It has been a fantastic start to the day for the Beach Energy Ltd (ASX: BPT) share price on Tuesday.
In morning trade the energy producer's shares are up 13% to $1.41.
Why is the Beach share price racing higher?
There have been a couple of catalysts for today's strong gain.
The first has been a sharp rise in oil prices overnight after Pfizer revealed extremely promising data from its COVID-19 vaccine study.
With early data indicating that the vaccine is 90% effective at preventing COVID-19, life could return to normal sooner than expected. This would be great news for the global economy and is likely to underpin a rebound in demand for oil and gas.
At the time of writing, the WTI crude oil price is up 7.2% to US$39.81 and the Brent crude oil price is up 6.5% to US$41.99.
What else is supporting Beach shares?
In addition to the above, this morning Beach released an update on its exploration activities.
According to the release, the company has made a gas discovery at Enterprise 1 in the nearshore Victorian Otway Basin. Enterprise 1 was spud from an onshore location, 3.5 km from Port Campbell and 8 km from the Otway Gas Plant.
Management advised that the well intersected a 146 metre gas column in the Upper Waarre Formation, including 115 metres of net gas pay with no gas-water contact identified. Sampling indicates a gas composition with 10% CO2 by volume.
And while estimates of the potential resource size are not yet defined, management appears very pleased with this discovery.
Beach Energy's Managing Director and CEO, Matt Kay, commented: "To have our first exploration well in the Victorian Otway program deliver a successful result is an excellent outcome for the business."
"This success enhances our plans to develop more supplies for the East Coast gas market. The Enterprise result also de-risks other nearby prospects, warranting their evaluation as potential future drilling candidates," he added.
A volumetric estimate for the Enterprise discovery is expected to be completed before the release of the company's FY 2021 half year results in February.
