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  • Beach Energy (BPT) has seen its shares spill over three per cent after releasing half yearly results for the 2020 financial year
  • The company delivered a strong underlying net profit after tax of $274 million
  • Beach has increased its capital expenditure guidance by at least one hundred million to support various projects in the Cooper, Perth and Otway basins
  • However, its production forecast has dropped from between 27 and 29 millions of barrels of oil equivalent to between 27 and 28
  • This is due to a lower customer demand and exploration delays
  • As a result of lower oil prices, Beach has updated its EBITDA guidance from between $1.25 – 1.4 billion to between $1.275 to $1.35 billion
  • Beach Energy’s shares are down 3.16 per cent and are trading for $2.30 each

Beach Energy (BPT) has seen its shares spill over three per cent after releasing its half year results for the 2020 financial year.

The company delivered a strong underlying net profit after tax (NPAT) of $274 million, which is roughly $4.8 million less than its first half yearly report for the 2019 financial year.

“In a year in which we are undertaking a record level of growth investment, I am extremely proud to see the Beach team maintain a razor-sharp focus on execution and sustain a discipline towards cost management across the business,” Managing Director Matt Kay said.

The ASX 200-lister had a number of wins as part of its growth program in this period.

Drilling activities between July and December 2019 largely focused on the Cooper, Perth and Otway basins. A total of 105 wells were drilled at a success rate of 83 per cent.

In late October, Beach made a discovery in its 50 per cent-owned Beharra Springs well within the Perth Basin – an important asset to its portfolio.

Additionally, the company had further success with a discovery in the Otway Basin and appraisal work in the Bauer Field confirming another field extension.

“It is this sort of success from our drilling team that supports the decision to increase our investment in FY20,” Matt stated.

In support of increased oil production, Beach is undertaking infrastructure expansion in the Western Flank of the Cooper Basin which is expected to cost roughly $30 million.

It’s also forking out an approximate $25 million for a farm-in agreement with OMV GSB to buy a 30 per cent interest in the Tawhaki prospect in offshore New Zealand.

In addition, Beach is completing a two-well appraisal campaign in Otway.

“The Ocean Onyx rig is currently scheduled to arrive in March, to kick off our 9-well offshore drilling program with the Artisan-1 exploration well,” Matt added.

In relation to its Cooper Basin joint venture with Santos, Beach expects to contribute $20 million more than its original estimate to stay in business.

The reason for this is continued strong production in the Cooper Basin has required more works planned for this year. These works are anticipated to support higher-for-longer liquids processing, handling and shipping from Port Bonython.

These projects have led Beach Energy to revise its 2020 financial year capital expenditure guidance from $750 – $850 million to between $875 and $950 million.

Its production guidance has lowered from 27 – 29 millions of barrels of oil equivalent (MMboe) to 27 – 28 MMboe.

Beach attributes the drop in forecasted production to a reduction in customer demand and a two-month delay of rig mobilisation in the Otway Basin.

The oil and gas giant also updated its underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) guidance to between $1.275 to $1.35 billion.

Its prior FY20 EBITDA guidance was between $1.25 and $1.4 billion. This incorporates the impact of lower oil prices.

Beach Energy’s shares are down 3.16 per cent and are trading for $2.30 each at 1:18 pm AEDT.

BPT by the numbers
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