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The Whitehaven Coal Ltd (ASX: WHC) share price tumbled as much as 10.3% to $2.97 earlier this morning after China’s top economic planner is looking at possibly intervening in its coal market.

At the time of writing, Whitehaven Coal share price is down 5.74% to $3.12.

China working towards coal intervention

China’s state planner, the National Development and Reform Commission (NDRC) held a meeting with coal miners, industry bodies and electricity companies on Tuesday to study measures to rein in surging coal prices, according to Reuters.

“The current price increase has completely deviated form the fundamentals of supply and demand,” the NDRC said.

The NDRC vowed to step up regulation in the sector, and severely punish those involved in thermal coal speculation.

China’s coal shortage has driven a lengthy energy crisis, forcing many cities and industries to ration energy, weighing on economic growth and commodity prices.

Chinese coal futures tumbled sharply on Tuesday, hitting a limit-down of 8% to 1,755 yuan (US$275) a tonne after briefly hitting an all-time high of 1,982 yuan (US$310) a tonne.

The Whitehaven Coal share price, alongside other ASX-listed coal producers such as Yancoal Australia Ltd (ASX: YAL) and New Hope Corporation Limited (ASX: NHC) are all currently down between 7% and 4% at the time of writing.

Brokers lift Whitehaven Coal share price target

Despite the negative news coming out of China, Morgans released a note with a 12-month price target of $3.92. The broker believes there is a “clear upside in WHC linked to sustained coal prices above expectations”.

Morgans forecasts Whitehaven revenues to almost double in FY22 from $1,557 million to $3,054 million. Its strong earnings are expected to significantly reduce debt by $920 million to a $100 million net cash position.

The note said that a “perfect storm of drivers looks likely to persist” and support current record prices. These factors include a resurgence of post-pandemic demand, Chinese domestic shortages, seaborne supply constraints and tight LNG markets/pricing.

The post Why the Whitehaven Coal (ASX:WHC) share price is plunging 6% on Wednesday appeared first on The Motley Fool Australia.

More reading

• Why Adriatic Metals, Platinum, Redbubble, & Whitehaven Coal are dropping
• Whitehaven Coal (ASX:WHC) share price slumps despite positive profit outlook
• Why I’d hold this coal-mining ASX share for 4 years: expert
• Star Entertainment and SkyCity share prices plunge, Whitehaven Coal up. Scott Phillips on Nine’s Late News
• Here are the top 10 ASX shares today

Motley Fool contributor Kerry Sun 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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Caspin Resources Ltd (ASX: CPN) shares started the day’s trading horrendously with 18% scalped from their previous close since the market opened.

The mineral explorer’s shares are on the move despite there being no market-sensitive information for the company today.

However, previous updates released over the past few days may help explain the price action in Wednesday’s session.

Let’s take a closer look.

Why is the Caspin Resources share price plummeting today?

There’s nothing remarkable coming out of the company’s camp today that could directly explain the dramatic movements in its share price.

However, Caspin released a note yesterday that explained it had obtained the first results from its reverse circulation (RC) drilling program at its Yarawindah Brook PGE-Nickel-Cobalt project in WA.

The update was made by the board “out of an abundance of caution” in response to an ASX-penned letter inquiring about Caspin’s share price movement on 14 October.

Due to the nature of the ASX’s investigative letter, which does not imply any wrongdoing from Caspin, the company decided to provide an update regarding its RC drilling program results at Yarawindah Brook to clear the air and ensure no stones were left unturned.

The update notes that drill results came from the first 3 holes while assays from the remaining 8 holes are still pending. The company said further and more detailed analytical interpretation is required on all 11 sets of results.

Caspin also advises that it “will require additional drill results…to complete a thorough interpretation of these [11 holes] drill results”.

Consequently, the company also advised that investors should keep that in mind when examining the exploration results it announced yesterday.

With this context, Caspin explained the first 3 drill holes were “originally designed to test what was originally interpreted to be the prospective eastern margin of the [mineral] intrusion”.

It also explained that RC drilling will recommence this month at Yarawindah after being temporarily paused due to soggy ground conditions that reduced access to some sections of the project.

Caspin also explained there is no way of knowing when the assay laboratory will be finished with its interpretations.

In light of this, investors appear to be spooked and are exiting their positions at a rapid pace, hence, the drop in the Caspin Resources share price today.

At last check, shares in the minerals’ exploration company were trading at 86.5 cents, a significant fall from the previous close of $1.06.

Caspin Resources share price snapshot

The Caspin Resources share price has enjoyed bathing in a pool of green this year to date, having posted a return of 63% since January 1.

This extends its gain over the last 12 months to 92%, well ahead of the benchmark S&P/ASX 200 Index (ASX: XJO)’s climb of about 19% during the same time.

The post Here’s why the Caspin Resources (ASX:CPN) share price is crashing 18% today appeared first on The Motley Fool Australia.

More reading

• Why is the Airtasker (ASX:ART) share price climbing on Wednesday?
• Why the Whitehaven Coal (ASX:WHC) share price is plunging 6% on Wednesday
• BITO, the first US Bitcoin ETF just started trading. Here’s what happened
• ASX 200 (ASX:XJO) midday update: Kogan jumps, Flight Centre sinks
• Evolution (ASX:EVN) share price lifts on production guidance beat

The author Zach Bristow has no positions 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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ProShares Bitcoin Strategy ETF (NYSE: BITO) began trading in the United States market yesterday, overnight Aussie time.

The futures-based Bitcoin (CRYPTO: BTC) exchange traded fund (ETF) is the first to launch in US, in an event eagerly anticipated by crypto enthusiasts.

And investor response was phenomenal.

What happened with BITO on the first day?

The BITO share price closed its first day of trading up 4.8% to US$41.94. And it’s up another 0.2% in after hours trading at time of writing.

According to data from Bloomberg, more than 24 million shares of BITO changed hands yesterday. That represents a turnover of some US$1 billion (AU$1.3 billion). In a single day.

That makes BITO the second-most heavily traded fund on its debut day on record.

But this could just be the tip of the iceberg.

Tom Lee, co-founder of Fundstrat Global Advisors, believes the ETF could attract US$50 billion or more of inflows in its first year.

And if a futures-based ETF isn’t enough, there will soon be more ways for investors to speculate on the Bitcoin price.

Derivatives.

Yep, according to Bloomberg “options on BITO will begin trading on the NYSE Arca Options and NYSE American Options exchanges on Wednesday”.

That’s tonight for you and me.

How has the Bitcoin price reacted?

Bitcoin is within a whisker of its all-time highs of US$64,863, set on 14 April this year.

The Bitcoin price is up 3.5% over the past 24 hours and up 14% over the last week to US$64,217, leaving it just 1% shy of retaking its record.

The run higher has seen Bitcoin’s total market valuation once more exceed US$1.2 trillion, according to data from CoinMarketCap.

A range of factors have helped drive the Bitcoin price back up from its lows of US$29,807 on 20 July. But many analysts have pointed to the global hype surrounding the pending US Bitcoin ETFs, of which BITO just became the first, as fuelling demand for the digital token.

The ETF opens the door for more institutional investor participation, and many retail investors are more comfortable buying shares than working with digital wallets or crypto exchanges.

A word on BITO from ProShares and the market experts

Commenting on the long awaited launch, Simeon Hyman, global investment strategist at ProShares, said on Bloomberg TV:

We are really excited to bring BITO, the first Bitcoin-linked ETF, to investors as an important opportunity for them conveniently to invest in Bitcoin in their regular brokerage account. This is going to allow many people who have been waiting for an easy way to do this and a robust way to do this to now be involved and have it in their portfolios.

Addressing the success of the ETF during its first day of trade, Stephane Ouellette, CEO of cryptocurrency and derivatives provider FRNT Financial said:

From our conversations with market participants, I think it’s related to the growing belief as the trading day goes on that this is going to be considered a successful launch. Given the amount of avenues retail investors already have to participate in BTC, clearly the US-based ETFs are nonetheless satisfying some kind of latent, even if niche, demand.

Sam Bankman-Fried, CEO of crypto exchange FTX added, “It’s an incredibly bullish week – there’s been really positive sentiment around the ETF in particular.”

While some analysts are again eyeing a potential US$100,000 Bitcoin price, others are cautioning things could well move the other way.

And if the Bitcoin price does retrace, the BITO price will go down with it.

Invest with care.

The post BITO, the first US Bitcoin ETF just started trading. Here’s what happened appeared first on The Motley Fool Australia.

More reading

• Here are the pros and cons of investing in the pending US Bitcoin ETFs
• Why Bitcoin miners are flocking to the US and what this could mean for Australia
• Bitcoin price to US$500,000? Why ARK’s Cathie Woods is doubling down
• ASX set to welcome first cryptocurrency ETF… but there’s a catch
• What happened to the Bitcoin price in the FY22 first quarter?

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Bitcoin. 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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At lunch on Wednesday, the S&P/ASX 200 Index (ASX: XJO) is back on form and charging notably higher. The benchmark index is currently up 0.8% to 7,436.2 points.

Here’s what is happening on the ASX 200 today:

Kogan shares jump

The Kogan.com Ltd (ASX: KGN) share price is surging higher today following the release of its first quarter update. For the three months ended 30 September, the ecommerce company reported gross sales of $330.5 million. This represents an increase of 21.1% year on year and 23.2% quarter on quarter. And while its gross profit fell 1.7% year on year to $52.5 million, it increased 31.6% quarter on quarter. Another big positive was a meaningful reduction in its inventory position during the period.

Flight Centre AGM

The Flight Centre Travel Group Ltd (ASX: FLT) share price is tumbling following the release of a trading update at its annual general meeting. That update revealed that during the month of September, Flight Centre’s sales reached 27% of pre-COVID levels globally. This is still not at a level that makes its operations breakeven. As a result, the travel agent recorded a net operating cash outflow of $41 million for the month. It did, however, note a surge in enquiries and bookings growth in October in Australia.

Super Retail update

The Super Retail Group Ltd (ASX: SUL) share price is pushing higher today following the release of a trading update. For the first 16 weeks of FY 2022, the retail conglomerate posted a 12% decline in group sales. This was largely expected by the market and driven by COVID-19 lockdowns across key markets. Pleasingly, management revealed that it has a strong inventory position and is well placed to take advantage of the expected uplift in consumer demand over the summer holiday period.

Best and worst ASX 200 performers

The best performer on the ASX 200 on Wednesday has been the Kogan share price with a 10% gain following its update. The worst performer on the benchmark index has been the Flight Centre share price with a 5% decline following its AGM update.

The post ASX 200 (ASX:XJO) midday update: Kogan jumps, Flight Centre sinks appeared first on The Motley Fool Australia.

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• Super Retail (ASX:SUL) share price climbs 3% on trading update
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• Flight Centre (ASX:FLT) share price falls following Q1 update
• 5 things to watch on the ASX 200 on Wednesday
• Why is the Vanguard MSCI Index International Shares ETF (ASX:VGS) underperforming the ASX 200 lately?

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. owns shares of and has recommended Kogan.com ltd and Super Retail Group Limited. The Motley Fool Australia owns shares of and has recommended Kogan.com ltd and Super Retail Group Limited. The Motley Fool Australia has recommended Flight Centre Travel Group Limited. 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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The Evolution Mining Ltd (ASX: EVN) share price is moving higher on Wednesday morning. This follows the company releasing its September quarterly report this morning.

At the time of writing, shares in the gold mining company are up 2.15% to $3.80. This incline places the S&P/ASX 200 Index (ASX: XJO) constituent 16.2% above its 52-week low.

Let’s have a look at what investors are getting excited about this morning.

Why is the Evolution Mining share price moving higher?

The market appears to be pleased by the quarterly numbers posted by Evolution Mining today. In the first quarter of FY22, gold production improved with a slightly higher achieved price. Here are some highlights from the quarterly report:

• Gold production of 170,681 ounces, above the 155,000 to 167,000 previously guided
• All-in sustaining costs (AISC) of A$1,413 per ounce, below the A$1,450 per ounce previously guided
• Mine operating cash flow of A$193.7 million
• Group cash flow of $30.2 million
• Cash in the bank at the end of the quarter of $422.2 million

What happened during the quarter?

It was mostly a positive quarter for the nearly $7 billion gold mining company. During the 3-month period, Evolution achieved total group gold production of 170,681 ounces. This represents a 0.9% quarter-on-quarter lift in production output. Importantly, the production exceeded the range previously guided, giving shareholders a pleasant surprise.

Additionally, the miner managed to deliver AISC below its projections. Although, the $1,413 per ounce costs do reflect a 14% increase compared to the prior quarter. However, the stronger achieved gold price during the quarter helped partially offset the rising costs, this being a positive for the Evolution share price.

With reasonably steady gold prices and 163,046 ounces of gold sold during the first quarter, Evolution was able to pull in $193.7 million in mine operating cash flow. These funds accommodated the repayment of a $145 million drawn-down facility and a $25 million quarterly repayment. As a result, the company’s net debt finished the quarter at $467.8 million, slightly higher than the $451.2 million at the end of FY21.

Operationally, Evolution progressed the development of the Cowal underground mine, with several key milestones being achieved. Meanwhile, at Red Lake, underground development increased a further 28% to 3,132 metres.

Other milestone moments during the first quarter included the completion of the Kundana mine and Carbine project acquisition. This project, including multiple joint ventures with Northern Star Resources Ltd (ASX: NST), came to a total consideration of $400 million.

Looking ahead

The gold mining giant did not provide any forward-looking guidance in conjunction with its quarterly report. However, Evolution Mining did highlight its continued drive to upgrade the quality of its asset portfolio.

For now, it appears the miner will have its hands full with progressing its Cowal underground development and Red Lake transformation plan. On top of this, drilling at Cue joint venture has extended the gold mineralisation footprint for over 1.6km strike length, with the release stating it is “emerging as an exciting discovery”.

Despite what it has planned ahead, the Evolution share price is down 38.5% over the past 12 months.

The post Evolution (ASX:EVN) share price lifts on production guidance beat appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Wednesday
• Northern Star (ASX:NST) share price wanes as quarterly production falls
• 5 things to watch on the ASX 200 on Tuesday
• Top brokers name 3 ASX shares to sell today
• 5 things to watch on the ASX 200 on Thursday

Motley Fool contributor Mitchell Lawler 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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The Pilbara Minerals Ltd (ASX: PLS) share price is off to a slow start on Wednesday morning. This comes after the lithium miner provided investors with an announcement regarding a solar farm commitment.

At the time of writing, the Pilbara Minerals share price is trading flat at $2.11.

What’s in the Pilbara Minerals update?

Investors appear to be relatively unfazed by the company’s latest news, sending the Pilbara Minerals share price sideways today.

In its release, Pilbara Minerals advised it has signed a power purchase agreement (PPA) with Pacific Energy Group subsidiary, Contract Power Australia.

The deal will see Pilbara Minerals construct, operate and maintain a 6MW solar array at its 100% owned Pilgangoora Project. The area is located 120km south of Port Hedland in the Pilbara region of Western Australia.

Pilbara Minerals noted that the solar array was an important demonstration of its commitment to implementing environmentally friendly power solutions. It hopes to become a net-zero emission producer by the decade starting 2040.

The solar array is estimated to displace around 3.8 million litres of diesel fuel each year. This will save an estimated 9,900 tonnes of CO2 per annum over the 15-year contract period. 

The installation of the project facilitates the future expansion of solar capacity and the potential inclusion of battery storage at Pilgangoora. Pilbara Minerals is aiming to create further efficiencies in regards to its power supply and storage solutions at the site.

It is anticipated that procurement for the project will start with commissioning expected in late July. Commercial operations are planned to begin at the end of August 2022.

Pilbara Minerals share price snapshot

Over the past 12 months, the Pilbara Minerals share price has accelerated more than 490%, with year-to-date above 140%. However, it hasn’t be until late July that the company’s shares began taking off to record highs.

Pilbara Minerals commands a market capitalisation of roughly $6.22 billion, and has approximately 2.97 billion shares outstanding.

The post What’s with the Pilbara Minerals (ASX:PLS) share price today? appeared first on The Motley Fool Australia.

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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 Bruce Jackson.

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The Commonwealth Bank of Australia (ASX: CBA) share price is in the green amid the launch of the bank’s new Smart payment solution.

The Smart payment solution features a stand-alone terminal that can run on mobile internet and features-tailored apps for businesses.

At the time of writing, the CBA share price is $104.88, 0.95% higher than its previous close.

Let’s take a closer look at CBA’s ‘smart’ new payment system.

CBA launches new payments terminal

The CBA share price is rising after the bank announced its business customers can get their hands on its Smart terminal from Monday.

The terminal will replace the bank’s Albert terminals. The bank states it will be particularly useful for hospitality, retail, and healthcare businesses.

Additionally, before the end of this year, CBA will be launching a lightweight, pocket-sized card reader. The aptly named Smart Mini Pay can pair with a business’s own device to take chip and contactless payments.  

Together, the bank’s Smart terminals offer many of the same features as Square Inc‘s (NYSE: SQ) popular portable terminals.

CBA also launched into the buy now, pay later arena in August. The bank’s StepPay offering launched ahead of Square’s acquisition of Afterpay Ltd (ASX: APT).

CBA’s Smart terminal also offers dual-sim functionality and an ‘App Marketplace’ personalised to individual businesses like a “donations app” or “health claiming app”.

It also allows users to split payments, add surcharges, email receipts, and can help keep track of inventories.

CBA group executive of business banking Mike Vacy-Lyle commented on the Smart terminal:

Using the latest technology and customer feedback, we’re making payment solutions that are more intuitive, customisable and secure…

This means businesses can spend more time serving their customers and focusing on what matters most to them in their business.

CBA share price snapshot

The CBA share price hasn’t gone far this month, gaining just 0.3% since the end of September.

However, it is 25% higher than it was at the start of 2021. It has also gained 51% since this time last year.

The post CBA (ASX:CBA) share price gains amid ‘smart’ new payments launch appeared first on The Motley Fool Australia.

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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned.

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO and Square. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO. 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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The Treasury Wine Estates Ltd (ASX: TWE) share price is pushing higher on Wednesday.

At the time of writing, the wine company’s shares are up 1% to $11.88.

This means Treasury Wine’s shares are now up 24% since the start of the year.

Could the Treasury Wine share price reach $14 by the end of 2021?

The good news for shareholders is that one leading broker believes the Treasury Wine share price can climb even higher from here.

According to a note out of Morgans this week, its analysts have retained their add rating but trimmed their price target on its shares ever so slightly to $13.90.

Based on the current Treasury Wine share price, this implies potential upside of 17% for investors.

In addition, Morgans is forecasting a 29 cents per share fully franked dividend in FY 2022. If we add this into the equation, the total potential return stretches to approximately 19.5%.

All in all, it appears as though the team at Morgans see scope for the Treasury Wine share price to be trading around the $14.00 mark come the end of the year.

Why is the broker bullish?

Morgans notes that the company’s recent annual general meeting update revealed that COVID headwinds have been weighing on its sales. However, the broker wasn’t surprised by this and remains positive on the future.

It commented: “Unsurprisingly, COVID has continued to impact some of TWE’s key channels, particularly the higher margin ones. However, with key markets starting to reopen, we expect sales to improve from here. We also highlight that TWE is performing well in what it can control and in markets not impacted by COVID.”

Overall, Morgans believes the company is well placed for growth in the coming years and feels the Treasury Wine share price is trading at an attractive level.

The broker explained: “We believe that the strategies TWE has in place will deliver solid earnings growth over coming years. Recent share price weakness represents a great buying opportunity in this high quality company.”

“The stock has been oversold and is looking good value trading on an FY23 PE of 22.2x compared to its long-term average of 25x,” it concluded.

The post Could the Treasury Wine (ASX:TWE) share price hit $14 by the end of 2021? appeared first on The Motley Fool Australia.

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• Why Harvey Norman, IAG, Pendal, and Treasury Wine are dropping
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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 owns shares of and has recommended Treasury Wine Estates Limited. 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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The De Grey Mining Ltd (ASX: DEG) share price won’t be going anywhere on Wednesday after the company initiated a $125 million capital raising.

Capital raising overview

The gold explorer is conducting a fully underwritten institutional placement to raise $125 million comprised of 113.6 million new shares representing 8.8% of existing shares on issue.

The offer price of $1.10 will represent a 9% discount to its last traded price of $1.21 on Tuesday, 19 October.

The De Grey share price is expected to remain in a trading halt no later than Friday, 22 October.

What’s the capital raising for?

The proceeds from the offer, together with existing cash, will be used to accelerate the development of De Grey’s “globally significant” Mallina Gold Project.

According to the capital raising presentation, uses of funds include:

• $77 million — exploration, infill and other drilling
• $17 million — pre-feasibility studies
• $8 million — operations support and capital expenditure
• $11 million — corporate
• $6.5 million — general working capital

The placement follows the release of De Grey’s Scoping Study for the Mallina Gold Project which highlighted average annual production of 473koz over the first five years and 427koz over 10 years. Average all-in-sustaining costs (AISC) are forecast at A$1,111/oz over the first five years and $1,224/oz over 10 years.

To add some perspective, Evolution Mining Ltd (ASX: EVN), which fetches a market capitalisation of about $6.8 billion, produced 680,788 ounces of gold in FY21 at an AISC of A$1,215/oz.

Management commentary

De Grey Managing Director Glenn Jardine commented on the placement:

De Grey is pleased to announce the launch of a fully underwritten Placement, which displays a high level of investor support for our growth strategy at the globally significant Mallina Gold Project.

The Placement provides De Grey with a significant capital runway to undertake exploration activities to expand the existing resource, and progress project development studies. De Grey will now have a significantly strengthened balance sheet which provides a strong platform to unlock further value at Mallina.

De Grey share price snapshot

The De Grey share price has had pretty smooth sailing this year given the weakness in gold prices.

It’s up 9% year-to-date compared to large-cap peers such as Northern Star Resources Ltd (ASX: NST) and Evolution Mining that have both tumbled 28% in 2021.

The post De Grey (ASX:DEG) share price halted amid $125 million cap raise appeared first on The Motley Fool Australia.

More reading

• Why is the De Grey Mining (ASX:DEG) share price higher on Friday?
• Which ASX shares are leading the way in the ASX 300 today?
• Which shares are the biggest winners and losers on the ASX 300 today?
• Why De Grey Mining, Gold Road, Nick Scali, & Redbubble shares are racing higher
• De Grey (ASX:DEG) share price jumps 4% on gold project update

Motley Fool contributor Kerry Sun 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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It has been a disappointing day so far for the Beach Energy Ltd (ASX: BPT) share price.

In morning trade, the energy producer’s shares are down 5% to $1.42.

Why is the Beach share price tumbling lower?

The catalyst for the weakness in the Beach share price on Wednesday has been the release of its quarterly report.

According to the release, Beach’s first quarter production was down 4% on the prior quarter to 5.7MMboe. This was driven largely by natural Western Flank oil decline, which was partially offset by increased nominations at Otway and the Cooper Basin joint venture.

Also potentially weighing on the Beach share price was its revenue for the quarter. Beach reported an 8% decline in sales revenue to $388 million despite an 11% increase in the realised oil price thanks to improving global product demand. This revenue decline was due to an 11% reduction in sales volumes to 5.76MMboe and a small decline in realised gas/ethane price.

Beach also revealed that its first quarter capital expenditure was $195 million, up 13% on the prior quarter. Management advised that its development, plant and equipment spend increased 14% as the offshore Otway drilling activities continued and increased drilling activity within the Cooper Basin joint venture and Western Flank.

Management commentary

Beach’s Managing Director, Matt Kay, acknowledged that production was softer during the quarter but remains positive on the future.

He said: “While production is slightly down for the quarter, we are in a phase where our focus is on executing our major growth gas projects. The Offshore Otway development drilling campaign now moves to the Thylacine targets, following successful results at Geographe 4 and 5. This is Beach’s largest ever drilling campaign and will be an important source of gas for the East Coast market.”

“A major milestone of the quarter was signing a HOA [heads of agreement] with bp for the sale of 3.75 MT of LNG from the Waitsia Stage 2 Gas Project – heralding our arrival into global LNG markets for the first time in our 60-year history. We also achieved first gas from the Kupe compression project, which means that asset, which is critical for New Zealand’s energy needs, will be able to maintain production at up to 77 TJ per day.”

“It is also exciting to commence an exploration campaign in the Western Flank, where we’ve already had two successful gas finds in this quarter – with an oil exploration campaign set for later in the year. This is to be followed by an uplift in production from first gas from the Geographe wells and the Cooper Basin development drilling in the second half of FY22,” he added.

The post Why the Beach Energy (ASX:BPT) share price is tumbling 5% lower today 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 Bruce Jackson.

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