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

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VWAP: volume weighted average price

1. 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

2. 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

3. 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

4. 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% )

5. 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

• Combined market capitalisation in excess of $1.1 billion1

• Combined FY2016 production guidance of 10.6 - 11.8 MMboe

• Drillsearch US$125m convertible notes to be redeemed from combined cash and available debt

Source: IRESS 22 October 2015

1. Market capitalisation based on last closing share prices as at 22 October 2015, the last trading day prior to announcement of the scheme

2. Based on 2015 Full Year Reports including Appendix 4E, Directors' Report and Financial Statements

3. No pro-forma adjustments have been made. Excludes impact of one off integration costs, synergies and acquisition accounting

4. Does not account for differences in accounting treatment and disclosures

5. Numbers may not add due to rounding

6. Drillsearch and Beach maintain separate estimates for jointly held assets. Estimates for the combined company to be decided post completion

   
   

   Ensuring a seamless transition

   • Recruitment process for a Beach CEO well underway

     • Priority for the Beach Board, in consultation with Drillsearch

   • Merger Integration Group formed and led by Beach Acting CEO Neil Gibbins and Drillsearch CEO Walter Simpson, to manage:

     • Internal and external communications

     • Delivering a plan for integration that takes into account:

       • Capital management strategy

       • Human resourcing requirements

       • Systems, processes and information technology

       • Familiarisation, assimilation and culture

     • Assessment of strategic opportunities arising prior to integration

     • 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

1. Last close of Beach and Drillsearch shares as at 22 October 2015, the day prior to announcement of the scheme

2. The Implied Offer Value is based on the Volume Weighted Average Price for Beach and Drillsearch shares over the corresponding periods

1. 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

   • Potential for improved liquidity, possible market re-rating and dividend potential - good for shareholders

   • $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

1. 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

   
   

   -

   
   

   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

   • Blending the best talent from both companies

   • Optimisation of technical and field activities

   • Opportunities to high-grade the exploration portfolio

     
     

     
     

   • Overheads

   • Elimination of duplicated technical efforts on overlapping assets

   • Reduced compliance, listing and corporate costs

   • Economies of scale, moving to a single platform

     
     

     
     

   • Commercial

   • Stronger balance sheet and greater funding capabilities

   • Infrastructure ownership

   • Broader universe of strategic opportunities

   • Enhanced value proposition for investors

   
   

   1. 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

      • More than 90% of Drillsearch's FY2015 production in joint venture with Beach

      • Combines key interests in:

        • Western Flank Oil (ex PEL 91)1

          • 60% Drillsearch

          • 40% Beach (Operator)

        • Western Wet Gas (ex PEL 1062)

          • 50% Drillsearch

          • 50% Beach (Operator)

      • Drillsearch shareholders gain exposure to new oil assets on the Western Flank

      • Beach shareholders gain exposure to wet gas assets held jointly with Santos

   
   

   1. PRLs 151 to 172 and PPLs 253 to 256

   2. PRLs 129 and 130 and PPL 239 and PPL 257

   
   

   * Drillsearch shareholders gain access to Light Blue; Beach