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    BPT   AU000000BPT9

BEACH ENERGY LIMITED

(BPT)
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Australia Beach Energy's market value dives by $730 mln as reserves estimate cut

04/29/2021 | 07:21pm EDT

* Western Flank oil reserves slashed by 38%

* Downgraded earnings outlook well below brokers' outlook

* Shares sink 24%

MELBOURNE, April 30 (Reuters) - Beach Energy slashed its reserves estimate and earnings outlook on Friday after oil production fell at its Western Flank field in South Australia, sending its shares tumbling by almost a quarter.

Beach's market value plunged by A$935 million ($727 million) after the grim forecast, following a review of declining output at Western Flank, first flagged in February. The company also warned of an impairment charge and withdrew its five-year production outlook.

"It's clear this was a pretty big risk for the company - what could come out of this review. It's much more disappointing than the market had expected," said JPMorgan analyst Mark Busuttil.

Beach, Australia's largest onshore oil producer, downgraded its estimate of proven and probable Western Flank oil reserves by 17.6 million barrels, a 38% cut on what it booked in its 2020 annual report.

It cut its gas reserves estimate by 7.2 million barrels of oil equivalent (mmboe), a 45% reduction on the reserves booked in 2020.

"The past five years has seen the Western Flank outperform our expectations, but we are now witnessing material decline from a number of fields," Chief Executive Matt Kay said in a statement.

The downgrade in reserves across Western Flank oil and gas assets "could lead to carrying value adjustments" at its annual results, due on Aug. 16, Beach said.

The company pared its forecast for underlying earnings before interest, tax, depreciation and amortisation (EBITDA) for the current year by 5% to between A$850 million and A$900 million, well below broker forecasts around A$973 million.

It also cut its annual pro-forma production forecast to 25.2 mmboe to 25.7 mmboe from 26.5 mmboe to 27.5 mmboe earlier.

Beach withdrew its five-year outlook, and said it will no longer provide a five-year outlook in its current form.

The company reported production of 5.89 MMboe for the quarter ended March 31 versus 6.94 MMboe for the year-ago quarter, and posted a near 9% fall in sales revenue.

Beach's shares fell 24% on Friday, giving it a market value of around A$2.9 billion. ($1 = 1.2860 Australian dollars) (Reporting by Sonali Paul in Melbourne; Additional reporting by Arundhati Dutta in Bengaluru; Editing by Devika Syamnath and Muralikumar Anantharaman)


© Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
BEACH ENERGY LIMITED -4.12% 1.28 End-of-day quote.-29.09%
JPMORGAN CHASE & CO. -0.16% 158.18 Delayed Quote.24.77%
LONDON BRENT OIL 0.67% 69.22 Delayed Quote.31.95%
WTI 0.67% 65.97 Delayed Quote.34.81%
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Financials
Sales 2021 1 509 M 1 168 M 1 168 M
Net income 2021 319 M 247 M 247 M
Net Debt 2021 67,1 M 51,9 M 51,9 M
P/E ratio 2021 8,84x
Yield 2021 1,69%
Capitalization 2 860 M 2 214 M 2 213 M
EV / Sales 2021 1,94x
EV / Sales 2022 1,88x
Nbr of Employees 483
Free-Float 70,2%
Chart BEACH ENERGY LIMITED
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Technical analysis trends BEACH ENERGY LIMITED
Short TermMid-TermLong Term
TrendsBearishBearishNeutral
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 14
Average target price 1,72 AUD
Last Close Price 1,26 AUD
Spread / Highest target 99,2%
Spread / Average Target 37,3%
Spread / Lowest Target 13,1%
EPS Revisions
Managers and Directors
NameTitle
Matthew Vincent Kay Chief Executive Officer, MD & Executive Director
Morné Engelbrecht Chief Financial Officer
Glenn Stuart Davis Independent Non-Executive Chairman
Ian Grant Chief Operating Officer
Colin David Beckett Independent Non-Executive Deputy Chairman
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