Beach Energy's FY24 Financial Results Highlight Strong Performance and Key Milestones
BPT (BPT) Share Update August 2024 Sunday 11th
Beach Energy Reports Solid FY24 Financial Results Amid Major Project Deliveries
Beach Energy Limited (ASX: BPT) has released its FY24 full year results, showcasing solid financial performance and significant progress on major projects despite various challenges.
Instant Summary:
- Sales revenue increased by 9% to $1.8 billion.
- Underlying EBITDA decreased by 3% to $950 million.
- Production dropped by 7% to 18.2 MMboe.
- Net gearing at year-end was 15%, with $437 million in available liquidity.
- No recordable injuries for the last eight months.
- Enterprise field came online with peak rates of up to 68 TJ/day.
Financial Performance
Beach Energy reported a 9% increase in sales revenue, reaching $1.8 billion, supported by early Waitsia swap cargoes and higher realized prices. However, underlying EBITDA decreased by 3% to $950 million, and underlying NPAT fell by 11% to $341 million. Despite these declines, the company's financial position remains strong with $437 million in available liquidity and a net gearing of 15% at year-end.
Production for the year was 18.2 MMboe, a 7% decrease from the previous year, attributed to lower customer nominations, weather events, and natural field decline. Despite lower production, sales volumes increased by 3% to 21.3 MMboe.
Operational Highlights
Beach Energy achieved several operational milestones, including a turnaround in health, safety, and environment (HSE) performance, with no recordable injuries for the past eight months. The Enterprise field, which came online on 12 June 2024, has flowed at peak rates of up to 68 TJ/day. However, early pressure data indicates a smaller resource pool than originally estimated, leading to a 2P reserves revision of 11.5 MMboe.
The company also made significant progress on major projects. The Thylacine West flowline was manufactured and transported to Australia, with connection targeted for the first half of FY25. The Waitsia Gas Plant construction is progressing, with first gas expected in early CY2025. Additionally, Beach Energy reported two new gas discoveries at Redback Deep and Tarantula Deep.
Strategic Review and Sustainability Initiatives
Beach Energy undertook a strategic review to reset its base business, focusing on operational performance, project delivery, and cost reduction. The company aims to reduce its free cash flow breakeven oil price from US$54/bbl to below US$30/bbl. A new organizational structure is in place, and executive leadership appointments are underway.
Beach Energy is also investing in sustainability initiatives to support the energy transition. The Moomba CCS project is nearing completion, with the first CO2 injection targeted for the first half of FY25. The company released its inaugural Climate Transition Action Plan, outlining its commitment to sustainability.
FY25 Guidance
For FY25, Beach Energy has provided the following guidance:
- Production: 17.5 - 21.5 MMboe
- Capital expenditure: $700 - 800 million
- Depreciation and amortisation: $400 - 450 million
The company plans to deliver structural cost savings, work with joint venture partners to commission key projects, and continue its focus on health, safety, and environment.
Beach Energy's solid financial performance and progress on major projects are likely to positively impact its stock. The company's strong liquidity position and focus on cost reduction will be reassuring to investors. However, the revision of 2P reserves and production challenges may temper some of the positive sentiment.
Investor Reaction:
Analysts are likely to view Beach Energy's results positively, given the strong financial performance and progress on key projects. The company's efforts to reduce costs and improve safety performance will also be well-received. However, the revision of 2P reserves and production challenges may raise some concerns among investors.
Conclusion:
Beach Energy's FY24 results demonstrate its resilience and ability to deliver on major projects despite challenges. Investors should monitor the company's progress on its strategic initiatives and sustainability projects. Beach Energy's strong financial position and focus on cost reduction make it a compelling investment opportunity.