Amplitude Energy Ltd (ASX: AEL) shares have performed well over the last year.
At the time of writing, shares are trading at approximately $2.95 each. This is an impressive 34.09% higher than 12 months ago.
The company supplies gas and oil to the domestic market.
It is involved in the discovery and commercialisation of gas from the Otway and Gippsland Basins in Victoria and its sale in southeast Australia. Amplitude Energy is also a joint venture partner in onshore oil production in the Cooper Basin in South Australia.
It has benefited from its strategic market position, and strong management in the last 12 months.
Analysts are bullish there is still more room for growth for this energy company.
A new report from Bell Potter has reinforced that even after a 34% stock price rise in the last year, there is still more upside.
Here's what the broker had to say.
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Record revenue
Bell Potter pointed to record revenue as a key catalyst for the company.
In yesterday's report, the broker said Amplitude Energy delivered a better-than-expected production quarter driven by strong Orbost performance and higher gas prices, offsetting natural field decline and supporting record revenue.
Key takeaways from the report include:
- Orbost is outperforming: Record Gippsland production with the plant running above nameplate capacity, and approvals in place to lift throughput further.
- Otway decline continues: Lower production reflects expected natural field depletion.
- Growth project progressing: The East Coast Supply Project is moving into drilling and final investment decision, with expansion likely this quarter.
- Gas prices strengthening: Realised prices were strong and are expected to rise ~20% next quarter as higher-priced contracts kick in.
- Balance sheet improving: Net debt fell sharply, supported by equity raising and strong operating cash flow.
The broker also said the company expects contracted gas prices to lift this quarter by around 20% on indexation and new agreements.
EPS changes in this report are: FY26 +4%; FY27 +41%; and FY28 +38%. These changes are mostly driven by AEL's strong leverage to higher gas price assumptions.
Price target upside for Amplitude Energy shares
Based on this guidance, Bell Potter increased its price target to $3.40 per share (previously $3.08) for Amplitude Energy shares.
The broker also maintained its buy recommendation.
Based on this target, Bell Potter sees an approximate upside of 15.25%.
AEL's conventional gas assets deliver into Australia's east coast market. Debottlenecking at Orbost could incrementally lift near-term production and contracted prices are expected to strengthen on indexation and sales agreements. In the medium term, the ECSP could materially lift production from 2028, with a portfolio of low-risk wells tied into existing pipeline and processing infrastructure with latent capacity.
