Beach energy Limited (ASX: BPT
) is involved in the operations of exploration and production of gas and oil in Australia and New Zealand. Last year Beach energy bought Origin’s Lattice Energy Ltd for $1.6 billion. Through Lattice Energy, Beach got the West Australian-based Waitsia project which was having reserves of about 232 petajoules. Due to this takeover, the company’s oil and gas reserves increased by approximately 200%.
In the financial year 2018, the company showcased strong drilling performance with 96 wells drilled at an 82% success rate. The whole drilling program has been expanded across the portfolio with more rigs and more wells. With the increase in the global oil prices and increased company’s capacity and resources, the Beach energy was able to put its total production to 19.0 MMboe in FY 2018 which was 80% higher than the previous year. This led Beach Energy Limited making some space to be at the top spot as the nation’s largest oil producer. This is being projected by the end of this year.
For the year end 30 June 2018, the company’s sales revenue increased by 92% to $1.125 billion compared to last year. The underlying net profit after tax of the company increased by 86% to $302 million. The underlying net profit mostly increased due to 70% in the sales volume, 92% increase in the sales revenue and 36% increase in the average realised oil price. Due to the impact of exploration asset impairment and non-recurring items like integration and acquisition cost, the net profit after tax decreased by 49% to $199 million. Compared to last year the operating cash flow of the company was up by 108%.The company declared a fully franked dividend of 1.0 cents per share. The net assets of the company increased by 31% from $1402 million in FY2017 to $1838 million in FY2018.
For the year 2019, the company is focusing on reducing the controllable operating cost. And the company is targeting $60 million of synergy and operating efficiencies by the end of FY2019. The company is also aiming to produce more than 30 MMboe by FY2021. This is the right time for Beach to accelerate organic growth and Beach is planning to increase its expenditure on highly value accretive growth portfolio. Also, it is forecasted that from the year 2021 there will be shortage of gas on the east coast and the company is well positioned to take advantage of this situation. For 2018, the group indicated to produce about 5.9million barrels of oil as opposed to Woodside Petroleum (ASX: WPL) that slated a figure of about 5million with few challenges in oil fields.
In the last six months the company’s share price increased by 58.09% from $1.250 to $1.90 as on 21 September 2018.
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