShield, CSL, and WiseTech shares right now appeared first on The Motley Fool Australia.

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• Under $100, are CSL shares finally too cheap to ignore?
• Here are the latest growth forecasts for the CSL share price
• These are the 10 most shorted ASX shares
• I’d listen to Warren Buffett and load up on cheap ASX shares
• How to turn $500 a month into $500,000 with ASX shares

Motley Fool contributor Grace Alvino has positions in CSL and DroneShield. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL, DroneShield, and WiseTech Global. The Motley Fool Australia has positions in and has recommended WiseTech Global. The Motley Fool Australia has recommended CSL. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

BHP Group Ltd (ASX: BHP) shares have had a strong run.

At $59.75, the mining giant is trading well above where it was earlier in the year, and I can understand why some investors may be wondering whether the easy money has already been made.

I do not think BHP looks like a screaming bargain after its rise. But if the question is whether it is still a good share to buy and hold, my answer is yes.

A different type of miner

BHP is often thought of as an iron ore giant, and that is fair.

Iron ore has been the company’s earnings engine for many years. Its Pilbara operations remain among the best mining assets in the world, with scale, quality, infrastructure, and cost advantages that are difficult to replicate.

That gives BHP a strong cash flow base when commodity markets are supportive.

But I think the more interesting part of the story today is what BHP could become over the next decade.

This is no longer just a simple iron ore income play. BHP has been reshaping itself around commodities that could become increasingly important in a changing global economy.

Copper sits at the centre of that.

Why copper changes the equation

Copper is used across electricity networks, renewable energy, electric vehicles, data centres, industrial equipment, and construction.

The world is going to need a lot more of it if electrification and energy infrastructure spending keep growing.

At the same time, copper supply is not easy to bring on quickly. New mines take years to approve, fund, build, and ramp up. Existing mines can face declining grades, higher costs, water constraints, community opposition, and political risk.

That creates an attractive setup for established producers.

BHP is already one of the world’s largest copper producers, which gives it a strong position if prices remain elevated over the long term.

BHP also has its Jansen potash project in Canada. This will not transform the business overnight, but I like the strategic logic. Potash gives BHP exposure to fertiliser demand and global food production, which is a different driver from iron ore or copper.

What about the valuation?

The main reason for caution is the share price.

After strong gains, I would not necessarily go all-in at once. A staged approach may make more sense, especially for investors who already have resources exposure.

But I still think BHP deserves a place in a long-term portfolio.

Morgan Stanley also appears positive. A recent note reportedly put an overweight recommendation on BHP shares with a $67.50 price target. Compared with the current share price of $59.75, that suggests analysts there still see upside from here.

Foolish takeaway

BHP shares are not as cheap as they were.

That makes position sizing and patience important.

But I still think this is one of the best ASX mining shares to buy and hold. The iron ore business remains a powerful cash generator, copper gives BHP exposure to a long-term supply squeeze, and potash adds another future growth option.

For investors willing to accept commodity volatility, I think BHP shares remain a buy at current levels.

The post Is now a good time to buy and hold BHP shares? appeared first on The Motley Fool Australia.

More reading

• Why a weak US dollar could be the best thing that happens to ASX resource stocks in 2026
• Invested $10,000 in Rio Tinto, Fortescue or BHP shares 5 years ago? Guess which one has gained the most
• Thinking about dividend yields? Here’s how much the top 10 ASX 200 shares pay
• How big will the BHP dividend be in 2027?
• How to build a $20,000 ASX share portfolio with $100 a month

Motley Fool contributor Grace Alvino 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 recommended BHP Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Shares in Adore Beauty Ltd (ASX: ABY) piled on more than 7% on Monday morning after the company announced a positive trading update to the market.

Strong trading result

In a statement to the ASX, the company said that despite challenging conditions, its FY26 revenue for the first 47 weeks of the year was up 7.4% to $193.4 million compared to the previous corresponding period.

Year to date, new customer acquisition was up 13.9% while the company’s gross margin was expected to be in line with the prior year at 34.5%.

Adore Beauty also opened three new stores during the first half, bringing its total to 14 Adore Beauty stores and 6 iKOU stores.

Chief Executive Officer Sacha Laing said regarding the result:

More pronounced cost-of-living pressures have seen an increase in promotional activity in the market through April and May resulting in a tempered slowdown in trading in Q4. Pleasingly the Group is expecting to achieve gross margins for H2 in line with the prior year, achieved through our higher margin own brands and store network. While we are benefiting from new growth levers, including our loyalty program, higher-margin retail network and iKOU brand, we will not see the full benefit of these initiatives until next financial year. Store performance is in line with expectations with our retail network continuing to cost-effectively introduce new customers to the Adore Beauty brand, increase revenues, and support our online channel through new customer acquisition.

Adore Beauty said the recent period had been the most capital-intensive in its 26-year history, with investment in new stores, the acquisition of iKOU, the replacement of its core enterprise resource planning (ERP) system, and investment in AI capability.

Future looking bright

The company also issued guidance for FY27, saying the group expected revenue growth of at least 10% and underlying EBITDA of $9 to $13 million.

Mr Laing said regarding the near future:

Our large infrastructure projects remain on budget and on schedule with the ERP transition expected to be completed in the coming weeks and commissioning of our new National Distribution Centre (NDC) on track for the first quarter of FY27. Both will support a material step-up in efficiency and customer experience, with the NDC saving approximately $2 million in annualised labour costs. In addition, we have recently reshaped our Head Office team delivering over $2.5 million in cost efficiencies on an annualised basis.

Mr Laing said the company would open another four Adore Beauty stores and one iKOU store during the first half of FY27.

Adore Beauty shares were 7.8% higher at 34.5 cents mid-morning on Monday.

The company is valued at $30 million.

The post Why are Adore Beauty shares charging higher today? appeared first on The Motley Fool Australia.

More reading

• Leading brokers name 3 ASX shares to buy today
• UBS sounds the alarm on this ASX 200 financial stock after a big 2026 run
• Why I’d buy DroneShield, CSL, and WiseTech shares right now
• Is now a good time to buy and hold BHP shares?
• Experts recommend CBA and these ASX shares as buys

Motley Fool contributor Cameron England has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Adore Beauty Group. 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.

If you are looking for some new investment opportunities, then it could be worth checking out the three ASX shares in this article.

That’s because they have just been named as buy ideas by experts, courtesy of The Bull.

Let’s see what they are recommending to investors:

Argo Investments Ltd (ASX: ARG)

The team at Shaw and Partners thinks that this investment company’s shares are undervalued at current levels and has named them as a buy.

The broker likes the company due to the discount to its underlying asset value, as well as its attractive fully franked dividend yield. It said:

This listed investment company is trading at a material discount to its underlying asset value, offering an attractive entry point. It provides broad diversity across leading Australian companies and pays a reliable fully franked dividend yield, which was recently above 4.4 per cent. Recent results highlight steady income growth and a strong balance sheet.

Its conservative style suits investors seeking income and stability. Buying at a discount enhances long term return potential, while maintaining exposure to high quality Australian equities.

Commonwealth Bank of Australia (ASX: CBA)

Over at Investor Pulse, it has named CBA shares as a buy. It believes that recent share price weakness has created a buying opportunity for long-term focused investors.

This is especially the case given Investor Pulse’s belief that CBA shares could recover once sentiment in the banking sector stabilises. It said:

CBA remains Australia’s dominant retail bank. The recent sharp sell-off has created a more attractive entry point for long term investors. The bank generated unaudited cash net profit after tax of $2.7 billion in the third quarter of fiscal year 2026, up 4 per cent on the prior corresponding period. Lending and deposits continued to grow despite a softer economic backdrop.

CBA also maintains strong capital levels and recently paid a fully franked interim dividend of $2.35 a share for the first half of fiscal year 2026. The shares fell heavily following housing concerns flowing from the Federal Budget. We see scope for a recovery once sentiment stabilises.

Kingsgate Consolidated Ltd (ASX: KCN)

Another ASX share that Investor Pulse rates as a buy this week is gold miner Kingsgate.

It highlights its exposure to elevated gold prices as a reason to be positive, commenting:

Kingsgate operates the Chatree gold mine in Thailand and is benefiting from elevated gold prices and improving operational momentum. We like the stock because March quarter gold production reached 21,036 ounces, with record margins of $US2613 per ounce.

Total cash and bullion climbed to $213.4 million, while debt was significantly reduced. Management is also targeting gold production of between 85,000 ounces to 95,000 ounces in full year 2026, supported by stronger grades and ongoing exploration upside near Chatree.

The post Experts recommend CBA and these ASX shares as buys appeared first on The Motley Fool Australia.

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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.

S&P/ASX 300 Index (ASX: XKO) gold stock Black Cat Syndicate Ltd (ASX: BC8) is leaping higher today.

Black Cat shares closed on Friday trading for $1.045. In earlier morning trade on Monday, shares jumped to $1.135, up 8.6%. At the time of writing, shares are changing hands for $1.128 apiece, up 7.9%.

For some context, the ASX 300 is up 0.1% at this same time.

Here’s what’s catching investor interest.

ASX 300 gold stock rockets on growth plans

Black Cat shares are surging today after the miner released an update on its ambitious 2026 exploration and growth plans at its Coyote Gold Operation, located in Western Australia.

The ASX 300 gold stock aims to kick off drilling in June, noting that prior drill campaigns at the project have “consistently” intersected gold mineralisation.

Black Cat said it will spend $11 million in the 2026 field season to deliver 35,000 metres of drilling at Coyote. That’s more than three times as much as the miner has drilled since acquiring the project.

The company aims to expand the current Resource, which stands at 645,000 ounces at 5.5 grams of gold per tonne.

What did Black Cat management say?

Commenting on the upcoming drill campaign that’s boosting the ASX 300 gold stock today, Black Cat managing director James Bruce said, “This discovery program is one of the largest drilling investments in Coyote’s history and will build on the successful high-grade discoveries at Coyote over twenty-five years ago.”

Bruce added:

The aim is to extend mineralisation to 850 metres depth to materially strengthen the underground Resource and unlock additional high-grade gold potential.

Coupled with existing surface infrastructure and the extremely high-grade nature of the orebody, this discovery program will better define the opportunity to develop a modern efficient underground operation at a scale that creates value for Black Cat.

What else is happening with the ASX 300 gold stock today?

Separately, Black Cat reported on its Barrenjoey Emerging Gold Investor Day presentation today.

The ASX 300 gold stock highlighted that its three West Australian gold mines have an FY 2026 production rate of 100,000 ounces of gold.

And with global gold prices remaining at historic highs, management noted that Black Cat remains 100% unhedged. This saw the miner achieve a realised gold price of $6,817 per ounce.

As for funding its growth ambitions, Black Cat has no debt and $92 million in cash and investments.

Black Cat generated $61 million of operating cash flow in the March quarter.

The post This ASX 300 gold stock is leaping 9% today on major growth news appeared first on The Motley Fool Australia.

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• Moelis is tipping these two ASX gold miners will deliver better than 40% returns

Motley Fool contributor Bernd Struben 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.

As you may have heard, the investing world is currently abuzz with the looming initial public offering (IPO) of SpaceX. It is well-known, despite its current status as a private company, for its cutting-edge rockets, its Starlink satellite internet services, and, more recently, its ownership of xAI and X (formerly Twitter).

Of course, SpaceX is also famous for its CEO, the irreplaceable Elon Musk. Musk cuts a controversial figure. But no one can deny that his leadership of SpaceX is almost single-handedly responsible for the manic interest in its impending IPO.

According to Forbes, Musk is pursuing a dual-class stock structure for SpaceX, once it becomes a public company. Although these dual-class structures are not permitted on the ASX, they are an increasingly common choice for US stocks. Let’s break down how it works.

In a nutshell, dual-class share structures create multiple versions of shares in a company’s stock. Here on the ASX, we tend to follow a democratic ‘one share, one vote’ methodology. There is only one iteration of Telstra Group Ltd (ASX: TLS) shares, for example, and every share gives an investor one vote. That is not the case with many US stocks, though. Dual-class structures allow a company to create tiers of stock. Most of the time, these tiers represent the same ownership stake of a company, but alter its voting power.

SpaceX IPO: 10 votes for Musk, 1 for the public

They are often created to ensure that the founders of a company can retain control over it despite being able to sell down a significant portion of their shares. What’s even more startling is that the class of shares that founders and insiders tend to own is often not even traded on the public market.

This is the model that SpaceX reportedly intends to follow. Here’s how it set out its proposed stock structure in its recent prospectus:

Following the completion of this offering, we will have two classes of common stock issued and outstanding: Class A common stock  and Class B common stock. Each share of Class A common stock will entitle its holder to one vote per share. Each share of Class B  common stock will entitle its holder to 10 votes per share. Class A shareholders and Class B shareholders will vote together as a  single class on all matters to be voted on by shareholders, except Class B shareholders will be entitled to elect a majority of our board  of directors in addition to having certain other class votes…

If this structure is implemented, it will allow Musk to own about half of the economic share of SpaceX, but give him more than 80% of the company’s voting power. That relegates other shareholders to mere spectators in the company’s affairs.

The Zuckerberg method

If that sounds rather wild, it is not, by any means, unprecedented in America. Facebook-owner Meta Platforms Inc (NASDAQ: META) follows a similar structure. Meta’s Class A shares are the META stock we see being quoted on the markets every day. However, its Class B shares are unlisted and are almost all owned by founder Mark Zuckerberg. It’s how ‘Zuck’ can own less than 15% of Meta, but has a sole casting vote on any company decisions.

Some stocks take it even further. Google-owner Alphabet Inc (NASDAQ: GOOG)(NASDAQ: GOOGL) has three types of shares: Class A, Class B, and Class C. Class A shares (GOOGL) have one vote per share. Class C (GOOG) shares represent the same ownership stake in Alphabet, but come with no voting rights. However, Class B shares represent the same ownership stake as Classes A and C, but grant their owner ten votes per share.

Class B shares are unlisted, though, and are mostly divided between Alphabet’s two co-founders, Larry Page and Sergei Brin.

Companies tend to follow these dual-class structures when they want outside investors’ money, but not their input. That’s clearly the model Musk is pursuing at SpaceX. Given his profile and following, I’d be surprised if too many investors even cared.

The post SpaceX IPO: What are dual-class shares? appeared first on The Motley Fool Australia.

More reading

• Leading brokers name 3 ASX shares to buy today
• UBS sounds the alarm on this ASX 200 financial stock after a big 2026 run
• Why I’d buy DroneShield, CSL, and WiseTech shares right now
• Is now a good time to buy and hold BHP shares?
• Why are Adore Beauty shares charging higher today?

Motley Fool contributor Sebastian Bowen has positions in Alphabet and Meta Platforms. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet and Meta Platforms. The Motley Fool Australia has positions in and has recommended Telstra Group. The Motley Fool Australia has recommended Alphabet and Meta Platforms. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

There are a few names in my portfolio I’ve significantly invested in for passive income and long-term growth. One of those is L1 Long Short Fund Ltd (ASX: LSF), a listed investment company (LIC) that offers numerous positives as a reliable ASX dividend stock.

It’s operated by investment manager L1 Group Ltd (ASX: L1G), with the team investing in a quite different style to the local or global share markets.

The LIC is already more than $2.5 billion in size, and I believe it has a very positive future ahead for multiple reasons.

Diversification

The ASX dividend stock’s investment strategy is to invest in both ASX-listed and global shares, providing the business with significant diversification. It’s great to look across numerous companies that could be the best investment opportunities.

Additionally, I like that the business can short-sell overvalued shares, if it wants to. That way, it can generate returns in a variety of ways, including when markets are falling.

Typically, L1 Long Short Fund likes to invest in businesses with growing earnings and a low price-earnings (P/E) ratio. That’s why the investment team regularly look at cyclical sectors when there is pessimism in the air, which can be a particularly effective time to invest.

The L1 Long Short Fund has delivered an average return per year of 17.6% over the three years to 30 April 2026. That’s enough for the ASX dividend stock to deliver capital growth and good long-term dividends.

Reliable ASX dividend stock

The business has increased its dividend in every period since the company declared its first dividend of 1.5 cents per share in February 2021.

In FY26, the current financial year, the ASX dividend stock began paying quarterly dividends and recently announced its latest quarterly dividend of 3.7 cents per share. Each FY26 quarter has seen another increase. It expects the dividend to continue increasing.

I expect the next four quarterly dividends to be paid could come to approximately 15.4 cents per share, which would translate into a grossed-up dividend yield of 5.25%, including franking credits.

Given how effectively the investment portfolio has performed, the LIC has grown its dividend per share at a double-digit percentage rate, which is a pleasing compounding rate. I expect the business will continue to increase its dividend in the coming years.

How much could $1,000 buy?

If an investor were to put $1,000 into L1 Long Short Fund shares, they’d be able to buy 238 shares at the time of writing.

I’d be very happy to invest in the ASX dividend stock for the long term.

The post $1,000 buys 238 shares in an incredibly reliable ASX dividend stock appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has positions in L1 Long Short Fund. 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.

Charter Hall Group (ASX: CHC) shares are catching the eye on Monday.

In morning trade, the ASX 200 share is up over 5% to $20.37.

Why is this ASX 200 share roaring higher?

Investors have been scrambling to buy the integrated diversified property investment and funds management company’s shares following the release of a guidance update.

According to the release, the company has experienced continued momentum across its Property Funds Management (PFM) platform since its last update.

As a result, it has increased its guidance for FY 2026 operating earnings per share by a further 3% from $1.00 to $1.03. This assumes no material adverse change in market conditions.

Impressively, this represents a 26.5% increase on FY 2025’s operating earnings per share of 81.4 cents.

What is driving this growth?

The ASX 200 share revealed that its institutional PFM platform continues to grow, underpinned by increased allocations from existing clients and new investor gross equity inflows across institutional pooled funds, partnerships, and mandates.

It notes that financial year-to-date gross equity inflows total $6.5 billion, which represents an increase of $1.7 billion since the first half.

This growth has been driven by investor customers increasing allocations within existing investments, as well as diversification into additional Charter Hall managed strategies and sectors.

Recent client activity has resulted in the addition of 25 new institutional investors to the platform over the last 18 months. This includes several institutions making initial allocations to the Australian property sector, which it believes supports long term growth potential.

In addition, following recent investment activity, PFM has increased to $74.7 billion. This is up from $71.7 billion at the end of December.

Management notes that this is supporting further growth in recurring base funds management and property services earnings.

It also advised that capital deployment remains disciplined, targeting high quality assets with long WALEs, strong tenant covenants, and attractive risk adjusted returns.

Commenting on the company’s performance, the ASX 200 share’s managing director and CEO, David Harrison, said:

Australia continues to attract institutional capital as a stable and highly dependable real asset market. We are seeing increased allocations from existing institutional investors alongside new domestic and offshore inflows seeking diversified exposures.

The resilience of unlisted property returns, and inflation hedge characteristics continue to support strong investor demand, with Australia remaining a preferred destination for global capital. Our platform scale, disciplined capital deployment and co-investment alignment continues to drive equity flows and sustained earnings growth.

The post Guess which ASX 200 share is racing 5% higher after upgrading its earnings guidance appeared first on The Motley Fool Australia.

More reading

• Charter Hall lifts FY26 guidance as capital inflows surge
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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.

S&P/ASX 300 Index (ASX: XKO) energy stock Amplitude Energy Ltd (ASX: AEL) is slipping today.

Amplitude Energy shares closed on Friday trading for $1.675. In early morning trade on Monday, shares are changing hands for $1.66 apiece, down 0.90%.

For some context, the ASX 300 is up 0.1% at this same time, while the S&P/ASX 200 Energy Index (ASX: XEJ) is down 2.1% following a retrace in oil prices over the weekend.

Amplitude Energy shares are outpacing the broader energy sector stocks today following news of a major gas field acquisition from Beach Energy Ltd (ASX: BPT).

Here’s what’s happening.

ASX 300 energy stock growing its offshore gas footprint

Amplitude Energy shares are getting plenty of attention today after the company announced that has has entered into a binding agreement to acquire a 50% interest in Beach Energy’s VIC/L35 permit.

The permit area contains the Artisan gas field in the Offshore Otway Basin, situated off Australia’s southern coast.

As part of the agreement, O.G. Energy will purchase a 10% interest in Artisan on the same terms. That will see O.G Energy and Amplitude Energy each holding a 50% interest in the gas field.

The ASX 300 energy stock noted that the field is located just 17 kilometres from the existing Offshore Otway Basin pipeline.

Amplitude Energy will pay $58.3 million cash for the asset, which it said will be fully funded through existing sources.

The agreement will also see Beach Energy receive a future production royalty of $3.75 per gigajoule (GJ) for 60% of all gas produced before 30 June 2036, up to 62 petajoules (PJ).

The total implied transaction value of the agreement was reported to be approximately $130 million after tax.

Amplitude said it expects the acquisition to be net asset value (NAV) accretive and earnings accretive from the commencement of production from Artisan. The ASX 300 energy stock is accelerating targeted gas production to 2028.

The agreement remains subject to certain conditions precedent.

What did Amplitude and Beach Energy management say?

Commenting on the acquisition that’s yet to lift the ASX 300 energy stock today, Amplitude CEO Jane Norman said, “Producing Artisan through Amplitude Energy’s existing infrastructure allows faster and lower-cost development of this gas for the east coast domestic market.”

Norman continued:

Artisan development costs will significantly benefit from leveraging the existing ECSP program and our readily-available infrastructure. This is a win-win for Amplitude, O.G. Energy and Beach with respect to optimising our respective Otway Basin positions.

Beach Energy CEO Brett Woods added:

This transaction demonstrates Beach’s capital discipline, monetising Artisan while preserving exposure to future development through the production royalty.

It is also a positive outcome for Otway participants and domestic customers, with the gas still expected to be developed into the East Coast market through the Athena Gas Plant.

The post Guess which ASX 300 energy stock just announced a major Beach Energy gas acquisition appeared first on The Motley Fool Australia.

More reading

• This beaten-down ASX 200 energy share is slipping despite a major update
• Beach Energy sells Otway Basin stake, redeploys $500 million capital
• 3 ASX stocks that could benefit from oil prices hitting US$105 a barrel
• 5 things to watch on the ASX 200 on Wednesday
• 5 things to watch on the ASX 200 on Tuesday

Motley Fool contributor Bernd Struben 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.

Beach Energy Ltd (ASX: BPT) shares are lower on Monday after the oil and gas producer announced a new deal in the Otway Basin.

At the time of writing, the Beach Energy share price is down 2.04% to $1.107.

The move adds to a weaker stretch for shareholders. Beach Energy shares are down around 7% over the past month and 14% over the past year.

Let’s dive right in.

Beach sells part of its Otway position

According to the release, Beach Energy has agreed to sell its 60% operated interest in licence VIC/P35, which includes the Artisan gas discovery.

The buyer is Amplitude Energy Ltd (ASX: AEL), which will pay $70 million in cash when the transaction completes.

Beach will also receive a production royalty of $3.75 per gigajoule on all gas produced from the licence before 30 June 2036.

Based on the current 2C resource booking, Beach said the royalty payments are expected to total about $140 million over the life of the field.

The company said the transaction has an implied value of about $130 million after tax, or roughly $3.50 per gigajoule of 2C contingent resource.

The deal remains subject to several conditions, including regulatory approvals.

Where the capital is going instead

Beach is also changing how it wants to spend capital in the Otway Basin.

The company said it will no longer drill and complete the La Bella 2 development well, or pursue the development of Artisan through the Otway Gas Plant.

That decision frees up more than $500 million of capital that had previously been expected across Artisan and La Bella.

Management said the money can now be directed towards opportunities with stronger returns and lower development costs.

Beach is effectively cashing in part of its Otway portfolio instead of spending heavily to develop every asset itself.

It still keeps exposure through the royalty, while Amplitude takes on the development pathway.

Beach said Amplitude intends to develop Artisan through the Athena Gas Plant.

What comes next

The company said the Otway Gas Plant still has backfill options through lower-cost nearshore prospects and longer-dated offshore opportunities.

Managing Director and CEO Brett Woods said the deal reflects Beach’s focus on capital discipline. He said it turns development value into cash while leaving the company with royalty exposure.

After a difficult year for the share price, investors now have something practical to weigh up.

Beach gets cash from the sale, avoids more than $500 million in expected capital spending, and still has a way to benefit if Artisan is developed.

The next question is where that money goes.

The post This beaten-down ASX 200 energy share is slipping despite a major update appeared first on The Motley Fool Australia.

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• Guess which ASX 300 energy stock just announced a major Beach Energy gas acquisition
• Beach Energy sells Otway Basin stake, redeploys $500 million capital
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• 5 things to watch on the ASX 200 on Wednesday
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Motley Fool contributor Aaron Teboneras 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.