Amplitude Energy Limited · ASX:AEL
Amplitude Energy — Cooper Energy — H1 FY2021 Earnings Presentation
35 slides from Amplitude Energy's earnings presentation, Feb 15, 2021
Slide 1: FY21 half year results and outlook
For personal use only 15 February 2021 FY21 half year results and outlook
Slide 2: Step-change in production, challenging 2020, strong fundamentals
For personal use only 1. Step-change in production underway 2. Challenging 2020 3. Strong fundamentals for continuing growth Cover: Aerial photo of Coorong landscape to be revegetated with carbon offset investment by Cooper Energy Otway coastline, Pt Fairy, Victoria
Slide 3: Solid progress during a challenging period
Solid progress during a challenging period Transition Agreement with APA underpins step-change growth in 2021 For personal use only Production (MMboe) • OGPP reconfiguration enabled commencement of Sole GSAs Transition +82% Agreement signed • APA and Cooper Energy focussed on OGPP reaching 68 TJ/day
Slide 4: Orbost Gas Processing Plant
Orbost Gas Processing Plant Reconfigured absorbers and improved operating performance For personal use only Orbost Gas Processing Plant Sulphur absorber reconfiguration works completed • Increased operational flexibility to manage cleaning cycles • Variable production in January 2021 while testing a
Slide 5: Sole production and GSA sales volumes
Sole production and GSA sales volumes Nominations to increase with seasonal variation For personal use only TJ/day 70 Targeted OGPP production rate (68 TJ/day) • All customer gas nominations met 60 • GSA sales volumes contracted in Sole GSA contracted volumes in CY2021 (54 TJ/day / 19.75 PJ) CY2021
Slide 6: Step-change in total gas production and sales volumes
Step-change in total gas production and sales volumes Commencement of Sole GSAs and OGPP improvements underpin growth For personal use only Daily gas production rates (TJ/day) • Working towards a >100% increase in gas production 83 TJ/day rates from H1 FY21 (30 PJ/year) • Long-term sales contracts 6
Slide 7: Health, safety and environment
Health, safety and environment Clear focus on continual improvement across all operations For personal use only Health Safety metrics H1 FY20 H1 FY21 • No COVID-19 cases reported Hours worked 181,738 109,072 • Ongoing monitoring of staff health and wellbeing Recordable incidents 1 1 • Gas plant acce
Slide 8: Net zero carbon emissions for FY20
Net zero carbon emissions for FY20 Pursuing partnerships and emission reductions for long-term net zero carbon objectives For personal use only • In partnership with Greening Australia and BioDiverse Coorong Biodiversity Project Carbon and their Coorong Biodiversity Project • Environmental plantings
Slide 9: Financial results
For personal use only Financial results Otway coastline, Pt Fairy, Victoria
Slide 10: Headline financial metrics
Headline financial metrics Transition Agreement costs reflected in H1 FY21 results For personal use only $ million unless indicated H1 FY20 H1 FY21 Change • Gas revenue up 53% to $43.6 million from increased Sole production Production (MMboe) 0.66 1.20 ▲ 82% • Oil and condensate revenue down 53% to
Slide 11: Debt facility
Debt facility Targeting facility adjustments by end FY21; deleveraging to commence in Q3 FY21 For personal use only $ million 250 • Reserves-based lending facility 200 • $250 million limit plus $15 million working capital facility 150 • First principal repayment due in March 2021 ($4.5 million) 100
Slide 12: Reconciliations
Reconciliations For personal use only $ million H1 FY20 H1 FY21 $ million H1 FY20 H1 FY21 Statutory net profit / (loss) after tax 6.3 (23.1) Underlying net profit / (loss) after tax (2.0) (17.4) Adjusted for: Adjusted for: Liquidated damages (9.9) – Net finance costs 1.2 7.0 Restoration income (1.4)
Slide 13: Underlying NPAT movements
Underlying NPAT movements Lower oil revenue and Transition Agreement costs offset gas growth For personal use only • Higher gas revenue partially offset by lower oil $ million revenue (volumes and prices) • Cost of sales impacted by: (5.5) – $10.7 million Sole revenue and cost 15.0 sharing with APA
Slide 14: Movement in cash
Movement in cash Transition Agreement cost sharing arrangements included in lower operating cash flow For personal use only $ million 31.3 (6.0) (6.0) (7.4) (5.3) (10.0) (1.8) (5.7) (3.5) (2.0) 156.9 150.9 Operating cash flow143.5 138.2 138.3 131.6 131.6 $6.7 million 128.2 126.4 Other120.7 cash flow
Slide 15: Guidance
For personal use only Guidance Otway coastline, Pt Fairy, Victoria
Slide 16: FY21 production and sales volume guidance
FY21 production and sales volume guidance Improving OGPP performance and Sole GSAs underpin step-change in production and sales volumes For personal use only FY21 production guidance: 2.7 – 2.9 MMboe FY21 sales volumes guidance: 2.9 – 3.1 MMboe 2.9 – 3.1 MMboe 2.7 – 2.9 MMboe +75 - 85% +90 - 100% H2
Slide 17: FY21 capital expenditure guidance
FY21 capital expenditure guidance Progressing development and exploration growth projects For personal use only FY21 capital expenditure: $45 – 50 million (Prior guidance: $50 – 58 million1) Cooper Basin By category H1 FY20 FY212 • Horizontal oil development well in the Exploration 1.8 Up to 5 Calla
Slide 18: Gas market
For personal use only Gas market Otway coastline, Pt Fairy, Victoria
Slide 19: Cooper Energy gas contract portfolio
Cooper Energy gas contract portfolio 61% contracted1 under take-or-pay contracts; uncontracted gas supply mostly from 2024 onwards For personal use only 2P gas reserves2, contracted and uncontracted by term (PJ) Gas contract portfolio Contracted 1 year or less Customer Source Start End PJ/pa Uncontr
Slide 20: South-east Australia gas production and demand balance
South-east Australian gas production and demand balance By 2024 local production is expected to shortfall local demand by 113 PJ pa; equal to nearly 5 Sole projects For personal use only Forecast southern1 states’ gas demand and production Surplus / shortfall in southern gas production to gas demand
Slide 21: LNG netback vs Victorian spot prices
LNG netback vs Victorian spot prices JKM1 LNG futures strengthening and reflected in domestic gas prices For personal use only ACCC2 LNG netback to Wallumbilla vs Victorian spot prices $/GJ 14.00 • LNG netback an emerging benchmark for domestic price ex-Wallumbilla 12.00 • Transport to Victoria adds
Slide 22: Growth projects
For personal use only Growth projects Otway coastline, Pt Fairy, Victoria
Slide 23: Current growth projects
Current growth projects Status of gas development and exploration projects For personal use only Value Chain Explore Develop Construct Operate Project Phase ASSESS SELECT DEVELOP EXECUTE OPERATE FID Sole Commissioning OGPP Athena Gas Plant FID taken Jul-20 OP3D Concept selection for FEED Manta Manta
Slide 24: Athena Gas Plant Project
Athena Gas Plant Project A low-cost processing hub for Casino Henry gas and future developments in the Otway Basin For personal use only The Opportunity Execute Phase underway • Low-cost processing hub for Casino • Commenced October 2020 Henry and new discoveries • Targeting first gas in Q1 FY22 • O
Slide 25: Otway Phase Development Project (OP3D)
Otway Phase 3 Development Project (OP3D) Proposal to bring >120 PJ of gas from Henry-3 and Annie-2 via the Athena Gas Plant For personal use only OP3D indicative development concept • Potential drilling of Henry-3 and Annie-2 in the second half of CY2022 • Currently in Select phase; preparing to ent
Slide 26: Manta
Manta Manta-3 appraisal well a follow-on Gippsland development to Sole For personal use only Manta indicative development concept Manta Contingent Resource1 estimate 1C 2C 3C Gas PJ 78 121 190 Condensate MMbbl 2.2 3.4 5.4 • Development concept utilises existing infrastructure at Sole and Patricia Ba
Slide 27: Growth - building a material gas supply portfolio
Growth - building a material gas supply portfolio Existing portfolio of development opportunities continues growth trajectory For personal use only Growth strategy: Illustrative gas production pathway (TJ/day) Market-based Competitive assets 3 Long-term quality GSAs 23 Proven capabilities 45 Defined
Slide 28: Wrap up
Wrap up Step-change in gas production and revenue underway For personal use only ✓ Current gas production of ~60 TJ/day (H1 FY21: 37 TJ/day) – further increases from Sole/Orbost and OP3D ✓ Stable long-term cash flows underpinned by gas sales agreements with blue chip customers – ~10-year Sole 2P res
Slide 29: Appendix
For personal use only Appendix Otway coastline, Pt Fairy, Victoria
Slide 30: Transition Agreement with APA
Transition Agreement with APA As announced on 23 August and 30 October 2020 For personal use only H1 FY21 impacts Overarching objective • Commence Sole GSAs as early as possible • For gas volumes sold on the spot market prior to reaching • $7.6 million expense for APA’s share of revenue commissionin
Slide 31: Communities update
Communities update We work with communities where we operate to create legacies and options for the future For personal use only Royal Flying Doctor Service - Victoria 42 Fit-out of a new ambulance to provide health services in Warrnambool; supporting increased organisations supported telehealth ser
Slide 32: Market fundamentals underpinning Cooper Energy gas strategy
Market fundamentals underpinning Cooper Energy gas strategy New gas supply is needed, in large quantities, for south-east Australia For personal use only 1. A market opportunity for new gas supply to south-east Australia from 2023 2. Opportunity is substantial and growing: ~70 PJ/year by 2023 and ~1
Slide 33: Reserves and Contingent Resources at June 2020
Reserves and Contingent Resources at 30 June 2020 For personal use only 1P (Proved) 2P (Proved + Probable) 3P (Proved + Probable + Possible) Reserves Unit Cooper Otway Gippsland Total1 Cooper Otway Gippsland Total1 Cooper Otway Gippsland Total1 Developed Sales gas PJ 0 9 174 183 0 17 238 255 0 24 32
Slide 34: Abbreviations
Abbreviations For personal use only $ Australian dollars PPL Petroleum Production Licence APA APA Group (ASX: APA) PRL Petroleum Retention Lease bbl Barrels scf Standard cubic feet of gas Bcf Billion cubic feet of gas TJ Terajoules bopd Barrels of oil per day YTD Year to date Cooper Energy Cooper En
Slide 35: Disclaimer
Disclaimer For personal use only This presentation may contain forward looking statements, including statements of current intention, statements of opinion and expectations regarding Cooper Energy’s present and future operations, possible future events and future financial prospects. Such statements