Amplitude Energy Limited · ASX:AEL
Amplitude Energy — Cooper Energy — H1 FY2016 Earnings Presentation
34 slides from Amplitude Energy's earnings presentation, Feb 25, 2016
Slide 1: 2016 first half Results and outlook
COOPER ENERGY Wes 2016 first half Results and outlook 25 February 2016
Slide 2: Webcast and conference call details
The webcast can be accessed via the company’s website (cooperenergy.com.au) or Webcast: through: http://webcast.openbriefing.com/2671/ Conference call: Conference ID number: 4743 2559 Australia: Toll free: 1800 123 296 International dial- in: Toll: +61 2 8038 5221 (can be used if dialing from intern
Slide 3: Disclaimer and important information
The information in this presentation: • Is not an offer or recommendation to purchase or subscribe for shares in Cooper Energy Limited or to retain or sell any shares that are currently held. • Does not take into account the individual investment objectives or the financial situation of investors. •
Slide 4: On track for transformation
1 On track for transformation First half progress has Cooper Energy on the cusp of delivering the strategic vision - an Australia-only oil and gas company with particular focus on east coast gas. Gippsland gas projects resources upgraded; FEED advancing better than budget; and gas sales negotiations
Slide 5: Gippsland Basin Gas Projects: moving ahead, contracting gas, resource estimates upgraded
Gippsland Basin Gas Projects: moving ahead, contracting gas, resource estimates upgraded • Sole FEED on schedule and under budget; 44% complete • Sole Contingent Resource1 upgraded 14% to 241 PJ (gross; COE share 121 PJ) • Initial HOA for sale of Cooper Energy equity gas from Sole, further agreement
Slide 6: Half year financial summary
$ million unless otherwise indicated H1 16 H1 15 change Production MMbbl 0.25 0.25 = - Sales volume MMbbl 0.24 0.24 = - Oil price average A$/bbl 60.58 97.46 ▼ - 38% Sales revenue 14.6 23.0 ▼ - 37% Operating cash costs average A$/bbl 30.78 38.63 ▼ - 20% Gross profit 5.0 9.5 ▼ - 47% Gross profit/Sales
Slide 7: Contribution to NPAT vs prior period
$ million contribution to NPAT vs pcp -0.4 -1.3 +2.4 +0.5 +1.4 +0.5 +0.4 +3.7 -0.4 -8.6 +0.2 H1 15 Sales Sales Cost of Sales Other Exploration FX Accretion Admin and Tax impacts H1 16 revenue - revenue - revenue w/o movements other price volume 1 7
Slide 8: Underlying results: oil and gas/corporate
H1 16 $ million Oil Sales revenue 14.6 Gross profit 5.0 Gross profit / Sales revenue 34% Exploration expense -0.2 General Admin1 1.6 Underlying EBITDA 5.7 Underlying PBT 3.2 Income tax (1.0) Oil Underlying NPAT 2.2 Gas1 and Corporate1 Underlying NPAT/(loss) (3.6) Cooper Energy total Underlying NPAT/
Slide 9: Cash and investments movement
$ million 8.1 - 6.1 41.3 Investments 1.9 0.1 0.5 42.0 -13.8 (at fair value) 30.2 1.4 Investments 28.8 (at fair value) 0.6 Cash & 39.4 Cash & deposits deposits Operating cash flow Investing & FX + $2.6 - $13.2 Jun-15 Operations General Net Working Interest Operating E&D FX & Other Dec-15 Admin Capita
Slide 10: Production, operating cash costs and netback
Production Operating cash costs and netback General admin cash expenditure ‘000 bbls A$/bbl $ million Reduced 5% half-on-half; down Average A$ price down 38% 10% annualised Netback 59 175 215 Royalties Australia 30 6.4 6.1 10 Transportation Indonesia Operating 5 14 cash costs 13 73 down 20% Producti
Slide 11: Capex vs prior period and revised guidance
Revised capex Capex vs PCP guidance1 $ million $ million y.o.y3. 15 H1 16 H1 Change FY 15 FY16H2 FY16F change Cooper Basin 4.3 0.8 - 3.5 Cooper Basin 8 2 3 -4 Otway Basin 0.7 0.1 -0.6 Otway Basin 1 ~02 ~02 -1 Gippsland Basin 1.6 8.6 +7.0 Gippsland Basin 9 13 22 +13 Indonesia 3.7 3.9 +0.2 Indonesia 8
Slide 12: Sole gas project progress
Sub-surface • Contingent Resource upgraded 14% to 241 PJ gas UPGRADED (gross); COE share 121 PJ FEED • 44% complete, in line with schedule (end Jan) ON PLAN, UNDER BUDGET • Ahead on costs, 79% of budgeted spend to date (end Jan) • On track for completion in September Quarter Sole field development •
Slide 13: Manta untested Golden Beach reservoirs
A A’ • Untested Golden Beach reservoirs are identified within the same structure below proven gas in the Manta field • Potential to evaluate multiple additional reservoir sections by drilling Manta-3 another 1,000 metres deeper than Manta-1 Top GB 7 Depth Map 13
Slide 14: Gippsland Gas Hub and current interests
• Opportunity for capital efficient development through use of existing infrastructure and coordinated development • Gippsland Gas Hub centred around Orbost Gas Plant for Sole, Manta and the other gas resources in the region • Potential substantial savings and value increase if Manta developed1 • Gi
Slide 15: Gladstone drawing gas from Eastern Australia
Gladstone drawing gas from Eastern Australia • Existing producing fields in decline • Eastern Australia: new contracts needed from 2018 • Queensland and Cooper Basin commitments to Gladstone LNG • Gladstone taking gas from sources previously focussed on SE Australia • Gas is flowing from Victoria to
Slide 16: Cooper Basin oil operations
• H1 FY16 oil production of 175 kbbls, inline with estimates • Operating cash cost of A$32.50/bbl (FY16) including transport and royalties • Connection of Callawonga 10 & 11 in Sept-Oct • All drilling deferred into FY17 • Callawonga facilities expansion project studies ongoing, production capacity p
Slide 17: Indonesia divestment and production
Data room • Initiated December quarter Exploration acreage: Sumbagsel and Merangin III PSCs (COE 100%) • Agreed sale to Mandala Energy for US$8.25 million1 – subject to Indonesian Government approval • Expect transaction to complete within FY16 • Removes licence commitments for 2 wells plus seismic
Slide 18: Fully funded for FY16
Fully funded for FY16 $ million • Financial assets in place at 31 Dec 15 of $30 million plus: – ~A$10 million net proceeds from Indonesian exploration acreage divestment – finance facilities Finance facilities in Up to 40 – cash flow from production place1 • Hedging in place; 50% of FY16 H2 producti
Slide 19: Milestones and upcoming catalysts
FY16 FY17 Dec Qtr Mar Qtr Jun Qtr Sept Qtr Gippsland data room opens FEED on schedule Indonesia data room opened Gas sales contracts secured Indonesia exploration assets sold Indonesia production asset sales process FEED complete Bankable gas contracts Indonesia exploration divestment complete
Slide 20: Gas sales, reserves and portfolio highlights
~ 95 PJ Contracted gas • Firm gas sales agreements for 95 PJ that are expected to generate revenue between $660 million to $760 million (COE current share) at gas prices of $7/GJ to $8/GJ over 8-10 years ~ 90 PJ Uncommitted gas • Gas available for contracting to Eastern Australian customers in a tig
Slide 21: Summary and outlook
• First half results show impact of oil prices, reduced costs, positive cash flow • Operating cash costs for oil production are A$32.501/bbl, with revenue supported by hedging • Strong cash position to be reinforced by proceeds from Indonesian exploration acreage • Eastern Australian gas market outl
Slide 22: Appendices
Vhs wr) OOPER NERGY Mm Appendices
Slide 23: Net profit after tax to underlying NPAT
6 months ending 31 December 2015: $ million Net profit (loss) after tax (34.1) Adjusted for: Impairment of exploration & evaluation 20.8 Impairment of discontinued operations (Indonesia) 8.3 Provision 3.7 Underlying net profit (loss) after tax (1.3) 23
Slide 24: Hedge arrangements as at 31 December
Hedge arrangements as at 31 December H2 FY16 H1 FY17 H2 FY17 Total (bbl remaining): A$80.00 – 90.57 zero cost collar options 60,000 60,000 A$57.00 – A$69.70 zero cost collar options 60,000 60,000 30,000 150,000 Total 120,000 60,000 30,000 210,000 The company is actively looking at opportunities to t
Slide 25: Key figures
Key figures Cooper Energy is an independent Australian exploration and Shares on issue 333.7 mill production company Shareholders 5,009 • Cash generating from production of approx. 450,000 - 500,000 Market capitalisation2 ~$50 mill barrels of oil per annum Cash & investments3 $30 mill • Strong balan
Slide 26: Eastern Australian gas demand and contracted supply
Forecast Eastern Australian gas demand (PJ) Eastern Australia domestic demand and contracted supply (PJ) 2500 800 Forecast east coast domestic demand 700 2000 600 500 1500 400 Contract opportunities 1000 300 200 500 100 0 0 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2014 2016 2018 2020 2
Slide 27: Manta gas field
• Gas resource of 106 PJ 2C Contingent and Risked Prospective Resource of 10 PJ1 • Focus on Golden Beach reservoir, not Intra Latrobe accessed by BMG oil project • COE Business case identified economic opportunity for Manta development • Manta gas attracting enquiries from gas buyers • Vic /L26 , L2
Slide 28: Orbost Gas Hub, Sole and Manta gas fields
to Melbourne Eastern Gas Pipeline to Sydney Orbost Gas Hub COE 50%, STO 50% & Operator Sole Gas field COE 50%, STO 50% & Operator Patricia Baleen (depleted) (STO 100%) ~241* PJ Longtom (SVW 100%) 2.6 *MM bbls ~106* PJ Manta Gas field * 2C Contingent Resources 100% joint venture volume. Manta liquids
Slide 29: Indicative net production profile
Indicative net production (mmboe) Manta - Liquids Manta - Gas Sole - gas Existing3 Cooper Basin & Indonesia - oil 1 Indicative only from existing Contingent Resources and subject to key milestone achievement and joint venture decision 2 Current equity share of 50% (Sole) and 65% (Manta), equity sell
Slide 30: Gippsland gas projects indicative gross production
Indicative gross PJ 60 • Gippsland gas projects can produce more than 360 PJ (gross) from current projects 50 • Peak production ~50 PJ p.a. 25 25 25 21 • Strong stable cash flow anticipated 40 • Gas price of $8/GJ generates ~$400 million gas revenue per annum in the plateau period 11 30 8 Manta • Cu
Slide 31: Indicative Sole and Manta development timeline
FID First Gas Gas Production FID Business First Gas Case Prod'n Manta-3 Sole Development Manta Development Sole Manta Gas Sales Agreements Sole Gas Sales Agreements LOIs Sole Reserves Manta Reserves Booking Booking 1 Indicative only and subject to review at key milestones and joint venture decisions
Slide 32: Otway Basin PEL 495 and PRL 32
• Analysis of Jolly-1 and Bungaloo-1 well data in PEL 495 and PRL 32 has confirmed: – a deep conventional gas play in Lower Sawpit Formation – Casterton Formation unconventional shale gas play • Victorian acreage subject of application to suspend and extend due to moratorium on onshore gas productio
Slide 33: Reserve and resource calculation notes
The approach for all reserve and resource calculations is consistent with the definitions and guidelines in the Society of Petroleum Engineers (SPE) 2007 Petroleum Resources Management System (PRMS). The resource estimate methodologies incorporate a range of uncertainty relating to each of the key r
Slide 34: Glossary
$, A$ Australian dollars unless specified otherwise Bbls barrels of oil boe barrel of oil equivalent bopd barrel of oil per day EBITDA earnings before interest, tax, depreciation and amortisation FEED Front end engineering and design kbbls thousand barrels LTIFR Lost Time Injury Frequency Rate. Lost