Amplitude Energy Limited · ASX:AEL
Amplitude Energy — Cooper Energy — FY2020 Earnings Presentation
48 slides from Amplitude Energy's earnings presentation, Aug 31, 2020
Slide 1: FY20 Results / FY21 Outlook
For personal use only FY20 Results/ FY21 Outlook 31 August 2020 Ocean Monarch drilling Annie-1 gas discovery well, Otway Basin Victoria
Slide 2: Compliance statements and important information
Compliance statements and important information. This investor presentation (“Presentation”) is issued by Cooper Energy Limited ABN 93 096 170 295 (“Cooper Energy” or “the company”) ASX: COE. For personal use only Summary information: This Presentation contains summary information about Cooper Energ
Slide 3: FY20: standout features
FY20: 3 standout features For personal use only 1. Impact of COVID-19 energy demand and prices on financial results and near-term gas prices. 2. Impact of the delayed completion of the Orbost Gas Processing Plant for Sole gas. 3. Growth in Cooper Energy’s gas assets and opportunities and the portfol
Slide 4: Key outcomes from FY20 and what do they mean?
5 Key outcomes from FY20 and what do they mean? For personal use only Uncontracted gas revalued at COVID-19 low prices and for 1. Impairment to asset carrying value of $76 million after tax development and abandonment costs from FY20 price discovery Sole offshore project completed for $335 million v
Slide 5: Health, Safety, Environment and Community
Health, Safety, Environment and Community Safety: one lost time injury aboard Ocean Monarch For personal use only Health Safety metrics FY20 FY19 • Effective COVID response (as detailed on next page) Hours worked 283,672 505,300 Safety Recordable incidents 1 0 • One LTI aboard Ocean Monarch (Septemb
Slide 6: COVID-19 response
COVID-19 response Rapid response ensured safety of personnel. Limited direct impact as all gas production is via unmanned subsea facilities and locally staffed gas plants. Indirect impact via gas prices, supply chain and access restrictions For personal use only Assessing & monitoring risk to busine
Slide 7: Key financial results
Key financial results For personal use only $ million unless indicated FY20 FY19 change Production MMboe 1.56 1.31 ▲ 19% Sales revenue 78.1 75.5 ▲ 3% Other income 19.8 0.8 ▲ 2,375% Gross profit 23.6 31.7 ▼ (25)% Gross profit/Sales revenue % 30.2 42.0 ▼ (28)% Statutory profit/(loss) after tax (86.0)
Slide 8: Statutory and underlying loss
Statutory and underlying loss Impairment charges, liquidated damages restoration restatement responsible for difference between statutory and underlying profit For personal use only For the year ended 30 June 2020: $ million Net loss after tax 86.0 Adjustments for: Impairment announced 25 August 107
Slide 9: Underlying NPAT movement
Underlying NPAT movement Increased gas revenue offset by non-cash expenditure For personal use only $ million • Cost of sales increased due to higher: 30.0 − non-cash depreciation and amortisation ($8.5 million higher) 25.0 − higher processing tolls in line with higher volumes from Casino Henry 20.0
Slide 10: Movement in cash
Movement in cash Cash $32.7 million lower after funding $91.4 million for exploration & development and interest For personal use only $ million 240 (11.3) 4.1 (2.3) (9.7) 19.8 (2.5) 11.0 200 40.3 (81.7) 160 (0.4) 120 212.4 Cash Cash 80 164.3 Operating cash flow Financing & investing cash flow 48.1
Slide 11: Balance sheet
Balance sheet For personal use only $ million 30 June 20 30 June 19 Comments Assets Cash 131.6 164.3 Working capital 26.9 24.9 PPE, intangibles and right-of-use assets (leases) 28.0 4.6 Recognition of right-of-use assets per AASB 16 ($9.7 million), Minerva Gas Plant acquisition ($8.7 million) Explor
Slide 12: Operations
For personal use only Operations Skandi Acergy conducting umbilical lay, Sole Gas Project
Slide 13: Production and sales revenue
Production and sales revenue Higher gas production and prices drove sales revenue increase For personal use only Sales revenue Production $ million MMboe 1.6 80 Average prices FY20 FY19 Change 0.20 23.2 14.5 Gas 1.2 0.24 0.34 60 8.99 7.92 + 14% 63.6 A$/GJ 1.1 52.3 Crude oil 1.02 83.75 102.52 -18% 0.
Slide 14: Reserves and Contingent Resources
Reserves and Contingent Resources Proved and Probable Reserves 5% lower, Contingent Resources (2C) of gas up 33% For personal use only Movement in 2P Reserves1 at 30 June 2020 MMboe Movement in 2C gas Contingent Resources1 at 30 June 2020 PJ 13 (1.6) (1.2) 34 52.7 49.9 187 140 2019 Production Revisi
Slide 15: Sole Gas Project
Sole Gas Project Offshore completed. Onshore commissioning ongoing. COE and APA agree to unite to accelerate firm sales and complete plant. For personal use only Offshore project: Cooper Energy Onshore project: APA • 2 production wells, subsea tie-back • Construction completed Feb 20 • 65 km pipelin
Slide 16: Orbost: the path to completion
Orbost: the path to completion Phase 2 and other works to achieve practical completion. Commencement of term gas sales. For personal use only 1. The issue & consequences 2. Status 3. Clear path forward Unexplained foaming and build up of sulphur in • Root cause analysis ongoing • Return from shutdow
Slide 17: FY20 Exploration & development program
FY20 Exploration & development program Annie & Dombey gas discoveries, Athena Gas Plant secured and Sole offshore completed For personal use only Cooper Basin Capital expenditure by region • 16 wells drilled $ million • 3 appraisal wells cased & suspended Gippsland: Otway: 44 18 Cooper Basin: 11 Oth
Slide 18: Annie gas discovery and offshore Otway exploration
Annie gas discovery and offshore Otway exploration Annie discovery extends offshore Otway exploration success and encourages further drilling For personal use only • Annie-1 gas discovery supported by seismic amplitude • High quality gas reservoir in the Waarre C formation, analogous to Casino & Min
Slide 19: Environment, Sustainability and Legacy
Environment, Sustainability and Legacy Operate with care for people, communities and the environment For personal use only • Environment and Climate: - zero reportable incidents - commitment to TCFD basis reporting in inaugural 2019 Sustainability Report - conscious of emissions position and activel
Slide 20: Gas
For personal use only Gas Pipeline spooling, Crib Pt
Slide 21: Gas business model: core principles
Gas business model: core principles Portfolio gas business built to address gas supply opportunities foreseen in south-east Australia For personal use only Asset quality Gas contracts ✓ Competitive: ✓ Customer quality: blend of blue- among most competitive delivered chip utility and industrial custo
Slide 22: Recent spot gas prices and LNG netback
Recent spot gas prices and LNG netback Led by LNG prices, CY20 spot prices have trended lower, improvement expected from FY21 For personal use only ACCC1 LNG netback to Wallumbilla Vic. Average Daily Wholesale Gas Price (spot price)1 $/GJ by month by year $/GJ 14.00 Transport to Melbourne city gate
Slide 23: Gas market outlook and expectations
Gas market outlook and expectations Southern production moving from surplus to shortfall local demand1 For personal use only PJ 2020 – 2021: LNG surplus supply … which leads to… 500 • Low domestic spot prices • Term price > Spot price; buyer reluctance to commit to term agreements 400 -40 -9 • Cutba
Slide 24: Outlook
For personal use only Outlook Ocean Monarch drilling Annie-1 Otway Basin
Slide 25: August 2020 status and outlook
August 2020 status and outlook Clear program for Sole/Orbost. Solid gas book. Athena a key project for FY21. Production rising with Sole. For personal use only Sole Gas contract book New projects Balance sheet at 30 June 2020 $ million Transition Agreement: clear Solid long-term contract book, FY21:
Slide 26: FY21 Activities program
FY21 Activities program E & D spend expected to be ~29% lower. Delivery of Athena Gas Plant Project the major item For personal use only Capital expenditure1 by region Otway to account for ~ 65% of forecast Cooper Basin $ million • 2 development wells • Stay-in-busines capex 80 4 11 60 Other 44 7-8
Slide 27: Wrap-up
Wrap-up For personal use only 1. FY20 financial results show impact of COVID-19 energy prices and delays from Orbost. 2. FY20 operations results affirm capability in core business and expansion of gas assets and opportunity set. Sole offshore project delivery, gas contract book, Annie and Dombey gas
Slide 28: Appendices
For personal use only Appendices Otway coastline, Pt Fairy
Slide 29: Profit and loss items
Profit and loss items For personal use only Asset FY20 FY19 Change Cessation of production from Minerva, commencement from Sole. Sales revenue 78.1 75.5 2.6 Higher average gas price ($8.99/GJ vs $7.92/GJ). Cost of sales (54.5) (43.6) (10.9) Higher Casino Henry tolling. Higher fixed costs from CHN an
Slide 30: Non-cash impairments
Non-cash impairments Revision to asset carrying values chiefly driven by impact of lower post-COVID gas prices and cost discovery For personal use only Asset Statutory Statutory Factors & comment pre-tax post-tax Casino Henry 28 20 Uncontracted gas price assumptions Development & abandonment cost up
Slide 31: Operating assets and interests
Operating assets and interests Gas supply to south-east Australia from two hubs and some of the most competitive sources of supply For personal use only Cooper Basin Non-operated oil production Gippsland Otway Gas production & exploration Gas production & exploration • Sole gas field • Casino Henry
Slide 32: Gas reserves and resources
Gas reserves and resources Contracted and uncontracted 2P Reserves, development opportunities and production upside For personal use only Gippsland Basin Otway Basin 2P Reserves and 2C Contingent Resource1 2P Reserves and 2C Contingent Resource1 PJ PJ 245 67 238 58 52 • 2P Reserves movement inclusiv
Slide 33: Penola Trough, onshore Otway Basin
Penola Trough, onshore Otway Basin Dombey-1 gas discovery confirms potential. Further investigation required For personal use only • Dombey-1 discovery: - confirms a new Pretty Hill Formation play fairway within the Penola Trough - production test result indicates a small gas pool connected to a lar
Slide 34: FY21 Outlook
FY21 Outlook FY20 actual and FY21 guidance For personal use only Capital expenditure by region FY20 FY21 $ million incurred % share of guidance Actual Guidance1 Exploration Development Total Exploration Development Total • Athena Gas Project Gippsland 8% • OP3D Select process 66% Otway 29.8 14.5 44.
Slide 35: Gippsland FY20 overview
Gippsland FY20 overview Production from Sole. Analysis underway for future drilling targets For personal use only Sole Production FY20 FY19 • First gas to plant March ‘20 Sales gas PJ 2.1 - • Commissioning still underway Total MMboe 0.34 - • Offshore project completed July 2019 for $335 million vs b
Slide 36: Offshore Otway Basin FY20 overview
Offshore Otway Basin FY20 overview Secured ingredients for growth: gas discovery, gas plant and well-located exploration permit For personal use only Production FY20 FY19 • Annie gas discovery Sales gas PJ 6.2 6.6 • Minerva Gas Plant acquired- Athena Gas Plant Condensate kbbl 3.5 4.7 Project taken t
Slide 37: Cooper Basin FY20 overview
Cooper Basin FY20 overview Appraisal program completed For personal use only • Escalated drilling program with 13 Production FY20 FY19 appraisal wells in aggressive step-out Crude oil kbbl 0.19 0.24 campaign to clarify field boundaries Average oil price A$/bbl 83.75 102.52 - 3 appraisal wells cased
Slide 38: Projects and development options
Projects and development options Projects under development that can add value and increase gas production For personal use only Manta gas & liquids Appraise & develop • Drill Manta-3 and assess OP3D • Contingent Resource of 121 PJ 2 and 3 million Bring >100 PJ1 gas to market barrels of liquids • Ad
Slide 39: Current growth projects
Current growth projects Status of gas development and exploration projects under CARP (Cooper Energy Asset Realisation Process) For personal use only Value Chain Explore Develop Construct Operate Project Phase ASSESS SELECT DEVELOP EXECUTE OPERATE FID Sole Commissioning Plant FID taken Athena Gas Pl
Slide 40: Athena Gas Processing Project
Athena Gas Processing Project A low-cost, processing hub for Casino Henry gas and new discoveries For personal use only The Opportunity Execute Phase underway • Integration of low cost processing hub for Casino • Commenced July 2020 Henry and new discoveries • Targeting first gas into plant Sept qua
Slide 41: Otway Phase-3 Development Project (OP3D)
Otway Phase-3 Development Project (OP3D) Project to bring 100+ PJ1 of gas to market from 2023 onwards, utilising Minerva Gas Plant For personal use only The Opportunity Select Phase underway • Development of >100 PJ1 of gas from Henry and Annie • Commenced February 2020 • Gas to market in CY 20232 •
Slide 42: Manta
Manta Next phase of Gippsland development with 121 PJ gas and 3 MMbbl liquids 2C Contingent Resource1 For personal use only The Opportunity Select phase underway • Second phase Gippsland gas development • Manta-3 well design • Additional gas exploration potential in deeper Manta reservoirs • Engagem
Slide 43: Manta gas and liquids resource
Manta gas and liquids resource Contingent Resource with exploration potential For personal use only Manta Contingent Resource1 estimate 1C 2C 3C Condensate MMbbl 2.2 3.4 5.4 Gas PJ 78 121 190 Manta unrisked Prospective Resource1 estimate Low (P90) Best (P50) High (P10) Oil MMbbl 1.0 1.5 2.3 Condensa
Slide 44: Cooper Energy Snapshot
Cooper Energy Snapshot For personal use only Key statistics* Proved & Probable Reserves 49.9 MMboe Contingent Resources (2C) 34.9 MMboe Market capitalisation $545 million Cooper Basin Net debt $97.8 million • Oil production & exploration Issued shares (million) 1,626.6 * As at 30 June 2020; except f
Slide 45: Reserves and Contingent Resources at June 2020
Reserves and Contingent Resources at 30 June 2020 1P (Proved) 2P (Proved + Probable) 3P (Proved + Probable + Possible) Reserves Unit Cooper Otway Gippsland Total1 Cooper Otway Gippsland Total1 Cooper Otway Gippsland Total1 For personal use only Developed Sales gas PJ 0 9 174 183 0 17 238 255 0 24 32
Slide 46: Executive Leadership Team
Executive Leadership Team For personal use only Managing Director Chief Financial Officer David Maxwell Virginia Suttell David Maxwell has over 30 years’ Virginia Suttell is a chartered accountant experience as a senior executive with with more than 25 years' experience, companies such as BG Group,
Slide 47: Notes on calculation of Reserves and Contingent Resources
Notes on calculation of Reserves and Contingent Resources Cooper Energy prepares its petroleum reserves and contingent resources in accordance with the definitions and guidelines in the Society of Petroleum Engineers (SPE) 2018 Petroleum Resources Management System (PRMS). The estimates of petroleum
Slide 48: Abbreviations
Abbreviations $, A$ Australian dollars unless specified otherwise For personal use only Bbl barrels of oil Boe barrel of oil equivalent EBITDA earnings before interest, tax, depreciation and amortisation FEED front end engineering and design kbbl thousand barrels m metres MMbbl million barrels of oi