Beach Energy Limited · ASX:BPT
Beach Energy — Shareholder Meeting (November 2018)
52 slides from Beach Energy's shareholder meeting presentation, Nov 23, 2018
Slide 1: 2018 Annual General Meeting Addresses and Presentation
Beach Energy Limited ABN 20 007 617 969 25 Conyngham St, Glenside 5065, South Australia GPO Box 175, Adelaide 5001, South Australia T: +61 8 8338 2833 F: +61 8 8338 2336 beachenergy.com.au info@beachenergy.com.au ASX release 23 November 2018 Ref: #059/18 2018 Annual General Meeting Addresses and Pre
Slide 2: Beach Energy 2018 AGM Chairman and CEO Addresses
Beach Energy 2018 AGM Chairman and CEO Addresses Chairman Address GD: Slide 1 – Annual General Meeting Good Morning Good morning ladies and gentlemen, and thank you for taking the time to be here today. I declare open the 2018 Beach Energy Annual General Meeting. A quorum is present. Safety As I alw
Slide 3: Beach Energy 2018 AGM Addresses
Beach Energy 2018 AGM Addresses | 23 November 2018 Non-executive directors Richard Richards, Peter Moore, Philip Bainbridge and Jim McKerlie Jim McKerlie As announced on the 22nd of August, Jim informed the board he would not stand for re-election at this year’s AGM and would be retiring as a dire
Slide 4: Delivering On Our Strategy
Beach Energy 2018 AGM Addresses | 23 November 2018 significantly, from 33% in January to 20% in September and $250 million of debt has been repaid. Recent history in our industry has shown the importance of prudent balance sheet management. GD: Slide 5 – Delivering On Our Strategy: Efficiently Low C
Slide 5: Delivering On Our Strategy: Efficiently
Beach Energy 2018 AGM Addresses | 23 November 2018 GD: Slide 8 – Delivering On Our Strategy: With Good People Our workforce is a critical asset. We have undertaken extensive work to get it to the right size, the right structure and with the right people in the right place. We continue to invest in o
Slide 6: Delivering On Our Strategy: Safely
Beach Energy 2018 AGM Addresses | 23 November 2018 CEO Address MK: Slide 10 – CEO’s Address 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 Chief Executive Officer of Beach Energy. I’m particularly proud to stand befor
Slide 7: Delivering On Our Strategy: In Compliance
Beach Energy 2018 AGM Addresses | 23 November 2018 than one third of the increase due to the underlying performance of the assets. Our 2P reserves life, has increased from 7 years to 11 years at the end of FY18. With this foundation and a portfolio of highly value-accretive investment opportunities,
Slide 8: Delivering On Our Strategy: With Good People
Beach Energy 2018 AGM Addresses | 23 November 2018 MK: Slide 14 – Time is Right to Accelerate Organic Growth The time is right for Beach to accelerate investment in our organic growth opportunities. The reasons for this are clear. One. Our portfolio has expanded significantly over FY18. In the sec
Slide 9: CEO Address
Beach Energy 2018 AGM Addresses | 23 November 2018 MK: Slide 16 – Ready to Unlock Our Reserves and Cash Flow Potential Moving ahead, this slide is from our recent investor day presentation and provides a high level snap shot of our exciting 5 year outlook for capital expenditure, production and free
Slide 10: CEO's Address
Beach Energy 2018 AGM Addresses | 23 November 2018 In the Otway Basin, preparations are underway to drill 2 wells in the South Australian section of the Otway: the Dombey-1 exploration well and the Haselgrove-4 appraisal well. We are also progressing the development of the Haselgrove discovery to su
Slide 11: FY18: A Transformational Year
Beach Energy 2018 AGM Addresses | 23 November 2018 One. Accelerate organic growth investment further, and with two thirds of our projects generating rates of return in excess of 40%, this should be a priority for Beach; or Two. Evaluate other M&A and exploration opportunities, with a primary foc
Slide 12: Annual General Meeting
ANNUAL GENERAL MEETING 23 November 2018 Beach Energy Limited ABN20 007 617 969 1
Slide 13: Compliance Statements
COMPLIANCE STATEMENTS Disclaimer Reserves disclosure This presentation contains forward looking statements that are subject to risk factors associated Beach prepares its petroleum reserves and contingent resources estimates in accordance with the with oil, gas and related businesses. It is believed
Slide 14: Chairman's Address
CHAIRMAN’S ADDRESS Glenn Davis, Chairman Beach Energy Limited ABN 20 007 617 969 3
Slide 15: Delivering On Our Strategy: The Four Pillars
DELIVERING ON OUR STRATEGY: THE FOUR PILLARS Optimise Our Core in the Cooper Basin Build a Complementary East Coast Gas Business Cooper Basin 2P oil and gas reserves increased Supply ~ 15% of east coast domestic gas demand 71% to 128 MMboe at 30 June 2018 Pursue Compatible Growth Maintain Financia
Slide 16: Delivering On Our Strategy: Efficiently
DELIVERING ON OUR STRATEGY: EFFICIENTLY • Low-cost operating model • We continue to find efficiencies and drive down cost Beach Energy Limited ABN 20 007 617 969 5
Slide 17: Delivering On Our Strategy: Safely
DELIVERING ON OUR STRATEGY: SAFELY • Five years of continuous improvement in safety • HSER (Health, Safety, Environment, Risk) now has representation at the executive level Beach Energy Limited ABN 20 007 617 969 6
Slide 18: Delivering On Our Strategy: In Compliance
DELIVERING ON OUR STRATEGY: IN COMPLIANCE • Beach conducts its operations in accordance with the law, good governance and ethically • We were in FY18, and remain today, free of any known breach Beach Energy Limited ABN 20 007 617 969 7
Slide 19: Delivering On Our Strategy: With Good People
DELIVERING ON OUR STRATEGY: WITH GOOD PEOPLE • Our workforce is a critical asset • We continue to invest in our people • We continue our work on diversity Beach Energy Limited ABN 20 007 617 969 8
Slide 20: Delivering On Our Strategy: Transformation to a More Robust Model
DELIVERING ON OUR STRATEGY: TRANSFORMATION TO A MORE ROBUST MODEL Portfolio • Production diversity • Exposure to 3 gas markets East coast gas market exposure • Supplying 15% of east coast domestic market • Beach committed to bringing more supplies online Funding in place to pursue growth • High retu
Slide 21: CEO's Address
CEO’S ADDRESS Matt Kay Beach Energy Limited ABN 20 007 617 969 10
Slide 22: FY18: A Transformational Year
FY18: A TRANSFORMATIONAL YEAR Transformational Lattice acquisition • Material increase in company size and geographic footprint Excellent FY18 operational performance • 96 wells drilled at a success rate of 82% • Annual production of 19.0 MMboe, up 80% • 2P reserves life increased to 11 years Histor
Slide 23: Our Top Priority
OUR TOP PRIORITY STRONG SAFETY AND ENVIRONMENTAL PERFORMANCE A KEY PRIORITY Safety performance1 Environmental performance1 LTIFR2 6 CRUDE SPILL VOLUMES (KL) TOTAL SPILLS 51.9 99% 32% 5.4 67% Reduction in LTIFR2 since FY13 9.6 37 25 23 25 1.6 1.8 0 0.2 0.1 FY13 FY14 FY15 FY16 FY17 FY18 FY15 FY16 FY17
Slide 24: The Beach Approach
THE BEACH APPROACH TRACK RECORD OF LOW COST COOPER BASIN OPERATIONS Decades of Cooper Basin experience Cooper Basin operated performance Safe operation of over 130 oil and OIL FIELD OPERATING COSTS1 GAS FIELD OPERATING COSTS1 gas wells and multiple facilities 10 10 25 10 Operating cost ($ millio
Slide 25: Time Is Right To Accelerate Organic Growth
TIME IS RIGHT TO ACCELERATE ORGANIC GROWTH Beach has a high quality portfolio of investment opportunities Over two thirds of all discretionary investment to generate IRR > 40%1 Over two thirds of oil discretionary investment to generate IRR > 100%1 Positive market dynamics + funding capacity + q
Slide 26: Experienced Executive Team In Place
EXPERIENCED EXECUTIVE TEAM IN PLACE Executive Role Name Commenced Experience Prior experience Chief Executive Officer Matt Kay May 2016 > 25 years Oil Search, Woodside, Santos Chief Financial Officer Morné Engelbrecht September 2016 > 18 years InterOil, Newcrest, PwC Chief Operating Officer Dawn Sum
Slide 27: Ready To Unlock Our Reserves And Cash Flow Potential
READY TO UNLOCK OUR RESERVES AND CASH FLOW POTENTIAL Disciplined discretionary …driving medium term …generating > $2.6 billion investment… production growth… of free cash flow over 5 yrs CAPITAL EXPENDITURE OUTLOOK1 PRODUCTION OUTLOOK1 FREE CASH FLOW OUTLOOK1 ($ MILLION) (MMBOE) ($ MILLION) Vic Otwa
Slide 28: Victorian Otway Asset Sale
VICTORIAN OTWAY ASSET SALE BEACH TO SELL A 40% INTEREST IN OTWAY PERMITS TO O.G. ENERGY Transaction overview • Purchaser is O.G. Energy, the energy division of Ofer Global • Sale includes interests in Otway Gas Plant, existing gas fields (Geographe, Thylacine, Halladale, Speculant, Black Watch) and
Slide 29: Key Activities In FY19
KEY ACTIVITIES IN FY19 Operating Excellence • Target 20% reduction in direct controllable operating costs by FY20 • Target increase in plant reliability from 94.3% in FY18 to 98% by end FY20 • HSE remains key focus Cooper Basin • Beach to participate in up to 130 wells, a 37% increase on FY18 levels
Slide 30: FY19 Guidance
FY19 GUIDANCE UPDATED COMMENTS POST Q1 FY19 QUARTERLY REPORT Guidance range Comment Only 7% of FY19 production is derived FY19 production 25 – 27 MMboe Trending towards upper end from FY19 capital expenditure. The FY19 capex $440 – 520 million No change majority of FY19 capex is driving medium term
Slide 31: Key Takeaways
KEY TAKEAWAYS A COMPELLING FIVE YEAR OUTLOOK1 Portfolio provides growth Production growing to 30 - 36 MMboe High return / low risk investment Over two thirds of discretionary investment > 40% IRR2 Profitability ROCE target 17 - 20% Free cash flow generation Target of > $2.6 billion in cumula
Slide 32: Capital Management
CAPITAL MANAGEMENT • Beach remains a growth-oriented company, with TSR to be primarily achieved via share price appreciation • Growth to be achieved through the investment in our portfolio of value-accretive opportunities • Beach is on track to be debt free within 12 months, thanks to free cash flow
Slide 33: Our Vision, Purpose And Values
OUR VISION, PURPOSE AND VALUES Our vision We aim to be Australia’s premier multi-basin upstream oil and gas company Our purpose To deliver sustainable growth in shareholder value Our values Our values define us, guide our actions, our decisions and our words Safety Safety takes precedence in everyth
Slide 34: Q&A
Q&A Glenn Davis, Chairman Beach Energy Limited ABN 20 007 617 969 23
Slide 35: Resolutions For Voting
RESOLUTIONS FOR VOTING Glenn Davis, Chairman Beach Energy Limited ABN 20 007 617 969 24
Slide 36: Proxy Votes
PROXY VOTES • Beach has received 1,771,340,912 valid proxy votes • Represents 77.79% of total votes Beach Energy Limited ABN 20 007 617 969 25
Slide 37: Financial Statements
FINANCIAL STATEMENTS • 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 2018 Beach Energy Limited ABN 20 007 617 969 26
Slide 38: Resolution 1: Adoption Of The Remuneration Report
RESOLUTION 1 ADOPTION OF THE 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 2018 be adopted.” Beach Energy Limited ABN 20 007 617 969 27
Slide 39: Resolution 1: Adoption Of The Remuneration Report
RESOLUTION 1 ADOPTION OF THE REMUNERATION REPORT Total Valid For Against Open-Usable Available Abstain Votes 1,747,859,865 17,283,010 6,198,037 1,771,340,912 1,551,622 Adoption of remuneration report 98.67% 0.98% 0.35% 100.00% Beach Energy Limited ABN 20 007 617 969 28
Slide 40: Resolution 2: Re-Election Of Glenn Davis As A Director
RESOLUTION 2 RE-ELECTION OF GLENN DAVIS AS A DIRECTOR • To consider and, if thought fit, pass the following resolution as an ordinary resolution: “That Glenn Davis, who retires by rotation pursuant to clause 13.3 of the constitution of Beach and ASX Listing Rule 14.4 and, being eligible, offers hims
Slide 41: Resolution 2: Re-Election Of Glenn Davis As A Director
RESOLUTION 2 RE-ELECTION OF GLENN DAVIS AS A DIRECTOR Total Valid For Against Open-Usable Available Abstain Votes 1,608,982,862 156,630,819 6,597,600 1,772,211,281 1,210,552 Re-election of Glenn Davis 90.79% 8.84% 0.37% 100.00% Beach Energy Limited ABN 20 007 617 969 30
Slide 42: Resolution 3: Re-Election Of Ryan Stokes As A Director
RESOLUTION 3 RE-ELECTION OF RYAN STOKES AS A DIRECTOR • To consider and, if thought fit, pass the following resolution as an ordinary resolution: “That Ryan Stokes, who retires by rotation pursuant to clause 13.3 of the constitution of Beach and ASX Listing Rule 14.4 and, being eligible, offers hims
Slide 43: Resolution 3: Re-Election Of Ryan Stokes As A Director
RESOLUTION 3 RE-ELECTION OF RYAN STOKES AS A DIRECTOR Total Valid For Against Open-Usable Available Abstain Votes 1,705,788,038 59,963,079 6,623,453 1,772,374,570 1,047,263 Re-election of Ryan Stokes 96.25% 3.38% 0.37% 100.00% Beach Energy Limited ABN 20 007 617 969 32
Slide 44: Resolution 4: Election Of Joycelyn Morton As A Director
RESOLUTION 4 ELECTION OF JOYCELYN MORTON AS A DIRECTOR • To consider and, if thought fit, pass the following resolution as an ordinary resolution: “That Joycelyn Morton, who was appointed as a director subsequent to the last annual general meeting of Beach and being eligible, offers herself for elec
Slide 45: Resolution 4: Election Of Joycelyn Morton As A Director
RESOLUTION 4 ELECTION OF JOYCELYN MORTON AS A DIRECTOR Total Valid For Against Open-Usable Available Abstain Votes 1,759,233,913 5,790,260 6,627,757 1,771,651,930 1,769,903 Election of Joycelyn Morton 99.30% 0.33% 0.37% 100.00% Beach Energy Limited ABN 20 007 617 969 34
Slide 46: Resolution 5: Appointment Of Auditor
RESOLUTION 5 APPOINTMENT OF AUDITOR • To consider and, if thought fit, pass the following resolution as an ordinary resolution: “That, for the purposes of section 327B(1)(b) of the Corporations Act 2001 (Cth) and for all other purposes, Ernst & Young, having consented in writing to act as auditor of
Slide 47: Resolution 5: Appointment Of Auditor
RESOLUTION 5 APPOINTMENT OF AUDITOR Total Valid For Against Open-Usable Available Abstain Votes 1,739,456,487 26,172,966 6,580,692 1,772,210,145 1,211,688 Appointment of auditor 98.15% 1.48% 0.37% 100.00% Beach Energy Limited ABN 20 007 617 969 36
Slide 48: Resolution 6: Approval Of Beach Energy Employee Share Plan
RESOLUTION 6 APPROVAL OF BEACH ENERGY EMPLOYEE SHARE PLAN • To consider and, if thought fit, pass the following resolution as an ordinary resolution: “That for the purposes of Listing Rule 7.2 (exception 9(b)) and all other purposes, the establishment, operation and administration of a Beach Energy
Slide 49: Resolution 6: Approval Of Beach Energy Employee Share Plan
RESOLUTION 6 APPROVAL OF BEACH ENERGY EMPLOYEE SHARE PLAN Total Valid For Against Open-Usable Available Abstain Votes 1,756,730,834 8,775,707 6,310,846 1,771,817,387 1,414,088 Beach Energy Employee Share Plan 99.14% 0.50% 0.36% 100.00% Beach Energy Limited ABN 20 007 617 969 38
Slide 50: Resolution 7: 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 an ordinary 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
Slide 51: Resolution 7: Reinstatement Of Partial Takeover Provisions
RESOLUTION 7 REINSTATEMENT OF PARTIAL TAKEOVER PROVISIONS IN THE CONSTITUTION Total Valid For Against Open-Usable Available Abstain Votes Reinstatement 1,760,221,852 4,801,219 6,574,495 1,771,597,566 1,824,267 of Partial Takeover Provisions 99.36% 0.27% 0.37% 100.00% Beach Energy Limited ABN 20 007
Slide 52: Questions And Meeting Close
QUESTIONS AND MEETING CLOSE Beach Energy Limited 25 Conyngham Street Glenside SA 5065 Australia T: +61 8 8338 2833 F: +61 8 8338 2336 beachenergy.com.au Beach Energy Limited ABN 20 007 617 969 41