Beach Energy Limited Investor Morning Sydney - 6 April 2011 Beach Energy Limited, Investor Morning 6 April 2011 Slide 1
Welcome Chris Jamieson Investor Relations Manager Beach Energy Limited, Investor Morning 6 April 2011 Slide 2
Welcome and housekeeping Time Topic Presenter 8:30-9:00 am Registration 9:00-9:05am Welcome Chris Jamieson 9:05-9:25am Strategic overview Reg Nelson 9:25-9:40am Operational overview Neil Gibbins 9:40-9:55am Positioned for growth in…
Strategic overview Reg Nelson Managing Director Beach Energy Limited, Investor Morning 6 April 2011 Slide 4
Beach Energy Limited - A unique value proposition Beach Energy Limited, Investor Morning 6 April 2011 Slide 6
Operational overview Neil Gibbins Chief Operating Officer Beach Energy Limited, Investor Morning 6 April 2011 Slide 7
Safety priority Safety takes precedence in all operations Low Supervision Classification for Production Operations (SA) by PIRSA HSE Strategic Planning 3 year plan Continued support for APPEA Stand Together for Safety campaign…
Key growth pillars High margin Cooper Basin: Western Flank Egypt: Material oil Western Desert opportunities Gulf of Suez East African Rift: Tanzania Large scale gas Cooper Basin conventional resource to reserves Cooper…
Large Resource base to build Reserves 2P Reserves 2P Reserves & Contingent Resources 66 MMboe* 363 MMboe* 2P Reserves are a fraction of the total resource base Cooper / Eromanga Other Cooper / Eromanga 2P Other Material…
Solid production platform Beach Operated Western Flank Oil FY11 guidance of 7 MMboe* Gross Expected Ultimate Recovery (MMbbl) 12 Consistent Cooper Basin production performance 10 Short-term opportunities for 8 production growth…
A one in forty year flood event Typical conditions 2010 flood event Anticipating better conditions for the Cooper Basin in 2011 Beach Energy Limited, Investor Morning 6 April 2011 Slide 12
FY11 capital requirements HY11 FY11 Forecast million million Development capital Cooper Basin 32.1 90.2 BMG 0.8 0.8 Egypt 0.8 5.7 Total development capital 33.7 96.7 Exploration capital Australasia 8.7 52.0 Unconventional 16.8…
Key catalysts for 2011 Multiple near-term catalysts with material re-rating potential Beach Energy Limited, Investor Morning 6 April 2011 Slide 14
Positioned for growth in Eastern Australian gas markets Steve Masters Chief Commercial Officer Beach Energy Limited, Investor Morning 6 April 2011 Slide 15
Prolific acreage position Beach owns a strategic suite of assets and infrastructure, positioning it to supply gas for generations to come Beach Energy Limited, Investor Morning 6 April 2011 Slide 16
Australian pipeline growth Pre - 1995 Post - 1995 Approx 10,500 km Approx 20,000 km Point-to-point pipelines Interconnected pipelines Majority government owned Privatisation Source: APA investor presentation, April 2010 Beach…
Eastern Australian gas markets are growing Current domestic gas demand 700 PJ per annum: 100 PJ from Cooper Basin Domestic gas demand expected to grow to 1100 PJ by 2025*: Driven by power generation Higher demand scenarios…
Excellent prospects to increase Cooper Basin supply Uncontracted Demand by Country - Based on Likely Supply Strong predicted growth in Eastern 100 Australian gas demand 80 60 Strong predicted growth in Asian LNG mtpa 40…
Excellent prospects to increase East Coast gas supply Strong existing customer Existing relationships customers extension Developing new customers and contracts opportunities Existing customers Cooper Basin is likely to become…
The impact of eastern Australian LNG projects Australian East Coast 2P Reserves* Two projects have achieved FID committing 16 mtpa capacity 7.0% BG Group 2.3% 18.7% Santos / PETRONAS 4.2% BG Group has recently / TOTAL / Kogas…
Beach is an attractive supply option for gas customers Growing Cooper Basin reserves and contingent resources base Opportunities to add to reserves and resources in other basins close to markets Potential to develop scalable…
SACB/SWQ JV Significant long-term resource potential Gordon Moseby General Manager - Business Review and Planning Beach Energy Limited, Investor Morning 6 April 2011 Slide 23
SACB/SWQ JV Its importance to Beach Equity interests of approximately 20% for the SACB JV and 23% for the SWQ JV A significant land holding of 26,800 km2 Situated in a proven and prolific basin Cooper Basin cumulative gross…
SACB/SWQ JV Its importance to Beach A diversified product stream delivering gas, gas liquids and oil to multiple markets Synergies with other Beach operational areas Significant infrastructure made up of: Wells accessing Permian…
SACB/SWQ JV Ultimate potential is significant Source: Santos Remaining gross unrisked resource potential of over 4 billion barrels of oil equivalent Beach Energy Limited, Investor Morning 6 April 2011 Slide 26
SACB/SWQ JV Resource to reserves conversion Current 2P reserves of 63 MMboe* 2C resources of 262 MMboe* Resource to reserves conversion of 12.0 MMboe (net to Beach) recently announcement by Santos Implies a 170% 2P reserves…
SACB/SWQ JV Resource conversion drivers Resource to reserves conversion driven by: Infill drilling (denser well spacing) More focused fraccing of individual zones Multiple wells per pad delivering lower unit costs More efficient…
SACB/SWQ JV - GLNG Project supply opportunity Discussions ongoing between SACB JV and Santos for the supply of 750 PJ to Santos GLNG Project*: Beachs share of supply would be 152 PJ 15 year contract - proposed to commence in 2014…
SACB/SWQ JV - Summary Significant remaining resource potential New technology is unlocking this potential Reserves growth significantly exceeds current production levels Proposed GLNG contract would underpin gas production…
Questions ..and then morning tea Beach Energy Limited, Investor Morning 6 April 2011 Slide 31
The Cooper Basin shale gas potential Mark Pitkin Coordinator - Unconventional Resources Beach Energy Limited, Investor Morning 6 April 2011 Slide 32
A commanding Cooper Basin shale gas acreage position PEL-218 (Permian JV) potential shale gas in place 40-80 Tcf Similar properties to successful US shale plays Encounter-1 drilled late 2010: Target zone 30% thicker than…
The importance of REM section for shale & tight gas Thick target section Gas charged Over-pressured Favourable mineralogy Key attributes confirmed to date provide significant encouragement Beach Energy Limited, Investor…
Nappamerri Trough thick Early Permian shale sequence Shale play: Roseneath 80-200 metre thick Epsilon 100 metre shale Murteree 80 metre thick Over-pressured tight gas play: Epsilon mid and basal zones sandier Patchawarra multiple…
Over-pressured at REM level Pressure (psi) Normally pressured: 0 0 2000 4000 6000 8000 10000 Water gradient to surface All Formations outside Trough 0.43 psi/ft 1000 Over-pressured: Regional pressure data over-pressures…
Favourable mineralogy 40-60% Clay: 100 0 Barnet Haynesville Eagle Ford Utica Similar to Barnett and Haynesville Nappamerri 80 20 Barnet Eagle Ford 10-20% Carbonate: Haynesville Utica Carbonate in the form of siderite Sil…
Comparison to US plays Haynesville Parameter PEL 218 Permian REM Barnett (Texas) (Louisiana) Depth (metres) 2,900 3,500 1,650 3,000 3,050 3,950 Shale thickness 120 260 75 150 60 90 (metres) Total Organic Carbon 35 5 4 Av% Pressure…
Vertical well exploration program - key objectives Goals: Determine gas in place volumes Design fracture stimulation program Understand gas flow potential Book gas resource Prioritise targets for development Importance of early…
Key results from Encounter-1 Target section thicker than expected at 393 metres and therefore more volume Target section gas saturated and over-pressured No water bearing permeable sections intersected in, above or below…
Shale drilling - Cost reduction driven by technology Advancements in multi-stage fracture stimulation techniques has driven cost efficiencies in US oil and gas developments Pad drilling is enabling further equipment cost…
Shale gas exploration Stage 1 indicative timeline Proof of concept: 2010 2011 Drill and core Holdfast-1 & Fracture BOOK GAS Pilot Encounter-1 stimulate wells Flow test RESOURCE Production vertical 8 zones/well Wells exploration…
Next steps With successful proof of concept: Design pilot horizontal wells targeting highest yield zones in REM Drill further vertical delineation wells across acreage Expand production pilot to multiple wells Seek to…
Dominant Western Flank oil acreage position Mike Dodd Exploration and Development Manager Beach Energy Limited, Investor Morning 6 April 2011 Slide 44
Cooper Basin Western Flank Oil Western Flank oil is a core contributor to Beach due to: High net back per barrel Beach holding strong equity positions Quick drill and tie-in periods Established infrastructure and surety of…
Impress Energy acquisition Beach will have 100% ownership of Impress Energy through compulsory acquisition Impress holds a 40% interest in highly prospective Western Flank oil acreage On 21 February, Senex Energy (Operator)…
Western Flank Drilling Program Beach operated Five exploration wells in PEL 91 (Beach 40%) Eleven wells in PEL 92 (Beach 75%), seven exploration and four development Targeting exploration prospects of 0.5 - 5.5 million barrels of…
Namur Sandstone PARSONS-1 Namur Sandstones plays: Widespread high net to gross braided channel environment Subtle structures delineated on 3D seismic data Very high permeability Parsons-3 clean up flow 5,200 bopd Parsons-1…
Birkhead Formation Channel Sand Growler 3 Birkhead Sandstones plays: Deposited in meandering channels Do not necessarily rely on structural traps can be extensive accumulations Can be imaged on seismic data Beach Energy…
Birkhead Formation Channel Sand Source Senex, 2011 Birkhead channels can be imaged on seismic, significantly reducing risk Beach Energy Limited, Investor Morning 6 April 2011 Slide 50
2011 Drilling Program Expected outcomes Reserve additions 6 million barrels of oil net to Beach Increased pipeline capacity Beach operated production 4,500+ barrels of oil per day net to Beach Non-operated production 1,000+…
Big oil potential, Tanzania Danny Burns International and New Ventures Manager Beach Energy Limited, Investor Morning 6 April 2011 Slide 52
Tanzania Attracting the majors Various phases of exploration undertaken since 1952 with very few exploration wells drilled Early wells drilled with poor quality or inadequate seismic control Tanzania has now attracted attention…
Rift systems - Gulf of Suez vs Lake Tanganyika Gulf of Suez: Gulf of Suez Lake Tanganyika Rift valley system Area approximately 9,000km2 800+ exploration wells drilled 9.5 billion barrels of oil discovered Lake Tanganyika Rift…
Rift systems - Lake Albert, Uganda Tullow identified this East African rift basin opportunity in 2001 Lake Albert area approximately 5,300km2 The Lake Albert rift basin is part of a string of Pliocene-Miocene age rift basins that…
Rift systems - Lake Tanganyika, Tanzania Beach 100% Underexplored area with high potential Lake Tanganyika South acreage is approximately 7,000 km2 Potential for large ( 200 MMbbl) discoveries: Natural oil seeps on Lake…
Lake Tanganyika natural oil seeps Beach Energy Limited, Investor Morning 6 April 2011 Slide 57
Lake Tanganyika South vs Lake Albert - Analogy Lake Tanganyika South Seismic Line 2D Lake Albert Seismic Line 3D 1.5 sec - 2.0 sec - 2.5 sec - Deeper water in Lake Tanganyika Source: Beach Energy Ltd Project Probe…
Lake Tanganyika South play types Typical rift graben/half graben geometries Seismic indicates large structures with bounding faults Play types are: Stratigraphic traps Fault traps Three way structured traps against basement…
Lake Tanganyika South Beach exploration program Eleven year PSA structured into phases of 4 + 4 + 3 years Phase 1 minimum commitment expenditure of US7 million One exploration well required in Phase 2 & Phase 3 Phase 1 planned…
Egypt Established and growing portfolio Simon Brealey Exploration New Ventures Beach Energy Limited, Investor Morning 6 April 2011 Slide 61
Egypt overview Beach interests range 15 22% An established and growing portfolio Exposure to prolific and emerging hydrocarbon basins: Portfolio of near-term development & exploration opportunities North Shadwan expected to…
Abu Sennan concession Beach 22%* 3D seismic coverage over whole concession which has been the key to success for Apache in the surrounding tenements Initial four well program underway, with the potential for at least ten wells…
Gulf of Suez Beach 20% interest High potential Gulf of Suez acreage Three existing oil discoveries: NS 377 and 385 (near shore fields) NS 394 Burtocal First oil expected in 2011 North Shadwan delays due to pipeline operator…
Mesaha concession Beach interest 15%* One of the largest concession areas in Egypt at 57,000km2 Wildcat basin with the right ingredients Possible rift basin similar to Gulf of Suez/Lake Albert/Lake Tanganyika Potential for…
Closing remarks Reg Nelson Managing Director Beach Energy Limited, Investor Morning 6 April 2011 Slide 66
Strong and diverse growth potential Current share price does not reflect Beachs growth portfolio Beach Energy Limited, Investor Morning 6 April 2011 Slide 67
Contact information Beach Energy Limited 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 Investor Relations Manager Tel: +61 8 8338 2833…
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