Beach Energy Limited · ASX:BPT

Beach Energy — FY2017 Earnings Presentation

33 slides from Beach Energy's earnings presentation, Aug 21, 2017

  1. Slide 1: FY17 Preliminary Full Year Results

    BEACH ENERGY LIMITED FY17 PRELIMINARY FULL YEAR RESULTS 21 August 2017

  2. Slide 2: Compliance statements

    Compliance statements Disclaimer This presentation contains forward looking statements that are subject to risk factors associated with oil, gas and related businesses. It is believed that the expectations reflected in these statements are reasonable but they may be affected by a variety of variable

  3. Slide 3: Contents

    Contents Overview Matt Kay, Chief Executive Officer 4 Financial Morné Engelbrecht, Chief Financial Officer 10 Operations Mike Dodd, Chief Operating Officer 15 Matt Kay, Chief Executive Officer FY18 Outlook Jeff Schrull, Group Executive Exploration and Development 20 Key Highlights Matt Kay, Chief Ex

  4. Slide 4: Overview

    FY17 PRELIMINARY FULL YEAR RESULTS OVERVIEW Matt Kay – Chief Executive Officer BEACH ENERGY LIMITED

  5. Slide 5: Full year results and outlook reinforce the Beach value proposition

    Full year results and outlook reinforce the Beach value proposition Highly profitable base business Strict cost discipline  Underlying NPAT up 353% to $162m  Cash flow breakeven down 39% to US$16/bbl  Operating cash flow up 38% to $321m  Cooper Basin JV field operating costs down 20% Multi-year

  6. Slide 6: Operational highlights

    Operational highlights Drilling success, infrastructure expansions and operating efficiencies underpin multi-year work program Bauer facility  Record production of 10.6 MMboe, up 9% expansion 60% increase in  79% drilling success rate from 58 wells fluids handling capacity to  Three gas discoveri

  7. Slide 7: Financial headlines

    Financial headlines Operating results and strict cost discipline resulted in improvement across key financial metrics FY17 Change from FY16 NPAT $388 million +$976 million Profitability Underlying NPAT $162 million +353% Full year dividend 1.0 cps fully franked +0.5 cps Operating cash flow $321 mill

  8. Slide 8: Safety and environment

    Safety and environment A further strengthening of Beach’s social licence to operate Safety Performance FY17 achievements LTIFR1  Fourth consecutive reduction of lost time injury frequency1 6.0 5.4 70%  98% reduction in crude spill volumes Reduction in LTIFR1 since FY13  19% reduction in total env

  9. Slide 9: Reserves and contingent resources

    Reserves and contingent resources 179% 2P reserves replacement ratio in FY17  179% 2P reserves replacement ratio 2P Reserves as at 30 June 2017: 75 MMboe due to: 1% – New discoveries and field Western Flank oil extensions Oil Western Flank gas 27% 35% Gas / gas liquids Cooper Basin JV – Identificat

  10. Slide 10: Financial

    FY17 PRELIMINARY FULL YEAR RESULTS FINANCIAL Morné Engelbrecht – Chief Financial Officer BEACH ENERGY LIMITED

  11. Slide 11: Financial highlights

    Financial highlights Continuing improvement across key financial metrics Underlying profit Underlying NPAT1 ($m) Realised Oil Price (A$/bbl) EBITDA $m Margin4 +106%  Highly profitable in a +353% +13%  Cost savings contributing 400 100% ‘lower for longer’ to margin expansion environment  FY17: 59%

  12. Slide 12: Financial performance

    Financial performance Underlying NPAT growth demonstrates leverage to higher oil prices $ million FY16 FY17 Change  Underlying NPAT supported by: Production (MMboe) 9.7 10.6 +9% – Record production and sales volumes Sales volumes (MMboe) 10.9 11.8 +9% – Modestly higher realised oil prices Average r

  13. Slide 13: Underlying NPAT drivers

    Underlying NPAT drivers Record sales volumes, modestly higher oil prices and lower costs underpin profit turnaround $ million Underlying NPAT A$/bbl 220 9.7 3.6 (19.0) Brent oil 64.5 $ million (16.4) 100 Gas/ethane 180 Tax (14.3) Oil and prices Depreciation 161.7 +353% liquids $/GJ / other FX rates

  14. Slide 14: Robust funding position

    Robust funding position Continuing free cash flow generation and investment in growth  Net operating cash flow up 38% to $321 million FY17 Cash Sources and Uses  Net cash reserves up 303% to $198 million Operating cash flow $321 million  Available liquidity of $698 million – $348 million cash res

  15. Slide 15: Operations

    FY17 PRELIMINARY FULL YEAR RESULTS Operations Mike Dodd – Chief Operating Officer BEACH ENERGY LIMITED

  16. Slide 16: Production and operations

    Production and operations Record full year production supported by broad ranging field initiatives  Record full year production of 10.6 MMboe, up 9% Production and Guidance (MMboe) – 54% oil; 46% gas and gas liquids 10.6 10.0 – 10.6 – Operated production 51% of total production (FY16: 41%) 9.7 9.1

  17. Slide 17: Drilling activity

    Drilling activity FY17 drilling success supports expanded activity in FY18 and beyond  Three gas discoveries from four-well operated campaign Wells Successful Success Cooper / Eromanga Basins Drilled Wells Rate – Mapping techniques provide confidence for expanded FY18 program; up to 11 operated exp

  18. Slide 18: Cost savings

    Cost savings Broad ranging cost savings underpin US$16/bbl cash flow breakeven $/bbl US$/bbl $/boe 40 41% 4 15% Cash flow breakeven1 Operated field costs – 39%  Broad ranging cost and Western Flank3 operating efficiencies 35  Contract pricing reductions 3.6 3.1 26 21  Asset maintenance and 16  R

  19. Slide 19: Cooper Basin JV cost savings

    Cooper Basin JV cost savings Ongoing transformation into a material cash generating unit $/boe $m/well 20% Field operating costs1 20 Drilling costs2 10 35%  Transition to operator /  Reduced rig mobilisation / maintainer model 20 non-productive time 16 8.6  Headcount reductions  Contract price r

  20. Slide 20: FY18 Outlook

    FY17 PRELIMINARY FULL YEAR RESULTS FY18 Outlook Matt Kay – Chief Executive Officer Jeff Schrull – Group Executive Exploration and Development BEACH ENERGY LIMITED

  21. Slide 21: Capital expenditure and production guidance

    Capital expenditure and production guidance FY18 work program establishes foundation for sustained activity, production and cash generation FY18 Capital Expenditure Guidance FY18 Production Guidance $220 – 260 million Program highlights 10.0 – 10.6 MMboe  Participation in up to 78 wells (+35% from

  22. Slide 22: Birkhead oil play fairway

    Birkhead oil play fairway Under-appraised, proven reservoir with significant development potential Field Gross Prod. Cum. Prod.  Prospective / development Cooper / potential across ~165 km2 Ex PEL 91 Ex PEL 104 / 111 (bopd) (kbbl) SA Eromanga (100%) (40% non-op.) Western Basins Growler 1,100 4,800

  23. Slide 23: Central Namur oil play fairway

    Central Namur oil play fairway Targeting reserve additions through near-field exploration and field extensions Balgowan Field Prod. (bopd) Cum. Prod.  Advanced velocity Cooper / Ex PEL 91 modelling to define (kbbl) SA Eromanga Basins (100%) Stunsail Bauer / Namur exploration targets Western 6,900 1

  24. Slide 24: Southwest Patchawarra and Permian Edge gas play fairways

    Southwest Patchawarra and Permian Edge gas play fairways Expanded exploration program in FY18 may support doubling of production capacity Ex PEL 91 (100%) Gas production  Expanded FY18 campaign Cooper / following FY17 discoveries SA Eromanga Proven field area Coolawang Western Basins FY18 vertical

  25. Slide 25: Cooper Basin JV

    Cooper Basin JV Additional activity in FY18 due to improved economics of prospect seriatim  Rejuvenated exploration and development program  FY18 campaign aims: – Horizontal oil drilling – Liquids-rich gas targets – Under-balanced gas infill drilling – Interpretation of Snowball 3D survey  FY18 w

  26. Slide 26: Key Highlights

    FY17 PRELIMINARY FULL YEAR RESULTS Key Highlights Matt Kay – Chief Executive Officer BEACH ENERGY LIMITED

  27. Slide 27: Full year results and outlook reinforce the Beach value proposition

    Full year results and outlook reinforce the Beach value proposition Highly profitable base business Strict cost discipline  Underlying NPAT up 353% to $162m  Cash flow breakeven down 39% to US$16/bbl  Operating cash flow up 38% to $321m  Cooper Basin JV field operating costs down 20% Multi-year

  28. Slide 28: Appendix

    FY17 PRELIMINARY FULL YEAR RESULTS APPENDIX BEACH ENERGY LIMITED

  29. Slide 29: Underlying net profit after tax

    Underlying net profit after tax Reconciliation of Net Profit After Tax to Underlying Net Profit After Tax Comparison of Underlying Profit FY16 FY17 Change ($ million) Net profit / (loss) after tax (588.8) 387.5 976.3 Remove merger costs 7.7 – (7.7) Remove gain on asset sales – (52.0) (52.0) Remove u

  30. Slide 30: Record production

    Record production Area FY16 FY17 Change Oil (kbbl) Cooper / Eromanga basins 5,028 5,722 14% Egypt 141 – (100%) Total oil 5,169 5,722 11% Sales gas and ethane (PJ) Cooper Basin 21.8 23.1 6% Egypt 0.3 – (100%) LPG (kt) Cooper Basin 43.9 52.7 20% Condensate (kbbl) Cooper Basin 353 447 26% Total gas / l

  31. Slide 31: FY18 capital expenditure program

    FY18 capital expenditure program Wells $ million Exp. App/Dev Key Projects Western Flank Oil • Birkhead play fairway appraisal Ex PEL 91 40 – 50 4 5 • Namur / McKinlay development • Artificial lift campaign • Hanson facility expansion Ex PEL 92 Up to 10 1 – • Artificial lift campaign • Birkhead and

  32. Slide 32: Cooper Basin acreage

    Cooper Basin acreage Western Flank Oil Central Namur and Birkhead play fairways Ex PEL 91 (100%*) - Bauer Field / facility Ex PEL 92 (75%*) - Callawonga Field / facility Ex PEL 104 / 111 (40%) Lycium hub Western Flank Gas Southwest Patchawarra and Permian Edge play fairways Ex PEL 106 (100%*) - Midd

  33. Slide 33: Investor Relations

    FY17 PRELIMINARY FULL YEAR RESULTS BEACH ENERGY LIMITED Investor Relations 25 Conyngham Street, Glenside SA 5065 Derek Piper Tel: +61 8 8338 2833 Investor Relations Manager Fax: +61 8 8338 2336 Tel: +61 8 8338 2833 www.beachenergy.com.au

Beach Energy — FY2017 Earnings Presentation on 6ix