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As mentioned last week, I had something pretty cool. Well, here it is! Fair amount of effort to bring this report together, but now have established foundations to build from. Hopeful that future iterations will only be better.
ASX Energy Report - Apr 2025
ASX Energy Report - Apr 2025.pdf
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Executive summary

The Australian energy sector is undergoing a profound transformation characterised by parallel strategic initiatives across traditional production and emerging clean energy technologies. Analysis reveals the sector is approaching a significant financial inflection point in 2026-2027 as major capital projects complete and capital intensity transitions from development to harvesting phase.

The most striking pattern is an anticipated "J-curve" in financial metrics, with companies investing heavily in 2024-2026 before seeing enhanced returns from 2027 onward. Capital intensity is projected to decline from 40-45% of revenue to approximately 20% by 2027-2028, potentially releasing substantial free cash flow.

Our analysis ranks companies based on their operational metrics and strategic positioning in the current energy landscape:

Top-Tier Positioning:

  • Woodside Energy (9.2/10): Demonstrates industry-leading EBITDA margins (70%), strong project execution, and advanced completion status of major developments.
  • Santos (8.8/10): Shows resilience through low breakeven economics (below $35/bbl) and leadership in carbon management with operational Moomba CCS project.
  • Origin Energy (8.3/10): Maintains strategic advantage through balanced portfolio, strong APLNG cash flows, and well-positioned battery investments at existing generation sites.

Mid-Tier Positioning:

  • AGL Energy (7.9/10): Shows improving position with substantial battery deployment and virtual power plant orchestration capabilities.
  • Beach Energy (7.2/10): Benefits from diversification across multiple Australian basins but lacks the scale of larger competitors.

Challenged Positioning:

  • Viva Energy (6.5/10): Faces integration risks and elevated debt levels despite extensive retail network and promising conversion economics.
  • Ampol (6.1/10): Confronts significant challenges with severe refining margin compression (down 49% year-on-year) despite efforts in retail transformation.

This analysis highlights the synchronised capital allocation transformation occurring across the sector as companies position themselves for the energy transition.