Beach (ASX:BPT) share price charges higher after delivering rapid profit growth

Here's how Beach performed during the first half…

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In morning trade, the Beach Energy Ltd (ASX: BPT) share price is charging higher following the release of its half year results and a solid rise in oil prices on Friday night.

At the time of writing, the energy producer's shares are up over 4% to $1.55.

Beach share price higher following strong profit growth

  • First half production of 11.02 MMboe
  • EBITDA margin of 65%
  • EBITDA up 26% to $513 million
  • Net profit after tax (NPAT) up 66% to $213 million
  • Fully franked interim dividend of 1 cent per share
  • Net cash position of $73 million and availability liquidity $673 million

What happened during the first half?

For the six months ended 31 December, Beach reported a 26% increase in EBITDA to $513 million. This was driven by production of 11.02 MMboe and a realised oil price of $113.6 per barrel.

Beach also made a lot of progress operationally during the half, particularly in respect to its growth projects.

This includes the connection of Geographe 4 and 5 into the Otway Gas Plant to deliver an uplift in gas production. In addition, the first of four Thylacine wells has been drilled, with the offshore drilling program scheduled for completion mid-2022.

Another development is the LNG heads of agreement with BP for Beach's 3.75 million tonnes from Waitsia Stage 2 from 2023. And finally, the Kupe Compression Project is online and delivering a production boost, with the plant now running at full capacity.

Management commentary

Beach's Acting Chief Executive Officer, Morné Engelbrecht, commented: "Delivering on this phase of our growth means we are making progress towards our production target of 28 MMboe in FY24."

"We had previously stated FY22 was going to be a pivotal year in Beach's transformation, and I'm proud of what we have achieved so far. This includes our historic LNG agreement with BP and connecting our first Otway offshore wells to the East Coast market."

"Our balance sheet remains in great shape as we retain a net cash position, and we are well placed to deliver on the next stage of our growth agenda."


Management has retained its guidance for FY 2022. It continues to guide to production of 21 to 23 MMboe, capital expenditure of $900 million to $1,100 million, and unit operating costs of $11.50 to $12.50 per barrel of oil equivalent.

Mr Engelbrecht commented: "Despite the challenges in 2021, it is important to point out that Beach executed a significant portion of its organic growth platform, allowing us to enter 2022 with a solid base to keep delivering and reach our target of 28MMboe in FY24."

"The second half of FY22 remains a busy period with activity across the portfolio, and we are looking forward to the forthcoming Western Flank oil exploration campaign – in which any success would sit above our base-case target," he added.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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