1 FY18 FULL YEAR RESULTS Ian Davies, Managing Director and CEO Gary Mallett, Chief Financial Officer 21 August 2018
Production from the Growler oil field on the western flank 2 Agenda Performance overview Financial results Outlook and project updates Senex highlights Appendix
Senex highlights 3 Delivering with purpose Operational successes underpin return to growth 12% increase in production from western flank oil drilling success and WSGP appraisal gas 61% increase in sales revenue and 5% reduction in operating cost per barrel delivers solid cash flow 35% increase in 2P reserves from Project Atlas and successful WSGP Phase 2 appraisal program Major FY19 program planned and funded Ten well Cooper Basin western flank program agreed and free-carried by Beach Energy Ltd (Beach) Final investment decisions for the Surat Basin projects with an integrated drilling program planned Funding in place for growth projects: $150 million ANZ debt facility, $140 million Project Atlas Jemena infrastructure agreement and $67 million cash Core capabilities and quality assets to deliver transformational growth Senex’s financial and technical competence underpin award of Project Atlas acreage Enlarged portfolio of quality assets to drive a long term step-change in production, earnings and cash flow Commercial excellence and financial capacity enable disciplined evaluation of future growth opportunities
4 Ian Davies, Managing Director and CEO Performance overview Tubing for the Growler-15 oil field
Strategic priorities: FY18 performance 5 Setting the foundation for future growth Awarded valuable Project Atlas domestic gas acreage with first gas delivery in 2019 Gas Successfully appraised WSGP Glenora and Eos blocks, adding reserves and Realising the near-term production potential in the east coast Agreed debt financing (July 2018) to fund development of WSGP and Project Atlas gas market Discovered a potential new gas play at Gemba; Vanessa gas field online Achieved production growth from low cost oil portfolio Oil Successfully executed our first horizontal well in the Birkhead reservoir at Growler-15, now delivering strong production Focusing our material exploration and production Discovered the Marauder oil field in the Birkhead reservoir position in Cooper Basin oil Agreed up to $43 million free-carry commitment with Beach, funding a minimum ten well FY19 work program on the western flank Growth Senex’s financial and technical competence demonstrated by securing Project Atlas Pursuing opportunities in Flexible debt financing expandable to support new development assets new markets and new Strong long term financial position allows disciplined review of future organic and ventures inorganic opportunities over time
Our focus on working sustainably 6 Excellent environmental performance; disappointing safety performance Safety Environment Community Redoubling our efforts to improve No serious environmental incidents Building positive and enduring relationships safety performance occurred across any Senex operations with our local communities, landholders, businesses and industry groups: Reduced number and volume of spills Increased focus on behavioural Continue to support the RFDS Strong environmental management safety and contractor management Employing locals Active collaboration across our framework for Surat Basin projects Listen and inform via drop-in sessions Supporting the local environment industry 1.5 Sponsor and donate to community Participate in local business forums 1.1 1.0 Visit and engage local stakeholders 1.0 0.8 Work positively with landholders 0.7 0.6 Build long term and respectful 0.5 8.8 relationships with traditional owners 6.5 6.2 4.0 1.8 0.0 FY14 FY15 FY16 FY17 FY18 Crest-tailed mulgara in the Cooper Basin Millions of work hours TRIFR
Operating performance 7 Return to growth Production and capex Growing production and investment 1.39 1.38 175 1.40 Robust production from base oil portfolio Production 1.20 1.01 $151m 125 (mmboe) Focused exploration and development spend in western 1.00 0.84 0.75 0.80 flank resulted in two new wells online: Growler-15 horizontal 75 Capex ($ million) $82m 0.60 $80m delivering material production in Q4, and Marauder-1 $62m 0.40 25 delivering throughout FY18 $28m 0.20 -25 - Investment in WSGP 30-well appraisal program delivered FY14 FY15 FY16 FY17 FY18 reserve additions and initial gas production FY18 production of 0.84 mmboe, up 12% on FY17 and in line with annual guidance of 0.75 – 0.90 mmboe Cooper Basin oil operating costs 60 40.0 FY18 capex of $80 million, up 28% on FY17 and in line with 32.5 Oil unit operating 35.0 31.1 30.2 28.6 annual guidance of $80 - $100 million 50 28.0 cost (excluding 30.0 royalties) 25.0 40 $44m Reduced operating costs $43m ($/bbl produced) 20.0 30 15.0 Continued disciplined cost control Oil operating cost $28m 10.0 (excluding royalties) 20 $23m $21m Successful western flank focused FY19 program (funded 5.0 ($ million) 10 - by Beach) provides opportunity to further increase FY14 FY15 FY16 FY17 FY18 production and reduce unit operating costs
Financing our growth 8 Financial strength and liquidity to rapidly progress our Surat Basin projects Corporate and development debt facility with ANZ • Secured in July 2018 after extensive competitive process Cost effective • Fully underwritten by ANZ – Top four bank with energy industry track record • $125 million senior secured Reserve Base Lending (RBL) Facility Flexible • Seven year tenor with flexibility to refinance at any time Technical due diligence • Competitive margins: starting interest cost approximately 6% per annum, demonstrated quality of growth stepping down on completion of development projects projects • $25 million working capital facility Project Atlas downstream infrastructure agreement with Jemena Cost effective tariff • Secured in June 2018 after competitive process Leverage Jemena expertise • Jemena to fund, build, own and operate the $140m facility and pipeline Senex to focus on upstream • Agreement includes expansion and extension options
9 Gary Mallett, Chief Financial Officer Financial results
Financial highlights 10 Return to growth 6.0 $95/bbl 4.0 5.3 80.0 100 Sales revenue - $m Operating cash flow - $m 70.0 2.0 80 Revenue increased 61% to $70.3m $70.3m Return to positive operating cash 60.0 - $61/bbl flow 50.0 Higher realised oil price of $95/bbl 60 (2.0) 40.0 June 2018 cash balance of $66.5m $43.6m (4.0) Increased sales volumes of 40 30.0 (6.0) 0.79 mmboe Oil business operating cash flow 20.0 (8.1) 20 (8.0) breakeven at ~US$31/bbl 10.0 (assuming oil business funds (10.0) - 0 100% of corporate overheads) FY17 FY18 FY17 FY18 120.0 $95/bbl Oil unit cost and margin - $/bbl sold EBITDAX - $m 50.0 100.0 Hedging Higher revenue and cost Oil operating costs down to 80.0 34.9 40.0 Margin Gain on $61/bbl discipline contribute to $29.6/bbl sold, with further 16.9 Beach 60.0 4.6 increased EBITDAX 30.0 transaction potential to decrease on successful DD&A 25.8 25.7 FY19 work program 40.0 Non-recurring gain of $16.9m 26.5 3.4 7.0 20.0 Royalty from Beach transaction 20.0 Royalty up on higher oil price 31.5 29.6 10.0 Operating - DD&A stable along with production Cost (1.9) 7.3 (4.6) ($/bbl sold) and reserves - (20.0) FY17 FY18 FY17 FY18 Gross margin up to $34.9/bbl sold on higher realised oil price and cost control
Key financial headlines 11 Return to growth FY17 FY18 Change • Strong production and sales volumes Production (mmboe) 0.75 0.84 12% • Improved realised oil prices Sales volumes (mmboe) 0.72 0.79 10% • Significant investment in Surat Basin Average realised oil price ($ per bbl) 61 95 56% Capital spend ($ million) 62.3 80.1 29% • Strong sales revenue on higher prices Sales revenue ($ million) 43.6 70.3 61% • Lower operating costs and strong margins Operating cost ex royalties ($ per bbl produced) 30.2 28.6 (5%) • Return to underlying profit EBITDAX ($ million) 7.3 43.4 495% • Statutory NPAT impacted by non-cash impairment as a Underlying NPAT ($ million) (22.5) 2.0 N/A result of prioritising focus on Cooper Basin western Statutory NPAT ($ million) (22.7) (94.0) (314%) flank and Surat Basin • Robust cash position driven by positive cash from Operating cash flow ($ million) (8.1) 5.3 N/A operations helped to fund significant investment in Cash balance ($ million) 134.8 66.5 (51%) Surat Basin growth projects
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