Beach Energy Limited · ASX:BPT
Beach Energy — Macquarie Australia Conference 2019
31 slides from Beach Energy's conference presentation, May 2019
Slide 1: Macquarie Australia Conference
M AY 2 0 1 9 Macquarie Australia Conference
Slide 2: Compliance statements
Compliance statements Disclaimer Five year targets This presentation contains forward looking statements that are subject to risk factors associated References to five year targets refers to those targets listed in the 2018 Asia Roadshow with oil, gas and related businesses. It is believed that the
Slide 3: Beach Energy portfolio
Beach Energy portfolio FY18 2P reserves1 Perth Basin Cooper Basin 313 MMboe Otway Basin Bass Taranaki Basin Basin Five year targets (FY19 – 23) 1. Production growing to 30 - 36 MMboe2 2. > 100% reserves replacement2 3. ROCE 17 - 20%2 4. > $2.6 billion cumulative free cash flow2 Beach prepares its pe
Slide 4: Strong financial and operational performance continues
Strong financial and operational performance continues Tracking ahead on all fronts ✓ FY19 production expected towards upper end of previously upgraded guidance Production range of 28 – 29 MMboe ✓ Four of six operated facilities tracking above 98% reliability YTD ✓ FY19 underlying EBITDA expected to
Slide 5: Third quarter highlights
Third quarter highlights Strong financial and operational performance High drilling success rate recorded in the quarter; continues Activity with the drill bit to accelerate in Q4 FY19 ✓ Total quarterly production of 7.23 MMboe up 10% pcp. ✓ 93% drilling success rate in the quarter from 27 wells dri
Slide 6: FY19 guidance reaffirmed
FY19 guidance reaffirmed FY19 Guidance Comment Production 28 – 29 MMboe Upper end Capital Expenditure $450 – 500 million Lower end Underlying EBITDA $1.25 – 1.35 billion Upper end DD&A $450 – 500 million Upper end • Production is expected towards the upper end of the 28 – 29 MMboe range based on str
Slide 7: Our top priority
Our top priority Strong safety and environmental performance Safety performance Environmental performance1 TRIFR2 16 Crude Spill Volumes (kl) 15.6 12 51.9 7.9 100% 8 9.6 4 3.5 2.8 3.8 0.2 0.1 0 0 FY15 FY16 FY17 FY18 H1 FY19 FY15 FY16 FY17 FY18 H1 FY19 Focus on HSE delivering best performance to date
Slide 8: Disciplined Balance Sheet management
Disciplined Balance Sheet management Net gearing since Lattice acquisition completion • Targeting to be debt-free on completion of Otway Sale, more (end January 2018) than 2 years ahead of original debt-free target date 40% • Balance sheet flexibility can be applied to: 35% o Accelerate organic grow
Slide 9: Robust and stable revenue base
Robust and stable revenue base Fixed price contracts provide revenue certainty FY19 estimated sales revenue and expenditure 2,500 • Beach expects to generate revenue of more than $700 million in FY19 from its stable gas YTD average business @ US$80/bbl oil 2,000 realised oil price @ US$60/bbl oil •
Slide 10: East coast gas market
East coast gas market Supplying the market is a strategic imperative Beach east coast infrastructure • Beach is a material owner of critical gas infrastructure • Three basins and infrastructure hubs supplying East Coast gas • Currently 15% domestic market share1 Moomba Gas Hub • Strong demand for Be
Slide 11: Attractive near term and long term pricing outlook
Attractive near term and long term pricing outlook Repricing events approaching Current east Re-contracted / re-priced volumes2 coast vol’s • Annual step-ups and CPI adjustments of Lattice contracts 100% • Majority of existing East Coast volumes Beach 80% re-priced or re-contracted at end of 80% of
Slide 12: Delivering as a low cost operator
Delivering as a low cost operator Beach operating costs/boe1 • Beach extracted $56 million of synergies to H1 FY19, primarily relating to exiting the TSA with Origin Energy, insurance savings $/boe and other integration benefits. 12 • Beach is targeting $30 million reduction in operating costs by th
Slide 13: Asset Updates
Asset Updates Artificial lift in the Cooper Basin
Slide 14: Western Flank Oil
Western Flank Oil Beach 40 - 100% interest ✓ Hanson-7, was drilled and brought Western Flank Oil Production on line in Q3 and averaged over 1,600 bopd free flow over its first 30 (MMboe) days of production 1.4 ✓ Artificial lift was added at producing 1.3 1.2 well Bauer-30 which increased 1.2 1.1 1.1
Slide 15: Bauer Field development
Bauer Field development Horizontal vs vertical wells Improvement in drilling/connection times • Beach has increased the application of horizontal well technology, • In FY18 Beach’s first ever operated horizontal well, Bauer-26, achieved 12.7 targeting the lower permeability McKinlay and Birkhead res
Slide 16: Western Flank Oil
Western Flank Oil Rollout the “Bauer strategy” across the Western Flank • Six-well appraisal/development campaign completed in the Hanson Field • Both appraisal wells cased and suspended as future producers and Kangaroo App confirmed the extension to the south of the field where Hanson-7 planning un
Slide 17: Western Flank Gas
Western Flank Gas ex PEL 106 and ex PEL 91, Beach 100% and operator ✓ Liquids rich gas fields close to Moomba ✓ Liquids (condensate and LPG) have generated similar revenues to gas sales in FY19 ✓ Liquids handling capacity expanded to allow the Middleton facility to peak at 40 MMscfd of raw gas ✓ Sev
Slide 18: Cooper Basin JV
Cooper Basin JV Beach various interests (20.76 - 52.2% range), Santos operator ✓ 100% drilling success rate across 12 gas wells drilled in Q3, including: ✓ Completion of the Moomba South gas appraisal program with the final two wells, Moomba-234 and -235, drilled ✓ Completion of a five-well gas deve
Slide 19: Cooper Basin JV
Cooper Basin JV Moomba South appraisal • Phase one of Moomba South Appraisal completed • Seven successful wells from the eight well program, all seven wells now on production • Peak stabilised single-well gas flow of 8.7 MMscfd has been established • The eight wells constitute the first phase of a p
Slide 20: Victorian Otway Basin
Victorian Otway Basin Beach 100%* and operator ✓ Ocean Onyx secured for offshore Otway drilling program, late CY19 target start date ✓ First well expected to be drilled is the Artisan gas exploration well ✓ Nearshore drilling to commence with Black Watch-1 development well, currently expected in H1
Slide 21: Victorian Otway Basin
Victorian Otway Basin Production • Ten drilling opportunities (eight development) planned in the OGP production outlook (100% interest)1 next four years to keep the Otway Gas Plant (OGP) as full as possible. • Black Watch and Enterprise Extended Reach Directional (ERD) 60 wells to be drilled first i
Slide 22: Perth Basin
Perth Basin Waitsia (Beach 50%), Beharra Springs (Beach 67% and operator) ✓ Onshore rig Easternwell 106 contracted to drill the Beharra Springs Deep gas exploration well. Drilling is expected to occur in H1 FY20. ✓ Progress continuing towards decision regarding development of Waitsia ✓ Perth Basin c
Slide 23: South Australian Otway Basin
South Australian Otway Basin Beach interests 70 – 100% and operator ✓ Ensign 931 rig is on site for drilling of the Haselgrove-4 appraisal well ✓ Dombey-1 exploration well to follow Haselgrove-4 ✓ On track to deliver first gas from Haselgrove discovery via new 10 TJ/d gas processing facility by the
Slide 24: Carnarvon Basin – Ironbark Prospect
Carnarvon Basin – Ironbark Prospect WA-359-P Beach 21%, subject to farm-in; WA-409-P Beach 7.5% subject to farm-in1 ✓ BP has secured the Ocean Apex rig to drill the Ironbark prospect. Drilling is expected to commence in late calendar 2020 ✓ Ironbark is a potential high-impact gas resource within tie
Slide 25: Beach rig schedule
Beach rig schedule H1 FY19 H2 FY19 H1 FY20 Non-operated rig Non-operated rig Cooper Basin JV Non-operated rig Non-operated rig Operated rig (oil) Western Flank Non-operated rig (oil) Operated rig (gas) Operated rig (oil) Operated onshore rig (SA & Vic – gas) Otway Basin Ocean Onyx (Offshore Vic) Per
Slide 26: Key takeaways
Key takeaways Beach is ahead of schedule and delivering on its promises ✓ FY19 production expected towards upper end of previously upgraded guidance range Grow production of 28–29MMboe (30 – 36 MMboe by FY23) ✓ Four of six operated facilities tracking above 98% reliability YTD ✓ Successful Moomba So
Slide 27: Appendices
Appendices Lang Lang gas facility, Bass Basin
Slide 28: New Zealand – Kupe Gas Project
New Zealand – Kupe Gas Project Beach 50% and operator ✓ Front End Engineering and Design (FEED) commenced on the Kupe compression project, FID targeted for H1 FY20 1. PCP not included for this asset due to ownership change since PCP from Lattice acquisition. 28
Slide 29: Bass Basin
Bass Basin Beach 53.75% producing assets, 50.25% non-producing, Beach operated ✓ Progressed the evaluation of a potential tieback of the Trefoil Field 1. PCP not included for this asset due to ownership change since PCP from Lattice acquisition. 29
Slide 30: Oil hedging position
Oil hedging position Oil hedges as at 31 March 2019 3-way Collar Total Hedged $40 – 103 – 113 Volumes (bbl) per bbl FY19 90,000 90,000 Total 90,000 90,000 30
Slide 31: Beach Energy Limited Investor Relations
Beach Energy Limited 25 Conyngham Street Glenside SA 5065 Australia T: +61 8 8338 2833 F: +61 8 8338 2336 beachenergy.com.au Investor Relations Nik Burns, Investor Relations Manager Mark Hollis, Investor Relations Advisor T: +61 8 8338 2833