Beach Energy Ltd (ASX:BPT, OTC:BEPTF) shares rose 4.6 per cent to $1.14 in earlier trading today after the oil and gas producer posted first-quarter sales that beat forecasts.
Sales revenue increased 18% to $537 million, topping a consensus estimate of $449 million, helped by LNG cargoes from the Waitsia project, according to RBC Capital Markets analyst Gordon Ramsay. Production of 4,990 kboe also exceeded expectations, with solid quarter-on-quarter gains across the Otway, Cooper and Bass basins.
The stronger result came despite setbacks, including the failed Hercules exploration well—expected to cost about $50 million—and additional costs at Waitsia.
Looking ahead, Ramsay said flood-recovery work in the Cooper Basin remains underway, with production restoration likely to continue into the second quarter. He cautioned that Beach’s drilling program carries risk of cost overruns, noting the Equinox rig costs about US$500,000 per day.
Even so, he expects Otway Basin gas output to exceed prior guidance that pointed to a fall of about 20 per cent year on year.
The stock touched a four-year low of $1.09 last week. RBC maintained a “sector perform” rating with a $1.20 price target.