Beach Energy Limited · ASX:BPT

Beach Energy — Beach Petroleum — Shareholder Meeting (November 2008)

76 slides from Beach Energy's shareholder meeting presentation, Nov 28, 2008

  1. Slide 1: Beach Petroleum Limited Annual General Meeting

    + For personal use only BEACH PETROLEUM LIMITED ANNUAL GENERAL MEETING 28 November 2008

  2. Slide 2: Disclaimer & Important Notice

    + This presentation contains forward looking statements that are subject to risk factors associated with oil, gas and geothermal businesses. It is believed that the expectations reflected in these statements are For personal use only reasonable but they may be affected by a variety of variables and

  3. Slide 3: Mr Bob Kennedy, Chairman

    For personal use only + Mr Bob Kennedy Chairman

  4. Slide 4: Comparative share prices to November

    + Comparative share prices to Nov 08 For personal use only Stock price as a % of 52 week high 100% 90% 90% 82% 80% 69% 70% 67% 60% 56% 52% % of high 50% 49% 50% 48% 47% 40% 30% 25% 22% 20% 20% 16% 15% 10% 0% QGC ORG NZO OSH STO BPT AOE WPL AWE [avg] NXS TAP ROC PSA AED

  5. Slide 5: 1238 wells producing from oil & gas fields

    + For personal use only 1238 wells producing from 241 oil & gas fields

  6. Slide 6: Oil price in USD & AUD

    For personal use only + Oil price in USD & AUD The bulk of Beach’s oil production is sold at a premium to Tapis, the Asian benchmark. The decline of the Australian dollar against the US dollar has ensured that oil prices in Australian dollars per barrel have had a measure of protection during the gl

  7. Slide 7: Renewed growth in Asia is inevitable

    + For personal use only Renewed growth in Asia is inevitable, particularly for China and India

  8. Slide 8: Long Term Hedging Portfolio

    + Long Term Hedging Portfolio For personal use only

  9. Slide 9: FSA Remuneration Guidelines

    + Bad or poor practice (firm view) Good practice (initial thoughts) For personal use only Calculated on the basis of Calculated on profits, and by reference revenues, without any to other business goals if appropriate counterbalancing risk controls  Does not take risk or capital cost Uses a measure

  10. Slide 10: Environmental Responsibilities

    For personal use only + Environmental Responsibilities

  11. Slide 11: Shareholder eCommunication

    + Shareholder eCommunication For personal use only

  12. Slide 12: Save the Children Future Pathways

    + For personal use only Save the Children Future Pathways Re-engaging young people in remote areas

  13. Slide 13: Reg Sprigg "Rock Star"

    + For personal use only Reg Sprigg “Rock Star”

  14. Slide 14: Reg Nelson, Managing Director

    For personal use only + Reg Nelson Managing Director

  15. Slide 15: A Portfolio Based Approach

    + A Portfolio Based Approach For personal use only

  16. Slide 16: Fundamentals

    + For personal use only Fundamentals •Invest in people •Steady growth through : •Developing the existing asset base •Lower risk exploration •Improving margins •Creating “step change” potential through high impact exploration •Portfolio optimisation for appropriate balance of risk & reward •Includes

  17. Slide 17: Portfolio of Producing Assets

    + Portfolio of Producing Assets For personal use only 1. Cooper/Eromanga 2. Surat Coal Seam Gas 3. Gippsland Oil (BMG)  Record production  Producing 20+ million  Producing gross~10,000  Increasingly more oil cubic feet per day barrels of oil per day  Large contingent gas  Net reserves of 443 P

  18. Slide 18: Well Balanced Exploration Portfolio

    + Well Balanced Exploration Portfolio For personal use only

  19. Slide 19: Why go international?

    + Limited number of high impact opportunities in Australia/NZ that are material to Beach For personal use only Areas of interest determined by risk/reward considerations and ability to manage investment – initial focus:  Australasia  Europe – mainly onshore gas  North Africa & Middle East (oily)

  20. Slide 20: Why Egyptian Oil & Gas?

    + 1. A very “oily” region with new emerging plays & exploration upside; 2. Deal flow (3 License Rounds per year, farmins, asset sales); For personal use only 3. Supportive Government & reasonable fiscal regime via Production Sharing Concessions; 4. Infrastructure (gas & oil) means any discovery quic

  21. Slide 21: Addressing Greenhouse Gas Emissions

    +  Natural gas gives greenhouse benefits:  Gas-fired power stations produce 50- 70% less greenhouse gas emissions than equivalent coal-fired power For personal use only stations & as little as 1% of water usage*  Reporting emissions via APPEA and the National Greenhouse and Energy Reporting Syste

  22. Slide 22: Paralana Geothermal Energy

    + For personal use only Paralana Geothermal Energy Beach farming in to earn 21% with option to increase to 36% Highest recorded heat flow on Australian mainland (128 mW/m2) Close to entry points in main transmission grids TRUenergy Geothermal farming in for up to 30% Paralana-2 well scheduled for Ma

  23. Slide 23: Key Achievements FY08

    + For personal use only Key Achievements FY08 Record sales revenue of $564 million Cooper Basin oil reserves addition of ~ 5 MMbbl Acquired highly prospective acreage in Egypt, Albania, and Tanzania Successfully raised $191 million of new capital to fund Egyptian acquisitions, including 3 new fi

  24. Slide 24: Strong Reserves Backing

    + Strong Reserves Backing For personal use only Reserves (MMboe) 15 5.85 Cooper oil BMG oil 76.17 48.23 Cooper gas Surat CSG Reserves & Resource 100 Potential (MMboe) 145 2P Reserves Resource base 170 Exploration risked potential

  25. Slide 25: Consistent History of Reserves Growth

    + For personal use only 2P Reserves (MMboe) 150 Consistent History of Reserves Growth 100 50 0 FY05 FY06 FY07 FY08

  26. Slide 26: Consistent Production Profile

    + For personal use only 10 8 Consistent 6 Range Production Profile Gas 4 Oil 2 0 FY07 FY08 FY09 (est)

  27. Slide 27: Revenue Continues to Grow

    + For personal use only 700 600 Revenue ($ millions) Revenue Continues 500 to Grow 400 685 300 574 200 163 100 64 0 FY05 FY06 FY07 FY08

  28. Slide 28: Kathryn Presser, Chief Financial Officer

    For personal use only + Kathryn Presser Chief Financial Officer

  29. Slide 29: FY 2008 Key Financial Achievements

    +  Record sales revenue up 20% For personal use only to $564 million  Normalised net profit up 69% to FY 2008 Key $53 million Financial  Operating cash flow up 73% to Achievements $200 million  Cash on hand up 400% to $376 million  Continued dividend stream – 1.75cents

  30. Slide 30: Comparison of Normalised Profit

    + Comparison of „Normalised‟ Profit For personal use only Net profit after tax (NPAT) 2008 A$m 2007 A$m NPAT 63.7 103.8 SIGNIFICANT ITEMS Remove BMG Sale (64.2) (73.5) Remove unrealised commodity hedge loss / (gain) 12.3 (30.3) Remove commodity hedge close out 50.4 - Remove recognition of Ramelius i

  31. Slide 31: Key Drivers behind increase in Normalised NPAT

    + Key Drivers behind our increase in Normalised Net Profit after tax For personal use only 140 27.5 13.3 120 14.4 100 Depreciation 58.6 36.9 Net Interest Tax and Other 80 A$m 60 52.7 Hedging 40 31.2 Gross Profit 20 0 Normalised Normalised FY 07 NPAT FY 08 NPAT

  32. Slide 32: Sales increase

    + Sales increase For personal use only 700 147.1 17.8 53.9 600 564.4 Volume / Mix 500 472.2 FX Rates Prices 400 A$m 300 200 100 0 FY 07 FY 08

  33. Slide 33: Hedging

    +  Effect on Income Statement For personal use only  FY08 - net loss of $119 million  FY09 - net gain to date $103 million  Cash flow effect by closing out Oil Price Hedges Hedging  Minimal impact given average oil price to date

  34. Slide 34: Net Hedge Closeout vs AUD Tapis Oil Price

    + Relative loss on close out of hedge book to market average – Less than For personal use only $1 per bbl AUD Tapis Oil Price vs Net Hedge Closeout (Jul-Dec 08) 160.00 150.00 140.00 130.00 116.99 A$/bbl 120.00 Actual/Forecast 116.10 Act/Fct Avg. 110.00 Hedge Closeout 100.00 90.00 80.00

  35. Slide 35: Forward curve as at June 2008

    + Forward curve as at 30 June 2008 For personal use only

  36. Slide 36: Forward curve as at November 2008

    + Forward curve as at 21 November 2008 For personal use only

  37. Slide 37: Product Split – oil and gas revenue

    + Oil made up 57% of oil and gas revenue For personal use only Gas / gas-liquids a natural hedge against the oil price Product Split – Gas oil and gas Liquids 18% revenue Oil Sales 57% Gas and Ethane 25%

  38. Slide 38: Debt and dividend management

    +  30 June 2008 - debt down 29% For personal use only to $235million (18% gearing down from 26%) Debt and  30 September 2008 - debt now dividend reduced to $218million management (gearing down to 16%)  Ability to annually review debt  Dividends – partially franked in the future when franking cre

  39. Slide 39: Outlook for 2009 financial year

    +  Record quarter oil sales for For personal use only September 2008 quarter of $183 million  Strong first half supported by oil Outlook for 2009 hedge floors at US$60 and US$80 (representing 60% of oil financial year sales to June 2009)

  40. Slide 40: Hector Gordon, Chief Operating Officer

    For personal use only + Hector Gordon Chief Operating Officer

  41. Slide 41: Operations Review

    + For personal use only Operations Review • Review of FY2008 • Cooper Basin • Gippsland Basin • Surat Basin • Egypt • Outlook for FY2009

  42. Slide 42: FY08 Production

    +  FY08 Production FY08 Production  2.8 million barrels of oil (MMbbl) For personal use only 5%  30 Peta-Joules 21% of Gas (PJ)C ooper Oil  9.3 million barrels 9 % of oil Gippsland Oil Production 6 5 % equivalent (MMboe) C ooper Gas Surat Gas  FY08 Production  2.8 million barrels of oil (MMbbl

  43. Slide 43: Drilling Activity

    + For personal use only Drilling Activity Drilling 150  FY08 110 Wells No. of Wells  108 - Cooper Basin 100 Gas  1 - Gippsland Basin  1 - Taranaki Basin (NZ) 50 Oil  Success Rate – 71% 0  28 Exploration Wells  nine discoveries  32% Success Rate  43 Coal Seam Gas Wells

  44. Slide 44: Reserves Growth

    + Reserves Growth For personal use only 150 100 Surat Gas MMboe Reserves Cooper Gas  Reserves Growth of 62% 50 Oil  Tipton West up by 62 MMboe  8.4 MMboe added in Cooper 0 F Y0 6 F Y0 7 F Y0 8  Growth in Cooper oil:  High profit margin oil  Offsets sale of BMG interest Reserves by Asset  Valu

  45. Slide 45: Exploration

    + Exploration For personal use only  Lower Risk Cooper Basin Program High Impact Program  Offshore Australia / NZ  Spain  Albania  Egypt – Gulf of Suez  Tanzania  Rigorous Evaluation  Strong Joint Venture Partners  Effective Management  Significant Upside  Aiming for 60:30:10 Risk balanc

  46. Slide 46: Cooper Basin

    + For personal use only Cooper Basin Reserves – 235 PJ & 15 MMbbl Production - 30 PJ & 2MMbbl Revenue - $435 million Current oil focus Longer Term Gas focus 7,000 PJ potential in unconventional reservoirs CO2 Sequestration

  47. Slide 47: Cooper Basin – Western Flank

    + Cooper Basin – Western Flank For personal use only

  48. Slide 48: A Cooper Basin Sweet Spot

    + PEL 92 For personal use only A Cooper Basin Sweet Spot High Profit Oil Callawonga-Parsons Area A$ A$/barrel Oil discovered to date 6.4 MMbbl Exploration $27 million $4 / bbl Development $42 million $7 / bbl Total Finding & Dev’t $69 million $11 / bbl Production Costs $173 million $27 / bbl Total C

  49. Slide 49: Surat Basin – Tipton West Coal Seam Gas

    + For personal use only Surat Basin Tipton West – Coal Seam Gas  2P Reserves 1,107 PJ (443 PJ net)  Substantial Upside  Significant International Focus on Queensland CSG  Santos – Petronas  Arrow – Shell  Origin – ConocoPhillips  Queensland Gas – BG  Beach ranks 6th in Qld CSG reserves  Now

  50. Slide 50: Gippsland Oil – BMG Project

    + Gippsland Oil – BMG Project For personal use only  At 30 June 2008:  Beach 30%  Producing ~10,000 bbls/day  Oil Reserve - 25 MMbbl (7.5 MMbbl net)  Gas Resource - 249 PJ  Beach has recovered all its costs on BMG + $50 million  Further development planned for 2009 +

  51. Slide 51: Egypt

    For personal use only Egypt North Shadwan Concession Beach 20% Operator – BP 3 undeveloped oil + discoveries Reserves ~ 40 MMbbl (8 MMbbl net) First production end 2009 Southeast July Concession Beach 20% Operator – Dana South July -1 drilled early „09 Potential 100 MMbbl (20 MMbbl net)

  52. Slide 52: Drilling Outlook

    + For personal use only Drilling Outlook  90 Wells  80 in Cooper Basin (50:50 oil/gas)  10 Offshore / International Key Exploration Wells  Spikey Beach-1 (Bass) December  Burtocal-2 (Gulf of Suez) December  Fermat-1 (Otway) January  Manta-3 appraisal (Gippsland) February  South July-1 (Gulf

  53. Slide 53: Reg Nelson, Managing Director

    For personal use only + Reg Nelson Managing Director

  54. Slide 54: Outlook – where are oil prices heading?

    For personal use only + Outlook – where are oil prices heading? The International Energy Agency in its recent World Energy Outlook (November 2008) says that, despite the short term effects of global slow down, energy demand is expected to grow at 1.6% on average during 2006 to 2030 - a total increas

  55. Slide 55: Outlook – where are gas prices heading?

    + For personal use only “ … Carbon Pollution Reduction Scheme … Outlook – where are will add further momentum to the natural gas prices heading? gas sector …”* * Second Annual Report by the Australian Energy Regulator

  56. Slide 56: Cooper Gas Flare

    For personal use only + Cooper Gas Flare

  57. Slide 57: Beach Petroleum Limited Annual General Meeting

    + For personal use only BEACH PETROLEUM LIMITED ANNUAL GENERAL MEETING 28 November 2008

  58. Slide 58: Proxy Summary

    + PROXY Beach has received For personal use only 1,935 Proxy votes SUMMARY This represents 336,371,151 Votes

  59. Slide 59: Resolution 1 – Adoption of Remuneration Report

    + For personal use only  To consider and put to a non- binding vote the following RESOLUTION 1 – resolution: ADOPTION OF  “That the remuneration report REMUNERATION for the financial year ended REPORT 30 June 2008 be adopted”

  60. Slide 60: Resolution – Adoption of Remuneration Report results

    + RESOLUTION 1 – ADOPTION OF REMUNERATION REPORT For personal use only For Against Open Total Abstain / No Total (Usable) Valid instructions Proxies At Available / open Received Discretion Votes unusable / of Proxy excluded Adopt Remuneration Report 214,306,070 112,831,690 9,233,391 336,371,151 12,8

  61. Slide 61: Resolution 2 – Re-election of Mr J. C. Butler

    +  To consider and, if thought fit, pass the For personal use only following resolution as an ordinary RESOLUTION 2 – resolution: RE-ELECTION OF  "That Mr John Charles Butler, who retires MR J. C. BUTLER AS A by rotation pursuant to the constitution of DIRECTOR Beach Petroleum and who, being eligi

  62. Slide 62: Re-election of Mr J. C. Butler results

    + RESOLUTION 2 – RE-ELECTION OF MR J. C. BUTLER AS A DIRECTOR For personal use only For Against Open Total Abstain / No Total (Usable) Valid instructions Proxies At Available / open Received Discretion Votes unusable / of Proxy excluded Re-election of Mr J C 298,719,762 31,721,781 9,253,821 339,695,

  63. Slide 63: Presentation by Mr J C Butler

    + For personal use only PRESENTATION BY MR J C BUTLER

  64. Slide 64: Shareholder Trip

    For personal use only + SHAREHOLDER TRIP

  65. Slide 65: Resolution 3 – Re-election of Mr H M Gordon

    +  To consider and, if thought fit, pass the following resolution as an ordinary For personal use only RESOLUTION 3 – resolution: RE-ELECTION OF  "That Mr Hector Mackenzie Gordon, who MR H M GORDON AS A retires by rotation pursuant to the DIRECTOR constitution of Beach Petroleum and who, being eli

  66. Slide 66: Re-election of Mr H M Gordon results

    + RESOLUTION 3 – RE-ELECTION OF MR H M GORDON AS A DIRECTOR For personal use only For Against Open Total Abstain / No Total (Usable) Valid instructions Proxies At Available / open Received Discretion Votes unusable / of Proxy excluded Re- election 206,057,272 126,143,765 9,263,153 341,464,190 9,483,

  67. Slide 67: Presentation by Mr H M Gordon

    + For personal use only PRESENTATION BY MR H M GORDON

  68. Slide 68: Resolution 4 – Approval of Share Issue under Placement

    +  "To consider and, if thought fit, pass the For personal use only following resolution as an ordinary RESOLUTION 4 – resolution: APPROVAL OF SHARE  "That, for the purpose of listing rule 7.4 ISSUE UNDER A SHARE and for all other purposes, the issue of PLACEMENT 133,637,474 fully paid ordinary sh

  69. Slide 69: Approval of Share Placement results

    + RESOLUTION 4 – APPROVAL OF SHARE ISSUE UNDER A SHARE For personal use only PLACEMENT For Against Open Total Abstain / No Total (Usable) Valid instructions Proxies At Available / open Received Discretion Votes unusable / of Proxy excluded Approval of Share 47,846,054 4,097,602 9,258,353 61,202,009

  70. Slide 70: Resolution 5 – New Company Constitution

    +  "To consider and if thought fit pass the following resolution as a special resolution: For personal use only  "That the constitution tabled at the meeting, and signed by the Chairman of RESOLUTION 5 – the meeting for the purpose of NEW COMPANY identification, be adopted as the CONSTITUTION cons

  71. Slide 71: New Company Constitution results

    + RESOLUTION 5 – NEW COMPANY CONSTITUTION For personal use only For Against Open Total Abstain / No Total (Usable) Valid instructions Proxies At Available / open Received Discretion Votes unusable / of Proxy excluded New Company 326,363,097 3,120,535 9,649,280 339,132,912 10,124,080 349,256,992 Cons

  72. Slide 72: Resolution 6 – Issue of Rights to Managing Director

    +  "To consider and, if thought fit, pass the following resolution as an ordinary resolution: For personal use only RESOLUTION 6 –  "That the grant of rights to acquire ordinary shares in Beach Petroleum, and ISSUE OF RIGHTS TO the issue or transfer of ordinary shares in MANAGING DIRECTOR Beach Pe

  73. Slide 73: Issue of Rights to Managing Director results

    + RESOLUTION 6 – ISSUE OF RIGHTS TO MANAGING DIRECTOR – For personal use only MR R G NELSON For Against Open Total Abstain / No Total (Usable) Valid instructions Proxies At Available / open Received Discretion Votes unusable / of Proxy excluded Issue of rights to 228,641,132 98,239,269 9,154,537 336

  74. Slide 74: Resolution 7 – Issue of Rights to Executive Director

    +  "To consider and, if thought fit, pass the following resolution as an ordinary resolution: For personal use only RESOLUTION 7 –  "That the grant of rights to acquire ordinary shares in Beach Petroleum, and ISSUE OF RIGHTS TO the issue or transfer of ordinary shares in EXECUTIVE DIRECTOR Beach P

  75. Slide 75: Issue of Rights to Executive Director results

    + RESOLUTION 7 – ISSUE OF RIGHTS TO EXECUTIVE DIRECTOR – For personal use only MR H M GORDON For Against Open Total Abstain / No Total (Usable) Valid instructions Proxies At Available / open Received Discretion Votes unusable / of Proxy excluded Issue of rights to 228,589,360 97,569,159 9,156,526 33

  76. Slide 76: Time for Questions

    For personal use only + TIME QUESTION

Beach Petroleum — Shareholder Meeting (November 2008) on 6ix