Beach Energy (BPT) has struggled both in 2023 and over recent years due to reserve and production issues, the markets sentiment towards BPT wasn’t helped last month by some weak well-testing results at their first test in the Perth Basin although the stock has bounced following the news, the shares are now trading on an Est. 8.45x earnings for FY23. With the Aust Gov expected to implement its new Mandatory Code of Conduct imminently, we expect BPT to qualify for an exemption to the $12/GJ price requirement, allowing it to sell uncontracted East Coast gas at higher prices, providing upside risk to consensus forecasts.
- We can see upside risk to BPT share price from a valuation perspective but it may take a while for investor confidence to return i.e. we have BPT trading on an implied oil price of sub $US60/barrel.