Beach Energy Investor Morning Demonstrating resilience in a challenging market 5 November 2015
Welcome Time Topic Presenter 9.00 9.05 Welcome Derek Piper 9.05 9.15 Investor Relations Update Chris Jamieson 9.15 9.25 Overview Neil Gibbins 9.25 9.40 Proposed Drillsearch Merger Neil Gibbins 9.40 10.10 Operational Outlook Mike…
Investor Relations Update Chris Jamieson Group Executive External Affairs
Our refreshed vision, purpose and values Vision To be Australias premier multi-basin upstream oil and gas company Purpose To deliver sustainable growth in shareholder value Values Safety: Takes precedence in everything we do…
Share price performance A challenging year across the sector 1.20 1.00 (28%) 0.80 (42%) (45%) 0.60 (50%) 1 Beach Peers Brent oil (US) Brent oil (A) 0.40 Oct-14NovNov-14DecDec-14Jan…
Shareholder register perspectives October 2014 October 2015 Business model leveraged to oil recovery Investor Type 30% 32% Institutional 48% Low cost / high margin Corporate Retail operated oil 1% 69% 20% Increasing…
Liquidity trends Chi-X platform accounting for a material portion of total trading volumes Share of Trading Volumes 100% 17.5%: Average Chi-X share of trading over past two years 80% Average Daily % of 60% Trading Volumes ASX…
Overview Neil Gibbins Acting Chief Executive Officer
Four-pillar strategy Optimise our core Build a Pursue other Maintain in the Cooper complementary compatible growth financial strength Basin gas business in opportunities in east coast basins Australia and nearby Growth in…
Cooper Basin acreage A prolific onshore hydrocarbon basin, with Beach gross acreage of c.50,000 km2 11
Broad opportunity set in Cooper Basin Maximise returns from existing assets Safety improvements Operating efficiencies Facility upgrades and optimisation Re-invigorate exploration Comprehensive basin analysis Unlock new play…
Reserves and contingent resources1 2P: 74 MMboe 2P and 2C: 751 MMboe Gas and gas liquids 55 MMboe Unconventional 2P reserves 74 MMboe gas and gas liquids 589 MMboe Oil 19 MMbbl Conventional gas/gas liquids 75 MMboe Oil 13…
FY16 capital expenditure guidance Capital Expected Expenditure Other Major Activities Wells ( million) DEVELOPMENT Cooper Basin 45 50 78 Bauer facility upgrade; Middleton gas compression Cooper Basin (SACB and SWQ JVs) 145 160 28…
Financial strength underpins operations Operating cash flows of 303 million Pre-tax Operating Cash Flows million in FY15 (pre-tax) 640 Net operating cash flows 606 Underpinned by high margin Tax payments Western Flank oil…
Proposed Drillsearch Merger Neil Gibbins Acting Chief Executive Officer
Merger benefits Primed to pursue growth opportunities Creating a business based on expertise and a track record of growth Balance Sheet strength allowing new opportunities to be pursued A clear strategy and the ability to execute…
Combined Cooper Basin acreage Proposed merger with Drillsearch would increase gross acreage to c.69,000 km2 18
Leading ASX mid-cap oil and gas company Enhanced scale with capacity to pursue organic and inorganic growth options Potential for improved liquidity, possible market re-rating and dividend potential good for shareholders 313m in FY15…
Targeting synergies and operating efficiencies Pre-tax synergies of 20 million per annum within two years1 Blending the best talent from both companies 1 Operational Optimisation of technical and field activities Opportunities to…
Indicative timetable Event Date ASX announcement of scheme 23 October 2015 First Court Date Early December 2015 Despatch Beach Notice of Meeting to Beach shareholders Early December 2015 (if required) Despatch Explanatory Booklet to…
Operational Outlook Mike Dodd Acting Chief Operating Officer
Existing footprint across multiple basins A re-aligned focus closer to home Cooper and Eromanga Basins Oil Gas Gas Liquids Tight Gas Diversified hydrocarbon explorer Operated and producer Non-operated Core expertise in the…
Safety takes precedence Hours Worked and Lost Time Injuries Continual focus on safety, with over Hours 12 months of LTI-free operations (million) LTIs 1.5 8 Ongoing safety communications with Beach employees and contractors Review…
Operations overview Q1 FY16 First quarter ended 30 September 2015 Actual and Forecast Production MMboe Production of 2.3 MMbbl 10.0 9.6 50% oil; 50% gas and gas liquids 9.1 7.8 8.6 Stunsail and Pennington facilities 8.0…
Western Flank Ex PEL 91 FY15 gross production of 4.1 MMbbl Retention licences 151 to 172 granted (11,263 bopd) Up to seven exploration, appraisal and development wells in FY16 Bauer appraisal wells in Q2 FY16 to test northern and…
Western Flank Continuing evolution of the Bauer Field Pre-drill July 2011 June 2015 Pre-drill June 2015 July 2011 Gross oil Target six metre column of column height 17 metres 25 Good quality Permeability fluvial…
Western Flank Ex PEL 92 FY15 gross production of 1.5 MMbbl Retention licences 85 to 104 granted (4,110 bopd) FY15 successes include: Two-well appraisal / development campaign in Callawonga Field; Additional flowlines and separator…
Western Flank Ex PEL 104 / 111 FY15 gross production of 1.6 MMbbl Retention licences 136 to 150 granted (4,502 bopd) FY15 successes include: Martlet-1 and Martlet North-1 Namur Sandstone oil discoveries; and Production growth, with…
Western Flank Ex PEL 106 FY15 gross production of 0.7 MMboe Retention licences 129 and 130 granted (1,794 boepd) Two exploration wells in FY16, testing stacked stratigraphic traps in liquids-rich play Drilling planned for Q3 FY16…
Western Flank Technologies assisting new play types Conventional seismic Conventional seismic Reflection amplitudes associated with formation boundaries Enables structural interpretation Inverted seismic Inverted seismic…
Western Flank Ex PEL 106 3D seismic interpretation Middleton Admella Potential mounded sequence within the SSW NNE Brownlow Package Nappamerri Toolachee Epsilon Murteree Vs18 Vs30 Canunda Package Vs45 Brownlow…
Eastern Flank PL 184: Thylungra-2 Thylungra-1 drilled in 1995 Targeting Hutton Sandstone oil Encountered oil shows in the Hutton Sandstone and Basal Jurassic Formation (BJF) Thylungra-2 to be drilled 15 metres up-dip of…
Cooper Basin Gas SACB and SWQ JVs drilling program South Australia Reduced drilling activities in FY16, with up to 40 wells planned Three rigs currently drilling More appraisal / near-field exploration activities relative to past…
Cooper Basin Gas Deep Coals Southern Deep Coals Targeting coals at 1,500 2,000 metres depth Well costs of 3 million Davenport-1 exploration well indicated good permeability and gas content in core Extended production test expected…
Cooper Basin Gas Nappamerri Trough Natural Gas Ex PEL 218 (PRLs 33 to 49) Beach 100% 18 wells drilled across permits; 16 fracture stimulated ATP 855 Beach 64.9% and operator, Icon Energy 35.1% 495 MMboe contingent resources1 1. As…
Offshore Otway Basin 3D seismic survey Permit adjacent to producing Thylacine and Offshore Otway T/49P Geographe gas fields Proximal to existing infrastructure Two larges structures confirmed in north of Geographe Field permit…
International New Zealand Canterbury Basin (PEP 52717) Prospective exploration acreage Farm-down process underway Seeking extension to April 2016 well commitment Further studies underway to determine optimum well location Taranaki…
International Africa Tanzania Farm-down underway Egypt Sale process underway 40
Q&A
Gas Market Update Rod Rayner Group Executive Commercial
Eastern Australia gas market Demand to triple in five years Eastern Australia Gas Market Composition 2014 2013 consumption: 700 PJ 2018 consumption (forecast) 2,100 PJ 70% attributable to LNG Expanded transport infrastructure…
Eastern Australia gas market Domestic gas now exposed to global LNG Forecast Eastern Australia Gas Demand market dynamics Domestic gas consumers competing with export markets LNG demand ramp up coinciding with expiry of legacy Cooper…
Eastern Australia gas supply Conventional gas Eastern Australia 2P Gas Reserves (PJ) Regional market dynamics prevailed Historically able to meet seasonality in demand Recent decline hindered gas demand growth CSG Major increases in…
Opportunities for Cooper Basin gas Cooper Basin ideally situated adjacent to transport infrastructure to eastern and southern markets Able to supply domestic and LNG export markets Existing Beach gas sale contracts provide…
Otway and Gippsland basins Existing exploration acreage proximal to regional transportation and processing infrastructure, supplying eastern Australia markets Gas production able to be supplied to southern and LNG markets via…
Infrastructure Projects Mike Bangerter Team Leader, Facilities Engineering
Facilities Engineering Key functions Key activities Design, procure, construct and Facilities engineering commission surface plant and equipment for processing, custody metering, storage Asset integrity and reliability and…
Operated Cooper Basin infrastructure Cooper Basin Fields Producing Wells Facilities South Australia Oil 24 78 15 South Australia Gas 6 3 1 Queensland Oil 6 42 7 Total 36 123 23 23 facilities servicing 123 wells across 36…
Oil processing facilities General approach Modular design approach Pennington facility under construction Modular approach of pre-fabricated equipment and assemblies reduces on- site construction time and costs Template design…
Oil processing facilities 3D modelling 3D CAD design introduced late 2014 to improve design and construction implementation Allows better visualisation of how the facility will look and operate Assists HAZOP, risk assessments and…
Project execution Process overview Projects divided into phases with approval gates Phases 1, 2, 3 and 5 performed by Beach Phases 4 and 6 outsourced if required 53
Project execution Oil processing facilities Each development is different and requires careful evaluation During the Appraise and Select phases, facility processing requirements and engineering solutions are developed Considerations…
Project execution Timeline Timelines vary depending on complexity, capacity and content of project Stunsail facility 20,000 bfpd processing capacity 2,500 bopd storage 19 kilometre export pipeline and end of line facilities Multiple…
Western Flank pipelines Pipeline network installed between 2008 and 2015 280 kilometres of oil pipelines 72 kilometres of gas pipelines Delivers improved efficiency and reduced costs Uninterrupted production during times of…
Western Flank pipelines Spoolable composite pipe High pressure capability Immune to corrosion, with few joints Rapid installation, resulting in lower costs Minimal environmental impact Installation of Stunsail to Bauer oil…
Western Flank pipelines Stick glass reinforced epoxy (GRE) pipe material Manufactured with glass fibre filament windings in an epoxy resin High strength and corrosion resistant, with low installation costs Improved flow capacity and…
Best practice asset management Value engineering analysis and life of asset considerations factored into each development Skid mounted equipment reduces on-site installation and enables re-use at other locations Equipment selected to…
Approach to Basin Reviews Andrew Krassay Senior Geologist, New Ventures
Australian basins Regional geology Australian basins by Age Cenozoic Mesozoic- Cenozoic Mesozoic Paleozoic- Cenozoic Paleozoic- Mesozoic Paleozoic Neoproterozoic -Paleozoic Archean- Proterozoic BPT permits…
Australian basins Overview Frontier Mature Proven 62
Case 1: Mature Cooper / Eromanga basins Mature area 4,000 wells Good regional 2D seismic coverage Significant 3D seismic 500 oil and gas fields Pipelines Facilities Excellent access to markets Clear understanding of cost…
Case 1: Mature Cooper / Eromanga basins Mature area NGMA merged basement- top Permian depth map Extensive mapping and databases available Good understanding of regional geology Known structure and stratigraphy Basin review focus…
Case 1: Mature Cooper / Eromanga basins Wells 3,760 wells within 50 kilometres of Permian edge Oilfields (n=206) 74% within the Permian Basin Only seven oilfields (3%) 25 km Gasfields (n = 269) 99.6% within Permian Basin…
Case 1: Mature Cooper / Eromanga basins Lead Lead Lead Basin review Refining source, charge, migration models Well failure analysis Play fairway mapping Seismic mapping in time and depth Developing P&L inventory Risking and…
Case 2: Proven Otway Basin Proven basin with frontier areas 250 wildcat wells Good regional 2D seismic coverage Extensive 3D seismic over main producing areas 50 gas fields Pipelines and facilities localised to hubs Excellent…
Case 2: Proven Otway Basin Basin Review Well failure analysis Play fairway mapping New high quality seismic acquisition Structural model Proven fairway Detailed seismic mapping and AVO analysis Fairway extension Use of…
Case 2: Proven Otway Basin Creaming Curve Speculant 450 Martha - Henry Netherby 60,000 Cumulative Production (boe/d) 2.3 Tcf 400 Onshore Offshore 350 Casino Cumulative Reserves (MMboe) 40,000 300…
Case 2: Proven Otway Basin SSW NNE 10 km 2000mSS 3D Oil interpretation Key to unlocking remaining potential in this basin is 3D seismic with inversion Potential to extend the Shipwreck Trough play fairway is encouraging…
Case 3: Frontier Northern Territory Frontier areas Stacked, mostly old basins Two currently in production Amadeus and Bonaparte basins Only 152 petroleum exploration wells Sparse 2D seismic coverage Few existing fields Localised…
Case 3: Frontier Northern Territory Frontier areas Nearly all of NT under application or covered by existing exploration permits Regional geological assessment suggests vastly varying prospectivity and exploration risks Basin…
Case 3: Frontier Northern Territory Bonaparte Basin One of two producing basins in the NT Basin review suggested proven offshore plays extended onshore in Petrel Sub- basin Beach took a position in this acreage Drilled Cullen-1 to…
Case 3: Frontier Northern Territory 74
Case 3: Frontier Northern Territory High resolution airborne gravity gradiometer and magnetics survey Updip carbonate or clastic trap potential NW SE Oil shows 75
Case 3: Frontier Northern Territory Petrel Sub-basin gravity + play map 76
Key technical questions for basin reviews Shape, depth and thickness of the basin Nature of the basin-fill Age and thermal history of the basin Data coverage and confidence Exploration maturity Evidence for presence of active…
Close Neil Gibbins Acting Chief Executive Officer
Appendix
Other Australian interests Otway Basin Gippsland Basin Various Beach interests, from 30% to 75% Beach 35%, Cooper Energy 65% and operator 80
Other Australian interests Bonaparte Basin Browse and Carnarvon Basins Browse Basin: Beach 7.34%, Santos 47.83% and operator, Chevron 24.83%, Inpex 20.0% Beach 100% Carnarvon Basin: Beach 10.0%, Santos 37.33% and operator, APACHE…
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