Beach Energy Limited · ASX:BPT
Beach Energy — Shareholder Meeting (November 2016)
48 slides from Beach Energy's shareholder meeting presentation, November 2016
Slide 1: 2016 Annual General Meeting opening
Good morning ladies and gentlemen, and thank you for taking the time to be here today. I declare open the 2016 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 evacuatio
Slide 2: Compliance statements
Our compliance statements are set out on slide 2 of today’s presentation for those of you who wish to review them later. 2
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: • Matt Kay, Chief Executive Officer • Colin Beckett, Deputy Chairman • Our non‐executive directors, Ryan Stokes, Fiona Bennett, Jim McKerlie, Doug
Slide 4: Chairman's address: year in review
This time last year we spoke of Beach positioning itself for a “lower for longer” oil price environment. Today, the “lower” part of this equation still holds true, and “longer” remains a topic of much debate and speculation. The 2016 year posed many challenges for the oil and gas industry. Our avera
Slide 5: and strong financial performance.
and strong financial performance. 4
Slide 6: Operational performance
So turning to that operational performance, we again delivered good results across the business. Our safety record continued to improve, with reductions in lost time injuries and injury frequency rates. Safety is a core value for Beach and a key part of our culture. The board was recently in the fie
Slide 7: Progress against strategic growth objectives
We are making good progress against our strategic growth objectives. The four pillars of our growth strategy are well known to you. We continue to optimise our core in the Cooper Basin. The Drillsearch transaction, our results from the field, the divestment of under‐performing assets and operating e
Slide 8: Outlook for FY17
We look forward to the remainder of FY17. Our strict focus on operating efficiencies, the benefits from the Drillsearch transaction and a disciplined approach to capital allocation have put us in a very strong position to deliver on our growth strategy as we embark on an exciting year. We are contin
Slide 9: CEO's address: FY16 results
Thank you, Glenn. Good morning ladies and gentlemen. I am very pleased to be delivering my first Chief Executive Officer’s address to you, the shareholders of Beach Energy. And it is particularly pleasing to report on a solid set of results for FY16. It was another challenging year for the sector, h
Slide 10: Operations review: safety and environment
I will begin with a review of our operations. As you would be aware, safety takes precedence in everything we do at Beach. Our already high safety performance improved during FY16, with the recordable incident rate reduced by 76% and only one lost time injury recorded. During the year we continued t
Slide 11: Record production
On the production front, we achieved a record result with 9.7 million barrels of oil equivalent produced. Production was assisted by 46 new wells brought online, completion of various field development projects, and the successful Drillsearch transaction, which completed on 1 March 2016. It is also
Slide 12: Drilling activity and success rates
It was a year of reduced drilling activity due to constraints on capital expenditure brought about by lower oil prices. However, the program comprised a balance of exploration, appraisal and development activity, and drilling in the Cooper Basin targeted prospects across the acreage. Although our we
Slide 13: Financial performance
Turning to our financial performance, we achieved record sales volumes of 10.8 million barrels of oil equivalent, we proactively managed our capital expenditure, and we diligently focussed on reducing costs across the business. These efforts contributed to an underlying net profit of $36 million, de
Slide 14: Operating cost reductions and breakeven
Across the industry, cost reductions are front of mind. This year we continued to focus on operating efficiencies and achieved cost savings in the order of 25% within our operated Western Flank permits. We also reduced our drilling costs by 10%. These reductions were a result of broad ranging field
Slide 15: Organisation review and cost savings
Still on costs, Beach completed its whole‐of‐organisation review in FY16. The review aimed to clearly define the company’s medium and long‐term strategies, and to ensure the appropriate structure and capabilities are in place to support these endeavours. Recommended changes to our organisational des
Slide 16: Reserve and resource position
A snapshot of our reserve and resource position as at 30 June 2016 is set out on the slide behind me. During the year a thorough assessment of permit interests acquired as part of the Drillsearch transaction was undertaken, which added 11 million barrels of 2P oil and gas reserves, and contributed t
Slide 17: FY17 east coast gas outlook
So let’s turn to FY17. From an industry perspective, the east coast gas thematic remains a dominant theme, and is one which influences our strategic planning. Commissioning of Queensland’s recently constructed LNG plants has resulted in a tripling of east coast gas demand. At the same time, gas expl
Slide 18: FY17 capital expenditure outlook
It is an exciting outlook for Beach in FY17. We will continue to manage our operations and expenditure under the assumption of a “lower for longer” oil price environment, but our robust, profitable business enables us to continue investing for growth. Capital expenditure this year is broadly in line
Slide 19: Exploration program
Exploration success is an obvious necessity for a company like Beach. The outcomes of drilling campaigns help replace the reserves we produce, and contribute to our growth trajectory. In FY17, a greater portion of discretionary capital expenditure will be directed toward exploration drilling on the
Slide 20: Field development projects
As well as drilling, field development activities play an important role in achieving growth from our existing assets. We are currently undertaking two major infrastructure projects to mitigate the naturally declining profile of our oil and gas fields, and to increase our production capacity. Firstl
Slide 21: FY17 production guidance
Our planned activities for FY17, as well as benefits from the Drillsearch transaction, give us confidence in guiding toward another year of record production. We expect to produce between 9.7 and 10.3 million barrels of oil equivalent this year. It is worth noting that no additional production from
Slide 22: Year-to-date performance
It is pleasing to report that our momentum from FY16 has continued into the new financial year. Beach achieved record quarterly production of 2.9 million barrels of oil equivalent in the first quarter of FY17, supported by new wells brought online in our PEL 91 and PEL 106 oil and gas permits. Our f
Slide 23: Value proposition
Our results from 2016 and continuing strong performance this financial year reinforce Beach’s underlying value proposition. • We have a robust core operation which is profitable and cash generative in lower oil price environments. We have re‐shaped the business and will continue to do so as needed t
Slide 24: CEO closing remarks
In closing, I would like to extend my gratitude to the executive team and staff for their continuing diligent efforts in delivering results during challenging times. I would also like to thank those who left the company during what was a year of much change for Beach. In particular, thank you to Kat
Slide 25: Conclusion of webcast
Thank you, Matt. 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: Items for Voting
Resolutions for Voting Glenn Davis 24
Slide 27: Proxy votes
Proxy votes * Beach has received 1,204,466,737 valid proxy votes — Represents 64.6% 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 2016 26
Slide 29: Adoption of remuneration report
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 2016 be adopted.” 27
Slide 30: Adoption of remuneration report votes
Resolution 1 Adoption of remuneration report Against 1,186,199,922 11,528,111 Adoption of remuneration Open (Usable) At Discretion of Proxy 6,738,704 SaIENERGY / Total Valid Abstain Available Votes 1,204,466,737 6,204,275 report BEACH — 28
Slide 31: Re-election of G S Davis as a director
Resolution 2 Re-election of G S Davis as a director * To consider and, if thought fit, pass the following resolution as an ordinary resolution: “That Glenn Stuart Davis, who retires by rotation pursuant to clause 13.3 of the constitution of Beach and ASX Listing Rule 14.4 and who, being eligible, of
Slide 32: Re-election of G S Davis vote results
Resolution 2 Re-election of G S Davis as a director Against Open Total Valid Abstain (Usable) Available At Discretion WME of Proxy 1,067,338,391 135,953,775 6,330,539 1,209,622,705 1,476,086 Re-election of GS Davis 30
Slide 33: Election of P J Bainbridge as a director
Resolution 3 Election of P J Bainbridge as a director * To consider and, if thought fit, pass the following resolution as an ordinary resolution: “That Philip James Bainbridge, who was appointed as a director subsequent to the last annual general meeting of Beach and being eligible, offers himself f
Slide 34: Election of P J Bainbridge vote results
Resolution 3 Election of P J Bainbridge as a director Against 1,198,778,847 4,242,397 Election of Open (Usable) At Discretion of Proxy 6,476,005 Total Valid Available Votes 1,209,497,249 P J Bainbridge Abstain 1,601,542 32
Slide 35: Election of J D McKerlie as a director
Resolution 4 Election of J D McKerlie as a director * To consider and, if thought fit, pass the following resolution as an ordinary resolution: “That James David McKerlie, who was appointed as a director subsequent to the last annual general meeting of Beach and being eligible, offers himself for re
Slide 36: Election of J D McKerlie vote results
Resolution 4 Election of J D McKerlie as a director Against Open (Usable) At Discretion of Proxy 1,171,590,823 33,289,602 6,562,815 Election of Total Valid Abstain Available Votes 1,211,443,240 1,588,872 JD McKerlie 34
Slide 37: Election of R K Stokes as a director
Resolution 5 Election of R K Stokes as a director * To consider and, if thought fit, pass the following resolution as an ordinary resolution: “That Ryan Kerry Stokes, who was appointed as a director subsequent to the last annual general meeting of Beach and being eligible, offers himself for re-elec
Slide 38: Election of R K Stokes vote results
Resolution 5 Election of R K Stokes as a director Against Open (Usable) At Discretion of Proxy 1,193,668,248 9,469,441 6,513,159 Election of Total Valid Abstain Available Votes 1,209,650,848 1,447,943 RK Stokes 36
Slide 39: Renewal of approval of Executive Incentive Plan
Resolution 6 Renewal of approval of Executive Incentive Plan * To consider and, if thought fit, pass the following resolution as an ordinary resolution: “That issues of securities by Beach under the Beach Executive Incentive Plan, the key terms of which are set out in the Explanatory Statement, be a
Slide 40: Executive Incentive Plan vote results
Resolution 6 Against Open (Usable) At Discretion of Proxy Renewal of 749,534,021 21,935,042 6,379,229 approval of Renewal of approval of Executive Incentive Plan Total Valid Abstain Available Votes 777,848,292 | 432,822,720 Executive Incentive Plan 96.36% 38
Slide 41: Increase number of directors
Resolution 7 Increase number of directors * To consider and, if thought fit, pass the following resolution as an ordinary resolution: “That for the purpose of clause 13.2 of the constitution of Beach, the maximum number of directors shall be increased from seven to nine.” 39
Slide 42: Increase number of directors vote results
Resolution 7 Against 1,150,940,574 48,100,028 Increase number of Increase number of directors Open (Usable) At Discretion of Proxy 6,344,169 Total Valid Abstain Available Votes 1,205,384,771 5,714,020 directors BEACH — SaIENERGY / 40 40 40
Slide 43: Remuneration of non-executive directors
Resolution 8 Remuneration of non-executive directors * To consider and, if thought fit, pass the following resolution as an ordinary resolution: “That, for the purposes of ASX Listing Rule 10.17, clause 13.9.2 of the constitution of Beach and for all other purposes, the maximum aggregate remuneratio
Slide 44: Non-executive director remuneration vote results
Resolution 8 Remuneration of non-executive directors Against Open Total Valid Abstain (Usable) Available At Discretion Votes of Proxy Remuneration 724/381,725 47,522,094 6,334,721 778,238,540 | 432,432,472 of non- executive directors
Slide 45: Financial assistance for acquisition of Drillsearch
Resolution 9 Financial assistance for acquisition of Drillsearch * To consider and, if thought fit, pass the following resolution as a special resolution: “That the Company approve the giving by Drillsearch Energy Pty Limited and Great Artesian Oil and Gas Pty Ltd (Specified Drillsearch Subsidiaries
Slide 46: Financial assistance vote results
Resolution 9 Financial assistance for acquisition of Drillsearch Against Open Total Valid Abstain (Usable) Available At Discretion WME of Proxy Financial 1,199,477,588 3,134,697 6,477,622 1,209,089,907 2,008,884 assistance for acquisition of Drillsearch Energy shares 99.21% 44
Slide 47: Questions and Meeting Close
Questions and Meeting Close 45
Slide 48: Contact information
Contact information Beach Energy Limited 25 Conyngham Street Glenside SA 5065 Tel: +61 883382833) Fax: +61 8 8338 2336 Website: www.beachefiergy.comall Investor Relations Derek Piper Investor Relations Manager +61 8 8338:2833 46