Beach Energy share price gains as dividend doubled

The company has doubled its dividend despite its profit tumbling last half.

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Key points

  • The Beach Energy share price is rising 0.33% right now to trade at $1.515
  • Its gain comes on the back of its first half earnings, detailing a 10% slump in underlying post-tax profits
  • Meanwhile, the company doubled its interim dividend to 2 cents per share

The Beach Energy Ltd (ASX: BPT) share price is climbing on Monday after the company posted its first-half earnings this morning.

Shares in the S&P/ASX 200 Index (ASX: XJO) oil and gas producer are up 0.13% at the time of writing, trading at $1.512.

Here are the highlights:

Beach Energy share price gains on 2-cent interim dividend

Beach Energy produced 10 million barrels of oil equivalent last half – a 10% drop – and posted $569 million of capital expenditure. Its unit field operating cost came in at $14.46 per barrel.  

The company's sales revenue increased on higher third-party sales, favourable foreign exchange rates, and higher realised oil and contracted gas prices. Meanwhile, its profit slumped amid higher sales and financing costs.

It also updated its dividend policy. It will now aim to payout 40% to 50% of its pre-growth cash flow to shareholders.

What else happened last half?

The company progressed and derisked its projects in the Otway and Perth basins last half.

It agreed for Webuild to complete the Waitsia Stage 2 project, with first gas targeted for the end of this year. Meanwhile, its Thylacine wells are expected to provide up to an extra 100 terajoules each day, with first gas tipped to the middle of the year.

Finally, work continued at its Moomba carbon capture and storage (CCS) project. It's now 40% complete.

What did management say?

Beach Energy CEO Morné Engelbrecht commented on the news driving the company's share price today, saying:

Our continued balance sheet strength, including a net cash position at the end of the half, supports our decision to implement our new dividend policy now.

It ensures Beach can continue to invest further in growth beyond our current projects while increasing dividend payments to shareholders.

What's next?

The company also updated its full-year guidance this morning. It now expects to produce 19 million to 20.5 million barrels of oil equivalent – down from its previous guidance of between 20 million and 22.5 million.

It also narrowed its capital expenditure guidance to between $900 million and $1 billion and increased its expected unit field operating costs to between $13.75 a barrel and $14.75 a barrel.

Finally, it will no longer be refencing its financial year 2024 production target. It says future production will be subject to the timing of major project delivery.

Beach Energy share price snapshot

The Beach Energy share price has been underperforming the ASX 200 lately.

The stock has dropped 4% year to date while the index has lifted 7%.

Looking longer term, shares in Beach Energy have fallen 6% over the last 12 months while the ASX 200 has gained 2%.

Motley Fool contributor Brooke Cooper 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 Scott Phillips.

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