Beach (ASX:BPT) share price surges 7% higher on growth plans

Beach shares are flying on Tuesday. Here’s why…
The post Beach (ASX:BPT) share price surges 7% higher on growth plans appeared first on The Motley Fool Australia. –

The Beach Energy Ltd (ASX: BPT) share price has been among the best performers on the ASX 200 on Tuesday.

In morning trade, the energy producer’s shares are up over 7% to $1.33.

Why is the Beach share price charging higher today?

There have been a few catalysts for the rise in the Beach share price on Tuesday.

This includes the announcement of an agreement with energy giant BP after the market close yesterday, another rise in oil prices overnight, and an investor update this morning.

In respect to the latter, the company’s update outlined its low risk strategy targeting production of 28 MMboe by FY 2024. This target excludes exploration upside and pre-final investment decision projects.

If Beach were to achieve this target, it would be a big increase on FY 2022’s guidance. This year the company is targeting production of 21 to 23MMboe.

How will Beach get there?

Beach’s Managing Director and CEO, Matt Kay, advised that material gas production growth is expected in the near-term through the recently completed Kupe Inlet Compression project, future connection of the Offshore Otway wells, and the delivery of the Waitsia Stage 2 Gas Project.

He commented: “Beach’s corporate strategy focuses on filling our gas plants and supplying gas into the tightening Australian East Coast, New Zealand gas and international LNG markets.”

“The successful delivery of first gas from the Kupe Inlet Compression project and the recently signed HOA with BP for all our marketed Waitsia Stage 2 LNG volumes represent the first runs on the board as we look to deliver our growth strategy.”

“The offshore Otway and Waitsia Stage 2 developments are expected to provide significant production uplifts over the next two years, with the first of the offshore Otway wells on track to be connected in early 2022 with the recent Geographe 4 and Geographe 5 results meeting pre-drill expectations,” Mr Kay said.

All in all, Beach’s base case scenario provides production of 28 MMboe in FY 2024, a 27% increase on the midpoint of FY 2022 guidance.

But it may not stop there. The CEO notes that these plans are expected to lead to strong free cash flow generation which may be reinvested.

“Material cash flows from our stable gas business will provide Beach with optionality, including re-investment into our high returning gas assets to maintain plateau production, maximising the value of our infrastructure and other capital management decisions,” he added.

The Beach share price is down 29% in 2021 despite today’s decline. Shareholders will no doubt be hoping that this update is an inflection point for the Beach share price.

The post Beach (ASX:BPT) share price surges 7% higher on growth plans appeared first on The Motley Fool Australia.

Should you invest $1,000 in Beach right now?

Before you consider Beach, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Beach wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

5 things to watch on the ASX 200 on Tuesday

Why the Beach Energy (ASX:BPT) share price will be in focus on Tuesday
Leading brokers name 3 ASX shares to buy today

These were the best performers on the ASX 200 last week

Guess which sector this week’s top performing ASX 200 shares come from

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!