Manufacturers and car makers have bold plans to replace fossil fuels with renewables and batteries, which is good news for rare earth mining companies.
But there's still plenty of punch yet to be packed for these three S&P/ASX 200 oil and gas producers that every growth investor should have in their portfolio.
Woodside Petroleum Limited (ASX: WPL)
An oil and gas company involved in hydrocarbon exploration, evaluation and development, Woodside Petroleum has recently garnered strong support from institutional investors in its $2.5 billion equity raising strategy to buy a greater stake in Western Australia's Scarborough gas field.
Woodside released full year results a fortnight ago, showcasing the company's strong cash flow, steady output and healthy margins, with free cash flow up more than 600% to US$830 million, despite Wheatstone capital expenditure costs and assets yet to produce revenue.
Woodside's net profit rose 18% for the FY17 to hit US$1 billion while revenue was down slightly to US$3.9 billion and EBIT up to US$1.7 billion.
Woodside is tracking 4.5% below its 200-day moving average on a downward trend, opening down slightly to $28.92 today, down almost 7% from its share price of $31.11 at the same time last year.
Woodside produces 7% of the global LNG supply.
Woodside shareholders will receive a fully-franked interim dividend of 49 US cents per share, but it will be interesting to watch trading volumes for the company if the share price continues to decline and many may choose to jump on board, with the company poised to take advantage of plenty of growth opportunities in the near future.
Santos Ltd (ASX: STO)
Santos Ltd operates in the exploration, development, production, transportation and marketing of hydrocarbons, with share prices down today to $5.04 after a fairly steadily upwards swing over the last 12 months from $3.75 at this time last year.
Santos has spent much of the last 12 months paying off debt, cutting costs, and slashing dividends, while oil prices have generally been on the rise.
The release of its full-year results on February 21 saw Santos report a 433% increase in underlying profit to US$336 million excluding the net impairment taken at half-year and other significant items.
Operating cash flow rose 49% to US$1.2 billion and free cash flow was up 200% to US$618 million.
With Santos Managing Director and CEO Kevin Gallagher pointing to the removal of substantial costs and reducing net debt as underpinning the strong result, Santos moves into its next year of reporting more resilient, with a focus on "the capacity to execute and bring on-line "growth opportunities across its core long-life natural gas assets."
Investors might be waiting for prices to drop a bit before they buy in, but there is no secret that Santos has good prospects on the horizon as it pursues appraisal drilling in PNG and the search for new opportunities around its Western Australian assets. It is also ramping up activity in the Cooper Basin with all guidance for 2018 maintained.
Beach Energy Ltd (ASX: BPT)
Share prices in Adelaide-based oil and gas exploration and production company Beach Energy Ltd were at $1.36 at the time of writing after tracking up steadily from a low of 55c per share a year ago.
Beach announced its half-year results last week, with a 7% drop in profit to $95.7 million – impacted by transaction costs for the Lattice takeover – and an up-tick in sales of 12% to $385.9 million.
The report noted outstanding performance out of the Cooper Basin, with a lift in guidance for the project for FY18 and details of Beach's plans to return focus to South Australia and continue to capitalise on the Cooper Basin's strong performance.
But despite cost-cutting practices in play, shareholders have been considered as high-priority for Beach yet again, with the company declaring a half-year dividend of 1c per share fully franked.
Beach's Cooper Basin focus will be backed up by its plans to divest Otway gas project, with a deal expected to be struck in 6-12 months.
Analysts have named Beach as a bit expensive at present, but growth investors should keep this one on their watch list.
