Beach Petroleum Limited (BPT) said underlying net profit after tax jumped 69.2% to $52.7 million for the 2008 fiscal year, before taking into account the impact of the company's previously announced hedge book closure. The company said that including the impact of its decision to pay off commodity hedging, NPAT was $63.7 million, down 38.6%.
Beach Petroleum said the closure of the hedge book enhanced its exposure to the higher global spot prices for oil instead of being pinned down to unrealistic hedge prices, some of which were set in 2006.
Managing director Reg Nelson said that by going unhedged, the company could take advantage of the profitable Tapis spot prices instead of being tied to West Texas Intermediate prices.
"We look forward to a further handsome revenue and cash flow boost in the current year," Mr Nelson said.
He said up to 90% of its oil sales were available to be sold into the spot price oil market, mostly at Tapis plus a premium, which was considerably higher than Beach would have realised under its oil hedge obligations.
Record revenue levels were also attained with oil and gas sales hitting $564 million, up 19.5%.
Overall sales also grew a similar percentage to $685 million, net cash flow managed a 73.1% increase to $199.8 million.
Mr Nelson said the outlook for Beach remained exceptionally good, including increased recognition expected for the company's involvement in the coal seam gas and geothermal industries.
"Elsewhere, the immediate outlook for drilling includes three potentially high impact exploration wells offshore from Victoria and Tasmania, with two rigs now contracted to accelerate additional exploration, delineation and development wells in the BMG project," he said.
The company also said that subject to approval from the Egyptian government it expects to increase its activities in the Gulf of Suez in the latter half of 2008.
He said the activity included an oil appraisal well in the Burtocal oil field and two other oil field discoveries in adjacent waters.
The company declared 1c per share final dividend, maintaining the annual dividend at 1.75c per share, on par with last year.
As at 1541 AEST, shares in Beach Petroleum were up 3.5c to $1.14.