By David Winning
SYDNEY–Beach Energy reported a 20% drop in annual net profit while raising a forecast for completing the Waitsia Stage 2 natural-gas project in Western Australia for the second time in around six months.
Beach said its net profit totaled 400.8 million Australian dollars (US$261.7 million) for the 12 months through June, down from A$500.8 million a year ago. On an underlying basis, Beach’s net profit fell by 24% to A$384.8 million.
Beach produced 19.5 million barrels of equivalent in fiscal 2023, compared with 21.8 million BOE a year earlier. This decline in production more than offset the benefit of a slight rise in average realized prices to A$1.40 per barrel, from A$1.38/bbl in fiscal 2022. Overall, annual sales revenue fell by 7.5% to A$1.62 billion.
Directors of the company declared a final dividend of 2 Australian cent a share, up from the payout of 1 cent a year ago. That brought the total dividend for fiscal 2023 to 4 cents.
Beach encountered a series of challenges at key projects during fiscal 2023 that jolted investor confidence and hurt its stock. Earlier this year, the company experienced delays in commissioning one of the pipelines connecting some of the Thylacine wells to the Otway gas plant in Victoria state.
The company also had to pivot after the original contractor for the Waitsia Stage 2 natural-gas project in Western Australia became insolvent. Beach and joint-venture partner Mitsui hired Webuild as a replacement for Clough, while raising the estimated cost of completing the project to as much as A$450 million.
But in May, Beach withdrew a target date for completion of the Waitsia Stage 2 and said it could no longer be certain there wouldn’t be cost overruns given a tight labor market. Management had previously targeted first gas by the end of this year.
On Monday, Beach said it now expected first gas from Waitsia Stage 2 in mid-2024 and capex of A$450 million-A$500 million.
Beach also provided guidance for its 2024 fiscal year for the first time. The company said it expects to produce between 18 million and 21 million BOE in the 12 months through June, 2024, with capital expenditure forecast at between A$850 million-A$1.0 billion.
Meeting that guidance will be an early goal of new chief executive Brett Woods, who is due to join Beach on Feb. 21. Beach said last week that Bruce Clement will serve as interim CEO until Woods joins.
Write to David Winning at [email protected]
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