Beach Energy Limited · ASX:BPT
Beach Energy — Shareholder Meeting (November 2017)
39 slides from Beach Energy's shareholder meeting presentation, Nov 23, 2017
Slide 1: Chairman's welcome and housekeeping
Good morning ladies and gentlemen, and thank you for taking the time to be here today. I declare open the 2017 Beach Energy Annual General Meeting. A quorum is present. As safety is one of our key values at Beach, I want to begin with a safety message. In the unlikely event of an emergency evacuatio
Slide 2: Compliance statements
Our compliance statements are set out on slide 2 of today’s AGM presentation for those of you who wish to review them later.
Slide 3: Directors and board changes
There are of course others with me on stage today. To make sure everybody knows who we are, moving down the line from my immediate right are: • Matt Kay, Chief Executive Officer • Colin Beckett, Deputy Chairman • Richard Richards and Peter Moore, who are seeking your approval for election to the boa
Slide 4: FY17 key financial outcomes
Moving now to today’s presentation. At recent AGMs I have spoken of broad ranging actions and initiatives undertaken to ensure Beach remains profitable and cash generative at low oil prices. Such steps have included refinement of strategy, organisational reviews, board and executive changes, and str
Slide 5: Record field performance
Our financial results were underpinned by outstanding performance in the field, across both operated and non- operated ventures. Matt will talk to operations in more detail, but there are some highlights I would like to mention. We achieved record production of 10.6 million barrels of oil equivalent
Slide 6: Lattice Energy acquisition and growth strategy
Turning now to a very exciting opportunity for Beach. We have communicated our four pillar growth strategy for some time, and demonstrated material progress against each pillar over recent years. An element of our strategy has been inorganic growth, being the pursuit of growth beyond our existing as
Slide 7: FY18 focus and discipline
As always, focus and discipline will underpin our activity, and ultimately our success, in FY18. We have a major transaction to complete and integration of two complementary businesses to plan for and execute. Dedicated transition teams have been appointed and in place for some time, including exter
Slide 8: CEO address introduction
Thank you, Glenn. Good morning ladies and gentlemen. This time last year we were discussing the challenges of navigating low and volatile oil prices, including actions to ensure profitability and cash generation during such times. Twelve months on, the reward for these continuing efforts is evident
Slide 9: Four strategic pillars progress
Our purpose at Beach is to deliver sustainable growth in shareholder value. To do this, four strategic pillars, which are likely well known to you, drive all decision making and serve as a roadmap for the future. Once again, we have delivered clear progress against each pillar this year. • Record pr
Slide 10: Safety and environmental performance
As we focus on operating efficiencies and cost reductions, safety remains paramount at Beach. Continual improvement in process and procedures underpins our results, which was again on display in FY17. We recorded a fourth consecutive year of reduction in our lost time injury frequency rate. This was
Slide 11: Cooper Basin multi-year work program
Glenn touched on key operational highlights, including record production, drilling success, facility expansions and cost reductions. I would emphasise that work in the field in FY17, and particularly in the second half of the year, provided strong momentum for FY18 and the confidence to embark on ou
Slide 12: 2P reserves increase
This slide outlines another pleasing and significant result from FY17. We achieved a 7% increase in 2P oil and gas reserves, and a 179% 2P reserves replacement ratio. A number of factors contributed to our upward reserve revisions, including new discoveries, field extensions, production performance
Slide 13: Financial performance
Increased production, reduced costs, operational efficiencies and higher oil pricing were key drivers of our improved financial performance this past year. Underlying Net Profit After Tax increased 353% to $162 million, and our EBITDA margin expanded from 34% to 59%. This is a significant turnaround
Slide 14: Cooper Basin JV cash generation
The Cooper Basin JV has been transformed into a material cash generating unit. Santos as operator continues to impress with cost and capital efficiencies, and progress is ongoing. Combined with Beach’s ability to opt out of projects that do not meet our strict capital allocation hurdles, the Cooper
Slide 15: Lattice Energy combined portfolio
We will turn now to Lattice Energy. As Glenn mentioned, this is truly exciting and transformational opportunity for Beach. The transaction is fully aligned with our strategy and will propel Beach from a single-basin onshore producer, to a multi-basin, onshore and offshore producer with significant g
Slide 16: Transformational transaction
This slide neatly captures the transformational nature of the transaction. Not only will the acquisition of Lattice provide a material uplift in production and reserves, it significantly diversifies our operations across multiple basins and jurisdictions. Importantly, the transaction will deliver a
Slide 17: Becoming a mid-cap oil and gas company
The Lattice acquisition allows Beach to become a true mid-cap oil and gas company, with production rivalling our larger peers. With Lattice’s portfolio of gas producing assets, our production mix will become more gas weighted, which reduces exposure to fluctuating oil prices. Furthermore, most of ou
Slide 18: Production and processing infrastructure
Turning briefly to the underlying assets, we will boast significant production and processing infrastructure across Australia and New Zealand. Another key attraction of the acquisition is that by combining Beach and Lattice’s portfolios, we will bring together leading expertise across onshore and of
Slide 19: Value creation opportunities
As well as an immediate uplift in capabilities, production and cash flow, the expanded asset portfolio provides value creation opportunities through near-term production and development projects. • In the Cooper Basin, our development plans have been well communicated. • In New Zealand, planning for
Slide 20: Pro forma FY18 guidance
Our guidance in relation to pro forma FY18 production and capital expenditure currently reflects aggregation of standalone Beach and Lattice guidance. We previously provided Beach standalone production guidance of 10.0 to 10.6 million barrels of oil equivalent for FY18, and capital expenditure guida
Slide 21: Closing remarks
In closing, and to reiterate a key message for this AGM, our FY17 results demonstrate reward for significant hard work and effort over recent years, continued focus on core operations, and diligent execution of our growth strategy. Consequently, our investment proposition is greatly enhanced. Our fo
Slide 22: Lattice acquisition disclaimers
Thank you, Matt. For further information and disclaimers in relation to the acquisition of Lattice Energy, please refer to this slide, or past presentations relating to the transaction.
Slide 23: Webcast conclusion
That marks the conclusion of our webcast. Thanks to those who tuned in. Voting results for the upcoming resolutions will be lodged with the ASX as soon as possible.
Slide 24: Resolutions for voting
i) ANNUAL GENERAL MEETING BEACH ENERGY RESOLUTIONS FOR VOTING Glenn Davis 9. BEACH ENERGY LIMITED
Slide 25: Proxy votes
Proxy votes BEACH = Beach has received 1,678,613,219 valid proxy votes = Represents 73.8% of total votes ENERGY 25
Slide 26: Financial statements
Financial statements 2 BEACH ENERGY = The first item of business is to receive and consider the financial statements and the reports of the directors and auditor for the financial year ended 30 June 2017 26
Slide 27: Adoption of remuneration report
Resolution 1 2 BEACH Adoption of remuneration report = To consider and put to a non-binding vote the following resolution: “That the remuneration report for the financial year ended 30 June 2017 be adopted.” ENERGY 27
Slide 28: Remuneration report voting results
Resolution 1 @|BEACH Adoption of remuneration report @ ENERGY Total Valid Against Open-Usable Available Abstain Votes - 1,658,331,806 | 13,350,937 6,930,476 1,678,613,219 5,602,772 Adoption of remuneration report 0.42% 100.00% 28
Slide 29: Resolution withdrawn
Resolution 2 Withdrawn BEACH = Withdrawn due to retirement of Ms Fiona Bennett, as announced on 7 November 2017 ENERGY 29
Slide 30: Re-election of Colin Beckett
Resolution 3 2 BEACH Re-election of Colin Beckett as a director ENERGY = To consider and, if thought fit, pass the following resolution as an ordinary resolution: “That Colin Beckett, who retires by rotation pursuant to clause 13.3 of the constitution of Beach and ASX Listing Rule 14.4 and, being el
Slide 31: Colin Beckett voting results
Resolution 3 Re-election of Colin Beckett as a director Re-election of CD Beckett 1,628,326,653 Against 42,004,514 Total Valid Open-Usable Available Votes 7,336,666 1,677,667,833 0.43% 100.00% 4 Abstain 6,722,566 BEACH ENERGY 31
Slide 32: Election of Richard Richards
Resolution 4 @ BEACH Election of Richard Richards as a director ENERGY = To consider and, if thought fit, pass the following resolution as an ordinary resolution: “That Richard Richards, who was appointed as a director subsequent to the last annual general meeting of Beach and being eligible, offers
Slide 33: Richard Richards voting results
Resolution 4 Election of Richard Richards as a director Election of R J Richards 1,624,950,381 Against 48,402,975 Total Valid Open-Usable Available Votes 7,270,621 1,680,623,977 0.43% 100.00% 4 Abstain 3,766,422 BEACH ENERGY 33
Slide 34: Election of Peter Moore
Resolution 5 2 BEACH Election of Peter Moore as a director ENERGY = To consider and, if thought fit, pass the following resolution as an ordinary resolution: “That Peter Moore, who was appointed as a director subsequent to the last annual general meeting of Beach and being eligible, offers himself f
Slide 35: Peter Moore voting results
Resolution 5 2 BEACH Election of Peter Moore as a director SIENERGY Total Valid Against Open-Usable Available Abstain Votes 1,671,843,016 1,545,359 7,372,708 1,680,761,083 3,629,316 Election of PS Moore 0.43% 100.00% 35
Slide 36: Approval of financial assistance for Lattice Acquisition
Resolution 6 2 BEACH Approval of financial assistance in connection with the Lattice Acquisition = To consider, and if thought fit, pass the following resolution as a special resolution: “That, in accordance with section 260B(2) of the Corporations Act 2001 (Cth), Beach approve the financial assista
Slide 37: Financial assistance voting results
Resolution 6 Approval of financial assistance in connection with the Lattice Acquisition 2 BEACH SAIENERGY Approval of financial assistance in connection with the Lattice Acquisition 1,665,640,686 99.15% Total Valid Open-Usable Available Abstain Votes Against 1,269,869 13,206,121 1,680,116,676 4,273
Slide 38: Questions & meeting close
4) i) ANNUAL GENERAL MEETING BEACH ENERGY ——as QUESTIONS & MEETING CLOSE Vie BEACH ENERGY LIMITED
Slide 39: Investor Relations contact details
i) ANNUAL GENERAL MEETING BEACH ENERGY BEACH ENERGY LIMITED Investor Relations 25 Conyngham Street, Glenside SA 5065 i Tel: +618 8338 2833 Derek Piper Investor Relations Manager Fax: +618 8338 2336 ; www.beachenergy.com.au Mark Hollis Investor Relations Advisor Tel: +618 8338 2833