Beach Energy Limited · ASX:BPT
Beach Energy — FY2021 Earnings Presentation
48 slides from Beach Energy's earnings presentation, Aug 16, 2021
Slide 1: FY21 Full Year result
16 AUGUST 2021 FY21 Full Year result Enterprise 1 – Otway Basin
Slide 2: Compliance statements
Compliance statements Disclaimer Reserves disclosure This report contains forward-looking statements, including statements of current intention, opinion and predictions Beach prepares its reserves and resources estimates in accordance with the 2018 update to the Petroleum Resources regarding the Com
Slide 3: Key takeaways
FY21 Full Year result Key takeaways GAS GROWTH BALANCE SHEET PROGRESS ON PROGRESSING FID TAKEN ON DECARBONISING REMAINS WELL WELL WAITSIA LNG THE BUSINESS POSITIONED across Perth Basin, with marketing progressing including 25 by 25 emission to deliver committed growth in robust market Victoria and r
Slide 4: FY21 sets the foundations for our growth
FY21 sets the foundations for our growth Safest year on record during highly active year Overview of FY21 activities ▪ Beach’s safest year on record ▪ Final Investment Decision at Waitsia Gas Project Stage 2 ▪ Conducted Waitsia LNG marketing negotiations, targeting execution of Beach’s first LNG sal
Slide 5: Base set for FY22 execution
Base set for FY22 execution Focus on gas growth projects and Western Flank exploration Focus for FY22 ▪ Complete drilling and tie-in of Geographe 4 and 5 development wells, targeting first gas mid-FY22 ▪ Drilling four Thylacine development wells, targeting first gas in FY23 ▪ Enterprise nearshore ti
Slide 6: FY21 HS&E performance
FY21 HS&E performance Safest year on record Safety performance (TRIFR1) Environmental performance 15.6 Crude/hydrocarbon spill volume (kl) 51.9 7.9 18.9 3.8 3.5 3.5 3.7 2.1 9.6 0.2 0.1 0.1 1.8 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY15 FY16 FY17 FY18 FY19 FY20 FY21 Safety Process safety events – loss o
Slide 7: Sustainability
Sustainability Solid progress during FY21 with aspiration to reach net zero by 2050 ▪ Beach announces its aspiration to reach net zero Scope 1 and 2 operated emissions by 20501 ▪ Five key emissions reduction initiatives completed in FY21 ▪ Progressing FEED of the Santos-operated 1.7 million tonnes C
Slide 8: Emissions reduction activities
Emissions reduction activities ~50% of emissions reduction targets by FY25 complete, aspiration to reach net zero by 2050 PROGRESSING COMMITTED TO OFFSETTING ON TRACK MOOMBA CCS FEED STUDIES WAITSIA RESERVOIR EMISSIONS ▪ Estimated FY21 emissions are 12% lower than FY18 ▪ FEED Assurance Gate reviews
Slide 9: Progress on emissions reduction targets
Progress on emissions reduction targets Undertook key projects to support “25 by 25” target Initiatives include ▪ Leak Detection and Repair (LDAR) Program across all sites (excl. Middleton) 1 ▪ Bauer Electrification Project ▪ Otway Regen Gas MRU ▪ Fuel, Flare and Vent reduction and efficiency projec
Slide 10: FY21 summary
FY21 summary Committed to delivering Otway and Perth Basin growth activities Company performance Reinvestment into gas Robust financial position ▪ Safest year on record ▪ Commenced drilling activities in the offshore Otway Basin ▪ Well funded to deliver growth ▪ Reached Final Investment Decision at
Slide 11: Reserves and contingent resources
Reserves and contingent resources1 Gas volumes contribute ~80% of 2P reserves with gas reserve life of ~16 years Summary of reserves and resources at 30 June 2021 (developed plus undeveloped, Summary net to Beach) MMboe FY20 FY21 Δ (%) ▪ FY21 production of 25.6 MMboe2, 4% year-on-year variance 1P re
Slide 12: FY22 guidance
FY22 guidance Focus on gas-driven production growth profile FY22 Guidance FY22 production (by product) FY21 actual FY22 guidance Production (MMboe) 25.6 21.0 – 23.0 ~15% ~20% Oil Capital expenditure1 ($ million) $671 $900 – 1,100 Gas Unit field operating cost2 ($ per boe) $10.153 $11.50 – 12.50 Gas
Slide 13: FY22 guidance
FY22 guidance Production and capital expenditure guidance Production (21.0 – 23.0 MMboe) Capital Expenditure ($900 – 1,100 million) ▪ FY22 capital expenditure includes committed capital expenditure under major gas ▪ Lower production compared to FY21 due to: project developments, including: o Western
Slide 14: Financial results
FY21 Full Year result Financial results
Slide 15: FY21 financial summary
FY21 financial summary Financial highlights $317 million $363 million $953 million Reported NPAT Underlying NPAT1 Underlying EBITDA1 66% EBITDAX $760 million 40% revenue revenue margin Cash inflow from operations from gas production $402 million $48 million 1.0 cps Liquidity net debt (1.5% net geari
Slide 16: Financial highlights
Financial highlights FY21 v FY20 comparison $million (unless otherwise indicated) FY20 FY21 Δ (%) Production (MMboe) 26.7 25.61 (4%) Sales volumes (MMboe) 27.7 26.1 (6%) Average realised oil price ($ per bbl) 80.9 78.1 (3%) Average realised gas/ethane price ($ per GJ) 7.29 7.35 1% Sales revenue 1,65
Slide 17: Underlying NPAT
Underlying NPAT1 FY21 v FY20 comparison Underlying NPAT down 21% due to: $ million ▪ 6% decline in product sales volume 22 26 9 ▪ 3% decline in realised oil price (36) (55) ▪ Exploration expense of $57 million, primarily related to the (166) unsuccessful Ironbark 1 exploration well and relinquishmen
Slide 18: Impairment and exploration expensed
Impairment and exploration expensed Impairment of SA Otway assets FY21 impairment ▪ Impairment write-down of $117 million (before-tax) relates to South Australian Otway, including: o $35 million from producing assets o $82 million in exploration assets ▪ No impairment write-down attributed to Wester
Slide 19: Cash flow movements
Cash flow movements $ million ▪ Cash of $127 million as at 30 June 2021 ▪ Operating free cash flow of $760 million, including $153 million of income tax paid ▪ Cash capital expenditure of $674 million, including: o Exploration expenditure of $139 million, including drilling at Enterprise, Artisan an
Slide 20: Available liquidity
Available liquidity As of 13 August 2021, back to net cash position $ million 500 FY21 $83 million acquisition of ▪ Net debt position of $48 million1 as at 30 June 2021 Senex’s Cooper Basin assets 402 ▪ Net gearing 1.5%2 ▪ Total liquidity of $402 million, includes $275 million in undrawn loan facili
Slide 21: Capital management
Capital management Prioritising high-returning organic growth opportunities across our portfolio Growth orientated company with free cash flow prioritised towards organic growth Currently in execution phase of development for high-returning, organic growth opportunities Disciplined and selective app
Slide 22: Our Markets
FY21 Full Year result Our Markets
Slide 23: Beach Energy portfolio diversity
Beach Energy portfolio diversity Six production hubs supplying three distinct gas markets Bass, Cooper, Perth, Taranaki and Otway (Victoria and South Australia) Basins Liquids Oil Gas 31% 45% FY21 East 45% 55% Production Coast 25.6 gas MMboe 6% 7% Condensate 8% 3% LPG West Coast Kupe gas gas 23 Geog
Slide 24: East Coast domestic gas market
East Coast domestic gas market Emerging supply shortfall supports Beach’s east coast gas strategy East Coast gas supply/demand forecast (PJ) Beach’s forecast East Coast gas sales (% of volume) 2,500 Returning OGP to capacity 100% Proposed timing for Trefoil development 2,000 75% 1,500 Uncommitted de
Slide 25: LNG markets
LNG markets Beach to become an LNG supplier Global LNG supply/demand (Mt) LNG supply is forecast to tighten from 2022 Waitsia LNG volumes Supply tightness forecast between New greenfield LNG supply not anticipated 2022 and 2025 until post-2025 JKM pricing recovered to >US$15 per Global FID and first
Slide 26: Western Australia domestic gas market
Western Australia domestic gas market Well supplied in the near-term, uncertainty increasing from mid-2020s AEMO WA GSOO base scenario gas market balance (TJ per day)1 Domestic market expected to be well supplied until mid-2020s 1,600 1,400 Demand (high) Gas demand forecast to grow at a CAGR of Exis
Slide 27: Our Assets
FY21 Full Year result Our Assets
Slide 28: FY21 performance
FY21 performance Impacted by lower Western Flank production and Victorian Otway nominations Production1 (MMboe) Capital expenditure ($ million) 3% 1% Cooper Basin JV 7% 17% Western Flank Oil & Gas 11% 32% Victorian Otway Development 25.61 Kupe $671 E&A 11% MMboe 21% million BassGas 62% Stay-in-busin
Slide 29: Delivering our growth strategy
Delivering our growth strategy Continuing to re-invest in our high-returning, diversified gas business Committed growth projects Otway Basin Perth Basin Offshore1 Nearshore2 Waitsia Gas Project Stage 2 Ownership (%) 60%* 50% Anticipated first production3 Mid-FY22 H2 FY23 H2 2023 Net production incre
Slide 30: Perth Basin
Perth Basin Doubling of Perth Basin deliverability during FY21 FY21 Production FY21 activities 3% ▪ Increased deliverability to ~40 TJ per day following activities including: o Xyris Production Facility expansion (August 2020) 0.8 o Beharra Springs Deep 1 well tie-in (April 2021) MMboe ▪ Xyris Produ
Slide 31: Waitsia Gas Project Stage 2
Waitsia Gas Project Stage 2 Construction activities have commenced World class • Gross 810 PJ (405 PJ net) 2P gas reserves (~50% available to supply the domestic market from 2029) resource • Long life (>15 years) and high-quality asset • Strategically located close to growing Asian demand • Gross ca
Slide 32: Western Flank oil and gas
Western Flank oil and gas Focus on exploration and appraisal drilling FY21 Production FY21 activities ▪ >50% reduction in recordable injuries across Cooper Basin in FY21 Cooper ▪ Middleton Gas Plant operated at reliability of 98.5% during FY21 Basin Oil 26% ▪ Field operating costs <$6 per bbl 8.9 MM
Slide 33: Western Flank future activities
Western Flank future activities Remains a prospective, low-cost asset FY22 program ▪ Single-rig drilling program aims to: o Reduce decline experienced within Western Flank oil fields o Better constrain existing fields yet to be fully developed o Extend plateau production from Western Flank gas field
Slide 34: Cooper Basin JV
Cooper Basin JV Focus on high value, low-risk opportunities FY21 Production FY21 activities ▪ Participated in 43 Cooper Basin JV wells at an 84% success rate1 ▪ Production impacted by planned maintenance activity, unplanned compressor downtime at satellite fields and weather impacts 8.1 MMboe ▪ Succ
Slide 35: Otway Basin
Otway Basin Offshore Otway drilling campaign in full swing FY21 Production Nearshore exploration success ▪ Discovery of 34 MMboe gross 2P reserves1 (20 MMboe net Beach) at the nearshore Enterprise gas field, including 160 PJ of gross sales gas (96 PJ net) Offshore drilling campaign targeting mid-FY2
Slide 36: Otway Basin
Otway Basin Delivering Otway Gas Plant to full capacity by mid-FY23 Re-filling FY22 program OGP ▪ Mooring lines have been replaced following loss of tension event ▪ Awaiting improved weather conditions to re-commence operations ▪ Complete tie-in of Geographe 4 and 5 and commence gas production, by m
Slide 37: Bass Basin
Bass Basin Progressing plans to extend life of asset FY21 Production FY21 activities ▪ Announced the acquisition1 of Mitsui’s 35% interest in BassGas Project and 40% interest in TR/L2, TR/L4 and TR/L5, which host the Trefoil, 7% White Ibis and Bass gas discoveries 1.9 ▪ Completed ‘Concept Select’ ph
Slide 38: Bass Basin
Bass Basin Trefoil project to leverage existing Bass Basin infrastructure Trefoil project ▪ Targeting Final Investment Decision in H1 FY23 ▪ First gas targeted for H2 FY25, extending asset life to ~15 years ▪ Gross 2P undeveloped reserves of 26.1 MMboe (23.6 MMboe net to Beach1), including 120 PJ gr
Slide 39: New Zealand – Kupe Gas Project
New Zealand – Kupe Gas Project Start-up of Kupe inlet compression project FY21 Production FY21 activities ▪ Kupe facility operated at 98.5% reliability 11% ▪ Onshore compression project in commissioning phase FY22 activities 2.7 MMboe ▪ First gas from compressor project is expected in coming weeks N
Slide 40: Key takeaways
FY21 Full Year result Key takeaways GAS GROWTH BALANCE SHEET PROGRESS ON PROGRESSING FID TAKEN ON DECARBONISING REMAINS WELL WELL WAITSIA LNG THE BUSINESS POSITIONED across Perth Basin, with marketing progressing including 25 by 25 emissions to deliver committed growth in robust market Victoria and
Slide 41: Q&A
F Y 2 1 F U L L Y E A R R E S U LT Q&A
Slide 42: Appendices
F Y 2 1 F U L L Y E A R R E S U LT Appendices
Slide 43: Reconciliation of NPAT to Underlying NPAT
Reconciliation of NPAT to Underlying NPAT1 $ million FY202 FY21 Change Net Profit After Tax 499 317 (37%) Gain on reversal of acquired liabilities (38) (35) Gain on asset sales (18) - Impairment of assets 2 117 Tax impact of the above 14 (35) Underlying Net Profit After Tax (NPAT) 459 363 (21%) Note
Slide 44: Underlying EBITDAX, EBITDA, EBIT, NPBT and NPAT
Underlying EBITDAX, EBITDA, EBIT, NPBT and NPAT1 $ million FY202 FY21 Change Underlying EBITDAX 1,126 1,010 (10%) Exploration expensed (21) (57) 174% Underlying EBITDA 1,106 953 (14%) Depreciation and amortisation (455) (429) (6%) Underlying EBIT 651 524 (19%) Finance expenses (16) (6) (60%) Interes
Slide 45: AASB lease impacts
AASB 16 lease impacts Financial Statement disclosures Net impact of AASB 16 • Accounting change only: Lease assets: $98 million1 No net cash impact Balance Sheet ▪ o ▪ Lease liabilities: $103 million o Negative NPAT impact of $2 million o Immaterial net asset impact • Lease payments relating to oper
Slide 46: Summary of east & west coast gas contracts as at 30 June 2021
Summary of east & west coast gas contracts as at 30 June 2021 Beach gas sales to progressively be re-priced at prevailing market pricing Market pricing Volume End Move to New Term Asset Counterparty Basis FY22 FY23 FY24 FY25 FY26 (PJ) date Contract pricing Cooper Basin JV Origin Energy Oil-linked wi
Slide 47: Thank You
F Y 2 1 F U L L Y E A R R E S U LT Thank You
Slide 48: 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 T: +61 8 8338 2833