Amplitude Energy Limited · ASX:AEL
Amplitude Energy — Cooper Energy — FY2018 Earnings Presentation
44 slides from Amplitude Energy's earnings presentation, Aug 13, 2018
Slide 1: FY18 Results & FY19 Outlook
Sole-4 subsea Sole-3 tree 6deployment Flow-back July 2018 Sole-3 flow-back 6 July 2018 Sole-3 flow-back, sunrise 5 July 2018 FY18 Results & FY19 Outlook Investor presentation 13 August 2018
Slide 2: Important Notice – Disclaimer
Important Notice – Disclaimer This investor presentation (“Presentation”) is issued by Cooper Energy Limited ABN 93 096 170 295 (“Cooper Energy” or “COE”). Summary information: This Presentation contains summary information about Cooper Energy and its activities as at the date of this Presentation a
Slide 3: FY18 results: 4 features
FY18 results: 4 features 1 Gas strategy delivering growth: production up 54%; profit up 213%; and cash flow up 441%. 2 Sole project on track : 64% complete, critical technical and cost milestones completed, tracking within cost and schedule. 3 Uncontracted gas is being leveraged: negotiating gas con
Slide 4: FY18 key outcomes
FY18 key outcomes Gas strategy delivered financial growth and driving new initiatives, Sole passes critical milestones and on track • HSEC: zero lost time injuries and zero reportable environmental incidents, inclusive of 112 days of offshore drilling and workover • Sole Gas Project FID in August; r
Slide 5: Safety
Safety No lost time injuries or environmental incidents. Ongoing enhancement of management systems and improvement program driven by value of Care. • TRIFR* = 4.07 (FY17 = 1.98) Hours worked Frequency rate − zero lost time injuries (LTIs) 500 ‘000 10 • Compliance as a new offshore Operator – HSEC Ma
Slide 6: FY18 Key financial results
FY18 Key financial results $ million unless otherwise indicated FY18 FY17 change Sales revenue 67.5 39.1 ▲ 73% Gross profit 29.0 16.6 ▲ 75% Gross profit/Sales revenue % 43.0% 42.5% ▲ 1% Statutory profit before tax 31.0 (9.5) ▲ 426% Statutory profit/(loss) after tax 27.0 (12.3) ▲ 320% Underlying EBIT
Slide 7: Underlying NPAT movement
Underlying NPAT movement Addition of gas business and higher oil volume and prices the drivers for profit turnaround $ million To be updated Underlying NPAT 1.3 -4.5 9.7 Includes, acquisition & integration costs, Tunisian 3.8 -1.2 redundancy 0.7 21.9 -0.2 -15.8 2.8 9.8 -8.7 FY17 Gas Oil price Oil sa
Slide 8: Movement in cash
Movement in cash Cash from operations, capital raising and debt draw-down contributed to increase +48.1 -4.6 +113.6 $ million +127.2 22.4 Other financial -198.5 assets & -21.0 +0.7 +41.9 -40.2 +46.1 investments -8.6 +3.8 Other financial 0.7 -12.4 -6.7 assets & investments Cash & deposits 147.5 Opera
Slide 9: Production and Reserves at 30 June 2018
Production and Reserves at 30 June 2018 Production up 54%. Gas reserves up 350% on Sole FID & field performance. 2P gas up to 309 PJ. Production 2P Reserves MMboe MMboe 1.5 60 54.1 MMboe 52.4 MMboe Cooper Basin oil 50 7.0 PJ 309 PJ 305 PJ 1 40 4.0 PJ Indonesia oil 30 0.5 20 Oil Otway gas & gas 11.7
Slide 10: Offshore Otway Basin FY18
Offshore Otway Basin FY18 Gas production, new gas contracts commenced and further contracts under negotiation FY18 outcomes Production FY18 FY17 • Successful workover lifted Casino production from April Sales gas PJ 7.0 4.0 • Minerva continued to exceed expectations Condensate kbbl 6.2 3.6 • 2P gas
Slide 11: Sole Gas Project
Sole Gas Project 64% complete at end July 2018, within schedule and budget ORBOST GAS PROCESSING FACILITY Works By - APA Group Plant Upgrade & Operations ✓ Engineering progressing ✓ Procurement package being delivered ✓ Site works construction progressing Orbost Gas Plant: Inlet gas area Seven Seas
Slide 12: Sole drilling program
Sole drilling program Completed, reservoir performance & gas composition in line with pre-drill expectations. Production capability exceeds plant design rate. • Sole-3 and Sole-4 suspended for future connection following flow-back operations • Reservoir performance in line with expectations • Gas co
Slide 13: Gas strategy review: six years on
Gas strategy review: six years on 2012: opportunity identified, analysis conducted, strategy initiated Cooper Energy 2012 Presentation to Good Oil Opportunity outlined and strategy presented Conference Sept 2012 13
Slide 14: Gas strategy review: six years on
Gas strategy review: six years on Now - portfolio style gas business in place, prices increasing & creating more opportunities Cooper Energy 2012 Cooper Energy 2018 Opportunity outlined and strategy presented Gas business portfolio in place ACCC Interim Report July 2018 p29 14
Slide 15: Plans for FY19 – FY20
Plans for FY19 – FY20 Shift to completing Sole, realising potential and the additional value from the portfolio 1. Gas production • Increasing from 6 PJ to ~ 30 PJ pa in FY20 • Sole start-up delivers the targeted multi-gas hubs for optimising supply Otway Hub to south-east Australia Gippsland Hub 2.
Slide 16: Southern states gas markets: ACCC view
Southern states gas markets: ACCC view Prices aligning with LNG netback 2019 expected prices Average monthly commodity prices offered for 2019 supply against Expected 2019 wholesale gas commodity prices in the East Coast Gas Market contemporaneous expectations of 2019 LNG netback prices (Southern St
Slide 17: Gas marketing
Gas marketing Indicative production profile from 2P gas reserves PJ gas from 2P reserves Under negotiation Contracted 12 11 11 10 9 9 8 Uncontracted 10 21 11 Note 1. Assumes: • Sole sales commence July 2019 20 20 20 20 20 20 20 • Henry development well Sole 16 FY20 H1 Commissioning 3 • No exploratio
Slide 18: FY20 offshore campaign for growth after Sole
FY20 offshore campaign for growth after Sole Preparation for a 4-well campaign from Dec quarter 2019 - a key workstream in FY19 1 Henry-2 sidetrack 1 • To produce 24 PJ undeveloped Reserves (net to Cooper Energy) • Targeting initial production uplift of ~20 TJ/day gross 2 3 Otway gas exploration wel
Slide 19: Event pipeline; expected significant activities
Event pipeline; expected significant activities Drilling, development and commercial program to December 2019 FY19 H1 FY19 H2 FY20 Drilling & • Sole-4 production well • Sole gas to plant • Henry development well developing • Sole-2 abandonment • Sole commissioning • 2 x Otway gas exploration • FY20
Slide 20: Production outlook
Production outlook Gas production to increase more than 5 times from existing resources and projects Indicative1 production outlook MMboe Sole commences Henry development well 6 5 Exclusive of Sole 4 commissioning gas. 30 PJ 32 PJ Commissioning planned to Gas 3 commence in Q4 FY19. 2 Oil 1 7 PJ 6 PJ
Slide 21: FY19 production and capex guidance
FY19 production and capex guidance Production Crude oil & by product Gas PJ Total MMboe Notes condensate bbl • Does not include gas production from Sole which is due to Total ~6 ~238,000 1.4 commence supplying gas to plant for commissioning in Q4 FY19 Indicative incurred* capital expenditure by regi
Slide 22: Cash and expenditure in lead up to Sole cash flow
Cash and expenditure in lead up to Sole cash flow Optimising for cash and business momentum in a favourable market Cash and undrawn facilities Capital requirements anticipated $ million at 30 June 2018: $ million • Complete Sole Gas Project Current • Other expenditure including: Cash 236.9 − Sole-2
Slide 23: Position summary
Position summary Gas strategy gains flowing through, Sole on track, upside emerging in gas contracting and drilling campaign for next growth wave 1. Gas strategy delivered growth in FY18 and has Cooper Energy positioned to grow further and faster to FY21 2. Sole on track, major cost and technical mi
Slide 24: Appendices
thd wr) OOPER NERGY Mm Appendices
Slide 25: Cooper Energy snapshot
Cooper Energy snapshot Portfolio built around winning position on cost curve Key statistics* Proved & Probable Reserves 52.4 MMboe Contingent Resources (2C) 34.9 MMboe Production FY19 guidance 1.4 MMboe Market capitalisation $745 million Cooper Basin Net cash/(debt) $111.0 million Oil production Iss
Slide 26: Cooper Energy portfolio: focussed on southeast Australia
Cooper Energy portfolio: focussed on southeast Australia 309 PJ 2P and 125 PJ 2C gas and exploration acreage located close to market and infrastructure Cooper Basin: oil production • historical production source • production of ~230 kbbl oil pa • low cost operations Otway basin onshore: gas explorat
Slide 27: Statutory and underlying profit
Statutory and underlying profit Significant items essentially as reported previously in half-year accounts; Orbost Gas Plant value addition the major item in reconciliation of statutory to underlying profit 12 months ending 30 June 2018: $ million Net profit after tax 27.0 Adjustments for: Gain on s
Slide 28: From the ACCC Gas inquiry July interim report
From the ACCC Gas inquiry July interim report Supply tightly balanced Prices paid in short term trading markets ACCC forecast 2019 southern states gas supply / demand balance Daily prices paid in domestic short-term markets, July 2017 to June 2018 PJ potential 79 68 370 350 Supply Demand Production
Slide 29: Profile of contracted and uncontracted gas by project (PJ)
Profile of contracted and uncontracted gas by project (PJ) Existing assets & projects offer growth over 6 years before exploration opportunities considered Gas sales profile by project Manta uncontracted contracted & uncontracted PJ pa Sole uncontracted Sole contracted Manta (subject to appraisal we
Slide 30: Minerva Gas Plant
Minerva Gas Plant Strategically located offering gains in gas price, processing, recovery rates & production Minerva Gas Plant (10%)* * Equity to increase to 50% on completion of acquisition Minerva Gas Plant acquisition by Casino Henry Joint Venture as announced 1 May 2018 • Casino Henry Joint Vent
Slide 31: Exploration: Otway Basin offshore
Exploration: Otway Basin offshore Planning for drilling of two exploration wells in 20201 • Several prospects on trend with producing fields high-graded as potential candidates for 2020 drilling campaign • Easily defined 3-way structural traps • Completed 3D seismic inversion study validates Direct
Slide 32: Otway Basin, Penola Trough onshore
Otway Basin, Penola Trough onshore Haselgrove drilling results confirm prospectivity for deep conventional gas South Australia • Haselgrove-3 discovery in adjoining PPL 62 has confirmed conventional gas prospectivity of the Sawpit Sandstone at depths below previous producing levels • SA government g
Slide 33: Gippsland Basin
Gippsland Basin Cost competitive resource, existing plant and Sole production planned for FY19 Sole gas project Key assets (all 100% equity and Operator) • FID 29 August 2017 • Sole gas project (VIC/L32) • Sole gas project proceeding to first gas sales mid-2019 • Manta gas resource (VIC/RL13,14,15)
Slide 34: Schematic of Sole-2, 3 and 4
Schematic of Sole-2, 3 and 4 Sole-4 development well 2018 Sole-2 appraisal well 2002 745 metres TVDSS Top reservoir depth: 753.1 metres TVDSS, 1084.5 metres MDRT Top reservoir depth: 770 metres MDRT Net pay thickness 115.5 metres measured along welllbore Net pay thickness: 69.3 metres (Net to Gross
Slide 35: Exploration: Gippsland Basin
Exploration: Gippsland Basin New prospectivity adjacent to existing Patricia Baleen infrastructure • VIC/P72 adjoins VIC/L21 (Cooper Energy 100%) which holds the depleted Patricia Baleen gas field and its associated subsea production infrastructure VIC/P72 connected to the Orbost Gas Plant Equity: 1
Slide 36: Manta gas field
Manta gas field Contingent Resources plus significant deeper exploration potential Geological setting - a structural three-way dip, one-way fault closure against a NE-SW trending fault - Manta-1, exploration well drilled in 1984, and Manta-2A, production well drilled in 2006 - Gas, condensate and oi
Slide 37: Cooper Basin FY18
Cooper Basin FY18 Production up 8%, high and increased cash margin of $52.47/bbl, Reserves maintained Key figures FY18 FY17 Production Crude oil kbbl 0.27 0.25 Average oil price A$/bbl 85.55 63.54 Direct operating cost A$/bbl 33.08 29.77 2P Reserves1 MMbbl oil Developed 1.4 1.1 Undeveloped 0.4 0.6 T
Slide 38: Reserves and Contingent Resources at 30 June 2018
Reserves and Contingent Resources at 30 June 2018 1P (Proved) 2P (Proved + Probable) 3P (Proved + Probable + Possible) Reserves Unit Cooper Otway Gippsland Total1 Cooper Otway Gippsland Total1 Cooper Otway Gippsland Total1 Developed Sales Gas PJ 0 15 0.0 15.2 0 26 0 26.4 0 36 0 36 Oil + Cond MMbbl 1
Slide 39: Notes on calculation of Reserves and Resources
Notes on calculation of Reserves and Resources Notes on calculation of Reserves and Contingent Resources Cooper Energy has completed its own estimation of Reserves and Contingent Resources for its fully-operated Gippsland Basin assets, and elsewhere based on information provided by the permit Operat
Slide 40: Funding profile
Funding profile A$250 million reserve-based project financing facility for Sole development + A$15 million working capital facility A$250 million reserves-based project financing facility • Senior secured A$ syndicated facility agreement with ANZ, Natixis, ABN AMRO, ING and NAB. • Financial close ac
Slide 41: South-east Australia gas supply costs in 2020
South-east Australia1 gas supply costs in 2020* Cooper Energy projects are cost competitive for south-east Australia Delivered Melbourne city gate cost for gas from eastern Australia available for delivery to domestic market in 2020* AUD / GJ Typical peak daily quantity for 14 VIC/NSW/SA/TAS (2016)2
Slide 42: Senior Management Team
Senior Management Team Company Secretary & General Manager, General Manager, General Manager, Legal Counsel Operations Iain Development Commercial & Business Alison Evans MacDougall Duncan Clegg Development Eddy Glavas General Manager, General Manager, Managing Director Chief Financial Officer Proje
Slide 43: Senior management
Senior management Managing Director General Manager, Development Company Secretary & General Manager, Commercial David Maxwell Duncan Clegg Legal Counsel & Business Development Alison Evans Eddy Glavas David Maxwell has over 30 years’ Duncan Clegg has over 35 years’ experience in Alison Evans is an
Slide 44: Abbreviations
Abbreviations $, A$ Australian dollars unless specified otherwise Bbl barrels of oil Boe barrel of oil equivalent EBITDA earnings before interest, tax, depreciation and amortisation FEED Front end engineering and design kbbl thousand barrels m metres MMbbl million barrels of oil MMboe million barrel