Morgans highlights gas production in the fourth quarter increased 8% quarter-on-quarter (qoq), driven by increases in the Otway and Perth basins, offsetting declines in the Cooper Basin. FY21 production reached 25.6MMboe, in-line with the analyst’s forecast.
Realised oil prices increased 10% qoq though sales only increased 5% from weaker volumes in the Cooper Basin. As total sales increased 7% qoq, management increased guidance to the top end of the earnings (EBITDA) guidance range.
Given the recovery in oil prices seen in the last half, Morgans believes there is less upside for the oil-linked gas contracts in FY22, and therefore lowers average realised gas prices forecasts by -5%. The broker retains its add rating and lowers its target to $1.77 from $1.86.
Target price is $1.77.Current Price is $1.21. Difference: $0.56 – (brackets indicate current price is over target). If BPT meets the Morgans target it will return approximately 32% (excluding dividends, fees and charges – negative figures indicate an expected loss).