| Presentation - Recommended Merger of Beach and Drillsearch | |
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PowerPoint Presentation
Merger of Beach and Drillsearch
Positioning for future growth through a logical combination
23 October 2015
Creating the leading ASX-listed oil and gas mid-cap
Primed to pursue growth opportunities
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Significant benefits for both sets of shareholders
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Synergies from two complementary businesses
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Australia's largest onshore oil producer
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Set for East Coast gas market opportunity
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Structure
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Valuation
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Combined group
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Drillsearch shareholders to own 30%4 of the combined group
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Combined group market capitalisation of ~$1,169 million1
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Board and management composition
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Drillsearch Chairman Jim McKerlie and Director Phil Bainbridge to join Board of combined group; two Beach Directors to step down
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Glenn Davis to continue as Chairman of Beach
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Beach Board conducting a search for a CEO, who will be CEO of combined group
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Merger Integration Group to manage process - management team to be selected on a 'best for job' basis
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Key terms5
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Approval from Drillsearch shareholders
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No material adverse change or prescribed occurrence in relation to each company
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Certain exclusivity provisions and break fee arrangements
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Shareholder approval
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In the absence of an ASX waiver of LR 10.1, approval from Beach shareholders
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Drillsearch shareholder meeting to approve the proposed scheme expected in late January 2016
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VWAP: volume weighted average price
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Based on the closing share price of Beach (A$0.665) and Drillsearch (A$0.655) shares as at 22 October 2015, the day prior to announcement of the scheme
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Based on the 1-month VWAP of Beach (A$0.56) and Drillsearch (A$0.58) up to and including 22 October 2015, the day prior to announcement of the scheme
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Based on the 3-month VWAP of Beach (A$0.65) and Drillsearch (A$0.63) up to and including 22 October 2015, the day prior to announcement of the scheme
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Assumes all options are acquired for cash, all performance rights vest and no conversion of Convertible Notes; Beach currently holds 21,053,615 Drillsearch shares (~4.56% )
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Full conditions contained in the Merger Implementation Agreement, a copy of which has been released to the ASX on 23 October 2015
Strong balance sheet to support future growth
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Combined market capitalisation in excess of $1.1 billion1
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Combined FY2016 production guidance of 10.6 - 11.8 MMboe
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Drillsearch US$125m convertible notes to be redeemed from combined cash and available debt
Beach
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Drillsearch
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MergeCo3,4
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Market Capitalisation1 ($m)
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866
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303
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1,169
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Cash ($m)2 - 30 June 2015
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170
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131
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302
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Debt ($m)2 - 30 June 2015
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149
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162
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311
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Enterprise Value ($m)
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845
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333
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1,178
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FY2015 Revenue2 ($m)
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728
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251
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978
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FY2015 Operating Cash Flow2 ($m)
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229
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84
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313
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FY2015 Production2 (MMboe)
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9.1
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3.0
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12.1
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2P Reserves - 30 June 2015 (MMboe)
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74.4
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25.7
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Refer note 6
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FY2016 Production Guidance2 (MMboe)
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7.8 - 8.6
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2.8 - 3.2
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10.6 - 11.8
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Source: IRESS 22 October 2015
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Market capitalisation based on last closing share prices as at 22 October 2015, the last trading day prior to announcement of the scheme
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Based on 2015 Full Year Reports including Appendix 4E, Directors' Report and Financial Statements
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No pro-forma adjustments have been made. Excludes impact of one off integration costs, synergies and acquisition accounting
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Does not account for differences in accounting treatment and disclosures
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Numbers may not add due to rounding
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Drillsearch and Beach maintain separate estimates for jointly held assets. Estimates for the combined company to be decided post completion
Ensuring a seamless transition
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Recruitment process for a Beach CEO well underway
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Merger Integration Group formed and led by Beach Acting CEO Neil Gibbins and Drillsearch CEO Walter Simpson, to manage:
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Internal and external communications
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Delivering a plan for integration that takes into account:
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Capital management strategy
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Human resourcing requirements
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Systems, processes and information technology
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Familiarisation, assimilation and culture
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Assessment of strategic opportunities arising prior to integration
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Work on integration planning to commence immediately
Consideration of 1.25 Beach shares for each Drillsearch share held
27%
25%
21%
30%
A$0.83 A$0.82
A$0.655 A$0.65
A$0.70
A$0.58A$0.63
A$0.82
Last Close¹ 5-day VWAP² 1-month VWAP² 3-month VWAP²
Drillsearch Trading Price Implied Offer Value
Source: IRESS 22 October 2015
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Last close of Beach and Drillsearch shares as at 22 October 2015, the day prior to announcement of the scheme
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The Implied Offer Value is based on the Volume Weighted Average Price for Beach and Drillsearch shares over the corresponding periods
Benefits to Drillsearch shareholders
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Benefits to Beach shareholders
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Pre-tax synergies of ~$20m per annum within two years for both shareholders1
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Targeted synergies exclude one-off integration costs, and are in addition to Drillsearch's targeted cost base reduction of $10 - $15 million p.a., as announced by Drillsearch on 19 February 2015
Enhanced scale with capacity to pursue organic and inorganic growth options
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Potential for improved liquidity, possible market re-rating and dividend potential - good for shareholders
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$313m in FY2015 pro-forma operating cash flow, strong balance sheet - good platform for business growth
Market capitalisation (A$ million)1
1,169
866
FAR
303
Combined
Beach
LNG
Karoon
AWE
Energy World
Drillsearch
Senex
Sino Gas
Sundance
Horizon
Lonestar
NZOG
Carnarvon
Antares
Buru
Range
Strike
Central
Cooper
Tap Oil
Armour
Cue
Kina
Empire
Source: IRESS 22 October 2015
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Market capitalisation based on last closing share prices as at 22 October 2015, the last trading day prior to announcement of the scheme
Consolidates position as Australia's largest onshore oil producer
8.0
7.0
7.2
FY2015 Oil Production (MMbbl)
6.0
5.0 4.5
4.0
3.0
3.0
2.7
2.0
1.0
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1.4
0.4 0.30.2
Beach + Drillsearch
Beach Santos Drillsearch Senex Cooper Energy Origin Bengal
Source: ASX company announcements for the 12 months to 30 June 2015
1 Operational
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Blending the best talent from both companies
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Optimisation of technical and field activities
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Opportunities to high-grade the exploration portfolio
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Overheads
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Elimination of duplicated technical efforts on overlapping assets
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Reduced compliance, listing and corporate costs
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Economies of scale, moving to a single platform
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Commercial
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Stronger balance sheet and greater funding capabilities
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Infrastructure ownership
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Broader universe of strategic opportunities
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Enhanced value proposition for investors
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Targeted synergies exclude one-off integration costs, and are in addition to Drillsearch's targeted cost base reduction of $10 - $15 million p.a., as announced by Drillsearch on 19 February 2015
Strong logic for combination
Potential to generate greater efficiencies in the Cooper Basin
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More than 90% of Drillsearch's FY2015 production in joint venture with Beach
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Combines key interests in:
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Drillsearch shareholders gain exposure to new oil assets on the Western Flank
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Beach shareholders gain exposure to wet gas assets held jointly with Santos
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PRLs 151 to 172 and PPLs 253 to 256
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PRLs 129 and 130 and PPL 239 and PPL 257
* Drillsearch shareholders gain access to Light Blue; Beach
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Beach Petroleum
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CODE : BPT.AX |
ISIN : AU000000BPT9 |
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ProfileMarket IndicatorsVALUE : Projects & res.Press releasesAnnual reportRISK : Asset profileContact Cpy |
Beach Petroleum is a exploration company based in Australia. Beach Petroleum is listed in Australia and in Germany. Its market capitalisation is AU$ 3.2 billions as of today (US$ 2.1 billions, € 2.0 billions). Its stock quote reached its lowest recent point on January 22, 2016 at AU$ 0.35, and its highest recent level on January 24, 2020 at AU$ 2.91. Beach Petroleum has 1 873 810 048 shares outstanding. |