The Motley Fool

Beach Energy share price surges after profit rockets 190%

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.

Foolish takeaway

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.

Fools can find another stock that I think could be set to surge in 2019 below!

One ASX Stock For An Estimated $US22 Billion Marijuana Market

A little-known ASX company just unlocked what some experts think could be the key to profiting off the coming marijuana boom.

And make no mistake – it is coming. To the tune of an estimated $US22 billion.

Cannabis legalisation is sweeping over North America, and full legalisation arrived in Canada in October 2018.

Here's the best part: we think there's one ASX stock that's uniquely positioned to profit immensely from this explosive new industry... taking savvy investors along for what could be one heck of a ride.

AND, this is the first time The Motley Fool Australia has EVER put a BUY recommendation on a marijuana stock.

Simply click below to learn more on how you can profit from the coming cannabis boom.

Click here to find out more

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.

FREE REPORT: Five Cheap and Good Stocks to Buy now…

Our Motley Fool experts have FREE report, detailing 5 dirt cheap shares that you can buy today.

One stock is an Australian internet darling with a rock solid reputation and an exciting new business line that promises years (or even decades) of growth… while trading at an ultra-low price…

Another is a diversified conglomerate trading near a 52-week low all while offering a 2.7% fully franked yield…

Plus 3 more cheap bets that could position you to profit over the next 12 months!

See for yourself now. Simply click the link below to scoop up your FREE copy and discover all 5 shares. But you will want to hurry – this free report is available for a brief time only.

CLICK HERE FOR YOUR FREE REPORT!