BPT - Beach Energy

[Dona Ferentes]

Youse both beat me to it.

Beach is undertaking a comprehensive strategic review which aims to re-set the base business, deliver increasing returns to shareholders, drive efficiency and earn the right to grow.

The first stage of the strategic review has been completed with a new asset-based organisational structure to be implemented by 8 April 2024. Several of the current executive team will be leaving Beach over the coming months, and we appreciate their efforts and support through this leadership transition.

New executive leadership appointments are underway and will be announced once all positions have been confirmed. Further outcomes from the strategic review will be announced over the coming months. To achieve efficiency and operational cost improvements, a targeted headcount reduction of 30% will be delivered across the business.

Beach Managing Director and CEO Brett Woods said “Our new organisational structure will bring sharpened focus on our core assets as we strive to become a dominant supplier of gas into Australia’s East Coast and West Coast markets.
“It is imperative that Beach regains its status as a safe and efficient, low-cost operator by achieving structural reductions in operating costs and sustaining capital expenditure, including the announced reduction in headcount.
“Decisions about headcount reductions are not made lightly as we are highly cognisant of the personal impact organisational change can have on individuals and their families. To minimise the personal impact we are committed to implementing the new structure as soon as possible”, Mr Woods

.... and market said OK

 

[divs4ever]

Waitsia Stage 2 update

Reference #016/24

Date 8 April 2024

Beach Energy Ltd (ASX: BPT, Beach) provides the following update in relation to Waitsia Stage 2. Waitsia Stage 2 schedule and cost estimate

As communicated at Beach’s FY24 half year results, the Waitsia Joint Venture1 had identified quality issues during pre-commissioning of systems at the Waitsia Gas Plant.

These issues, which included rebuilding compressors, and replacing valves and flanges, are now substantially complete.

Since then, further quality issues are emerging as pre-commissioning activities progress.

The Waitsia Joint Venture is currently working through an updated schedule and cost estimate, however, prior to that being completed, the extent of additional quality issues is to a point where current guidance on schedule and cost needs to be updated.

Based on Beach’s review of the contractor’s draft schedule and cost estimate, the following updates to Waitsia Stage 2 guidance are provided.
• Waitsia Gas Plant first gas by early-CY2025 (previously mid-CY2024), with a planned three-month ramp-up of production thereafter.
• Total capital expenditure of $600 – 650 million net to Beach (previously $450 – 500 million).
• Unavoidable processing costs based on the above first gas target will also be incurred in FY25.
Beach will continue to assess options to partially mitigate unutilised capacity under its arrangements.

2 Managing Director and CEO Brett Woods said “It is extremely disappointing to be continually encountering quality and execution issues given the late stage of the project.

Having to redirect existing onsite labour to remedial works is slowing the progress of pre-commissioning activities, resulting in further delay and cost increases.

“Beach is committed to driving the construction of Waitsia Gas Plant to its conclusion and will work closely with the operator and contractor to deliver this strategically important project”, Mr Woods said.

Next Waitsia LNG cargo Beach continues to utilise commercial arrangements to enable LNG cargo liftings prior to completion of the Waitsia Gas Plant.

In addition to the LNG cargo lifted in December 2023, Beach expects to lift one more LNG cargo in FY24.

1 Mitsui E&P Australia (Mitsui) 50% and operator; Beach 50% 2 As announced on 14 August 2023, potential unavoidable costs for transportation, processing and sale of LNG associated with a delay to timing of first gas from Waitsia Stage 2 of up to $65 million may be incurred in FY24.

To facilitate these cargoes, the Waitsia Joint Venture continues to explore mutually beneficial time swap opportunities with Western Australia gas market participants who have excess gas prior to completion of the Waitsia Gas Plant, in exchange for returning these volumes when they need them most.

Authorisation This announcement has been authorised for release by the Beach Energy Board of Directors

i hold BPT ( 'free-carried' )

i doubt the price will drop low enough to tempt me to add extra

 

[divs4ever]

and maybe i got that drop wrong

80 cents always tempts me with BPT and it dropped around 20% near the open

 

[finicky]

Market cap down approx $690m last I looked.
But capital expense blowout about $150m at this new estimate, but with some costing balls still in the air.
Also minimum 6 months delay in commissioning, so there will be significant setback of income.
So is $690m loss of market cap overdone is the question and will any more issues emerge.
Tempted to roll the dice and add. Might just watch for a while.

Held and Holding

 

[divs4ever]

Market cap down approx $690m last I looked.
But capital expense blowout about $150m at this new estimate, but with some costing balls still in the air.
Also minimum 6 months delay in commissioning, so there will be significant setback of income.
So is $690m loss of market cap overdone is the question and will any more issues emerge.
Tempted to roll the dice and add. Might just watch for a while.

Held and Holding

View attachment 174274

BPT was my second attempt at my crude 'channel trading strategy '

the strategy was to buy sub 80 cents , and sell half of each buy at over $1.20

i had to wait 3 years for the entry point , but finally got it , buying from 76.5 cents down to 44 cents and lightening to load @ $1.42

BUT can i do a similar long-term trend trade again ( with BPT ) .... in my lifetime

the last adventure went from 2015 to 2023

( i still hold some BPT )

 

[qldfrog]

I had an initial entry at 1.49 and topped it at 1.6 today..time will tell..I see oil going higher so for a producer..that should help

 

[Dona Ferentes]

Beach is another beneficiary:

Aust government's long-term views on the need for Australian-produced gas.
This week, Federal Resources Minister Madeleine King said (quoted by The Australian Financial Review):

We will need affordable gas to support energy reliability for households and businesses as we move to a more renewable grid. We need gas to support Australian manufacturing and Australian industry, and tens of thousands of Australian jobs in the manufacturing sector.

King noted that Australia's gas industry, "creates highly paid and skilled jobs. It pays for roads, hospitals, schools and our security."

King said Australia's producers supply some 20% of the world's gas. This delivered $72 billion of export income for Australia's economy in 2023-24.

And King highlighted how the government's gas plan can work to help the nation and its trading partners reach their emissions reduction goals.

"We need gas to help us achieve our commitment to net zero. Our trading partners depend on our gas to meet their commitments to net zero..."

.
after the April smash, BPT may be turning around:

 

[Ferret]

Another blow from this perennial underperformer in the strategic review released yesterday. Reserves revised down for numerous fields.

Share price down 2% yesterday and nearly a further 6% so far today.

Watch out for a further reaction when the 30 June 2024 reserves and resources statement is released on 12 August.

 

[finicky]

Held and Holding, however ..

Morning report from Market Matters:

Beach Energy Ltd (BPT) $1.46​

BPT fell 4.25% on Wednesday following downgrades from Macquarie, Jarden, and Citi—a painful trifecta for the oil and gas company after it presented its Strategic Review and plan to become Australia’s leading domestic energy company on Tuesday. The positives from the presentation included plans to reduce their cost base aggressively, ultimately cutting their Free Cash Flow (FCF) breakeven from $US54/barrel to under $US30/barrel after FY25 – these seemed very optimistic numbers fraught with danger.

• Unfortunately, the negatives continued to outweigh the positives for BPT with a net 2P reserve downgrade across all key assets, plus it guided to FY25 production being ~20% below consensus.
• We believe the negative sentiment toward Tuesday’s news will likely persist as it compounds early April’s major cost blowout. Hence, we see no reason to catch this falling knife.

BPT
MM is neutral at best towards BPT

 

[divs4ever]

Held and Holding, however ..

Morning report from Market Matters:

Beach Energy Ltd (BPT) $1.46​

BPT fell 4.25% on Wednesday following downgrades from Macquarie, Jarden, and Citi—a painful trifecta for the oil and gas company after it presented its Strategic Review and plan to become Australia’s leading domestic energy company on Tuesday. The positives from the presentation included plans to reduce their cost base aggressively, ultimately cutting their Free Cash Flow (FCF) breakeven from $US54/barrel to under $US30/barrel after FY25 – these seemed very optimistic numbers fraught with danger.

• Unfortunately, the negatives continued to outweigh the positives for BPT with a net 2P reserve downgrade across all key assets, plus it guided to FY25 production being ~20% below consensus.
• We believe the negative sentiment toward Tuesday’s news will likely persist as it compounds early April’s major cost blowout. Hence, we see no reason to catch this falling knife.

BPT
MM is neutral at best towards BPT

have already caught the falling knife here ( my theoretical av. SP is 52.5 cents ) recovered the investment cash

am willing to go for a second adventure , but not until sub 80 cents , for the next 'average down ' adventure

but i suspect the traders among us , will have much more fun than me

 

[Garpal Gumnut]

I don't know about the rest of you but I have found the Energy sector over the last 2 years to be a medium sized drain on my SMSF portfolio's value.

I never have and never will be looking at BPT for a LT investment although as @divs4ever notes it may be worthwhile as a trading stock.

gg

 

[Rabbithop]

have already caught the falling knife here ( my theoretical av. SP is 52.5 cents ) recovered the investment cash

am willing to go for a second adventure , but not until sub 80 cents , for the next 'average down ' adventure

but i suspect the traders among us , will have much more fun than me

Oh mine, that low. Thought I will be interested to take a good look around 1.20 Mark.

 

[finicky]

Here's what Greg Canavan (fat tail investment advisory) was saying about Beach on 11 June, before the major strategic review 18 June.
His current preferred exposure is WDS and has reiterated buy on WDS and was retaining hold on BPT (11 June)
Greg is very bullish on energy and keen on the fossil types.

---

Why oil prices are about to turn higher​

By Greg Canavan

​ Beach Energy [ASX:BPT] is higher risk given it’s all about the Waitsia LNG project.​

At full capacity, Waitsia should produce nearly 15 million barrels of oil equivalent. At 50% ownership, it will add nearly 7.5 million barrels to Beach’s annual production, representing an increase of close to 40% on FY24 production.
That is a significant production increase in what I expect to be a bullish energy price environment.
Provided Beach can complete the project without any more major hiccups, increased production and earnings should begin to flow through in the second half of FY25 and into FY26.
But it’s a decent proviso given the delays and cost blowouts seen so far.
We’ll get an update on this and the overall business next week (18 June) as the company presents the results of a major strategic review.
One of the best energy analysts in the country, Saul Kavonic, seems to think Beach is on the right track. Quoted in The Australian, he said:

‘We see upside at Beach Energy from rising domestic gas price realisations, ramp up at Otway and Waitsia, a strong cost-out program, capital management ramp-up, the potential for high margin exploration discoveries and possible mergers and acquisitions from 2025.
‘The Beach Energy turnaround story is finally gaining momentum.’

 

[divs4ever]

the trick for me in the oil/gas sector is to get the share price average down low ... and WAIT

now OTE turned into ISX and i escaped with a very nice profit ( about 50X )

LNC plunged one day while i was stalking BPT , so i grabbed some ( LNC )

that went OK until Bond decided to list on the Singapore Stock Exchange , which pushed me into cash and rapidly into BKL ( which proceeded into China-mania )

i bought BPT from 76.5 cents down to 40 cents recovered the investment cash ( but kept some shares on the way up, selling down in April 2023 @ $1.42)

now WPL ( now WDS ) is in the green but not that exciting

and TEG is the flea-bag of the pack

now the hilarious part of all this is .... i know crap about oil and gas ... but my math skills aren't bad ( and i try not to push my luck too far )

 

[finicky]

BPT @ 1.455

GAp down break of short term uptrend support for Beach. Looks like a bearish flag break?

Seeing a possibilty of an undoing of previous rally with a target maybe of 1.30 where I'm likely to add, absent stock specific bad news. WDS also doing poorly so I'm guessing it's maybe a reflection of weakening crude prices, even though neither WDS or BPT are directly affected by spot crude - open to being corrected on that.

Held
Holding
DAILY

 

[qldfrog]

BPT @ 1.455

GAp down break of short term uptrend support for Beach. Looks like a bearish flag break?

Seeing a possibilty of an undoing of previous rally with a target maybe of 1.30 where I'm likely to add, absent stock specific bad news. WDS also doing poorly so I'm guessing it's maybe a reflection of weakening crude prices, even though neither WDS or BPT are directly affected by spot crude - open to being corrected on that.

Held
Holding
DAILY
View attachment 181410

probably a fall in sympathy with WDS
I hold both

 

[finicky]

Yeah could be some value buying ahead. Greg Canavan reiterated his buy for WDS today and I might add there too. Greg likes the strategic prospects for Woodside's Tellurian acquisition in the U.S.

Lots of targets at the moment and don't want to run down cash reserves too much. Have to have something for the big one.

Held
Looking for lower

 

[divs4ever]

my entry point target was sub 80 cents in 2012 , i finally got some in 2015 @ 76,5 cents and bought down as low as 40 cents

and my top-up target is still sub 80 cents

sometimes good things come to those who wait

 

[finicky]

Interesting stuff in the Lowell Fund (LRT) investor communications. Almost worth the price of admission (they have high fees). Got a 12% unfranked annual distribution from them today, albeit down 7% on buy price.

This screenshot from June.
Bit by bit the Labor type governments, which are hostage to greens and 'net zero', are caving to real world demands - see highlighted remarks re N.Z govt after Jacinda and Vic govt.
Also as an aside, coal and India.

BPT Held

 

[divs4ever]

Interesting stuff in the Lowell Fund (LRT) investor communications. Almost worth the price of admission (they have high fees). Got a 12% unfranked annual distribution from them today, albeit down 7% on buy price.

This screenshot from June.
Bit by bit the Labor type governments, which are hostage to greens and 'net zero', are caving to real world demands - see highlighted remarks re N.Z govt after Jacinda and Vic govt.
Also as an aside, coal and India.

BPT Held

View attachment 181753

LRT caught my eye yesterday ( i do not hold )

and haven't researched it yet , invests in some places/resources i have avoided so far , will have to think hard

but yes the clipping has some interesting info ( for the OZ investor/trader )