Fund Manager Summary
The fund managers believe that the outlook for Beach Energy Ltd presents a significant opportunity, particularly as the company is expected to export Liquified Natural Gas by the second half of 2023. In their opinion, despite facing challenges such as the collapse of contractor Clough, Beach remains undervalued, currently trading at 6.6x 2024 earnings. The fund managers assert that the market often misunderstands the Oil & Gas industry, with anticipated growth in demand for these resources, especially in non-OECD nations, which are projected to consume 55% of annual oil by 2030. They maintain that Beach is a compelling investment, especially given its performance since their initial purchase at approximately $1.10.
Source: Trading View
Commentary From The Managers
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Blackwattle Investment Partners
30 Apr 2025
$1.18
Summary
- Beach Energy dropped 18.1% in early April due to overall market softness and tariff announcements.
- The Coalition's new energy strategy aimed to cut LNG exports to boost East coast gas supply was viewed as an 'own goal' by the industry.
- This strategy was expected to reduce profitability of new domestic gas projects and worsen the existing supply shortfall.
- The election of the Labor party has alleviated this risk.
- Since month-end, Beach Energy has started flowing gas into its Waitsia gas plant project, which is a key catalyst for the stock.
- Blackwattle Investment Partners anticipates that the ramp-up of the plant will drive a re-rating of the stock as the company transitions into a strong cash flow generation phase.
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Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
Commentary From The Managers
Blackwattle Investment Partners
30 Apr 2025
$1.18
- Beach Energy dropped 18.1% in early April due to overall market softness and tariff announcements.
- The Coalition's new energy strategy aimed to cut LNG exports to boost East coast gas supply was viewed as an 'own goal' by the industry.
- This strategy was expected to reduce profitability of new domestic gas projects and worsen the existing supply shortfall.
- The election of the Labor party has alleviated this risk.
- Since month-end, Beach Energy has started flowing gas into its Waitsia gas plant project, which is a key catalyst for the stock.
- Blackwattle Investment Partners anticipates that the ramp-up of the plant will drive a re-rating of the stock as the company transitions into a strong cash flow generation phase.
Summary
Longwave Capital
28 Feb 2025
$1.40
- Negative market reaction to lower 1H dividend payout
- Disappointments from Waitsia commissioning affecting sentiment
- Longwave Capital emphasizes three critical long-term factors:
- Increasing gas production at Beach Energy
- Declining costs associated with production
- Rising market prices due to supply shortfall
- Overall, investment thesis remains intact despite short-term fluctuations
Summary
Blackwattle Investment Partners
31 Dec 2024
$1.40
- BPT was the largest positive contributor to performance during the month.
- BPT rallied 13% in December due to positive feedback from a site visit and stronger oil prices.
- BPT is an Australian focused oil and gas player with assets on both east and west coasts.
- The site visit included the Waitsia gas field and plant in WA, which was highly anticipated.
- Despite struggles with the project, it has reached mechanical completion after delays and cost overruns.
- After underperformance in the last 6 months, the stock had a modest relief rally.
- There is still upside for BPT as they are seen as an ‘improving quality’ cyclical business.
- BPT is nearing the end of a multi-year, capital intensive growth journey to develop high value gas assets.
- This should enable BPT to generate improved financial metrics and strong cashflow, while creating capital management optionality.
- BPT is strategically well placed for consolidation in the Australian gas sector under strong leadership.
Summary
Tyndall Asset Management
31 Dec 2024
$1.40
- Tyndall Asset Management sold their investment in Beach Petroleum due to concerns over continued delays in project timelines.
- There were significant capex blowouts associated with the Waitsia project.
- The decision reflects a strategic move to maintain portfolio integrity amid increasing project risks.
- Tyndall Asset Management aims to focus on companies with more predictable outcomes.
Summary
Equity Trustees Asset Management
30 Sept 2024
$1.22
- BPT experienced challenges during the quarter with a low oil price.
- A reserve downgrade was announced at their FY24 result.
- This downgrade was not the first for BPT, contributing to management's credibility issues.
- Project delays have further affected confidence in management.
- Equity Trustees Asset Management continues to hold because they see value in BPT.
- Upcoming projects must deliver evidence of cashflow and cost reductions for market confidence.
- Once delivery occurs, potential for strong production growth and cashflow generation exists.
Summary
Blackwattle Investment Partners
30 Apr 2024
$1.61
- Beach Petroleum’s share price has declined due to delays in the Waitsia project in WA.
- Despite the delays, Blackwattle Investment Partners maintains that the investment case remains intact.
- Incoming CEO Brett Woods, formerly of Santos, has been selected by Kerry Stokes to lead a strategic transformation.
- The aim is to evolve Beach from an accident-prone explorer/developer into a focused, cash-generative producer.
- Key to this transition is the alignment of major shareholder, board, and management.
- Blackwattle Investment Partners anticipates insights from Beach's upcoming strategy day where Woods will present his plans.
Summary
Milford Asset Management
31 Mar 2024
$1.86
- Performance for the month was led by Beach Energy (+14.7%)
- Beach Energy is leveraged to global oil markets
- Company operates in an extremely tight Australian domestic gas market
- Historical challenges include major downgrades to reserves, capex blowouts, and negative exploration results
- New leadership signals potential for positive change
- Encouraging results from the first stage of strategic review include significant cost savings
Summary
Endeavor Asset Management
31 Mar 2024
$1.86
- Endeavor Asset Management identified relative value in Beach Energy compared to its peers.
- The company's share price rallied 20% following the announcement of the first stage of their strategic review.
- This strategic review included a 30% headcount reduction.
- Projected annual cost savings range from $24-50 million.
- Endeavor Asset Management continues to hold as they see potential in the company's strategy.
Summary
Collins St Asset Management
30 June 2023
$1.35
- Collins St Asset Management initially invested in Beach Energy in 2021 when the share price fell approximately 45% due to a production downgrade.
- The purchase was made at around $1.10, indicating the company was trading at roughly 5 times earnings.
- Significant growth potential was anticipated from their joint venture to export Liquified Natural Gas by the second half of 2023.
- Beach Energy's share price peaked over $1.80 but is currently trading around $1.40, following some setbacks.
- The company faced challenges, notably due to the collapse of Clough, the contractor for their major project.
- Collins St Asset Management believes the market continues to misunderstand the Oil & Gas industry.
- Despite the momentum towards renewable energy, demand for oil and gas is expected to grow.
- Oil remains the most commonly used commodity globally, and increasing energy needs persist, particularly in non-OECD nations.
- Beach Energy is currently trading at 6.6x 2024 earnings, which Collins St Asset Management views as too cheap.
- The fund manager maintains that Beach Energy is a worthwhile investment to hold.
Summary
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
ANALYST INSIGHT
Equity Research Analyst
"Despite the prevailing narrative around renewables, the demand for oil and gas seems poised for growth. Beach Energy appears undervalued at 6.6x 2024 earnings, suggesting it could be a hidden gem in a misunderstood market."
Last Updated: 30 Apr 2025
Query The Data
Frequently Asked Questions
Who is investing in Beach Energy Ltd (ASX:BPT)?
Fund managers including Collins St Asset Management, Endeavor Asset Management, Milford Asset Management, Blackwattle Investment Partners, Longwave Capital, Equity Trustees Asset Management and Tyndall Asset Management have invested in Beach Energy Ltd (ASX:BPT).
Why do fund managers invest in Beach Energy Ltd?
Fund managers invest in Beach Energy Ltd due to its attractive valuation, trading at approximately 6.6 times projected 2024 earnings, and significant growth potential from its liquefied natural gas export initiatives. Despite challenges like contractor issues, the oil and gas sector is expected to experience sustained demand, particularly from non-OECD nations. Fund managers view Beach as undervalued, with the potential for strong returns as the market continues to overlook the company's fundamentals.
What happened to Beach Energy Ltd (ASX:BPT)?
There have been no recent updates from fund managers regarding Beach Energy Ltd although fund managers including Collins St Asset Management, Endeavor Asset Management, Milford Asset Management, Blackwattle Investment Partners, Longwave Capital, Equity Trustees Asset Management and Tyndall Asset Management have previously commented.