Beach Energy's shares fall on weak production forecast, but the company is still profitable.

Beach 'Energy' posted a profit for the year on Thursday. This is a dramatic turnaround from a loss a year earlier. However, shares in this Australian oil and gas producer fell more than 6% as investors focused on their?soft? production outlook.

The Adelaide-headquartered company forecast fiscal 2027 production of between 19.5 million and 23 million barrels of oil equivalent (MMboe), a range Citi analysts said was around 5% below the Visible Alpha consensus estimate at the midpoint.

Beach shares fell 6.2%, to A$0.835. This made Beach one of the top three decliners on the benchmark index. The benchmark index was up 0.8%, at a record-high.

Citi said that the company's forecast capital expenditure of A$600 ($423.30 millions) to A$700 for fiscal 2027 is about?12% higher than consensus expectations.

Citi analysts said: "We expect that the market will likely look past the headline core NPAT beating."

Beach reported a net profit of A$281.4million for the year ended June 30th, compared to a loss A$43.8million a year ago.

The company attributes the turnaround to a 7% rise in its average realized gas price, to A$11.5 a gigajoule.

Field operating costs fell by 3%, to A$244 millions despite the additional costs associated with the launch of the Waitsia Gas Plant (Western Australia) during the year.

The production remained robust despite flooding in Cooper Basin and natural fields decline in Otway Basin. This was supported by the ramping up of the Waitsia Gas Plant which reached its nameplate capacity in early April.

Beach's results come as Canberra is evaluating a policy which would require energy producers to reserve 20% for the domestic market in Australia's east coast. This will help to avoid supply shortages and reduce energy bills.

The company said that any policy should be based on a long-term, reliable supply of gas at affordable prices. The company said it supported a prospective reservation for new supply between 2030 and 2032 on a basis of "must offer" rather than "must sell" to avoid forced structural excess.

Beach announced a final dividend per share of 2 Australian Cents, down from the 6 Australian Cents declared a year ago.

(source: Reuters)