SYDNEY–Beach Energy Ltd. said its annual net profit fell by 37% after it absorbed a large impairment charge against its Western Flank operation in Australia’s Cooper Basin.
Beach said it made a net profit of 316.5 million Australian dollars (US$233.4 million) in the 12 months through June, compared to a A$500.8 million profit in the same period a year earlier. The result included a A$117 million writedown, reflecting lower expectations for the company’s Western Flank assets where production is declining and management is refocusing activity toward exploration.
Directors of the company declared a final dividend of 1.0 cent a share, in line with the payout a year earlier.
A weak result was expected from Beach because management in April cut a production forecast for the 2021 fiscal year and withdrew its five-year outlook after downgrading an estimate of Western Flank’s reserves by a net 18.4 million barrels of oil equivalent.
Beach produced 25.6 million barrels of oil equivalent in fiscal 2021, below original guidance of 26.5 million-27.5 million barrels. Still, annual revenue totaled A$1.56 billion, as the company benefited from energy prices sharply rebounding from lows reached early in the pandemic last year.
Beach’s output fetched an average price of A$58.30 per barrel in fiscal 2021, with prices notably strengthening toward the end of the year.
On Monday, Beach also provided maiden guidance for the 2022 fiscal year, including production of 21.0 million-23.0 million barrels of oil equivalent. Capital expenditure is forecast at A$900 million-A$1.1 billion, up from A$671 million in fiscal 2021.
Chief Executive Matt Kay said Beach expects production in fiscal 2022 to be impacted more by depletion in the Western Flank fields, ahead of the ramp up of production in the Perth Basin and Victorian Otway Basin development projects.