Beach Energy Limited · ASX:BPT
Beach Energy — Shareholder Meeting (November 2019)
56 slides from Beach Energy's shareholder meeting presentation, Nov 26, 2019
Slide 1: 2019 Annual General Meeting Addresses and 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 2019 Annual General Meeting Addresses and Presentation Reference #40/19 Date 26 November 2019
Slide 2: Chairman Address
Beach Energy Limited | 25 Conyngham Street Glenside, South Australia 5065 GPO Box 175, Adelaide, South Australia 5001 | beachenergy.com.au Beach Energy 2019 AGM For personal use only Chairman and Managing Director Addresses Date 26 November 2019 Chairman Address Slide 1 – Annual General Meeting Good
Slide 3: Chairman's address: introductions and shareholder value
Slide 3 – Chairman’s address Introductions For personal use only There are of course others with me on stage today who I would like to introduce. Moving down the line from my immediate right are: • Matt Kay, Managing Director and Chief Executive Officer. • Colin Beckett, Deputy Chairman. • Sally-Ann
Slide 4: Delivering on our strategy: with the community
Slide 5 – Delivering on our strategy: With the community But it’s also an exciting time for others as the company grows. In growing, we also grow our contribution to For personal use only our broader stakeholders and it’s here that I want to reflect briefly this morning. The most objective measure o
Slide 5: Climate scenarios and our people
• modelling the impact of 4 climate scenarios from the International Energy Agency. A key conclusion from our scenario modelling is that the enterprise value of Beach’s current portfolio remains For personal use only robust and resilient across all 4 scenarios. In FY19 Beach also embarked on a numbe
Slide 6: Managing Director and CEO Address
Managing Director and CEO Address Side 8 For personal use only Thank you Glenn and hello and welcome to everyone joining us today. For those who don’t know me, my name is Matt Kay and I am the Managing Director and Chief Executive Officer of Beach Energy. I’m particularly proud to stand before you t
Slide 7: HSE Performance
Slide 11 – HSE Performance As you know, health, safety and environmental management are a top priority at Beach. We want to ensure For personal use only our workers and contractors stay safe, the environment and communities are respected, and we retain our license to operate. To that end, we again h
Slide 8: FY20 capital expenditure guidance splits
Slide 14 – FY20 capital expenditure guidance splits It’s worth highlighting where we will be investing in FY20. These charts show our capital expenditure split in For personal use only various ways. • over 85 per cent of our FY20 capital expenditure will be directed towards growth investments with 9
Slide 9: East coast gas supply and Otway growth
At Beach, we are making a determined effort to bring on more gas supplies into the east coast market. When discussing capital expenditure, I mentioned that almost two thirds of our expanded FY20 investment program is targeting more gas supplies for the local market. As shareholders, you can be sure
Slide 10: Frontier exploration
Slide 18 - Frontier exploration The final area I wanted to highlight was our upcoming frontier exploration opportunities. For personal use only Our exploration team carefully assesses new exploration opportunities for investment, and Beach’s hurdle for frontier areas is very high. We are not a compa
Slide 11: Key takeaways
Slide 21 – Key Takeaways Finishing up we move to Slide 21 – your key takeaways. For personal use only 1) We had an outstanding FY19 both financially and operationally, further enhancing our strong balance sheet. 2) We have a portfolio that presents us with exceptional growth opportunities. 3) We hav
Slide 12: November 2019 Annual General Meeting
26 NOVEMBER 2019 For personal use only ANNUAL GENERAL MEETING
Slide 13: 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 14: Chairman's Address
G L E N N D AV I S Chairman’s Address For personal use only
Slide 15: Delivering sustainable growth in shareholder value
Delivering sustainable growth in shareholder value For personal use only FY19 results: • Record safety performance • Record process safety performance • Record production • Statutory NPAT of $577 million • Payback of $950 million in debt 4
Slide 16: Delivering on our strategy: With the community
Delivering on our strategy: With the community For personal use only • We are growing our contribution to the good of our broader stakeholders • Supporting 38 community organisations, including: • RFDS • Port Campbell SLSC • SAHMRI • Zoos SA 5
Slide 17: Delivering on our strategy: Safely and environmentally consciously
Delivering on our strategy: Safely and environmentally consciously For personal use only • We are committed to playing our role in a lower emissions future • Adopted recommendations from TCFD • Commenced emission reduction projects Gas supplied by Beach is playing a critical role in lowering emissio
Slide 18: Our people
Our people For personal use only • Continuing to execute against our goal of delivering strong shareholder returns requires the best people 7
Slide 19: Managing Director's Address
M AT T K AY Managing Director’s Address For personal use only
Slide 20: FY19: A year of accelerated growth
FY19: A year of accelerated growth For personal use only FY19 highlights ▪ $447 million investment ▪ 134 wells drilled ▪ 84% overall drilling success rate ▪ 29.4 MMboe production ▪ Largest Australian oil producer ▪ Supplied more than 15% of Australian East Coast and New Zealand domestic gas markets
Slide 21: 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 22: 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 23: 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 24: 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 25: 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 26: Western Flank Oil
Western Flank Oil Record year of investment and drilling activity planned in FY20 For personal use only FY19 production FY20 proposed activities Western • ~$200 million to be invested in Western Flank Flank Oil oil, a record for Beach 5.2 MMboe 29.4 • Up to 77 oil wells to be drilled in FY20, includ
Slide 27: East coast gas supply
East coast gas supply Beach investing almost two thirds of growth capex into new East Coast gas supplies For personal use only Southeastern Australia gas demand vs production1 600 SA Otway 500 • Constructing 10 TJ/day Katnook gas facility 400 Supply gap expected to be met by • Haselgrove-4 and Dombe
Slide 28: Perth Basin
Perth Basin Waitsia (Beach 50%), Beharra Springs (Beach 50%1 and operator) For personal use only FY19 production FY20 Focus: Perth Basin • Commence construction of Waitsia Stage 1 0.7 MMboe expansion 29.4 • FID on Waitsia Gas Project Stage 2 targeting MMboe 100 – 250 TJ/day output Rest of • Trieste
Slide 29: 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 30: 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 31: Beach as a growth company
Beach as a growth company For personal use only • Beach’s portfolio has substantial highly accretive investment opportunities • More than 90% of investment commencing in FY20 is expected to generate > 50% rates of return • Increased investment is expected to drive medium term production and free cas
Slide 32: 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 33: Q&A
ANNUAL GENERAL MEETING For personal use only Q&A
Slide 34: Resolutions for Voting
ANNUAL GENERAL MEETING For personal use only Resolutions for Voting
Slide 35: Proxy Votes
Proxy Votes For personal use only • Beach has received 1,184,389,328 valid proxy votes • Represents 51.97% of total votes 24
Slide 36: Financial Statements
Financial Statements For personal use only • The first item of business is to receive and consider the financial statements and the reports of the directors and auditor for the financial year ended 30 June 2019 25
Slide 37: Adoption of the Remuneration Report
Resolution 1 Adoption of the Remuneration Report For personal use only • To consider and put to a non-binding vote the following resolution: “That the remuneration report for the financial year ended 30 June 2019 be adopted.” 26
Slide 38: Adoption of the Remuneration Report: results
Resolution 1 Adoption of the Remuneration Report For personal use only Total Valid For Against Open-Usable Available Abstain Votes 1,159,076,867 20,017,189 5,295,272 1,184,389,328 2,453,748 Adoption of remuneration report 97.86% 1.69% 0.45% 100.00% 27
Slide 39: Re-election of Philip Bainbridge as a director
Resolution 2 Re-election of Philip Bainbridge as a director For personal use only • To consider and, if thought fit, pass the following resolution as an ordinary resolution: "That Philip Bainbridge, who retires by rotation pursuant to clause 13.3 of the Beach constitution and ASX Listing Rule 14.4 a
Slide 40: Re-election of Philip Bainbridge: results
Resolution 2 Re-election of Philip Bainbridge as a director For personal use only Total Valid For Against Open-Usable Available Abstain Votes 1,156,571,431 24,628,906 5,309,552 1,186,509,889 719,503 Re-election of Philip Bainbridge 97.47% 2.08% 0.45% 100.00% 29
Slide 41: Re-election of Colin Beckett as a director
Resolution 3 Re-election of Colin Beckett as a director For personal use only • To consider and, if thought fit, pass the following resolution as an ordinary resolution: "That Colin Beckett, who retires by rotation pursuant to clause 13.3 of the Beach constitution and ASX Listing Rule 14.4 and, bein
Slide 42: Re-election of Colin Beckett: results
Resolution 3 Re-election of Colin Beckett as a director For personal use only Total Valid For Against Open-Usable Available Abstain Votes 1,115,066,925 65,730,838 5,314,539 1,186,112,302 1,117,090 Re-election of Colin Beckett 94.01% 5.54% 0.45% 100.00% 31
Slide 43: Re-election of Peter Moore as a director
Resolution 4 Re-election of Peter Moore as a director For personal use only • To consider and, if thought fit, pass the following resolution as an ordinary resolution: "That Peter Moore, who retires by rotation pursuant to clause 13.3 of the Beach constitution and ASX Listing Rule 14.4 and, being el
Slide 44: Re-election of Peter Moore: results
Resolution 4 Re-election of Peter Moore as a director For personal use only Total Valid For Against Open-Usable Available Abstain Votes 1,153,926,151 25,572,912 7,017,997 1,186,517,060 722,332 Re-election of Peter Moore 97.25% 2.15% 0.60% 100.00% 33
Slide 45: Election of Matthew Kay as a director
Resolution 5 Election of Matthew Kay as a director For personal use only • To consider and, if thought fit, pass the following resolution as an ordinary resolution: "That Matthew Kay, who was appointed as a director subsequent to the last annual general meeting of Beach and being eligible, offers hi
Slide 46: Election of Matthew Kay: results
Resolution 5 Election of Matthew Kay as a director For personal use only Total Valid For Against Open-Usable Available Abstain Votes 1,168,298,148 12,482,608 5,383,669 1,186,164,425 1,064,967 Election of Matthew Kay 98.49% 1.05% 0.46% 100.00% 35
Slide 47: Election of Sally-Anne Layman as a director
Resolution 6 Election of Sally-Anne Layman as a director For personal use only • To consider and, if thought fit, pass the following resolution as an ordinary resolution: "That Sally-Anne Layman, who was appointed as a director subsequent to the last annual general meeting of Beach and being eligibl
Slide 48: Election of Sally-Anne Layman: results
Resolution 6 Election of Sally-Anne Layman as a director For personal use only Total Valid For Against Open-Usable Available Abstain Votes 1,133,945,683 46,394,221 5,337,942 1,185,677,846 1,551,546 Election of Sally-Anne Layman 95.64% 3.91% 0.45% 100.00% 37
Slide 49: Issue of securities to Matthew Kay under 2018 STI Offer
Resolution 7 Approval of the issue of securities to Matthew Kay under the Beach 2018 STI Offer For personal use only • To consider and, if thought fit, pass the following resolution as an ordinary resolution: "That, for the purposes of ASX Listing Rule 10.14 and for all other purposes, the acquisiti
Slide 50: 2018 STI Offer: results
Resolution 7 Approval of the issue of securities to Matthew Kay under the Beach 2018 STI Offer For personal use only Total Valid For Against Open-Usable Available Abstain Votes Approval of the 1,172,909,217 7,478,954 5,202,876 1,185,591,047 1,638,345 issue of securities to Matthew Kay under the Beac
Slide 51: Issue of securities to Matthew Kay under 2019 LTI Offer
Resolution 8 Approval of the issue of securities to Matthew Kay under the Beach 2019 LTI Offer For personal use only • To consider and, if thought fit, pass the following resolution as an ordinary resolution: “That, for the purposes of ASX Listing Rule 10.14 and for all other purposes, the acquisiti
Slide 52: 2019 LTI Offer: results
Resolution 8 Approval of the issue of securities to Matthew Kay under the Beach 2019 LTI Offer For personal use only Total Valid For Against Open-Usable Available Abstain Votes Approval of the 1,170,570,495 9,625,551 5,333,143 1,185,529,189 1,700,203 issue of securities to Matthew Kay under the Beac
Slide 53: Adopt a new constitution
Resolution 9 Adopt a new constitution For personal use only • To consider and, if thought fit, pass the following resolution as an ordinary resolution: “That for the purposes of sections 136(2) and 648G(4) of the Corporations Act 2001 (Cth) and for all other purposes, the constitution submitted to t
Slide 54: Adopt a new constitution: results
Resolution 9 Adopt a new constitution For personal use only Total Valid For Against Open-Usable Available Abstain Votes 1,176,837,886 2,320,581 5,628,066 1,184,786,533 2,442,859 Adopt a new constitution 99.32% 0.20% 0.48% 100.00% 43
Slide 55: Questions and meeting close
ANNUAL GENERAL MEETING For personal use only Questions and meeting close
Slide 56: 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