Beach Energy has doubled its dividend in spite of a 3% drop in half year profits.
This was revealed in the company’s financial and operating results for the first half of FY23, including a new dividend policy, further milestones for major growth projects and continued Balance Sheet strength.
Beach Energy posted a net profit of $207.2 million in the six months to December 31.
Chief Executive Officer Morné Engelbrecht said: “Our agreement with Webuild to complete the Waitsia Stage 2 project and the Environmental Plan approval for installation of the offshore Otway Thylacine wells are big steps forward for Beach in 2023. These two projects will trigger a step-change in production and free cash flow generation from FY24.
“Our agreement with Webuild to complete the Waitsia Stage 2 project is particularly welcome news. Webuild and the Waitsia JV are now planning for first gas from the Waitsia Gas Plant by the end of 2023.
“We also completed our development drilling campaign at Waitsia during the half and we have since had success from the Perth Basin exploration campaign, which soon turns to the Beach-operated phase commencing in early Q4 FY23 with the spudding of Trigg 1.
“In the Otway Basin, the Thylacine well connections will add up to 100 terajoules a day through the Otway Gas Plant. These extra volumes will be available for the East Coast market, which will again be stretched for supply in the coming winter.
“Our continued Balance Sheet strength, including a net cash position at the end of the half, supports our decision to implement our new dividend policy now. It ensures Beach can continue to invest further in growth beyond our current projects while increasing dividend payments to shareholders.
“The new dividend policy will reward our shareholders for their ongoing commitment to our strategy, targeting a payout ratio of 40-50% of pre-growth free cash flow and enabling the distribution of our substantial franking credit balance. Having invested in our major growth projects we are now in a position to reward shareholders.
“While we are focussed on delivering energy security through increased gas supply in Australia and New Zealand, we are equally focussed on reducing our emissions, and exploring new energy opportunities across our portfolio.
“The Moomba CCS project is one of Australia’s most significant emissions reduction activities and will deliver up to 1.7 million tonnes of CO2 abatement once operational. “This is a key contributor to Beach’s strategy to reduce its portfolio emissions intensity by 35% by 2030. “Our industry today is experiencing a dynamic regulatory environment where the rules of the game are frequently changing. This is generating new challenges for project scheduling as we navigate these regulatory headwinds. Meanwhile, the East Coast desperately needs as much gas as it can get. “Finally, I want to thank our people at Beach for their commitment to our Strategy and for all the hard work they have put in as we continue to deliver on our plans”, Mr Engelbrecht said.