How did Beach Energy shares pull off a 40% return in FY 2022?

We’ve just wrapped up the 2022 financial year, and what a year it was. The S&P/ASX 200 Index (ASX: XJO) had a pretty depressing FY 2022, falling by 10.19% between 1 July 2021 and 30 June 2022. That makes the performance of ASX 200 energy share Beach Energy Ltd (ASX: BPT) even more prominent.

Beach shares had a cracking FY 2022. This ASX oil share started FY 2022 at a share price of $1.24. But by the end of June, Beach shares had risen to $1.73 each. That means investors enjoyed a gain of 39.5% over the financial year just gone.

You can add another point or two there to account for the 2 cents per share in fully franked dividends that investors enjoyed over the year as well.

So what was behind Beach’s lucrative FY 2022?

How did the Beach share price manage a gain of 40%?

Well, we don’t have to dig (or should we say drill) too deep. As an ASX 200 energy share, Beach’s fortunes are more or less tied to the price of crude oil itself. And oil has had a wild few months.

As we discussed earlier this month in relation to Beach’s oil peer Woodside Energy Group Ltd (ASX: WDS), oil prices surged in the wake of the Russian invasion of Ukraine earlier this year.

West Texas Intermediate (WTI) crude was going for around US$75 a barrel at the start of 2022. But until very recently, it was well over US$100 a barrel, having soared following the onset of the war in Ukraine.

That explains why the Beach share price was more or less flat over the six months to 31 December 2021, but soared over the second half of the 2022 financial year. Most ASX oil shares, including Woodside, experienced similar share price moves.

So investors largely have higher oil prices to thank for Beach Energy’s 40% return over the 2022 financial year. It will be interesting to see if Beach gives investors a repeat performance over FY 2023.

At the current Beach Energy share price, this ASX 200 energy share has a market capitalisation of $3.89 billion, with a dividend yield of 1.18%.

The post How did Beach Energy shares pull off a 40% return in FY 2022? appeared first on The Motley Fool Australia.

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More reading

• Why are ASX 200 energy shares making a comeback on Friday?
• Woodside shares rally amid broker’s positive outlook on LNG
• 5 things to watch on the ASX 200 on Friday
• What’s the outlook for ASX 200 dividend shares in FY23?
• Woodside share price defies 3-month low in oil prices

Motley Fool contributor Sebastian Bowen 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 Scott Phillips.

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