Beach Energy (BPT) Investor Update summary

Strategic reset and refreshed operating model

• New strategy emphasizes disciplined capital allocation, cost reduction, and a pivot to longer-life, resilient assets, targeting free cash flow breakeven at less than $30/bbl and field operating costs below $11/bbl by FY 2026.

• Core assets are East and West Coast gas hubs, with non-core assets targeted for value run-down, divestment, or repurposing for storage and gas peaking.

• Significant organizational changes include new executive hires, asset-based accountability, and a 23% headcount reduction, aiming for 30% by year-end, delivering $65–75 million in annual savings.

• Capital management targets gearing below 15% (flexing to 25%), with 40–50% of pre-growth free cash flow allocated to fully franked dividends.

• Disciplined investment framework established, with minimum IRRs of 12% for gas and 15% for oil projects, and alignment with climate transition goals.

Financial and operational targets

• Targeting a ~30% reduction in unit field operating costs to below $11/boe by FY26, with significant headcount and cost reductions already delivered.

• Sustaining capital expenditure for FY 2025 guided at AUD 425–475 million, including previously achieved savings, with further reductions possible through JV collaboration.

• Free cash flow breakeven oil price targeted at under US$30/bbl for FY 2025, down from US$54/bbl, with every $10/bbl above this adding ~$75 million in free cash flow.

• Strong balance sheet with net gearing under 14%, $421 million liquidity, and equity over AUD 3 billion, with ambition to further deleverage as Waitsia comes online.

• 40–50% of pre-growth free cash flow to be allocated for franked dividends.

Production, reserves, and growth outlook

• FY 2025 production guidance set at 17.5–21.5 million barrels, with growth dependent on Waitsia Gas Plant ramp-up and upside from Otway.

• Reserve downgrades announced: ~7 million barrels reduction at Kupe, 4% reduction in Perth Basin, and 6% in Otway due to faster-than-expected depletion and lower reservoir quality.

• Growth projects include Hercules and Mavis (each >100 BCF), targeting tiebacks to existing Otway infrastructure, with development aimed at extending production plateau post-2027.

• Waitsia Gas Plant commissioning expected to start with first gas in July, full ramp-up in early 2025, with debottlenecking across FY26.

• Exploration and appraisal focus on Western Flank, Otway, and Perth Basins, with both organic and inorganic reserve replacement strategies.