Beach Energy share price surges on updated guidance

Beach Energy Ltd (ASX: BPT) announced a strong result in its half-year earnings as it doubled underlying net profit. The company's updated FY19 guidance should see the stock soar in early trade.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Beach Energy Ltd (ASX: BPT) shares surged this morning as the company increased revenue by 147% and doubled underlying profit in 1H19.

Beach reported a 199% increase in underlying net profit to $279 million and announced a $0.01 per share, fully-franked dividend following the strong result. Facility reliability averaged above 97% for the half-year whilst 1H19 production of 15.2 million barrels of oil equivalent (MMboe) showed the company's operations are running smoothly.

The company drilled 68 wells in 1H19 with a 79% success rate while its Bauer horizontal development well average spud-to-online (i.e. from beginning of drilling to output) improved by 24% to 23.5 days.

An increase in operating cash flow to $479 million and free cash flow of $293 million leaves Beach in good financial health heading into the second half of the year, which has seen the company upgrade its guidance for the full financial year (FY18).

Beach has upgraded production guidance for the full year from 25-27 MMboe to 2-29 Mboe, while capex guidance has narrowed to $450-$500 million. FY19 EBITDA guidance also increased by $200 million to $1.25-$1.35 billion for the full year ended 30 June 2019.

Foolish Takeaway

Beach's result follows a similarly strong earnings season for AGL Energy Ltd (ASX: AGL) as national electricity prices remain sky-high. While the energy companies remain an easy target, I expect today's result and updated guidance to see the stock soar with no sign of falling wholesale electricity prices in the near-term.

I'd be keeping an eye on Seven Group Holdings Ltd (ASX: SVW) this morning given its 70% stake in Beach and wouldn't be surprised to see the duo lead the ASX200 higher in early trade.

Motley Fool contributor Lachlan Hall does not own shares in any of the companies mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Market News

Mini house on a laptop.
Dividend Investing

Do ASX 200 dividend shares out-earn Aussie property?

We compare the forecast FY25 dividend yields of the top 10 ASX 200 companies to rental property yields.

Read more »

A fit woman in workout gear flexes her muscles with two bigger people flexing behind her, indicating growth.
Best Shares

Top ASX shares to buy with $500 in November 2024

$500 worth of ASX shares might not sound like a huge investment. But, to realise the benefits of compounding, you…

Read more »

A diverse group of people form a circle at a park and raise their arms together.
Share Market News

Here are the top 10 ASX 200 shares today

ASX investors ended the trading week on a high note this Friday...

Read more »

Broker Notes

Brokers name 3 ASX shares to buy today

Here's why brokers are feeling bullish about these three shares this week.

Read more »

A businessman looking at his digital tablet or strategy planning in hotel conference lobby. He is happy at achieving financial goals.
Share Gainers

Why Catapult, De Grey Mining, Domino's, and Nufarm shares are charging higher

These shares are ending the week strongly. But why?

Read more »

A young woman holds an open book over her head with a round mouthed expression as if to say oops as she looks at her computer screen in a home office setting with a plant on the desk and shelves of books in the background.
Healthcare Shares

This ASX All Ords share is diving 18% as inflation pain draws blood

This healthcare company delivered a trading update at its annual general meeting today.

Read more »

Three analysts look at tech options on a wall screen
Technology Shares

Up 70%, is it too late to invest in Xero shares?

This ASX tech darling hit a new all-time share price record yesterday.

Read more »

A woman with a sad face looks to be receiving bad news on her phone as she holds it in her hands and looks down at it.
Share Fallers

Why Healius, Opthea, Peninsula Energy, and Wildcat shares are falling today

These shares are having a tough finish to the week. But why?

Read more »