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Average Intrinsic Value
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Active Member Straws
#Company Presentations
Added 2 months ago

07-May-2020:  Macquarie Australia Conference Presentation

$80 million in net cash (no debt) as at March 31, 2020, with $530m of available liquidity (if and when required).  

FY21 FCF BREAKEVEN OIL PRICE $0/BBL (does not include growth investment - assumes zero oil production).  [i.e. they ain't going broke!]

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#Bull Case
Last edited 4 months ago

10-Mar-2020:  I bought BPT shares this morning.

Good S&P/ASX100 Energy company, with good management. 

Good exposure to Australian east-coast gas demand.  They currently supply around 15% of the Australian east coast natural gas demand, and (very importantly) almost all of their gas is sold under fixed-price supply contracts.

They said last month that they have minimal spot gas price exposure: More than 99% of East Coast gas sales in H1 FY20 was sold under contract, with 98% expected to be sold under contract in H2 FY20.

That's critally important.  It means that Beach know exactly what they'll be earning from their gas as long as those contracts remain in force, regardless of what the oil prices does.  These are multi-year contracts.

They are also currently Australia's LARGEST onshore oil producer.

Possible M&A activity in the sector may well benefit BPT, as either a target or even as the acquirer of a smaller player such as COE or SXY (I hold both of those companies also).

Very solid balance sheet.  Have only had net debt once in the past 10 years.  As at 31-Dec-19, had $60m net cash.  No net debt.  

The following points are from their FY2020 H1 results released last month:

Growth program execution progressing well:

  • 105 wells drilled in H1 FY20 at 83% success rate
  • Western Flank operated oil production above 22,000 bopd
  • Victorian Otway drilling program underway with Black Watch-1
  • Ocean Onyx rig expected to arrive in March for offshore drilling program

Exploration/appraisal success: 

  • Bauer appraisal confirms further field extension
  • Cooper Basin exploration/appraisal success rate of 66%
  • Beharra Springs Deep-1 gas discovery in Perth Basin, flow tested at 46 MMscfd1
  • Dombey-1 gas discovery in SA Otway
  • Easternwell 106 rig contracted to appraise SA Otway, Perth Basin discoveries

Operational excellence program delivering results:

  • Facility reliability averaged 98% across operated asset base in H1 FY20
  • Kupe shutdown completed safely, on time and on budget
  • H1 FY20 production 13.0 MMboe, oil production on track

Financial strength:

  • Underlying EBITDA $622 million
  • Underlying NPAT $274 million, +9% versus Pro Forma H1 FY19 Underlying NPAT
  • Strong balance sheet position with $60 million net cash at 31 December 2019
  • Interim dividend 1.0 cps (you wouldn't buy them as an income stock)

Full year FY20 guidance updated:

  • Production guidance has been updated to 27 – 28 MMboe (prior 27 - 29 MMboe)
  • Capital expenditure guidance has been updated to $875 – 950 million (prior $750 – 850 million)
  • Underlying EBITDA guidance has been updated to $1.275 – 1.35 billion (prior $1.25 – 1.4 billion)

BPT were trading at over $2.60/share in September and again in January, and they closed yesterday at $1.33, so they're down over 50% from their recent highs (peaked at $2.87 on 20-Jan-2020).  They are not worth half as much in March than they were in January.  They have been oversold. 

The shock moves by Russia and Saudi Arabia (to lower prices and increase supply, presumably to crush the US shale oil industry) will certainly impact the oil price, which gas prices are tethered to, and the demand for both oil and gas will be lower this year due to the impact of COVID-19, but longer term I believe this will be a good price-point to pick up some good quality energy companies, especially those with significant natural gas businesses such as BPT and Woodside (WPL).

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#Business Update
Added 4 months ago

27-Mar-2020:  Business Update

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#Company Reports
Added 6 months ago
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#Company Reports
Last edited 3 months ago

22-Apr-2020:  Quarterly report for the period ended 31 March 2020

Q3 FY20 production increases 8% to 6.9 MMboe, continued growth in Western Flank oil

  • Western Flank oil production increased by a further 15% to 2.1 MMbbl, with gross operated Western Flank oil production averaging 22,400 BOPD through the quarter.
  • Q3 FY20 sales revenue decreased by 7% relative to the prior quarter, due to the declining oil price through the end of the period, partly offset by higher realised gas prices.

Beach ends quarter in net cash position; Black Watch-1 well completed

  • Beach had a net cash position of $80 million at 31st March 2020 with access to $530 million in liquidity.
  • The Black Watch-1 well in the Victorian Otway Basin has been completed after intersecting the target Warre C reservoir in-line with pre-drill expectations. The well is expected to be tied into the Otway Gas Plant in the June 2020 quarter.
  • As advised on 20 April 2020, subsequent to quarter end Beach has issued a termination notice to Diamond Offshore Inc in relation to the Ocean Onyx drill rig and is engaging in discussions to negotiate a new rig contract with Diamond; offshore drilling is now unlikely to commence until FY21.
  • Subsequent to quarter end, the Haselgrove-4 well was successfully side tracked. The well is being completed as a production well and is expected to be tied into the nearby Katnook gas facility.

Review of FY21 work program underway, FY20 guidance maintained

  • A review of proposed FY21 activities is underway, with Beach targeting a deferral of up to 30% of previously planned capital expenditure.
  • FY20 guidance is unchanged, with underlying EBITDA expected at the lower end of the current range.

--- click on link above for more ---

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#Company Reports
Last edited 5 months ago

19 August 2019:  Beach have reported this morning - there are a number of reports and announcements and they can all be reached from here:  https://www.beachenergy.com.au/asx/

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#Company Reports
Last edited 6 months ago
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#ASX Announcements
Last edited 7 months ago
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