Beach Energy Limited

Thank you for standing by and welcome to the Beach Energy Limited FY26 half-year results. All participants are in a listen-only mode. There will be a presentation followed by a question and answer session. If you would like to ask a question, you'll 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 Mr Brett Woods, Managing Director and Chief Executive Officer. Please go ahead.

Thank you. Good morning everyone and welcome to Beach Energy's FY26 half-year results presentation. Joining me today is Anne-Marie Barbaro, our Chief Financial Officer. Together we'll take you through our half-year results and outlook for the remainder of FY26, before I open up the lines for Q&A. This morning I'm pleased to report a solid set of underlying results in what has been a very active first half across our core basins, with great progress made on delivery of some key milestones. This half, BEACH has continued to demonstrate great progress across our base business. through our strong operating discipline and outstanding safety and environmental performance. We end the half year in a strengthened financial position and are well placed to pursue growth. Slide 2 sets out the compliance statements, which I'll leave to read at your leisure. Slide 3 will begin, which highlights the key milestones achieved in the first half. Starting over in the west, first gas was achieved from the Wake Deer gas plant in early December, with the plant now in production ramp up. Two gas compressors have now been commissioned and the plant has reached peak rates of 165T today so far. The third compressor is expected to commence commissioning in the coming weeks and once ramped up we will deliver the plant's main bank capacity of 250T a day. Also on the Wake Deer front we listed four cargoes in the half, generating $233 million in revenue. Onshore in the Cooper Basin, the team were hard at work to restore operations from the severe flooding experienced in late FY25. I'm pleased to report that 97% of flood impact production has been brought back online at the end of the December quarter. This is a great outcome which will support our second half performance. We also welcome the Venture 101 rig into the western flank to commence our 12-well oil appraisal and development program. It's fantastic to have the active rig back in the western flank. which we'll talk through more in coming slides. Offshore, phase one of the Equinol 3 campaign was delivered, the drilling of the Heapleys Exploration Prospect, as well as safe completion of three offshore well abandonments across Otway and Bass Basins. Member CCS ticked over 12 months in operation, having safely stored over 1.5 million tonnes of CO2 since start-up. It was pleasing to see Moomba CCS meet the clean energy regulated strict compliance standards and each receive over 30,000 ACCUs per FY25. This puts BEACH well on track to achieve its target of 35% equity emissions intensity reduction by 2030. During the half, we also completed the refinancing of our 2025 and 2026 facility maturities. and secured a new $300 million in Asian term loan, lifting total available liquidity to $925 million. This positions Beach Wells to pursue growth and continue our crucial role of supporting national energy security. On the marketing front, Beach flooded more than 15 petajoules of gas into spot in short-term projects, driving a 13% increase in our realized gas prices for the half-year compared to the prior corresponding period. Turning now to slide four and our headline financial results. Our financial results for the half were solid in a period of major pressure delivery and flood recovery. This is the outcome of our team's discipline across operations and focused execution against our strategic objectives. Production of 9.5 million barrels of all equivalent was largely impacted by the 2025 Cooper Basin flood event. It is also worth calling out the positive performance of a production uplift in the prior corresponding period, providing a meaningful contribution to total production through continued success from our descaling initiatives. A great example of our potent mindset in action. Sales volumes have increased 3% to 12.7 million barrels all according, supported by a delivery of four LNG cargoes during the period. Successful delivery of gas marketing customer base, resulting in that 13% uplift in our realised gas prices to $11.80, which is over a 30% increase in realised gas prices over the past two years. This resulted in delivery of $1 billion in total revenue for the half year. These factors, combined with ongoing structural cost reductions achieved across our operated to deliver solid first half earnings with underlying EBITDA of $558 million and pre-growth free cash flow generation of $225 million. With a focus on prudent capital management and noting our dividend policy is a full year policy, today the board has declared an interim dividend of $0.01 per share with a step up in capital activity expected in the second half of FY26. which demonstrates our strong safety performance achievements for the half year. Notably, we've recorded no T1 or T2 process safety events during this period. We've also achieved over 12 months recordable injury-free at all our operated sites, which is an outstanding result and it credits all our staff in maintaining their dedication to safety through a period of heightened activity, including the commencement of the Equinox campaign over the winter period in offshore Victoria, as well as the recent commencement of all appraisal and development of trawling in the western flank. To put this safety result into context, beach activity has significantly increased half on half, with a 43% increase in man hours and field work complexity. For such a ramp-up to be achieved with no recordable injuries is a fantastic accomplishment, achieved through focus, execution, leadership and operating disciplines. Our team is dedicated to maintaining this disciplined flow as we recommence the Equinox campaign in offshore Victoria and deliver the Western Plain drilling campaigns in the second half of FY26. Turning now to slide 6, I was pleased to report the Waste and Joint Venture achieved the first gas milestone of the Waste and Gas Plan during December. Having now completed what is the most significant project in Beaches history, The wastage I mentioned experienced some minor operational issues in the early stages of ramp-up. However, with two compressors currently in operation, the plant has achieved its peak production rate to date of 165 terajoules a day. As the remaining compressors are identical, we will continue to work with the operator to ensure minimal disruption as we commission them in the third quarter and ramp-up towards our main plate capacity. I also wanted to take a moment to highlight the excellent work delivered through our commercial team with the operator, which saw us deliver another four LNG cargoes during the period, resulting in a total of 11 cargoes today and $740 million in revenue ahead of the Waits Your First gas. These cargoes were facilitated through a combination of gas from Ziris, plant production, gas time swaps, and purchase and listing arrangements with the Northwest Shelf. West Australian Government remains supportive of the WAX and joint venture achieving its agreed export volumes and the facility now affords a compelling pathway for Perth Basin Gas to market to Menton Beach in a strong position. Now cutting to slide 7 and the East Coast Gas Market. As we know, East Coast Gas supply is in steep decline with demand remaining strong over the longer term. It is important to highlight that current demand outlooks provided don't yet contemplate the material increase in demand expected from emerging industries, including data centres and AI. Over the last five years, Beech has invested over $2 billion in capital to develop new supply to the East Coast market. And for the first half of FY26, we supplied more than 18% of East Coast gas demand, delivering 100% of our production to domestic customers. Our gas marketing strategy and re-contracting efforts have diversified retailers gas-fired power generators and deliver an up-list in real-life gas prices of 30%. In late December, the government released its Gas Market Review Report, turning around a recommendation to develop a reservation policy model. We expect further consultation to commence shortly and culminate in legislative process in the first half of FY27. BEACH is supportive of a prospective domestic gas reservation policy. To be successful, however, It must be paired with streamlined approvals and other incentives to drive exploration and development. Domestic-only producers need to be prioritised, incentivised and not constrained in delivering new projects. Nor should we be impacted by pricing or regulatory constraints, as it is the domestic-focused companies like Beach, who are delivering the much-needed gas to Australian manufacturers, supporting and power generation, which in turn bolsters Australian jobs. While there is a lot of focus on supply from the north, there is also significant infrastructure, transport capacity constraints, which make the gas less attractive and higher costs. Opening up new plays, faster approval times and a fit-for-purpose fiscal setting in the southern basin must be a key outcome for the review. Best gas for the market is always going to be that which is produced closest to where it's used. Pleasingly, all relevant government the need for further exploration and development. Governments must stay focused on supporting upstream investment by domestic focus companies such as BEACH to ensure a balanced long-term solution for Australia's energy security. On the East Coast, we continue to invest in our core onshore and offshore assets, targeting new East Coast gas supply. Our operating facilities have been operating at over 99% reliability this past and provide us with the ability to leverage our existing infrastructure to support future market requirements. We have been busy offshore having safely completed phase one of the ECONOLDS campaign with a successful flood and abandonment of three legacy wells and the drilling of Hercules exploration prospect. As we announced through a quarter one result, the Hercules well was a moderate to high risk target and failed to intercept hydrocarbons. We're now waiting for the return of Equinox rig at the end of third quarter, when we kick off phase two of the offshore campaign with a well intervention at Thylacine West, followed by the drill and completion of Lavalla 2 development well and undertake the completion of Artisan 1. This will be followed by the final abandonment in the Bass Basin to complete the campaign towards the end of FY26. Looking forward, we are targeting FID on the Artisan and Lavalla connections in the second half of FY26. Both discoveries currently sit within our contingent resources. Subject to final investment decision, gas production will be targeted for FY29. We're also progressing the assessment of nearshore drilling and exploration opportunities. This will likely be a multi-world campaign drill from the enterprise pad and in a success phase tied into existing infrastructure. Onshore on the Cooper Basin, we're working closely with operator Santos to complete our active drilling campaign with four rigs drilling in the basin, roughly equating to 100 wells per year. Beaches' ongoing investment in new supply will be a key contributor to the east coast market in the medium to long term. Now turning to the western flank on slide nine. In December, we commenced our 12-well appraisal and development program targeting undeveloped reserves in the McKinley and Birkhead reservoirs. with the aim to add new production following a drilling hiatus I imposed over two years ago to enable Beech to refresh and deliver new drilling inventory. We've had early success in the Kalawonga field with the results of our first three development wells, and as of last Friday, Kalawonga 26 was brought online just 33 days from re-release, which is a real credit to the focused planning efficiencies achieved by the same. We have facilitated these rapid online times by pre-laying flowlines, utilising a fasted rig, and driving end-to-end synergies throughout the process. This significant improvement will see the next two wells, Hallamwood 24 and 25, be brought online within the next week. A very full-easing 100% success rate from our first six wells, which we look forward to continuing through the remainder of our appraisal and development program, the program aims remains on budget and most importantly, safely executed and continues to support possible future work programs. For our fit-for-purpose onshore rig is operating with 20% less manpower than its comparable rig in FY24 and a 60% reduction in beach personnel, a remarkable outcome for our beach team in conjunction with our contract partners delivering on our strict operating principles. On completion of the development and appraisal campaign, we will commence the 10 World Fall Exploration Programme, planned for late FY26 and carrying into FY27. The campaign forms part of our focus to rebuild 2PM2C resources across the Western Plain and secondly to refresh with a view to build high-quality inventory for future exploration campaigns. Turning now to slide 10 for a look at our second half priorities, On the west coast, production ramp-up for the waste and gas plant is our key priority, as the Operating Commission's third and fourth sales cap compresses in Q3 FY26 to bring the plant up towards name-plate capacity. Offshore, we look forward to commencing Phase 2 of the Equinox campaign with the Thalassine Well Intervention, drilling and completion of the Ovala II development well, and the undertaking of the completion at Ardison. In the Cooper Basin, we look forward to successfully drilling the remaining well in the oil development and appraisal campaign and kicking off our 10 oil well exploration campaign in the Western Flames, along with continued exploration, appraisal and development drilling in our non-operated Cooper Basin joint venture. On the marketing front, we'll continue to expand commercial marketing with industrial sector and gas power generators. And on that note, I'll hand over to Anne-Marie to discuss our financial performance.

Thank you Brett. Good morning all and thank you again for joining us today. Our headline financial metrics are set out on slide 12. Our first half results reflect solid performance as we made significant progress on flood recovery, delivered first gas at Waitsia and completed the first phase of the Equinox campaign in offshore Victoria during the period. Results for the half were underpinned by four Waitsia LNG cargoes, continued progress on structural cost reductions through our operated assets and delivery on our gas marketing strategy, which resulted in an increase in realised gas prices during the period. Earnings were impacted by lower production in the flood-impacted Cooper Basin and a softer bread price. Our average realised oil price was 12% lower compared to the prior corresponding period at Australian $110 per barrel, whilst average realised gas prices rose 13% to $11.80. Underlying EBITDA of $558 million and underlying MPAT of $219 million were down 5% and 8% respectively. Statutory earnings were impacted by the expensing of the unsuccessful Pennsylvania exploration well drilled during the half year, as well as costs associated with unutilised Northwest Shelf processing capacity. Slide 13 steps out movements in underlying MPAT. which, as mentioned, was 8% below the prior corresponding period. Sales revenue was largely in line at $982 million, with lower production and softer rent prices offset by two additional weight-fit LNG cargoes and strengthened gas prices. Higher cost of sales, including third-party purchases, tolling and inventory movements, facilitated the four weight-fit LNG cargoes listed during the half. Field operating costs were 8% lower than the prior corresponding periods, reflecting ongoing cost discipline across our operated assets. Notably, our operated assets delivered a unit operating cost of $10 per barrel of oil equivalent for the half year, reflecting that the operations within our control and over which we apply our strict operating principles continues to strengthen beaches-based business. Higher other income reflects a revaluation of the common-site overlooks liability recognised at the time we listed our one-off cargo at Waitsia in the first half of FY24. With a higher proportion now expected to be returning volume in the future, this reduces the cash settlement component, in addition to the foreign exchange gains made in the half. Slide 14 shows movements in cash during the year, which resulted in closing cash reserves of $235 million. Operating cash flow of $442 million includes around $1 billion in receipts from customers for the half and also includes $107 million in restoration payments, reflecting the delivery of three offshore abandonment wells during the period. Total payments for capital expenditure for the half was $377 million, reflecting Waitsier Stage 2 completion, drilling of the Hercules Well in offshore Victoria, ongoing drilling throughout the period at the Cooper Face and Drake Venture, and the commencement of our Western Flank Oil Development and Appraisal Campaign. Slide 15 reiterates Beech's strong financial position. We ended the half year with $925 million of available liquidity and have maintained our low leverage position, reflected through 12% net gearing reported at the end of the period. As Brett spoke to you earlier, we have announced an interim dividend of $0.01 per share, reflecting capital management discipline and to acknowledge the heightened capital activity and spend across optional Victoria and the Cooper Basin in the second half. As our dividend policy is an annual policy we will revisit this at the full year. On that note I'll hand back to Brett.