The Beach Energy Ltd (ASX: BPT) share price is in the red on Wednesday after the company revealed its production slumped 8% in the first quarter of financial year 2023.
The S&P/ASX 200 Index (ASX: XJO) oil and gas producer's activities were hampered by natural field decline, Cooper Basin flooding, and unplanned outages.
Right now, the Beach Energy share price is $1.4525, 5.68% lower than its previous close.
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Beach Energy share price falls 6% as production, sales tumble
Here are the key takeaways from the energy giant's quarterly report:
- Production fell 8% on the prior quarter to 5.2 million barrels of oil equivalent
- Sales revenue dropped 20% to $405 million
- Sales volumes fell 10% to 5.3 million barrels of oil equivalent
- Realised oil price dropped 6% to $157.10 a barrel
- Realised gas price fell 3% to $8.5 per gigajoule
Beach Energy's quarterly production was dinted by flooding in the Cooper Basin, which caused shut-in of some wells and delays of well connections.
Meanwhile, national field decline continued in the Otway Basin amid continued high gas demand.
The company also recognised a one-off, non-cash revenue impact of $32 million due to aligning the Cooper Basin joint venture (JV) revenue recognition accounting treatment.
It ended the quarter with $638 million of liquidity and $38 million net cash. Its cash position was lower due to the timing of receipts, payment of full-year dividend, and higher tax and capital expenditure.
What else happened in Q1?
Beach Energy pushed forward with its financial year 2023 drilling campaigns in the first quarter.
So far, it's clocked up one Western Flank oil discovery and four cased and suspended oil appraisal and development wells. It currently boasts a 100% success rate from 29 Cooper Basin JV oil and gas wells. Finally, five of six Waisia stage 2 development wells are now drilled and completed.
It also signed a sale and purchase agreement with bp [BP Singapore Pte. Limited, a BP subsidiary] for all Waitsia Stage 2 LNG volumes.
The Beach Energy share price fell nearly 14% over the quarter just been.
What did management say?
Beach Energy CEO Morné Engelbrecht commented on the news driving the company's share price lower today, saying:
Beach has started the new financial year with strong momentum on delivery of our major projects, with production in the field being challenged from flooding in the Cooper Basin and unplanned production outages.
We achieved key milestones for our major growth projects in the Otway and Perth basins. These projects differentiate Beach by delivering material growth in production and free cash flow in the near-term.
[T]his quarter we will commence gas exploration drilling in the Perth Basin, the most exciting exploration play in Australia. We look forward to communicating the results over the next 12-18 months of drilling.
What's next?
The company is progressing its major growth projects, expected to grow its East Coast gas market share by more than 30% and transform its LNG revenue in financial year 2024.
The company has also recently announced a new equity emissions reduction framework, targeting a 35% reduction in scope 1 and 2 emissions intensity by 2030.
Beach Energy share price snapshot
The Beach Energy share price has been outperforming of late.
It has gained 9.5% since the start of 2022. It's also trading 4.3% lower than it was this time last year.
Meanwhile, the ASX 200 has fallen 10.5% year to date and 7.9% over the last 12 months.
