The Kerry Stokes-dominated Beach Energy saw its shares jump 9% yesterday after it revealed a big jump in underlying profit for the year to June.
Beach, which is 25% controlled by Stokes’ Seven Group Holdings will pay one cent a share dividend after reported an 86% rise in underlying earnings to $560 million.
The shares ended at $2.0 up 10.8%.
Beach’s upbeat report and outlook will be in stark contrast to the release later this morning of the 2018-19 results from Seven West Media, 41% controlled by Stokes through his control of Seven Group Holdings. Seven Group itself reports later in the week.
Beach said it produced 29.4 million barrels of oil in 2018-19, up 55%on the previous year (thanks to the takeover of Lattice Energy, the former offshoot of Origin Energy).
But the company said 2019-20 production would be slightly lower at 27 and 29 million barrels of oil equivalent (mmboe).
Beach Energy though did increase the bottom end of its 5-year production target from between 30 and 36 mmboe to between 34 and 40 mmboe. It says is also aiming for $2.7 billion in free cash flow over the next five years.
“To say that I am proud of what the Beach team has achieved would be a gross understatement,” CEO Matt Kaye said yesterday.
“We have delivered on every promise we made a last year’s investor briefing and the focus is now about investing in the company’s high-value growth assets.”
Beach Energy expects to invest between $750 million and $850 million on expansion this financial year. Among that spending will be a 45% lift in the number of new wells (to 194) to be drilled mostly in the Cooper and Otway Basins.
It expects to deliver underlying earnings before interest, tax, depreciation, and amortisation of between $1.25 billion and $1.4 billion, which would be flat on 2018-19’s EBITDA of $1.375 billion.
