Beach records $345m loss, updates on Waitsia

Asset write-downs pushed Beach Energy to record a statutory half-year loss of $345 million, as new managing director Brett Woods committed to undertake a review of business strategy.

The result at the Kerry Stokes-backed natural gas play was driven by a $721 million write-down on the company’s Cooper Basin assets in south-west Queensland and north-east South Australia, and exploration tenements.

It came despite sales revenue of $941 million – up 16 per cent from the first half of the previous financial year – supported by first liquefied natural gas exports from the company’s Waitsia joint venture in Western Australia.

Underlying net profit after tax was down 10 per cent to $173 million.

Mr Woods, who replaced interim chief executive Bruce Clement at the end of January, said the company would undertake a review of its strategy but was well positioned to grow.

“We have commenced a comprehensive strategy review to align our organisation and the market on our objectives and approach to growing our capital returns to shareholders and disciplined growth,” he said.

The company revealed it would pay shareholders a fully franked 2 cents per share dividend for the half year.

Mr Woods also offered an update on progress at the long-stalled Waitsia stage two gas project in the Perth Basin.

Beach previously withdrew cost and timeline guidance for the LNG-approved onshore gas project following the sale of contractor Clough to Italian firm Webuild early in 2023.

“On my first Friday with Beach, just last week, I attended an executive meeting with Mitsui, Webuild Clough and the lead project and operations staff of the Waitsia project,” Mr Woods said. 

“Within that meeting, Clough and Webuild recommitted ... to the [ready for start up] and gas export dates.

“Through what I observed as an acceleration of some of their critical path items such as engineering sign offs and comprehensive commissioning activity, I can support that the project timelines are still in line with Beach’s market guidance of Waitsia being online in mid calendar year 2024.”

The Waitsia plant will facilitate LNG exports from the Perth Basin project, where joint venture partners Mitsui and Beach received a controversial export exemption from the state government in 2021.

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

The company said the milestone shipment was achieved by storing surplus gas at its Xyris gas plant.

Stage two will enable new production facility capacity from Waitsia of up to 250 terajoules per day.

The company said it was active on the exploration front in the basin, with an exploration well at its Redback Deep 1 prospect to be spudded imminently.

Beach shares were up 3.44 per cent at 11am this morning.