Beach Energy Limited · ASX:BPT
Beach Energy — Non-Deal Roadshow (February 2019)
38 slides from Beach Energy's roadshow presentation, Feb 28, 2019
Slide 1: ASX release: Asia Roadshow Presentation
Beach Energy Limited ABN 20 007 617 969 25 Conyngham St, Glenside 5065, South Australia GPO Box 175, Adelaide 5001, South Australia T: +61 8 8338 2833 F: +61 8 8338 2336 beachenergy.com.au info@beachenergy.com.au ASX release 28 February 2019 Ref: #010/19 Asia Roadshow Presentation For information, a
Slide 2: Asia Roadshow Presentation February/March 2019
ASIA ROADSHOW PRESENTATION FEBRUARY/MARCH 2019 Kupe (New Zealand) offshore platform Beach Energy Limited ABN 20 007 617 969
Slide 3: Compliance Statements
COMPLIANCE STATEMENTS Disclaimer Five year targets This presentation contains forward looking statements that are subject to risk factors associated References to five year targets refers to those targets listed in the 2018 Asia Roadshow presentation with oil, gas and related businesses. It is belie
Slide 4: Beach Energy Portfolio
BEACH ENERGY PORTFOLIO FY18 Pro forma production1 Bass Basin Cooper Taranaki Basin Basin 26.8 MMboe Otway Basin Perth Basin FY18 2P reserves2 Perth Basin Cooper Basin 313 MMboe Otway Basin Beach prepares its petroleum reserves and contingent resources estimates in accordance with the Petroleum Resou
Slide 5: Ahead of Target in First Half FY19
AHEAD OF TARGET IN FIRST HALF FY19 ✓ Beach output has exceeded expectations Production ✓ High levels of facility reliability (97%) ✓ FY19 EBITDA guidance raised Guidance update ✓ FY19 production guidance increased, capex guidance narrowed on 31 January ✓ Net gearing 13.5% at 31 December 2018 Financi
Slide 6: H1 FY19 Highlights
H1 FY19 HIGHLIGHTS DELIVERING ON OUR PROMISES TO MEET OUR 5 YEAR TARGETS Operating and Financial performance Key H1 FY19 activities ✓ H1 FY19 production of 15.2 MMboe ✓ Bauer appraisal campaign successful ✓ Sales revenue $955 million, up 147% ✓ Bauer Hz wells spud-to-online time improved by 24% ✓ Un
Slide 7: Our Top Priority: Strong Safety and Environmental Performance
OUR TOP PRIORITY STRONG SAFETY AND ENVIRONMENTAL PERFORMANCE Safety performance1 Environmental performance1 TRIFR2 16 CRUDE SPILL VOLUMES (KL) 15.6 51.9 7.9 8 100% 3.8 9.6 3.5 2.8 0 0.2 0.1 0 FY15 FY16 FY17 FY18 H1 FY19 FY15 FY16 FY17 FY18 H1 FY19 Loss of containment Focus on HSE delivering best per
Slide 8: FY19 Guidance
FY19 GUIDANCE Capital expenditure FY19 Guidance Guidance narrowed on 31 January 2019 from $440-520 million to $450-500 million Production 28 – 29 MMboe Higher expenditure is forecast in H2 FY19 due to increased planned drilling activity: Capital expenditure $450 – 500 million • Additional rig in Wes
Slide 9: Financial Highlights
FINANCIAL HIGHLIGHTS Sales volumes +181% over H1 FY18 due to: SALES VOLUME UNDERLYING EBITDA1 • Lattice acquisition 16.0 $724 • Strong customer demand MMBOE MILLION • Improved facility reliability Improvement in Underlying EBITDA, Underlying NPAT and UNDERLYING NPAT1 OPERATING CASH FLOW Operating Ca
Slide 10: Disciplined Balance Sheet Management
DISCIPLINED BALANCE SHEET MANAGEMENT • Targeting to be debt-free on completion of Otway Sale, Net gearing since Lattice acquisition more than 2 years ahead of original debt-free target date completion (end January 2018) • Balance sheet flexibility can be applied to: 40% - Accelerate organic growth i
Slide 11: Robust and Stable Revenue Base
ROBUST AND STABLE REVENUE BASE FIXED PRICE CONTRACTS PROVIDE REVENUE CERTAINTY FY19 estimated sales revenue and expenditure 2,500 • Beach expects to generate revenue of more than $700 million in FY19 from its stable gas business @ US$80/bbl oil 2,000 • Revenues from liquids sales provides upside @ U
Slide 12: East Coast Gas Market
EAST COAST GAS MARKET SUPPLYING THE MARKET IS A STRATEGIC IMPERATIVE • Beach is a material owner of critical gas infrastructure • Three basins and infrastructure hubs supplying East Moomba Coast gas Gas Hub 33.4% • Currently 15% domestic market share1 • Strong demand for Beach’s uncontracted sales g
Slide 13: Exposure to East Coast Gas Prices
EXPOSURE TO EAST COAST GAS PRICES AN ATTRACTIVE LONG-TERM PRICING OUTLOOK • Annual step-ups and CPI Current east Re-contracted / re-priced volumes2 adjustments of Lattice contracts coast volumes 100% • Majority of existing East Coast Beach volumes re-priced or average 80% 80% of current re-contracte
Slide 14: Delivering as a Low Cost Operator
DELIVERING AS A LOW COST OPERATOR • Beach has extracted $56 million of synergies to date, Beach operating costs/boe1 primarily relating to exiting the TSA with Origin Energy, insurance savings and other integration benefits. $/boe 12 • Beach is targeting $30 million reduction in operating costs by t
Slide 15: Asset Updates
ASSET UPDATES Artificial lift in the Cooper Basin Beach Energy Limited ABN 20 007 617 969 14
Slide 16: Western Flank Oil
WESTERN FLANK OIL BEACH 40 - 100% INTEREST ✓ H1 FY19 production 2.4 MMboe, +4% Western Flank Oil on H1 FY18 largely a result of the successful Bauer Field appraisal and Production (MMboe) development program 2.4 2.4 2.3 2.2 ✓ Bauer four-well appraisal program has extended field limit towards the eas
Slide 17: Bauer Field Development
BAUER FIELD DEVELOPMENT Horizontal vs vertical wells Improvement in drilling/connection times • Beach has increased the application of horizontal well • In FY18 Beach’s first ever operated horizontal well, technology, targeting the lower permeability McKinlay Bauer-26, achieved 12.7 days from spud-t
Slide 18: Western Flank Oil: Rollout the Bauer Strategy
WESTERN FLANK OIL ROLLOUT THE “BAUER STRATEGY” ACROSS THE WESTERN FLANK • Following success of Bauer appraisal program, the technical workflow to be applied across the Western Flank Kangaroo App planning underway • Hanson appraisal has commenced Kalladeina/ Congony • Second oil rig will allow for fi
Slide 19: Western Flank Gas
WESTERN FLANK GAS EX PEL 106 AND EX PEL 91, BEACH 100% AND OPERATOR ✓ H1 FY19 production 1.0 MMboe, +55% on H1 FY18 largely a result of the commissioning of the latest Middleton facility capacity expansion ✓ Seven-well gas appraisal campaign in the core gas production area to commence in March 2019
Slide 20: Cooper Basin JV
COOPER BASIN JV BEACH VARIOUS INTERESTS (20.76 - 52.2% RANGE), SANTOS OPERATOR ✓ H1 FY19 production of 4.1 MMboe1 ✓ 48 wells drilled in H1 FY19 (10 oil and 38 gas; 20 development, 28 exploration/appraisal) ✓ Overall success rate 85%, with eight exploration successes ✓ 8 Moomba South gas appraisal we
Slide 21: Cooper Basin JV: Moomba South Appraisal
COOPER BASIN JV MOOMBA SOUTH APPRAISAL • Phase one of Moomba South Appraisal saw seven successful wells from the eight well program • The eight wells constitute the first phase of a program designed to test up to 120 Bcf of 2C contingent resources (Beach share) • Four of the seven successful wells o
Slide 22: Victorian Otway Basin
VICTORIAN OTWAY BASIN BEACH 100%* AND OPERATOR ✓ Ocean Onyx secured for offshore Otway drilling program, late CY19 target start date ✓ First well expected to be drilled is the Artisan gas exploration well ✓ Nearshore drilling to commence with Black Watch-1 development well, currently expected in H1
Slide 23: Victorian Otway Basin: Production
VICTORIAN OTWAY BASIN PRODUCTION • Ten drilling opportunities planned in the next four years to OGP production outlook (100% interest)1 keep the Otway Gas Plant (OGP) as full as possible. • Black Watch and Enterprise Extended Reach Directional (ERD) wells to be drilled first in H1 FY20 60 • Offshore
Slide 24: Perth Basin
PERTH BASIN WAITSIA (BEACH 50%), BEHARRA SPRINGS (BEACH 67% AND OPERATOR) ✓ H1 FY19 production 0.4 MMboe1 ✓ Progress made towards decision regarding development of Waitsia ✓ Perth Basin contains ~420 PJ 2P reserves (Beach share) ~830 PJ (gross)2 ✓ High well deliverability demonstrated (90 MMscfd DST
Slide 25: South Australian Otway Basin
SOUTH AUSTRALIAN OTWAY BASIN BEACH INTERESTS 70 – 100% AND OPERATOR ✓ Drilling scheduled to commence with Haselgrove-4 in Q3 FY19 ✓ Dombey-1 exploration well currently expected to spud in July 2019 ✓ Drilling sequence re-phased to provide additional time for Dombey site preparation ✓ On track to del
Slide 26: Carnarvon Basin: Ironbark Prospect
CARNARVON BASIN IRONBARK PROSPECT Ironbark Prospect1 (WA-359-P Beach 21%, subject to farm-in; WA-409-P Beach 7.5% subject to farm-in) Ironbark • BP has secured the Ocean Apex rig to drill the Ironbark prospect • Drilling is expected to commence in late calendar 2020 • Ironbark is a potential high-im
Slide 27: Bonaparte Basin
BONAPARTE BASIN EXPLORATION BLOCK ALIGNMENT AGREED WITH SANTOS • Santos and Beach have reached agreement on alignment in the Bonaparte Basin • Agreement spans four exploration blocks in the offshore Bonaparte Basin • Ownership will become Beach 50% and Santos 50% and operator Block Changes NT/P85 No
Slide 28: Beach Rig Schedule
BEACH RIG SCHEDULE H1 FY19 H2 FY19 H1 FY20 Non-operated rig Cooper Non-operated rig Basin JV Non-operated rig Non-operated rig Western Operated rig (oil) Non-operated rig (oil) Operated rig (gas) Flank Operated rig (oil) Otway Operated onshore rig (SA & Vic – gas) Basin Ocean Onyx (Offshore Vic) Tod
Slide 29: Key Takeaways
KEY TAKEAWAYS ✓ Beach is ahead of schedule and delivering on its promises to: ▪ Grow production (30 – 36 MMboe by FY23) ▪ Achieve > 100% reserves replacement ratio ▪ Maintain high ROCE (17 – 20%) ▪ Generate significant free cash flows (>$2.6 billion cumulative from FY19 – FY23) ✓ Our gas business pr
Slide 30: Appendices
APPENDICES Lang Lang gas facility, Bass Basin Beach Energy Limited ABN 20 007 617 969 29
Slide 31: FY19 Drilling Program
FY19 DRILLING PROGRAM INCREASING FOCUS ON HORIZONTAL WELLS FY19 well participation increases to 160 wells (from 133 prior) FY19 expected participation Cooper Basin JV (number of wells) • Expect to participate in 98 wells (up from 87) after 4th rig added in August 2018 Gas Oil Total • Biggest increas
Slide 32: New Zealand – Kupe Gas Project
NEW ZEALAND – KUPE GAS PROJECT BEACH 50% AND OPERATOR ✓ H1 FY19 production 1.5 MMboe1 ✓ Front End Engineering and Design (FEED) commenced on the Kupe compression project, FID targeted for H1 FY20 1. PCP not included for this asset due to ownership change since PCP from Lattice acquisition. Beach Ene
Slide 33: Bass Basin
BASS BASIN BEACH 53.75% PRODUCING ASSETS, 50.25% NON-PRODUCING, BEACH OPERATED ✓ H1 FY19 production 0.9 MMboe1 ✓ Progressed the evaluation of a potential tieback of the Trefoil Field 1. PCP not included for this asset due to ownership change since PCP from Lattice acquisition. Beach Energy Limited A
Slide 34: Oil Hedging Position
OIL HEDGING POSITION OIL HEDGES AS AT 31 DECEMBER 2018 3-way Collar 3-way Collar 3-way Collar Total Hedged $40 – 90 – 100 $40 – 103 – 113 $55 – 100 – 110 Volumes (bbl) per bbl per bbl per bbl FY19 97,500 270,000 825,000 1,192,500 Total 97,500 270,000 825,000 1,192,500 • Realised hedging losses total
Slide 35: Reconciliation of NPAT to Underlying NPAT
RECONCILIATION OF NPAT TO UNDERLYING NPAT1 Comparison of Underlying Profit ($ million) H1 FY18 H1 FY19 Change Net profit / (loss) after tax 96 283 187 196% Acquisition costs and writeoff of debt establishment fees 10 8 (2) Gain on asset sales (5) - 5 Unrealised hedging movements 3 (14) (17) Gain on
Slide 36: Underlying EBITDAX, EBITDA, EBIT, NPBT and NPAT
UNDERLYING EBITDAX, EBITDA, EBIT, NPBT AND NPAT1 Comparison of Underlying EBITDAX, EBITDA, EBIT, NPBT ($ million) H1 FY18 H1 FY19 Change Underlying EBITDAX 228 724 496 218% Exploration expense 0 0 Underlying EBITDA 228 724 496 218% Depreciation and amortisation 88 284 Underlying EBIT 140 440 300 214
Slide 37: H1 FY19 Financial Results
H1 FY19 FINANCIAL RESULTS $ million H1 FY18 H1 FY19 Change Underlying NPAT recognises: • 181% increase in sales volumes Production (MMboe) 5.2 15.2 193% • 15% increase in average realised oil price Sales volumes (MMboe) 5.7 16.0 181% • 147% increase in sales revenue Average realised oil price ($/bbl
Slide 38: Asia Roadshow Presentation
ASIA ROADSHOW PRESENTATION FEBRUARY/MARCH 2019 Beach Energy Limited Investor Relations 25 Conyngham Street Nik Burns, Investor Relations Manager Glenside SA 5065 Australia Mark Hollis, Investor Relations Advisor T: +61 8 8338 2833 T: +61 8 8338 2833 F: +61 8 8338 2336 beachenergy.com.au Kupe (New Ze