Australia’s leading Mid-cap oil and gas company, Beach Energy Limited (ASX: BPT) has recently released its half-year results for FY 2019. For the half-year period, the company has reported revenues from ordinary activities of A$1,057.2 million which is 169 percent higher than the previous corresponding period (pcp). Further, the company has reported a Net profit after tax (NPAT) from ordinary activities of A$282.9 million which is 196% higher than pcp. Following the release of the results, the share price of the company increased by 5.325% in the intraday trade as on 13 February 2019 (AEST 03:18 PM).
The sales revenue of the company increased by 147% in H1 FY19 to $955 million, driven by higher oil and gas sales volumes during the period. For the half year period, the gross profit of the company increased by 189% driven by higher sales and other revenue. The sales volumes were up 181% in H1 FY19 as compared to pcp, driven by Lattice acquisition, strong customer demand and improved facility reliability.
From the South Australia and Western Australia segment (SAWA), the Western Flank oil operations accounted for 16% of the company’s H1 FY19 production and the majority of Beach’s H1 FY19 oil production. Western Flank oil production was 2.4 MMbbl (million barrels of oil) in H1 FY 2019 which is 4% higher than pcp, driven by the successful Bauer Field appraisal and development program. Further, Western Flank gas operations accounted for 6% of Beach’s H1 FY19 production. Western Flank gas production was 1.0 MMboe (million barrels of oil equivalent) which is 55% higher than pcp, driven by the commissioning of the latest Middleton facility capacity expansion.
At the September 2018 investor day, the company outlined a clear strategy to increase shareholder value, with five-year targets of:
- Production growing to 30 – 36 MMboe
- >100% reserves replacement
- ROCE 17 – 20%
- >$2.6 bn in cumulative free cash flow
In the second half of FY 2019, the company plans to continue to execute its strategy to deliver on the targets outlined at the investor day.
Recently, the company increased its FY 2019 guidance, and now the company is expecting its FY 2019 Production to be around 28 – 29 MMboe with capital expenditure expected to be in the range of $450 Mn – $500 Mn. The company has increased its FY19 Underlying EBITDA from $1.05 – 1.15 billion to $1.25 – 1.35 billion. The company is expecting to generate revenue of more than $700 million in FY19 from its stable gas business. At the end of H1 FY19, the company was having a Net debt of $311 million with a net gearing ratio of 13.5%.
The board has declared a fully franked interim dividend of 1.00 cents per share with a record date of 28 February 2019 and payment date of 29 March 2019.
In the last six months, the share price of Beach Energy decreased by 12.44% as on 12 February 2019. BPT’s shares traded at $1.780 with a market capitalization of circa $3.85 billion as on 13 February 2019.
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