Beach Energy Limited · ASX:BPT
Beach Energy — H1 FY21 Earnings Presentation
44 slides from Beach Energy's earnings presentation, Feb 15, 2021
Slide 1: FY21 Half Year Results
15 FEBRUARY 2021 FY21 HALF YEAR RESULTS Enterprise 1 – Otway Basin
Slide 2: 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 3: Key takeaways
Key takeaways Already delivering on requirements1 to meet >37 MMboe by FY25, further supported by Waitsia FID and Enterprise exploration success Five-year Enterprise discovery supports further upside potential for the outlook remains Otway Basin on-track Otway offshore drill rig now on site at the A
Slide 4: Key first half achievements
Key first half achievements Execution lays foundations for growth ▪ Reached FID1 of Waitsia Gas Project Stage 2 ▪ Discovery of the Enterprise gas field in offshore Victorian Otway Basin ✓ Executed processing agreements with NWS project participants ✓ Booked net 2P Reserves of 21 Mmboe2 (34 MMboe gro
Slide 5: Second half activities
Second half activities Focus on execution and delivery of our growth strategy ▪ Reached unconditional FID at Waitsia Gas Project Stage 2 ▪ Enter FEED for the Enterprise gas field connection to the Otway Gas Plant ✓ Currently progressing Detailed Design for planned construction activities ✓ Targeting
Slide 6: Delivering on targets
Delivering on targets Already delivering on our requirements to meet 37 MMboe in FY25 To deliver Key assumptions Track record ▪ Stable gas production from Cooper Basin JV ✓ Cooper Basin production currently being maintained ▪ Waitsia Stage 2 FID H1 FY21, start-up in H2 CY23 ✓ Reached FID for Waitsia
Slide 7: H1 FY21 Results
H1 FY21 Results Maintaining disciplined approach Operating and drilling summary Financial summary ▪ Total first half production of 13.0 MMboe ▪ NPAT of $128.7 million ▪ Unit field cost of $9.20 per boe (down 2% pcp1) ▪ EBITDAX2 of $446 million, at a 63% margin on sales revenue ▪ Gas discovery at the
Slide 8: Health, safety and environmental performance
Health, safety and environmental performance Safest year on record to date Safety performance (TRIFR1) Environmental performance 15.6 Crude/hydrocarbon spill volume (kl) 51.9 9.7 7.9 5.9 5.7 3.8 3.5 3.4 4.1 3.7 2.0 9.6 0.2 0.1 0.1 1.8 2.0 FY15 FY16 FY17 FY18 FY19 FY20 H1FY21 FY15 FY16 FY17 FY18 FY19
Slide 9: Progressing delivery of 25% emission reduction
Committed to reducing our emissions Progressing delivery of 25% emission reduction Initiatives include: Flare and vent management Bauer Hybrid Renewable Project Leak Detection and Repair • Beach is implementing initiatives to reduce • Beach is undertaking further preparatory work Program the need fo
Slide 10: FY21 Guidance Update
FY21 half year results presentation FY21 Guidance Update
Slide 11: FY21 guidance update
FY21 guidance update Incorporating recent acquisitions and asset performance Original guidance Pre-acquisition Updated guidance Key impacts to guidance guidance (pro forma1) • Higher customer nominations • Optimisation of Western Flank gas activities Production (MMboe) 26.0 – 28.5 25.5 – 26.5 26.5–
Slide 12: Updated FY21 guidance
Updated FY21 guidance Guidance changes reflect bolt-on acquisitions of Cooper and Bass Basin interests Production guidance Capital expenditure ▪ H1 FY21 production of 13.0 MMboe (pro forma: 13.7 MMboe1) ▪ $314 million of capital expenditure in H1 FY21 ▪ Pre-acquisition guidance of 25.5 – 26.5 MMboe
Slide 13: Financial results
FY21 half year results presentation Financial results
Slide 14: H1 FY21 financial summary
H1 FY21 financial summary Cash and existing loan facilities support funding of growth profile FY21 half year results Beach retains a strong balance sheet ▪ NPAT of $129 million ▪ $404 million of total liquidity ▪ EBITDAX of $446 million, at a margin of 63% on sales revenue ▪ $46 million net debt, wi
Slide 15: Financial highlights
Financial highlights Result impacted by weaker liquids pricing and exploration expensed $million (unless otherwise indicated) H1 FY20 H1 FY21 Change Production (MMboe) 13.0 13.0 0% Pro forma1 production (MMboe) 13.0 13.7 6% Sales volumes (MMboe) 13.4 13.4 0% Average realised oil price ($ per bbl) 10
Slide 16: Reported NPAT
Reported NPAT H1 FY21 v H1 FY20 comparison $ million Reported NPAT down 54% due to: ▪ 38% fall in realised oil price ▪ Exploration expense of $39 million, primarily related to the unsuccessful Ironbark 1 exploration well and relinquishment of the Wherry and (222) Bonaparte Basin exploration permits
Slide 17: Segment results
Segment results H1 FY21 impacted by plant maintenance and natural field declines H1 FY21 segment data SAWA Victoria New Zealand Total ▪ H1 FY21 revenue impacted by a 38% fall in realised oil Production (MMboe) 9.5 2.0 1.5 13.0 ▪ Beach assets deliver solid EBITDAX margins of 63% Sales revenue ($ mill
Slide 18: Maintaining financial strength
Maintaining financial strength Beach remains well capitalised to deliver its investment program in FY21-22 Cash flow movements ($ million) Available liquidity ($ million) Capital management framework Beach’s capital management priorities: 510 500 ▪ Beach remains a growth orientated company 296 (345)
Slide 19: Our Markets
FY21 half year results presentation Our Markets
Slide 20: Beach Energy portfolio diversity
Beach Energy portfolio diversity Six production hubs supplying three distinct gas markets West Coast gas 2% 33% Liquids Oil HY21 46% production Gas 13.0 44% 54% MMboe East Coast gas 6% Condensate 7% 8% LPG NZ gas 20 Geographical locations, product mix and market distribution provides a diversified p
Slide 21: LNG markets
LNG markets Beach to become an LNG producer at an opportune time in the LNG cycle Global LNG supply/demand (Mtpa) Waitsia LNG volumes LNG supply is forecast to tighten from 2022 ▪ Supply tightness forecast between 2022 and 2025 ▪ New greenfield LNG supply not anticipated until post-2025 ▪ Recent LNG
Slide 22: Western Australia domestic gas market
Western Australia domestic gas market Well supplied in the near-term, uncertainty increasing from mid-2020s Production guidance by product (TJ per day) Domestic market expected to be well supplied until mid-2020s 1,600 ▪ Existing supply expected to peak from 2022, in line with reserves depletion 1,4
Slide 23: East Coast domestic gas market
East Coast domestic gas market Supportive of Beach’s east coast gas strategy East coast gas supply/demand (TJ per day) Market operator (AEMO) continues to see gas shortfall 2,400 2,000 within eastern states from 2026 1,600 ▪ AEMO continues to forecast insufficient reserves to meet domestic demand 1,
Slide 24: Our Assets
FY21 half year results presentation Our Assets
Slide 25: On track to deliver FY25 target of >37 MMboe with high returning projects
On track to deliver FY25 target of >37 MMboe with high returning projects What is driving our growth profile? Cooper Basin Perth Basin Bass Basin Otway Basin Taranaki Basin Western Flank oil & Waitsia Gas Project Trefoil development Offshore Otway Nearshore Kupe compression gas activities Stage 1A &
Slide 26: Perth Basin
Perth Basin Waitsia Stage 2 reaches Final Investment Decision on schedule Reached FID in December 2020, becoming unconditional in February 2021 NWS access Pipeline access Approvals EPC contract ▪ Executed agreements to process ▪ Executed transportation ▪ Remaining Waitsia 2P reserves ▪ Clough awarde
Slide 27: Enterprise gas discovery
Enterprise gas discovery New nearshore gas discovery supports Otway Basin five-year production profile ▪ Discovered in November 2020 following extended reach exploration drilling from onshore Otway Basin (Beach: 60% interest) ▪ High relief, fault-bound structure with net 2P reserves of 21 Mmboe1 (34
Slide 28: Otway Basin
Otway Basin Targeting tripling in the utilisation of the Otway Gas Plant by mid-FY23 Gas discovery at Enterprise gas Forward activity field during H1 FY21 ▪ Diamond Ocean Onyx rig now on site at the Artisan 1 well location ▪ H1 FY21 production of 1.4 MMboe, down o Six development wells across Thylac
Slide 29: Western Flank Oil
Western Flank Oil Reviewing production model from current field performance to optimise future development Higher than expected declines Forward plan focuses on during H1 optimising future ▪ H1 FY21 production of 3.7 MMbbls, +8% on H1 performance FY20 ▪ Further six horizontal wells planned for H2 FY
Slide 30: Consolidating the Western Flank (Senex acquisition)
Consolidating the Western Flank (Senex acquisition) Using Beach’s proven track record to extract further value Logical value accretive Forward activity acquisition ▪ Reviewing prospect inventory with >20 ▪ H1 FY21 production of 0.3 MMboe1 from Senex exploration targets identified and being assets ev
Slide 31: Trefoil development
Trefoil development Material development, progress towards FEED Extending life of existing Forward activity infrastructure ▪ Concept select phase to be completed in Q3 FY21 ▪ T/RL2 (including the Trefoil discovery) located ▪ Plans to commence FEED in FY21, with ~37km west of the Yolla gas field and
Slide 32: Cooper Basin JV
Cooper Basin JV Focus on high value, low-risk opportunities Production steady despite Forward activity downtime and weather ▪ Beach plans to participate in 28 wells ▪ H1 FY21 production of 4.3 MMboe, +1% on during H2 FY21, including follow up drilling H1 FY20 of the successful Anna North-1 well in 2
Slide 33: New Zealand – Kupe Gas Project
New Zealand – Kupe Gas Project Kupe gas compression on-track for completion in H1 FY22 First half delivers production Forward activity uplift ▪ Planned Kupe well intervention in Q3 FY21 ▪ Kupe compression project online H1 FY22, ▪ H1 FY21 production of 1.5 MMboe, expected to maintain plateau plant +
Slide 34: Five-year outlook remains on-track
Key takeaways Already delivering on requirements1 to meet >37 MMboe by FY25, Five-year further supported by Waitsia FID and Enterprise exploration success outlook remains Enterprise discovery supports further upside potential for the Otway Basin on-track Otway offshore drill rig now on site at the A
Slide 35: Q&A
F Y 2 1 H A L F Y E A R R E S U LT S P R E S E N TAT I O N Q&A
Slide 36: Appendices
F Y 2 1 H A L F Y E A R R E S U LT S P R E S E N TAT I O N Appendices
Slide 37: Perth Basin
Perth Basin Ramp-up of Xyris and Beharra Springs production following plant upgrades Completion of plant expansion Forward activity and modifications ▪ Xyris facility performance testing and debottlenecking, targeting uplift to ~25 TJ ▪ H1 FY21 production of 0.3 MMboe, +1% on H1 per day FY20 ▪ Compl
Slide 38: Western Flank Gas
Western Flank Gas Preparing for return of exploration and development in FY22 Middleton facility fully Forward activity supplied by existing well ▪ Planned Middleton facility maintenance to deliverability coincide with SACB JV outages to minimise production impact ▪ H1 FY21 production of 1.1 MMboe,
Slide 39: Bass Basin
Bass Basin Acquisition of Mitsui’s Bass Basin assets showcases upside potential of Trefoil Progressing Trefoil towards Forward activity FY21 FEED ▪ Minor facility maintenance planned for Q3 ▪ H1 FY21 production of 0.6 MMboe, +2% on FY21 H1 FY20 ▪ Reviewing in-field drilling opportunities ▪ Productio
Slide 40: Reconciliation of NPAT to Underlying NPAT
Reconciliation of NPAT to Underlying NPAT1 $ million H1 FY20 H1 FY21 Change Net Profit After Tax 279 129 (54%) Gain on asset sales (9) - nmf Impairment of exploration assets 1 - nmf Tax impact of the above 2 - nmf Underlying Net Profit After Tax (NPAT) 274 129 (53%) Note: Due to rounding, figures an
Slide 41: Underlying EBITDAX, EBITDA, EBIT, NPBT and NPAT
Underlying EBITDAX, EBITDA, EBIT, NPBT and NPAT1 $ million H1 FY20 H1 FY21 Change Underlying EBITDAX 622 446 (28%) Exploration expensed - (39) nmf Underlying EBITDA 622 407 (35%) Depreciation and amortisation (224) (219) (2%) Underlying EBIT 398 188 (54%) Finance expenses (8) (5) (38%) Interest inco
Slide 42: Summary of east & west coast gas contracts as at December 2020
Summary of east & west coast gas contracts as at 31 December 2020 Beach gas sales to progressively be re-priced at prevailing market pricing Move to New Term Market pricing Volume End Asset Counterparty Basis Contract pricing FY21 FY22 FY23 FY24 FY25 (PJ) date Oil-linked with downside Cooper Basin J
Slide 43: Thank You
F Y 2 1 H A L F Y E A R R E S U LT S P R E S E N TAT I O N Thank You
Slide 44: 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 Chris Morbey, Head of Investor Relations Adam Stokes, Investor Relations Advisor T: +61 8 8338 2833