Shares in Amplitude Energy Ltd (ASX: AEL) have fallen more than 40% over the past 12 months, but if the analysts at Macquarie are to be believed, they are in line for a re-rating.
The broker has published a new research note on the gas producer with a bullish share price target which I'll get to shortly.
First, let's have a look at Amplitude's recent full-year results release.
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Solid operating results from Amplitude
The Otway Basin-focussed company delivered record full-year production of 27.6 petajoules of gas, up 3% on the previous year.
Revenue meanwhile was up 7% to $285.8 million, and underlying earnings were a record $191.8 million, up 12%.
Managing Director Jane Norman said the company was delivering on its strategy.
She added:
Amplitude Energy has delivered record financial results for the third consecutive year, underpinned by solid operational performance and continued cash flow improvement through FY26. The business remains resilient in the face of external challenges. With strong base business cash flows providing funding for our growth projects, the Company is well placed to maximise its long-term value. Record production performance was driven by Orbost, where production was increased above the plant's previous 68 TJ/day nameplate level. Orbost has since demonstrated an ability to operate well above 70 TJ/day, recently setting a series of new production records.
Ms Norman said the company was on track to achieve "transformational growth through the East Coast Supply Project, one of the most significant sources of new domestic gas supply currently being advanced in south-east Australia''.
She added:
Our acquisition of the discovered Artisan gas field, combined with our existing Annie discovery, provides the basis for a very attractive project, with further potential near-term exploration upside from Juliet drilling. The Artisan transaction is a good example of cooperation between Otway Basin participants leading to project synergies, and was made possible in part by our strong relationship with O.G. Energy.
Amplitude is forecasting production of 26.6-28.5 petajoules of gas in FY27.
Amplitude Energy shares looking cheap
Macquarie said in its research note that 80% of Amplitude's legacy gas was contracted for the current calendar year, along with 80% of Annie and Artisan.
Macquarie added:
Recent contracts with AGL & Energy Australia have been well timed, and reflect the prudent approach of steadily engaging high quality, well capitalised customers over time and de-risking the project. AEL now has an impressive track record of operational delivery (not the case in exploration, however this could change very soon with Juliet), and production guidance was in line with our expectations.
Macquarie has a price target of $2.45 for Amplitude Energy shares, compared with the current price of $1.62.
