Beach Energy to slash jobs

Adelaide-based Perth Basin gas play Beach Energy will slash its workforce by 30 per cent, following a strategic review into its operations in the east and west coast gas markets.

Kerry Stokes-backed Beach revealed the news to the ASX today, pitching it as a reset of the company’s base business that would deliver increasing shareholder returns while driving efficiency and growth.

The jobs cut will include those at an executive level, with the company flagging a major cleanout of 30 per cent of its workforce.

Beach is understood to have around 550 employees on its books.

“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,” the company said.

“New executive leadership appointments are under way and will be announced once all positions have been confirmed.

“Further outcomes from the strategic review will be announced over the coming months.”

The review followed the appointment of new managing director and chief executive Brett Woods in January, after the sudden exit of former chief executive Morne Engelbrecht in August last year.

Ryan Stokes, whose Seven Group Holdings has a 30 per cent interest in Beach, became the company’s interim chair in November.

A former Santos executive, Mr Woods said the company had little choice but to cut jobs as it seeks 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,” he said.

“Decisions about headcount reductions are not made lightly as we are highly cognizant 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.”

Beach reported a statutory half-year loss of $345 million in the second half of 2023, driven by a write-down of its Cooper Basin assets in south-west Queensland and north-east South Australia.

The company reported sales revenue of $941 million from its Waitsia joint venture in the Perth Basin, where it operates alongside Japan’s Mitsui & Co.

Cost and production guidance for the Waitsia stage two project were withdrawn last year after the sale of contractor Clough to Italian firm Webuild, but the company expects the project to be online mid-2024.

The project had experienced a series of cost blowouts in the lead up to the withdrawal, and current cost expectations are unclear.

Waitsia has been a point of contention in the ongoing debate around Western Australia's domestic gas supply, having been granted a liquefied natural gas export exemption by the state government in 2021.

First LNG cargoes were lifted from Waitsia during the December quarter, and were credited with lifting Beach’s revenue by 37 per cent despite a 4 per cent decrease in production volumes.

Beach’s statutory loss weighed on Seven Group Holdings’ half-year results released in February, but were more than offset by the diversified investment group’s performance across its industrial assets.