Loss for Beach Energy as production drops
Beach Energy has reported a loss of over $450 million for the 2024 financial year amid $1.1 billion of impairment charges and a decrease in reserves.
The Adelaide-based company reported a $475.3 million net loss for the 2024 financial year, compared to a $400.8 million profit in the previous financial year.
While sales revenue was up by 9 per cent from FY23, gross profit was down 15 per cent to $503.3 million.
Beach Energy reported $1.2 billion in ‘other expenses’ in FY24, which included impairment charges for its Cooper Basin, SA Otway, Bassgas, New Zealand and Bonaparte assets. The previous financial year saw $14.8 million of expenses in this category.
The company reported production was down by seven per cent to 18.2 million barrels of oil equivalent (MMboe), attributing the decrease to lower nominations, weather events and natural field decline.
Beach Energy’s South Australian operating segments brought in the majority of revenue, with $1.1 billion.
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Managing director and CEO Brett Woods said that “despite some challenges, Beach delivered several operational and project milestones and a turnaround in safety performance in the second half”.
Beach reported its Enterprise development, which allows gas to flow from the offshore Enterprise reservoir to the onshore Otway Gas Plant, had been completed, though it said early pressure data had indicated a smaller resource pool than originally estimated.
“Disappointingly, over recent weeks we have observed pressure decline at Enterprise…we have moved rapidly to assess the impact,” Woods said.
Woods said the change had led the company to review its reserve revision.
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The company reported 205 MMboe of proven and probable reserves at the end of the financial year, a decrease of 18.2 MMboe.
Beach Energy reported its Otway Gas Plant operations were reliably performing at higher rates, with its Thylacine West flowline manufactured and transported to Australia, having a HI FY25 connection target.
The company’s Waitsia Gas Plant, which saw delays impact last quarter’s results, has seen construction progress and has an early CY2025 target for first gas.
As a result of a review undertaken in the second half of FY24, Beach Energy has reduced its headcount by 26 per cent, with an end goal of 30 per cent reduction by H1 FY25.
“The strategic review has established the pathway for returning Beach to being a low-cost operator while earning the right to grow,” Wood said.
The company’s total assets decreased to $5.5 billion in FY24. Beach’s total liabilities increased by $169.7 million to $2.2 billion, which it attributed to a $368.8 million increase of debt drawn.
The company declared a final dividend of 2.0 cents per share, resulting in full year dividends of 4 cents per share.
At the time of writing, Beach Energy’s share price had dropped by 10.88 per cent since markets opened, to $1.27.
