Beach boss has plan for a revival

Beach Energy will be laser focused on reducing costs and increasing production in a bid to revive the fortunes of the company, the oil and gas giant’s new chief executive has promised.

Beach, which is majority owned by billionaire Kerry Stokes, has tested the patience of investors amid a series of production shortfalls, but new chief executive Brett Woods said he is focused on delivering growth.

“I’ve got a target to deliver a disciplined, high-performance organisation,” Mr Woods said. “This is how I’m built. My history is about driving efficiency and driving lower costs.”

The vow won immediate favour with the market, with shares rallying more than 4 per cent. But investors remain anxious, particularly with Beach’s long history of underwhelming performance. Mr Woods said he has implemented a strategic review of the company to achieve his aspiration of reducing costs. He said he would brief the market on the findings at the full-year results later this year.

But illustrating the difficulty of the task ahead, Beach on Monday reported a 10 per cent fall in half-year profits as stagnant production and high costs from a series of writedowns weighed.

Underlying net profit fell to $172.7m for the six months ended December 31, from $191.2m a year earlier.

The fall came despite Beach reporting a 16 per cent increase in revenue, as costs rose 30 per cent year-on-year and production fell 10 per cent.

Beach said annual production will be between 18m and 20m barrels of oil equivalent, less than the 18m to 21m previously envisaged by the company, intensifying some concerns about Beach’s struggles to bolster production.

Mr Woods said he could understand any lingering concern about a fresh false dawn but said Beach was on the verge of a brighter outlook.

“We are on the cusp of unlocking a whole lot more volumes to market and that’s coming through the middle of the year through to the end of the year,” he said.