On 27 September 2018, Beach Energy Limited’s (ASX: BPT) share price uplifted by 7.8% after the release of 2018 Investors Briefing Presentation. In the presentation, the company indicated its plans for growth from its newly expanded and diversified portfolio. The company is planning to increase its production to 34–40 MMboe in next five years. In FY 2018, the company achieved the Production level of 19.0 MMBoe. In FY 2018, the company successfully completed the acquisition of Lattice Energy which has resulted in record production and profits for the company. The operating cashflow of the company in FY 2018 was $663 million and underlying NPAT was $302 million. The Company is planning a sale process to farm down a 30-40% interest in Victorian Otway Basin assets, however the company is planning to retain the operatorship. The company is planning to use the proceeds of the sale to fund a portion of Beach’s future capital program. In the last five years, the company saw substantial growth in the return on capital employed (ROCE) which is driven by highly accretive growth investment, oil prices and higher gas prices. The company is targeting ROCE to be 17%-20% in the next five years and cumulative free cash flow to be greater than $2.3 billion.
For FY2019, the company is targeting production to 26-28 MMboe. By the end of FY 2019, Net gearing is expected to be greater than 20%. The capital expenditure of the company is expected to be in between $460 to $540 million. Depreciation, depletion and amortization is expected to be around $400 to $450 million in FY2019. The EBITDA of the company is expected to be in between $1.1 to $1.2 billion. The company is now focusing on its direct controllable operating costs and it is planning to reduce $30 million of direct controllable operating cost by the end of the FY 2020. By the end of FY 2019, the company is planning to have $60 million of synergy and operating efficiencies. By the end FY 2019, the company is also going to have a participation in up to 133 wells. The company is also evaluating its options for capital management. The company is expecting to be debt free by the end of FY 2020.
BPT’s share traded at $2.145 with a market capitalization of $4.53 billion as on 27 September 2018 (AEST 1:30 PM).
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