Beach Energy Limited · ASX:BPT
Beach Energy — FY2022 Earnings Presentation
42 slides from Beach Energy's earnings presentation, Aug 16, 2022
Slide 1: FY22 full-year results
15 AUGUST 2022 FY22 full-year results Delivering energy security
Slide 2: Compliance statements
Compliance statements Disclaimer These future development, appraisal and exploration projects are subject to approvals such as government approvals, joint venture approvals and Board approvals. Beach expresses no view as to whether all required approvals will be This report contains forward-looking
Slide 3: Key takeaways
Key takeaways Delivering the foundation for sustainable growth Growing Growing Growing Growing Gas Supply in Key Markets Free Cash Flow Sustainably ▪ 7 well offshore Otway ▪ Targeting 4 gas markets ▪ $1.2 billion operating ▪ New target for 35% campaign complete for >15 years from FY24 cash flow emis
Slide 4: Key project milestones delivered
Key project milestones delivered De-risking growth Geographe 4 and 5 connected to the Otway Gas Plant SPA with bp for Waitsia Stage 2 LNG Otway production up 47% to 4.1 MMboe Waitsia Stage 2 commenced FY22 milestones ✓ Offshore Otway drilling completed FID for Moomba CCS FID for Enterprise Pipeline
Slide 5: Strong financial results in FY22
Strong financial results in FY22 Strengthening cash flows and financial position 21.8 MMboe 15% $1.1 billion 17% $504 million 39% Production Underlying EBITDA Underlying NPAT (64% margin) $752 million 73% $765 million +$363m 1.0 cps nc Free cash flow pre- Liquidity at year-end Final dividend declare
Slide 6: Growing gas into existing and new markets
Growing gas into existing and new markets Focused on delivering growth projects Objectives FY23 focus ❑ Complete tie-in of the Thylacine 1, 2, 3 and 4 wells - Targeting first gas mid-20231 ❑ Complete Enterprise pipeline construction - Targeting first gas mid-20231 (subject to regulatory approvals) G
Slide 7: East Coast gas market
East Coast gas market Gas prices continue to rise as demand and supply challenges persist Reducing coal-fired power, intermittent renewable supply Beach contracted vs uncontracted East Coast gas volumes1 and grid network instability support gas demand outlook 11% 19% 24% Anticipate gas supply will c
Slide 8: LNG sale agreement with bp signed
LNG sale agreement with bp signed Targeting first LNG sales in H2 2023 Beach a new entrant in the global LNG market Sale and Purchase Agreement with bp signed bp to acquire all 3.75 Mt of Beach LNG from Waitsia over ~5 years Up to ~200 million MMBtu Hybrid pricing linked to both Brent and JKM indice
Slide 9: Major projects underpin production growth
Major projects underpin production growth Completion of major projects to deliver production target Delivery target Key target drivers FY24 delivery risks FY23 ▪ Otway customer ▪ Thylacine well connections delayed beyond 1 July 2023 guidance nominations to ▪ Delay to Enterprise connection beyond 1 J
Slide 10: Reserves and resources
Reserves and resources 2P Reserves impacted by Trefoil development deferral and limited exploration MMboe 30-Jun-21 30-Jun-22 Change ▪ Decline in 2P reserves primarily driven by production (-22 MMboe) and Bass Basin revisions (-25 MMboe) with the latter revisions from 1P reserves 183 146 (20%) recla
Slide 11: Health, safety and environment
Health, safety and environment Focused on continual improvement Safety performance FY22 highlights 16 15.6 14.5 ✓ 2021 IADC Safety Award 12 7.9 Outstanding safety performance for the Otway Basin Total Recordable Injuries 8 13 3.8 3.5 3.5 3.7 4.4 drilling campaign, awarded to the rig operator 2.1 4.5
Slide 12: Financial results
F Y 2 2 F U L L - Y E A R R E S U LT S Financial results
Slide 13: FY22 financial highlights
FY22 financial highlights A strengthened financial position to deliver sustainable growth Growing Fully Funded Capital Free Cash Flow Growth Management ▪ $1.2 billion operating cash flow ▪ $765 million liquidity at year- ▪ Demonstrated capital end management discipline ▪ 73% increase in free cash fl
Slide 14: Production diversity from multi-basin strategy
Production diversity from multi-basin strategy Investing to produce more gas for supply-constrained domestic and LNG markets FY22 production: 21.8 MMboe1 Liquids Oil 35% 20% East Coast gas Condensate 7% 21.8 MMboe 50% 8% LPG Gas 9% 6% 65% NZ gas West Coast gas FY23 guidance: 20.0 – 22.5 MMboe 14 1.
Slide 15: Financial highlights
Financial highlights Diverse revenue streams $ million (unless otherwise indicated) FY21 FY22 Change FY22 sales revenue: $1.7 billion Production (MMboe) 25.61 21.8 (15%) Sales volumes (MMboe) 26.1 22.4 (14%) Sales revenue 1,519 1,749 +15% NZ West Coast gas gas 2% Average realised oil price ($ per bb
Slide 16: Underlying Net Profit After Tax
Underlying Net Profit After Tax1 Strong FY22 earnings growth $ million Underlying NPAT up 39% due to: (30) (8) ▪ Higher realised prices and revenue 57 (119) ▪ Reduced depreciation from lower production (62) 53 40 ▪ Minimal exploration expensed 209 Partially offset by: ▪ Higher royalties and third-pa
Slide 17: Cash flow movements
Cash flow movements A strengthened financial position supports delivery of the FY23 capital program $ million ▪ Cash reserves up 100% to $255 million (402) ▪ $242 million free cash flow generated1 ▪ 6.2% free cash flow yield2 ▪ $752 million free cash flow pre-growth 1,223 Growth expenditure3 (511) e
Slide 18: Fully funded to deliver major capital programs
Fully funded to deliver major capital programs Targeting a net cash position throughout FY23 Available Liquidity ($ million) 765 Successful debt facility refinance to $600 million ▪ A strengthened financial position 500 ▪ Provides flexibility for current and future growth projects 510 402 ▪ Debt fac
Slide 19: Sustainability
F Y 2 2 F U L L - Y E A R R E S U LT S Sustainability
Slide 20: Sustainability at Beach
Sustainability at Beach Environment, Social and Governance (ESG) Environment Social Governance Reporting ▪ Aspiration to reach net zero ▪ $4.1m contributions (monetary and ▪ Board committees for oversight ▪ Several reports and statements Scope 1 and 2 emissions by 2050 volunteering hours) across 66
Slide 21: New emissions intensity reduction target
New emissions intensity reduction target Targeting 35% reduction by 2030 New emissions intensity reduction target Beach is committed to the emissions reduction journey ✓ Dedicated sustainability team focused on emissions reduction opportunities ✓ 7.4 kt CO2e emissions reductions delivered in FY22 ✓
Slide 22: Moomba CCS to deliver material CO2 reductions
Moomba CCS to deliver material CO2 reductions A globally significant Carbon Capture and Storage project ▪ Targeting up to 1.7 Mt of CO2 storage annually (>0.5 Mtpa net to Beach) ▪ Depleted reservoirs with proven rock seal across the Cooper Basin ▪ Potential to store up to 20 Mtpa gross if fully deve
Slide 23: Markets
F Y 2 2 F U L L - Y E A R R E S U LT S Markets
Slide 24: Exposure to five markets with strong fundamentals
Exposure to five markets with strong fundamentals Underinvestment in new supply, strengthening demand and energy security concerns East Coast gas market Global oil and liquids West Coast gas market NZ gas market Global LNG ▪ Beach supplying ~12% of annual ▪ Beach supplying ~2% of annual ▪ Beach supp
Slide 25: East Coast gas market
East Coast gas market Gas prices continue to rise as demand and supply challenges persist Reducing coal-fired power, intermittent renewable supply Upward pressure on term contract prices and grid network instability support gas demand outlook “…the ACCC is concerned at the recent extreme price incre
Slide 26: Western Australia domestic gas market
Western Australia domestic gas market Market expected to tighten further from mid-2020s Demand forecast to exceed supply in the mid-2020s, coinciding Domestic gas prices have strengthened while remaining with rising uncontracted demand globally competitive 1,300 100% Stable demand with potential gro
Slide 27: Global LNG market
Global LNG market Increasing demand and geopolitical uncertainty driving prices higher Geopolitical / energy security concerns highlight Tightening global LNG market importance of LNG 600 LNG (Mtpa) Increased European demand (diversifying from Russian 400 pipeline gas) competing with Asian demand 20
Slide 28: Outlook
F Y 2 2 F U L L - Y E A R R E S U LT S Outlook
Slide 29: FY23 guidance
FY23 guidance Optimising production performance ahead of growth in FY24 FY23 production guidance: 20.0 – 22.5 MMboe ~12.5% ~10% ➢ FY23 highly dependent on Otway customer nominations ~22.5% ~10% Cooper Basin JV Oil ~35% Western Flank Targeting flat production from Western Flank oil and Cooper Gas Otw
Slide 30: FY23 guidance
FY23 guidance Otway and Perth basin developments underpin growth in FY24 FY23 production assumptions (20.0 – 22.5 MMboe) FY23 capital expenditure assumptions ($800 – 1,000 million) ▪ Otway Basin: Sales gas outlook based on offshore well deliverability ▪ Otway Basin: Pipelines and connections for Thy
Slide 31: Perth Basin
Perth Basin Targeting commencement of LNG sales in H2 2023 Asset overview Elegans ▪ Interests: 50% interest and operator of Beharra Springs (Mitsui 50%); 50% interest in Waitsia (Mitsui 50% and operator) Synaphea ▪ Assets: Beharra Springs Gas Plant (~22 TJ/day capacity); Xyris Gas Plant (~24 TJ/day
Slide 32: Otway Basin
Otway Basin Investing in new gas supply to support the East Coast market Asset overview ▪ Interest: 60% interest and operator (O.G. Energy 40%) ▪ Assets: Otway Gas Plant (~205 TJ/day capacity); Thylacine, Geographe, Speculant, Halladale and Black Watch gas fields; Enterprise, Artisan and La Bella ga
Slide 33: Offshore Otway Basin exploration
Offshore Otway Basin exploration Multiple seismic-amplitude supported prospects Artisan ▪ 100% success rate from seismic amplitude supported wells in Beach acreage1, including: Offshore Otway Basin Acreage2 ▪ La Bella, Geographe, Thylacine, Halladale, Hercules Enterprise, Artisan Thistle Up-dip ▪ Mu
Slide 34: Nearshore Otway Basin exploration
Nearshore Otway Basin exploration Short-cycle opportunities; 3D seismic planning underway Nearshore Otway Basin Acreage1 ▪ Enterprise discovery drilled from onshore well pad to offshore reservoir ▪ 4.9 km directional well ▪ High-value liquids-rich gas with direct tie-in to the Otway Gas Plant Enterp
Slide 35: Taranaki Basin
Taranaki Basin Planning for development drilling in FY24 Asset overview ▪ Interest: 50% interest and operator (Genesis Energy 46%, NZOG 4%) ▪ Assets: Kupe Gas Plant (~77 TJ/day capacity); Kupe gas field FY22 highlights ▪ Completion of the Kupe Inlet Compression project with improved plant reliabilit
Slide 36: Bass Basin
Bass Basin Planning developments to increase production and extend asset life Asset overview ▪ Interest: 88.75% interest and operator of BassGas (Prize Petroleum 11.25%); 90.25% interest and operator of Trefoil (Prize Petroleum 9.75%) ▪ Assets: Lang Lang Gas Plant (~67 TJ/day capacity); Yolla gas fi
Slide 37: Western Flank oil and gas
Western Flank oil and gas Active drilling and workovers to target flat oil production in FY23 FY22 drilling highlights ▪ 40% exploration and appraisal drilling success rate (total 20 wells) ▪ Two oil discoveries (Bangalee, Coorong); one discovery after year-end (Rocky) ▪ Two gas discoveries (Rosebay
Slide 38: Cooper Basin JV
Cooper Basin JV Five-rig drilling campaign targeting stable production in FY23 Asset overview ▪ Interest: Various non-operated interests (Santos operator) ▪ Assets: Moomba Gas Plant ~400 TJ/day capacity; ~190 producing oil and gas fields; depleted reservoirs for CCS FY22 highlights ▪ Final Investmen
Slide 39: Key takeaways
Key takeaways Delivering the foundation for sustainable growth Growing Growing Growing Growing Gas Supply in Key Markets Free Cash Flow Sustainably ▪ 7 well offshore Otway ▪ Targeting 4 gas markets ▪ $1.2 billion operating ▪ New target for 35% campaign complete for >15 years from FY24 cash flow emis
Slide 40: Q&A and appendix
F Y 2 2 F U L L - Y E A R R E S U LT S Q&A and appendix
Slide 41: Other financial statement impacts
Other financial statement impacts Reconciliation of EBITDA and NPAT $ million FY21 FY22 Change Underlying EBITDA 953 1,111 +17% Legal cost provision for shareholder class actions - (5) Gain on reversal of acquired liabilities 35 - Impairment of assets (117) - EBITDA 871 1,106 +27% Depreciation and a
Slide 42: Beach Energy Limited
Beach Energy Limited Level 8, 80 Flinders Street Adelaide SA 5000 Australia T: +61 8 8338 2833 F: +61 8 8338 2336 beachenergy.com.au Investor Relations Derek Piper, General Manager Investor Relations T: +61 8 8338 2833