Beach Energy, which counts Kerry Stokes’ Seven Group as its biggest shareholder, cashes in on oil price boom as profit soars

The oil and gas company, part-owned by Kerry Stokes’ Seven Group, has lifted its interim earnings and retained its annual guidance as oil prices near $US100 a barrel.

Beach Energy, part-owned by Kerry Stokes’ Seven Group, has profited from a surge in oil prices as the group searches for a permanent boss.

Beach Energy, part-owned by Kerry Stokes’ Seven Group, profited from a surge in oil prices while the board has affirmed its confidence in interim chief executive Morne Engelbrecht as the search continues for a permanent boss to lead the Adelaide firm.

The gas producer’s first half net profit after tax surged 66 per cent to $213m with higher crude prices delivering an extra $198m in revenue as Beach fetched $US83.66 per barrel of oil equivalent from $US46.62 boe for the same period a year earlier.

Revenues rose 11 per cent to $786m while an interim dividend of 1c will be paid, steady on last year. Investors cheered Beach retaining its annual outlook guidance with production kept at 21-23m boe and capital spending of $900m to $1.1bn.

Mr Engelbrecht, Beach’s former chief financial officer, was installed in November after the surprise departure of Matt Kay as chief executive but declined to say whether he would apply to land the role on a permanent basis.

“I won’t be commenting on whether I will be putting my name in the hat or not. It’s fair to say the board is conducting a very thorough process in terms of the best possible candidate for the role.”

Beach may look across town at Santos’ executive ranks for its next leader, according to Credit Suisse.

Beach’s board said it had “full confidence in Mr Engelbrecht to oversee the company’s growth agenda, while the thorough search process is conducted in order to find the best possible candidate.”

The company plans to start its oil exploration campaign in the Cooper Basin’s Western Flank in the second half of 2022.

The region emerged as a source of tension with shareholders after a class action was launched in November over a reserve downgrade of the assets.

The company is also an emerging LNG exporter through its Waitsia project in Western Australia with a heads of agreement signed up with bp for supplies from the second half of 2023.

Seven owns 30 per cent of Beach Energy.

Beach shares rose nearly 11 per cent to $1.64m on the ASX, capping a 50 per cent rise in the last six months and handing the company a $3.75bn market capitalisation.

The group has set a target for 28m boe by 2024 and looks on track to reach its goal, analysts said, with its campaigns in the Otway Basin and Western Flank expected to deliver.

“We continue to expect Western Flank to outperform Beach full year guidance, supported by the fact all the Western Flank oil development wells drilled over the second quarter were successful and are to be brought on line progressively over the third quarter,” RBC analyst Gordon Ramsay said.

Originally published as Beach Energy, which counts Kerry Stokes’ Seven Group as its biggest shareholder, cashes in on oil price boom as profit soars