Slide 1: FY18 Results & FY19 Outlook
For personal use only Sole-4 subsea Sole-3 tree 6deployment Flow-back July 2018 Sole-3 flow-back 6 July 2018 Sole-3 flow-back, sunrise 5 July 2018 FY18 Results & FY19 Outlook Investor presentation 13 August 2018
Slide 2: Important Notice – Disclaimer
Important Notice – Disclaimer This investor presentation (“Presentation”) is issued by Cooper Energy Limited ABN 93 096 170 295 (“Cooper Energy” or “COE”). Summary information: This Presentation contains summary information about Cooper Energy and its activities as at the date of this Presentation a
Slide 3: FY18 results: 4 features
FY18 results: 4 features For personal use only 1 Gas strategy delivering growth: production up 54%; profit up 213%; and cash flow up 441%. 2 Sole project on track : 64% complete, critical technical and cost milestones completed, tracking within cost and schedule. 3 Uncontracted gas is being leverage
Slide 4: FY18 key outcomes
FY18 key outcomes Gas strategy delivered financial growth and driving new initiatives, Sole passes critical milestones and on track For personal use only • HSEC: zero lost time injuries and zero reportable environmental incidents, inclusive of 112 days of offshore drilling and workover • Sole Gas Pr
Slide 5: Safety
Safety No lost time injuries or environmental incidents. Ongoing enhancement of management systems and improvement program driven by value of Care. For personal use only • TRIFR* = 4.07 (FY17 = 1.98) Hours worked Frequency rate − zero lost time injuries (LTIs) 500 ‘000 10 • Compliance as a new offsh
Slide 6: FY18 Key financial results
FY18 Key financial results For personal use only $ million unless otherwise indicated FY18 FY17 change Sales revenue 67.5 39.1 ▲ 73% Gross profit 29.0 16.6 ▲ 75% Gross profit/Sales revenue % 43.0% 42.5% ▲ 1% Statutory profit before tax 31.0 (9.5) ▲ 426% Statutory profit/(loss) after tax 27.0 (12.3)
Slide 7: Underlying NPAT movement
Underlying NPAT movement Addition of gas business and higher oil volume and prices the drivers for profit turnaround For personal use only $ million To be updated Underlying NPAT 1.3 -4.5 9.7 Includes, acquisition & integration costs, Tunisian 3.8 -1.2 redundancy 0.7 21.9 -0.2 -15.8 2.8 9.8 -8.7 FY1
Slide 8: Movement in cash
Movement in cash Cash from operations, capital raising and debt draw-down contributed to increase For personal use only +48.1 -4.6 +113.6 $ million +127.2 22.4 Other financial -198.5 assets & -21.0 +0.7 +41.9 -40.2 +46.1 investments -8.6 +3.8 Other financial 0.7 -12.4 -6.7 assets & investments Cash
Slide 9: Production and Reserves at June 2018
Production and Reserves at 30 June 2018 Production up 54%. Gas reserves up 350% on Sole FID & field performance. 2P gas up to 309 PJ. For personal use only Production 2P Reserves MMboe MMboe 1.5 60 54.1 MMboe 52.4 MMboe Cooper Basin oil 50 7.0 PJ 309 PJ 305 PJ 1 40 4.0 PJ Indonesia oil 30 0.5 20 Oil
Slide 10: Offshore Otway Basin FY18
Offshore Otway Basin FY18 Gas production, new gas contracts commenced and further contracts under negotiation For personal use only FY18 outcomes Production FY18 FY17 • Successful workover lifted Casino production from April Sales gas PJ 7.0 4.0 • Minerva continued to exceed expectations Condensate
Slide 11: Sole Gas Project
Sole Gas Project 64% complete at end July 2018, within schedule and budget ORBOST GAS PROCESSING FACILITY For personal use only Works By - APA Group Plant Upgrade & Operations ✓ Engineering progressing ✓ Procurement package being delivered ✓ Site works construction progressing Orbost Gas Plant: Inle
Slide 12: Sole drilling program
Sole drilling program Completed, reservoir performance & gas composition in line with pre-drill expectations. Production capability exceeds plant design rate. For personal use only • Sole-3 and Sole-4 suspended for future connection following flow-back operations • Reservoir performance in line with
Slide 13: Gas strategy review: six years on
Gas strategy review: six years on 2012: opportunity identified, analysis conducted, strategy initiated For personal use only Cooper Energy 2012 Presentation to Good Oil Opportunity outlined and strategy presented Conference Sept 2012 13
Slide 14: Gas strategy review: six years on
Gas strategy review: six years on Portfolio targeted low-cost supply close to infrastructure and market For personal use only Cooper Energy 2012 2012 Opportunity outlined and strategy presented Onshore Otway added through Somerton Energy 14
Slide 15: Gas strategy review: six years on
Gas strategy review: six years on Gippsland position began with Bass Oil and then acquisition of BMG For personal use only Cooper Energy 2012 2014 Opportunity outlined and strategy presented Gippsland Basin through Bass Oil and BMG 15
Slide 16: Gas strategy review: six years on
Gas strategy review: six years on BMG position meant Cooper Energy the logical buyer of interest (50%) in Sole and Orbost For personal use only 2015 Cooper Energy 2012 Gippsland position built with 50% interests in Opportunity outlined and strategy presented Sole and Orbost Gas Plant 16 Orbost Gas P
Slide 17: Gas strategy review: six years on
Gas strategy review: six years on Victorian asset acquisition added offshore Otway and 100% of Sole, Orbost & Patricia Baleen For personal use only Cooper Energy 2012 2016 Opportunity outlined and strategy presented Victorian gas asset acquisition: Casino Henry, Minerva; and move to 100% of Sole and
Slide 18: Gas strategy review: six years on
Gas strategy review: six years on Now - portfolio style gas business in place, prices increasing & creating more opportunities For personal use only Cooper Energy 2012 Cooper Energy 2018 Opportunity outlined and strategy presented Gas business portfolio in place ACCC Interim Report July 2018 p29 18
Slide 19: Plans for FY19 – FY20
Plans for FY19 – FY20 Shift to completing Sole, realising potential and the additional value from the portfolio For personal use only 1. Gas production • Increasing from 6 PJ to ~ 30 PJ pa in FY20 • Sole start-up delivers the targeted multi-gas hubs for optimising supply Otway Hub to south-east Aust
Slide 20: Southern states gas markets: ACCC view
Southern states gas markets: ACCC view For personal use only Prices aligning with LNG netback 2019 expected prices Average monthly commodity prices offered for 2019 supply against Expected 2019 wholesale gas commodity prices in the East Coast Gas Market contemporaneous expectations of 2019 LNG netba
Slide 21: Gas marketing
Gas marketing Indicative production profile from 2P gas reserves For personal use only PJ gas from 2P reserves Under negotiation Contracted 12 11 11 10 9 9 8 Uncontracted 10 21 11 Note 1. Assumes: • Sole sales commence July 2019 20 20 20 20 20 20 20 • Henry development well Sole 16 FY20 H1 Commissio
Slide 22: FY20 offshore campaign for growth after Sole
FY20 offshore campaign for growth after Sole Preparation for a 4-well campaign from Dec quarter 2019 - a key workstream in FY19 For personal use only 1 Henry-2 sidetrack 1 • To produce 24 PJ undeveloped Reserves (net to Cooper Energy) • Targeting initial production uplift of ~20 TJ/day gross 2 3 Otw
Slide 23: Event pipeline; expected significant activities
Event pipeline; expected significant activities Drilling, development and commercial program to December 2019 For personal use only FY19 H1 FY19 H2 FY20 Drilling & • Sole-4 production well • Sole gas to plant • Henry development well developing • Sole-2 abandonment • Sole commissioning • 2 x Otway g
Slide 24: Production outlook
Production outlook Gas production to increase more than 5 times from existing resources and projects For personal use only Indicative1 production outlook MMboe Sole commences Henry development well 6 5 Exclusive of Sole 4 commissioning gas. 30 PJ 32 PJ Commissioning planned to Gas 3 commence in Q4 F
Slide 25: FY19 production and capex guidance
FY19 production and capex guidance Production For personal use only Crude oil & by product Gas PJ Total MMboe Notes condensate bbl • Does not include gas production from Sole which is due to Total ~6 ~238,000 1.4 commence supplying gas to plant for commissioning in Q4 FY19 Indicative incurred* capit
Slide 26: Cash and expenditure in lead up to Sole cash flow
Cash and expenditure in lead up to Sole cash flow Optimising for cash and business momentum in a favourable market For personal use only Cash and undrawn facilities Capital requirements anticipated $ million at 30 June 2018: $ million • Complete Sole Gas Project Current • Other expenditure including
Slide 27: Position summary
Position summary Gas strategy gains flowing through, Sole on track, upside emerging in gas contracting and drilling campaign for next growth wave For personal use only 1. Gas strategy delivered growth in FY18 and has Cooper Energy positioned to grow further and faster to FY21 2. Sole on track, major
Slide 28: Appendices
For personal use only Appendices
Slide 29: Cooper Energy snapshot
Cooper Energy snapshot Portfolio built around winning position on cost curve For personal use only Key statistics* Proved & Probable Reserves 52.4 MMboe Contingent Resources (2C) 34.9 MMboe Production FY19 guidance 1.4 MMboe Market capitalisation $745 million Cooper Basin Net cash/(debt) $111.0 mill
Slide 30: Cooper Energy portfolio: focussed on southeast Australia
Cooper Energy portfolio: focussed on southeast Australia 309 PJ 2P and 125 PJ 2C gas and exploration acreage located close to market and infrastructure For personal use only Cooper Basin: oil production • historical production source • production of ~230 kbbl oil pa • low cost operations Otway basin
Slide 31: Statutory and underlying profit
Statutory and underlying profit Significant items essentially as reported previously in half-year accounts; Orbost Gas Plant value addition the major item in reconciliation of statutory to underlying profit For personal use only 12 months ending 30 June 2018: $ million Net profit after tax 27.0 Adju
Slide 32: From the ACCC Gas inquiry July interim report
From the ACCC Gas inquiry July interim report Supply tightly balanced Prices paid in short term trading markets For personal use only ACCC forecast 2019 southern states gas supply / demand balance Daily prices paid in domestic short-term markets, July 2017 to June 2018 PJ potential 79 68 370 350 Sup
Slide 33: Profile of contracted and uncontracted gas by project
Profile of contracted and uncontracted gas by project (PJ) Existing assets & projects offer growth over 6 years before exploration opportunities considered For personal use only Gas sales profile by project Manta uncontracted contracted & uncontracted PJ pa Sole uncontracted Sole contracted Manta (s
Slide 34: Minerva Gas Plant
Minerva Gas Plant Strategically located offering gains in gas price, processing, recovery rates & production For personal use only Minerva Gas Plant (10%)* * Equity to increase to 50% on completion of acquisition Minerva Gas Plant acquisition by Casino Henry Joint Venture as announced 1 May 2018 • C
Slide 35: Exploration: Otway Basin offshore
Exploration: Otway Basin offshore Planning for drilling of two exploration wells in 20201 For personal use only • Several prospects on trend with producing fields high-graded as potential candidates for 2020 drilling campaign • Easily defined 3-way structural traps • Completed 3D seismic inversion s
Slide 36: Otway Basin, Penola Trough onshore
Otway Basin, Penola Trough onshore Haselgrove drilling results confirm prospectivity for deep conventional gas For personal use only South Australia • Haselgrove-3 discovery in adjoining PPL 62 has confirmed conventional gas prospectivity of the Sawpit Sandstone at depths below previous producing le
Slide 37: Gippsland Basin
Gippsland Basin Cost competitive resource, existing plant and Sole production planned for FY19 For personal use only Sole gas project Key assets (all 100% equity and Operator) • FID 29 August 2017 • Sole gas project (VIC/L32) • Sole gas project proceeding to first gas sales mid-2019 • Manta gas reso
Slide 38: Schematic of Sole-2 and Sole-4 development wells
Schematic of Sole-2, 3 and 4 For personal use only Sole-4 development well 2018 Sole-2 appraisal well 2002 745 metres TVDSS Top reservoir depth: 753.1 metres TVDSS, 1084.5 metres MDRT Top reservoir depth: 770 metres MDRT Net pay thickness 115.5 metres measured along welllbore Net pay thickness: 69.3
Slide 39: Exploration: Gippsland Basin
Exploration: Gippsland Basin New prospectivity adjacent to existing Patricia Baleen infrastructure For personal use only • VIC/P72 adjoins VIC/L21 (Cooper Energy 100%) which holds the depleted Patricia Baleen gas field and its associated subsea production infrastructure VIC/P72 connected to the Orbo
Slide 40: Manta gas field
Manta gas field Contingent Resources plus significant deeper exploration potential For personal use only Geological setting - a structural three-way dip, one-way fault closure against a NE-SW trending fault - Manta-1, exploration well drilled in 1984, and Manta-2A, production well drilled in 2006 -
Slide 41: Cooper Basin FY18
Cooper Basin FY18 Production up 8%, high and increased cash margin of $52.47/bbl, Reserves maintained For personal use only Key figures FY18 FY17 Production Crude oil kbbl 0.27 0.25 Average oil price A$/bbl 85.55 63.54 Direct operating cost A$/bbl 33.08 29.77 2P Reserves1 MMbbl oil Developed 1.4 1.1
Slide 42: Reserves and Contingent Resources at June 2018
Reserves and Contingent Resources at 30 June 2018 1P (Proved) 2P (Proved + Probable) 3P (Proved + Probable + Possible) Reserves Unit For personal use only Cooper Otway Gippsland Total1 Cooper Otway Gippsland Total1 Cooper Otway Gippsland Total1 Developed Sales Gas PJ 0 15 0.0 15.2 0 26 0 26.4 0 36 0
Slide 43: Notes on calculation of Reserves and Resources
Notes on calculation of Reserves and Resources Notes on calculation of Reserves and Contingent Resources Cooper Energy has completed its own estimation of Reserves and Contingent Resources for its fully-operated Gippsland Basin assets, and elsewhere based on information provided by the permit Operat
Slide 44: Funding profile
Funding profile A$250 million reserve-based project financing facility for Sole development + A$15 million working capital facility For personal use only A$250 million reserves-based project financing facility • Senior secured A$ syndicated facility agreement with ANZ, Natixis, ABN AMRO, ING and NAB
Slide 45: South-east Australia gas supply costs in 2020
South-east Australia1 gas supply costs in 2020* Cooper Energy projects are cost competitive for south-east Australia For personal use only Delivered Melbourne city gate cost for gas from eastern Australia available for delivery to domestic market in 2020* AUD / GJ Typical peak daily quantity for 14
Slide 46: Senior Management Team
Senior Management Team For personal use only Company Secretary & General Manager, General Manager, General Manager, Legal Counsel Operations Iain Development Commercial & Business Alison Evans MacDougall Duncan Clegg Development Eddy Glavas General Manager, General Manager, Managing Director Chief F
Slide 47: Senior management
Senior management For personal use only Managing Director General Manager, Development Company Secretary & General Manager, Commercial David Maxwell Duncan Clegg Legal Counsel & Business Development Alison Evans Eddy Glavas David Maxwell has over 30 years’ Duncan Clegg has over 35 years’ experience
Slide 48: Abbreviations
Abbreviations $, A$ Australian dollars unless specified otherwise For personal use only Bbl barrels of oil Boe barrel of oil equivalent EBITDA earnings before interest, tax, depreciation and amortisation FEED Front end engineering and design kbbl thousand barrels m metres MMbbl million barrels of oi