Life’s a beach, life’s a gas

The Kerry Stokes dominated Beach Energy (ASX:BPT) yesterday revealed its best quarterly earnings off the back of the surge in global oil and gas prices since the invasion of Ukraine in late February and the harsh sanctions being applied by the West to Russia and many of its exports and finances.

As well, the company also rode the local shortage of gas for consumers and business that has seen a surge in local prices since late autumn.

Beach said revenues during the June quarter of 2022 totalled $504 million, up 10% on the $458 million the oil and gas company reported in the third quarter of 2021-22.

More importantly, the 4th quarter figure was up nearly 20% from the $421 million for the same quarter of 2020-21.

That saw full year revenues rise 15% to $1.749 billion from 2020-21.

(Later today (Thursday) Woodside Petroleum (ASX:Wds) will confirm a surge in earnings from higher gas and oil prices, as well as the early boost from the purchase of BHP Petroleum).

For the three months ended 30 June, Beach delivered a 9% increase in production to 5.6 million barrels of oil equivalent (MMboe). The company said this was driven by higher customer gas demand from the offshore Otway Basin.

For the full year, the company said it achieved its guidance with production of 21.8 MMBoe.

That was sold at an average realised price of $78.20 a barrel (across all products) and with costs coming in at the low end of the $11.50 to $12.50 a barrel range, the company’s earnings should be close to a record when reported in August.

At June 30, the company had a net cash position of $165 million, which was up from $7 million three months earlier.

Beach CEO Morné Engelbrecht was confident about the performance and what it meant for the coming year.

” Our results this quarter against the backdrop of the current energy crisis validate this strategy. This quarter Beach supplied an additional 3.5 PJ (0.6 MMboe) of gas from the Otway Gas Plant to Australian domestic retailers, thanks in part to recent commissioning of two Geographe development wells.

“We enter FY23 with strong momentum as we complete our major development projects and deliver more new gas to the domestic market. In the Otway Basin, we will connect four offshore Thylacine development wells and the Enterprise discovery to the Otway Gas Plant to bring production rates back to full capacity.

“In the Perth Basin, Waitsia Stage 2 is developing material gas volumes for both domestic and global LNG markets.

“Beach remains focused on delivering our major Otway and Perth Basin development projects,” he said.

“We are also planning for our next phase of growth, including exploration in the Perth, Otway, and Cooper basins, and we do so with a Balance Sheet capable of supporting our growth aspirations.”

Kerry Stokes main listed company Seven Group Holdings owns 30% of Beach.

Beach shares rose 2.8% to $1.825.