Amplitude Energy Limited · ASX:AEL
Amplitude Energy — Cooper Energy — Investor Day (June 2024)
59 slides from Amplitude Energy's investor day presentation, Jun 4, 2024
Slide 1: ASX Announcement: 2024 Investor Briefing
ASX Announcement / Media Release 4 June 2024 PROUDLY PART OF AUSTRALIA’S ENERGY FUTURE 2024 Investor Briefing Cooper Energy Limited (“Cooper Energy”, or the Company) (ASX:COE) will today hold its 2024 investor briefing. The investor briefing presentation follows this announcement. The strategy annou
Slide 2: Investor Briefing 4 June 2024
For personal use only INVESTOR BRIEFING 4 June 2024
Slide 3: Disclaimer
DISCLAIMER This document contains summary information about Cooper Energy and its activities as at the date of this document and should not be considered to be comprehensive or to comprise all the information which a shareholder or potential investor in Cooper Energy may require in order to determin
Slide 4: Agenda
AGENDA For personal use only 1. Strategy Jane Norman 2. Market Eddy Glavas 3. Operations Chad Wilson 4. Growth Chad Wilson / Eddy Glavas 5. Finance Dan Young 6. Q&A 7. Morning tea 3
Slide 5: Overview & Strategy
For personal use only OVERVIEW & STRATEGY SECTION #1 STRATEGY UPDATE JANE NORMAN MANAGING DIRECTOR & CEO 4
Slide 6: FY24 Business Priorities Delivered
FY24 BUSINESS PRIORITIES DELIVERED OVERVIEW For personal use only Orbost performance improvement Up 11% since Q3 FY23 Decommission BMG wells safely Completed May 2024 On track for A$10m in Cost-out / Transformation annualised savings Committed to rig and Positioning for growth long-lead items Reset
Slide 7: Our Assets
OUR ASSETS OVERVIEW Gippsland Basin, PJe1 Offshore Gippsland Basin 2P • Gas and gas liquids production from the Sole field • Manta and Gummy gas and gas liquids resource For personal use only 2C and multiple gas exploration prospects 195 • 100% Cooper Energy interest 229 Orbost Gas Processing Plant
Slide 8: Industry Leading ESG Record
INDUSTRY LEADING ESG RECORD OVERVIEW Enabled by strong stakeholder engagement and governance structures For personal use only Safety & Zero lost time incidents Injury rate below industry Zero reportable environment during BMG average1 environmental incidents2 Partnering locally to Pursuing circular
Slide 9: Capitalising on Our Infrastructure Position in the Premium East Coast Domestic Gas Market
CAPITALISING ON OUR INFRASTRUCTURE POSITION IN THE OVERVIEW PREMIUM EAST COAST DOMESTIC GAS MARKET 2001: Incorporated 2011-23: Focus strategy on Australian energy market 2023: Operator of two integrated upstream and plant positions For personal use only 8
Slide 10: 10-Year Vision
10-YEAR VISION: Win-win Australia’s progressive energy company Leverage Workplace of outcomes with technology choice adapting to customer needs stakeholders Targeting Shape and add margin For personal use only to our product Production growth in a rising price environment Peaking Unlock our products
Slide 11: Horizons Strategy to Deliver Our 10-Year Vision
3 HORIZONS STRATEGY TO DELIVER OUR 10-YEAR VISION OVERVIEW STRENGTHEN: • Maximise production and value through existing infrastructure, and lowering the Unlock our latent HORIZON 1 Short-term (1-2 years) cost base For personal use only potential • Reset the culture to focus on delivery and accountab
Slide 12: Targeting High Value Markets That Align With Our Capabilities
TARGETING HIGH VALUE MARKETS THAT ALIGN WITH OUR CAPABILITIES OVERVIEW For personal use only COE WILL SELECTIVELY COE WILL FOCUS ON: COE WILL NOT PURSUE PARTICIPATE IN: ✓ Domestic conventional ✓ Partnerships to access value Frontier basins onshore and offshore gas of firming power generation Uti
Slide 13: Volume and Value Growth in a Premium Market
VOLUME AND VALUE GROWTH IN A PREMIUM MARKET OVERVIEW Potential for 3x production growth, enhanced by margin growth and energy transition opportunities Potential production growth1, TJ/d Indicative reserve1,2 growth potential For personal use only >200% 200 >20 3x Gippsland years production Growth po
Slide 14: A Low Emissions Intensity Portfolio
A LOW EMISSIONS INTENSITY PORTFOLIO OPERATIONS OVERVIEW With targets to improve further by FY30 New FY30 Emissions Reduction Targets Peer group emissions intensity For personal use only benchmarking, kgCO2e/boe1 Scope 1: Reduce flaring by 40% by FY30 Scope 2: Integrate renewable electricity to suppo
Slide 15: Cooper Energy Investment Proposition
COOPER ENERGY INVESTMENT PROPOSITION OVERVIEW Strengthened operating capability to capture value and volume growth potential Pure play in highly attractive domestic gas market For personal use only Integrated operator with existing strategic infrastructure High-value growth in established basins wit
Slide 16: Market
For personal use only MARKET SECTION #1 STRATEGY UPDATE EDDY GLAVAS CHIEF COMMERCIAL OFFICER 15
Slide 17: Gas Meets 27% of Australia's Energy Demand
GAS MEETS 27% OF AUSTRALIA’S ENERGY DEMAND MARKET “We cannot turn off Australia’s gas without significant adverse impacts on Australians and our region.” Future Gas Strategy, Department of Infrastructure, Science and Resources, May 2024 For personal use only Gas demand in Southern States1, 2023 Powe
Slide 18: Gas Plays a Critical Role in the Future Electricity Market
GAS PLAYS A CRITICAL ROLE IN THE FUTURE ELECTRICITY MARKET MARKET South Australia is a window into the future national electricity mix “Without GPG, the electricity grid would be unable to cope with peak electricity demand.” Future Gas Strategy, Department of Infrastructure, Science and Resources, M
Slide 19: Domestic Gas Demand Expected to Remain Consistent
DOMESTIC GAS DEMAND EXPECTED TO REMAIN CONSISTENT MARKET STRATEGY “Gas remains crucial to our economy and region to support the transition to net zero.” Future Gas Strategy, Department of Infrastructure, Science and Resources, May 2024 For personal use only Southern States domestic gas demand, PJ1 O
Slide 20: Urgent Need for New Domestic Gas Supply
URGENT NEED FOR NEW DOMESTIC GAS SUPPLY MARKET STRATEGY “Government policies to enable natural gas exploration and development should focus on optimising existing discoveries and infrastructure in producing basins...” Future Gas Strategy, Department of Infrastructure, Science and Resources, May 2024
Slide 21: East Coast Contracted Gas Prices Trending Towards LNG Import Parity
EAST COAST CONTRACTED GAS PRICES TRENDING TOWARDS MARKET LNG IMPORT PARITY East Coast contracted gas prices, A$/GJ For personal use only High Low 24 18 We continue to see 12 16 strong demand from 14 COE term contract our customers, who average Q3 FY24 10 A$8.82/GJ see LNG imports as the likely alter
Slide 22: Tight Market Conditions Lead to Price Volatility
TIGHT MARKET CONDITIONS LEAD TO PRICE VOLATILITY STRATEGY MARKET COE has sold 2,542 TJ of gas into the spot market in FY24 Victorian spot gas prices1, A$/GJ For personal use only Quarterly max Quarterly average Coal-fired generation outages Outage at Longford 58 driving high levels of gas-fired 55 g
Slide 23: Operations
For personal use only OPERATIONS SECTION #1 STRATEGY UPDATE CHAD WILSON CHIEF OPERATING OFFICER 22
Slide 24: Strengthened Capability Driving Stable Production
STRENGTHENED CAPABILITY DRIVING STABLE PRODUCTION OPERATIONS OPERATIONS Targeting low 60s TJ/d from Orbost to deliver group production >70 TJe/d by end-FY25 Group average production rate, TJe/d1 For personal use only Gippsland Otway PEL 92 +6% ▪ Catalysts for improved Orbost production 61.7 63.1 59.
Slide 25: Orbost Improvement Initiatives
ORBOST IMPROVEMENT INITIATIVES OPERATIONS OPERATIONS Increasing average processing rates by reducing downtime For personal use only Polisher and inlet piping insulated Clean-in-place washing trials, 4-nozzle distributor installed, extending and heat-traced to maximise reducing downtime for cleans an
Slide 26: AGP Delivered Initiatives
AGP DELIVERED INITIATIVES OPERATIONS OPERATIONS CHN life extended to after 2030, in preparation for the East Coast Supply Project For personal use only Long-standing dry gas seal issue resolved, contributing to Inlet pressure reduced to 800 Enabling dual export lines for sales gas improvement in rel
Slide 27: Strengthened Capability Improving Reliability
STRENGTHENED CAPABILITY IMPROVING RELIABILITY OPERATIONS OPERATIONS Targeting 2% reliability loss at both facilities by end-FY26 For personal use only Production loss1, % Optimisation -9% ▪ Ensure the equipment is receiving the right attention Reliability 30% at the right time 27% — Experienced engi
Slide 28: Minimising Our Footprint With a Commercial Mindset
MINIMISING OUR FOOTPRINT WITH A COMMERCIAL MINDSET STRATEGY OPERATIONS Targeting >A$2 million in cost savings and providing circular economy benefits Emissions reduction Reducing cost of waste For personal use only initiatives management ▪ Reduced annual ▪ Commercialising emissions by >4,000 sulphur
Slide 29: Growth
For personal use only GROWTH SECTION CHAD WILSON #1 STRATEGY UPDATE CHIEF OPERATING OFFICER EDDY GLAVAS CHIEF COMMERCIAL OFFICER 28
Slide 30: East Coast Supply Project Targeting First Gas 2028
EAST COAST SUPPLY PROJECT TARGETING FIRST GAS 2028 GROWTH Unlocking gas resources in established basins to backfill existing infrastructure Rig campaign For personal use only scheduled from H2 2025 First gas 2028 >350 Bcf1 gross unrisked Partners and resource gas customer potential support Exceeds N
Slide 31: Targeting TJ/d Production Through AGP
TARGETING 90 TJ/D PRODUCTION THROUGH AGP GROWTH Potential 3-well development comprising Elanora with side-track to Isabella, Juliet and Annie-2 Otway Basin For personal use only ▪ 1 firm rig slot, multiple optional slots, with flexibility to call until March 2026 Athena capacity 150 TJ/d ▪ Rig expec
Slide 32: Elanora / Isabella: Largest Potential Resource Booking
ELANORA / ISABELLA: LARGEST POTENTIAL RESOURCE BOOKING GROWTH Targeting >300 Bcf mean unrisked prospective resource with a 90% chance of discovering gas For personal use only ▪ Plan to drill a twin exploration well to test Waarre Formation reservoir targets at Elanora and Isabella prospects from a s
Slide 33: Juliet: Low Risk, Directly Under Existing Pipeline
JULIET: LOW RISK, DIRECTLY UNDER EXISTING PIPELINE GROWTH 49 Bcf mean unrisked prospective resource with an 84% chance of discovering gas Juliet-1 For personal use only A B Waarre C Amplitude High ▪ 4 km east of Casino gas field in ~63 m Casino water depth (WaC) Juliet (WaC) Low ▪ Directly under Bla
Slide 34: Annie: 2019 Discovered Resource
ANNIE: 2019 DISCOVERED RESOURCE GROWTH 65 PJ 2C discovered gas resource, 10 km from pipeline tie-in Annie-2 Annie-1 Waarre C A B For personal use only Amplitude High ▪ Annie-1 (2019) discovered a 70m thick, high-quality gas-bearing Waarre C Annie (WaC) Regional Seal Low reservoir (Mudstones) B ▪ Sei
Slide 35: East Coast Supply Project Next Steps
EAST COAST SUPPLY PROJECT NEXT STEPS GROWTH Rapid commercialisation of low-risk prospective resource through existing infrastructure For personal use only ✓ Targeting 3-well development, with first Next steps gas in 2028 ▪ Rig arriving in the region in H2 2025 ✓ 358 Bcf1 (179 Bcf COE net) gross mean
Slide 36: Gippsland Basin Farmout: Next Phase of Exploration
GIPPSLAND BASIN FARMOUT: NEXT PHASE OF EXPLORATION GROWTH GIPPSLAND FARMOUT UNDERWAY FOR VIC/P80 & VIC/RL13, 14 & 15 For personal use only ▪ Bringing a partner into the next phase of Gippsland gas exploration and development ▪ Significant discovered resources and high-quality prospectivity in proven
Slide 37: Gippsland Basin Gas Hub: Potential for Commercial Storage
GIPPSLAND BASIN GAS HUB: POTENTIAL FOR COMMERCIAL GROWTH STORAGE ON THE EASTERN GAS PIPELINE For personal use only RESTART OF PATRICIA BALEEN Gippsland Patricia BaleenBasin storage opportunity ▪ Opportunity to restart Patricia Baleen, connected into Orbost Gas Eastern Gas Pipeline Processing OGPP Pl
Slide 38: Shaping Gas to Create a Premium Product for Power
SHAPING GAS TO CREATE A PREMIUM PRODUCT FOR POWER GROWTH CUSTOMERS Bairnsdale Power Station, Alinta Energy For personal use only ▪ Agreement with Bairnsdale Power Station, a 94 MW open cycle gas peaker, to supply as-available gas during peak electricity demand ▪ Minimises transport costs through exi
Slide 39: Energy Transition Opportunities
ENERGY TRANSITION OPPORTUNITIES GROWTH Progressing Horizon 3 opportunities with minimum capital outlay Carbon credits Renewable fuels Carbon capture and storage For personal use only Sole / OGPP Opportunity to store CO2 in Foundation off-taker in providing Investigating opportunity to produce deplet
Slide 40: Growing the Value of Our Portfolio
GROWING THE VALUE OF OUR PORTFOLIO GROWTH Extending downstream to maximise the value of our gas through the energy transition Cooper Energy’s current activities Future opportunities For personal use only Horizon 1 Horizon 2 Horizon 3 Gas production & processing Gas transport Gas storage Link to elec
Slide 41: Finance
For personal use only FINANCE SECTION #1 STRATEGY UPDATE DAN YOUNG CHIEF FINANCIAL OFFICER 40
Slide 42: Increasing Spot/Uncontracted Volumes From 2026
INCREASING SPOT/UNCONTRACTED VOLUMES FROM 2026 FINANCE FINANCE Uncontracted volumes based on Group target average production of 70 TJe/day (equity gas) Gas contract stack, existing reserves only1 For personal use only PJ/annum Excludes any volumes from East ~TJ/day 30 Q3 FY24 production: Coast Suppl
Slide 43: Focus on Further Reductions in Production Expenses
FOCUS ON FURTHER REDUCTIONS IN PRODUCTION EXPENSES FINANCE FINANCE Further cost reductions expected at Orbost as improvement initiatives are realised For personal use only Further work on savings in production expenses ▪ Sulphur plant — Cadence of absorber cleans — Polisher bed efficiency & media li
Slide 44: Reset to G&A via FY24 Cost-Out Programme
RESET TO G&A VIA FY24 COST-OUT PROGRAMME FINANCE FINANCE Excludes special projects or other one-off or discretionary spend For personal use only Approximate split of other opex Approximate split of G&A Approximate split of SIB capex People Sole/Orbost Insurance CHN/Athena Park & transport Finance co
Slide 45: Transformation/Cost-Out Programme
TRANSFORMATION/COST-OUT PROGRAMME FINANCE FINANCE On track for A$10mm of sustained savings/revenue enhancement from mid 2025 For personal use only Targeted annualised savings ▪ Over 101 initiatives Group-wide A$mm Overview 16 Cost out ▪ Target ~85% complete by end of FY24 target from ▪ H1 FY24 highl
Slide 46: Significant Undrawn Capacity Under the RBL
SIGNIFICANT UNDRAWN CAPACITY UNDER THE RBL OPERATIONS FINANCE Low-cost facility with sculpted reducing commitment schedule For personal use only Reserve based loan (RBL) committed & available funding, A$mm A$mm ▪ Strong RBL bank group — Redetermined borrowing base above A$400mm fully committed and a
Slide 47: Cycling Into Significant Underlying FCF Generation
CYCLING INTO SIGNIFICANT UNDERLYING FCF GENERATION OPERATIONS FINANCE Excluding capital expenditure on East Coast Supply Project Indicative underlying FCF & deleveraging, before growth capex, A$mm For personal use only Strong underlying cash generation Underlying FCF, base (LHS) Underlying FCF, high
Slide 48: Funding for East Coast Supply Project Capex
FUNDING FOR EAST COAST SUPPLY PROJECT CAPEX OPERATIONS FINANCE Focus on three key pools of cost competitive capital For personal use only ▪ Optimal funding mix Committed undrawn RBL ▪ Deleveraging 2024 – 2026 funding ▪ Customer appetite to support new gas supply — Seek to fund to capture as much gas
Slide 49: Wrap Up
For personal use only WRAP UP SECTION #1 STRATEGY UPDATE JANE NORMAN CEO & MANAGING DIRECTOR 48
Slide 50: Focus for FY25 and Near-Term Investment Catalysts
FOCUS FOR FY25 AND NEAR-TERM INVESTMENT CATALYSTS WRAP UP Superior shareholder returns driven by a tightening market, strong cash generation and de-risking growth For personal use only Reduce production loss at Orbost to deliver low 60s TJ/d and group production >70 TJe/d by end-FY25 Increase realis
Slide 51: Cooper Energy Investment Proposition
COOPER ENERGY INVESTMENT PROPOSITION WRAP UP Strengthened operating capability to capture value and volume growth potential Pure play in highly attractive domestic gas market For personal use only Integrated operator with strategic existing infrastructure High-value growth in established basins with
Slide 52: Appendix
For personal use only SECTION #1 APPENDIX STRATEGY UPDATE 51
Slide 53: New Company Purpose and Values
NEW COMPANY PURPOSE AND VALUES APPENDIX For personal use only Proudly part of Australia’s energy future Think Differently Deliver Together Act Responsibly 52
Slide 54: Refreshed Executive Leadership
REFRESHED EXECUTIVE LEADERSHIP APPENDIX For personal use only Jane Norman Managing Director & Chief Executive Officer Chad Wilson Dan Young Andrew Thomas Eddy Glavas Nathan Childs Ying Luo Nicole Ortigosa Chief Chief Chief Chief Chief Chief Company Operating Financial Exploration & Commercial Corpor
Slide 55: Getting Orbost to Over 60 TJ/d
GETTING ORBOST TO OVER 60 TJ/D OPERATIONS APPENDIX Targeting average of 58 TJ/d in coming months and 62 TJ/d by end-FY25. For personal use only Inlet from Sulphur Dew Point Sales Gas Export Gas Flow Path Sole Pipeline Removal Unit Control Unit Compression Pipeline Separate gas from Dehydrate gas for
Slide 56: AGP Ready for Backfill
AGP READY FOR BACKFILL OPERATIONS APPENDIX Capacity up to 150 TJ/d For personal use only Inlet from CHN Dew Point Control Sales Gas Gas Flow Path Pipeline Unit Compression Export Pipeline Separate gas from Dehydrate gas for Increase pressure Transport to SEAGas 55 liquids pipeline specification
Slide 57: Otway Exploration Opportunities
OTWAY EXPLORATION OPPORTUNITIES APPENDIX High quality, low risk prospects in amplitude-supported play Elanora-1/ST1 Casino-1 Casino-3 Juliet-1 Nestor-1 A B Waarre Formation Seismic Amplitudes For personal use only Essington Isabella (WaC) Regional Seal Juliet (Mudstones) Nestor Elanora (WaA) Stratig
Slide 58: Otway Exploration Opportunities
OTWAY EXPLORATION OPPORTUNITIES APPENDIX High quality, low risk prospects in amplitude-supported play Otway Basin, Top Waarre Formation Prospective Resource Summary 1 For personal use only COE Low (P90) Best (P50) Mean High (P10) Prospect Permit Pg4 Equity (%) Gross2 Net3 Gross2 Net3 Gross2 Net3 Gro
Slide 59: Gippsland Exploration Opportunities
GIPPSLAND EXPLORATION OPPORTUNITIES APPENDIX Prolific basin adjacent to existing infrastructure Prospective Resource Estimates for Gummy Deep, Manta Deep, Chimaera East and Wobbegong Prospects, offshore Gippsland Basin 1 For personal use only COE Low (P90) Best (P50) Mean High (P10) Prospect Permit