The Beach Energy Ltd (ASX: BPT) share price is back in the red today following bittersweet news of its Bass Basin activities.
Though, it’s far from lonely. It’s slipping alongside many of its S&P/ASX 200 Energy Index (ASX: XEJ) peers.
At the time of writing, the Beach Energy share price is $1.61, 2.72% lower than its previous close.
Let’s take a closer look at what might be weighing on the oil and gas producer’s stock on Friday.
Beach Energy share price slips on Bass Basin news
The Beach Energy share price is continuing its slide for a third consecutive session after the company announced it’s deferring a final investment decision for the Trefoil opportunity. The decision was previously due in the first half of financial year 2023.
But not all is dire. The company has decided to prioritise a newly identified fault block instead.
Reprocessing of existing 3D seismic over the Yolla field has revealed Yolla West – a fault block able to be drilled from the company’s Yolla platform.
The company notes the fault block’s chance of success is approximately 50%. But if the odds line up in its favour, gas from the fault could be connected to the Lang Lang Gas Plant shortly after drilling.
Thus, Beach Energy believes Yolla West represents “a lower-cost, nearer-term and higher-returning investment opportunity”.
It is hoping to start drilling at Yolla West over the summer of 2022 and 2023.
Energy sector struggles despite higher oil prices
The Beach Energy share price is dipping despite higher oil prices today.
The price of Brent crude oil price increased 2.7% to US$112.04 a barrel overnight while the US Nymex crude oil price rose 2.4% to US$112.21 a barrel, according to CommSec.
However, reports of an unclaimed glut of oil from Iran might have dampened sentiment in the energy sector.
China has been snapping up cheap oil from Russia since the West placed sanctions on the commodity following the invasion of Ukraine earlier this year, reports Reuters.
That has reportedly left more than 40 million barrels of Iranian oil stranded off the coast of Singapore awaiting buyers.
Right now, the ASX 200 energy sector is the S&P/ASX 200 Index (ASX: XJO)’s worst-performing sector.
It’s recording a 1.68% drop. Meanwhile, the ASX 200 is up 1.06%.
The sector’s fall is being led by the Woodside Petroleum Limited (ASX: WPL) share price. It’s currently down 3.14%.
The Beach Energy share price is the sector’s second-worst performer and stock in Santos Ltd (ASX: STO) is coming in third.