Track your investments for FREE with Simply Wall St, the portfolio command center trusted by over 7 million individual investors worldwide.

Project approval: why Moomba Central Optimisation matters for Beach Energy

Beach Energy (ASX:BPT) has moved ahead with Santos on the Moomba Central Optimisation project in the Cooper Basin, a A$250 million infrastructure upgrade aimed at lowering costs, cutting emissions and supporting higher gas output.

See our latest analysis for Beach Energy.

Despite the Moomba Central Optimisation news, Beach Energy’s A$1.165 share price has only modestly moved in recent months, with low single digit gains over 1 to 90 days and a 1 year total shareholder return decline of 11.82%, which points to fading longer term momentum.

If infrastructure upgrades and gas projects are on your radar, it could also be a good time to look across the energy value chain and check out 23 power grid technology and infrastructure stocks as another way to spot potential opportunities.

With Moomba Central Optimisation targeting lower costs and higher efficiency, yet Beach Energy shares still showing multi year underperformance, is this an overlooked value story, or are markets already pricing in any future growth?

Most Popular Narrative: 1.3% Undervalued

At A$1.165, Beach Energy is trading just below a narrative fair value of about A$1.18, which rests heavily on future LNG and domestic gas pricing.

The ramp-up and commissioning of the Waitsia Gas Project, positioning Beach Energy as a leading LNG exporter, is expected to significantly boost export volumes and enable higher realized pricing via exposure to international LNG markets, providing a structural uplift to revenue and EBITDA margins starting late FY'26 and beyond.

Read the complete narrative.Read the complete narrative.

Curious what kind of profit turnaround needs to sit behind that LNG story, and what margin profile justifies the A$1.18 fair value? The narrative leans on a sharp swing from current losses, steady revenue assumptions, and a future earnings multiple below many peers. The full set of expectations is worth checking line by line.

Result: Fair Value of A$1.18 (ABOUT RIGHT)

Have a read of the narrative in full and understand what's behind the forecasts.

However, you still need to weigh shorter reserve life and the risk of costly acquisitions or project delays. Any of these factors could quickly challenge that fair value story.

Find out about the key risks to this Beach Energy narrative.

Next Steps

With both risks and rewards on the table, do you think the market is being too cautious or fair? Take a moment to review the numbers yourself and weigh up the full picture with 3 key rewards and 1 important warning sign

Story Continues

Looking for more investment ideas?

If this story has you thinking more broadly about your portfolio, do not stop at one stock. Use screeners to hunt for ideas that fit your goals.

Target potential upside by scanning our list of 7 high quality undervalued stocks that combine attractive pricing with solid underlying fundamentals. Strengthen your income stream by reviewing 7 dividend fortresses built around companies offering higher yields with a focus on payout support. Prioritise resilience by checking 8 resilient stocks with low risk scores that focus on businesses with lower risk scores and steadier profiles.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include BPT.AX.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

View Comments