Beach Energy Boosts Production 8% as Waitsia Gas Plant Nears Start-Up
Beach Energy reported an 8% increase in production to 5.0 million barrels of oil equivalent in Q1 FY26, driven by strong performance in the Otway Basin and Cooper Basin flood recovery. Sales revenue rose 18% to $537 million, supported by two LNG cargoes from the Waitsia Gas Plant, which is now approaching its Ready For Start Up milestone.
- 8% quarter-on-quarter production increase to 5.0 MMboe
- Sales revenue up 18% to $537 million, aided by two Waitsia LNG cargoes
- Waitsia Gas Plant commissioning nearly complete, first sales gas imminent
- Cooper Basin JV flood recovery progressing with 10% production rise
- Board changes with new director Shaun Gregory appointed ahead of AGM
Strong Production Growth Amid Recovery Efforts
Beach Energy has kicked off FY26 with a solid operational performance, reporting an 8% increase in production quarter-on-quarter to 5.0 million barrels of oil equivalent (MMboe). This uplift was largely driven by a 12% production rise in the Otway Basin, buoyed by high customer demand, and a 10% increase in the Cooper Basin Joint Venture (JV) as flood recovery efforts restored output from affected wells.
Despite ongoing challenges from natural field declines and flood impacts, Beach managed to maintain flat production year-on-year when adjusting for these disruptions, underscoring the resilience of its asset base.
Revenue and Pricing Momentum
Sales volumes surged 15% to 6.8 MMboe, translating into an 18% jump in sales revenue to $537 million. This was supported by the lifting of two liquefied natural gas (LNG) cargoes from the Waitsia Gas Plant, generating $121 million in revenue. The average realised gas price rose 8% to $11.7 per gigajoule, reflecting strong market conditions and successful re-contracting in the Cooper Basin JV.
Oil prices remained steady, with a slight 2% increase to $113 per barrel, contributing to the overall positive revenue mix. The company’s ability to leverage both gas and oil markets highlights its diversified portfolio strength.
Waitsia Gas Plant Nears Operational Milestone
Commissioning of the Waitsia Gas Plant’s critical systems is largely complete, with the project approaching the Ready For Start Up (RFSU) milestone. Final start-up processes are underway, and first sales gas is expected imminently, marking a significant step toward ramping up production to nameplate capacity.
While some equipment replacements are planned post-commissioning, these are routine and will not affect the timeline for first gas or subsequent production ramp-up. The Waitsia project remains a cornerstone for Beach’s growth strategy in the Perth Basin.
Exploration Success and Ongoing Development
Beach’s exploration and development activities continue to deliver, with a 96% drilling success rate in the Cooper Basin JV. Notably, the Kwaremont 1 well discovered oil and gas, adding to the company’s resource base. Flood recovery in the Cooper Basin is progressing as expected, with approximately one quarter of flood-impacted wells restored and further recovery efforts planned for Q2 FY26.
In the Otway Basin, the Equinox rig campaign achieved safe plug and abandonment of two offshore wells, while the Hercules 1 exploration well was plugged after failing to intersect hydrocarbons. The company plans to commence a 10-well appraisal and development campaign in the Western Flank area in late Q2 FY26, subject to flood conditions.
Financial Position and Corporate Updates
Capital expenditure remained steady at $166 million, balancing reduced spend on Waitsia Stage 2 with increased rig campaign activity. Beach maintains a strong liquidity position of $586 million, supported by recent refinancing and extension of key syndicated loan facilities with favorable terms and maturities extending to 2029.
On the corporate front, Beach announced the retirement of long-serving director Dr Peter Moore, with Shaun Gregory appointed as an independent non-executive director. Gregory brings over 30 years of industry experience, including leadership in new energy strategy at Woodside Energy.
Additionally, Beach executed an Area of Mutual Interest agreement with Omega Oil and Gas and Tri-Star Group covering prospective acreage in Queensland’s Taroom Trough, signaling potential future exploration opportunities in a promising gas and liquids resource play.
Bottom Line?
With production gains and Waitsia’s start-up on the horizon, Beach Energy is poised for a pivotal FY26, though flood recovery remains a watchpoint.
Questions in the middle?
- How quickly will the Waitsia Gas Plant ramp up to full production capacity?
- What is the timeline and expected impact of the Cooper Basin flood recovery on overall output?
- How will the new Area of Mutual Interest in the Taroom Trough translate into exploration activity and reserves growth?