Beach Energy's transformation

Beach Petroleum has lifted reserves and production as the investment pendulum has swung back to energy stocks

When it comes to resources, the investment pendulum clearly has swung from minerals to energy.

And Beach Energy (BPT) is one of a number of companies that has positioned itself to capitalise on stronger energy prices in the next few years.

A company shifting from exploration towards production – now ranking as Australia’s sixth biggest oil producer – underlying earnings were better than expected lifting 15% to $140.8 million on a solid lift in revenue that helped deliver a fully franked 2c dividend.

Managing director Reg Simpson has positioned the company for growth with its Cooper Basin interests in conjunction with Santos (see Gas price rises, share prices rocket), its unconventional gas interests along with promising prospects in Tanzania and Egypt that have attracted the attention of global majors. 

As a result, it is in the happy position of having doubled its reserves which has helped drive a strong lift in its stock price in recent times.

It also has a farm-in agreement with Chevron and an offtake agreement with Origin.

This morning’s result was greeted with some early selling given previous production guidance of 8.7 and 9.3 million barrels of oil was merely maintained.

But as a company with significant cash reserves, increasing revenues and promising exploration potential, it is likely to remain in demand.

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