FY20 Highlights

• Ended the year with $50m Net Cash, highlighting Balance Sheet strength
• ROCE > 19% because of high-margins from onshore oil and diversified pipeline gas business
• No write down of producing assets at reduced commodity prices
• 214% 2P organic reserves replacement ratio(2) and 352 MMboe of 2P reserves
• 178 wells drilled at a success rate of 81%
• Underlying NPAT $461 million and Statutory NPAT $501 million
• Final Dividend 1 cent per share

Revised Growth Strategy

• Same plan at a prudent pace to manage the impact of COVID-19 and oil prices
• Waitsia Stage-2 FID anticipated in December 2020 quarter, gas from new 250 TJ/d facility to be processed into LNG at North West Shelf Facilities
• Waitsia Stage-1 expansion being commissioned, Beach Perth Basin joint ventures providing 40 TJ/d to
• WA domestic gas market in FY21 and seeking further domestic gas sales opportunities
• 6+ well offshore Victorian Otway Basin drilling campaign to commence by March 2021 via a new rig contract signed with Diamond Offshore
• Revised low-risk investment profile targeting 37 to 43 MMboe production in FY25 from existing portfolio
• 5-year outlook generates >$2 billion of FCF at lower price assumptions
• Significant Carnarvon Basin prospect, Ironbark, to be drilled by BP in Q2FY21

Beach Energy has today released its FY20 Full Year results, as well as FY21 guidance, and an updated 5-year outlook that recommits Beach to a multi-year growth strategy.

In releasing its FY20 Full Year Results, Beach announced it had recorded a Net Profit After Tax of $501 million and ended the year with $50 million in net cash.

Managing Director Matt Kay said it was a year in which the company’s robust financial position entering the COVID-19 pandemic means it is well positioned to succeed in the lower oil price environment and continue its actively-controlled growth program.

“In a year like no other, FY20 demonstrated the resilience of the Beach business,” Mr Kay said. “Our net cash balance sheet position, high margin oil business, stable gas revenues and dedicated staff delivered a strong full year result despite the choppy waters that confronted us in the second half of FY20. Our diverse business generated a 19% ROCE, and our excellent performance with the drill bit saw 178 wells drilled at an 81 per cent success rate, contributing to a 2P organic reserves replacement ratio of 214 percent.

“Given our high margin, high returning business, Beach was in an enviable position at the end of the financial year in which we had no material write downs and were able to maintain our final dividend at 1 cent.”

Mr Kay said the strong operational performance of the business, with production of 26.7 MMboe, 2% higher than pro forma FY19 production (26.2 MMboe), was a testament to how Beach managed the impacts of COVID-19 across the business.

“FY20 was a year in which we made new gas discoveries in the Perth and Otway basins, we commissioned a new gas plant in South Australia and connected new supply to our Otway Gas Plant in Victoria, the first new supply to that plant in more than four years,” Mr Kay said.

“Western Flank oil again hit new heights, producing as much as 23,000 barrels per day in the second half of FY20, and, significantly, Beach achieved an organic 2P reserves replacement above 200% for the third consecutive year.

“Our facilities performed at 98% reliability, a testament to the performance and the resilience of our workforce in FY20.”

Mr Kay said the continued underlying performance of the business coupled with a net cash balance sheet meant Beach would continue to invest through the cycle – albeit at a measured pace with more $300 million of FY21 capex deferred.

“We have made prudent decisions in response to the current low oil price environment and COVID-19, slowing the pace of our current program and continuing to drive down operating costs – but importantly, our destination remains the same,” Mr Kay said.

“We have an exciting program ahead of us, with our offshore drilling campaign in the Victorian Otway Basin expected to commence by March 2021 following the execution of a new rig contract with Diamond Offshore.”

In the west, the Waitsia JV has made great progress, closing in on a Final Investment Decision of our Stage 2 development in the December quarter, which will see 250 TJ/day of processing capacity developed to supply gas and produce LNG through the North West Shelf while also committing to ongoing supply to the WA domestic market. Subject to the finalisation of various agreements and approvals, production is currently estimated to commence in late calendar 2023.

Mr Kay said Beach’s revised low-risk investment profile has a target to deliver between 37 and 43 MMboe of production in FY25, while generating more than $2 billion of free cash flow at lower price assumptions.

“Beach has set itself up to be in a position of strength during this downturn. We expect to invest in our highmargin and diverse portfolio and target creating over $2 billion of free cash flow over the next 5 years,” Mr Kay.

“Our current projections have Beach remaining in a net cash position through our peak investment years at around US$40/bbl Brent. This means Beach has the ability to pursue growth despite the current macro challenges.”

FY21 guidance

Summary of reserves at 30 June 2019 (developed plus undeveloped, net to Beach)

• 2P reserves increased by 8% from 326 MMboe to 352 MMboe
• 214% organic 2P reserves replacement ratio
• 263% organic 2P reserves replacement ratio average FY18 - 20
• 2P reserves life increased from 12.4 years to 13.2 years4
• Initial booking of 29 MMboe 2P reserves at Beharra Springs Deep
• 159% 2P reserves replacement ratio in Western Flank Oil
• Reserves includes impact of sale of interest in La Bella and Beharra Springs
• 75% of 2P reserves independently audited in FY20
• Long term oil price assumption reduced in-line with consensus forecasts
• As a sensitivity, a further 20% reduction in commodity (oil and gas) price assumptions would reduce 2P reserves by less than 3%

KeyFacts Energy: Woodside Australia country profile