Beach Energy Limited · ASX:BPT
Beach Energy — Investor Presentation (September 2013)
67 slides from Beach Energy's investor presentation, Sep 4, 2013
Slide 1: Investor briefings September 2013
For personal use only Investor briefings September 2013 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: Overview
For personal use only Overview 3
Slide 4: Beach Energy
Beach Energy For personal use only Is a…. • Safety, people and environment first company • 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 in terms of capital
Slide 5: Company overview
Company overview For personal use only Key global operations • ASX 100 company with a market cap ~A$1.8 billion • Largest Cooper Basin oil producer, sixth largest in Australia • Strong balance sheet with cash of $348 million* • Undrawn secured debt facility of A$320 million • Record underlying FY13
Slide 6: Actual and forecast production
Actual and forecast production For personal use only FY13 • Production: 8.0 MMboe 9.3 MMboe to • Production mix: 53% gas and gas liquids, 8.7 MMboe 47% oil 8.0 MMboe • Oil production up 34% due to: 7.5 MMboe – Development, appraisal and exploration 6.6 MMboe Gas* 4.8 MMboe success to 4.5 MMboe Gas*
Slide 7: FY14 Capital expenditure guidance
FY14 Capital expenditure guidance For personal use only Expected reserves Seismic Capex additions Wells ($ million) 2D – km 3D – km2 MMboe DEVELOPMENT Cooper Basin – non-SACB JV 60 – 65 10 – 13 – – – Cooper Basin – SACB/SWQ JV 175 – 200 35 – 45 – – – International 10 – 15 6 – – – Total Development 2
Slide 8: Key Australian activities
Key Australian activities For personal use only 8
Slide 9: Key international activities
Key international activities For personal use only 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: Australian east coast gas market
For personal use only Australian east coast gas market 11
Slide 12: Eastern Australian gas markets
Eastern Australian gas markets For personal use only Eastern Australia Total Gas Demand Scenarios (PJ) • Strong predicted growth in Eastern Australian gas and Asian LNG demand • Gladstone based export LNG projects Eastern Australia Domestic Demand and Supply (PJ) have transformed the east coast gas
Slide 13: Prolific acreage strategically located
Prolific acreage strategically located For personal use only Beach is well placed to supply gas to Eastern Australia 13
Slide 14: 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 15: Gas pricing – then and now
Gas pricing – then and now For personal use only Traditional gas pricing • A$ price with CPI escalation and periodic price re-openers New gas pricing paradigm • Clear shift to oil-linked pricing • Driven by export opportunities • Potential for hybrid pricing: – Curves? – Floors / Caps / Collars? – O
Slide 16: Recent gas related transactions
Recent gas related transactions For personal use only • Origin Gas Sales Agreement: – Signed April 2013 High value opportunities – 139 PJ over eight years, potential to extend to 173 PJ over ten years • PEL 106B – SACB JV raw Gas Sales Quality counterparties Agreement: – Signed March 2013 – Minimum
Slide 17: Key commercialisation initiatives
Key commercialisation initiatives For personal use only • Cooper Basin – Conventional: • Delhi Petroleum (wholly owned Beach subsidiary) • PEL 106B gas and gas liquids – Nappamerri Trough Natural Gas: • PEL 218/ATP 855 activities • Various potential development options • Otway Basin: – Near term dri
Slide 18: The Cooper Basin
For personal use only The Cooper Basin 18
Slide 19: Cooper Basin acreage
Cooper Basin acreage For personal use only 19
Slide 20: The Cooper Basin
The Cooper Basin For personal use only • Prolific acreage position • Main oil and gas production, reserve and resource contributor to Beach • Largest onshore gas producing province in Australia • Australia’s third largest oil producing basin • Established infrastructure with access to markets • Sign
Slide 21: SACB JV and SWQ JVs
For personal use only SACB JV and SWQ JVs 21
Slide 22: SACB JV and SWQ JVs
SACB JV and SWQ JVs For personal use only • Significant 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) • Joint ventures include: – ~6,000 kms of
Slide 23: Moomba processing facility
Moomba processing facility For personal use only • Strategically located expandable facility • Moomba facility cumulative gross production to date of ~6 Tcf • Current daily capacity approximately: – 300 TJ gas – 35 kbbl oil/condensate – 600 tonnes LPG • Substantial gas storage system with capacity ~
Slide 24: SACB JV gas growth project
SACB JV gas growth project For personal use only • Multi-well pad drilling, with four rigs expected to be operating by 2014 • SIMOPS approach to drilling, completions and connections • Production costs reduction target of 30%, to ~$9/boe, by 2015 • 30% production growth to 2015 • Maintenance strateg
Slide 25: SACB JV unconventional program
SACB JV unconventional program For personal use only • SACB JV increasing focus on unconventional potential near Moomba • Net capex of $32 million planned for FY14 REM play • Moomba-191 vertical well fracture stimulated over three stages and producing strongly at ~2.0 MMscfd • Two vertical and three
Slide 26: Nappamerri Trough Natural Gas
For personal use only Nappamerri Trough Natural Gas 26
Slide 27: Nappamerri Trough Natural Gas
Nappamerri Trough Natural Gas For personal use only • Sizeable footprint of >800,000 acres for PEL 218 and ATP 855 • Significantly underexplored area off-structure • Off-structure drilling has delivered: – Gas saturated sections >1,000 metres – Gas flow from all wells flow tested • Material net 2C r
Slide 28: Exploration and appraisal cross section
Exploration and appraisal cross section For personal use only 28
Slide 29: Vertical exploration
Vertical exploration For personal use only • 13 wells drilled across the two permits (ten in PEL 218, three in ATP 855), testing: – Areal distribution of sandstone – Overpressure – Sensitivity to structural position • Fracture stimulation campaign: – Seven wells (six in PEL 218) to date over 70 stag
Slide 30: Horizontal exploration
Horizontal exploration For personal use only • Two well program in PEL 218 • Holdfast-2 drilled laterally into the Murteree shale • Stimulation awaiting specialised micro-seismic tools • Boston-3 horizontal well rigging up adjacent to Boston-2 • Boston-3 to target the Murteree shale • Close well spa
Slide 31: Well summary PEL
Well summary PEL 218 For personal use only Total Depth Gas Saturated section Stimulation Peak flow rate Well (metres) (metres) stages (MMscfd) Holdfast- 1 3,497 >600 7 2 Encounter- 1 3,616 >600 6 2.1 Moonta- 1 3,810 >1,000 10 2.6 Streaky-1 3,821 >1,000 9 Dec-13 Marble- 1 3,962 >1,100 12 Nov-13 Nepea
Slide 32: Well summary ATP
Well summary ATP 855 For personal use only Total Depth Gas Saturated section Stimulation Peak flow rate Well (metres) (metres) stages (MMscfd) Halifax- 1 4,266 >1,300 14 4.5 Hervey- 1 4,269 >1,500 12* Feb-14 Geoffrey-1 TBC TBC TBC TBC Redland-1 TBC TBC TBC TBC Keppel- 1 3,898 >700 Suspended Suspende
Slide 33: NTNG look back and look forward
NTNG look back and look forward For personal use only Confirmation of resource Vertical and horizontal Pilot production Pilot development potential exploration phase appraisal phase implementation 2010-2012 2012-2014 2014-2015 2015-2016 • Determine • Appraise areal production • Prove concept variabi
Slide 34: NTNG proposed timeline
NTNG proposed timeline For personal use only Note: Timeline subject to third party equipment delivery and joint venture approval Transitioning to pilot production phase in FY15 34
Slide 35: Western Flank
For personal use only Western Flank 35
Slide 36: The Western Flank
The Western Flank For personal use only Key facts • High net back for oil and wet gas • Quick drill and tie-in • High flow rates • Excellent understanding of the geology • Established infrastructure • 1,200 km2 of 3D seismic FY14 targets • Net production target in excess of 10,000 boepd • Up to 34 e
Slide 37: Western Flank infrastructure
Western Flank infrastructure For personal use only Oil infrastructure • 250 kilometres of flowlines • 10 facilities and five trucking points • 30 oil wells on production • Lycium Hub: – Oil received from three facilities via 180 kilometres of flowlines – Export rates of ~18,500 bopd to Moomba (poten
Slide 38: Average net production
Average net production For personal use only Last four months in excess of net 10,000 boepd from the Western Flank 38
Slide 39: PEL
PEL 91 For personal use only • Beach 40% and operator, Drillsearch Energy 60% • Gross production ~10,000 bopd, with further wells to be tied-in • Advanced 3D seismic interpretation techniques being utilised to increase understanding of the mid-Birkhead play FY14 capital program • 11 exploration/appr
Slide 40: PEL
PEL 92 For personal use only • Beach 75% and operator, Cooper Energy 25% • Gross production of ~5,500 bopd • Callawonga-7 and -8 development wells, expected on-line September 2013 FY14 capital program • Five exploration/appraisal and four development wells • Interpretation to be completed on Irus an
Slide 41: PEL and PEL
PEL 104 and PEL 111 For personal use only • Beach 40%, Senex Energy 60% and operator • Focus on the Birkhead formation • Gross production of ~4,300 bopd from Growler and Snatcher fields FY14 capital program • Anticipated program of 18 wells, of which 11 will be exploration • Snatcher appraisal well
Slide 42: PEL 106B and PEL
PEL 106B and PEL 107 For personal use only • PEL 106B – Beach 50% and operator, Drillsearch Energy 50% • First production in FY12 from the Middleton /Brownlow production licence • Commercial discussions successful in establishing extended gas sales through to March 2016 • Connected liquids rich Canu
Slide 43: International
For personal use only International 43
Slide 44: International operations
International operations For personal use only Romania • Provides long-term growth • Offshore oil and gas options • First well recently spudded • Targeted and disciplined • Favourable fiscal regime approach to key attributes: Egypt – Technical • Production growing – Commercial • Exploration upside –
Slide 45: 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 20+ MMbbl oil prospects • Returns of $10-20 per bbl, depending on fiscal terms Beach value add • Sharing of core skill set: –
Slide 46: Abu Sennan Concession
Abu Sennan Concession For personal use only • Beach 22%, Kuwait Energy 50% and operator, Dover Investments 28% • Eight exploration wells drilled, five successful, one drilling ahead • Combined total gross flow rate from four wells of ~12,300 boepd (gross) • New three well appraisal program in progre
Slide 47: Abu Sennan 3D seismic line
Abu Sennan 3D seismic line For personal use only NW SE Appollonia Top Khoman Base Khoman Bahariya Kharita Alamein Dol Jurassic • Initial drilling campaign encountered shows/pay at all named formations except Jurassic • Cross fault juxtaposition of lithologies critical for the Kharita and Jurassic •
Slide 48: El Salmiya-2 Kharita Formation: log analysis
El Salmiya-2 Kharita Formation: log analysis For personal use only Oil water • 49 metre vertical column, 82% net to gross contact • Operator estimates 2P reserves of 18.5 MMbbl of oil and 142 bcf of gas Excellent sandstone, flowed at 3,530 bopd on test 48
Slide 49: NS and NS
NS 377 and NS 385 For personal use only • Beach 20%, BP 50% and operator, Tri-Ocean 30% • Shallow Miocene sands draped over older highs • On-shore to off-shore developments • NS 377 field steady at 700 bopd (gross) • NS 385-1 field: – Current gross production of 750 bopd – Decline analysis and water
Slide 50: Burtocal development
Burtocal development For personal use only • Drill well from proposed NS 394 platform location • Test NS 394E prospect • Success – suspend and install platform • Failure – sidetrack to NS 394 discovery, suspend and install platform Prospect Conceptual monopod platform 50
Slide 51: Tanzania – Lake Tanganyika South Block
Tanzania – Lake Tanganyika South Block For personal use only • Natural oil seeps indicate a working petroleum system • South block area ~7,200 km2 • Aeromag and gravity surveys completed • 2,080 kilometre 2D seismic survey completed in August 2012 • Farm-out process to commence in September 2013 • E
Slide 52: Indicative exploration targets
Indicative exploration targets For personal use only 18 prospects and leads generated from high quality 2D seismic 52
Slide 53: Romania – Est Cobalcescu block
Romania – Est Cobalcescu block For personal use only • Est Cobalcescu: Beach 30%, PetroCeltic 40% and operator, Petromar 30% • Area of ~1,000 km2, with 3D seismic coverage • Water depth <100 metres • Significant leads identified on available data • Adjacent to ExxonMobil deep water block with a 2012
Slide 54: Other Australian assets
For personal use only Other Australian assets 54
Slide 55: Bonaparte Basin
Bonaparte Basin For personal use only Underexplored with conventional and unconventional targets 55
Slide 56: Otway Basin
Otway Basin For personal use only Existing infrastructure and history of producing fields 56
Slide 57: Appendices
For personal use only Appendices 57
Slide 58: FY13 Overview
FY13 Overview For personal use only Financial • Record underlying net profit after tax (NPAT) of $141 million • Record revenue of $700 million • Operating cash flow of $264 million • Cash balance of $348 million • Full year dividend of 2.75 cps Corporate • Chevron farm-in to PEL 218 and ATP 855 • Or
Slide 59: FY13 Overview (cont….)
FY13 Overview (cont….) For personal use only Operations • Australia’s sixth largest oil producer • Production of 8.0 MMboe, up 7% • Western Flank oil flowlines installed and operational • Nappamerri Trough Natural Gas (NTNG) exploration and appraisal milestones achieved • Prospects and leads generat
Slide 60: Look forward
Look forward For personal use only FY14 expectations • A$ oil to remain strong • Seek to maintain throughput of Western Flank oil flowlines at maximum available capacity • Ongoing NTNG exploration and appraisal phase, transitioning to pilot production • Initiating exploration activity in Bonaparte,
Slide 61: Record underlying NPAT
Record underlying NPAT For personal use only Record FY13 underlying NPAT of Underlying NPAT $141 million $141 million, driven by: $122 • Strong A$ Brent oil price million • Increased oil in the sales volume mix • Oil development, exploration and appraisal success • Increased oil transportation capac
Slide 62: Sources and uses of funds FY14/FY15
Sources and uses of funds FY14/FY15 For personal use only • $348 million cash on hand (as at FY14/FY15 1600 30 June 2013) Sources and uses of funds* 1400 • Secured $320 million debt facility Undrawn • Increase in final dividend to 2 cents per 1200 facilities and cash share, full year dividend up 22%
Slide 63: FY13 Financial results overview
FY13 Financial results overview For personal use only FY13 FY12 Change Sales volume (MMboe) 9.0 9.0 0% Total revenue ($ million) 700.5 619.3 13% Operating cash flow ($ million) 264.0 218.2 21% NPAT ($ million) 153.7 164.2 (6%) Underlying NPAT ($ million) 140.8 122.1 15% Cash balance ($ million) 347.
Slide 64: FY13 Production by area
FY13 Production by area For personal use only Change Area FY13 FY12 % Cooper/Eromanga 3.6 2.8 31% Basins Egypt 0.13 0.02 545% Oil (MMbbl) Williston Basin 0.01 0.02 (45%) Total Oil 3.7 2.8 34% Sales gas and ethane (PJ) Cooper Basin 20.5 23.0 (11%) LPG (ktonne) Cooper Basin 43.8 48.1 (8%) Condensate (
Slide 65: New ASX Listing Rules
New ASX Listing Rules For personal use only 1P 2P 3P 2C Oil (MMbbl) 10.4 22.0 42.2 – Gas and gas liquids (MMboe) 30.8 70.7 146.4 – Oil (MMbbl) – – – 17.1 Conventional gas and gas liquids (MMboe) – – – 112.9 Unconventional gas and gas liquids (MMboe) – – – 318.9 Total 41.2 92.7 188.6 448.9 • Enhanced
Slide 66: 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 67: 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.
Beach Energy — Investor Presentation (September 2013) on 6ix