Beach Energy Limited · ASX:BPT
Beach Energy — Non-Deal Roadshow (March 2014)
64 slides from Beach Energy's roadshow presentation, Mar 3, 2014
Slide 1: Non-deal roadshow presentation
Non-deal roadshow presentation For personal use only 1
Slide 2: Compliance statements
Compliance statements For personal use only Disclaimer This presentation contains forward looking statements that are subject to risk factors associated with oil, gas, geothermal and related businesses. It is believed that the expectations reflected in these statements are reasonable but they may be
Slide 3: General overview
For personal use only General overview 3
Slide 4: Beach Energy
Beach Energy For personal use only • A company that puts safety, people and the environment first • Global oil and gas explorer and producer with unrivalled cash generation amongst its peer group • Prudent portfolio manager Will seek to…. • Deliver consistent superior shareholder returns • Maintain
Slide 5: Key facts
Key facts For personal use only • ASX 100 company with a market capitalisation of ~A$2.0 billion1 • Largest Cooper Basin oil producer, sixth largest in Australia • Strong balance sheet with cash of $404 million2 • Undrawn secured debt facility of A$300 million • Record HY14 sales revenue, oil produc
Slide 6: Australian focused
Australian focused For personal use only • Largest onshore oil producer in Australia with world class margins • Strategically positioned as an independent upstream gas producer • Gas markets transitioning to higher prices/oil linked contracts • Strong financial position provides optionality • Contin
Slide 7: Australian onshore oil production
Australian onshore oil production For personal use only Australia’s largest onshore oil producer, with a strong inventory of Cooper Basin oil discoveries coming on-line in FY15 Sources: Recent half year and quarterly publicly available company information 7
Slide 8: Sources and uses of funds
Sources and uses of funds For personal use only Sources and uses of funds assumptions: • $404 million cash balance (as at 31 December 2013) • Secured $300 million debt facility • Operating cash flow forecast includes minimal exploration success • Chevron Stage 2 funds received • Capex forecast has n
Slide 9: Operational overview
For personal use only Operational overview 9
Slide 10: Reserves and contingent resources
Reserves and contingent resources For personal use only 2P: 93 MMboe 2P and 2C: 542 MMboe Gas and gas liquids Unconventional 71 MMboe Gas and gas liquids 2P reserves 319 MMboe 93 MMboe Oil 22 MMbbl Conventional Gas and gas liquids 113 MMboe Oil 17 MMbbl Large reserve and resource base driving produc
Slide 11: Cooper Basin acreage
Cooper Basin acreage For personal use only Prolific gross acreage position of over 56,000 km2 generating 98% of current production 11
Slide 12: FY14 Half year operating results
FY14 Half year operating results For personal use only Actual and forecast production • Production for HY14 of 5.0 MMboe, 9.6 MMboe up 25% to 9.2 MMboe • Production mix: 47% gas and gas liquids, Gas* 2.4 MMboe 53% oil 8.0 MMboe to 2.1 MMboe • Cooper Basin oil production up 59% due to: 7.5 MMboe (12-
Slide 13: FY14 Revised capital expenditure guidance
FY14 Revised capital expenditure guidance For personal use only Potential recovery Seismic Capex additions* Wells ($ million) 2D – km 3D – km2 MMboe DEVELOPMENT Cooper Basin – non-SACB JV 55 – 60 10 – 13 – – – Cooper Basin – SACB/SWQ JV 200 – 220 50 – – – International 10 4 – – – Total Development 2
Slide 14: Key activities
For personal use only Key activities 14
Slide 15: Western Flank, Cooper Basin
For personal use only Western Flank Cooper Basin 15
Slide 16: The Western Flank
The Western Flank For personal use only • High net back for oil and wet gas • Quick drill and tie-in • High flow rates • Excellent understanding of the geology • Established infrastructure – 250 kilometres of flowlines – 10 facilities and five trucking points – 40 oil wells on production • 1,200 km2
Slide 17: Average Western Flank net production
Average Western Flank net production For personal use only (to date) Last eight months in excess of net 10,000 boepd from the Western Flank 17
Slide 18: Western Flank PEL joint venture (Drillsearch)
PEL 91 For personal use only • Beach 40% and operator, Drillsearch 60% • Current gross production ~12,000 bopd, with further wells to be tied-in • Successful appraisal wells have increased recovery: – Bauer-12 – Chiton-3 • Three new fields expected on-line (Congony, Sceale, Kalladeina) • Five explor
Slide 19: The Bauer oil field
The Bauer oil field For personal use only • Bauer-12 appraisal well intersected a nine metre oil column: – Four metres of McKinlay Member – Five metres of Namur Sandstone – Added 2.5 MMbbl (gross) of 2P reserves • Currently producing from eight wells • Bauer-9, -10 and -11 completed and available to
Slide 20: Western Flank PEL (Cooper Energy)
PEL 92 For personal use only • Beach 75% and operator, Cooper Energy 25% • Current gross production ~6,000 bopd • Callawonga-7 and -8, Windmill-1 and -2 development wells on-line, production add of ~700 bopd • Three/four exploration wells planned for Q2 2014 • Interpretation of Irus and Caseolus 3D
Slide 21: PEL joint venture with Senex
PEL 104 and PEL 111 For personal use only • Beach 40%, Senex 60% and operator • Focus on the Birkhead Formation • Gross production of ~4,300 bopd from Growler and Snatcher fields • Anticipated program of 18 wells, of which 13 to be exploration/appraisal • Further appraisal drilling at Spitfire and M
Slide 22: Beach operated gas and gas liquids
PEL 106 For personal use only • Beach 50% and operator, Drillsearch 50% • Commercial discussions successful in establishing extended gas sales to March 2016 • Liquids rich Canunda field operational since July 2013 • Gross flow rate of ~12 MMscfd (~7 TJ per day sales gas) and ~1,000 bbls per day LPG
Slide 23: Eastern Australian gas market
For personal use only Eastern Australian gas market 23
Slide 24: Prolific acreage strategically located
Prolific acreage strategically located For personal use only Multi-basin portfolio to feed eastern Australian markets 24
Slide 25: Eastern Australian gas markets
Eastern Australian gas markets For personal use only • Strong predicted growth in Eastern Australian gas and Asian LNG demand • Gladstone based export LNG projects have transformed the east coast gas market • Projected gas supply is ‘tight’ and demand strong • The bulk of ‘non-LNG’ demand is yet to
Slide 26: Upstream and downstream dynamics
Upstream and downstream dynamics For personal use only • ‘Equity’ molecules to ‘equity’ projects • Suppliers creating new markets via downstream investments • Vertical integration driven by both domestic and export opportunities • Depending on volume and deliverability, supply likely to under- write
Slide 27: Recent gas related transactions
Recent gas related transactions For personal use only Origin Gas Sales Agreement • Signed April 2013 • 139 PJ over eight years, potential to extend to 173 PJ over ten years • Commencement date window for supply is July 2014 to June 2015 Beach is positioned for future • Price incorporates a combinati
Slide 28: SACB JV and SWQ JVs Conventional gas
For personal use only SACB JV and SWQ JVs Conventional gas 28
Slide 29: SACB JV and SWQ JVs
SACB JV and SWQ JVs For personal use only • Significant acreage with substantial reserves base • 20.21% in the South Australian Cooper Basin Joint Venture (SACB JV) and 20-40% in the South West Queensland JVs (SWQ JVs) • Gross area covered by various joint ventures ~26,800 km2 (~6.6 million acres) •
Slide 30: Moomba processing facility
Moomba processing facility For personal use only • Strategically located expandable facility • Current daily capacity approximately: – 300 TJ gas – 35 kbbl oil/condensate – 600 tonnes LPG • Substantial gas storage system with capacity ~70 PJ • Gas supplied directly into New South Wales, Queensland a
Slide 31: SACB JV gas growth project
SACB JV gas growth project For personal use only • Drilling, including multi-well pad drilling, with five rigs operating • SIMOPS approach to fracture stimulation • 30% production growth to 2015 leads to step-change in cost reductions • Production costs reduction target of 30%, to ~$9/boe, by 2015 •
Slide 32: Cowralli multi-well pad drilling
Cowralli multi-well pad drilling For personal use only • Multiple wells drilled from closely spaced surface locations • 16 Cowralli wells drilled from two pads, completed in October 2013 • 32% reduction in average drilling and fracture stimulation costs over the campaign (versus historical Cooper Ba
Slide 33: Unconventional gas, Cooper Basin
For personal use only Unconventional gas Cooper Basin 33
Slide 34: Unconventional positioning
Unconventional positioning For personal use only • Strategically targeted three key basins for unconventional acreage • Cooper Basin activity: – Nappamerri Trough Natural Gas with Chevron and Icon – SACB JV unconventional REM and BCG plays • Otway and Bonaparte Basins targeting gas and gas liquids •
Slide 35: The unconventional learning curve
The unconventional learning curve For personal use only 1 2 3 4 5 Resource Exploration phase Continued Pilot Development potential appraisal projects 35
Slide 36: Learning curve reference stages
Learning curve reference stages For personal use only 1. Confirmation of resource potential 3. Continued appraisal • Prove gas saturated target zones • Determine production variability • Establish ability to fracture stimulate • Build resource confidence • Establish ability to flow gas from target z
Slide 37: The keys to unconventional success
The keys to unconventional success For personal use only • Well profiles the key focus on all projects • Uncovering ‘sweet spots’ with focused activity around them • Process improvements and technology to drive efficiencies • Costs to be driven down by efficiencies and scale • Gas pricing trending u
Slide 38: SACB JV Unconventional gas
For personal use only SACB JV Unconventional gas 38
Slide 39: SACB JV unconventional program
SACB JV unconventional program For personal use only 39
Slide 40: REM play
REM play For personal use only • Targeting the Roseneath Shale, Epsilon Formation, Murteree Shale and Patchawarra Formation • Moomba-191 flowing at ~2 MMscfd for more than 12 months • Roswell-1, Moomba-192 and -194 vertical wells fracture stimulated and flow tested • Roswell-2 and Moomba-193 ST1 hor
Slide 41: BCG play
BCG play For personal use only • Gaschnitz-1 ST1 vertical well: – Seven zone stimulation, produced at ~1 MMscfd – Shut-in, awaiting completion • Van der Waals-1 targeting lower Patchawarra, delayed by operational issues • Langmuir-1 fracture stimulated • 2014 pilot production initiation with up to f
Slide 42: Nappamerri Trough Natural Gas
For personal use only Nappamerri Trough Natural Gas 42
Slide 43: Nappamerri Trough Natural Gas
Nappamerri Trough Natural Gas For personal use only • A staged and methodical exploration and appraisal program • Delineation of a significant untapped resource • Multiple formations present • Aerially extensive with permits covering more than 800,000 acres • In excess of 1,000 metres of gas saturat
Slide 44: NTNG wells
For personal use only NTNG wells 44
Slide 45: Exploration concept
Exploration concept For personal use only 45
Slide 46: Exploration and appraisal cross section
Exploration and appraisal cross section For personal use only Note: Well locations are approximate only and may have been shifted to show their correct structural position on the cross section 46
Slide 47: Holdfast-2 update
Holdfast-2 update For personal use only • Holdfast-2 drilled laterally into the Murteree shale • Fracture stimulation completed over nine stages • Stimulation monitored by surface micro- seismic tools • Testing different fracture stimulation approaches to increase understanding of formation response
Slide 48: The Boston program
The Boston program For personal use only • Two fracture stimulation stages completed at Boston-1, with a shallow technical issue • Reviewing options including flow testing • Boston-3 horizontal well drilled in the lower Murteree Shale • Boston-3 fracture stimulation commenced, 10 stages planned • Bo
Slide 49: Other Australia
For personal use only Other Australia 49
Slide 50: Bonaparte Basin
Bonaparte Basin For personal use only • EP 126, 138 (Beach earning up to 90%) • EP 135, NTC/P10 (Beach earning up to 55%) • ~6,500 km2 high resolution airborne gravity and magnetic survey acquired, processed and interpreted • Ensign 965 rig to be mobilised end of March • Cullen-1 anticipated spud da
Slide 51: Cooper Basin – Eastern Flank
Cooper Basin – Eastern Flank For personal use only • ATP 732 (Beach earning 50%, Bengal 50%) • Located between the Jackson (~50 MMbbl of oil produced) and the Kenmore/Bodalla (~20 MMbbl of oil produced) fields • ~300 km2 Nassarius 3D seismic survey completed • Targeting conventional oil reservoirs •
Slide 52: Otway Basin
Otway Basin For personal use only • PELs 494 and 495 (Beach 70% and operator, Cooper Energy 30%) • Jolly-1 vertical exploration well at ~3,800 metres and coring • Exploring the lower Sawpit shale and Casterton Formation in the Penola Trough • Targeting both oil and gas Existing infrastructure and a
Slide 53: International
For personal use only International 53
Slide 54: International operations
International operations For personal use only Romania • Provides long-term growth • Offshore oil and gas options • Favourable fiscal regime • Targeted and disciplined approach to key attributes: Egypt – Technical • Production growing – Commercial • Exploration upside • Recent major discovery – Risk
Slide 55: Egypt
Egypt For personal use only Country status • Recent history of political volatility and unrest • Business as usual from an operations standpoint Growth potential • Targeting material oil prospects • Abu Sennan success with El Salmiya wells Beach value add • Sharing of geological and operational core
Slide 56: Abu Sennan Concession
Abu Sennan Concession For personal use only • Beach 22%, Kuwait Energy 50% and operator, Dover Investments 28% • El Salmiya-2, tested a new reservoir zone at ~3,500 bopd • El Salmiya appraisal program in progress: – El Salmiya-3 flow tested from the Abu Roash ‘C’ formation at ~4,800 bopd – El-Salmiy
Slide 57: Abu Sennan – trap geometry
Abu Sennan – trap geometry 101 For personal use only Further appraisal wells to address potential upside 57
Slide 58: Tanzania – Lake Tanganyika South Block
Tanzania – Lake Tanganyika South Block For personal use only • Beach 100% • Block area ~7,200 km2 • Natural oil seeps indicate a working petroleum system • 2,080 kilometre 2D seismic survey completed in August 2012 • Extensive structuring confirmed, similar to Lake Albert in Uganda • Indications of
Slide 59: Romania – Est Cobalcescu block
Romania – Est Cobalcescu block For personal use only • Beach 30%, PetroCeltic 40% and operator, Petromar 30% • ~1,000 km2 with 3D seismic coverage • Water depth <100 metres • ExxonMobil deep water block Domino discovery • Two further exploration wells planned in the next 12 months Newly available ac
Slide 60: Appendices
For personal use only Appendices 60
Slide 61: Cooper Basin acreage
Cooper Basin acreage For personal use only 61
Slide 62: Chevron transaction summary
Chevron transaction summary For personal use only • Subject to joint venture approvals, the key work program elements envisaged across the two permits involve an initial exploration program to be followed by pilot production programs PEL 218 – potential payments ATP 855 – potential payments Stage 1
Slide 63: SACB JV unconventional and infill
SACB JV unconventional and infill For personal use only Moomba wells - nomenclature Current Well Name Previous Well Name Purpose Status Roswell 1 Roswell 1 Vc 50 coal, REM, Microseismic Flowing from Vc 50 post frac Roswell 2 Roswell 2 Horizontal Roseneath Shale 1000 -1500' Spud 12 Oct Moomba 192 Aur
Slide 64: Contact Information
Contact Information For personal use only Head office 25 Conyngham Street Glenside SA 5065 Tel: +61 8 8338 2833 Fax: +61 8 8338 2336 Website: www.beachenergy.com.au Chris Jamieson General Manager Investor Relations Tel: +61 8 8338 2833 Mob: +61 8 (0)487 173 244 Email: chris.jamieson@beachenergy.com.