The Beach Energy Ltd (ASX: BPT) share price is fighting back after losing more than 8% on Monday morning, amid the release of the company's FY23 results.
This compared to a fall of 0.47% for the S&P/ASX 200 Index (ASX: XJO).
Shares in the oil and gas producer are now trading for 1.613 a share, down 3.44% on Friday's closing price, after dropping as low as $1.53 apiece in early trade.
Let's take a look at ASX energy share's FY23 results in more detail.
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Beach Energy share price falls on profit decline and guidance
- Sales revenue declined 8% to $1.62 billion
- Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) fell 12% to $982 million
- Underlying net profit after tax (NPAT) declined 24% to 385 million
- Operating cash flow down by 24% to $929 million
- Statutory profit down by 18.5% to $403.8 million
- Annual dividend per share of 3 cents, up 50%
The decline in revenue was largely down to a reduction in sales volume, with a fall of 7% to 20.7 million barrels of oil equivalent (MMboe). Production volume dropped by 11% in FY23 to 19.5 MMboe.
The average realised oil price per barrel was $138, while the average realised gas price per GJ went up 9% to $8.80.
Beach Energy explained that underlying profit fell because of higher costs related to higher third-party purchases and accelerated Cooper Basin joint venture activity.
There were also higher financing costs and higher depreciation and amortisation charges because of higher production from the higher-depreciating Otway Basin.
What else happened in FY23?
Progress on the company's projects could have a sizeable impact on the Beach Energy share price in the future because they will boost production.
Beach Energy said the Thylacine North wells were connected in the fourth quarter of FY23, which will supply "critical gas for the domestic market".
The Enterprise pipeline has been constructed and installed. It's awaiting final approvals to deliver the first gas in the second half of FY24.
Stage two of Waitsia is targeting first gas for the middle of the 2024 calendar year, for a total net capital expenditure of between $450 million to $500 million.
The ASX energy share also said the Perth Basin gas exploration campaign has commenced and the rig is mobilising for the Kupe South 9 development in New Zealand.
What did Beach Energy management say?
The Beach Energy interim CEO commented:
Our significant investment in organic growth over recent years has started to bear fruit. Connection of the Thylacine North wells enabled an increase in Otway Gas Plant well deliverability of ~70 TJ/day to ~170 TJ/day. This is a critical new source of gas supply for the East Coast market.
Implementation of our new Capital Management Framework delivered franked dividends of four cents per share, a 100% increase from the prior year. The framework provides a transparent pathway for increased shareholder returns as we deliver our growth projects.
Progress on decarbonisation was spearheaded by the nation's biggest emissions reduction project, Moomba CCS, which is scheduled for first CO2 injection in 2024. Once operational, it will have the capacity to store up to 1.7 million tonnes of CO2 annually, making a substantial contribution to mitigating emissions.
What's next for Beach Energy?
In FY24, Beach is focused on delivering several of its growth projects mentioned above, including connection of the Enterprise gas discovery and progressing Waitsia to first gas.
FY24 full-year guidance for production is expected to be between 18 MMboe to 21 MMboe. The mid-point of this guidance would see FY24 production being very similar to the FY23 production of 19.5 MMboe.
Capital expenditure for the year ahead is guided at between $850 million to $1 billion.
The Beach Energy share price reaction today may be taking into account a possible one-off expense in FY24 of up to $65 million in relation to "potential unavoidable costs for transportation, processing and sale of LNG in the event of a delay to timing" of the first gas from the Waitsia stage 2 project.
The ASX energy share is "maturing" a number of options to partially mitigate unutilised capacity under these arrangements.
Beach Energy share price snapshot
Over the last year, the Beach Energy share price is down around 4%, while the ASX 200 has gone up 3.5%.
