Beach Energy Limited

Thank you for standing by and welcome to the Beach Energy Limited FY23 full year results briefing. All participants are in a listen only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by the number one on your telephone keypad. I would now like to hand the conference over to Derek Piper, General Manager, Investor Relations. Please go ahead.

Good morning, everybody. Thank you for joining us this morning for the Beach Energy FY23 four-year results webcast. Bruce Clement is our interim CEO, and he'll be leading the call today. And with us also is Anne-Marie Fabara, our chief financial officer, and other executives are in the room as well. So with that, Bruce, I'll hand over to you.

Thanks, Derek. Yes, this is Bruce Clement, and I am the interim CEO Chief Executive Officer of BEACH. I'd like to begin today by acknowledging that I'm speaking to you from the lands of the Kaurna people of the Adelaide Plains, and BEACH pays respect to their elders past, present and emerging. For the presentation today, I plan to provide an overview of our results and achievements for financial year 23, provide an outlook for financial year 24, And then I'll pass to Anne-Marie to run through the financials in detail. And following this, I'll come back and provide a brief update on our sustainability activities and plans, and also a view on some of Beech's key markets. So I'll just roll onto the next slide. And this is our compliance statements, and I'll draw your attention there to the disclaimer, the assumptions, and some of the reserves disclosure, and leave that for you to read at your leisure. Moving on to slide three, here is a summary of what we see as Beach Energy's value proposition and I think it's an excellent value proposition. We're executing key projects, we're continuing our investment in growth and we have a strong operational performance underlying that. Targeting delivery of material uplift in production beyond financial year 24, we have a number of projects we're aiming to deliver during this year and into the calendar year 24 that will deliver increased production and moving forward cash flows. We are supplying key markets and supporting the energy transition in Australia and New Zealand in particular with our domestic gas. We're in a strong financial position, and Anne-Marie will talk more to that, and we have in place a capital management framework to support that and also return dividends to shareholders. As I said, strengthening cash flows will support those dividends and our ongoing growth plans, and we have multiple organic growth opportunities for the next stage of growth that we are already pursuing today. And on the sustainability front, BCS is a key part of our business, but we are pursuing carbon reduction activities across our business in addition to the key Moomba project that's planned to be delivered in calendar year 24. Just moving on to the next slide, and I'll dwell on this for just a couple of moments or a few moments. What I want to identify here is that we are delivering key or critical new gas supply, but also want to identify the breadth and depth of our business and our investments and what we are doing at Beach. We are targeting growth in production, delivering projects through this next financial year and into financial year 25 and beyond. We expect to see production improvements. This year, we connected the phyllocene wells to the OGP and delivered additional production and well deliverability into that plant. Later this year, we're planning to drill the coupe development well, aiming for increased production into the New Zealand gas market. We installed the enterprise pipeline, and we're planning to hook that up later in fiscal year 24. And wait here, I'll talk to this in more detail later, but the stage two, first gas is targeted for mid-calendar year 24. We do have a pipeline of further organic growth. We have Perth Basin exploration underway. We're continuing our western flank exploration appraisal as well as in the Cooper Basin joint venture. We have a rig secured for the offshore drilling program in Victoria in fiscal year 25 and we are continuing efforts on ongoing production and performance optimization across the business. We have built and are building a unique market position. We've got diversified markets in core regions, in particular in the domestic markets in Australia and New Zealand, as well as obviously in the international liquids market and moving into the LNG space when we bring weights here online. We will have eight plants to supply local and global markets, and we're exempt from the Australian Code of Conduct price cap exemption. We have an exemption, I should say, for that. We are in a strong financial position with good liquidity to support our development activities and growing production from financial year 25 onwards. Importantly, we have set ourselves a sustainability goal of 35% emissions intensity reduction for 2030, and we are building a sustainable business around this. Our gas is key to the transition in energy in Australia and New Zealand and globally as we move into the LNG space. One of those key projects is Moomba CCS, which is at 70% complete at year end. We are pursuing and assessing other initiatives that leverage our expertise and assets in this space. On to the next slide. And I want to focus on our health, safety and environment performance this year. It was another strong year or a very strong year for us. Our second best safety performance on record. You can see the TRIFA performance was down to 2.4 this year. We had a period of six months injury free across the organisation. And in a couple of our plants, Otway and Bahara Springs in particular, we reached milestone performance during those years. during this year, I should say. On the environmental front, it's been another robust performance with no significant spills. And yes, we did get an award, the Premier's Award for our performance on one of our seismic programs in South Australia. Moving on to the next slide. These are just some of the headline results, financial results for this year. I'll leave Anne-Marie to to dive into these in more detail. But you can see there 19.5 million barrels of production, produced 1.6 million barrels of reserves and underlying EBITDA of a billion dollars, which is a very strong performance. We've seen increased domestic gas prices and we're able to deliver an increased dividend this year. And as I said, liquidity is in a good position and gearing is low moving into completion of our development programs. Next slide. This is a slide to identify some of our key milestones achieved during 23 and also looking a little bit forward into 24. We're delivering on our growth projects. Thylacine North 1 and 2 were connected this year and added significant volumes to the Otway gas plant deliverability. We've had another successful Cooper Basin drilling campaign, both in the joint venture and the western flank drilling. Our Moomba project, as I said, is 70%. The CCS project is 70% complete. And the Waitsia development drilling was completed during the year, and we're moving forward there into an exploration and further development program in this financial year operated by BEACH. The enterprise pipeline was installed, and we're looking to connect that later in this financial year. In the Waitsia gas plant, I'll talk to this in more detail, but we have turned that project around as a joint venture with WeBuild, and we're moving forward there to start first gas there in mid-calendar year 24. We are currently mobilising a rig to Coupe South, planning to spud that well later this calendar year, and targeting bringing on more gas into the domestic market in New Zealand. And on the western flank, as I said, 22 new oil producers. And we have secured a rig, as you'll see, for the offshore Victoria drilling program planned for financial year 25. So just move on to the next slide if we can. Just want to address a couple of our key projects, Otway and Perth Basin with weights here. The Otway project has been a significant success for us. It was. the largest drilling program completed in the Otway Basin, which we finished earlier in this financial year. We've now connected four development wells and we've increased the Otway gas plant well deliverability to 170 terajoules today, supplying into the East Coast domestic market. Part of that drilling program, as I said, three wells in particular represented significant and the longest horizontal drilling campaign we've conducted there, 8.1 kilometres of horizontal sections in those wells and they are delivering into that gas plant now. And we received an APS Safety Project Excellence Award for our performance during that drilling program. So on the next slide, Waitsier Gas Plant, as we recognise this is This project, we recognise, has had its problems, particularly around the insolvency of Clough, our major contractor, in late 22 and into 23, which obviously had a disruptive effect on the project. We have worked together as a joint venture to move this project forward, re-establish it, and it now has momentum going forward. We're seeing significant progress being made there, and we anticipate first gas being delivered in mid-calendar year 24. We've recast our capital expenditure forecast for 50 to 500 million net to beach. First gas from the plant is planned to be sold into the LNG international market up to 3.75 million tonnes over the period to 2028. We have a hybrid pricing model for that or hybrid pricing contracts for that. And we're LNG processing through the Northwest shelf. And that was secured in 2024. I'll just move on to the next slide. This is our guidance slide for fiscal year 24. You can see we're guiding production in the 18 to 21 million barrels of oil equivalent range. The range is a little larger than what we had forecast for this year, and that will be driven by potential timing of startup of a couple of our development projects, as well as the offtake arrangements in the Otway, given we now have additional well capacity there and our contract offtake will determine to some degree the amount of gas we produce and sell out of Otway. On the capital expenditure side, we're forecasting $850 million to $1 billion of capital expenditure, and you can see there the breakdown between development, exploration, appraisal, and our stay-in-business capex. On the development side, clearly Waits here and Otway are in there, as well as Coupé. But the ongoing Cooper Basin Joint Venture and Western Flank Drilling programs are also in there. So significant activity still on the development front from which we're expecting to see results later in the financial year and into 2025 and beyond. On the next slide, this is a timeline to give you a sense of activities and when they are happening and going to be delivered coming to the market as information. You can see there are five key areas for the company that we're working in. Coupe, we have the Coupe South 9 well being drilled or planned to be spudded later this year, aiming to bring that production on during the financial year and into the gas market in New Zealand. On the western flank, we have an ongoing drilling program. This year, focusing a little more on appraisal and exploration program. But again, bringing wells into production there, we would expect during this financial year and on into the future as well. In the Cooper Basin, we have, on the joint venture, I should say, we have four to five rigs operating there across exploration, appraisal and development. And again, bringing more oil and gas production into the basins, into the Moomba plant. In the Otway Basin, we have... Significant amount of activity planned. We've tied in, as I said, the Thylacine North 1 and 2 wells, and we've seen extra production now into the gas plant. We plan to hook up the enterprise wells into the pipeline that's been installed later in this financial year. And then moving into financial year 25, we're planning to bring on the Thylacine West 1 and 2 wells, again, delivering gas into that Otway plant and into the East Coast gas market. And we have the offshore Victoria gas project planned to be active during fiscal year 26, and we'll be getting prepared for that in the coming years. In the Perth Basin, as I said, we're targeting Waitsea Startup first gas mid calendar year 24 to a considerable amount of work to be done there and we've seen accelerated activity there and performance from the contractors has improved significantly. In the background or in the foreground now, we have an exploration program going on in the Perth Basin as well as some further development drilling planned across discovered fields during this financial year. Move on to the next slide, and this is a summary of our reserves and resources position. We have a very good reserves and resource base for the company. I won't dwell on this for too long, other than focusing on the change in 2p reserves for the year, which saw us. The delta there is driven by production, 19.5 million barrels, and the remainder is largely the revisions to weights here post the development drilling. earlier this financial year. We have a good contingent resources base and we'll be pursuing that through drilling across the portfolio in the Otway, WA, Kupa and to a degree in New Zealand with Kupa. So I'll leave it here but the message should be that we're in a very good position moving forward into this financial year. We have a number of projects we're delivering and I'll pass over now to Anne-Marie to talk more in detail about the financials.