Beach Energy Posts 164% Profit Jump to $222.3 Million in H1 FY25

Financial Turnaround

Beach Energy Limited has reported a remarkable turnaround in its financial performance for the half year ended 31 December 2024. The company posted a net profit after tax (NPAT) of $222.3 million, a significant improvement from the $345.1 million loss recorded in the same period last year. This 164% swing to profitability reflects a combination of higher sales revenue, lower costs, and operational efficiencies.

Sales revenue increased by 5% to $989.8 million, primarily driven by higher production volumes in the Otway and Bass basins, an additional LNG swap cargo from the Waitsia project, and an 18% rise in realised gas prices to $10.48 per gigajoule. These gains were partially offset by lower third-party sales and weaker oil and liquids prices, with average realised liquid prices falling 12% to US$71.97 per barrel of oil equivalent.

Cost Management and Profitability

Cost of sales declined by 5% to $680.7 million, driven by reduced third-party purchases and lower field operating costs. Despite higher tariffs and tolling expenses, gross profit surged 37% to $362.9 million. Other expenses fell dramatically from $759.6 million in H1 FY24 to $29.0 million, as the prior period included a substantial $721.2 million impairment charge. Adjusting for one-off items such as tariffs for unutilised capacity and legal costs, Beach’s underlying NPAT rose 37% to $236.9 million.

Operational Highlights

Production increased to 10.2 million barrels of oil equivalent (MMboe), up from 8.9 MMboe in the prior corresponding period. Notably, Otway Basin production more than doubled to 3.4 MMboe, supported by the commissioning of new development wells and the Enterprise gas field connection. The Bass Basin also saw a 67% production increase due to successful well interventions.

The Perth Basin’s Waitsia Gas Plant reached mechanical completion and transitioned into commissioning, with first sales gas now targeted for Q4 FY25. However, some delays were encountered due to quality issues at the flowline valve station, which the joint venture is actively addressing. The Moomba Carbon Capture and Storage (CCS) project achieved first CO2 injection in September 2024 and is performing ahead of expectations, with capacity injection rates reached by mid-October.

Balance Sheet and Cash Flow

Beach’s balance sheet strengthened with net assets rising to $3.49 billion, supported by a cash balance of $250.7 million. Operating cash flow was robust at $659 million, funding $413.3 million in investing activities and $167 million in financing outflows, including debt repayments and dividends. The company maintains $1.02 billion in debt facilities, with $640 million drawn as of December 2024.

Dividend and Outlook

The board declared a fully franked interim dividend of 3.0 cents per share, payable on 31 March 2025, following a 2.0 cent final dividend paid in September 2024. Looking ahead, Beach plans to focus on commissioning the Waitsia Gas Plant, drilling exploration wells such as Arenaria 1 and Hercules, and initiating a 10-well oil development campaign in the Western Flank. Production guidance for FY25 has been updated to 18.5-20.5 MMboe, with capital expenditure expected between $400-450 million.

Beach Energy’s half-year results underscore a successful operational pivot and improved market conditions, positioning the company for sustained growth amid evolving energy demands.