Shares in Beach Energy Ltd (ASX: BPT) hit a multi-year high at $1.57 on Tuesday morning's trade, up 3% from the previous close and 118% from this time last year, following the release of the company's quarterly report.
The March 2018 quarterly result is the first to consolidate Lattice Energy, the upstream oil and gas business purchased in September from Origin Energy Ltd (ASX: ORG) for $1.5 billion.
The acquisition transformed Beach Energy: production in the three months to March 31, including the new assets, is 150% higher than in the previous quarter, with sales revenue up 90% to $393 million. The product mix also changed, with gas – which previously accounted for about one third of revenue – now making up more than 60% of sales value.
The company narrowed the range of its full-year production guidance to between 26 and 27 million barrels of oil equivalent, confirming the expected 150% increase in production capacity brought about by Lattice.
Beach Energy funded the acquisition with cash reserves of $503 million, resorting to debt for the remaining $995 million. Thanks to the strong cash flow of $133 million generated in the quarter, the company reduced net gearing to 29% – compared to an original estimate of 35%.
