Beach Energy Limited · ASX:BPT
Beach Energy — Shareholder Meeting (November 2020)
58 slides from Beach Energy's shareholder meeting presentation, Nov 25, 2020
Slide 1: 2020 Annual General Meeting Addresses and Presentation
Beach Energy Limited (ABN 20 007 617 969) | Level 8, 80 Flinders Street Adelaide, South Australia 5000 GPO Box 175, Adelaide, South Australia 5001 | beachenergy.com.au ASX Announcement 2020 Annual General Meeting Addresses and Presentation Reference #039/20 Date 25 November 2020 Attached is a copy o
Slide 2: Chairman and Managing Director Addresses
Beach Energy Limited | Level 8, 80 Flinders Street, South Australia 5000 GPO Box 175, Adelaide, South Australia 5001 | beachenergy.com.au Beach Energy 2020 AGM Chairman and Managing Director Addresses Date 25 November 2020 Chairman’s Address Slide 1 – Annual General Meeting Good Morning Good morning
Slide 3: Chairman's address: housekeeping and questions
I would also like to welcome all our shareholders participating online. Before we move to the formalities, there are several housekeeping matters to mention as we adjust to our new format. Shareholders have been provided with instructions as to how to participate and vote at the AGM, with details av
Slide 4: Returning Officer and voting instructions
Debbie Burnard from Computershare will act as the Returning Officer for the purposes of conducting and determining the results of the poll, the results of which will be announced to the ASX later today. The voting icon should soon appear if it hasn’t already. Please select your votes at any time. Yo
Slide 5: Purpose and sustainability
This updated purpose highlights how making a positive contribution to the communities in which we operate is of great importance to everyone at Beach. We take pride in being an active and leading member in our communities, while delivering the critical energy our society needs in a safe and sustaina
Slide 6: Gas demand and climate scenarios
In its 2019 World Energy Outlook global gas demand grew across the scenarios modelled by the IEA. In its very recent 2020 World Energy Outlook the IEA modelled 4 scenarios. In its Sustainable Development Scenario global gas demand essentially remains constant to 2030 and gas demand in the Asia Pacif
Slide 7: Thanks to employees and shareholders
Before I finish, I would like to acknowledge the crucial contributors to Beach’s continued success – our employees and shareholders. To continue to achieve the results we have - delivering on our growth expectations while dealing with the impacts of a global pandemic, requires a lot of hard work and
Slide 8: Safety and COVID impact
A comprehensive review of common causal factors was completed during the year and appropriate actions were implemented. This led to a reduction in incidents in the second half of FY20, which has continued into the new financial year. In fact, in the last fortnight we surpassed a company milestone of
Slide 9: FY21 off to an excellent start
Slide 16 – FY21 off to an excellent start As we continue the journey in FY21, I’m excited about the early momentum we have created less than 6 months into the year. In the West, we are tracking well to reach FID for Waitsia Stage 2 by the end of this calendar year and in doing so become part of the
Slide 10: East coast gas market
As such, the states of South Australia, New South Wales and Victoria are reliant on gas diverted from LNG projects in Queensland to meet demand. Going forward, the picture doesn’t get any better, with this reliance on LNG only set to increase over time unless there is a significant increase in suppl
Slide 11: Senex acquisition and frontier exploration
In my mind this is a perfect example of a logical, value accretive acquisition that will deliver long-term value for shareholders. Slide 21 – Frontier exploration FY21 also marks an exciting year from a Frontier exploration perspective. As I speak our operator BP is drilling the Ironbark 1 well in t
Slide 12: Free cash flow outlook and capital management
We have however lowered our commodity price outlook given the recent weakness in oil prices, and under these revised assumptions, Beach is forecast to generate $2.1 billion in cumulative free cash flow from FY21- 25. Slide 25 – Capital Management This talk of free cash flow brings us to a very impor
Slide 13: Emissions projects and closing overview
I am very excited to see these three projects progressed this year as we continue to build momentum around our emissions reduction push. Slide 27 – Overview In closing I would like to say Beach stands in an incredibly strong position today, especially when you consider the global economic turbulence
Slide 14: 2020 Annual General Meeting
25 NOVEMBER 2020 2020 Annual General Meeting
Slide 15: Compliance statements
Compliance statements Disclaimer Assumptions This presentation contains forward looking statements that are subject to risk factors associated with oil, gas and The five year outlook set out in this presentation is not guidance. The outlook is uncertain and subject to change. The related businesses.
Slide 16: Chairman's Address
2020 BEACH ENERGY AGM Chairman’s Address
Slide 17: Using the Lumi platform: submitting a question
Using the Lumi platform Submitting a question To ask a question: 1. Tap on/click the question icon 2. Type your question in the chat box at the bottom of the screen and select the send icon. 3. Confirmation that your message has been received will appear. You can submit a question at any stage durin
Slide 18: Using the Lumi platform: voting
Using the Lumi platform Voting To vote on the resolutions: 1. When voting opens, a voting icon will appear. Click or tap that icon to vote. 2. To vote, tap one of the voting options. Your response will be highlighted. 3. To change your vote, simply press a different option to override 4. The number
Slide 19: Overview: a high margin and high growth business
Overview A high margin and high growth business ✓ 178 wells drilled – 81% overall success rate Solid FY20 result in ✓ Maintaining solid production – 26.7 MMboe challenging conditions ✓ Statutory net profit $501 million ✓ Beach maintained a net cash balance sheet ✓ Prudent slow down in activity inclu
Slide 20: Our purpose
Our purpose “Sustainably deliver energy for communities” 7
Slide 21: Sustainability
Sustainability Beach releases new emissions targets ▪ Emissions reduction target of 25% CO2e by FY25 relative to FY18 benchmark levels1 ▪ Internal carbon price used on project economics ▪ Further emissions reductions projects to be screened in FY21, including: o Flaring efficiency o Renewables augme
Slide 22: Climate Change
Climate Change Beach aims to be part of the solution in addressing climate change International Energy Agency World Energy 2020 AEMO GSOO Eastern Australia Outlook Sustainable Development Scenario (bcm) gas demand vs supply (PJ) 4500 4000 2,000 3500 3000 1,500 2500 2000 1,000 1500 1000 500 500 0 0 2
Slide 23: Chairman's Address
2020 BEACH ENERGY AGM Chairman’s Address | Add file name in footer by going to Insert Header and Footer and edit footer contents and apply as needed
Slide 24: Managing Director's Address
2020 BEACH ENERGY AGM Managing Director’s Address
Slide 25: Beach Response to COVID-19
Beach Response to COVID-19 The Journey Office Staff Emergency Crisis Business COVID-19 Site Transitioned Response Partial Return Management Continuity Specific to Work Exercises and to Office Team Team Procedures from Home Assurance Activated Activated Commenced Activated Commenced Focus moving 20 F
Slide 26: Beach Energy HSE performance
Beach Energy HSE performance Strong performance despite COVID-19 challenges Safety performance Environmental performance2 16 15.6 60 Crude/Hydrocarbon Spill Volume (kl) 50 12 51.9 9.7 40 7.9 TRIFR 8 5.9 30 5.7 3.5 3.8 4.1 3.7 3.5 3.4 20 4 10 0 9.6 0.2 0.1 0.1 1.7 0 FY15 FY16 FY17 FY18 FY19 FY20 FY15
Slide 27: COVID-19 impact
COVID-19 impact A tale of two halves ✓ 105 wells drilled in H1 at 83% success rate On track at ✓ Beharra Springs Deep 1 exploration success FY20 half year results ✓ Bauer appraisal drilling identifies field extension ✓ Spudded Black Watch 1 ✓ Rapid health and safety response across all sites COVID-1
Slide 28: Looking back over FY19/20
Looking back over FY19/20 Track record of delivery on journey to date Total Total Met (✓ ) or FY19 + FY20 guidance1 FY19 + 20 results Exceeded (✓ ✓) Production (MMboe) 53–57 56.1 ✓ Capex ($ million) 1,210–1,390 1,310 ✓ Free Cash Flow ($ million) 310 437 ✓✓ 2P reserves replacement ratio >100% 209% ✓✓
Slide 29: FY21 off to an excellent start
FY21 off to an excellent start Material progress on key project execution and disciplined M&A Waitsia Stage 2 progress Positive progress on refilling Expands Cooper Basin revealed – FID by end Dec ‘20 Victorian Otway Gas Plant portfolio via acquisition ✓ Waitsia to be exported as LNG via North West
Slide 30: Waitsia Stage 2 expansion via North West Shelf
Waitsia Stage 2 expansion via North West Shelf (NWS) Two years of progress and ready to reach Final Investment Decision ✓ Non-binding gas processing term sheet signed with NWS North West Shelf access ✓ Fully termed agreements being finalised ✓ Pipeline connection to AGIG owned DBNGP in place Pipelin
Slide 31: East coast gas market
East coast gas market Market dynamics support Beach’s investment strategy Eastern Australia gas demand vs supply (PJ)1 2,000 Forecast FY21/22 East Coast Gas Sales 1,500 Spot Market Pricing (% of volume) 2% 1,000 500 0 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 20
Slide 32: Victorian Otway Basin
Victorian Otway Basin Excellent start to drilling campaign Positive start to our drilling ▪ Black Watch 1 success – longest onshore well in Australia. Online May 2020 ▪ Enterprise 1 exploration well gas discovery Forward plan ▪ Develop reserves and re-fill the 205 TJ/d Otway Gas Plant ▪ Offshore dri
Slide 33: Western Flank Oil
Western Flank Oil Complemented by low risk bolt-on Senex asset acquisition Positive progress over past 4 years ▪ More than doubled 2P Estimated Ultimate Recovery (net) ▪ More than doubled gross operated oil production over the past 2 years ▪ Operated production increased to as high as 23,000 BOPD in
Slide 34: Frontier exploration
Frontier exploration Drilling underway for material exploration prospect ▪ Large gas prospect within 50km of existing NWS infrastructure ▪ Targeting deeper Mungaroo reservoirs; the primary reservoirs at Gorgon ▪ Drilling commenced on 30 October 2020, drilling result expected in March quarter 2021 ▪
Slide 35: 5 year investment expenditure outlook
5 year investment expenditure outlook Prudent deferral of FY21 investment to manage external challenges 5 Year Capital Expenditure Outlook1 ($ million) 1,200 >$300 million of planned ▪ Planned FY21 capex reduced by >30% to $650-750 million FY21 growth investment deferred 1,000 ▪ Deferred FY21 capex
Slide 36: 5 year production outlook
5 year production outlook Production on track to deliver 37-43 MMboe in FY25 5 Year production outlook1 (MMboe) 45 ▪ Production growth impacted by FY21 investment 40 expenditure deferral and COVID-19 ▪ Waitsia Stage 2 start-up forecast by end calendar 2023 35 ▪ Victorian Otway program deferred due t
Slide 37: 5 year free cash flow outlook
5 year free cash flow outlook Revised investment profile, commodity price outlook set to deliver $2.1 billion in FCF 5 Year free cash flow outlook1 ($ billion) FCF outlook updated for revised timing, price assumptions 3.0 2.7 2.7 ▪ FY21-25 cumulative free cash flow: $2.1 billion 2.5 2.1 2.0 ▪ New fr
Slide 38: Capital management
Capital management Beach remains a growth Board reviews capital oriented company management regularly High returning capital Conservative approach investment through FY21-23 to balance sheet management Victorian Otway Basin, Perth Basin, Cooper Basin 25 1. Refer to disclaimers and assumptions on sli
Slide 39: 25% emissions reduction by FY25
Reducing our emissions 25% emissions reduction by FY25 Flare and vent Bauer Hybrid Leak Detection and management Renewable Project Repair Program Beach will implement initiatives to reduce Beach will be performing further Beach will implement a program across the need for flaring across operational
Slide 40: Overview: a high margin and high growth business
Overview A high margin and high growth business ✓ 178 wells drilled – 81% overall success rate Solid FY20 result in ✓ Maintaining solid production – 26.7 MMboe challenging conditions ✓ Statutory net profit $501 million ✓ Beach maintained a net cash balance sheet ✓ Prudent slow down in activity inclu
Slide 41: Formal business
2020 ANNUAL GENERAL MEETING Formal business
Slide 42: Q&A
2020 ANNUAL GENERAL MEETING Q&A
Slide 43: Resolutions for voting
2020 ANNUAL GENERAL MEETING Resolutions for voting
Slide 44: Proxy voting
Proxy voting Vote totals based on the first resolution Valid proxy votes received 994,479,689 % of total votes 43.59% 31
Slide 45: 2020 Financial Report
2020 Financial Report Receipt and consideration of the Financial Report, the Directors’ Report and the Auditor’s Report of the Company, and the Group, for the financial year ended 30 June 2020. There is no requirement for shareholders to approve the financial statements and reports 32
Slide 46: Resolution 1: Adoption of Remuneration Report
Resolution 1 Adoption of Remuneration Report Total Valid Available For Against Open-Usable Abstain Votes QTY 979,875,525 10,926,149 3,678,015 994,479,689 4,754,616 % 98.53% 1.10% 0.37% 100.00% 33
Slide 47: Resolution 2: Re-election of Glenn Davis
Resolution 2 Re-election of Glenn Davis as a director To consider and, if thought fit, pass the following resolution as an ordinary resolution: That Glenn Davis, who retires by rotation pursuant to clause 6.1 of the Constitution and ASX Listing Rule 14.4 and, being eligible, offers himself for re-el
Slide 48: Resolution 2: voting results
Resolution 2 Re-election of Glenn Davis as a director Total Valid Available For Against Open-Usable Abstain Votes QTY 1,321,134,966 75,319,775 3,677,690 1,400,132,431 4,255,244 % 94.36% 5.38% 0.26% 100.00% 35
Slide 49: Resolution 3: Re-election of Richard Richards
Resolution 3 Re-election of Richard Richards as a director To consider and, if thought fit, pass the following resolution as an ordinary resolution: That Richard Richards, who retires by rotation pursuant to clause 6.1 of the Constitution and ASX Listing Rule 14.4 and, being eligible, offers himself
Slide 50: Resolution 3: voting results
Resolution 3 Re-election of Richard Richards as a director Total Valid Available For Against Open-Usable Abstain Votes QTY 1,322,698,346 73,584,566 3,810,457 1,400,093,369 4,290,478 % 94.47% 5.26% 0.27% 100.00% 37
Slide 51: Resolution 4: Securities to Managing Director (STI)
Resolution 4 Approval of the issue of securities to the Managing Director Matthew Kay under the Beach 2019 Short Term Incentive Offer Total Valid Available For Against Open-Usable Abstain Votes QTY 1,380,948,582 10,681,076 3,798,249 1,395,427,907 8,959,768 % 98.97% 0.76% 0.27% 100.00% 38
Slide 52: Resolution 5: Securities to Managing Director (LTI)
Resolution 5 Approval of the issue of securities to Managing Director Matthew Kay under the Beach 2020 Long Term Incentive Offer Total Valid Available For Against Open-Usable Abstain Votes QTY 1,380,220,031 11,375,133 3,800,185 1,395,395,349 8,992,326 % 98.91% 0.82% 0.27% 100.00% 39
Slide 53: Resolution 6(a): Amendment to the Constitution
Resolution 6(a) Requisition Resolution: Amendment to the Constitution Total Valid Available For Against Open-Usable Abstain Votes QTY 42,196,540 1,322,082,869 3,553,027 1,367,832,436 36,555,239 % 3.10% 96.65% 0.25% 100% 40
Slide 54: Resolution 6(b): Capital Protection
Resolution 6(b) Requisition Resolution: Capital Protection Total Valid Available For Against Open-Usable Abstain Votes QTY 75,325,247 1,320,497,658 3,612,503 1,399,435,408 4,952,267 % 5.38% 94.36% 0.26% 100.% 41
Slide 55: Finalisation of Polls
2020 ANNUAL GENERAL MEETING Finalisation of Polls
Slide 56: Shareholder Raffle
Shareholder Raffle Prize 2x bottles Majella Wine (Cabernet Sauvignon/Shiraz blend & Sparkling Shiraz) MAJELLA 7
Slide 57: Thank You
2020 ANNUAL GENERAL MEETING Thank You
Slide 58: Beach Energy Limited Investor Relations
Beach Energy Limited Level 8, 80 Flinders Street Adelaide SA 5000 Australia T: +61 8 8338 2833 F: +61 8 8338 2336 beachenergy.com.au Investor Relations Nik Burns, Investor Relations Manager Adam Stokes, Investor Relations Advisor T: +61 8 8338 2833