Beach Energy Limited · ASX:BPT
Beach Energy — Investor Presentation (November 2010)
40 slides from Beach Energy's investor presentation, Nov 15, 2010
Slide 1: Macquarie Private Wealth presentation
For personal use only Macquarie Private Wealth 15 November 2010 Reg Nelson Managing Director Macquarie Private Wealth Slide 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: Agenda
For personal use only 1. The Beach strategy 2. Highlights of the year 3. Positioned for growth 4. Key catalysts for FY11 Macquarie Private Wealth Slide 3
Slide 4: 1. The Beach strategy
For personal use only 1. The Beach strategy Macquarie Private Wealth Slide 4
Slide 5: The Beach strategy: A parallel pathway to growth
The Beach strategy: A parallel pathway to growth For personal use only Large project development Capital asset growth through resource play development Book gas (e.g., shale gas) Market recognition / deal flow reserves Proof of concept/ pilot plant Credible partners Revenue & asset growth Book gas t
Slide 6: 2. Highlights of the year
For personal use only 2. Highlights of the year • An active last twelve months • FY10 production • Reserves and resources • Operations highlights – Cooper oil and gas – Egypt oil – Gippsland oil – Geothermal – Other Macquarie Private Wealth Slide 6
Slide 7: An active last twelve months
An active last twelve months For personal use only • Managed a once in 30-40 year flood event • Expanded the unconventional footprint in high potential areas • Signed three MOUs related to gas commercialisation • Acquired highly prospective onshore acreage in Egypt • Commenced exploration activities
Slide 8: FY10 production
FY10 production • Total for year of 7.3 MMboe Production For personal use only (approximately 20,000 boepd) 10 9 • Consistent production 8 performance - Cooper flooding 7 main driver in lower production 6 • Oil and gas liquids accounted for 5 46% of production (approximately 4 9,000 boepd) 3 2 • 96%
Slide 9: Reserves and resources snapshot: June 2010
Reserves and resources snapshot: 30 June 2010 For personal use only 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 2P reserves maintained from FY09 and se
Slide 10: Operations highlights: Cooper oil and gas
Operations highlights Cooper oil and gas For personal use only • Increased acreage position, including farmin to ATP 855P, strengthening Beach’s shale gas holdings • Ongoing western flank oil exploration success: – Oil discoveries in PEL 92 (Butlers, Perlubie, Perlubie South) were brought on-line –
Slide 11: Operations highlights: Egypt, Gippsland, Geothermal
Operations highlights For personal use only Egypt oil • Development drilling in North Shadwan expected to yield recoverable reserves of 2.2 MMbbl net to Beach • Nearshore oil fields in Gulf of Suez being developed, first production anticipated during first quarter 2011 at a flow rate in excess of 3,
Slide 12: 3. Positioned for growth: Gas
For personal use only 3. Positioned for growth GAS Macquarie Private Wealth Slide 12
Slide 13: The gas market – Demand
The gas market – Demand For personal use only Domestic gas demand in Eastern Australia is projected to grow by ~3.4% per annum from 2010 to 2025 under the Core Energy Group Reference Demand Scenario. Eastern Australia Domestic Gas Demand 1,600 1,400 1,200 1,000 Gas (PJ) 800 600 400 200 0 2010 2011 2
Slide 14: The gas market – Contract vs unfulfilled demand
The gas market – Contract vs unfulfilled demand For personal use only Existing Cooper, Gippsland and other large contracts are set to expire by the middle to late this decade. This creates the potential for new sources to supply this market. Domestic Market: Gas Contracts versus Reference Demand Unc
Slide 15: The gas market – International LNG
The gas market – International LNG Asian LNG Demand and Supply: Unfulfilled Demand: For personal use only Projected Asian Uncontracted LNG Demand - Firm Uncontracted Demand by Country - Based on Contracts, Likely Extensions and Likely Contracts Likely Supply 250 100 200 80 150 60 mtpa mtpa 100 40 50
Slide 16: How will Beach capitalise on this gas market?
How will Beach capitalise on this gas market? For personal use only 1. Cooper Basin – GLNG project supply opportunity – Unconventional shale gas 2. Gippsland Basin Macquarie Private Wealth Slide 16
Slide 17: Cooper Basin: GLNG project supply opportunity
Cooper Basin: GLNG project supply opportunity For personal use only • Discussions ongoing between SACB JV and Santos for the supply of 750 PJ to Santos’ GLNG Project*: – Beach’s share of supply would be ~ 152 PJ – 15 year contract - proposed to commence in 2014 – Oil-linked gas pricing • Highlights
Slide 18: Cooper Basin: Unconventional shale gas
Cooper Basin: Unconventional shale gas For personal use only What is shale gas? • Gas recovered from high TOC* shale/ mudstone at depth Why shale gas? • A cleaner fuel for a lower carbon future • Fewer wells required for CSG equivalent CSG** production • Unlike CSG, does not require large scale dewa
Slide 19: Unconventional to overtake conventional gas by 2020
Unconventional to overtake conventional gas by 2020 Contribution to eastern USA: gas production from For personal use only Australian gas production 48 contiguous states Source: Core Energy Group; historic data from ABARE. Source: Core Energy Group from Wood McKenzie et al. Macquarie Private Wealth
Slide 20: Cooper Basin: Real estate play
Cooper Basin: Real estate play Will Australian shale gas real estate mirror values being realised in the US? For personal use only Some recent US shale gas transactions Deal Location Date Value Chevron - Atlas Marcellus Nov 10 US$3.2b Mitsui - Anadarko Marcellus Feb 10 US$1.4b Total - Chesapeake Bar
Slide 21: Cooper Basin: Building a dominant shale gas acreage
Cooper Basin: Building a dominant shale gas acreage For personal use only • Nappamerri Trough potential gas in place > than 200TCF* • Extensive and thick shale packages • Similar properties to the best US shale plays • Nappamerri Trough total area ~ 10,000 km2 • Potential gas in place 20 – 100 Bcf/k
Slide 22: Cooper Basin: Initial testing for shale gas
Cooper Basin: Initial testing for shale gas For personal use only • Encounter-1 now drilling: – This will be followed by Holdfast-1 • Gas in place (GIP) measurement a key objective: – Extensive coring – Evaluate gas content of shale – Determine porosity and free gas • Results will assist in the desi
Slide 23: Cooper Basin: Preparing for shale gas commercialisation
Cooper Basin: Preparing for shale gas commercialisation • Sundance Energy Limited alliance Domestic Market For personal use only to build knowledge relating to unconventional shale oil and gas Electricity (ATCO) • LNG – ITOCHU MOU Residential and Commercial – Qld LNG supply opportunities • Power gen
Slide 24: Cooper Basin gas: Indicative shale gas development timeline
Cooper Basin gas: Indicative shale gas development timeline For personal use only Encounter Design pilot Pilot Pilot BOOK FIRST GAS BOOK GAS and production production development GAS SALES RESOURCE Holdfast well Q3 well RESERVE vertical exploration wells Drill Q4 FY11 Frac Q2 FY12 Commence Target Ta
Slide 25: Gippsland Basin gas: New horizons
Gippsland Basin gas: New horizons Offshore (Beach 30%) For personal use only • Refocus from oil to a potentially larger gas-liquids project Onshore • Beach earning up to 50% in PRL 2 • $10M expenditure for Beach to earn 15% • Option to spend a further $40M expenditure for Beach to take equity share
Slide 26: 3. Positioned for growth: Oil
For personal use only 3. Positioned for growth OIL Macquarie Private Wealth Slide 26
Slide 27: The Australian liquids market: Production declining
The Australian liquids market: Production declining Annual Cooper Basin Oil Production (BBls) For personal use only Australia is experiencing 12,000,000 significant decline in all major oil 10,000,000 producing regions: 8,000,000 • Gippsland/ Bass Strait 6,000,000 4,000,000 • North West Shelf 2,000,
Slide 28: Global oil market: Supply peak looming = pricing pressure?
Global oil market: Supply peak looming = pricing pressure? • Oil remains the dominant fuel in the primary energy mix to 2035 For personal use only • The oil price needed to balance oil markets is set to rise • Oil usage increase to be driven by population and economic growth • Natural gas and renewa
Slide 29: Expanding the African portfolio: Egypt
For personal use only Expanding the African portfolio: • Egypt Macquarie Private Wealth Slide 29
Slide 30: Egypt: A balanced and prospective portfolio
Egypt: A balanced and prospective portfolio For personal use only • Interests in prolific and emerging hydrocarbon basins • Enhanced portfolio of near- term development & exploration opportunities • Focus on oil • Abu Sennan could be another PEL 92, but substantially bigger • Longer-term upside via
Slide 31: Egypt: Abu Sennan Concession
Egypt: Abu Sennan Concession • Beach interest 22%* • Multiple target horizons For personal use only • Numerous prospects • Four well program approved • 3D seismic coverage • Existing GPZZ discovery to be over entire concession appraised *Subject to EGPC & regulatory approvals Macquarie Private Wealt
Slide 32: Egypt: Mesaha Concession
Egypt: Mesaha Concession For personal use only • Beach interest 15%* • One of the largest concession areas in Egypt at 57,000km2 • Wildcat basin with the right ingredients • 2D seismic activities underway to delineate basin architecture • Potential for very large oil fields (~ 100 MMbbl+) *Subject t
Slide 33: Expanding the African portfolio: Tanzania
For personal use only Expanding the African portfolio: • Tanzania Macquarie Private Wealth Slide 33
Slide 34: Tanzania: An emerging 'big oil' province
Tanzania: An emerging ‘big oil’ province For personal use only • Beach 100% • Petroleum Sharing Agreement signed in June 2010 • Significant success in nearby analogous areas (Uganda) • Potential for 200 MMbbl + discoveries • Geophysical exploration commenced in September 2010 • Natural oil seeps on
Slide 35: Tanzania: Lake Tanganyika natural oil seeps
Tanzania: Lake Tanganyika natural oil seeps For personal use only Macquarie Private Wealth Slide 35
Slide 36: Tanzania: Lake Tanganyika - Initial objectives
Tanzania: Lake Tanganyika - Initial objectives For personal use only • Eleven year PSA structured into phases of 4 + 4 + 3 years • Phase 1 minimum commitment expenditure of ~ US$7 million: – Phase 1 primarily involves geophysical activities – Prospects & leads definition key aim of Phase 1 activitie
Slide 37: Tanzania: Attracting investment by the Majors
Tanzania: Attracting investment by the Majors For personal use only • Various phases of high-level exploration undertaken since 1952 • Very few exploration wells drilled • Early wells drilled with poor quality or inadequate seismic control • Tanzania has now attracted attention of the large players,
Slide 38: 4. Key catalysts for FY11
For personal use only 4. Key catalysts for FY11 Macquarie Private Wealth Slide 38
Slide 39: Key catalysts for FY11
Key catalysts for FY11 Project Q1 FY11 Q2 FY11 Q3 FY11 Q4 FY11 For personal use only Drilling, fracture stimulation and evaluation Cooper Basin unconventional gas of Encounter-1 & Holdfast-1 exploration wells Implement production pilots to convert 2C Cooper Basin JV contingent resource to 2P reserve
Slide 40: Thank you
For personal use only Thank you Tanzania: Lake Tanganyika Macquarie Private Wealth Slide 40