Beach Energy Limited · ASX:BPT
Beach Energy — Non-Deal Roadshow (September 2019)
44 slides from Beach Energy's roadshow presentation, Sep 2, 2019
Slide 1: ASX Announcement: International roadshow presentation
Beach Energy Limited (ABN 20 007 617 969) | Level 8, 80 Flinders Street Adelaide, South Australia 5000 GPO Box 175, Adelaide, South Australia 5001 | beachenergy.com.au ASX Announcement For personal use only International roadshow presentation Reference #031/19 Date 02 September 2019 For information,
Slide 2: International Roadshow Presentation September 2019
SEPTEMBER 2019 For personal use only INTERNATIONAL ROADSHOW PRESENTATION
Slide 3: Compliance statements
Compliance statements For personal use only Disclaimer Assumptions This presentation contains forward looking statements that are subject to risk factors associated with oil, gas and The five year outlook set out in this presentation is not guidance. The outlook is uncertain and subject to change. T
Slide 4: Beach Energy portfolio
Beach Energy portfolio For personal use only FY19 production Taranaki Basin Western Bass Flank Basin 29.4 MMboe Otway Cooper Basin Basin Perth Basin FY19 2P reserves Taranaki Basin Western Bass Flank Basin Otway 326 Basin MMboe Cooper Basin Perth Basin 3
Slide 5: Asset summary
Asset summary For personal use only Beach FY19 production1 FY19 2P reserves2 FY20 capex3 Asset Operator? Key FY20 proposed activities Interest (MMboe) (MMboe) range ($million) Western Flank Oil 40 – 100% Op/Non-op 5.2 42 200 – 225 Drill up to 77 wells Western Flank Gas 100% Op 1.9 16 40 – 60 Drill u
Slide 6: Strong FY19 sets the platform for FY20
Strong FY19 sets the platform for FY20 For personal use only ✓ Production 29.4 MMboe, +55% vs FY18 Strong FY19 performance ✓ 85% drilling success rate in Beach-operated wells ✓ 204% organic 2P reserves replacement1, 2P reserves life increased to >12 years2 ✓ Underlying EBITDA $1,375 million, +80% vs
Slide 7: Delivering on our promises
Delivering on our promises For personal use only Beach said…. In FY19 Beach delivered… FY19 production1 26 – 28 MMboe ✓ 29.4 MMboe FY19 capital expenditure1 $460 – 540 million ✓ $447 million FY19 free cash flow2 ~$290 million ✓ $559 million FY19 underlying EBITDA2 $1.1 – 1.2 billion ✓ $1.375 billion
Slide 8: Investing to accelerate production and free cash flow growth
Investing to accelerate production and free cash flow growth For personal use only Beach is now targeting …and cumulative free cash flow3 …by accelerating investment in 34–40MMboe annual production of more than $2.7 billion over our expanded growth portfolio in the medium term… the next 5 years… Pro
Slide 9: Bridging to our updated five year outlook
Bridging to our updated 5 year outlook $1.5 billion of new investment opportunities identified since 2018 investor day For personal use only 5-Year Capital expenditure outlook ($ million) Outcomes ✓ Production outlook increased from 30 – 36 MMboe to • More Western Flank and CBJV drilling ~850 34 – 4
Slide 10: Reserves and contingent resources
Reserves and contingent resources 204% organic 2P reserves replacement, well ahead of 100% five year average target For personal use only Summary of reserves at 30 June 2019 Highlights (developed plus undeveloped, net to Beach) ✓ 2P reserves increased by 4% from 313 MMboe to 326 MMboe (MMboe ) FY18
Slide 11: FY20 guidance
FY20 guidance For personal use only FY19 Reported1 FY19 Pro Forma1 FY20 Guidance Production 29.4 MMboe 26.2 MMboe 27 – 29 MMboe Capital Expenditure2 $447 million $435 million $750 – 850 million Underlying EBITDA $1.375 billion $1.22 billion $1.25 – 1.40 billion DD&A3 $523 million ($17.8/boe) $443 mi
Slide 12: FY20 production guidance
FY20 production guidance Higher Western Flank oil output to offset statutory shutdowns in Otway, Kupe For personal use only FY20 production movement vs FY19 29.4 Oil production 27 – 29 26.2 Forecast increase driven by contribution from up to 97 new oil wells planned in FY20, including up to 16 Weste
Slide 13: FY20 capital expenditure guidance splits
FY20 capital expenditure guidance splits Investment focus remains on Cooper Basin and Victoria For personal use only Increase in FY20 vs FY19 driven by Capital expenditure by type …by asset group 5% • Participation in up to 194 wells (FY18: 134 wells) 4% 14% 4% 29% o Western Flank (~84 wells doublin
Slide 14: FY20 capital increase driving high return growth
FY20 capital increase driving high return growth Doubling well count in Western Flank and growing the Otway For personal use only Capital expenditure bridge ($ million) 800 Project phasing - deferral of FY19 capital items to FY20 New onshore investment added (Western Flank and CBJV rigs for longer i
Slide 15: East coast gas market
East coast gas market Market dynamics support Beach’s investment strategy For personal use only Southeastern Australia gas demand vs production1 600 • AEMO forecasts project Southeastern Australia gas production to be insufficient to meet demand 500 • Supply shortfall has been met by gas from Queens
Slide 16: Attractive medium-long term pricing outlook
Attractive medium-long term pricing outlook Higher gas sales and repricing of legacy volumes to deliver higher gas revenues For personal use only East coast Re-contracted / re-priced volumes gas supply • Lattice gas contracts have annual 100% step-ups and CPI adjustments 90% 80% ahead of repricing e
Slide 17: Key takeaways
Key takeaways Beach is ahead of schedule and delivering on its promises For personal use only ✓ Expanded value-accretive portfolio (90% of growth projects deliver IRRs > 50%) Ready to accelerate growth ✓ Strong balance sheet position ($172 million cash at 30 June 2019) ✓ Target development of 169 MM
Slide 18: Asset updates
I N T E R N AT I O N A L R O A D S H O W P R E S E N TAT I O N For personal use only Asset updates
Slide 19: HSE Performance
HSE Performance Lattice acquisition safely integrated For personal use only Safety performance Environmental performance2 TRIFR1 16 Crude Spill Volumes (kl) 15.6 12 51.9 7.9 99.9% 8 9.6 4 3.5 3.4 3.8 0.2 0.1 0.07 0 FY15 FY16 FY17 FY18 FY19 FY15 FY16 FY17 FY18 FY19 Focus on HSE delivering best perfor
Slide 20: Delivering as a low cost operator
Delivering as a low cost operator For personal use only Beach operating costs/boe1 $/boe • Operational Excellence program launched to generate 10 9.9 value through safe, reliable and efficient operations 9.7 o Reliability focus has seen average facility reliability 9.4 improve to >97% across our six
Slide 21: A successful year on the Western Flank
A successful year on the Western Flank For personal use only ✓ Record Western Flank oil and gas production of 7.1 MMboe, +16% vs FY18 ✓ Western Flank oil and gas had total 2P reserves revision of 22 MMboe (309% Production and reserves reserves replacement ratio) ✓ Western Flank 2P reserves life incr
Slide 22: Western Flank Oil
Western Flank Oil Successful year of appraisal and development For personal use only FY19 Highlights: FY19 production ✓ 10% increase in production on FY18, 2P Western Flank Oil reserves now 42MMbbl, +7 MMbbl over FY18 5.2 MMboe ✓ Increased drilling activities. 34 Western Flank 29.4 MMboe oil wells d
Slide 23: Western Flank Oil: Bauer keeps on getting bigger
Western Flank Oil Bauer (Beach 100% interest) – keeps on getting bigger For personal use only Top reservoir map - 2018 Top reservoir map - 2019 Success of the Bauer appraisal strategy • Flat structural relief means seismic is of limited value in defining field extent • In FY19 Beach appraised “throu
Slide 24: Western Flank Oil: Accelerated investment strategy
Western Flank Oil Accelerated investment strategy in place to unlock remaining potential For personal use only FY20 activity – record investment year for Western Flank oil • ~$200 million to be invested in Western Flank oil, a record for Beach • Up to 77 oil wells to be drilled in FY20, including: •
Slide 25: Western Flank Gas
Western Flank Gas ex PEL 106, ex PEL 107 and ex PEL 91, Beach 100% and operator For personal use only FY19 Highlights: FY19 production ✓ 35% increase in production on FY18, 2P Western reserves now 16MMboe, +8 MMboe over FY18 Flank Gas 1.9 MMboe ✓ Successful gas exploration/appraisal programs in Lowr
Slide 26: Cooper Basin JV
Cooper Basin JV Beach various interests (20.76 - 52.2% range), Santos operator For personal use only Cooper Basin JV wells drilled in FY19 • Santos and Beach aligned and targeting production growth • FY19 CBJV drilling success rate of 87% 25 Beach’s Cooper Basin interests span 33,000 km2 with surfac
Slide 27: Cooper Basin JV
Cooper Basin JV Beach various interests (20.76 - 52.2% range), Santos operator For personal use only FY19 Highlights: FY20 Focus: FY19 production ✓ 37% increase in production ✓ ~100 wells currently planned for FY20 Cooper Basin JV 8.1 MMboe ✓ 2P reserves 84 MMboe ✓ Follow up development proposed at
Slide 28: Victorian Otway Basin
Victorian Otway Basin Beach 60% and operator For personal use only FY19 Highlights FY19 production ✓ Excellent production outcome at 8.4 MMboe, Vic Otway driven by 97% facility reliability and strong Basin 8.4 MMboe customer nominations 29.4 ✓ Completed the 40% sell-down of Victorian MMboe Otway Ass
Slide 29: Victorian Otway Basin: FY20 activities
Victorian Otway Basin FY20 activities For personal use only • Ten drilling opportunities (eight development) planned in the OGP gas production outlook (100% interest)1 next 3 years to keep the Otway Gas Plant (OGP) full. 60 • Development wells plus one exploration success at either Enterprise or Art
Slide 30: Bass Basin
Bass Basin Beach 53.75% producing assets, 50.25% non-producing, Beach operated For personal use only FY19 Highlights: FY19 production ✓ Progressed the evaluation of a potential tieback of Bass Basin 1.7 MMboe the Trefoil Field moving to “Concept select” phase ✓ Facility reliability 93.3% in FY19 29.
Slide 31: New Zealand – Kupe Gas Project
New Zealand – Kupe Gas Project Beach 50% and operator For personal use only FY19 Highlights: FY19 production ✓ High facility reliability and customer nominations New Zealand supported 115% increase in reported production 3.2 MMboe ✓ Reliability of >99% achieved at Kupe production 29.4 station MMboe
Slide 32: Perth Basin
Perth Basin Waitsia (Beach 50%), Beharra Springs (Beach 50%1 and operator) For personal use only FY19 Highlights: FY19 production ✓ GSA executed with Alinta Energy for delivery of 20 Perth Basin TJ/d from July 2020 for 4.5 years. FID reached on 0.7 MMboe Waitsia Stage 1 expansion to 20 TJ/day 29.4 ✓
Slide 33: South Australian Otway Basin
South Australian Otway Basin Beach interests 70 – 100% and operator For personal use only FY19 Highlights: ✓ Initial 2P reserves booking: 1 MMBoe ✓ Haselgrove-4 encountered thicker sands than Haselgrove-3 in both primary and secondary targets. Well completed for production testing in H1 FY20 ✓ Const
Slide 34: Frontier Exploration
Frontier Exploration High Impact Exploration Targets in Portfolio For personal use only Ironbark – Carnarvon Basin (Beach 21% interest) Wherry – Canterbury Basin (Beach 37.5% interest) • Large liquids-rich gas prospect with follow-up potential • Drilling planned FY21, subject to rig availability • B
Slide 35: Beach illustrative rig schedule
Beach illustrative rig schedule1 Beach to employ 10 rigs in FY20, up from 5 in at the start FY19 For personal use only H1 FY20 H2 FY20 H1 FY21 Non-operated rig (Santos operator) Non-operated rig (Santos operator) Cooper Basin JV Non-operated rig (Santos operator) Non-operated rig (Santos operator) O
Slide 36: Indicative FY20 drilling program
Indicative FY20 drilling program Record drilling activity in the Western Flank, offshore Otway drilling to commence For personal use only FY20 expected number of wells Highlights Gas Oil Total • Record drilling activity for Beach in FY20 - up to 194 wells (FY19: 134) Western Flank 7 77 84 • Record W
Slide 37: Appendices
I N T E R N AT I O N A L R O A D S H O W P R E S E N TAT I O N For personal use only Appendices
Slide 38: Financial highlights
Financial highlights For personal use only $ million (unless otherwise indicated) FY18 FY19 Change Underlying NPAT recognises Production (MMboe) 19.0 29.4 55% • 55% increase in sales volumes Sales volumes (MMboe) 20.1 31.2 55% • 9% increase in realised oil price Avg. realised oil price1 ($/bbl) 93.4
Slide 39: Underlying NPAT drivers
Underlying NPAT drivers For personal use only Movement in Underlying NPAT1 $560 million Underlying NPAT is 86% higher $ millions than FY18 driven by factors including: 25 12 • A 55% increase in sales volumes Gas and 19 91 Other2 23 ethane FX A$/GJ Oil and Net • Higher realised Australian dollar oil
Slide 40: Outstanding debt fully repaid during FY19
Outstanding debt fully repaid during FY19 Beach in a net cash position two years ahead of initial expectations For personal use only Movement in Net Debt $ millions • $950 million in debt repaid from: 36 o Operating cash flow 262 o Proceeds from Otway Sale 1,038 o Cash on hand 479 46 172 • Closing c
Slide 41: Reconciliation of NPAT to Underlying NPAT
Reconciliation of NPAT to Underlying NPAT1 $ millions For personal use only FY18 FY19 Change Net profit after tax 199 577 379 +190% Acquisition costs and writeoff of debt establishment fees 51 - (51) Gain on asset disposals (20) (20) (0) Unrealised hedging movements 13 - (13) Impairment of assets 88
Slide 42: Underlying EBITDAX, EBITDA, EBIT, NPBT and NPAT
Underlying EBITDAX, EBITDA, EBIT, NPBT and NPAT1 $ millions For personal use only FY18 FY19 Change Underlying EBITDAX 766 1,375 609 80% Exploration expense 0 0 Underlying EBITDA 766 1,375 609 80% Depreciation and amortisation (315) (527) Underlying EBIT 451 848 397 88% Finance expenses (42) (62) Int
Slide 43: Summary of east coast gas contracts at June 2019
Summary of east coast gas contracts at 30 June 2019 Beach gas sales to progressively be re-priced at prevailing market pricing For personal use only FY19 Market pricing Asset Volume (PJ) Counterparty Basis End date Repricing FY20 FY21 FY22 FY23 FY24 Cooper Basin JV 16.6 Origin Energy1 Oil-linked Jun
Slide 44: Beach Energy Limited contact details
Beach Energy Limited Level 8, 80 Flinders Street For personal use only Adelaide SA 5000 Australia T: +61 8 8338 2833 F: +61 8 8338 2336 beachenergy.com.au Investor Relations Nik Burns, Investor Relations Manager Mark Hollis, Investor Relations Advisor T: +61 8 8338 2833