Beach Energy shares drop after tightening production guidance
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More news: Shares in Beach Energy dropped 4% to $1.46 in early trading after the oil and gas producer narrowed its full-year production guidance despite output climbing during the first half.
Jarden analysts counted the overall result as negative despite the figures being in line with expectations, noting the "surprisingly low 1H dividend" and said the production guidance update implies consensus downgrades. Jarden has a 'neutral' rating on the company with a price target of $1.42.
RBC Capital Markets analysts said the result was in line with forecast but the delivery of Waitsia and Otway production growth remain key drivers to lowering the company's free cash flow break even and operating costs. RBC has a 'sector perform' rating on the stock with a price target of $1.35.
What they said: "While BPT has maintained the target of first gas sales in the June 2025 quarter, there was no actual mention fuel gas was in the plant yet ... very light payout vs dividend policy; may potentially suggest company wants to see Waitsia up and running before returning more cash to shareholders," Jarden analysts said in a note
Beach Energy narrows production guidance as first-half profit soars
The news: Oil and gas producer Beach Energy has tightened its full-year production guidance, after output climbed during the first half on the back of strong performance.
The numbers: The company swung to a statutory profit of $222.3 million for the six months to December 2024, compared to a $345.1 million net loss a year ago.
Underlying profit rose 37% to $236.9 million, while revenue was up 6% to $1.04 billion. It will pay an interim dividend of 3 cents a share.
The context: Beach Energy said production was up 15% from a year ago to 10.2 million barrels of oil equivalent (Mboe) as Otway basin output more than doubled and the Bass basin production jumped 67%.
The company has narrowed its full-year production guidance and now expects it to be in the range of 18.5 to 20.5 Mboe, compared to between 17.5 and 21.5 million earlier.
Beach, 30% owned by Kerry Stokes’ Seven Group, has been looking to boost production but has been previously troubled by delays at its key Waitsia project in the Perth Basin.
The sources: ASX announcement, Jarden research, RBC Capital research
