The share price of S&P/ASX 200 Index (ASX: XJO) oil and gas producer Beach Energy Ltd (ASX: BPT) is plummeting on news that guidance for its Waitsia Stage 2 gas project has been scrapped.
Its previously targeted schedule and capital estimates for the project have gone out the window, the company revealed this morning.
The shake-up comes after construction group Clough entered voluntary administration on the back of a tight labour market.
The Beach Energy share price is $1.307 right now, 7.3% lower than its previous close.
Let's take a closer look at the news dragging on the ASX 200 energy share on Thursday.
Beach Energy shares tumble as project guidance binned
It's been a hair-raising few months for the Waitsia Stage 2 project, currently being developed by a joint venture between Beach Energy and Mitsui.
It all started in December when Clough – the original engineering, procurement, and construction contractor for the project – was placed into voluntary administration.
After weeks of uncertainty, Webuild signed on to deliver the project in February.
But it hasn't been smooth sailing since.
The ASX 200 energy producer today revealed progress at the Waitsia Gas Plant has been impacted by Western Australia's tight labour market.
Due to continuing uncertainty, Beach Energy said it "no longer considers it prudent or appropriate" to stand by its targeted schedule and capital estimates.
First gas at the project's second stage was previously expected this year. Beach Energy lifted its expected expenditure for the project to between $400 million and $450 million in February. That was up from its original forecast spend of $350 million to $400 million.
The ASX 200 energy share has vowed to undergo a review of the project's costs and schedule. Meanwhile, Webuild will look for opportunities to mitigate impacts and constrain uncertainties.
Beach Energy said the project remains "strongly value accretive and a key element in Beach's future growth". It will update the market on its review when it's finished.
Beach Energy share price underperforms ASX 200
Today's slump is just the latest blow felt by the Beach Energy share price.
The stock has tumbled 17% since the start of 2023. It's also trading 23% lower than it was this time last year.
For comparison, the ASX 200 has lifted 4% year to date and 1% over the last 12 months.
