Beach Energy (ASX:BPT) Slides 4% on Weaker Half-Year Profit- Is the Dip a Buying Opportunity as Waitsia Ramps Up?

Beach Energy dips on profit, while Waitsia lifts the outlook

Beach Energy (ASX: BPT) dropped more than 4 per cent to A$1.20 on Thursday after reporting half-year production down 7 per cent to 9.5 million barrels of oil equivalent and underlying net profit off 8 per cent to AUD 219 million. At first, the numbers seem weak. But when you look closely, the company actually did better than many people expected. Flood damage in the Cooper Basin had reduced production, but that problem is now almost over, with 97% of production running again. For investors, the key question is whether the share price already includes all the bad news and if signs of recovery will start showing soon.

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Cooper Basin Floods Are Rolling Off- And Results Beat Expectations

The Cooper Basin floods that impacted operations throughout late 2025 were the main reason for the production decline. For a company that relies heavily on this basin, the disruption was meaningful, but it was a one-off event, not a deeper problem. CEO Brett Woods confirmed that almost all flood-affected wells are now back online, which means the production drag should largely disappear in the second half.

Despite the headwinds, Beach Energy still pulled in AUD 982 million in revenue, roughly flat on the prior year. Higher gas prices, up 13 per cent to AUD 11.80 per gigajoule, helped offset lower production and a 12 per cent drop in realised oil prices. Operating costs also fell 7 per cent to AUD 10 per barrel, showing management is keeping costs tight even during a disrupted period. We believe this signals a business performing better than the headline numbers suggest.

Waitsia Ramps Up as Beach Energy’s New Growth Engine

The bigger story right now is Waitsia. Beach achieved first gas from its Waitsia Gas Plant in Western Australia in early December, and the plant has already hit peak rates of 165 terajoules per day, roughly two-thirds of its full capacity, with a third compressor due online soon.

Four LNG cargoes shipped during the half brought in AUD 233 million in revenue. That is a brand-new earnings stream that did not exist a year ago, and it will only grow as Waitsia scales up. For investors, this is the key catalyst; it shifts Beach from a company recovering from disruption to one actively growing its earnings base. Management maintained full-year guidance of 19.7 to 22.0 MMboe, implying a much stronger second half driven largely by Waitsia.

The Investor’s Takeaway for Beach Energy

The better-than-feared result suggests the market had already priced in much of the flood impact. With a market cap of around AUD 2.7 billion, Beach Energy trades at a modest valuation compared to larger peers like Woodside Energy (ASX: WDS) and Santos (ASX: STO), while offering a real production recovery story. The balance sheet is solid too, with AUD 925 million in available liquidity and net gearing at just 12 per cent.

The one clear negative was the dividend. Management declared a reduced interim payout of 1 cent per share, down from 3 cents a year ago, citing higher capital spending. For income-focused investors, that is disappointing. However, the company signalled it will revisit returns at the full-year result, and a stronger second half could support a more generous final dividend.

In our view, Beach Energy looks reasonable for investors seeking mid-cap energy exposure with a recovery catalyst. The flood impact is rolling off, Waitsia is ramping, and cost control is evident. However, Brent crude sitting around USD 68 per barrel and ongoing geopolitical uncertainty mean the oil price backdrop remains unpredictable. We would like to see a strong production result next quarter before this becomes a higher-conviction call. For now, this is a stock worth watching closely rather than chasing on the dip.