Kerry Stokes’ 25% owned oil and gas arm, Beach Energy’s profits and revenues surged in the six months to December as it continued to benefit from the purchase of Lattice Energy from Origin Energy in late 2017 and the brief surge in prices in the last quarter.
Beach said its net profit rose 196% from $96 million in the first half 2018 to $279 million for the six months to December.
The result will boost its biggest shareholder, Kerry Stokes’ Seven Group Holdings which is due to release its first-half figures in a week’s time.
First-half sales jumped 147% from $386 million to $955 million, thanks to the surge in oil prices for part of the half.
In October, the oil price reached its highest point since 2015, rising to $US86 a barrel, before it tumbled over November and December dropping to under $US46 a barrel on Christmas Eve for US crude and $US52 a barrel for Brent.
Crude prices then started recovering to where it is at the moment – around $US53 to $US60 a barrel for US crude and the global benchmark, Brent crude.
Beach says it now expects to be debt free by the end of the current March quarter, two years ahead of its initial estimates.
As revealed in late January production jumped by 193% from 5.2 million barrels of oil equivalent (MMboe) to 15.2 MMboe, thanks in part to the extra output in WA from Lattice (Beach paid Origin $1.6 billion for Lattice).
This lifted its onshore oil output above other energy giants Woodside and Santos.
“Our output of 15.2 million has exceeded expectations, driven by a combination of strong customer demand, improved facility reliability and positive field performance,” Beach chief executive Matt Kay said yesterday.
“On the New Ventures front we have secured the La Bella gas field in the Otway Basin, aligned exploration interests with Santos in the Bonaparte Basin and BP has secured a rig for the Ironbark prospect in the Carnarvon Basin. Beach is preparing for further growth,” he said.
Production guidance was also been boosted from between 25 and 27 MMboe to between 28 and 29 MMboe, due to stronger than expected customer demand and better output.
Beach plans to drill up to 92 wells in the second half of the year.
Mr. Kay said its five-year growth plan will see the company continue to expand rapidly, supported by an investment of $2.6 billion.
Beach announced a fully franked interim dividend of 1 cent per share, to be paid March 29.
Beach shares jumped 5.3% to $1.78.