Beach advances growth as Waitsia ramps up and Moomba moves ahead

About Beach Energy

Beach Energy (ASX:BPT) is an Australian oil and gas producer with assets spanning the Perth, Otway, Cooper, Bass and Taranaki basins. Its current portfolio blends conventional gas, oil and gas liquids production with infrastructure-linked domestic gas exposure, LNG-linked sales from Waitsia, and exploration acreage aimed at extending the group’s East Coast and Western Australian supply position. This quarter’s update shows Beach pushing ahead on several fronts at once: ramping up Waitsia, advancing offshore and onshore drilling campaigns, expanding acreage, and investing in infrastructure designed to unlock further Cooper Basin gas capacity.

Waitsia ramp-up reshaped the quarter

The main operational driver was the Perth Basin. Net production from the basin jumped 174 per cent quarter on quarter to 1,155 kboe as the Waitsia Gas Plant ramped up during the period. Beach said Waitsia averaged 100 TJ/day gross during the quarter and achieved a peak production rate of 235 TJ/day gross. The final two sales gas compressors at the plant were commissioned by quarter-end, taking the plant close to its 250 TJ/day gross nameplate rate.

This ramp-up was not entirely smooth. Compressor performance slowed production during the quarter, and Cyclone Narelle forced a shutdown at both the North West Shelf and Waitsia Gas Plant late in March. After quarter-end, the operator encountered further compressor performance interruptions when bringing the plant back online, although Beach said these issues are now largely resolved and production rates have recovered to above 200 TJ/day with the third compressor online.

That matters because Waitsia is central to Beach’s near-term growth outlook. The group’s revised FY26 production guidance of 19.4 to 20.3 MMboe, down from 19.7 to 22.0 MMboe, reflects not just wet weather in the Cooper Basin, but also temporary impacts from the North West Shelf and Waitsia cyclone shut-in and compressor interruptions. In other words, the guidance downgrade appears driven more by timing and ramp-up friction than by any structural change in project value.

Revenue remained solid even as sales volumes slipped

Beach sold 5.3 MMboe during the quarter, down 10 per cent from the prior quarter. The lower sales figure was mainly due to one fewer Waitsia LNG cargo, partly offset by the timing of Cooper Basin oil liftings. Even so, revenue remained robust at $419 million, only 6 per cent below the previous quarter, reflecting a stronger average realised price across the portfolio.

Oil pricing was a clear support. The average realised oil price rose 19 per cent to A$125/bbl, while the average realised price across all products increased 4 per cent to $78/boe. Gas pricing was softer, with the average realised gas price down 6 per cent to $11.2/GJ, reflecting lower East Coast demand and weaker spot pricing. Beach also lifted one LNG cargo in February, generating $54 million of revenue at an average realised LNG price of $13.7/MMBtu.

The revenue mix is important because it shows Beach still has exposure to multiple pricing levers. Oil prices supported the quarter, Waitsia LNG added a meaningful uplift, and the company continues to balance domestic gas, LNG-linked sales and liquids across several basins. That diversity helps offset weaker pricing in any one product stream.

Balance sheet flexibility remains a clear strength

Financially, Beach exited the quarter in a stronger position. Available liquidity rose to $974 million at 31 March 2026, comprising $204 million of cash reserves and $770 million of undrawn committed facilities. Net debt improved modestly to $396 million from $445 million at the end of December, and net gearing fell to 11 per cent.

This is strategically important because it gives Beach room to fund current projects and pursue future growth without obvious balance sheet strain. Management explicitly described the stronger liquidity position as providing optionality for future growth, and that seems credible given the company is simultaneously ramping Waitsia, progressing Otway and Cooper drilling, and moving into new acreage and infrastructure expansion.

Capital spending also eased in the quarter. Capital expenditure was $126 million, down 24 per cent from the prior quarter, reflecting the completion of Waitsia ramp-up activity, weather-related drilling delays and lower Equinox rig usage while it was with another consortium member. FY26 capital expenditure guidance of $675 million to $775 million remains unchanged, as does abandonment expenditure guidance of $200 million to $250 million.

Cooper Basin weather disruptions were real, but underlying activity stayed constructive

The biggest operational drag outside Waitsia was heavy rainfall in the Cooper Basin. Western Flank production fell 8 per cent quarter on quarter to 357 kboe, with oil output down 16 per cent after severe rains in February and March interrupted production and road access. Beach estimates the weather affected roughly 1,200 bopd, mainly across the Bangalee, Callawonga, Martlet and Snatcher fields, with impacted wells expected to be progressively restored in the first half of FY27, subject to future weather conditions.

The Western Flank drilling campaign still produced encouraging results. Three wells were drilled before the weather delays, including the Stunsail West 1 exploration well, which encountered oil in the primary Namur and secondary McKinlay and Birkhead reservoirs. Beach said the Namur oil-water contact was consistent with the nearby Stunsail field, suggesting a continuous accumulation that could support further appraisal and a broader development concept. Kangaroo 5 and Kangaroo 6 also returned positive appraisal results, with Kangaroo 6 planned to be completed and connected in Q4 FY26.

The Cooper Basin JV also saw production fall 5 per cent quarter on quarter to 1.5 MMboe because of heavy rain, but drilling performance remained strong. Beach participated in 10 wells during the quarter, with a 100 per cent success rate across three oil development wells, two gas appraisal wells and five gas development wells. That success rate is meaningful because it reinforces the repeatability of drilling outcomes in the basin, even in a quarter where weather disrupted activity and production volumes.

Moomba optimisation and new acreage add to the growth pipeline

One of the more important strategic developments was the final investment decision on the Moomba Central Optimisation project. Beach and Santos will replace compression at seven ageing gas compressor stations with a single centralised electric-driven compressor station, plus modern inlet compression and gas-fired generation capacity at the Moomba Gas Plant. The project is designed to debottleneck infrastructure, simplify upstream operations, lower sustaining costs, unlock growth from the Central Fields and materially extend asset life, with completion targeted in the first half of FY29.

Beach also expanded its future opportunity set through new acreage awards. In Queensland, the company and its partners secured ATP 2081 in the Taroom Trough, where a two-well drilling campaign is planned for FY27 followed by 200 km of 2D seismic, with follow-up drilling in FY28 also planned. The block is described as prospective for oil and condensate-rich gas, with any gas designated for Australian market supply. Beach and Santos were also awarded three exploration blocks in the Cooper Basin, spanning roughly 7,000 km², with seismic likely to commence in FY27 and a possible drilling campaign in FY28. In the onshore Otway Basin, Beach and Tri-Star were awarded block RSEL-E, where a 3D seismic survey and possible future drilling campaign are being assessed.

These awards matter because they offer relatively low-cost options to extend Beach’s East Coast and liquids portfolio at a time when domestic gas supply remains strategically important.

Otway, Bass and Taranaki were softer, but activity continues

Elsewhere, the Otway Basin produced 1.2 MMboe, down 9 per cent quarter on quarter, mainly due to lower customer nominations and maintenance-related downtime. Even so, the Otway Gas Plant maintained over 98 per cent reliability and the second phase of the Equinox rig campaign commenced shortly after quarter-end with a Thylacine West intervention. Bass Basin output fell 25 per cent because of maintenance at Lang Lang, while Taranaki production also declined 25 per cent after planned maintenance at the Kupe Gas Plant.

Outlook

Beach Energy’s third-quarter update reflects a business making strategic progress even as some near-term operational issues persist. Waitsia is now much closer to delivering the production profile the market has been waiting for, liquidity remains strong, drilling results in the Cooper Basin have been encouraging, and Moomba optimisation plus new acreage awards provide additional pathways for future gas and liquids growth. The revised FY26 production guidance acknowledges that wet weather and plant ramp-up issues have had a real impact, but the broader direction of travel remains constructive. With lower gearing, nearly $1 billion of liquidity and multiple basin-level growth options, Beach appears increasingly well positioned to build out its role as a long-term domestic gas and liquids supplier.