Beach Energy Ltd (ASX: BPT) shares are on the move on Friday morning.
At the time of writing, the ASX 200 energy stock is up 4% to $1.27.
Why are Beach Energy shares racing higher?
Investors have been buying the energy producer's shares on Friday after it released its first quarter update.
For the three months ended 30 September, Beach Energy reported a 10% quarter on quarter increase in production to 5.2 MMboe. This reflects the completion of the Enterprise development, which underpinned a 24% increase in Otway Basin production. In addition, its successful wellbore intervention program delivered an 81% increase in Bass Basin production.
This led to revenue coming in at $427 million for the quarter, which is in-line with the prior quarter. Management notes that higher gas volumes replaced Waitsia LNG swap cargo revenue from the previous quarter. Beach Energy averaged a realised gas price of $10.3/GJ, which was in-line with the prior quarter.
Management notes that it has made strong progress on cost and capital reductions. Its headcount reduction is now 27%. This is expected to increase to 30% by the end of the second quarter.
At the end of the quarter, the ASX 200 energy stock's net gearing stood at 14%. This is down from 15% at the end of June. It had $465 million available liquidity.
The company also notes that it has now appointed Ryan Stokes as its permanent chair. He has been interim chair since this time last year.
What was the market expecting?
Goldman Sachs laid out its expectations earlier this week. It said:
We expect mixed results from BPT with our 5.2 mmboe production estimate 4% above Visible Alpha Consensus Data driven by higher observed gas production at Otway & Lang Lang, though our A$0.4 bn revenue estimate is 7% below consensus where we do not assume an LNG cargo was swapped/sold this quarter.
As you can see above, Beach Energy has delivered production in line with Goldman's estimates and beaten on its revenue estimate of $396 million.
Conversely, it has beaten the consensus estimate for production, but delivered revenue in line with the consensus estimate of $426 million.
Overall, the market seems happy, which explains why Beach Energy shares are rising today.
Management commentary
The ASX 200 energy stock's managing director and CEO, Brett Woods, said:
Beach made good strides in project execution and delivery during the first quarter of FY25. Key project highlights included higher production from completion of the Enterprise development and optimisation initiatives, nearing first gas from the Thylacine West development wells and first CO2 injection at Moomba CCS.
The potential of our asset portfolio was on display during the first quarter. With new leadership, strengthened governance and our focus on core East and West Coast markets, Beach is uniquely positioned for disciplined growth as we provide the transitional energy desperately needed by Australia.
