Macquarie Private Wealth 15 November 2010 Reg Nelson Managing Director Macquarie Private Wealth Slide 1
1. The Beach strategy 2. Highlights of the year 3. Positioned for growth 4. Key catalysts for FY11 Macquarie Private Wealth Slide 3
1. The Beach strategy Macquarie Private Wealth Slide 4
The Beach strategy: A parallel pathway to growth Large project development Capital asset growth through resource play development Book gas (e.g., shale gas) Market recognition / deal flow reserves Proof of concept/ pilot plant…
2. Highlights of the year An active last twelve months FY10 production Reserves and resources Operations highlights Cooper oil and gas Egypt oil Gippsland oil Geothermal Other Macquarie Private Wealth Slide 6
An active last twelve months Managed a once in 30-40 year flood event Expanded the unconventional footprint in high potential areas Signed three MOUs related to gas commercialisation Acquired highly prospective onshore acreage…
FY10 production Total for year of 7.3 MMboe Production (approximately 20,000 boepd) 10 9 Consistent production 8 performance - Cooper flooding 7 main driver in lower production 6 Oil and gas liquids accounted for 5 46% of…
Reserves and resources snapshot: 30 June 2010 2P Reserves: 2P Reserves & Contingent 66 MMboe Resources: 363 MMboe 2P Reserves are a fraction of the total resource base Cooper / Eromanga Gippsland Egypt Cooper / Eromanga 2P…
Operations highlights Cooper oil and gas Increased acreage position, including farmin to ATP 855P, strengthening Beachs shale gas holdings Ongoing western flank oil exploration success: Oil discoveries in PEL 92 (Butlers, Perlubie,…
Operations highlights Egypt oil Development drilling in North Shadwan expected to yield recoverable reserves of 2.2 MMbbl net to Beach Nearshore oil fields in Gulf of Suez being developed, first production anticipated during first…
3. Positioned for growth GAS Macquarie Private Wealth Slide 12
The gas market Demand Domestic gas demand in Eastern Australia is projected to grow by 3.4% per annum from 2010 to 2025 under the Core Energy Group Reference Demand Scenario. Eastern Australia Domestic Gas Demand 1,600 1,400…
The gas market Contract vs unfulfilled demand Existing Cooper, Gippsland and other large contracts are set to expire by the middle to late this decade. This creates the potential for new sources to supply this market. Domestic…
The gas market International LNG Asian LNG Demand and Supply: Unfulfilled Demand: Projected Asian Uncontracted LNG Demand - Firm Uncontracted Demand by Country - Based on Contracts, Likely Extensions and Likely Contracts Likely…
How will Beach capitalise on this gas market 1. Cooper Basin GLNG project supply opportunity Unconventional shale gas 2. Gippsland Basin Macquarie Private Wealth Slide 16
Cooper Basin: 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…
Cooper Basin: Unconventional shale gas What is shale gas Gas recovered from high TOC* shale/ mudstone at depth Why shale gas A cleaner fuel for a lower carbon future Fewer wells required for CSG equivalent CSG** production Unlike…
Unconventional to overtake conventional gas by 2020 Contribution to eastern USA: gas production from Australian gas production 48 contiguous states Source: Core Energy Group; historic data from ABARE. Source: Core Energy Group…
Cooper Basin: Real estate play Will Australian shale gas real estate mirror values being realised in the US Some recent US shale gas transactions Deal Location Date Value Chevron - Atlas Marcellus Nov 10 US3.2b Mitsui - Anadarko…
Cooper Basin: Building a dominant shale gas acreage Nappamerri Trough potential gas in place than 200TCF* Extensive and thick shale packages Similar properties to the best US shale plays Nappamerri Trough total area 10,000 km2…
Cooper Basin: Initial testing for shale gas Encounter-1 now drilling: This will be followed by Holdfast-1 Gas in place (GIP) measurement a key objective: Extensive coring Evaluate gas content of shale Determine porosity and free…
Cooper Basin: Preparing for shale gas commercialisation Sundance Energy Limited alliance Domestic Market to build knowledge relating to unconventional shale oil and gas Electricity (ATCO) LNG ITOCHU MOU Residential and Commercial…
Cooper Basin gas: Indicative shale gas development timeline Encounter Design pilot Pilot Pilot BOOK FIRST GAS BOOK GAS and production production development GAS SALES RESOURCE Holdfast well Q3 well RESERVE vertical exploration…
Gippsland Basin gas: New horizons Offshore (Beach 30%) Refocus from oil to a potentially larger gas-liquids project Onshore Beach earning up to 50% in PRL 2 10M expenditure for Beach to earn 15% Option to spend a further 40M…
3. Positioned for growth OIL Macquarie Private Wealth Slide 26
The Australian liquids market: Production declining Annual Cooper Basin Oil Production (BBls) Australia is experiencing 12,000,000 significant decline in all major oil 10,000,000 producing regions: 8,000,000 6,000,000…
Global oil market: Supply peak looming = pricing pressure Oil remains the dominant fuel in the primary energy mix to 2035 The oil price needed to balance oil markets is set to rise Oil usage increase to be driven by population and…
Expanding the African portfolio: Egypt Macquarie Private Wealth Slide 29
Egypt: A balanced and prospective portfolio Interests in prolific and emerging hydrocarbon basins Enhanced portfolio of near- term development & exploration opportunities Focus on oil Abu Sennan could be another PEL 92, but…
Egypt: Abu Sennan Concession Beach interest 22%* Multiple target horizons Numerous prospects Four well program approved 3D seismic coverage Existing GPZZ discovery to be over entire concession appraised *Subject to EGPC &…
Egypt: Mesaha Concession Beach interest 15%* One of the largest concession areas in Egypt at 57,000km2 Wildcat basin with the right ingredients 2D seismic activities underway to delineate basin architecture Potential for…
Expanding the African portfolio: Tanzania Macquarie Private Wealth Slide 33
Tanzania: An emerging big oil province Beach 100% Petroleum Sharing Agreement signed in June 2010 Significant success in nearby analogous areas (Uganda) Potential for 200 MMbbl + discoveries Geophysical exploration commenced…
Tanzania: Lake Tanganyika - Initial objectives Eleven year PSA structured into phases of 4 + 4 + 3 years Phase 1 minimum commitment expenditure of US7 million: Phase 1 primarily involves geophysical activities Prospects & leads…
Tanzania: Attracting investment by the Majors Various phases of high-level exploration undertaken since 1952 Very few exploration wells drilled Early wells drilled with poor quality or inadequate seismic control Tanzania has now…
4. Key catalysts for FY11 Macquarie Private Wealth Slide 38
Key catalysts for FY11 Project Q1 FY11 Q2 FY11 Q3 FY11 Q4 FY11 Drilling, fracture stimulation and evaluation Cooper Basin unconventional gas of Encounter-1 & Holdfast-1 exploration wells Implement production pilots to convert 2C…
Thank you Tanzania: Lake Tanganyika Macquarie Private Wealth Slide 40
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