The Beach Energy Ltd (ASX: BPT) share price has opened slightly up at $2.36 per share, and is one to watch this morning after reporting a strong first quarter result before market open.
What was in the Beach first quarter result?
Beach reported its Western Flank oil production is up 9% to 1.6 million barrels.
The Aussie oil and gas group’s first-quarter FY20 production of 6.55 million barrels is down 6% on the previous quarter, however, the company’s Otway sale on 31 May meant that was a 1% increase on Q4 2019.
Beach’s drilling success rate remains high, with the company reporting 59 wells spudded during the period. The company reported a drilling success rate of 83%, which included a 73% success rate on 26 appraisal wells.
A new gas discovery prior to the end of the quarter should also boost shareholders’ hopes higher.
Was it all good news for Beach Energy?
The company’s sales volumes fell 12% on Q4 2019 levels to 6.76 million barrels. It was a similar story with sales revenue, which came in down 13% to $438 million.
Despite an increase in oil revenue, lower sales volumes from its 40% Otway stake sale and lower pricing hurt Beach’s revenues.
Beach’s realised oil price edged 1% higher on last quarter to $103.2 per barrel in a positive for the group; however, this was offset by lower average realised prices for both LPG and Condensate. The company’s LPG levels plummeted 29% on the prior quarter to $462 per tonne, while Condensate fell 9% to $81.3 per barrel.
First-quarter capital expenditure came in 33% higher on Q4 2019, which Beach said is part of its “multi-year investment program”.
The company remains well capitalised in a net cash position with $668 million in liquidity, as at quarter-end.
What’s ahead for Q2 2020?
Beach Energy expects to commence its Victorian Otway drilling campaign next quarter as operations ramp up, after wrapping up its drilling activities at Dombey-1 in the SA Otway Basin.
What about FY20 guidance?
Beach’s FY20 guidance remained unchanged as at quarter-end. The company expects to see oil production of 27 million to 29 million barrels of oil equivalent.
Capital expenditure is expected to be between $750 million and $850 million with underlying earnings before interest, tax, depreciation and amortisation of $1.25 billion to $1.40 billion.
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