annual general meeting - asx.com.au · annual general meeting . for personal use only. ... evita...

AWE Limited Annual General Meeting

27 November 2013

For

per

sona

l use

onl

y

Opening Welcome

For

per

sona

l use

onl

y

Opening Welcome, AWE Limited’s 2013 AGM

3 Bruce Phillips, Chairman

For

per

sona

l use

onl

y

Introduction of directors Bruce Clement, Managing Director David McEvoy

4

Andy Hogendijk Kenneth Williams

For

per

sona

l use

onl

y

Introduction of directors Vijoleta Braach-Maksvytis Raymond Betros

5

Karen Penrose Neville Kelly, Company Secretary

For

per

sona

l use

onl

y

Indonesian Advisory Board Members Introduction

Evita Herawati Legowo

• Evita is the former Director General of Oil & Gas of the Ministry of Energy and Mineral Resources (2008-2012).

• She was a Commissioner of PT Pertamina (Persero) from May 2010 to April 2013.

• Evita received a Dr. Ing. in Oil Chemicals from Technische Universität Clausthal Germany in 1991.

• She also currently serves as a lecturer at the Swiss German University in Jakarta and is a Commissioner and adviser for a number of Indonesian and international companies.

Evita Herawati Legowo

6

For

per

sona

l use

onl

y

Indonesian Advisory Board Members Introduction

Suwito Anggoro • Suwito is CEO of PT Austindo Nusantara

Jaya (Food, Agro & Renewable Energy).

• Previous roles include Commissioner and then Deputy President Director of PT ANJ, President Director of Chevron Pacific Indonesia (CPI) and before that as Senior Vice President Exploration, Production & Technology (EPT), Business Development & Non-Operated Joint Ventures (CPI).

• Suwito holds a degree in electrical engineering from the Bandung Institute of Technology, Bandung (1979), a Master of Science in Power System Engineering from Union College, Schenectady, New York (1986) and achieved a certification in International Business Management from University of Michigan, Ann Arbor in 2000.

Suwito Anggoro

7

For

per

sona

l use

onl

y

Today’s formal business

Notice of meeting Accounts and reports Chairman’s address Managing Director’s report Questions

Resolution 1 - Remuneration report Resolution 2(A) - re-election of Vijoleta Braach-Maksvytis as a

director Resolution 2(B) – re-election of Kenneth Williams as a director Resolution 2(C) – election of Karen Penrose as a director Resolution 3 - Issue of Cash Share Rights Closure

8

For

per

sona

l use

onl

y

AWE on course Bruce Phillips,

Chairman

9

For

per

sona

l use

onl

y

US shale growth has driven down US gas and oil prices

10 Source: Bloomberg

For

per

sona

l use

onl

y

AWE performance vs ASX indices

11

For

per

sona

l use

onl

y

AWE relative to peers

12

Source: Bloomberg, Company filings. Notes: (1) Peer group includes Horizon, Beach, TAP, Aurora, Senex, Drillsearch, NZOG, Nexus, ROC Oil (not in that order). (2) Enterprise Value as of 18-Nov-13

Source: Bloomberg, Company filings. Notes: (1) Peer group includes Horizon, Beach, Aurora, Senex, Drillsearch, NZOG, Nexus, ROC Oil (not in that order). (2) Reserve Life = 2P Reserves / annualised production.

AWE cheapest of its peers

Long reserves life compared to peers

For

per

sona

l use

onl

y

A year of achievement

Bruce Clement, Managing Director

13

For

per

sona

l use

onl

y

Disclaimer This presentation may contain forward looking statements that are subject to risk factors associated with the oil and gas businesses. It is believed that the expectations reflected in these statements are reasonable but they may be affected by a variety of variables and changes in underlying assumptions which could cause actual results or trends to differ materially, including but not limited to: price fluctuations, actual demand, currency fluctuations, drilling and production results, reserve estimates, loss of market, industry competition, environmental risks, physical risks, legislative, fiscal and regulatory developments, economic and financial market conditions in various countries and regions, political risks, project delay or advancement, approvals and cost estimates.

This presentation may also contain non-IFRS measures that are unaudited but are derived from and reconciled to the audited accounts. All references to dollars, cents or $ in this presentation are to Australian currency, unless otherwise stated.

The reserve and resource information contained in this report is based on information compiled by Neil Tupper (General Manager, Exploration & Geoscience) and Ian Palmer (General Manager, Development). Mr Tupper is a Geologist with a Masters Degree in Sedimentology and has over 30 years’ experience in petroleum exploration. Mr Palmer holds a Bachelor Degree in Engineering and has 32 years’ experience in the practice of petroleum engineering. Both have consented in writing to the inclusion of this information in the format and context in which it appears.

14

For

per

sona

l use

onl

y

Agenda

• Highlights

• Financials

• Operations

• Growth Projects

• Future Direction

15

For

per

sona

l use

onl

y

A year of achievement

Strong operational and financial performance

in FY 2012-13

16

For

per

sona

l use

onl

y

Highlights for FY 2012-13

Sustainability

Reserves

Production

AAL Selldown

Growth Projects

Unconventional

• Safety performance improved substantially, no reportable environmental incidents, positive community engagement

• 2P Reserves more than doubled to 110.4 mmBOE in the 6 months to 30 June 2013

• Production up 6% to 5.0 mmBOE, strong revenue and cash flow

• AAL oil project significantly enhanced; sale of 50% interest for USD188 million subsequent to year end

• Sugarloaf production up 273%, 2P Reserves increased 52%, cash positive in FY2013-14

• AAL POD optimised, 2P recoverable oil up 33% to 101 million barrels gross, booked 50mmbbls to 2P Reserves

• BassGas achieves FID for development drilling in 2014

• Perth Basin unconventional gas testing delivers positive results

• Senecio stage 1 development under way

17

For

per

sona

l use

onl

y

Strong financial performance AWE met or exceeded its financial targets • Sales Revenue $301 million • Field EBITDAX $185 million • EBIT $61 million • Statutory NPAT $20 million • Operating cashflow $118 million

after tax Sound balance sheet at 30 June • Cash $41 million • Debt $78 million • Undrawn facilities $222 million

• Note: excludes proceeds from AAL sale

18

For

per

sona

l use

onl

y

Strong operating performance

19

AWE has a balanced operating portfolio • Strong performance from

South Eastern Australia and the USA offset declining oil production from New Zealand and Western Australia

Focused on cost control • Disciplined exploration

program capped at $50m per year

• Development expenditure well planned and managed

For

per

sona

l use

onl

y

Operational review

20

For

per

sona

l use

onl

y

AWE focused on oil and high value gas

21

For

per

sona

l use

onl

y

Contribution by asset

22

Bass Gas (46.25%) Production: 1.2 MMBOE 2P Reserves: 27.9 MMBOE

Casino/Henry (25%) Production: 1.4 MMBOE 2P Reserves: 10.9 MMBOE

Onshore Perth Basin (33-100%), some Operated Production: 0.5 MMBOE 2P Reserves:1.9 MMBOE

For

per

sona

l use

onl

y

Contribution by asset

23

Tui Oil Fields (42.5%), Operator Production: 0.7 MMBOE 2P Reserves: 2.5 MMBOE

Cliff Head Oil Field (57.5%) Production: 0.6 MMBOE 2P Reserves: 2.7 MMBOE

Sugarloaf AMI (10%, net ~7.5% after royalties) Production: 0.7 MMBOE 2P Reserves:14.8 MMBOE

For

per

sona

l use

onl

y

Reserves doubled in 6 months to 30 June

Reserves at 30 June 2013 represent more than 20 years of production at current rates

24

For

per

sona

l use

onl

y

2P Reserves weighted towards liquids

25

Reserves will reduce after AAL sale by approximately 25 mmbbls, but AWE received USD100 million cash before tax and USD88 million capex carry, cost recoverable to AWE

For

per

sona

l use

onl

y

Safety gains reflect operational performance

Improved safety performance reflects well managed operations • Corporate HSE manager appointed • Renewed focus on contractor performance • No LTI’s in past 12 months has reduced rolling rate to zero • No reportable environmental incidents

26

For

per

sona

l use

onl

y

Positive stakeholder engagement

27

AWE’s approach to community stakeholder engagement stands on four key pillars OPERATIONAL EXCELLENCE • Health, safety and environmental

management • Application of best available

technologies • Extensive risk assessment and

management

OPEN ENGAGEMENT • Honest, transparent, timely and

relevant • Community right to know • Community right to a say • Always consider community needs

and expectations

BEYOND COMPLIANCE • Compliance is the minimum standard • Environmental management goes

beyond compliance • Priority given to community and

stakeholder engagement

RETURNS TO THE COMMUNITY • Open negotiations and fair

compensation to landowners • Economic benefit from direct and

indirect local employment • Social investments and sponsorship

For

per

sona

l use

onl

y

Experienced management team

28

AWE Key Executives Bruce Clement • Managing Director

• Engineer with 30+ years’ of technical, financial and management O&G experience in Australia and internationally

Ayten Saridas • Chief Financial Officer • 20+ years’ experience in corporate finance, treasury and financial

risk management in resources and financial markets

Dennis Washer • Chief Operating Officer, General Manager New Zealand • 30+ years’ management experience in international O&G industry

Neil Tupper • General Manager, Exploration and Geoscience • 30+ years’ experience in Australian and international O&G

exploration and production

Michael Drew • General Counsel, General Manager Commercial • Extensive major law firm and O&G experience in Australia, UK,

Russia, Canada and the USA.

Neville Kelly • Company Secretary, General Manager Corporate • 30+ years’ financial, commercial and company secretarial

experience in the upstream O&G

Ian Palmer • General Manager Development • 30+ years’ engineering, operational and project management

experience in upstream O&G

For

per

sona

l use

onl

y

Growth initiatives

29

For

per

sona

l use

onl

y

AWE delivers transformative project Significantly enhanced AAL Plan of Development • Constructed new reservoir model

following comprehensive review of subsurface data

• Improved facilities design to handle high water cut and initial production rates above 25,000 bopd

• Improved drilling and completion design

• Total wells reduced from 43 to 33 with longer horizontal reach and increased reservoir contact

Delivered • K-Sand gross recoverable oil up

33% to 101 mmbbls (2P) • Additional gross recoverable

36 mmbbls in G-Sand (2C, not included in POD)

30

For

per

sona

l use

onl

y

Sale of AAL oil project is complete AWE crystallises value in AAL asset • Acquired 100% of Northwest Natuna

and Anambas PSCs in February 2012 for US$139 million

• Sold 50% interest in Northwest Natuna PSC to Santos for US$188 million in August 2013

• Expected to generate estimated unaudited profit of approximately A$60 million

• Operatorship has transferred to Santos

• FID planned for 1H 2014 and First Oil in 2016

31

For

per

sona

l use

onl

y

Sugarloaf shale oil and gas Quality Eagle Ford shale play highly leveraged to liquids • Reported production up 273% year

on year • Current production approximately

2,300 boepd net at 30 September • Cash flow positive in 2013-14 • Net 2P Reserves increased 53% to

14.8 mmBOE at 30 June 2013 • Net 2C Contingent Resources now

5.0 mmBOE with upside potential • Further growth potential being

realised: − Preliminary results positive from down-

spacing pilot wells drilled in 2013 − Austin Chalk initial well performance

similar to Eagle Ford wells

32

Sugarloaf AMI, Texas, USA

For

per

sona

l use

onl

y

AWE’s leveraged to rising gas markets

Substantial uncontracted domestic gas position • Industry experts expect the

domestic gas price to rise sharply over the next 5-10 years as demand for LNG plants increases

• Over 50% of AWE’s 2P gas reserves is uncontracted

• None of AWE’s 2C gas resources are contracted

33

For

per

sona

l use

onl

y

Substantial east coast gas potential Significant exploration, appraisal and development opportunities in Otway and Bass Basins • BassGas expansion opportunity to

include Trefoil, White Ibis and Rockhopper discoveries

• Casino/Henry addition of Blackwatch discovery

• Vic/P67 – La Bella discovery and exploration potential

34

For

per

sona

l use

onl

y

Perth Basin unconventional gas Momentum building • AWE is accelerating unconventional

gas activity in calendar 2014 − 2-4 wells planned − Arrowsmith-2 evaluation − 3D seismic planned

• Basin dominant position with extensive acreage - 3,380 Km2 across 10 licences

• Existing gas plants and pipeline infrastructure improves opportunity for commercialisation

• Positive outlook for gas markets

35

UNCONVENTIONAL GAS PLAY FAIRWAY

For

per

sona

l use

onl

y

Perth Basin near term activity Accelerating activity in Perth Basin in 2014 • Opportunity for early

commercialisation in northern licences

• Plans to drill up to 3 wells − Senecio − Corybas − Synaphea

• Substantial contingent and potential resources identified

• Senecio first stage development drilling

• Geothermal opportunity being considered subject to significant government financial assistance

36

For

per

sona

l use

onl

y

Indonesia appraisal & exploration Indonesia remains a key platform for AWE’s expansion into Asia • Lengo-2 (Bulu PSC, 42.5%) − Achieved gas flow rates of 4.5 mmscf/d

for DST1 and 21.2 mmscf/d for DST2 − Operator assessing commercialisation − Draft POD prepared and gas marketing

opportunities being developed

• North Madura PSC (50%, Operator) − Evaluating opportunity to drill Dyah-1

exploration well

• Indonesian unconventional gas − Shale gas study assessed and approved

by regulator − Award subject to finalisation of PSC terms

37

For

per

sona

l use

onl

y

Business development LaBella (Vic/P67) • Farmed in for 60% working interest in

La Bella gas field, offshore Victoria and Operatorship

• Adjacent to Vic/P44 (Casino) • Acquisition of 3D Seismic under way • AWE’s carry capped at US$1.8 million • Peer company paid 2x more per %

point than AWE to farm in

Tui (PMP38158) • Acquired additional interest in Tui oil

project and Oi exploration well from Mitsui for US$6.4 million

• Drilling 2 wells in early 2014 − Pateke-4H development well − Oi exploration well

38

Kan Tan IV offload in Admiralty Bay, New Zealand

CGG Viking 2 acquiring La Bella 3D seismic survey

For

per

sona

l use

onl

y

Future direction

39

For

per

sona

l use

onl

y

Core strengths • Engineering and geoscience

technical excellence • Extensive financial and commercial

capabilities and discipline • Strong board and management • Ability to identify and acquire assets

with significant upside potential • Robust balance sheet and strong

cash flow from a portfolio of assets

40

• Targeting early involvement in projects where AWE can add substantial value

For

per

sona

l use

onl

y

Delivering our strategy

Leverage skills from unconventional into new opportunities • Continue Perth Basin shale testing at Arrowsmith-2 and drill Drover-1 • Develop Ande Ande Lumut oil project with Santos • Midwest Geothermal Power Project will deliver valuable well data in Perth Basin

41

Identify and pursue selective growth assets

Deliver opportunit-ies near existing infrastructure

Optimise core asset production performance

Deliver base business

Maximise near-field opportunities

Develop new ventures and opportunities

Grow through exploration & acquisitions

Leverage skills from unconventional into new opportunities

LEVERAGE OUR CORE STRENGTHS

For

per

sona

l use

onl

y

42

Plan to double production in 3-5 years

Note: Based on Brent oil price of USD100 per bbl, illustrative model only and not formal company guidance

For

per

sona

l use

onl

y

43


Ande Ande Lumut production uplift


For

per

sona

l use

onl

y


44

Ande Ande Lumut production uplift

2C Contingent Resources


For

per

sona

l use

onl

y

Cash flow growth

45

AWE has financial capacity to deliver growth

For

per

sona

l use

onl

y

Looking ahead – calendar 2014

46

• La Bella 3D Seismic acquisition

• NZ exploration and development drilling

• Perth Basin exploration and appraisal drilling

• BassGas development drilling

• AAL Final Investment Decision

• Sugarloaf development drilling

• Indonesia exploration drilling

For

per

sona

l use

onl

y

Guidance FY2013-14

Aiming to improve on production and revenue performance

47

Key Indicator Guidance FY2013-14

Production (million BOE) 5.0 – 5.5

Revenue ($m) 290 – 320

Development expenditure ($m) 160 – 180

Exploration expenditure ($m) 50

For

per

sona

l use

onl

y

Summary

48

• Highlights: Achieved our goals across the business in FY2012-13

• Financial: Strong performance and discipline Sound foundation for growth

• Operations: Meeting or exceeding targets Portfolio of assets performing well

• Growth Projects: In place, substantial size and gaining momentum

• Future Direction: Clear strategy and plans are in place Goals to double production and triple operating cash flow by 2017

For

per

sona

l use

onl

y

Thank you

For

per

sona

l use

onl

y

Accounts and reports Questions

For

per

sona

l use

onl

y

Remuneration report Resolution 1, adopt remuneration report

For

per

sona

l use

onl

y

Remuneration report Resolution 1, adopt remuneration report • This resolution is an advisory resolution

Proxies for 314,566,428 Proxies against 5,101,031 Proxies undirected 1,907,760 Proxies abstained 1,766,690

52

For

per

sona

l use

onl

y

Re-election and election of directors

For

per

sona

l use

onl

y

Election of directors Resolution 2(a) That Dr Vijoleta Braach-Maksvytis be re-elected as a director of the Company

54

For

per

sona

l use

onl

y

Election of directors Resolution 2 (a), that Dr Vijoleta Braach-Maksvytis be re-elected as a director of the Company • This resolution is an ordinary resolution


55

For

per

sona

l use

onl

y

Election of directors Resolution 2(b) That Mr Kenneth Williams be re-elected as a director of the Company

56

For

per

sona

l use

onl

y

Election of directors Resolution 2 (b), that Mr Kenneth Williams be re-elected as a director of the Company • This resolution is an ordinary resolution


57

For

per

sona

l use

onl

y

Election of directors Resolution 2(c) That Ms Karen Penrose be elected as a director of the Company

58

For

per

sona

l use

onl

y

Election of directors Resolution 2 (c), that Ms Karen Penrose be elected as a director of the Company • This resolution is an ordinary resolution


59

For

per

sona

l use

onl

y

Issue of Cash Share Rights

For

per

sona

l use

onl

y

Issue of Cash Share Rights Resolution 3 (a), regarding the issue of 427,474 cash share rights to the Managing Director, Mr Bruce Clement. To be tested against performance related vesting conditions at

30 June 2016. This resolution involves the issue of 213,737 Absolute TSR

cash share rights and 213,737 Relative TSR cash share rights.

61

For

per

sona

l use

onl

y

Issue of Cash Share Rights Resolution 3 (a), regarding the issue of 427,474 cash share rights to the Managing Director, Mr Bruce Clement. • This resolution is an ordinary resolution


62

For

per

sona

l use

onl

y

Closure Download and view AGM presentation at www.awexplore.com

63

AWE thanks you for your attendance today

For

per

sona

l use

onl

y

annual general meeting - asx.com.au · annual general meeting . for personal use only. ... evita...

Documents