Why the Beach Energy Ltd share price is surging today

Shares in oil and gas exploration and production company Beach Energy Ltd (ASX: BPT) were among the top 10 gainers on the S&P/ASX 200 today as the company released a strong half-year report.

Beach holds interests in exploration and production tenements in Australia, Tanzania, New Zealand and Romania. Currently, the flagship operations are located in the Cooper/Eromanga Basins and New Zealand.

Beach Energy booked a 14% increase in revenue to $392.6 million thanks in part to higher oil and gas prices for the half-year ending December 31, 2017, an EBITDA up 5% to $236 million and underlying NPAT up 5% to $93 million.

Beach Energy’s report detailed an “active and successful” first half for FY18, with continued progress in the Cooper Basin and the financial close of the $1.58 billion Lattice acquisition as notable events.

The Lattice buy should pay off, with Beach saying the acquisition would see “diverse and multiple” growth opportunities including; improved cash flow to maintain financial strength, the opportunity to expand beyond the Cooper Basin, grow their east coast gas business and optimise current Cooper Basin projects.

Lattice bring with it a 50% stake in the onshore gas discovery project Waitisa Gas – forecast to inject $50 million per annum into the Beach books.

Shareholders rallied behind the Adelaide-based company on February 19 with the share price zooming up 5.3% to $1.33 at the time of writing, no doubt buoyed by the announcement of a 1c per share fully-franked interim dividend payable on March 30.

Operationally Beach has upgraded its full-year outlook due to drilling and field development successes and a potential large gas discovery at Haselgrove-3 ST1 in the Otway Basin.

Beach announced free cash flow levels have hit $155 million, a 12% increase in sales revenues and ‍FY18 pro forma capital expenditure expected to be within the range of $405 million to $455 million.

The Beach Energy share price has travelled upwards consistently since this time last year, when it was at just 69c per share.

Analysts should weigh in on the results in coming weeks with expectations likely to hinge on how potential earnings from Lattice could increase Beach’s position in the market.

Top 3 ASX Blue Chips To Buy In 2018

For many, blue chip stocks mean stability, profitability and regular dividends, often fully franked..

But knowing which blue chips to buy, and when, can be fraught with danger.

The Motley Fool’s in-house analyst team has poured over thousands of hours worth of proprietary research to bring you the names of "The Motley Fool’s Top 3 Blue Chip Stocks for 2018."

Each one pays a fully franked dividend. Each one has not only grown its profits, but has also grown its dividend. One increased it by a whopping 33%, while another trades on a grossed up (fully franked) dividend yield of almost 7%.

The names of these Top 3 ASX Blue Chips are included in this specially prepared free report. But you will have to hurry. Depending on demand – and how quickly the share prices of these companies moves – we may be forced to remove this report.

Click here to claim your free report.

Motley Fool contributor Carin Pickworth has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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.