2018 ASIA ROADSHOW Successful transition with strong growth platform Beach Energy Limited ABN20 007 617 969 1
INTRODUCTION Beach Energy Limited ABN 20 007 617 969 3
SUCCESSFUL TRANSITION WITH STRONG GROWTH PLATFORM Low cost operator focussed on synergy and margin extraction Clear strategy to increase shareholder value Financial Market Five year target5: Strength and Access Discipline…
BEACH ENERGY PORTFOLIO EXPANDED FOOTPRINT WITH FIVE PRODUCTION HUBS AND SIGNIFICANT GAS PROCESSING INFRASTRUCTURE FY18 Pro forma production1 Bass Basin Cooper Taranaki Basin Basin 26.8 MMboe Otway Basin Perth Basin FY18 2P…
EXPERIENCED EXECUTIVE TEAM IN PLACE Executive Role Name Commenced Experience Prior experience Chief Executive Officer Matt Kay May 2016 25 years Oil Search, Woodside, Santos Chief Financial Officer Morn Engelbrecht September 2016 18…
BEACH ENERGY SINCE 2016 THE EMERGENCE OF A LEADING MID-CAP E&P COMPANY Drillsearch merger Cost and efficiency focus Lattice acquisition 100% ownership in ex PEL 91 Reduction in operating costs Expansion to five production hubs and ex…
READY TO UNLOCK OUR RESERVES AND CASH FLOW POTENTIAL Disciplined discretionary driving medium term generating 2.6 billion investment production growth of free cash flow over 5 yrs CAPITAL EXPENDITURE OUTLOOK1 PRODUCTION OUTLOOK1 FREE…
READY TO UNLOCK OUR RESERVES AND CASH FLOW POTENTIAL Disciplined discretionary Development priorities: Development capex investment Cooper Basin and Victoria targeting east coast gas CAPITAL INVESTMENT SPLIT DEVELOPMENT CAPEX SPLIT BY…
INVESTMENT TO GROW PRODUCTION Over two thirds of discretionary investment to 5 year production outlook (MMboe)1 generate IRR 40% 40 Over two thirds of discretionary oil investment to generate IRR 100% 35 Outlook Range 30 Key…
ROCE AND NET GEARING OUTLOOK 5 year ROCE outlook (%)1 ROCE improvement driven by highly Net gearing update accretive growth investment, oil prices and higher gas prices 25% Net gearing at 30 June 2018 was 25.9% Maintaining high…
VICTORIAN OTWAY ASSET SALE BEACH TO SELL A 40% INTEREST IN OTWAY PERMITS TO O.G. ENERGY Transaction overview Purchaser is O.G. Energy, the energy division of Ofer Global Sale includes interests in Otway Gas Plant, existing gas fields…
FY19 GUIDANCE UPDATED TO REFLECT OTWAY SALE Prior Updated Only 7% of FY19 production is FY19 production 26 28 MMboe 25 27 MMboe derived from FY19 capital expenditure. The majority of FY19 capex is driving medium FY19 capex 460 540…
RESERVES EXPOSED TO HIGH MARGIN MARKETS Beach 2P reserves1 Future gas production Future East Coast Gas by location2 supply by sales agreement2 19 17 128 18% 42 313 1,224 PJ 677 PJ 12% MMboe 419 (210 MMboe) (116 MMboe) 677 66%…
BEACH TO UNLOCK RESERVES POTENTIAL OVER NEXT 5 YEARS Beach 2P reserves1 Undeveloped 2P reserves1 Production outlook (MMboe)2 40 35 Outlook Developed 16 16 52% Range 30 12 25 Undeveloped + 2C 313 131 contingent resources +…
MULTIPLE AVENUES TO REPLACE OR GROW 2P RESERVES Western Flank Oil 3P 2P 2C 2P Cooper Basin JV Western Flank Gas Reserve Reserve Conversion Conversion 100% reserve replacement target1 Cooper Basin Otway Basin Exploration…
OUR VISION, PURPOSE AND VALUES Our vision We aim to be Australias premier multi-basin upstream oil and gas company Our purpose To deliver sustainable growth in shareholder value Our values Our values define us, guide our actions,…
KEY TAKEAWAYS A COMPELLING FIVE YEAR OUTLOOK1 Portfolio provides growth Production growing to 30 - 36 MMboe High return / low risk investment Over two thirds of discretionary investment 40% IRR2 Profitability ROCE target 17 -…
SYNERGY AND COST EFFICIENCY TARGETS FOCUS TURNS TO DIRECT CONTROLLABLE OPERATING COSTS Better than expected synergy and efficiency million Reduction in direct controllable opportunities have emerged post acquisition operating costs…
FINANCIAL STRENGTH AND DISCIPLINE TRACK RECORD OF DELIVERY Strong underlying EBITDA margin growth Continuing growth in return on capital employed Free cash flow growth and double digit free cash 141% CAGR in underlying EPS from FY16…
FINANCIAL STRENGTH AND DISCIPLINE OIL AND GAS PROJECT RETURNS 67% all discretionary capex to Gas projects Oil projects generate IRR 40%1 with remainder 15 15 WACC Count of projects Count of projects 10 10 5 5 67% of oil…
FINANCIAL STRENGTH AND DISCIPLINE COMMODITY PRICE EXPOSURE Low commodity price risk exposure with upside Cashflow underpinned by strong long term gas contracts and repricing 18% 51% 60% of cashflow in FY19 from liquids exposure…
KEY COMMODITY MARKET EXPOSURE BEACH EXPOSED TO FOUR KEY COMMODITY MARKETS Strong commodity market fundamentals, providing revenue portfolio diversity East Coast gas West Coast gas Global liquids New Zealand gas Currently 15% of…
EAST COAST GAS MARKET SOUTHERN MARKETS INCREASINGLY RELIANT ON LNG SUPPLIES AEMO forecasts flat southern gas supply1 Daily South West Queensland pipeline flow2 300 Gas flow from Southern 200 states into Queensland Gas flow…
EAST COAST GAS MARKET POTENTIAL COST OF IMPORTED LNG 11.50- Approximate cost (A/GJ) of LNG into South Eastern Australia 15.75 from Asia based on range of recent spot prices GJ Henry Hub New Notional US3.00/MMBtu Liquefaction 12.50…
EAST COAST GAS MARKET SUPPLYING THE MARKET IS A STRATEGIC IMPERATIVE Beach is a material owner of critical gas infrastructure Three basins and infrastructure hubs supplying East Moomba Coast gas Gas Hub 33.4% Currently 15%…
EXPOSURE TO EAST COAST GAS PRICES AN ATTRACTIVE LONG-TERM PRICING OUTLOOK Annual step-ups and CPI Current east Re-contracted / re-priced volumes2 adjustments of Lattice contracts coast volumes 100% Majority of existing East Coast…
WEST COAST GAS MARKET WAITSIA OPTIMALLY POSITIONED Short term: Waitsia ideally positioned to capture market: WA domestic gas market expected to remain Low unit cost gas balanced Low complexity development Medium term: Fast project…
GLOBAL LIQUIDS MARKET PREMIUM PRODUCTS A KEY REVENUE CONTRIBUTOR FY18 revenue by product Second largest producer of LPG produced from Cooper, Australian oil with 14.6% of Otway, Kupe and Bass production1 Realised average price in…
OPERATIONAL EXCELLENCE Beach Energy Limited ABN 20 007 617 969 31
OPERATIONAL EXCELLENCE DELIVERY OF VALUE THROUGH SAFE, RELIABLE AND EFFICIENT OPERATIONS HSE and Process and Performance People risk technology Beach Energy Limited ABN 20 007 617 969 32
THE BEACH APPROACH TRACK RECORD OF LOW COST COOPER BASIN OPERATIONS Decades of Cooper Basin experience Cooper Basin operated performance Safe operation of over 130 oil and OIL FIELD OPERATING COSTS1 GAS FIELD OPERATING COSTS1 gas…
OUR TOP PRIORITY STRONG SAFETY AND ENVIRONMENTAL PERFORMANCE A KEY PRIORITY Safety performance1 Environmental performance1 LTIFR2 6 CRUDE SPILL VOLUMES (KL) TOTAL SPILLS 51.9 99% 32% 5.4 67% Reduction in LTIFR2 since FY13 9.6 37…
OPERATIONAL EXCELLENCE IMPROVING BASE PRODUCTION USING INDUSTRY BEST PRACTICE &TECHNOLOGY Productivity Automation of steady state operations, efficient start-up and reduced downtime Advanced Process Control Secondary recovery…
OPERATIONAL EXCELLENCE DRIVING A SUSTAINABLE REDUCTION IN DIRECT OPERATING COSTS Operating Cost Drone technology - Offshore Platform Inspections Advanced Advanced Digital Radiographic techniques - CUI inspections Inspection…
FIVE YEAR OUTLOOK FACILITY RELIABILITY BUILDING A FOUNDATION FOR THE FUTURE Higher operated facility will help Beach achieve and generate higher reliability our production targets revenue and production FACILITY RELIABILITY1,2…
FIVE YEAR OUTLOOK DIRECT OPERATING COSTS BUILDING A FOUNDATION FOR THE FUTURE Beach is targeting 20% reduction in translating to 30 million/annum saving direct controllable operating costs1 versus FY18 pro forma levels DIRECT…
OPERATIONAL EXCELLENCE DELIVERY OF VALUE THROUGH SAFE, RELIABLE AND EFFICIENT OPERATIONS Our top priority is safety Continue to embed the Cooper Basin low cost operating model Deliver operational excellence Reliability…
ASSET REVIEWS Beach Energy Limited ABN 20 007 617 969 40
FY19 DRILLING PROGRAM INCREASING FOCUS ON HORIZONTAL WELLS Drilling program expanded across the portfolio with more rigs and more wells FY19 expected participation (number of wells) Beach to participate in up to 133 wells Up to 69…
COOPER BASIN JV Beach Energy Limited A.B.N. 20 007 617 969 42
COOPER BASIN JV BEACH VARIOUS INTERESTS (MOST IN 30-40% RANGE), SANTOS OPERATOR Cost reductions enable renewed focus on growth Targeting steady to increasing production over the medium-long term (87 wells in FY19, up 36%)…
COOPER BASIN JV IMPROVING PRODUCTION COSTS AND CYCLE TIMES A 50% reduction in gas well drilling costs and 34% A 40% reduction in drill cycle times since 2014 has improvement in unit production cost has led to a led to increased number…
COOPER BASIN JV MOOMBA SOUTH APPRAISAL 2C 2P reserve conversion potential App F Beach supporting Santos in appraising Patchawarra in Moomba South App I App B Key uncertainties are reservoir App D thickness and deliverability…
COOPER BASIN JV WATKINS/WATSON NORTH NEW OPPORTUNITIES IN AN OLD FIELD Example of oil potential in CBJV and collaboration between JV partners Field reviews in late 2017 identified immediate drilling opportunities in Watkins/Watson…
COOPER BASIN JV EFFICIENCY HAS CREATED A GROWTH STORY Operator targeting steady to increasing Activities to enhance value 5 year contribution to Beach1 production levels for next decade Increased drilling activity to 28-33%…
VICTORIAN OTWAY BASIN Beach Energy Limited ABN 20 007 617 969 48
VICTORIAN OTWAY 1 BASIN BEACH 60% AND OPERATOR Liquids-rich, long-life asset with low risk 2P reserves1 by product exploration and development opportunities (MMboe) 5 6 Multi-year, nine-well programme commencing in H2 FY19 with…
VICTORIAN OTWAY BASIN PRODUCTION Nine drilling opportunities planned in the next four OGP production outlook (100% interest) years to keep the Otway Gas Plant (OGP) as full as possible until FY26. Project life 15 years Start with…
VICTORIAN OTWAY BASIN TWO EXTENDED REACH DIRECTIONAL WELLS TO BE DRILLED FY19 TO FY20 Two ERD wells drilled from onshore to offshore Program starts with Blackwatch-1 development well in late FY19, followed by Enterprise-1…
VICTORIAN OTWAY 1 BASIN INDICATIVE TIMELINE Phased development with high impact, FY19 FY20 FY21 FY22 low unit technical cost exploration/development up front Black Watch (development) Early exposure to uncontracted gas with…
VICTORIAN OTWAY BASIN KEY ASSET WITH LARGE CONTRIBUTION TO BEACH Long-life asset Activities to enhance value 5 year contribution to Beach1,2 Optimise rig contracting strategy 18-23% Investing capital in undeveloped to mitigate risk…
SOUTH AUSTRALIAN OTWAY BASIN Beach Energy Limited ABN 20 007 617 969 54
SOUTH AUSTRALIAN OTWAY BASIN BEACH INTERESTS 70 100% AND OPERATOR Reinvigorated area of business with FY18 Haselgrove discovery (15 MMboe 2C contingent resource) Attractive local gas market gas demand Supported in part by state and…
SOUTH AUSTRALIAN 1 OTWAY BASIN INDICATIVE TIMELINE Beach planning first gas to FY19 FY20 FY21 FY22 FY23 market by end of 2019 (H1 Katnook facility FY20) (design and build) Katnook processing facility Dombey-1 concept select…
PERTH BASIN Beach Energy Limited ABN 20 007 617 969 57
PERTH BASIN WAITSIA (BEACH 50%), BEHARRA SPRINGS (BEACH 67% AND OPERATOR) 2P reserves by product Waitsia is a high quality, low cost (MMboe) gas resource 0 Multiple commercialisation options 72 MMboe being evaluated with…
PERTH BASIN WAITSIA GAS COMMERCIALISATION Joint Venture is evaluating a number of commercialisation options, including: - existing gas customers - potential new domestic gas customers (including mining and petrochemical…
PERTH BASIN KINGIA PLAY OPENING Perth Basin gas discoveries over time1 Waitsia appraisal result is a game changer for the Perth Basin 180 320 Opened up the Kingia / High Cliff play, a Cumulative EUR (MMboe) new, deeper play…
PERTH BASIN BEHARRA SPRINGS DEEP PROSPECT (BEACH 67% INTEREST) Multiple material deep pool tests and potential for stacked gas pools as seen at Waitsia Beach Energy Limited ABN 20 007 617 969 61
WESTERN FLANK Beach Energy Limited ABN 20 007 617 969 62
WESTERN FLANK OIL BEACH OPERATED INTERESTS 75 - 100%, NON-OPERATED 40%, SENEX OPERATOR 2P reserves by product Material part of Beachs portfolio (MMboe) Provides significant oil price exposure 34 MMboe Value accretive near term…
WESTERN FLANK OIL BAUER APPRAISAL PROGRAM Bauer field limit appraisal and development in FY19 Two vertical development wells to obtain critical data for modelling and four McKinlay horizontal wells for production Four appraisal…
WESTERN FLANK OIL ROLLOUT THE BAUER STRATEGY ACROSS THE WESTERN FLANK Appraisal and development planning underway for multiple fields Kangaroo App planning underway Significant upside in McKinlay, Namur and Birkhead…
WESTERN FLANK OIL RESERVES GROWTH HAS EXCEEDED EXPECTATIONS Western Flank 2P oil reserves: Beach Western Flank Oil 2P reserve life1 - More than doubled over the past 3 years 8 6 7.2 - Reserves life now 7 years 5 Annual…
WESTERN FLANK OIL APPLICATION OF HORIZONTAL WELL TECHNOLOGY Strong economic metrics have always been a Comparison of vertical and horizontal wells1 competitive advantage for the Western Flank Oil assets 2,500 Actual Birkhead…
WESTERN FLANK OIL HIGH MARGIN ASSET WITH MORE TO GIVE Significant contributor of free cash Activities to enhance value 5 year contribution to Beach1 flow due to high margin production Appraisal of lateral extent of Bauer 18-23% and…
WESTERN FLANK GAS PRODUCING ASSETS EX PEL 106 AND EX PEL 91, BEACH 100% AND OPERATOR 2P reserves by product A recent growth story (MMboe) 2 Liquids rich gas play with access to East Coast gas market through 2 9 MMboe Moomba gas…
WESTERN FLANK GAS MIDDLETON GAS FACILITY Continued drilling success has allowed expansion from 25 to 40 MMscfd production capacity Middleton area raw gas rate1 50 'Loop' line installed Middleton compressors Installation of the…
WESTERN FLANK GAS EXPLORATION AND DEVELOPMENT Drilling program to support objective of long term stable production out of Middleton Eight gas wells planned for FY19 (appraisal and exploration) - Appraisal to convert 3P reserves to…
WESTERN FLANK GAS GROWTH STORY Capital program designed to maintain Activities to enhance value 5 year contribution to Beach1 Middleton raw gas at 40MMscfd 5-9% Appraisal of existing gas discoveries for 2P reserves upside Key…
BASS BASIN Beach Energy Limited ABN 20 007 617 969 73
BASS BASIN BEACH 53.75% PRODUCING ASSETS, 50.25% NON-PRODUCING, BEACH OPERATED 2P reserves by product BassGas is a mature asset (MMboe) servicing the east coast gas 1 market 1 9 MMboe Beach objectives are to minimise operating…
NEW ZEALAND Beach Energy Limited ABN 20 007 617 969 75
NEW ZEALAND KUPE GAS PROJECT BEACH 50% AND OPERATOR 2P reserves by product Stable, solid free cash flow (MMboe) generating asset 5 3 Important to New Zealand gas and 30 MMboe LPG supply 22 Low risk compression Gas Condensate…
NEW ZEALAND KUPE GAS PROJECT KUPE GAS PLANT Nameplate capacity of the plant is 77 TJ/day with Kupe sales gas production outlook1 (gross) excellent reliability ( 99%)2 25 Gas exported via pipeline to North Island distribution network…
NEW ZEALAND KUPE GAS PROJECT DESCRIPTION OF FIELD Kupe developed by three wells Valuable liquids-rich gas produced Compression project working towards FID in early FY20 - Low risk, high value to extend production plateau and…
NEW ZEALAND KUPE GAS PROJECT KEY GROUP CASH FLOW CONTRIBUTOR Activities to enhance value 5 year contribution to Beach1 Expected to generate 10% of Beachs 6-11% free cash flow over the next 5 years Successful FEED and subsequent…
FRONTIER EXPLORATION Beach Energy Limited ABN 20 007 617 969 80
FRONTIER EXPLORATION HIGH IMPACT EXPLORATION TARGETS IN PORTFOLIO Carnarvon Basin Key Prospect: WA-359-P / Ironbark Bonaparte Basin Three exploration permits, two with Santos as JV partner Gas-condensate-oil, multiple plays Key…
BONAPARTE BASIN NORTHERN AREA MALITA GRABEN Beach holds five permits in the Bonaparte Basin covering two main exploration play trends: - Northern Area - Malita Graben; and - Southern Area - Petrel Sub-Basin Northern Area Malita…
BONAPARTE BASIN SOUTHERN AREA PETREL SUB-BASIN Southern Area Petrel Sub-basin Two large Beach-operated exploration permits; WA-454-P (100% Beach) and NT/P84 (Beach 50%, Santos 50%) Features multiple prospects and leads Gas,…
CARNARVON BASIN IRONBARK PROSPECT Ironbark Prospect1 (WA-359-P Beach 21%, subject to farm-in; WA-409-P Beach 7.5% subject to farm-in) Potential high-impact gas resource within tie-back distance to the NWS project. Targeting the…
CANTERBURY BASIN LARGE PROSPECTIVE RESOURCE POTENTIAL Canterbury Basin (Barque, Beach 50%; Wherry and Gondola, Beach 65%) Wherry prospect Three multi-Tcf plus liquids prospects1 Proven hydrocarbon system with high liquids…
APPENDICES Beach Energy Limited A.B.N. 20 007 617 969 86
FY19 OIL HEDGING POSITION OIL HEDGES AS AT 1 JULY 2018 3-way Collar 3-way Collar 3-way Collar 3-way Collar Total Hedged 40 90 105 40 90 100 40 103 113 55 100 110 Volumes (bbl) per bbl per bbl per bbl per bbl FY19 285,000 577,500…
2018 ASIA ROADSHOW Beach Energy Limited Investor Relations 25 Conyngham Street Nik Burns, Investor Relations Manager Glenside SA 5065 Australia Mark Hollis, Investor Relations Advisor T: +61 8 8338 2833 T: +61 8 8338 2833 F: +61 8…
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