Beach Energy Limited

I would now like to hand the conference over to Mr Brett Woods, Managing Director and Chief Executive Officer. Please go ahead.

Good morning everyone and welcome to Beach Energy's FY25 full year results presentation. Joining me today is Anne-Marie Barbaro, our Chief Financial Officer. Together we will take you through our results for the year and our latest outlook for FY26 before we open up the lines for Q&A. We thought it was appropriate to bring forward our results, given there was a lot of news out in the quarterly last Thursday, including reserves revision and a non-cash impairment, which we will discuss today. This year, Beach made significant progress against our strategic review objectives and its company vision of becoming Australia's leading domestic energy company, while delivering outstanding safety, environmental performance and strong financial results. It was Beach's operated assets which drove our solid results Those operations within our control and over which we apply our strict operating principles have transformed Beaches Foundation. We ended the year with a strengthened balance sheet and the financial flexibility to pursue both organic and opportunistic growth. Beaches operated assets and non-operated interests now supply 19% of the entire East Coast domestic gas market. This positions Beaches as one of the most significant suppliers of gas to the East Coast. Slide two sets out the compliance statements, which I'll lead you to read at your leisure. We begin with slide three, which conveys a compelling value proposition for BEACH. The hard work we've put in over the last 12 months has clearly transformed the organisation and strengthened our foundation for growth. We've materially lowered operating costs, expanded margins and finished with a year with a strong balance sheet. This puts us in great shape to deliver our existing pipeline of opportunities return cash flow to shareholders through the record fully frank dividend we announced today and position ourselves for growth. The strategy we announced last year is clear and simple. We are focused on our core East Coast and West Coast hubs as we work towards our vision of becoming Australia's leading domestic energy company. In FY25, we made great progress towards this vision by increasing our share of the East Coast gas market share from beaches operated assets and non-operated interests to 19%, as I mentioned. But more on the East Coast in a moment. An owner's mindset has become ingrained in the culture at beach. We have restructured the business, taken structural costs out, improved our margins and cash flows, and have driven our pre-growth, pre-cash flow break-even, all price, well below $30 a barrel. In the field, we delivered great outcomes from our operated assets, including completing the offshore oilway development program and reviving production in the Bass Basin. And we did this while achieving our best safety performance in 14 years. This is a credit to our teams. Our commercial focus on extracting maximum value for our molecules has seen a material proportion of the Cooper Joint Venture gas volumes recontracted while retaining volumes to capture value through seasonal spot demand. So in summary, all the elements of our strategy have been progressing this past year, which culminated in strong growth in earnings and free cash flow. This enabled the board to declare a record dividend of $0.06 per share, bringing total dividends declared this year to $0.09 per share. Slide four. shows our strategic pillars, four hubs, high margins and sustainable growth. These pillars established a clear framework to drive operational efficiencies, foster a culture of accountability and performance, and balance dividends with investment growth. As highlighted in today's presentation, in FY25, we made significant progress in executing key elements of our strategy. Strict focus on core hubs saw a material increase in the supply of gas from Beaches operated assets and non-operated assets. While progress made at Waitsea sets the foundation for a significant increase in West Coast gas market share once our LNG export period ends later this decade. An owner's mindset saw us deliver high margins with a 300 basis point increase in underlying EBITDA margin. And we are growing sustainably with Moomba CCS now online. Progress made this past financial year has positioned BEACH as an efficient, resilient and focused supplier of natural gas to Australia's domestic markets with a commitment to long-term value creation. Next slide shows outcomes against objectives at the start of the year. Implementation of the asset-based organisation structure and appointment of my full executive leadership team have clearly underpinned the reset of BEACH. This past year, we delivered the base horizon of BEACH's strategy, as outlined in the strategic review presentation from June last year. The base horizon involved forming a profitable and resilient foundation for growth through lower costs and higher margins, notably $130 million in cost reductions with a 20% reduction in sustaining capital, and an 18% unit operating cost reduction. Maintaining a strong balance sheet, notably reflected through our free cash flow breakeven, which is well below US$30 a barrel in FY25, and our low leverage. Refreshing exploration inventory and delivering sustainability objectives. The results set out on this slide clearly align with these objectives. We will talk to these achievements in more detail throughout today's presentation. The key targets for FY25 were imperative for delivering a low-cost, disciplined operating model. And I'm very proud of those achievements of our organisation, led by our exceptional executive team. Slide five tells a great story of Beech's position in the East Coast gas market. Starting with the macro outlook, where the story remains the same. Gas supply available to the domestic market is declining, while gas demand over the long term remains firm. This sees widening structural supply deficits from late this decade onwards, not to mention the seasonal supply deficits the East Coast currently experiences and are expected to increase over time. In response, Beech has been investing heavily over recent years to position ourselves as a leading supplier of gas to the East Coast market. This year, we've made great progress in achieving that goal. New gas supply from Enterprise and Thylacine West in the Otway Basin and a rejuvenated Yola Field in the Bass Basin saw our East Coast gas production increase by 23% in FY25. With high gas demand throughout the year, and in particular in recent winter months, beaches supplied 90% of the East Coast gas demand in 2025. On the contracting side, our disciplined gas marketing strategy saw us reposition our contract portfolio through this last financial year. The legacy Cooper-based and joint venture gas contract that we have been speaking of for some time ended on the 30th of June, allowing us to recontract a large volume of that gas in recent months. Approximately 40 terajoules a day of gas has been recontracted on a short-term basis, and you will see the benefits of this through our improved pricing and margins starting to flow through our quality reports during FY26. We are continuing to mature our sales and marketing capability and now have access to all the spot gas markets in the East Coast. This ensures we can deliver gas to where it is most needed when it is most needed. We have also begun exposing our molecules to the power market with one of the new contracts providing spark spread upside. This is a novel way to capture power pricing upside on days when demand for gas-fired power generation is high. On days when it's not, we retain our exposure to the gas spot market. Our June 2024 strategic review outlines that we would pursue adjacency in the power market, and this is just the start of implementation of that strategy. I look forward to sharing more with you over time. Our recontracting allowed us to rebalance our customer portfolio. We now have several new customers and have diversified our exposure across end users and industrial sector, retailers, and gas-fired power generators. Lastly, in line with our marketing strategy, we've retained approximately 30% of our East Coast gas supply for the spot market. This means we have a good balance between contracted volumes and spot exposure for when the market needs our gas. Our contracting strategy will enable us to make annual decisions on where these volumes can go. Turning now to slide six and our headline financial results, which again showed the outcomes of our hard work. Material growth across all key metrics were delivered. Total production increased 9% to 19.7 million barrels of all equivalent. In the Otway Basin, the 64% increase in production to 6.8 million barrels of all equivalent was driven by a connection of the Enterprise Fields in June 2024 and the Thales and West Development Wells in October 2024. In the Bass Basin, a low-cost production optimisation initiative delivered greatly improved well performance, leading to a 91% increase in production to 1.4 million barrels. Unfortunately, these good production outcomes were partially offset by severe flooding in the Cooper Basin late in the financial year. Sales volumes rose 16% to 24.7 million barrels of oil equivalent, supported by higher production and five weightsier LNG swap cargoes. The 13% increase in sales revenue to $2 billion benefit from those five LNG cargoes and a 13% increase in the average realised gas price to $10.70 for domestic volumes. The $352 million of revenue generated from the Waitsea LNG cargoes clearly shows the value to be created once the Waitsea gas plant is up and running. Underlining EBITDA increased 20% year-on-year to $1.1 billion while underlining NPAT increased 32% to 451 million. The underlying EBITDA margin improved by 300 basis points to 57%, reflecting structural cost savings achieved and improved commercial outcomes. These results culminated in a much higher cash flow generation with a four times increase in pre-growth free cash flow to 657 million. In recognition of these results, the Board has declared a record final dividend of $0.06 per share, bringing our full-year dividend to a record $0.09 per share. This represents a 31% pre-growth free cash flow payout ratio. I want to highlight that whilst the payout ratio is below the targeted 40% to 50% range, our policy has always been subject to Board discretion with a view of balancing returns to shareholders with investment in value-accredited growth. This year, we as a board took the decision to deliver a material step up in the dividend. However, to also preserve flexibility for FY26 capital activities and potential value accretive opportunities. As part of our strategic review outcomes we delivered in June last year, we highlighted the vision of this company to become Australia's leading domestic energy company. And to do this, we're always looking at opportunities for disciplined value accretive growth. We have active work programs across our portfolio in FY26 as we continue to progress our objectives of growing east and west coast market shares. Slide 7 sets out our reserves and resources position at 30 June 2025. Bahara Springs revision was clearly a disappointment. We had reported a reserves revision in FY24 due to results at Bahara Springs Deep 2. where well partial pressure communication was observed between Bajara Springs Deep 1. We had an upcoming well that had a range of potential outcomes, including compartmentalisations, which have been observed throughout the Waitsia Field. Therefore, Bajara Springs Deep 3 was required to address the initial reserve booking and to test connectivity across the fault floor, the variety of the commercial bookings, and to identify the preferred development pathway for that field. What we experienced was partial communication across a more significant fault block, which was unexpected. The potential for Bajara Springs Deep 3 to intersect an isolated compartment within the northern area of the Bajara Springs fields did not eventuate. The remaining reserves balance now correlates to a fully connected field volume across those three wells. While this is a disappointing outcome, learning from the campaign have focused our attention on structural traps further south and east of the Bajara Springs Kingia Fairway. A number of these present as material opportunities. We are refreshing our exploration portfolio and inventory and are planning further seismic acquisition across this area as we prepare for our next exploration campaign. I remain highly encouraged by the potential of the acreage. Flood down and reserve is also worth noting that the results from Bajara Springs 3 deep has no impact on weights year two, weights year stage two LNG sales or returns of any swap gas. We actually drilled three weight seer wells during the year and the results support our 2P bookings. In fact, the last three wells have been some of the best wells drilled in the field to this point. There are three wells remaining for full field development and we are confident in the booking that we have today. However, we'll be able to resolve further the range between 1P and 3P once the weight seer gas plant is online. Turning now to health, safety and environment on slide eight. Over the past year, we launched several targeted safety campaigns aimed at increasing awareness and strengthening compliance with critical safety procedures. Pleasingly, we delivered outstanding safety environmental performance, recording our best personal safety result in 14 years and no hydrocarbon spills of consequence. On the safety front, we recorded just one tier two process safety event, and one recordable injury. These are very pleasing results given the heightened focus beach has placed over recent years on improving our safety culture. It is also a credit to our staff in maintaining their dedication to safety as the organisation went through such a period of significant change. As we look to FY26, it is imperative we continue this level of performance, particularly as we've embarked on the Equinox rig campaign in offshore Victoria. Continual improvement is our mantra and is reflected in performance improving focuses over FY26. Slide 9 highlights several sustainability milestones that Beech have achieved over the past year. First and foremost, the key highlight was completion of the Moomba CCS project, which is an integral element to Beech's emissions reduction pathway. Moomba CCS is safely and reliably storing CO2 and has already abated more than 1 million tonnes equivalent to removing roughly 400,000 cars from Australian roads today. Successful commissioning and operation of member CCS have put Beech well on track to achieve its target of a 35% equity emissions intensity reduction by 2030. This is a significant achievement for both Beech and Australia's broader decarbonisation efforts. It was also very pleasing to see member CCS recognised at the 2025 APAC Energy Awards in Singapore. In FY25, we set a new methane intensity reduction target, reinforcing our commitment to safe and efficient operations, achieving a methane intensity of just 0.05%, an outstanding result and reflects our team's year-round focus on minimising fugitive emissions from our facilities. In addition, We published our inaugural Reconciliation Action Plan, formalising our commitment to build a more inclusive, respectful and equitable society. It's empowering to see the strong relationships we're building in local communities. On that note, I'll hand over to Anne-Marie to discuss our financial performance.

ANNE-MARIE BUSBY- Thanks, Brett. Good morning, everyone, and thank you again for joining us today. Our headline financial metrics are set out on slide 12. Results this year were underpinned by higher production, five weightsier LNG cargoes and great progress with structural cost reductions throughout the business. These delivered a material step up in underlying earnings and cash flow. Sales revenue was up 13% to 2 billion, driven by an uplift in our offshore Victorian sales volume, coupled with a 13% increase in realised gas pricing. in addition to five LNG cargoes at Waitsea which were delivered during the financial year. Growth in sales revenue was partly mitigated by a lower oil price realised during the financial year. Our average realised oil price was 13% lower this year at 124 Aussie per barrel. Underlying EBITDA and MPAT were up 20% and 32% respectively with a 300 basis point underlying EBITDA margin expansion. Statutory earnings were impacted by the non-cash impairment announced in our quarterly report last week. We recorded a $474 million post-tax impairment of our Cooper Basin and Perth Basin carrying values. The impairment in the Cooper Basin was largely driven by a lower near-term commodity price outlook, as we saw realised through FY25, in addition to prioritisation of development drilling in the Cooper Basin joint venture in the near term following recovery of the floods. This prioritisation has no overall impact on our capital expenditure guidance or outlook. In the Perth Basin, again, the impairment recognised was largely driven by lower near-term commodity prices, with other smaller impacts, including the reserve revision in Bahara Springs and cost inflation associated with future weights year development activities. Our strong operating results delivered a greater than four times increase in pre-growth free cash flow to $657 million for the financial year. Slide 13 steps out the movements in underlying NPAT, which, as mentioned, was 32% above the prior year. This slide shows the great job done across the business in driving costs out of our operations with a $32 million reduction in field operating costs, which equates to an 18% reduction in unit operating costs to $12.80 per barrel of oil equivalent, well below our FY25 target of $14 per barrel of oil equivalent. We're well on track to deliver our $11 barrel of oil equivalent target once Waits Year is up and running. It's also worth calling out that Beaches Operated Assets delivered a unit operating cost of $10.68 per barrel of oil equivalent this year. The operations within our control and over which we apply our strict operating principles have transformed Beaches Foundation. Turning to slide 14, which shows movements in cash during the financial year, which resulted in closing cash reserves of $172 million. Operating cash flow of $1.1 billion was a significant step up and was driven by higher production, largely across offshore Victoria, the delivery of five weight tier LNG cargoes and the cost reductions achieved. Sustaining capital expenditure of $465 million was 22% below last year, which again reflects our efforts in driving cost out of our business. Just to note, sustaining capex incurred during FY25 was $402 million, well below our target of $450 million, with the remainder reflecting movements in working capital. With a strong free cash flow generated this year, we paid down $215 million of debt, enabling us to maintain our low leverage position, which I'll turn to now. Slide 15 reflects our strong position. We ended the year with $652 million of available liquidity and have maintained our low leverage position reflected through 10% net gearing at the end of the financial year. Our capital management framework aims for net gearing to remain below 15% through our cycle. This target leaves ample capacity to increase debt levels to enable Beach to capture opportunistic growth. As Brett spoke to earlier, Beach delivered a record final dividend of $0.06 per share, bringing full-year dividends declared to $0.09 per share. This dividend reflects a balance between delivering strong shareholders' returns whilst maintaining capital for our organic capital program and to capture opportunistic growth. On that note, I'll hand back to Brett.