Beach Energy Limited · ASX:BPT
Beach Energy — Shareholder Meeting (November 2015)
43 slides from Beach Energy's shareholder meeting presentation, November 2015
Slide 1: Welcome and opening of 2015 Annual General Meeting
Good morning ladies and gentlemen and thank you for taking the time to be here today. I declare open the 2015 Beach Energy Annual General Meeting. A quorum is present. As safety is one of our key values at Beach, I want to begin with a safety message. In the unlikely event of an emergency evacuation
Slide 2: Compliance statements
Compliance statements Disclaimer This presentation contains forward looking statements that are subject to risk factors associated with oil, gas and related businesses. It is believed that the expectations reflected in these statements are reasonable but they may be affected by a variety of variable
Slide 3: Introduction of directors and management on stage
There are of course a few others on stage here with me today. To make sure everybody knows who we are, moving down the line from my immediate right are: • Neil Gibbins – Acting Chief Executive Officer • Our non‐executive directors – Fiona Bennett, Doug Schwebel, Colin Beckett, Belinda Robinson and J
Slide 4: Chairman's address: lower oil prices and four key points
This time last year I touched on the evolving new world of lower oil prices. One year later, we face even lower prices, with oil having fallen 60% since the beginning of FY15, and continuing uncertainty within global commodity markets. Despite that Beach responded and produced a sound underlying res
Slide 5: Review of 2015
So a brief review of 2015. We recorded a 60% reduction in lost time injuries in FY15, and have continued this trend since, with LTI‐free operations for more than 12 months. Financially, we achieved revenue of $728 million and underlying net profit of $91 million, which were both lower compared with
Slide 6: FY15 cash flows and liquidity
In FY15, our cash flows were directly impacted by the fall in Brent oil prices, and we also paid a significant amount of tax following record profits in FY14. Despite this, we ended the year in a strong position, with available liquidity of $320 million. In tough times, it is more important than eve
Slide 7: Four-pillar strategy
During the year we commenced a whole‐of‐organisation review. Part of that process was to clearly define our strategy, which is effectively our roadmap for the future. Our strategy comprises four pillars, as depicted on this slide. Since announcing our strategy in August, significant work has been un
Slide 8: Maintain financial strength
4. Maintain financial strength: As I have already mentioned, we remain financially strong. We are cash flow positive over the past six months, with capex down from $416 million in FY15 to $240 – $270 million in FY16. Furthermore, the proposed merger with Drillsearch was structured as an all share de
Slide 9: Proposed merger with Drillsearch
So turning to the proposed merger with Drillsearch, it was very pleasing to announce this recommended transaction on 23 October. It’s a clear demonstration of execution on our strategy. This is a logical common sense deal. At the same time it’s an exciting deal. With the two companies together we bu
Slide 10: Merger structure and key terms
The proposed transaction, if approved by Drillsearch shareholders, will be implemented by a scheme of arrangement. As outlined in the Merger Implementation Agreement, Beach proposes to acquire all of the shares in Drillsearch that it does not already own. An indicative timeline was set out in our an
Slide 11: Thanks and handover to Acting CEO
It hasn’t been the easiest of years in upstream oil and gas and the team at Beach has had to work hard to stay ahead of the game. I’d like to thank them for that hard work and you, our shareholders, for your continued support. Ladies and gentlemen, enough from me. I will now ask Neil Gibbins to addr
Slide 12: Safety performance
Thank you, Glenn, and good morning ladies and gentlemen. I would like to begin by highlighting some impressive results we are achieving on the safety front. As you know, we have a safety‐first culture here at Beach, and over the past financial year particular emphasis has been placed on emergency re
Slide 13: Production and FY16 guidance
Turning to production, Glenn has already mentioned the strong operating result achieved in FY15. We produced 9.15 million barrels of oil equivalent, which was only marginally lower than our record level in FY14. In FY15, total gas production was higher, and on the oil front, natural field decline wa
Slide 14: FY16 compression, Bauer expansion and Windorah Trough campaign
• And still in PEL 106, we will be progressing our compression project and looking to tie‐in four wells. If these activities go to plan, we expect to see a more than doubling of output from this permit area; • We are also continuing to increase processing capacity at the Bauer facility, with a furth
Slide 15: First quarter FY16 highlights
We have also continued our momentum from FY15 into FY16, with the first quarter result containing many highlights. Production levels have been sustained, and we commissioned a number of facilities which will help us optimise production in FY16 and beyond. Of note were the Stunsail and Pennington fac
Slide 16: Reserves and resources
I won’t spend too long discussing reserves and resources, but it is worth mentioning that our 10‐ well development and appraisal campaign in the Bauer Field added approximately 2.7 million barrels to the field’s estimated ultimate recovery, net to Beach. This is an outstanding result. It exceeded ou
Slide 17: Beach's footprint and multi-basin strategy
Taking a step back, it is worth reminding ourselves of Beach’s existing footprint, and how this ties in with our four‐pillar strategy. The green areas on this map represent the basins to which we currently have exposure. The Cooper is obviously our core, but interests in the Otway, Gippsland, and Bo
Slide 18: East coast gas demand
Turning to the gas side of our business, we have included a chart on this slide which has been produced in many forms over recent years. Despite its various forms, it tells a compelling story – gas demand from east coast markets will escalate as LNG trains are commissioned and LNG production ramps‐u
Slide 19: Delhi drilling program and Windorah Trough
The Delhi drilling program is another exciting aspect of this year’s campaign. We have moved away from infill drilling and are now undertaking more appraisal and near‐field exploration drilling. One example is the Windorah Trough program in Queensland. This is an extensive campaign comprising: • A f
Slide 20: Ex PEL 106 gas activities
We also have a lot going on in our ex PEL 106 permit this year. Two exploration wells will test further potential in this proven gas‐liquids play, and we should have these results by the end of February 2016. We also have an inventory of four wells to be tied in, and we have recently been working th
Slide 21: Unconventional plays and Nappamerri Trough
Adding diversity to our gas portfolio is an existing collection of unconventional play types. One particularly interesting program is an add‐on play to be undertaken within fields in the Patchawarra Trough. Dry coals are present throughout the structures we target, and while we have been drilling th
Slide 22: Operated oil business
Our operated oil business continues to produce at an extremely low all‐in cash cost of $25‐30 per barrel, which in turn underpins our margins and cash flows to support other activities. We have already spoken to a number of the activities listed here, however I would like to point out the marked inc
Slide 23: Infrastructure upgrades and Callawonga-7 beam pump
An important element of sustaining production in a curtailed drilling environment is ensuring infrastructure capabilities are upgraded and optimised where possible. This financial year we have already seen the commissioning of the Pennington and Stunsail facilities, each with capacity of 20,000 barr
Slide 24: Resilient business model and outlook
We are clearly working through a difficult period, but Beach has a resilient business model and a very dedicated and appreciated workforce. I would like to acknowledge their continued support, commitment and hard work, which is very much focused on delivering value to our company. Beach has always b
Slide 25: Conclusion of webcast
Thank you, Neil. That marks the conclusion to our webcast. Thanks to those who tuned in. Voting results for the upcoming resolutions will be lodged with the ASX as soon as possible. 23
Slide 26: Resolutions for Voting
Resolutions for Voting Glenn Davis 24
Slide 27: Proxy votes
Proxy votes * Beach has received 525,039,767 valid proxy votes — Represents 40.30% of total votes 25
Slide 28: Financial statements
Financial statements * The first item of business is to receive and consider the financial statements and the reports of the directors and auditors for the financial year ended 30 June 2015 26
Slide 29: Adoption of remuneration report resolution
Resolution 1 Adoption of remuneration report * To consider and put to a non-binding vote the following resolution: “That the remuneration report for the financial year ended 30 June 2015 be adopted.” 27
Slide 30: Adoption of Remuneration Report vote results
Adoption of Remuneration Report Resolution 1 Adoption of remuneration report 512,427,605 Against 6,128,311 Open (Usable) At Discretion of Proxy 6,483,851 Total Valid Available Votes 525,039,767 39.33% Abstain 4,911,202 Total number of valid proxy votes 529,950,969 28
Slide 31: Re-election of F R V Bennett
Resolutio n2 Re-election of F R V Bennett as a director Ms Fi ona Bennett * To consider and, if thought fit, pass the following resolution as an ordinary resolution: “That Fiona Rosalyn Vivienne Bennett, who retires by rotation pursuant to clause 13.3 of the constitution of Beach and ASX Listing Rul
Slide 32: Re-election of F R V Bennett vote results
Re-election of FR V Bennett Resolution 2 Re-election of F R V Bennett as a director 493,712,266 Against 31,315,809 Open (Usable) At Discretion of Proxy 6,543,885 Total Valid Available Votes 531,571,960 37.89% Abstain 1,493,721 Total number of valid proxy votes 533,065,681 30
Slide 33: Re-election of D A Schwebel
Resolution 3 Re-election of D A Schwebel as a director * To consider and, if thought fit, pass the following resolution as an ordinary resolution: “That Douglas Arthur Schwebel, who retires by rotation pursuant to clause 13.3 of the constitution of Beach and ASX Listing Rule 14.4 and who, being elig
Slide 34: Re-election of D A Schwebel vote results
Resolution 3 Re-election of D A Schwebel as a director Against Open Total Valid Abstain Total (Usable) Available number of Votes valid proxy votes At Discretion of Proxy 494,689,493 30,409,180 6,531,067 | 531,629,740 = 1,435,963 533,065,703 Re-election of D A Schwebel 37.97% 32
Slide 35: Election of C D Beckett
Resolution 4 Election of C D Beckett as a director * To consider and, if thought fit, pass the following resolution as an ordinary resolution: “That Mr Colin David Beckett, who was appointed as a director subsequent to the last annual general meeting of Beach and being eligible, offers himself for r
Slide 36: Election of C D Beckett vote results
Election of CD Beckett Resolution 4 Election of C D Beckett as a director 521,867,583 Against 2,284,349 Open (Usable) At Discretion of Proxy 6,552,429 Total Valid Available Votes 530,704,366 Abstain 2,361,337 Total number of valid proxy votes 533,065,703 34
Slide 37: Election of R J Cole
Resolution 5 Election of R J Cole as a director * To consider and, if thought fit, pass the following resolution as an ordinary resolution: “That Mr Robert James Cole, who was appointed as a director subsequent to the last annual general meeting of Beach and being eligible, offers himself for re-ele
Slide 38: Election of R J Cole vote results
Election of RJ Cole Resolution 5 Election of R J Cole as a director 521,314,579 Against 3,616,512 Open (Usable) At Discretion of Proxy 6,608,965 Total Valid Available Votes 531,540,056 Abstain 1,525,647 Total number of valid proxy votes 533,065,703 36
Slide 39: Approval of securities issued under the EIP
Resolution 6 Approval of securities issued under the EIP * To consider and, if thought fit, pass the following resolution as an ordinary resolution: “That the issue of securities in Beach to participants under Beach’s Employee Incentive Plan, the principal terms of which are summarised in the Explan
Slide 40: Issue of securities under the EIP vote results
Issue of securities under the EIP Resolution 6 Approval of securities issued under the EIP 512,643,085, Against 7,388,481 Open (Usable) At Discretion of Proxy 6,704,061 Total Valid Available Votes 526,735,627 39.35% Abstain 4,409,843 Total number of valid proxy votes 531,145,470 38
Slide 41: Reinstatement of partial takeover provisions
Resolution 7 Reinstatement of partial takeover provisions in the Constitution * To consider and, if thought fit, pass the following resolution as a special resolution: “That Clause 6.4 of Beach’s constitution is reinstated in the constitution for a further three years after the date of this annual g
Slide 42: Partial takeover provisions vote results
Resolution 7 in the Constitution Against 520,186,646 2,320,567 Reinstate partial Reinstatement of partial takeover provisions Open (Usable) At Discretion of Proxy 6,836,538 Total Valid Abstain Available number of Votes valid proxy votes 529,343,751 | 1,801,719 531,145,470 takeover provisions 39.93%
Slide 43: Contact information
Contact information Beach Energy Limited 25 Conyngham Street Glenside SA 5065 Tel: +61 8 8338 2833 Fax: +61 8 8338 2336 Website; www:beachenergy.com.au Investor Relations Derek Piper Investor:Relations Manager Email: derek. piper@bgachenergy.com.au 41