Apa Group · ASX:APA
Apa — Investor Presentation (June 2022)
56 slides from Apa's investor presentation, Jun 20, 2022
Slide 1: Orbost Gas Processing Plant
DRAFT STRICTLY PRIVATE 12/10/2020 & CONFIDENTIAL 20 June 2022 Orbost Gas Processing Plant NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES OR TO U.S. PERSONS Transformational acquisition of Orbost Gas Processing Plant. Accelerating the next phase of growth
Slide 2: Important notice
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES OR TO U.S. PERSONS Important notice This investor presentation (“Presentation”) is issued by Cooper Energy Limited ACN 096 170 295 (“Cooper Energy” or “the Company”). This Presentation has been issued by Cooper Energy in relation to: • Cooper Ener
Slide 3: Important notice
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES OR TO U.S. PERSONS Important notice Investment risk An investment in Cooper Energy shares is subject to investment and other known and unknown risks, some of which are beyond the control of Cooper Energy. None of Cooper Energy, any of its related
Slide 4: Table of contents
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES OR TO U.S. PERSONS Table of contents 1. Transaction Overview 5 2. Acquisition Highlights 9 3. OGPP Overview 20 4. Funding 24 5. Adding value and accelerating growth options 31 6. Appendices 34 A. International Offer Restrictions 35 B. Reserves and
Slide 5: Transaction overview
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Slide 6: Orbost Gas Processing Plant – a transformational acquisition
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES OR TO U.S. PERSONS Orbost Gas Processing Plant – a transformational acquisition Strategic and accelerated growth underpinned by market fundamentals ✓ Binding asset sale agreement to acquire the Orbost Gas Processing Plant (“OGPP”) from APA Key pla
Slide 7: Transaction and funding summary
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES OR TO U.S. PERSONS Transaction and funding summary Upfront cash consideration of $210 million plus deferred payments ranging from $60-120 million linked to OGPP performance Sources and Uses1 Overview • Binding Asset Sale Agreement (“ASA”) with APA
Slide 8: Transaction consideration/payments
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES OR TO U.S. PERSONS Transaction consideration/payments Deferred payments linked to plant performance during transition Transaction consideration/payments ($ million) • Total payments range from $270-330 million Average rate 1st 2nd 3rd 4th Upfront
Slide 9: Acquisition highlights
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Slide 10: Tightening South-east Australia gas supply
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES OR TO U.S. PERSONS Tightening South-east Australia gas supply Attractive market dynamics support new developments which are enabled by the Acquisition ACCC forecast supply and demand in the Southern states (PJ pa)1, 2 Spot gas prices ($/GJ)3 60 50
Slide 11: Remaining reserves in South-east Australia
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES OR TO U.S. PERSONS Remaining reserves in South-east Australia Cooper Energy - pure play East Coast gas status with a bias to early life reserves Gippsland, Otway & Bass Basins, net remaining WoodMac assessed commercial reserves (MMboe)1 • Majority
Slide 12: Transformational acquisition
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES OR TO U.S. PERSONS Transformational acquisition Adding strategic value and accelerating execution of the South-east Australia twin hub gas supply strategy Average gas spot price (A$/GJ) Mar-22 Apr-22 May-22 Jun-222 • Twin gas supply hub position c
Slide 13: Twin hub access to East Coast gas market
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES OR TO U.S. PERSONS Twin hub access to East Coast gas market Strengthened operating expertise across integrated upstream and midstream gas projects Adelaide Otway Basin Gippsland Basin NSW • Cooper Energy – 50% and operator SA • 100% owned and oper
Slide 14: Integration enables greater optionality and value creation
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES OR TO U.S. PERSONS Integration enables greater optionality and value creation Across the full value chain, Otway & Gippsland • Enhanced alignment between upstream, processing and customer supply • Greater flexibility across the Cooper Energy portf
Slide 15: Highly accretive to operating margins, cashflow and earnings
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES OR TO U.S. PERSONS Highly accretive to operating margins, cashflow and earnings ~$60 million increase in post-tax cashflow and at an average OGPP processing rate of 55 TJ/day1,2,4 Sole project daily EBITDAX (A$’000)1,2,3 Increase in annual Group E
Slide 16: Material upside value at elevated spot prices
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES OR TO U.S. PERSONS Material upside value at elevated spot prices Fixed-cost nature of OGPP enhances the combined project economics as processing rates increase Combined Sole + OGPP Project – Indicative Daily EBITDAX (A$’000)1 • Operating costs of
Slide 17: Growth acceleration opportunity – Otway Basin
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES OR TO U.S. PERSONS Growth acceleration opportunity – Otway Basin Foundation to facilitate development of Cooper Energy’s proven and prospective gas portfolio Otway Phase-3 Development • OP3D development concept involves development of Annie gas di
Slide 18: Growth acceleration opportunity – Gippsland Basin
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES OR TO U.S. PERSONS Growth acceleration opportunity – Gippsland Basin Foundation to facilitate development of Cooper Energy’s proven and prospective gas portfolio Manta Contingent Resource Estimate1 1C 2C 3C Gas PJ 78 121 190 Condensate MMbbl 2.2 3
Slide 19: Industry leading net zero carbon position
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES OR TO U.S. PERSONS Industry leading net zero carbon position1 Will offset incremental emissions Cooper Energy is carbon neutral today/before OGPP acquisition OGPP emissions to be offset from FY23 • Scope-1, Scope-2 and controllable Scope-3 emissio
Slide 20: OGPP overview
03 OGPP overview
Slide 21: OGPP - commercial and operational overview
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES OR TO U.S. PERSONS OGPP - commercial and operational overview Strengthens twin hub, flexible gas supply strategy Operational overview Plant & equipment summary • Processes raw gas exclusively from the Sole Gas Project (~227 PJ 2P reserves1) • The
Slide 22: Sole production and GSA sales volumes
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES OR TO U.S. PERSONS Sole production and GSA sales volumes Improved OGPP processing rates + managed GSA reshape increase spot sales opportunity 100 50 90 40 Sydney Spot Price Victoria Spot Price 80 30 70 20 60 10 Processing Rate (TJ/day) Spot Gas Pr
Slide 23: OGPP integration planning underway with all key personnel identified
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES OR TO U.S. PERSONS OGPP integration planning underway with all key personnel identified Experienced team and key learnings from Athena Gas Plant being adopted Overview Core operating objectives • Established integration team for OGPP transition •
Slide 24: Funding
04 Funding
Slide 25: Underwriting commitments in place for $400 million debt facility
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES OR TO U.S. PERSONS Underwriting commitments in place for $400 million debt facility New facility refinances the existing loan and supports the Group’s future activities Underwritten facility overview • Commitment papers executed for $400 million f
Slide 26: $244 million fully underwritten equity raising
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES OR TO U.S. PERSONS $244 million fully underwritten equity raising Equity raise • Fully underwritten Institutional Placement to raise $84 million, combined with a 2-for-5 pro-rata, accelerated, non-renounceable Entitlement Offer to raise structure
Slide 27: Equity raising timetable
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES OR TO U.S. PERSONS Equity raising timetable Institutional Placement and Institutional Entitlement Offer opens Monday, 20 June 2022 Institutional Placement and Institutional Entitlement Offer closes Wednesday, 22 June 2022 Trading Halt lifted and s
Slide 28: Pro-forma cash and facilities available
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES OR TO U.S. PERSONS Pro-forma cash and facilities available OGPP transaction and the new debt facility significantly improve Cooper Energy’s capital base Proforma cash and facilities as at 31 December 2021 Cooper Energy Transaction Pro forma • ~$20
Slide 29: Funding for growth
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES OR TO U.S. PERSONS Funding for growth Acquisition of OGPP and the new debt facility resets the balance sheet for the next phase of growth Indicative funding sources and uses to the end of FY25 ($ millions) ✓ Improved operating cash flow Indicative
Slide 30: FY2022 Underlying EBITDAX
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES OR TO U.S. PERSONS FY2022 Underlying EBITDAX Highly levered to OGPP processing rate Outlook for FY2022 Underlying EBITDAX at various OGPP processing rates (excluding cleans) and A$40/GJ spot gas price 1 85 • Revised guidance issued on 6 June 2022
Slide 31: Adding value and accelerating growth options
05 Adding value and accelerating growth options
Slide 32: Growth staircase
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES OR TO U.S. PERSONS Growth staircase High value growth pipeline - producing, development and exploration prospects via two gas hubs 121 PJ2 Production (MMboe) 1 (Manta 2C Contingent Resource) Manta (Gippsland) 286 Bcf3 (Near field exploration, Otwa
Slide 33: Wrap-up
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES OR TO U.S. PERSONS Wrap-up Transformational, value adding and accelerating Cooper Energy’s next growth phase in South-east Australia gas Gippsland Basin • Fully integrated gas supply from Sole upstream through to high quality customer base integra
Slide 34: Appendices
06 Appendices
Slide 35: International offer restrictions
A International offer restrictions
Slide 36: International offer restrictions
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES OR TO U.S. PERSONS International offer restrictions This document does not constitute an offer of New Shares of Cooper Energy in any jurisdiction in which it would be unlawful. In particular, this document may not be distributed to any person, and
Slide 37: International offer restrictions (continued)
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES OR TO U.S. PERSONS International offer restrictions (continued) This document has been prepared in compliance with Australian law and has not been registered, filed with or approved by any New Zealand regulatory authority. This document is not a p
Slide 38: Reserves and resources
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Slide 39: Reserves and Contingent Resources at 30 June 2021
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES OR TO U.S. PERSONS Reserves and Contingent Resources at 30 June 2021 1P (Proved) 2P (Proved & Probable) 3P (Proved, Probable & Possible) Reserves1 Cooper Otway Gippsland Total Cooper Otway Gippsland Total Cooper Otway Gippsland Total Developed Sal
Slide 40: Cooper Energy tenements
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES OR TO U.S. PERSONS Cooper Energy tenements1 Otway Basin (Victoria): Gippsland Basin: Cooper Basin: Otway Basin (onshore South Australia & Victoria ): 40 1 Please refer to Cooper Energy’s 2021 Annual Report for further information regarding tenemen
Slide 41: Risks
C Risks
Slide 42: Key Acquisition risks
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES OR TO U.S. PERSONS Key Acquisition risks Risk Description Regulatory approvals The key regulatory approvals and licences required in connection with the Acquisition are the approval of the transfer of: • the Major Hazard Facility Licence; • the Pi
Slide 43: Key Acquisition risks - continued
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES OR TO U.S. PERSONS Key Acquisition risks - continued Risk Description Reliance on Cooper Energy has undertaken a due diligence review in respect of the OGPP Assets, including engaging external legal, insurance, technical, operating and commercial
Slide 44: Key Acquisition risks - continued
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES OR TO U.S. PERSONS Key Acquisition risks - continued Risk Description Gas processing Cooper Energy and APA have agreed extend the Transition Agreement entered into on 20 August 2020 (and last extended on 19 April 2022) to completion of the Acquisi
Slide 45: Cooper Energy business risks
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES OR TO U.S. PERSONS Cooper Energy business risks Risk Description Debt refinancing As outlined in more detail on slide 25, Cooper Energy has recently announced a refinancing of its existing SFA and replacing it with a new debt facility. The new deb
Slide 46: Cooper Energy business risks - continued
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES OR TO U.S. PERSONS Cooper Energy business risks - continued Risk Description Operations There are a number of risks associated with operating in the oil and gas industry, including fire, explosions, blow outs, pipe failures, abnormally pressured f
Slide 47: Cooper Energy business risks - continued
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES OR TO U.S. PERSONS Cooper Energy business risks - continued Risk Description Counterparties The ability of Cooper Energy to achieve its stated objectives may be impacted by the performance of counterparties under material agreements the Company ha
Slide 48: Cooper Energy business risks - continued
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES OR TO U.S. PERSONS Cooper Energy business risks - continued Risk Description Climate and Cooper Energy has taken an industry leading position in becoming the first Australian upstream gas company to become carbon neutral in FY20 by fully offsettin
Slide 49: Cooper Energy business risks - continued
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES OR TO U.S. PERSONS Cooper Energy business risks - continued Risk Description COVID-19 Cooper Energy continued its response to the COVID-19 pandemic in line with its focus on: • prioritising the safety and welfare of its employees and their familie
Slide 50: Cooper Energy business risks - continued
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES OR TO U.S. PERSONS Cooper Energy business risks - continued Risk Description Community Cooper Energy conducts gas and oil exploration, development, and production operations. The Company processes gas near regions with residential, environmental,
Slide 51: Cooper Energy business risks - continued
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES OR TO U.S. PERSONS Cooper Energy business risks - continued Risk Description Access to capital Cooper Energy must undertake significant capital expenditure in order to fund field, exploration, appraisal, development and restoration requirements. L
Slide 52: General risks
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES OR TO U.S. PERSONS General risks Risk Description General market and There are general risks associated with investments in equity capital such as Cooper Energy shares. The trading price of Cooper Energy shares may fluctuate with movements in equi
Slide 53: New Shares and equity raise risk
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES OR TO U.S. PERSONS New Shares and equity raise risk Risk Description Underwriting Cooper Energy has entered into an underwriting agreement with the Underwriters under which the Underwriters have agreed to fully underwrite the Equity Raising (the "
Slide 54: New Shares and equity raise risk
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES OR TO U.S. PERSONS New Shares and equity raise risk Risk Description Underwriting • trading in all securities in any financial market, trading board or services is suspended or materially limited for one or a substantial part of a day during the p
Slide 55: Abbreviations
E Abbreviations
Slide 56: Abbreviations
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES OR TO U.S. PERSONS Abbreviations $ Australian dollars kbbl Thousand barrels APA APA Group (ASX: APA) km Kilometres ASA Asset Sale Agreement executed between Cooper Energy and APA on Monday 20 MHFL Major Hazard Facilities License June 2022 MMboe Mi