Beach Energy Boosts Production and Cuts Debt Amid Major Project Advances
Beach Energy delivered a robust Q2 FY25 with a 22% production increase and a 32% surge in sales revenue, driven by LNG sales and operational efficiencies. The company also significantly reduced net debt while advancing key projects like the Waitsia Gas Plant and Moomba CCS.
- 22% increase in Bass Basin production from well interventions
- 32% quarter-on-quarter sales revenue growth to $563 million
- Net debt reduced by $166 million to $389 million, net gearing down to 10%
- Thylacine West wells brought online, restoring Otway Gas Plant capacity
- Waitsia Gas Plant transitioned to commissioning, targeting first sales gas in Q4 FY25
Strong Operational Performance Drives Production Growth
Beach Energy Limited reported a solid second quarter for FY25, with total production reaching 5.0 million barrels of oil equivalent (MMboe), underpinned by a 22% increase in production from the Bass Basin. This uplift was primarily due to successful follow-up wellbore interventions, which boosted output from the Lang Lang Gas Plant and associated fields. Meanwhile, the Western Flank maintained strong reservoir performance and high facility uptime, offsetting some declines in the Lower Otway Basin caused by planned maintenance and connection activities at Thylacine West.
Revenue Growth Fueled by LNG Sales and Higher Gas Prices
Sales revenue rose 32% quarter-on-quarter to $563 million, driven largely by LNG sales. Beach lifted its third and fourth LNG swap cargoes from the Waitsia project, generating $139 million in revenue, with a fifth cargo lifted shortly after quarter-end. The company achieved a 3% increase in realised average gas prices to $10.7 per gigajoule (GJ) and maintained a strong LNG price of $17.3 per MMBtu. Despite a slight 3% dip in realised oil prices to $123 per barrel, the overall sales mix and pricing dynamics supported robust revenue growth.
Balance Sheet Strengthened Through Debt Reduction and Cost Controls
Beach Energy’s financial position improved markedly, with net debt reduced from $555 million to $389 million, lowering net gearing from 14% to 10%. This de-leveraging was supported by strong free cash flow generation and a targeted 30% reduction in headcount, reflecting disciplined cost management. At quarter-end, the company held $631 million in liquidity, comprising $251 million in cash reserves and $380 million in undrawn committed facilities, providing a solid buffer for ongoing development activities.
Project Milestones: Thylacine West Online and Waitsia Gas Plant Commissioning
Significant operational milestones were achieved with the completion of the largest offshore drilling campaign in the Otway Basin. The Thylacine West 1 and 2 wells were brought online, restoring the Otway Gas Plant to nameplate capacity and enhancing supply flexibility for the East Coast market. Meanwhile, the Waitsia Stage 2 project in the Perth Basin transitioned from construction to commissioning. Despite a brief delay caused by a bushfire and quality issues at a flowline valve station, commissioning is progressing with first sales gas targeted for Q4 FY25. Two Waitsia development wells were completed and suspended, and exploration drilling is planned to continue with the Arenaria 1 well expected to spud in Q3 FY25.
Environmental Leadership with Moomba CCS Project
Beach Energy also marked a key environmental milestone with the commissioning of the Moomba Carbon Capture and Storage (CCS) project. The project has exceeded expectations during ramp-up, achieving capacity injection rates and injecting over 300,000 tonnes of CO2 equivalent during the quarter. This initiative positions Beach well on track to meet its 2030 emissions intensity reduction target of 35%, underscoring its commitment to sustainable operations.
Outlook and Upcoming Results
Looking ahead, Beach Energy is poised to benefit from the full ramp-up of the Waitsia Gas Plant and continued development in key basins. The company’s FY25 half-year results, due on 6 February 2025, will provide further insight into operational progress and financial momentum. Investors will be watching closely how Beach navigates commissioning challenges and capitalises on LNG market opportunities amid evolving East Coast gas supply dynamics.
Bottom Line?
Beach Energy’s Q2 momentum sets a strong foundation, but execution on Waitsia commissioning and market conditions will be critical next steps.
Questions in the middle?
- Will the Waitsia Gas Plant meet its Q4 FY25 first sales gas target despite recent commissioning delays?
- How will LNG swap cargo volumes evolve ahead of Waitsia’s full start-up?
- What impact will ongoing East Coast gas market dynamics have on Beach’s pricing and sales volumes?