Beach Energy Limited · ASX:BPT
Beach Energy — Citi conference London and Goldman Sachs conference New York, March 2012
52 slides from Beach Energy's conference presentation, Mar 1, 2012
Slide 1: Beach Energy Limited – Citi and GS conferences March 2012
Beach Energy Limited For personal use only Citi conference – London, 5-6 March 2012 Goldman Sachs conference – New Citi and GS conferences – March 2012 York, 7-8 March 2012 Slide 1
Slide 2: Compliance statements
Compliance statements For personal use only Disclaimer • This presentation contains forward looking statements that are subject to risk factors associated with oil, gas, geothermal and related businesses. It is believed that the expectations reflected in these statements are reasonable but they may
Slide 3: Strategic and operational overview
For personal use only Strategic and operational overview Citi and GS conferences – March 2012 Slide 3
Slide 4: A unique value proposition
A unique value proposition For personal use only Citi and GS conferences – March 2012 Slide 4
Slide 5: Safety a priority
Safety a priority For personal use only • Low Supervision Classification for Production Operations (SA) by South Australian Government regulator • HSE Strategic Planning – three year plan • Continued support for APPEA Stand Together for Safety campaign • 2010 and 2011 without a recordable injury acr
Slide 6: Large Resource base to build Reserves
Large Resource base to build Reserves 2P Reserves and For personal use only 2P Reserves 2C Contingent Resources 77 MMboe* 660 MMboe* 73% gas & gas liquids 2P Reserves are a fraction 27% oil of the total resource base 97% gas & gas liquids 3% oil Cooper / Eromanga Other Cooper / Eromanga 2P Other 2P
Slide 7: Reserves expected to increase for FY12
Reserves expected to increase for FY12 100 For personal use only 90 2P Reserves 80 70 60 50 66 MMboe 77 MMboe 95 MMboe 40 30 20 10 0 FY10 FY11 FY12* 1. Additions to be confirmed as part of Beach’s annual reserves statement, and do not * Estimates only include international and unconventional • SACB
Slide 8: FY12 production guidance of 7.5 MMboe
FY12 production guidance of 7.5 MMboe For personal use only Beach actual and forecast production • Production guidance for FY12 expected to be primarily driven by: 8 7.5 MMboe – Better access for activities following 7 6.6 MMboe Cooper Basin floods 6 Oil – Enhanced exploration and Oil 2.7 MMbbl deve
Slide 9: Underlying NPAT increased significantly for 1H12
Underlying NPAT increased significantly for 1H12 • Six months to December 2011 (1H12) Beach historical underlying NPAT For personal use only 70 underlying net profit after tax (NPAT) has increased, year on year, by 179% 60 • Improvement mainly due to: – Renegotiation of Delhi – Esso 50 confidential
Slide 10: Renegotiation of the Delhi – Esso royalty
Renegotiation of the Delhi – Esso royalty • Legacy royalty from the acquisition of Delhi 35 Beach Group Royalties* For personal use only Petroleum Pty Ltd in 2006 • Original royalty agreement required Delhi to 30 pay Esso Resources Australia Pty Ltd (EARL) a 25 percentage of revenue from certain pro
Slide 11: FY12 Capital guidance
FY12 Capital guidance For personal use only Higher capex due to enhanced FY12 program with no flooding forecast Citi and GS conferences – March 2012 Slide 11
Slide 12: Unlocking the Cooper Basin gas potential
For personal use only Unlocking the Cooper Basin gas potential Citi and GS conferences – March 2012 Slide 12
Slide 13: Prolific acreage position strategically located
Prolific acreage position strategically located For personal use only Beach is well placed strategically and geographically, with the necessary infrastructure in place to supply gas to the market for generations to come Citi and GS conferences – March 2012 Slide 13
Slide 14: Eastern Australian gas markets are growing
Eastern Australian gas markets are growing For personal use only • Strong predicted growth in Eastern Australian gas and Asian LNG demand • Cooper Basin has excellent channels to markets • Gladstone based LNG projects add a new dimension to gas market dynamics • Independent producers with material r
Slide 15: Excellent prospects to increase Cooper Basin supply
Excellent prospects to increase Cooper Basin supply For personal use only • Current domestic gas demand ~ 715 petajoules (PJ) per annum: – ~ 100 PJ from Cooper Basin • Domestic and LNG project gas demand expected to grow to ~ 3,000 PJ by 2025* • 2015+ opens up various domestic and export linked oppo
Slide 16: Cooper Basin a potential supply option for LNG
Cooper Basin a potential supply option for LNG For personal use only Gladstone based LNG projects Benefits of non-CSG supply to LNG proponents include: • Flexibility, security and base load supply • Field sequencing optimisation, delivering enhanced project economics • Different risk profile in term
Slide 17: LNG supply opportunity
LNG supply opportunity • Discussions ongoing between For personal use only Beach and Santos for the supply of gas to Santos’ GLNG Project: – 15 year contract proposed to commence around 2014 – Oil-linked gas pricing • Joint Venture discussions regarding the development size being progressed • Beach’
Slide 18: The impact of eastern Australian LNG projects
The impact of eastern Australian LNG projects For personal use only Australian East Coast 2P • Three LNG projects in Gladstone, Reserves* Queensland, have achieved FID, committing > 20 mtpa capacity • LNG proponents are seeking more Non-LNG gas for expansion ~ 11k PJ • LNG markets provide access to
Slide 19: SACB/SWQ JV – Significant long-term resource potential
For personal use only SACB/SWQ JV – Significant long-term resource potential Citi and GS conferences – March 2012 Slide 19
Slide 20: SACB/SWQ JV
SACB/SWQ JV For personal use only • Santos operated • Equity interests of approximately 20% for the SACB JV and 23% for the SWQ JV • A significant land holding of 26,800 km2 (gross) • Situated in a proven and prolific basin • Cooper Basin cumulative gross production to date of approximately 6 Tcf •
Slide 21: SACB/SWQ JV
SACB/SWQ JV • A diversified product stream delivering For personal use only gas, gas liquids and oil to multiple markets • Synergies with other Beach operational areas • Significant infrastructure made up of: – Wells accessing Permian strata – Gathering systems across the tenement area – Gas and oil
Slide 22: Resources conversion drivers
Resources conversion drivers Resources to reserves conversion For personal use only driven by: Infill drilling – 40 vs 200 acre spacing • Infill drilling with denser well spacing moving towards 40 acres • More focused fracture stimulation of individual zones • Pad drilling at the Tindilpie field del
Slide 23: Unconventional Cooper Basin gas potential
For personal use only Unconventional Cooper Basin gas potential Citi and GS conferences – March 2012 Slide 23
Slide 24: Commanding acreage position
Commanding acreage position PEL 218 ~1,600 km2 For personal use only • Beach 100% (Permian) • 2 Tcf of contingent resource booked in the Permian ATP 855P ~1,670 km2 • Beach 60% (operator), Icon Energy 40% • First dedicated shale well in 2012 SACB JV ~7,100 km2 • Beach 20.21%, Santos 66.6% (operator)
Slide 25: Program highlights to date
Program highlights to date • Results from Encounter-1 and For personal use only Holdfast-1 exceeded expectations due to: – Shale thickness – Gas saturated sands outside structural closure – 700 metres of gas saturated section encountered – ~2 MMscfd maximum flow rate from Holdfast-1 post fracture st
Slide 26: Shale and basin centred gas play
Shale and basin centred gas play For personal use only Source: Amended from Schenk and Pollastro, 2002 Gas saturation across a continuous shale and basin centred gas play Citi and GS conferences – March 2012 Slide 26
Slide 27: PEL drilling - massive gas saturated zone
PEL 218 drilling - massive gas saturated zone For personal use only • REM thickness exceeded expectations at 350-400 metres • Core and log analysis indicates REM, Toolachee, Daralingie and Patchawarra Formations all gas saturated • Fracture stimulation confirmed gas flows from Roseneath shale to top
Slide 28: Advantages of Beach's Cooper Basin acreage
Advantages of Beach’s Cooper Basin acreage For personal use only • Good working relationship with pastoral owners and other stakeholders • Co-operative not competitive land use • Semi-desert country • Relatively flat topography • Well established oil and gas infrastructure • Raw and sales gas pipeli
Slide 29: Shale and sands isolated from aquifers
Shale and sands isolated from aquifers For personal use only • Three cemented casing strings in the first 1,000 metres isolate surface aquifer • Two cemented casing strings between 1,000 and 2,000 metres isolate the Eromanga aquifers • Eromanga aquifers well above the target zone • The Triassic zone
Slide 30: The next steps
The next steps • Fracture stimulate Encounter-1 with sequential stimulation and testing For personal use only • Independent certification of all reserves and resources • Drill vertical delineation wells to appraise significant basin centred gas accumulation • Design and drill three horizontal wells
Slide 31: Things you can find in your own backyard…
Things you can find in your own backyard… For personal use only A relatively under-explored part of the Cooper Basin with enormous potential Citi and GS conferences – March 2012 Slide 31
Slide 32: Other unconventional opportunities
For personal use only Other unconventional opportunities Citi and GS conferences – March 2012 Slide 32
Slide 33: Other unconventional opportunities
Other unconventional opportunities For personal use only • Established significant acreage positions in other prospective basins • Focusing on under-explored basins with infrastructure access close to markets: – High grading acreage in parallel • Further potential for gas and liquids • Complimentary
Slide 34: Otway and Gippsland basins
Otway and Gippsland basins For personal use only Otway gas and liquids • Beach 35-67% • Conventional plays proven – gas, condensate and oil discoveries • Casterton main source rock and most Map with troughs shown and attractive unconventional target permits outlines – Moderate to high TOC’s – Gas an
Slide 35: Bonaparte basin
Bonaparte basin • Beach earning up to 90%* of onshore For personal use only and up to 55%* of offshore areas • Underexplored to date due to lack of quality modern seismic • Conventional and deep unconventional targets • Highly prospective as a result of: – Working petroleum systems identified in the
Slide 36: Dominant Western Flank acreage position
For personal use only Dominant Western Flank acreage position Citi and GS conferences – March 2012 Slide 36
Slide 37: Cooper Basin – Western Flank oil
Cooper Basin – Western Flank oil Western Flank oil is a core contributor For personal use only to Beach due to: • Sales in Brent, considerably stronger than WTI • High net back per barrel of approx. A$75* (incl. Opex, royalties and transportation costs) • Strong equity positions • Quick drill and ti
Slide 38: 3D and 2D seismic recently acquired
3D and 2D seismic recently acquired PEL 91 For personal use only • Beach 40% (operator), Drillsearch 60% • 336 km2 Aquillus 3D and 151 km2 Limbatus 3D seismic surveys completed and currently being processed • Targeting Birkhead channel plays in line with PEL 104 in addition to Namur plays • Interpre
Slide 39: Western Flank oil production
Western Flank oil production PEL 91 For personal use only • Bauer oil field expected to produce at up to 1,000 bopd (net) in April 2012 • JV pipeline construction discussion ongoing PEL 92 • Current net production 4,500 bopd • Lycium to Moomba trunkline to increase production capacity to 6,000 bopd
Slide 40: FY12 Western Flank drilling program
FY12 Western Flank drilling program PEL 91 For personal use only • FY12 drilling program complete • FY12 success of 1.4 MMbbl (net) to date, which has exceeded expectations PEL 92 • JV in discussions for up to three exploration wells and three development wells • FY12 success of 0.5 MMbbl (net) to d
Slide 41: New pipelines proposed
New pipelines proposed For personal use only • Lycium to Moomba trunkline (Beach 60%): – Capacity of 15,000 bopd – 8 inch pipeline – Expected completion first half 2012 • Growler to Lycium flowline (Beach 40%): – Capacity of 8,000 bopd – 6 inch pipeline – Expected completion second half 2012 • Beach
Slide 42: Western Flank gas and gas liquids production
Western Flank gas and gas liquids production • Beach 50% (operator), Drillsearch 50% For personal use only • First production from the Middleton Brownlow production licence • Gas sale agreement with the SACB JV for the sale of a minimum of 3 Bcf of raw gas • Fiberspar flexible pipeline reduced capit
Slide 43: 'Big oil' potential, Tanzania
For personal use only ‘Big oil’ potential, Tanzania Citi and GS conferences – March 2012 Slide 43
Slide 44: Rift systems - Lake Tanganyika South Block, Tanzania
Rift systems - Lake Tanganyika South Block, Tanzania • Beach 100% For personal use only • Permit 7,200 km2 (Lake Albert 5,300 km2) • Underexplored area with high potential • Natural oil seeps on Lake Tanganyika, as with Lake Albert, indicate a working petroleum system • Total S.A. and CNOOC invested
Slide 45: Egypt – Established and growing portfolio
For personal use only Egypt – Established and growing portfolio Citi and GS conferences – March 2012 Slide 45
Slide 46: Egypt overview
Egypt overview • Beach interests range 15 – 22% For personal use only • An established and growing portfolio of production, development & exploration opportunities • Abu Sennan - six well appraisal/ exploration program – three consecutive discoveries • North Shadwan - first oil imminent from near sh
Slide 47: Gulf of Suez – North Shadwan
Gulf of Suez – North Shadwan • Beach 20%, BP 50% (operator), For personal use only Tri Ocean 30% NS 377 and NS 385 • Near shore field NS 377 initially to produce approx. 1,000 bopd (gross) via pipeline to Ras Ghara facility • NS 385 development well expected to spud in May/June 2012 • Total oil flow
Slide 48: Abu Sennan concession – exploration success
Abu Sennan concession – exploration success For personal use only • Beach 22%, Kuwait Energy 50% (operator), Dover Investments 28% • Oil, gas and condensate discoveries from the first three wells drilled ZZ-4 • Gas and condensate, total flow rate of approx. 2,400 boepd (gross) Al Ahmadi-1 • Gas and
Slide 49: Mesaha concession
Mesaha concession For personal use only • Beach 15%, Melrose 40% (operator), Hellenic 30%, Kuwait Energy 15% • The largest concession area in Egypt at 42,700 km2 • Possible rift basin similar to Gulf of Suez • Potential for very large oil fields (>100 MMbbl+) • ~2,500 km of regional and infill 2D se
Slide 50: Summary – multiple near term catalysts
For personal use only Summary – multiple near term catalysts Citi and GS conferences – March 2012 Slide 50
Slide 51: Multiple near term catalysts for FY12
Multiple near term catalysts for FY12 For personal use only Additional re-rating potential through portfolio optimisation and other opportunities Citi and GS conferences – March 2012 Slide 51
Slide 52: Contact information
Contact information Beach Energy Limited – Head office For personal use only 25 Conyngham Street Glenside SA 5065 Tel: +61 8 8338 2833 Fax: +61 8 8338 2336 Website: www.beachenergy.com.au Chris Jamieson Investor Relations Manager Tel: +61 8 8338 2833 Mob: +61 8 (0)487 173 244 Email: chris.jamieson@b
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