4 reasons why Beach Energy should be on your hot stock list

In the next few years the energy sector will drive the economy more, especially the LNG export industry as it begins to supply the always-hungry Asian energy market. While the news has been running stories about the mining pullback, smart investors are keeping up on energy producers both big and small.

Beach Energy Limited (ASX: BPT) could be a promising addition to your portfolio. Here are four reasons why it is moving ahead now and taking the next step up from mid-tier player.

1) Largest onshore producer

Recent oil discoveries in its Western Flank areas within the Cooper-Eromanga Basin region have led to a great increase in production. The company is now the largest onshore oil producer in Australia with record oil production in the latest quarter.

2) Enviable cash position

Higher revenue and earnings have allowed the company to build up cash reserves of $428 million that it can apply to further production development. Underlying net profit has more than doubled in the past two years.

3) $1 billion revenue

By the end of the financial year, the company projects that its full year revenue will be on track to reach $1 billion. In FY 2013, total revenue was $700.5 million, so reaching $1 billion would be an impressive 43% increase.

4) Gas sales agreement with Origin

In April, Beach Energy entered into an eight-year agreement to supply gas to Origin Energy Limited (ASX: ORG). As a member of the South Australian Cooper Basin joint venture, the company can use existing pipeline infrastructure operated by Santos Ltd (ASX: STO) and shared with other companies like Senex Energy Ltd (ASX: SXY) and send it to Origin. Origin needs to secure gas supplies for its LNG export facilities in Queensland which will deliver first LNG by mid-2015.

The Cooper-Eromanga basin region is opening up great amounts of oil and gas, yet still most of the area has not been fully developed. Beach Energy has good opportunities over the next few years to add to both oil and unconventional gas production.

Every oil investor must read this!

Beach Energy is not the only great energy stock we have in our sights. With limited oil supply and growing demand, oil prices are likely to rise over time.

Position yourself to profit from this trend now, with The Motley Fool's brand-new FREE research report, "3 Oil Stocks to Send Your Portfolio Gushing Higher".

Motley Fool contributor Darryl Daté-Shappard does not own shares in any company mentioned. 

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.