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 FY26 full-year results presentation. Joining me today is Anne-Marie Barbero, our Chief Financial Officer. Together, we will take you through this year's operational and financial results, progress we have made against our strategic priorities, and the outlook for FY27 before opening the lines for Q&A. FY26 was a year of tangible delivery against the strategic reset we outlined two years ago. We assisted our operator in bringing a major project into production at Waitsia, executed a large offshore campaign in Victoria, recommenced drilling in the western flank after nearly a three-year hiatus, grew margin across our business through an embedded cost discipline, commercial focus, and the owner's mindset, and maintained a strong focus on safe and reliable operations. Importantly, that discipline translated into strong cash generation and strengthened balance sheet. Beach delivered positive all-in free cash flow during a major period of project execution, supported by increased realized gas pricing, lower field operating costs, and disciplined capital allocation. We also reinforce as a critical supplier of domestic gas on the East Coast, our operated assets and non-operated interests supplied approximately 19% of total gas demand, with 100% of our East Coast gas production delivered to domestic customers. As a result, Beach enters FY27 in a stronger financial position with greater flexibility to fund disciplined organic investment, pursue value-accredited organic opportunities, with a view to building the resource base to support the next phase of growth. Slide two sets out our compliance statements, which I'll leave to you to read at your leisure. We begin with our headline results on slide three. FY26 headline results demonstrate the resilience of Beech's operating model, with commercial execution and cost discipline helping offset production headwinds and support strong cash generation. Production of 19.4 million barrels, all equivalent, was 2% below the prior year, primarily due to the Cooper Basin flood event and further severe rainfall in February-March of this year. All operated assets delivered above their FY26 targets, but this was partially offset by the delay to first production and a slower ramp-up for Waitsia. Waitsia achieved its nameplate capacity of 250 turtles a day in April, Beach will continue the ongoing support of the operator as it continues to work towards sustained production rates. Sales volumes were 22.9 million barrels of all equivalent with revenue of $1.8 billion. While lower production reduced sales volumes, revenue benefited from six LNG cargos with a 7% uplift in realized gas pricing, reflecting the continued value of our targeted gas marketing strategy. Host discipline also remained a key focus, with total field operating costs reduced by 3%, including the addition of the waste to gas plant operations from December. Together with stronger realized gas pricing, this supported underlying EBITDA of $1 billion and pre-growth free cash flow of $458 million. Today, we announced a refreshed capital management framework, which is designed to support discipline growth and increase total shareholder returns over time. whilst maintaining prudence as we navigate through a period of uncertainty with the domestic gas reservation policy still under review. We will continue to review the framework as our portfolio evolves. The approach is deliberately disciplined. It preserves financial flexibility, directs capital to the opportunities with the strongest returns, and provides a clear pathway to grow total shareholder returns over time. Within this framework, the Board has declared a final dividend of $0.02 per share, bringing full-year dividends declared to $0.03 per share fully franked. Slide 4 brings together the key FY26 milestones that demonstrate delivery against the strategy. Across our core hubs, FY26 was defined by safe execution and the delivery of critical infrastructure. In the West, Waitstir commenced production in December, establishing a long-life infrastructure platform in the Perth Basin. We are working closely with operator Mitsui to move the plan towards steady-state operations following a planned statutory shutdown in September. On the East Coast, Beech supplied 100% of its gas production to domestic customers, with our operated and non-operated interest supplying approximately 19% of the total East Coast gas demand. This clearly reinforces the critical role of domestic-only producers in the Australian economy, and why we continue to advocate for policy settings that support new supply and long-term energy security. Safety performance was also a standout. The team achieved 18 months recordable injury-free while executing major offshore activity, drilling in the Cooper Basin, and day-to-day field operations across our portfolio. This is an exceptional outcome, last achieved in 2011, when beach operated only in the Cooper Basin. Member CCS also conditioned to perform strongly with nearly 2.3 million tonnes of CO2 equivalently safely stored since the start-up. We also maintain our focus on margins and cash generation, with commercial execution and cost discipline helping to convert operational delivery into strong financial outcomes. Our targeted gas marketing strategy saw 29 petajoules of gas sold into spot and short-term markets across a diversified customer base, supporting high realized gas pricing and improved margins. The six LNG cargoes of Waitsea delivered revenue of $343 million, supported by a combination of gas time swaps, purchases, Waitsea production, and Northwest shelf-lifting arrangements. Our sustainable growth pillar remains focused on lengthening the duration of our portfolio. In FY26, we took disciplined steps to high-grade the portfolio monetize high-cost and low-margin investments and add exposure to attractive growth opportunities across Queensland, the Cooper Basin, and the onshore railway. During the year, we announced the sale of our 60% operated interest in Vic L35, the offshore permit that contains the artisan discovery. That transaction enables Beach to monetize the asset while preserving exposure to future development through a production royalty. Importantly, it also allows us to redeploy more than $500 million of near-term capital to higher value opportunities. We also expanded our footprint in Queensland through new acreage awards with our joint venture partners in the Taroom Trough and Cooper Basin, alongside additional acreage in the Onshore Otway. The Taroom Trough is one of Australia's most active exploration and prize areas, and I'll speak to that in more detail later in the pack. The three new Cooper Basin Joint Venture Blocks capture an existing field extension and further strengthen our exploration portfolio. We also acknowledge the Queensland Government's proactive approach to the release and award of exploration acreage in both the Taroom and the Cooper. A supportive Government is paramount to establish affordable and reliable energy over the long term. On the organic front, we commenced our Western Flank Oil Appraisal and Development Program with with success across all nine wells drilled today. The remaining three wells are scheduled to be drilled in the first half of FY27, along with the commencement of an eight-well exploration campaign. Taken together, these milestones demonstrate that BEACH is delivering against the strategy, operating safely, improving margins, strengthening the portfolio and building the resource base to support discipline growth. Turning to slide five, FY26 was the record year for health and safety and environmental performance, achieved during a period of significant operational activity across the portfolio. The team safely executed more than 1.5 million work hours, including the offshore Equinox campaign in Victoria, an active onshore drilling program in the western flank, and day-to-day operations across our operated assets. Beach has now been recordable injury-free for more than 18 months, a performance level last achieved in 2011 when the company operated a single offshore asset. Importantly, we recorded no T1 process safety events during the year, noting our last T1 process safety event was in February 2020. This outcome reflects the discipline of our operating model, the commitment to our people, and the focus on planning, risk management, and frontline execution. Those foundations will remain critical in FY27 as we continue to work across programs over our core hubs. Slide six shows how the owner's mindsets we introduced through the strategic reset is now embedded in the way Beach operates, allocates capital, and captures value across the portfolio. For us, an owner's mindset means every asset team is accountable for safe delivery, cost discipline, capital efficiency, and the commercial value of every molecule produced. It is about making decisions as an owners of the capital, not simply operators of the assets. That discipline is visible in the operating cost base. Operated fields have reduced by 18% since FY24, reflecting structural cost out, tighter activity planning and stronger frontline accountability. While FY26 field operating costs finish slightly above our $11 per barrel all-equivalent target at $11.40 per barrel, This was impacted by lower production and weather-related disruptions in the Western Flames. The underlying cost trajectory remains clear and strong. The same mindset is evident commercially. We have been deliberately and actively managing uncontracted gas volumes, increasing exposure to spot and short-term markets, adopting alternative pricing models and optimising routes to market across our portfolio. Since H1 FY24, this has supported a 29% uplift in average realized gas pricing. Importantly, this operating discipline is translating into cash outcomes. We have kept our pre-growth free cash flow breakeven all plus well below US $30 per barrel for the last two financial years and continue to meet our sustaining capital target. That is the owner's mindset in practice, lower structural costs, higher realized value, disciplined capital deployment and strong cash generation. Flight 7 sets out our position on the domestic gas reservation and the role policy can play in supporting new supply. Beach supports prospective reservation for new gas developments provided it is implemented on a must-offer, not must-sell basis. That distinction is important because it ensures new domestic suppliers are made available to Australian customers while preserving market discipline investment confidence and efficient allocation of gas to the customers who value it most. Gas support is conditional on any scheme being prospective, rules-based, transparent and linked to a published adequacy test. It should also be recognised physical market realities prioritising domestic supply close to customers and infrastructure and aligning obligations with market and the asset capable of serving. So Beach, This reinforces the strategic choices that we are making. We have monetized high-cost developments through sale, and we are prioritizing low-cost onshore developments where gas can be brought to market efficiently, while continuing to target high-margin, large-scale offshore opportunities that can materially extend life and scale to our portfolio. At the same time, our marketing strategy will remain focused on value capture and customer alignments. We will continue working closely with customers, expanding our routes to market across domestic supply, LNG export, and emerging demand, and using portfolio flexibility to maximize value while supporting reliable energy supply. Slide 8 sets out our reserves and resources position as at 30 June 2026, and the action is underway to rebuild and extend the resource base. CUPE reserves 156 million barrels of oil equivalent at the year end. The annual movement was primarily driven by production of 19.4 million barrels of oil equivalent, partially offset by positive revisions from the Western Flank campaign and through the Cooper Basin joint venture. The key contributors included the Western Flank, reflecting successful oil appraisal and development drilling and improved performance across our operated assets. The Cooper Basin joint venture are reflecting an improvement in reservoir performance, exploration success, and additional undeveloped opportunities. The proportion of 2P developed reserves increased slightly to 77%, up from 76% in the prior year, supported by successful drilling activity in the western flank. Our 2C contingent resource position remained broadly stable at 174 million barrels of oil equivalent at 30 June 2026. Further detail on our reserve position is included in the annual report which has been released today. Looking ahead, the FY27 program is focused on building the resource base with targeted organic growth opportunities across the portfolio. This includes active exploration and appraisal across our east and west coast assets, planned seismic activity across the recently awarded Queensland gas exploration blocks to high-grade future opportunities, and progressing the Moomba Central Optimization Project. The MCO project is expected to improve production recovery, reduce fuel consumption, and support lower development costs through a more optimized central fuel drilling strategy, ultimately improving the pathway from 2C to 2P reserves. In parallel, we'll continue to progress growth opportunities in the offshore hotway, T30, T50P permits, as well as the Perth Basin backfill opportunities, which we will cover in more detail later in the presentation. With that, I'll now hand over to Anne-Marie for a deeper dive into our FY26 financial results.

Thank you, Brett, and good morning, everyone. FY26 headline financial metrics demonstrate the resilience of the business with disciplined cost management and commercial execution helping offset lower volumes and softer leverage pricing, largely reflected from LNG. Sales revenue of $1.8 billion was 10% below the prior year, primarily reflecting lower crude sales volumes following Cooper Basin flood impacts and lower gas sales volumes in the Otway. This was partly offset by the contribution from six Whitesia LNG cargoes and stronger realised gas pricing, reflecting continued execution of our targeted gas marketing strategy. These commercial benefits, combined with structural cost reduction across our operated assets, supported our underlying EBITDA of $1 billion with an improvement in EBITDA margin at 57% and underlying net profit after tax of $355 million. Statutory earnings were $281 million with a difference to underlying earnings primarily reflecting the write-off of the unsuccessful Hercules exploration well at the half-year and costs associated with unutilised north-west shelf processing capacity. prior to the commencement of production at Waitsia. Turning to slide 11, the waterfall chart highlights the year-on-year movement in underlying NPAT. Lower sales revenue, down 10% on the prior year, reflected lower crude and gas sales volumes, combined with soft-delivered pricing. These impacts were partly offset by high realized gas pricing, up 7% on the prior year, and the benefit of one additional LNG cargo from Waitsia. Cost of sales benefited from lower third-party purchases following the commencement of production at Waitsia, coupled with lower royalties which were driven by lower revenue in the flood-impacted Cooper Basin. This was partly offset by higher tolling, LNG-related inventory movements and depreciation following commencement of production at Waitsia. Build operating costs were 3% lower than the prior year, and that includes the addition of Waitsia gas plant operations from December. This demonstrates the cost discipline now embedded across our operated assets and reinforces the strength of the operating model. Higher other income included recognition of carbon credits received during the year at market value. The revaluation of the condensate over-lift liability initially recognised when we lifted the one-off weight-year cargo in the first half of FY24 and foreign exchange gains during the period. Slide 12 reflects the movement in cash during FY26, with closing cash reserves of $213 million. Operating cash flow of $890 million reflected the benefit of six weightsier LNG cargos, strong realised gas pricing and continued cost discipline across the business. Operating cash flows also include beaches offshore decommissioning activities conducted during the financial year as part of the Equinox campaign, which is now largely complete. Sustaining capital cash payments for $422 million, including sustained capital incurred of $394 million and working capital movements, well below the $450 million operating principle, reinforcing the capital discipline now embedded in the business. Importantly, Bates delivered positive all-in free cash flow during the year of elevated capital activity, including heightened offshore activity and the decommissioning of four offshore wells. The outcome further strengthened our financial position and preserved flexibility to fund future growth. Slide 13 highlights the strength of Beach's financial position at year end and the flexibility it provides to fund disciplined growth. We ended FY26 with $983 million of available liquidity up 51% on the prior year. This was supported by positive free cash flow generation and the 300 million Asian term loan secured in December completed with strong lender support. We also maintain the low leverage position with net gearing of 10.6% at year end. This remains below our target of below 15% providing balance sheet capacity to support discipline, organic investment and assessment of value accrued in organic growth opportunities. As noted, the board has declared a final dividend of 2 cents per share bringing full-year dividends declared to $0.03 per share, while preserving flexibility to fund the next phase of growth. I'll talk to this decision more now. Slide 14 sets out our refreshed capital management framework, which is designed to support disciplined growth and increase total shareholder returns over time, whilst maintaining prudence as we navigate through a period of uncertainty with the domestic gas reservation policy still under review. The hierarchy is clear. First, we'll fund the sustaining capital required to operate the base business safely, reliably and efficiently. Second, we'll allocate capital to organic and inorganic growth opportunities only where they are value accretive, risk balanced and meet our disciplined hurdle rates. Our through the cycle gearing target remains around 15% with capacity to move up to 25% through the growth cycle where the returns justify it. This provides the flexibility to navigate the current period of domestic gas market review uncertainty while continuing to pursue high return opportunities across the portfolio. Surplus free cash flow after sustaining capital growth and balance sheet requirements will then be available for the board to consider shareholder distributions, including dividends and other capital returns. Put simply, the framework prioritises four things, sustaining the base business, Investing in growth where it creates value, maintaining a strong balance sheet and returning surplus cash to shareholders. We'll continue to review the framework as the portfolio evolves, but the approach is deliberately disciplined. It preserves financial flexibility, directs capital to the opportunities with the strongest returns and provides a clear pathway to grow total shareholder returns over time. With that, I'll hand back to Brett to take you through the outlook.