What: Earlier today shares in Drillsearch Energy Limited (ASX: DLS) were trading lower despite the release of an impressive set of full-year results. Here are the highlights:
- Production up 209% to 3.4 mmboe
- Revenue up 279% to $387 million
- Underlying NPAT up 56% to $94.6 million
- Earnings per share up 50% to 16.6 cents
- Operating cash flow up 1,183% to $246.4 million
- Debt down 99% to $1 million
- Cash of $152 million
So what: Despite a seemingly stellar performance, investors have sold down the company's shares in morning trade. Analysts were expecting a strong set of results from Drillsearch as the company ramped up production but the market's reaction says that they were expecting more.
Managing Director Brad Lingo said: "A Successful 2014 has positioned the group with strong stable production cashflows from the Western Flank Oil Fairway that enable us to focus on medium-term growth opportunities in Oil and Wet Gas, and also to advance our program with our highly prospective acreage."
Now What: In FY15, management expect production to come in slightly lower than FY14, with guidance set between 3.0 and 3.4 mmboe. Capital expenditure is forecast between $130 million and $170 million with the majority focused on conventional business units, particularly Oil and Wet Gas. It expects to drill around 40 wells.
A better bet than Drillsearch
With a big result in FY14 and shares trading on just 9 times earnings per share, Drillsearch appears cheap. However with production guidance largely flat and no dividend declared, I'm not in any rush to buy in.
