Beach Energy share price tumbles 9% as production slides

What did Beach Energy report?

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Key points

  • The Beach Energy share price is tumbling 9% 
  • Underlying earnings and profit increased, but production was lower 
  • Beach also forecast operating costs to jump in FY22 

The Beach Energy Ltd (ASX: BPT) share price is falling today amid the company's FY22 earnings.

The energy company's share price is currently trading at $1.69, an 8.65% fall. For perspective, the  S&P/ASX 200 Index (ASX: XJO) is rising 0.56% today.

Let's take a look at what Beach Energy reported to the market.

Beach Energy reports

Key points in Beach Energy's results include:

  • Production fell 15% to 21.8 million barrels of oil equivalent (MMboe)
  • Underlying EBITDA leapt 17% on FY21 to $1.1 billion
  • Underlying NPAT surged 39% to $504 million
  • Total revenue jumped 13% to $1.8 billion
  • $765 million net cash position and total liquidity
  • A dividend of 1 cent per share to be paid on 30 September

What else did the company report?

Beach Energy's underlying NPAT lifted despite lower production due to higher realised gas prices and revenue.

At the end of FY22, Beach had 283 MMboe of 2P oil and gas reserves, down 17% compared to the previous year. These reserves fell due to the Trefoil development getting pushed back and less exploration.

Unit field operating costs are forecast to rise from $11.74 per boe in FY22 to between $12 to $13 per boe in FY23.

Beach Energy announced a new emissions intensity reduction target of 35% by 2030.

The company completed offshore Otway Basin drilling, delivering a new gas discovery at Artisan field and six development wells within the Geographe and Thylacine fields.

Construction and development of the Waitsia stage two project in the Perth Basin is now underway.

Management commentary

Commenting on the results, the chief executive officer said:

Despite lower production, increased demand and pricing for our products saw a rise in earnings and cash flows.

Beach's multi-basin strategy is to develop the assets within our portfolio, keep our plants processing at higher rates for longer, and in doing so maximise gas supply.

The benefits of this strategy were clearly evident in our financial results this year

What's ahead

Beach is forecasting production of between 20 to 22.5 MMboe in FY23 compared to 21.8 MMboe in FY22.

Capital expenditure is predicted to be between $800 million and $1 billion, in comparison to $872 million in FY22.

Further commenting on the outlook for FY23, Engelbrecht said:

We have a busy schedule in FY23 completing the major projects that will deliver material free cash flow from FY24.

Key activities include connecting the Thylacine and Enterprise wells to the Otway Gas Plant, Waitsia stage two progress, Perth basin exploration drilling, ongoing Cooper Basin drilling, and planning for exploration and development activity in the Otway, Bass and Taranaki basins

Beach Energy share price snapshot

The Beach Energy share price has soared 53% in the past year, while it has lifted 38% year to date.

In the past month, Beach Energy shares have climbed 8%.

For perspective, the ASX 200 index has shed nearly 7% in the past year.

Motley Fool contributor Monica O'Shea 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 Scott Phillips.

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