Slide 1: Victorian Otway Basin Site Visit
24 / 25 SEPTEMBER 2019 VICTORIAN OTWAY BASIN SITE VISIT
Slide 2: Compliance statements
Compliance statements Disclaimer Assumptions This presentation contains forward looking statements that are subject to risk factors associated with oil, gas and The five year outlook set out in this presentation is not guidance. The outlook is uncertain and subject to change. The related businesses.
Slide 3: Session 1: Introduction
OT W AY B A S I N S I T E V I S I T – 2 4 S E P T E M B E R Session 1: Introduction
Slide 4: 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 4
Slide 5: Beach's portfolio
Beach’s portfolio FY19 production Taranaki Basin Western Bass Flank Basin 29.4 MMboe Otway Cooper Basin Basin Perth Basin FY19 2P reserves Taranaki Basin Western Bass Flank Basin Otway 326 Basin MMboe Cooper Basin Perth Basin 5
Slide 6: Beach's corporate strategy
Beach’s corporate strategy Optimise Strengthen Pursue Maintain Our People our operated and non- our complementary gas other compatible growth financial strength and culture operated producing assets businesses opportunities FY20 Focus • Focus on operating costs – • Continue executing Victorian • Con
Slide 7: Five year outlook updated at FY19 results
Five year outlook updated at FY19 results Accelerated production growth via highly value-accretive investment Beach is targeting 34–40MMboe …and cumulative free cash flow2 …by accelerating investment in annual production in the of more than $2.7 billion over our expanded growth portfolio medium term
Slide 8: Victorian Otway Basin
Victorian Otway Basin Overview Victorian Otway Gas Assets comprise: • Otway Gas Plant, ~10 km from Pt. Campbell FY19 production • Producing gas fields: Vic Otway Basin o Thylacine 8.4 MMboe o Geographe 29.4 MMboe o Halladale Rest of Beach o Speculant • Undeveloped gas fields: o Black Watch FY19 2P r
Slide 9: Victorian Otway is pivotal to Beach's strategy
Victorian Otway is pivotal to Beach’s strategy Beach plans to develop its Otway Basin represents 19% of Refilling the hopper through undeveloped 2P reserves over Beach 2P reserves and 27% of value-accretive exploration the next 5 years Beach undeveloped 2P reserves Beach 2P reserves1 Beach undevelop
Slide 10: The role of the Victorian Otway assets in Beach's strategy
The role of the Victorian Otway assets in Beach’s strategy Victorian Otway assets are Beach plans to invest ~$600 At capacity, the Otway Gas Plant expected to contribute million in the Vic Otway Basin, can meet ~15% of Victorian peak approximately 17% of group 87% of investment is development winter
Slide 11: Why are we investing in the Victorian Otway?
Why are we investing in the Victorian Otway? Four years since last well drilled and three years since last well connected Otway Gas Plant output1 (TJ/day) 250 Halladale and Speculant brought Facility Capacity = 205 TJ/d online in August 2016 200 JV plans to increase gas supply to 150 the OGP via the
Slide 12: Positive exploration track record
Positive exploration track record 100% success to date in Beach-operated acreage with seismic amplitude support Well Name Year Amplitude support? Success? La Bella-1 1993 Yes Yes Geographe-1 2001 Yes Yes Thylacine-1 2001 Yes Yes Thylacine-2 2001 Yes Yes Halladale-1-DW1 (Black Watch) 2005 Yes Yes Hal
Slide 13: Increasing exposure to market pricing
Increasing exposure to market pricing Legacy contract pricing to end in FY21/22, exploration and La Bella adds flexibility Otway Gas Plant gas production outlook (100% interest)1 • Increased Otway Gas Plant output to 70 coincide with re-pricing of Lattice 60 GSA and end of AGL GSA 50 • Thereafter, a
Slide 14: Beach East Coast gas portfolio
Beach East Coast gas portfolio Otway gas an important component in Beach’s portfolio • Beach’s East Coast gas portfolio comprises gas Re-contracted / re-priced volumes from: o Otway Basin assets 100% o Bass Basin assets 90% 80% o Cooper Basin assets Beach Almost 80% of 70% Beach’s estimated average
Slide 15: Session 2: Progress since Otway acquisition
OT W AY B A S I N S I T E V I S I T – 2 4 S E P T E M B E R Session 2: Progress since Otway acquisition
Slide 16: Priorities and outcomes since Beach acquisition
Priorities and outcomes since Beach acquisition Priorities Outcomes People • Functional operating model to promote technical excellence ✓ Functional operating model now in place • Build out offshore capabilities to support offshore programs ✓ 190 staff increased to 550, plus contractor support HSER
Slide 17: Progress under Beach ownership
Progress under Beach ownership February 2019: June 2019: January 2018: November 2018: Awarded VIC/P73 Commence Lattice Contracted Ocean containing SA Otway acquisition Onyx semi- La Bella gas field drilling completed submersible rig for $4 million campaign 2018 2019 October 2018: December May 2019:
Slide 18: Beach's functional operating model
Beach’s functional operating model Development and Exploration & Appraisal teams for Otway development program Geoff Barker Jeffrey Schrull Group Executive – Group Executive – Development Exploration & Appraisal 30+ years’ experience 30+ years’ experience Woodside, Shell, RISC Chevron, Addax GM Well
Slide 19: Otway Basin seismic reprocessing and remapping
Otway Basin seismic reprocessing and remapping 19
Slide 20: Otway Basin data review since acquisition
Otway Basin data review since acquisition Integrated workflows targeting exploration and development opportunities Seismic – Lower subsurface risk • Legacy 3D seismic surveys in the offshore basin reprocessed into a Super Cube – over 9,000 km2 of data • State-of-the-art seismic reprocessing and rigo
Slide 21: Otway Basin data review: new data
Otway Basin data review since acquisition New data – fundamentals in place A A’ Enterprise- Minerva-1 Artisan-proposed Thistle-1 Geographe Geographe-1 Thylacine-1 Thylacine-2 proposed North-1 In-house and external reprocessing of existing seismic surveys has led to a better understanding of Courtesy
Slide 22: Thylacine remapped
Otway Basin data review since acquisition Thylacine remapped – leading to optimised well locations • Thylacine gas field currently producing from four wells • Current deliverability ~50 TJ/day • Four new development wells planned as part of upcoming drilling campaign • State-of-the-art reprocessing
Slide 23: Artisan and Hercules
Otway Basin data review since acquisition Artisan and Hercules Artisan-1 SSE NNW • Artisan, a low risk exploration - prospect, will be the first well drilled in the offshore campaign • Super Cube seismic data allows other de-risking indicators to be 500m observed and calibrated • Work on Artisan and
Slide 24: La Bella discovered gas field
Otway Basin data review since acquisition La Bella – discovered gas field provides optionality • Permit VIC/P73 containing the La Bella gas field was acquired as part of government gazettal round in February 2019 for $4 million • Gross 2P gas reserves ~40 PJ • Victorian Otway 2P reserves life of 12
Slide 25: Further exploration potential - T/30P and beyond
Otway Basin data review since acquisition Further exploration potential - T/30P and beyond • T/30P prospect and lead portfolio being refreshed utilising Super Cube data o Portfolio currently being matured for drilling o The T/30P commitment well is on the rig schedule for execution in FY21 • Further
Slide 26: Session 3: Otway Gas Plant
OT W AY B A S I N S I T E V I S I T – 2 5 S E P T E M B E R Session 3: Otway Gas Plant
Slide 27: Beach's functional operating model: HSER team
Beach’s functional operating model HSER team Brett Doherty Group Executive – HSER 30+ years’ experience Rasgas, Inpex Head of Operations Head of Head of Head of Corporate Risk Head of Health & Safety Head of Environment Assurance Technical Assurance 20+ years’ experience 13+ years’ experience 20+ ye
Slide 28: Health, safety, environment and risk
Health, safety, environment and risk Safety performance Environmental performance2 TRIFR1 16 Crude Spill Volumes (kl) 15.6 12 51.9 7.9 99.9% 8 9.6 4 3.5 3.4 3.8 0.2 0.1 0.07 0 FY15 FY16 FY17 FY18 FY19 FY15 FY16 FY17 FY18 FY19 Focus on HSE delivering best performance to date Process Safety - Loss of
Slide 29: Pacesetting HSER performance achieved through ...
Pacesetting HSER performance achieved through … Organisation • Modelled on established industry practice, yielding HSE independence and significant discipline experience. • Entire Division recruited to provide HSE expertise across all Oil & Gas Drilling, Construction and Operations activities • Deli
Slide 30: HSE&R Vision and Strategy
HSE&R - 5 Year Vision and Strategy • 5 Year Vision: Zero incidents achieved and maintained • Strategy of continuous improvement year on year 15% Reduction strategy leverages: Safety • Annual KPIs and Targets • Internal Inputs # incidents o Incident investigation learnings o Audit and assurance findi
Slide 31: Operational excellence
Operational excellence Delivery of value through safe, reliable and efficient operations People Performance HSE Process & and risk technology 31
Slide 32: Production Division: Victoria - Otway
Beach’s functional operating model Production Division : Victoria - Otway Dawn Summers Chief Operating Officer 25+ years’ experience BP, Genel Energy, Origin GM Victorian GM Technical Services GM Production, Planning GMs of SA, WA and Operations 20+ yrs experience & Performance NZ 30+ yrs experience
Slide 33: Operational excellence
Operational excellence Delivery of value through safe, reliable and efficient operations Reliability Operating costs 98% reliability across all operating assets Sustainable reduction in direct operating costs of Key goals greater than 20% by end FY20 by end FY20 > $20 million per annum incremental r
Slide 34: Operational excellence
Operational excellence Improving base production using industry best practice & technology Productivity Application at Victorian Otway ✓ Advanced Process Control • Best practice start-up times and reduced downtime • Process efficiency including inlet compressor control ✓ Secondary recovery and LPG y
Slide 35: Operational excellence
Operational excellence Driving a sustainable reduction in direct operating costs Operating Cost Application at Victorian Otway • Drone technology - Offshore Platform Inspections ✓ Advanced Inspection • Advanced Digital Radiographic techniques - CUI inspections techniques • Reducing confined space en
Slide 36: The Otway Gas Plant
The Otway Gas Plant • The Otway Gas Plant is located onshore near Port Campbell, Victoria • It processes commingled raw gas from the Thylacine, Geographe, Halladale and Speculant gas fields, into sales gas, LPG (propane and autogas) and condensate products • The maximum operating capacity of the ons
Slide 37: Facilities overview
Facilities overview OGP connection to the gas grid • The Otway Gas Plant is strategically located close to key infrastructure: o Iona gas storage facility o SEA Gas pipeline (to Adelaide) o South-west pipeline (to Melbourne) 37
Slide 38: Otway Gas Plant process flow diagram
Otway Gas Plant process flow diagram 38
Slide 39: Session 4: Development plans
OT W AY B A S I N S I T E V I S I T – 2 5 S E P T E M B E R Session 4: Development plans
Slide 40: Our forward development program
Our forward development program Indicative drilling timeline FY20 FY21 FY22 ERD program Rig: Ensign 931 Black Watch-1 Enterprise-1 Offshore program Rig: Ocean Onyx Development drilling Development drilling Development program: 4 x Thylacine, 2 x Geographe wells and La Bella Artisan-1 T/30P well • El
Slide 41: Nearshore - starting close to home
Nearshore - starting close to home Lowest development costs Ensign 931 rig secured for ERD drilling program • Same rig was used to drill Halladale and Speculant development wells • Rig is currently drilling Dombey-1 in SA Otway Basin • Following the completion of Dombey-1 drilling, rig will mobilise
Slide 42: Black Watch-1 to be drilled from Halladale well pad
Black Watch-1 to be drilled from Halladale well pad 42
Slide 43: Halladale as a template - Black Watch as follow up
Halladale as a template - Black Watch as follow up Halladale delivered: • Halladale/Speculant online rate 80 MMscf/d • High production rates maintained by pressure support/recharge • 2P reserves increased by 3.6 Bcf (net) FY19 due to lower production declines supported by new mappings Black Watch de
Slide 44: Enterprise exploration well
Enterprise exploration well Low risk, high value exploration target in a proven play Enterprise-1 Enterprise-1 • Enterprise 7 km from Minerva in proven Waarre play • New Super Cube tied to proprietary transition zone data allows calibration to known fields reducing subsurface risk • In a success cas
Slide 45: Ocean Onyx semi-submersible rig
Ocean Onyx semi-submersible rig • Ocean Onyx semi-submersible rig contracted in December 2018 for the offshore Otway Basin drilling program • Ocean Onyx is currently undergoing upgrades in Singapore • Upgrades are required to handle the expected operating conditions in the Otway Basin • Rig delivery
Slide 46: Otway offshore scope
Otway offshore scope • Schematic shows how the seven offshore development wells and Artisan exploration well (success case) would be connected to the existing offshore infrastructure o Geographe wells are connected with short rigid connectors to existing tie-in points • Short lead times and low cost
Slide 47: Our plan is to fill the Otway Gas Plant
Our plan is to fill the Otway Gas Plant …and keep it full with the lowest unit technical cost gas Otway Gas Plant gas production outlook (100% interest)1 • Output to progressively ramp up as wells connected and tied in, commencing with Black Watch-1 in 60 H2 FY20 50 • Sufficient deliverability expec
Slide 48: Growth potential (debottlenecking)
Growth potential (debottlenecking) • Beach undertaking review of facility constraints • Evaluating options for increasing throughput above current capacity limit of 205 TJ/day • Range of low to higher cost and capacity addition options expected to be prepared • Capacity expansion to be considered ba
Slide 49: Key takeaways
Key takeaways 1. Safety takes precedence in everything we do 2. Vic Otway is a strategically important asset to Beach and East Coast gas market o 15-20% of Beach 2P reserves, 5 year investment and production, Vic winter gas demand (at capacity) 3. We’ve made significant progress in Vic Otway since a
Slide 50: Appendices
OT W AY B A S I N S I T E V I S I T Appendices
Slide 51: Otway Basin – History of asset and commercial activity
Otway Basin – History of asset and commercial activity Year Asset Activity Year Commercial Activity Initial joint venture for development of Thylacine and 2001 Gas discovered at Thylacine and Geographe Geographe: Woodside Energy 51.55%, Origin Energy Resources 2004 29.75%, Benaris International NV 1
Slide 52: Beach Energy Limited Investor Relations
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 Nik Burns, Investor Relations Manager Mark Hollis, Investor Relations Advisor T: +61 8 8338 2833