Beach Energy’s Net Profit Surges 742% as Waitsia Gas Plant Hits Full Capacity

Profit Soars Despite Revenue Dip

Beach Energy (ASX:BPT) delivered a standout financial performance for the year ended 30 June 2026, with net profit after tax rocketing 742% to $281.4 million, up from a loss of $43.8 million the prior year. This surge came despite a 9% decline in sales revenue to $1.92 billion, reflecting a challenging volume environment driven by flooding impacts in the Cooper Basin and natural field declines in the Otway Basin.

Underlying net profit after tax, a non-IFRS measure, fell 21% to $354.8 million, highlighting the impact of one-off items and the company’s disciplined approach to capital allocation and cost management.

Waitsia Gas Plant Drives Production Growth

Key to Beach’s operational momentum was the commissioning and ramp-up of the Waitsia Gas Plant in Western Australia, which achieved its nameplate capacity of 250 terajoules per day in April 2026. Production from Waitsia contributed to a 106% jump in Perth Basin output to 3.3 million barrels of oil equivalent (MMboe), largely offsetting production disruptions elsewhere.

The plant also supported six LNG cargoes under swap arrangements, generating $343 million in revenue at an average realised price of $14.4 per MMBtu, underpinning Beach’s exposure to global LNG markets.

Strategic Asset Sale Unlocks Capital

In a portfolio optimisation move, Beach agreed to sell its 60% operated interest in the VIC/L35 permit in the Otway Basin, including the Artisan gas discovery, for $70 million upfront plus a production royalty expected to total around $140 million. This transaction, valued at approximately $130 million after tax, is expected to free up more than $500 million in near-term capital, which Beach plans to redeploy into higher-return projects including onshore developments and offshore exploration campaigns.

This deal also led to the cancellation of the La Bella 2 development well, reflecting a clear pivot towards disciplined capital allocation amid regulatory uncertainty around the proposed Domestic Gas Reservation Scheme.

Safety Excellence and Operational Discipline

Beach maintained an exemplary safety record, achieving 18 months without a recordable injury across all operated assets and no Tier 1 process safety events since 2020. This milestone was achieved despite a demanding operational program including the offshore Equinox rig campaign, Western Flank oil appraisal and development drilling, and flood recovery efforts.

Operational efficiencies contributed to a 3% reduction in field operating costs to $244 million, including the addition of Waitsia Gas Plant operations. The company’s free cash flow breakeven oil price remained below the US$30 per barrel target, reflecting a strong owner’s mindset and cost discipline.

Robust Balance Sheet and Dividend Policy

Beach ended FY26 with $983 million in available liquidity, comprising $213 million in cash and $770 million in undrawn committed facilities. Net gearing was a conservative 10.6%, well below the company’s target range.

The Board declared a fully franked final dividend of 2.0 cents per share, bringing full-year dividends to 3.0 cents per share. The dividend record date is 31 August 2026, with payment scheduled for 30 September 2026.

Growth Pipeline and FY27 Outlook

Looking ahead, Beach plans an active FY27, targeting production between 19.5 and 23.0 MMboe supported by ongoing drilling campaigns across core hubs. Key initiatives include completing the Western Flank oil appraisal and exploration programs, progressing the Moomba Central Optimisation project in the Cooper Basin joint venture, accelerating exploration in the Taroom Trough, and advancing nearshore Otway drilling with a final investment decision expected in the first half of FY27.

Beach is also focusing on maturing offshore Otway Basin prospects and Perth Basin tight gas backfill opportunities, aiming to build a resilient resource base aligned with its strategic pillars of core hubs, high margins, and sustainable growth.

Regulatory uncertainty, particularly around the Domestic Gas Reservation Scheme, remains a material challenge. Beach continues to advocate for policy settings that balance domestic supply security with investment incentives, emphasising a market-based approach over forced sales obligations.

Reserves and Resources Update

At 30 June 2026, Beach reported 156 million barrels of oil equivalent (MMboe) of 2P reserves, down from 173 MMboe the previous year, reflecting production of 19.4 MMboe and net positive revisions largely driven by successful drilling campaigns in the Western Flank and Cooper Basin joint venture.

Contingent resources remained steady at 174 MMboe, while 2P CO2 storage capacity stood at 3.6 million tonnes, underpinning Beach’s carbon capture and storage initiatives.

What to Watch Next

Investors will be watching Beach’s ability to sustain production growth amid ongoing flood recovery and operational challenges, the progress of the Moomba Central Optimisation project, and the outcome of the nearshore Otway drilling campaign decision. The evolving regulatory landscape, especially the design and implementation of the Domestic Gas Reservation Scheme, will also be pivotal in shaping Beach’s investment appetite and domestic gas supply strategy.

With a fortified balance sheet and a clear strategic focus, Beach Energy appears well-positioned to navigate these headwinds while pursuing disciplined growth opportunities that could enhance shareholder returns over the medium term.