The Beach Energy Ltd (ASX: BPT) share price has surged 5.26% higher early this morning after the Aussie oil company posted a 190% increase in net profit after tax (NPAT) in its latest full-year results.
What did Beach Energy announce today?
Beach’s NPAT soared 190% higher to $577 million for the year ended 30 June 2019 (FY19), with underlying NPAT surging 86% to $560 million for the year.
The biggest underlying NPAT driver was higher volumes, while other revenue and favourable foreign exchange movements also helped the $280 million increase.
Production and sales volumes both rose 55% compared to the prior corresponding period (pcp), up to 29.4 million and 31.2 million barrels of oil equivalent (mmboe) for the year.
The average realised oil price climbed 9% higher to $101.8 per barrel while Beach’s average realised gas/ethane price edged 4% higher to $6.81 per gigajoule (GJ), sending revenue soaring 54% higher on pcp to $1.93 billion.
The strong results continued for Beach shareholders with the company’s operating cash flow surging 57% on pcp to $1,038 million for the year.
The company also improved its balance sheet strength throughout the year, turning its $639 million net debt to a $172 net cash position.
Beach management said it has $622 million in available liquidity at its disposal, with its Gas portfolio revenue covering all of its FY20 operating costs.
What about Beach’s asset performance highlights?
Beach reported record investment in Western Flank Oil with $200 million to be invested in the asset and up to 77 oil wells to be drilled in FY20.
The Aussie oil and gas group also reported strong results from its Western Flank gas assets, with a 35% increase in yearly production on pcp.
At its Cooper Basin joint venture with Santos Ltd (ASX: STO), Beach increased production by 37% on pcp and completed 50 exploration and appraisal wells with an 80% success rate in 2018.
On the surface, this looks like a strong result for Beach Energy and one which should please Beach shareholders.
The Beach share price was trading at $1.80 per share prior to the market open and has climbed 39.5% higher so far this year. At the time of writing, the Beach share price trades at $1.90.
Given Beach shares are currently trading at around 19x earnings, there is an implicit growth assumption built into its valuation but the 190% surge in statutory NPAT is likely to be seen as a strong earnings result regardless.
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Motley Fool contributor Kenneth Hall 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 Scott Phillips.