Beach Energy hits over 2-1/2-yr low on profit decline, downgrade in reserves (updated)

Beach Energy

12/08/2024 08:25

(Updates with final share moves, background and analyst
comments)
    By Rajasik  Mukherjee
       Aug 12 (Reuters) - 
    Australian oil and gas producer Beach Energy  BPT.AX ,
backed by billionaire Kerry Stokes, slumped to a more than
2-1/2-year low on Monday after it reported a decline in profit
and downgraded reserves for a key gas field in Victoria state.
    The company's shares closed 12.6% lower at A$1.245, hitting
their lowest level since Dec. 29, 2021, and the stock logged its
worst session since early April. It fell as much as 13.2%
earlier in the day.  
        The stock was the top loser in the benchmark ASX 200
benchmark  .AXJO .
  
    Beach reported a 11% year-on-year fall in annual net profit
after tax to A$341 million ($224.3 million). Its fiscal 2024
production fell 7% to 18.2 million barrels of oil equivalent
(MMboe) due to adverse weather conditions, it said.
        Beach also lowered reserves at its Enterprise project,
which allows raw gas to flow from the offshore reservoir to its
Otway gas plant in Victoria. 
  
        The company told investors that it had noted a decline
in pressure at the project, leading to a smaller reservoir than
initially expected. This fueled concerns that the firm's target
production would not be achieved.
  
        "We had assumed all material reserves downgrades had
been pre-announced in June, but the downgrade of Enterprise gas
volumes is disappointing," Jarden energy analyst Nik Burns said.
  
        Analysts at Citi warned investors of the condition of
the reservoir. 
  
        Since coming online, Enterprise's reservoir pressure has
declined more than anticipated, indicating a smaller container
size, Citi analysts said in a note.
  

        
  

($1 = 1.5200 Australian dollars)

 (Reporting by Rajasik  Mukherjee in Bengaluru; Editing by
Subhranshu Sahu and Sonia Cheema)
 ((Rajasik.Mukherjee@thomsonreuters.com;))