Blue Energy Limited · ASX:BLU
Blue Energy — Shareholder Meeting (November 2018)
25 slides from Blue Energy's shareholder meeting presentation, Nov 13, 2018
Slide 1: Annual General Meeting
Annual General Meeting 13th November 2018 1
Slide 2: Legals
Legals Disclaimer This presentation may contain forward looking statements that are subject to risk factors associated with the gas and energy industry. It is believed that the expectations reflected in the statements contained within are reasonable, but they may be affected by a range of variables
Slide 3: The Domestic Gas Crisis worsens
The Domestic Gas Crisis worsens (Domgas alone needs $1.5 billion pa to drillout reserves to 2030) Un-developed Gas reserves = $15 billion Capex Who knows where this volume will come from? AEMO 2018 AEMO forecasts predicated on optimistic 2P and 2C estimates Surat CSG fields not performing to expecta
Slide 4: East Coast Gas Total 2P Reserves Ownership
East Coast Gas To t a l 2 P R e s e r v e O w n e r s h i p Global Gas Giants dominate 3:1 10,790 PJ 31,100 PJ 3
Slide 5: East Coast Gas 2P Reserves by Basin
East Coast Gas 2P Reserves by Basin CSG/LNG dominate long term contracts 10,790 PJ 31,100 PJ 199 PJ 1,034 PJ 37,879 PJ 502 2,272 PJ PJ Source: EnergyQuest 4
Slide 6: East Coast Gas Reserves and Production FY 2017
East Coast Gas Reserves and Production FY 2017 Surat/Bowen dominates and drives LNG export CSG Conv ratio 2P (PJ) 37,879 4,000 9:1 2C (PJ) 21,842 3,126 7:1 1,131 PJ Tj/day 3,753 1,274 3:1 To Asia 9.5 PJ Production Domestic LNG TJ/day 1,930 3,097 96 PJ 1,368 PJ PJ/a 728 1,131 Gladstone plants running
Slide 7: The East Coast Domgas problem has been evident for years
The East Coast Domgas problem has been evident for years “The triple whammy of the introduction of LNG and with it exposure to international gas pricing, a fall in oil prices leading to a downturn in exploration and new development, and regulatory uncertainty and exploration moratoria, has created a
Slide 8: So where's the new gas supply coming from?
So w here’s t he new gas suppl y comi ng f rom? Beetaloo – 12,000+ PJ Cost, timing, economics, Beetaloo regulation Narrabri – 2,254+ PJ North Bowen Regulatory risk, Activism, timing Dory – ?2,200 PJ Discovery?, Development timing (10+ years) - Exxon Narrabri North Bowen –~15,000 PJ Shell/Petrochina
Slide 9: Export Restrictions don't solve the problem
Export Restrictions don’t solve the problem The ADGSM • Doesn’t bring any new gas molecules to the market – just re-directs high cost molecules into the smaller domestic market • Doesn’t offer lower gas prices – just LNG netback • Disincentive for domestic exploration • Disincentive to Domgas buyers
Slide 10: East Coast Gas Prices escalate
East Coast Gas Prices escalate (linked to oil through LNG netback) • Domestic gas price is now based on competition for supply Export vs Domestic; Domestic vs Domestic • Cost of supply is increasing; Social Licence (industry is a contractor to State) Govt environmental regulation, Govt fees and char
Slide 11: ACCC LNG Netback Pricing
ACCC LNG Netback Pricing - increasing Linked to oil price ACCC 2018 Brent price graph - $US/bbl 10
Slide 12: Global LNG supply gap widens
Global LNG supply gap widens LNG supply gap Shell LNG Outlook 2018 Global gas companies are positioning their supply capacity to meet the gap (and increased price) from their lowest cost plants 11
Slide 13: World consumes 100 million barrels/day
World consumes 100 million barrels/day (and growing) Oil Price = Supply/demand + Storage + geopolitics 12
Slide 14: Distance to export markets is key
Distance to export markets is key 13
Slide 15: The North Bowen Basin Dilemma
The North Bowen Basin Dilemma • There’s enough discovered gas to meet east coast domestic demand for 30 years • The Northern Bowen was earmarked for LNG Feedgas development by global gas giants • Govt approvals for pipelines and development are in place (up to to 6,625 wells and a 450 km pipeline )
Slide 16: The Bowen Basin and ATP
T h e B o w e n B a s i n a n d AT P 8 1 4 A Key to long term East Coast gas security • Huge CSG play – with only a small area currently developed • Needs a pipeline connection – MOU signed with APA – CK takeover playing out • 10 year producing basin – 40 Tj/day currently into local market • 300 wel
Slide 17: The Bowen Basin Gas Resource needs a major gas trunkline
The Bowen Basin Gas Resource needs a major gas trunkline MAP Bowen Basin Gladstone 16
Slide 18: Bowen Gas Province controlled by Gas Giants
Bowen Gas Province controlled by Gas Giants Running to their global portfolio agenda (Shell(#2 globally) + Petrochina(#4 globally) = Arrow) Blue Acreage - 20% Shell/Petrochina – 80% Coal resource area 30 km 17
Slide 19: The Bowen Play is known and in production
The Bowen Play is known and in production Geological configuration - Moranbah • Production from 3 Coal Measure packages • Shale upside recognised – resources confirmed by NASI • Significant CSG upside for Blue - Monslatt and Central - ~ 3,000 PJ 3C 18
Slide 20: Additional gas potential – Sth Bowen
Additional gas potential – Sth Bowen ATP 854P Southern Bowen Basin • Uncontracted Gas Resources (~100 PJ) • Tenure secured by PCA’s • Adjacent to main LNG feed gas supply for GLNG & APLNG • Exploration upside 19
Slide 21: Northern Territory Proterozoic plays
Northern Territory Proterozoic plays Next hottest onshore gas play • Material basin acreage position • Proven Petroleum System • World class source rocks – seriously old ones • Proof of concept with Origin discovery Origin Discovery well – gas flow = 0.8-1.2 mcfd • Pepper Inquiry Recommendations (13
Slide 22: East Coast must have more Gas Supply
East Coast must have more Gas Supply Bowen Basin is the solution • Gas for the domestic users is controlled by LNG exporters (fuelling calls for gas reservation and price ceilings) • AEMO sees no domestic gas shortfall – this is technically incorrect! • Drilling CAPEX to develop reserves driven by L
Slide 23: Blue's Strategy
B lue ’s Str a te gy • Still focussed on monetising Bowen Basin gas - negotiating with buyers and speaking with Regulators • Continual focus on cost • Proof of concept testing in the Galilee Basin • Will continue to expand exploration project conveyor 22
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Slide 25: Agricultural Water Bores in QLD
A G R I C U LT U R A L WAT E R B O R E S I N Q L D Great Artesian Basin = 64,900,000 GL Total 2017 Qld Agricultural groundwater take = 612 GL (0.0001%) Total 2017 Surat CSG water production = 56 GL (most is reused) (0.00008%) DNRM Minesonlinemaps