Welcome Chris Jamieson General Manager Investor Relations 3
Welcome and housekeeping Time Topic Presenter 9:00-9:10am Welcome Chris Jamieson 9:10-9:30am Strategic gas overview Reg Nelson 9:30-9:50am Operational overview Neil Gibbins 9:50-10:10am Cooper Basin Western Flank Mike Dodd…
Company overview ASX 100 company with a Key global operations market capitalisation of A1.8 billion Largest Cooper Basin oil producer, sixth largest in Australia Strong balance sheet with cash of 402 million* Undrawn secured…
Actual and forecast production Q1 FY14 9.3 MMboe Record total revenue of to 270 million 8.7 MMboe Record net oil production of 8.0 MMboe 1.3 MMbbl 7.5 MMboe Gas* Record net oil sales volumes of 6.6 MMboe 4.8 MMboe to 4.5…
Share price insights Price (AUD) September Moonta-1 quarterly 1.51 Flight to 1.46 yielding large caps 1.41 1.36 1.31 1.26 Chevron JV 1.21 Origin GSA 1.16 Correction to oversold smaller cap O&G stocks 1.11 24…
Strategic gas overview Reg Nelson Managing Director 8
Beach Energy Is a. Safety, people and environment first company Global oil and gas explorer and producer with unrivalled cash generation amongst its peer group Prudent portfolio manager Will seek to. Deliver consistent superior…
Unconventional positioning Strategically targeted three key basins for unconventional acreage Cooper Basin activity: Nappamerri Trough Natural Gas with Chevron and Icon SACB JV unconventional REM and BCG plays Otway and Bonaparte…
Well commercialisation drivers Rocks Possible development scenarios (Bcf/well) Elasticity exists in potential are wide ranging, for example: economic scenarios Horizontal/vertical well completions Target horizon/s Revenue…
Gas price drivers Australian, and PNG, LNG to be a major supplier of energy to Asia Pacific region Rapid growth projected in ex-Gladstone LNG capacity Upstream gas shortages looming for domestic and LNG markets Cooper Basin…
Costs per well Cost reduction to be driven by: Pad drilling Improved drilling times Targeting a further No/minimal coring 30% reduction Scale Indicative development Depth (metres) well cost target (including fracture…
Illustrative well profiles 10 Initial production rate is not Well profiles the key to commerciality 9 The gap between 8 exploration and production Well A (0.9) 7 is reduced through Cumulative production Well B (4.2) improving…
Cracking the code Estimated ultimate recovery per well the main challenge for commerciality Well profiles now the key focus on all projects Uncovering sweet spots with focused activity around them Process improvements and…
Operational overview Neil Gibbins Chief Operating Officer 16
The Cooper Basin Prolific acreage position Main oil and gas production, reserve and resource contributor to Beach Largest onshore oil and gas producing province in Australia Australias third largest oil producing basin…
Cooper Basin acreage Prolific gross acreage position of over 56,000 square kilometres 18
Cooper Basin acreage Prolific gross acreage position of over 56,000 square kilometres 19
The Nappamerri Trough Multiple exposure to tight gas and shale opportunities Nappamerri Trough Natural Gas with Chevron and Icon Energy: 13 vertical and two horizontal wells Eight wells fracture stimulated Four flow tested SACB…
FY14 Capital expenditure guidance Expected reserves Seismic Capex additions Wells ( million) 2D km 3D km2 MMboe DEVELOPMENT Cooper Basin non-SACB JV 60 65 10 13 Cooper Basin SACB/SWQ JV 175 200 35 45 International 10 15 6…
Key Australian activities 22
Key international activities 23
Reserves and contingent resources 2P: 93 MMboe 2P and 2C: 542 MMboe Gas and gas liquids Unconventional 71 MMboe Gas and gas liquids 2P reserves 319 MMboe 93 MMboe Oil 22 MMbbl Conventional Gas and gas liquids 113 MMboe…
Western Flank Mike Dodd Exploration and Development Manager 25
The Western Flank Key facts High net back for oil and wet gas Quick drill and tie-in High flow rates Excellent understanding of the geology Established infrastructure 1,200 km2 of 3D seismic FY14 targets Net production target in…
Western Flank infrastructure Oil infrastructure 250 kilometres of flowlines 10 facilities and five trucking points 30 oil wells on production Lycium Hub: Oil received from three facilities via 180 kilometres of flowlines Export…
Average Western Flank net production (to date) Last six months in excess of net 10,000 boepd from the Western Flank 28
Callawonga EUR growth Oil EUR often increases from initial estimates 29
PEL 92 Beach 75% and operator, Cooper Energy 25% Current gross production 6,000 bopd Callawonga-7 and -8 and Windmill-1 development wells online, gross production addition of 800 bopd Butlers-7 and -8, Callawonga-9 and Windmill…
PEL 91 Beach 40% and operator, Drillsearch Energy 60% Current gross production 11,000 bopd, with further wells to be tied-in Advanced 3D seismic interpretation techniques being utilised to increase understanding of the…
Prospect life cycle Bauer South Australia Queensland Moomba Cooper Basin Structure at base Permian 32
Prospect life cycle - Bauer Bauer field exploration phase Bauer prospect 2D and 3D seismic mapping defines prospects Modiolus 3D data acquired 2008 Prospects evaluated for oil-in-place estimates and chance of success Chiton-1 4…
Prospect life cycle - Bauer Bauer field exploration phase Bauer-1 2D and 3D seismic mapping defines prospects 12 metre Namur oil Modiolus 3D data acquired 2008 Prospects evaluated for oil-in-place estimates and chance of success…
Prospect Life Cycle Bauer Bauer field appraisal/development phase Appraised by campaign drilling Bauer-2, -3 and -4 drilled September 2011 Production commenced May 2012 Bauer-5, -6 and -7 drilled July 2012 Oil initially trucked,…
PEL 104 and PEL 111 Beach 40%, Senex Energy 60% and operator Focus on the Birkhead formation Gross production of 4,300 bopd from Growler and Snatcher fields FY14 capital program Anticipated program of 18 wells, of which 13 will…
PEL 106B and PEL 107 PEL 106B Beach 50% and operator, Drillsearch Energy 50% Commercial discussions successful in establishing extended gas sales to March 2016 Connected liquids rich Canunda well in July 2013 Gross flow rate of…
International Simon Brealey Geologist International 38
International operations Romania Provides long-term growth Offshore oil and gas options Favourable fiscal regime Targeted and disciplined approach to key attributes: Egypt Technical Production growing Commercial Exploration…
Egypt Country status Recent history of political volatility and unrest Business as usual from an operations standpoint Growth potential Targeting 20+ MMbbl oil prospects El Salmiya-2 discovery to be further appraised in 2013/14…
Abu Sennan Concession Beach 22%, Kuwait Energy 50% and operator, Dover Investments 28% Nine exploration wells drilled, five successful Combined total gross flow rate from four wells of 12,300 boepd (gross) New five well appraisal…
Abu Sennan 3D seismic line NW SE Appollonia Top Khoman Base Khoman Bahariya Kharita Alamein Dol Jurassic Initial drilling campaign encountered shows/pay at all named formations except Jurassic Cross fault…
Abu Sennan trap geometry 101 Further appraisal wells to address potential upside 43
El Salmiya-2 Kharita Formation: log analysis 49 metre vertical column, 82% net to gross Operator estimates 2P reserves of 18.5 MMbbl OWC of oil and 142 Bcf of gas El Salmiya-2 production at 600 bopd (gross), taking permit total…
NS 377 and NS 385 Beach 20%, BP 50% and operator, Tri-Ocean 30% Shallow Miocene sands draped over older highs Onshore to offshore developments NS 377 field steady at 500 bopd (gross) NS 385-1 field: Current gross production of…
Tanzania Lake Tanganyika South Block Natural oil seeps indicate a working petroleum system South block area 7,200 km2 Aeromag and gravity surveys completed 2,080 kilometre 2D seismic survey completed in August 2012 Farm-out…
Indicative exploration targets 18 prospects and leads generated from high quality 2D seismic 47
Romania Est Cobalcescu block Est Cobalcescu: Beach 30%, PetroCeltic 40% and operator, Petromar 30% 1,000 km2 with 3D seismic coverage Water…
Eastern Australian gas market Steve Masters Chief Commercial Officer 49
Prolific acreage strategically located Beach is well placed to supply gas to Eastern Australia 50
Eastern Australian gas markets Strong predicted growth in Eastern Australian gas and Asian LNG demand Gladstone based export LNG projects have transformed the east coast gas market Projected gas supply is tight and demand strong The…
Upstream and downstream dynamics Equity molecules to equity projects Suppliers creating new markets via downstream investments Vertical integration driven by both domestic and export opportunities Depending on volume and…
Gas pricing then and now Traditional gas pricing A price with CPI escalation and periodic price re-openers New gas pricing paradigm Clear shift to oil-linked pricing Driven by export opportunities Potential for hybrid pricing:…
Recent gas related transactions Origin Gas Sales Agreement: Signed April 2013 High value opportunities 139 PJ over eight years, potential to extend to 173 PJ over ten years PEL 106B SACB JV Raw Gas Sales Quality counterparties…
Delhi (SACB JV and SWQ JVs) Mike Dodd Exploration and Development Manager 55
SACB JV and SWQ JVs Significant acreage with substantial reserves base 20.21% in the South Australian Cooper Basin Joint Venture (SACB JV) and 20-40% in the South West Queensland JVs (SWQ JVs) Gross area covered by various joint…
Moomba processing facility Strategically located expandable facility Current daily capacity approximately: 300 TJ gas 35 kbbl oil/condensate 600 tonnes LPG Substantial gas storage system with capacity 70 PJ Gas supplied directly…
SACB JV gas growth project Multi-well pad drilling, with four rigs expected to be operating by 2014 SIMOPS approach to fracture stimulation 30% production growth to 2015 leads to step-change in cost reductions Production costs…
Pad drilling and SIMOPS - Cowralli Multiple wells drilled from closely spaced surface locations 16 Cowralli wells drilled from two pads Drilling time and costs reduced as rig skidded from one well to another Fracture stimulation…
Moomba 191 Strong result with fracture stimulation over three stages 3.5 Moomba 191 - Total Gas Rate 3.5 Currently producing at 2.0 MMscfd Raw Gas Rate Cumulative Gas - Bscf 3 3 Reservoir performance suggests possibility…
SACB JV unconventional program Testing the western margins of the Nappamerri Trough 61
SACB JV unconventional REM Progress to Date Future micro-seismic monitoring wells Roswell-1 Fractured in VC 50 coal, flow tests ongoing Moomba-192 Conventional sand producer at 3 MMscf/d Moomba-194 Fracturing of shale and sand…
SACB JV unconventional BCG Gaschnitz-1 vertical well: Seven zone stimulation, produced at 1 MMscfd Shut in awaiting completion Van der Waals-1 being stimulated, Langmuir-1 to follow 2014 pilot production initiation with up to…
Nappamerri Trough Natural Gas Carrie Trembath Senior Geologist 64
Nappamerri Trough Natural Gas A staged and methodical exploration and appraisal program Delineation of a significant untapped resource Flexible program to adjust to results Multiple formations present Process takes time and…
Learning curve Confirmation of resource potential Proven gas saturated target zones Established ability to fracture stimulate Established ability to flow gas from target zone Initial volumetric estimates and resource booking…
Learning curve Vertical and horizontal exploration phase Geographically and vertically delineate target zones Build conceptual geological models Experiment with different stimulation techniques Increase resource booking with…
Learning curve Continued appraisal Determine production variability Build resource confidence Potential small scale pilot 68
Learning curve Pilot projects Stepwise optimisation: Refine well design and stimulation Build deliverability Scale efficiencies Targeted development 69
Learning curve Development Ongoing optimisation Competitive services Infrastructure expansion 70
Exploration concept 71
Exploring rocks regional scale Contributing to delineation of gas in place through the study of: Trough architecture Depositional environments Maturity variation Contributing to understanding of productivity through the study…
Exploring rocks well scale Contributing to delineation of gas in place through the study of: Organic content Diagenesis Porosity preservation Lithology heterogeneity Gas saturation Contributing to understanding of productivity…
Exploring rocks micro scale Contributing to delineation of gas in place through the study of: Micro porosity distribution Adsorption capacity in shales Free gas characterisation Porosity enhancement through diagenesis…
Exploring technology Increased understanding of the rocks resulting in reduced drilling times 75
Exploring technology New well design and stimulation designs are being evaluated Stimulation/ isolation methods: Sand plugs (applied) Flow through stimulation plugs (applied) Coil tubing jetting (being utilised) Coil conveyed…
Exploration and appraisal cross section Note: Well locations are approximate only and may have been shifted to show their correct structural position on the cross section Exploring the full range of possibilities 78
Holdfast-2 update Holdfast-2 drilled laterally into the Murteree shale Fracture stimulation completed Stimulation monitored by both downhole and surface micro-seismic tools as well as tiltmeters Utilised monitoring technology to…
Focused learning Boston Boston area selected for detailed program due to: Strong gas shows while drilling Good reservoir quality Proximity to raw gas line Boston-3 horizontal well drilled in the lower Murteree Shale Boston-2…
NTNG wells and proposed timeline Note: Timeline subject to third party equipment delivery, weather and joint venture and regulatory approvals 81
Financial Peter Sandery General Manager Accounting 82
Sources and uses of funds FY14/FY15 FY14/FY15 1600 Sources and uses of funds Sources and uses of funds assumptions: 1400 402 million cash balance Undrawn 1200 facilities and (as at 30 Sept) cash Secured 320 million debt facility…
Petroleum Resource Rent Tax (PRRT) Extension to onshore projects Combination certificate received for all Cooper Basin production licenses, therefore treated as one project Transitional arrangements, with choice of starting base:…
Chevron Transaction Treatment of payments Minimal guidance from accounting standards on farm-outs General practice to recognise: cash received as a reduction in carrying value; or profit/loss on sale with no value assigned to the…
Third party sales and purchases Oil Third party crude to Moomba purchased by the SACB JV Purchased at market price, net of account handling and transport costs Sales volumes increasing with new fields and pipelines Accounting…
Appendices 87
Bonaparte Basin Underexplored with conventional and unconventional targets 88
Otway Basin Existing infrastructure and history of producing fields 89
Chevron transaction summary Subject to joint venture approvals, the key work program elements envisaged across the two permits involve an initial exploration program to be followed by pilot production programs PEL 218 potential…
SACB JV unconventional and infill Moomba wells - nomenclature Current Well Name Previous Well Name Purpose Status Roswell 1 Roswell 1 Vc 50 coal, REM, Microseismic Flowing from Vc 50 post frac Roswell 2 Roswell 2 Horizontal Roseneath…
Contact Information Head office 25 Conyngham Street Glenside SA 5065 Tel: +61 8 8338 2833 Fax: +61 8 8338 2336 Website: www.beachenergy.com.au Chris Jamieson General Manager Investor Relations Tel: +61 8 8338 2833 Mob: +61 8…
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