Down 30% in 12 months, should I dive into Beach Energy shares?

Beach Energy Ltd (ASX: BPT) shares have taken a bit of a beating this week.

So much so, the energy producer's shares are now down almost 30% over the last 12 months.

This leaves them trading within a fraction of a 52-week low.

Should you buy Beach Energy shares?

The company is certainly going through a difficult period. Last month it withdrew its Waitsia Stage 2 guidance and earlier this week it released an update on the Trigg 1 gas exploration well.

Unfortunately, that update revealed that the reservoir is interpreted to be tight with insufficient porosity and permeability to flow gas. As a result, Trigg 1 will be plugged and abandoned.

As disappointing as this all is, a number of brokers remain positive on the Beach Energy and see a lot of value in its shares.

One of those is Bell Potter. Last month, responding to the Waitsia Stage 2 news, the broker said:

Waitsia Stage 2 is a key component of BPT's near-term production growth, adding around 7.8MMboe/year net capacity (for context FY23 production guidance is 19.0-20.5MMboe). Delays to the project will mostly impact FY24 production and earnings estimates and make providing FY24 guidance problematic for BPT. However, the impact on valuation is less pronounced with production deferred to later periods.

In light of this, the broker has a buy rating and $2.05 price target on Beach Energy's shares. This implies potential upside of 52% for investors from current levels.

Bell Potter also explained why investors should remain positive despite these setbacks. It said:

BPT has a strong, fully funded production growth outlook, diversified across five energy basins and across four separate gas markets, including LNG. BPT is rolling-off peak capex into a step-change in production and free cash flow in FY24, has a strong balance sheet, and has a capital management framework with franked dividends a key component. With a positive view on Australian east coast gas and LNG markets, and BPT's strong earnings growth outlook, we maintain a Buy recommendation.