The Beach Energy Ltd (ASX: BPT) share price has rocketed 98.45% higher so far this year to be one of the top performers amongst the S&P/ASX200 Index (INDEXASX: XJO).
So, what's driving the Beach Energy share price higher and can the bullish run continue next year?
Why the Beach Energy share price has surged this year
The Aussie oil and gas exploration company has had a strong 2019 with significant operational expansion and strong financial results to back it up.
Strong east coast gas prices here in Australia have helped boost Beach Energy's revenue and profit margins higher, while global oil prices have been volatile in 2019 as geopolitical tensions have risen.
The US-China trade war has dominated headlines so far this year while the likes of Brexit (or no Brexit) and tensions between the West and Iran have stoked fears in global markets and seen volatility return to oil prices.
While electricity prices were a hot topic in the May 2019 Federal Election, the Coalition has thus far been unable to get eastern electricty prices under control following years of climbing higher.
All of these factors have combined to boost Beach Energy's underlying earnings before interest, tax, depreciation and amortisation (EBITDA) 80% higher to $1.375 billion and underlying net profit after tax (NPAT) 86% higher to $560 million in FY19.
The company's balance sheet looks strong and free cash flow for FY19 came in at $559 million compared to the $290 million guidance figure provided by Beach Energy.
How is Beach Energy looking in 2020?
Beach Energy is investing in a strong pipeline of projects with 194 wells targeted and a particular focus on the Cooper Basin and Otway Basin.
In its full-year results, the Aussie oil and gas group said 90% of growth projects commencing in FY2020 are slated to deliver an internal rate of return (IRR) of 50% or more.
Beach Energy has proven to be a top performer in ASX 200 so far this year and given its price-to-earnings (P/E) ratio of just 10.1x earnings, it could be worth a look before the end of the year.
