Australian oil and gas producer Beach Energy, backed by billionaire Kerry Stokes, slumped to a more than 2-1/2-year low on Monday after it reported a decline in profit and downgraded reserves for a key gas field in Victoria state.
The company's shares closed 12.6% lower at A$1.245, hitting their lowest level since Dec. 29, 2021, and the stock logged its worst session since early April. It fell as much as 13.2% earlier in the day.
The stock was the top loser in the benchmark ASX 200 benchmark.
Beach reported a 11% year-on-year fall in annual net profit after tax to A$341 million ($224.3 million). Its fiscal 2024 production fell 7% to 18.2 million barrels of oil equivalent (MMboe) due to adverse weather conditions, it said.
Beach also lowered reserves at its Enterprise project, which allows raw gas to flow from the offshore reservoir to its Otway gas plant in Victoria.
The company told investors that it had noted a decline in pressure at the project, leading to a smaller reservoir than initially expected. This fueled concerns that the firm's target production would not be achieved.
"We had assumed all material reserves downgrades had been pre-announced in June, but the downgrade of Enterprise gas volumes is disappointing," Jarden energy analyst Nik Burns said.
Analysts at Citi warned investors of the condition of the reservoir.
Since coming online, Enterprise's reservoir pressure has declined more than anticipated, indicating a smaller container size, Citi analysts said in a note.
($1 = 1.5200 Australian dollars)
(Reuters - Reporting by Rajasik Mukherjee; Editing by Subhranshu Sahu and Sonia Cheema)