Beach Energy Limited · ASX:BPT
Beach Energy — FY2010 Earnings Presentation
29 slides from Beach Energy's earnings presentation, Aug 30, 2010
Slide 1: Full Year Results, Period Ending June 2010
For personal use only Full Year Results Period Ending June 2010 Reg Nelson, Managing Director Kathryn Presser, Chief Financial Officer Neil Gibbins, Chief Operating Officer 30 August 2010 1
Slide 2: Compliance statements
Compliance statements For personal use only Disclaimer • This presentation contains forward looking statements that are subject to risk factors associated with oil, gas, geothermal and related businesses. It is believed that the expectations reflected in these statements are reasonable but they may
Slide 3: Today's presentation
Today’s presentation For personal use only Beach’s current position FY 2010 production and reserves Financial results Operations update Outlook FY 2011 3
Slide 4: Beach's June 2010 position: strong balance sheet with high growth potential
Beach’s 30 June 2010 position: Strong balance sheet with high growth potential For personal use only • 2P reserves of 66 MMboe (unchanged from June 2009) Strong base • Sustainable long-term oil and gas production business • FY 2010 production 7.3 MMboe • $170 million cash plus undrawn financing faci
Slide 5: FY10 was a challenging year, but excellent progress on numerous fronts
FY10 was a challenging year, but excellent progress on numerous fronts For personal use only Successfully mitigated Cooper Basin flood impact to protect production 5
Slide 6: FY10 was a challenging year, but excellent progress on numerous fronts
FY10 was a challenging year, but excellent progress on numerous fronts For personal use only • Expanded the unconventional footprint in high potential areas • Entered into MOUs related to gas commercialisation • Signed the Lake Tanganyika PSA in Tanzania • Enhanced balance sheet strength • Well posi
Slide 7: FY 2010 production
FY 2010 production For personal use only Area FY10* FY09 Oil (MMbbl) Cooper and Eromanga Basins 2.3 2.5 Gippsland Basin 0.3 0.8 Total Oil 2.6 3.3 Sales Gas & Ethane (PJ) Cooper & Surat** Basin 23.1 31.4 LPG (kt) Cooper Basin 45.8 52.0 Condensate (MMbbl) Cooper Basin 0.3 0.4 Total oil and gas (MMboe)
Slide 8: Financial Results
For personal use only Financial Results Kathryn Presser Chief Financial Officer 8 June 2010 Full Year Results
Slide 9: Overview of results
Overview of results For personal use only Abnormal impact of a one in 40 year flood FY10 Change Sales volume 9.3 MMboe (11%) Sales revenue $487 million (16%) Cash flow from operations $128 million (26%) Net profit after tax $33 million (87%) Underlying net profit $41 million (33%) Total dividends de
Slide 10: Debt & dividends
Debt & dividends For personal use only Continuing financial strength • Nil debt and $170 million cash on hand at 30 June 2010 • $25 million in undrawn financing facilities • Declared 1 cent per share, 50% franked, final dividend • Substantial franking credits available for future dividends • $43 mil
Slide 11: Net profit
Net profit For personal use only FY10 FY09 $million $million Net profit after tax 33 260 Remove unrealised commodity hedge loss/(gain) 5 (50) Remove commodity hedge close out - 13 Remove asset sales (55) (279) Remove exploration and asset write-downs 68 128 Remove realised FX gain in Egypt acquisiti
Slide 12: Net profit: underlying net profit after tax comparison
Net profit For personal use only Underlying net profit after tax comparison 120 $17.3 $10.1 100 $48.3 $20.6 Other expenses 80 and revenue Net financing costs $61.3 $Million 60 Tax $40.8 40 Gross profit 20 $20.5 million total decrease 0 June 09 June 10 12
Slide 13: Gross profit comparison
Gross profit For personal use only Gross profit comparison 200 $10.5 $8.2 $55.2 $11.9 180 $93.9 Cash 3rd party 160 production purchases Inventory costs 140 $121.2 120 $Million Depreciation 100 80 $72.8 60 Sales revenue 40 $48.4 million total decrease 20 0 June 09 June 10 13
Slide 14: Sales revenue comparison
Sales revenue For personal use only Sales revenue comparison 700 $14.0 $1.3 $51.7 $41.9 600 $581.4 Gas/ethane $99.4 Third Prices Party FX Rates Liquids Prices Purchases A$/GJ 2009 $4.95 * AUD/USD $487.5 500 US$/boe 2009 $68 2010 $5.04 2009 $0.75 2010 $77 2010 $0.88 Volume / Mix 400 $Million 300 $93.
Slide 15: Sales revenue: reduced price & volume
Sales revenue For personal use only Reduced price & volume • Sales revenue $487 million, Oil Price down by 16% due to: 120 – Lower oil price, down 7% 100 – Cooper Basin flooding 80 – Lower BMG production A$/bbl 60 – Sale of Tipton West 40 • FY10 average sales gas and 20 ethane price $5.04/GJ – up 2%
Slide 16: Cash flow
Cash flow For personal use only Continuing strong cash position FY10 FY09 $million $million Opening cash balance 136 376 Cash from operations 129 173 Development (112) (206) Exploration (International) (6) (35) Exploration (Australia) (29) (100) Egyptian acquisition - (121) Proceeds from asset sales
Slide 17: Current financial risk management
Current financial risk management For personal use only Currency exchange rate protection Collar Collar Total • US$48 million (A$54 million) US$0.7500 US$0.7150 Hedged in foreign exchange hedged Period to to Currency US$0.8710 US$0.8980 (US$Million) • Aim to hedge 50% of net USD 24.0 24.0 48.0 expos
Slide 18: Operations Outlook
For personal use only Operations Outlook Neil Gibbins Chief Operating Officer 18 June 2010 Full Year Results
Slide 19: June 2010 reserves & resources
30 June 2010 reserves & resources For personal use only Steady state, pending further exploration success 2P Reserves: 2P Reserves & Contingent 66 MMboe Resources: 363 MMboe 2P Reserves are a fraction of the total resource base Cooper / Eromanga Gippsland Egypt Cooper / Eromanga 2P Gippsland Other 1
Slide 20: FY11: Markedly increased drilling & key initiatives activity
FY11: Markedly increased drilling & key initiatives activity For personal use only Project Q3 2010 Q4 2010 Q1 2011 Q2 2011 Drilling, fracture stimulation and Cooper Basin unconventional gas evaluation of Encounter-1 & Holdfast-1 exploration wells Implement production pilots to convert Cooper Basin J
Slide 21: Cooper Basin: Nappamerri Trough shale gas
Cooper Basin: Nappamerri Trough shale gas For personal use only • First exploration well (Encounter-1) spud planned for September 2010: – Immediately followed by Holdfast-1 • Gas in place (GIP) measurement a key objective: – Extensive coring – Evaluate gas content of shale – Determine porosity and f
Slide 22: Egypt: Onshore acquisitions balance portfolio
Egypt: Onshore acquisitions balance portfolio For personal use only • Enhanced portfolio of near- term development and exploration opportunities • Significant oil potential in under-explored onshore concessions • Longer-term upside via Mesaha Graben concession • Continue pursuit of opportunities tha
Slide 23: Egypt: Abu Sennan Concession
Egypt: Abu Sennan Concession • • For personal use only Beach interest 22%* Numerous prospects with multiple target horizons • 3D seismic coverage over entire concession • Existing GPZZ discovery to (~ 1600km2) be appraised *Subject to waiver of pre-emptive rights and regulatory approvals 23
Slide 24: Tanzania: East African Rift – Exploration underway
Tanzania: East African Rift – Exploration underway For personal use only • Beach 100% • Production Sharing Agreement signed June 2010 • Significant success in nearby analogous areas (Uganda) • Natural oil seeps on Lake Tanganyika indicate a working petroleum oil system • Potential for large (> 200+
Slide 25: Tanzania: Lake Tanganyika natural oil seeps
Tanzania: Lake Tanganyika natural oil seeps For personal use only 25
Slide 26: FY 2011 indicative capital requirements
FY 2011 indicative capital requirements For personal use only FY11 Forecast $million Development capital Cooper Basin 91 BMG 20 Egypt 5 Total development capital 116 Exploration capital Australasia & Unconventional * 117 International and new ventures ** 12 Total exploration capital 129 Total capita
Slide 27: Summary
For personal use only Summary Reg Nelson Managing Director 27 June 2010 Full Year Results
Slide 28: Beach Energy
Beach Energy For personal use only • Sustainable underlying base business: – Long-life reserves & resources – Asset, product and market diversity • At the forefront of developing an Australian shale gas industry • Tangible growth potential targeting regionally specific opportunities: – Egypt – Tanza
Slide 29: Full Year Results, Period Ending June 2010
For personal use only Full Year Results Period Ending June 2010 Reg Nelson, Managing Director Kathryn Presser, Chief Financial Officer Neil Gibbins, Chief Operating Officer 30 August 2010 29