Bridgepoint Group Annual Report 2020

FY2020 Annual Report · Bridgepoint Group

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Beach Energy Limited
ABN 20 007 617 969

Annual Report 2020

Sustainably delivering
energy for communities

This year a selection
of photos in the
2020 Annual Report
have been taken by
talented amateur
photographers on
our team.

# Photographer

1 David Sanderson

2 David Bessen

3 Jay Golley

4 David Sanderson

Sustainably delivering
energy for communities

About this report

This 2020 Annual Report is a summary of
Beach Energy’s operations and activities for
the 12-month period ended 30 June 2020
and financial position as at 30 June 2020.
In this report, unless otherwise stated,
references to ‘Beach’ and the ‘Group’, the
‘company’, ‘we’, ‘us’ and ‘our’ refer to Beach
Energy Limited and its subsidiaries. See
Glossary for further defined terms used in
this report.

This report contains forward-looking
statements. Please refer to page 47,
which contains a notice in respect of
these statements.

All references to dollars, cents or $ in this
document are to Australian currency,
unless otherwise stated. Due to rounding,
figures and ratios in tables and charts
throughout this report may not reconcile
to totals.

An electronic version of this report is
available on Beach’s website,
www.beachenergy.com.au

The 2020 Corporate Governance
Statement can be viewed on our website
on the Corporate Governance page.

Annual General Meeting

For information about the
Annual General Meeting, please visit:
beachenergy.com.au/agm

During FY20 Beach undertook to update
its purpose as a company to better
describe what we work to achieve on a
day-to-day basis.

Our Purpose
Sustainably deliver energy
for communities.

Our Vision
We aim to be Australia’s
premier multi-basin upstream
oil and gas company.

Our Values

Safety
Safety takes precedence in everything
we do

Creativity
We continuously explore innovative ways
to create value

Respect
We respect each other, our communities
and the environment

Integrity
We are honest with ourselves and others

Performance
We strive for excellence and deliver on
our promises

Teamwork
We help and challenge each other to
achieve our goals

Our committed people
and our values-based
culture are our foundation
for success.

66%

of production is
operated

03 Performance highlights

07 Chairman’s letter

19 Operating review

23 Operating review

35 Sustainability

In this report

About this report

About Beach Energy

Chairman’s letter

Managing Director’s letter

Executive team

Our strategy

Operating review

Reserves statement

Sustainability

Board of Directors

Full Financial Report

Directors’ report

Auditor’s independence declaration

2020 Remuneration in brief (unaudited)

Remuneration report

Directors’ declaration

Financial statements

Notes to the financial statements

Independent auditor’s report

Additional Information

Glossary of terms

Schedule of tenements

Shareholder information

Corporate information & directory

IFC

125

132

134

139

141

About Beach Energy

Australia’s largest
onshore oil producer,
with a major gas
business.

Beach Energy is an ASX listed, oil and
gas exploration and production company
headquartered in Adelaide, South Australia.

Beach’s purpose is to sustainably
deliver energy for communities and in
doing so is focused on maintaining the
highest health, safety and environmental
standards. Beach is committed to an
emissions reduction target of 25%
by FY25, measured from when Beach
acquired its Lattice assets in 2018.

Founded in 1961, Beach has oil and gas
production in five basins across Australia
and New Zealand and is a key supplier
of gas into the Australian east coast
gas market.

Beach’s asset portfolio includes
ownership interests in strategic oil and
gas infrastructure, such as the Moomba
processing facility, Otway Gas Plant
and BassGas, a portfolio of oil and gas
assets across Australia and New Zealand
including the Waitsia Gas Project and
Beharra Springs in the Perth Basin and
a suite of high potential exploration
prospects including the Ironbark frontier
exploration prospect in the Carnarvon
Basin, Western Australia.

Beach has a major gas business
comprising operated and non-operated,
onshore and offshore assets across five
producing basins that supply gas to the
Australian west coast and east coast
markets and the New Zealand market.
With its Cooper, Otway and Bass basin
assets, Beach supplied approximately
71 PJs of gas to the Australian east
coast domestic gas market in FY20.
The Beach-operated Kupe asset in New
Zealand is an important domestic gas
supplier and produces approximately
50% of domestic LPG supply.

Beach has established a world-class
operated oil business on the Western
Flank of the Cooper Basin and has grown
to become Australia’s largest onshore
oil producer.

In addition to its producing assets, Beach
has a suite of exploration permits across
the onshore Cooper and Perth basins,
onshore and offshore Otway Basin and
offshore Bonaparte and Carnarvon basins
in Australia and the offshore Canterbury
and Great South basins in New Zealand.

Beach continues to pursue growth
opportunities within Australia and
nearby which align with its strategy,
satisfy strict capital allocation criteria,
and demonstrate clear potential for
shareholder value creation.

Beach is also committed to engaging
positively with the local communities
in which it operates, providing local
employment, as well as partnerships
with a range of clubs and organisations.

FY20 Group
Highlights

26.7 MMboe

Production of
26.7 MMboe net
to Beach

8.8 MMbbls

Record oil
production of
8.8 MMbbls net
to Beach

+200%

2P Reserve
replacement of
+200%

98%

Achieved target
of 98% facility
reliability by FY20

$50m Net Cash

Financial strength
maintained during
a period of high
volatility

1 Return on capital employed (ROCE) defined as underlying NPAT divided by the average of opening total equity and closing

total equity.

2 Underlying EPS is based on underlying results which are categorised as non-IFRS financial information provided to assist

readers to better understand the financial performance of the underlying operating business. They have not been subject to
audit or review by Beach’s external auditors. Please refer to the table on page 42 for a reconciliation of the underlying results
to the financial report.

Beach Energy LimitedAbout Beach Energy

Performance highlights

Net Profit After Tax ($Million)

$501

Return on Capital Employed1 %

2P Reserves (MMboe)

Return on Capital
Employed3 %

2P Reserves
(MMboe)

313

326

352

FY18

FY19

FY20

FY18

FY19

FY20

Field Operating Costs ($/boe)

Operating Cash Flow ($Million)

Underlying EPS2 Cps

Operating Costs
($/boe)

9.7

9.3

9.0

Replace with Operat-
ing Cash Flow
($Million)

1,038

874

663

Underlying EPS1 Cps

24.6

20.2

13.9

FY18

FY19

FY20

FY18

FY19

FY20

FY18

FY19

FY20

Annual Report 2020Beach Portfolio

CARNARVON BASIN

BONAPARTE BASIN

DARWIN

Cooper Basin
WESTERN FLANK &
COOPER BASIN JV
(Various operated and
non-operated interests)

BRISBANE

SYDNEY

CANBERRA

PENOLA
(Regional
Office)

OPERATIONS OFFICE

MELBOURNE

HEAD OFFICE
ADELAIDE

SA Otway Basin
KATNOOK
(Beach 100% operated)

Victorian Otway Basin
OTWAY GAS PROJECT/HBWS
(Beach 60% operated)

Bass Basin
BASSGAS
(Beach 53.75%
operated)

HOBART

PERTH
(Regional Office)

Perth Basin
WAITSIA
(Beach 50% non-operated)

BEHARRA SPRINGS
(Beach 50% operated)

Gas processing facilities

Gas production

Oil production

Exploration

Beach office

Illustration not to scale. Ownership
percentages provided are Beach’s
ownership of the producing assets in
the respective regions.

Beach Energy LimitedAbout Beach Energy

Asset Highlights

Perth Basin

Victorian Otway Basin

– Gas discovery in the Kingia Sandstone
at Beharra Springs Deep 1 exploration
well. Initial 2P reserves booking of
29 MMboe.

– Construction of Waitsia Stage 1

expansion commenced.

Cooper Basin

– Record oil production from the

Western Flank, with Beach share of
oil output 7.5 MMbbl, a 44% increase
on FY19.

– 172 wells drilled in FY20 at an overall

success rate of 81%.

– Completion, connection and

commissioning of the Black Watch 1
extended reach gas development well.

Bass Basin

– Trefoil development project

progressing through “Concept
Select” stage.

Carnarvon Basin

– Continued to progress the Ironbark
gas exploration prospect for drilling,
currently planned for the fourth
quarter of calendar year 2020.

South Australian Otway Basin

Canterbury Basin

– First gas achieved from the new 10 TJ/
day Katnook Gas Processing Facility.
– Gas discovery at the Dombey gas field.

Taranaki Basin

– Construction commenced on the Kupe

compression project.

– Continued to progress the Wherry gas

exploration prospect for drilling.

Bonaparte Basin

– Interpretation of the new Bethany 3D
seismic survey and updating of the
prospects and leads inventory across
the portfolio.

Taranaki Basin
KUPE
(Beach 50% operated)

NEW
PLYMOUTH
(Regional Office)

WELLINGTON

CANTERBURY BASIN

GREAT SOUTH BASIN

Beach 2P Reserves

352
MMboe

Annual Report 2020Chairman’s Letter

Dear Shareholder,

Our FY20 Annual Report is released in a
challenging global setting, vastly different
from a year ago. The emergence and
spread of COVID-19 and its impact from
a health and economic standpoint has
been immense. Swift and decisive action
in relation to health and safety, capital
management and our operating model
has been critical.

As an upstream oil and gas company, our
constant focus on risk management and
planning for the unexpected saw Beach
well placed to respond to the pandemic
and oil price crash.

Our Crisis Management Team was
activated in February and moved quickly
to implement stricter safety and security
protocols across all of our sites.

From an operational standpoint,
I congratulate our team on their
adaptability and professionalism in
working to their usual high standards
in such difficult times, while remaining
focussed on safety. I am pleased to report
there have been no recorded cases of
COVID-19 at any of our sites and our
facilities achieved their 98% average
reliability target in FY20, despite the
difficult backdrop.

COVID-19 demand destruction and
positioning by global oil suppliers saw oil
prices tumbling from above US$65 per
barrel in January to below US$20 per barrel
in March. While prices have recovered
modestly since then, a lower oil price cycle
looks to be with us for some time.

Prudent financial risk management is a
key focus of the board and a key strength
of your company. In response to the
current oil price cycle, Beach has moved
to defer up to 30% of previously planned
FY21 capital investment and reduced
costs significantly. These were not easy
decisions, as our diverse portfolio of
growth opportunities remains highly value
accretive, even with a backdrop of lower
oil prices. Whilst difficult, to ensure Beach
lives within its means and retains a strong
balance sheet, the decision to reduce capital
expenditure and costs is the right one.

At last year’s AGM, Beach’s role in the
community was a key theme. It was only
fitting that during FY20 we updated our
written purpose: “Sustainably deliver
energy for communities”. We are proud
of our role and interactions in the
communities in which we operate. This
purpose also includes another key priority
at Beach; sustainability.

We are proud of our
role and interactions
in the communities
in which we operate.

We see natural gas as an important fuel
as our economy transitions to a lower
emissions future. In FY20 we completed
baseline emission studies and identified
opportunities to reduce emissions in
FY21 and beyond. As a tangible next step,
the board has approved an emissions
reduction strategy, targeting a 25%
reduction in emissions by FY25 relative to
FY18 levels. Our Sustainability Report will
detail the work we are doing in this regard.

Whilst programs have been deferred,
drilling in the offshore Otway, offshore
Carnarvon and onshore Cooper basins in
FY21 continue to provide a platform for
future growth.

The board remains confident your
company has the financial strength,
management team and assets in place to
grow shareholder value despite the very
difficult current environment.

I would like to thank all of our staff,
contractors and stakeholders for their
hard work in challenging conditions to
safely deliver our strong operational
results in FY20.

Glenn Davis
Chairman

17 August 2020

Beach Energy LimitedChairman’s Letter

1. David Sanderson, Supply Base Specialist, BPS Supply Chain SAWA

During FY20 we updated
our written purpose:
“Sustainably deliver energy
for communities”.

Sunset at Black Watch 1 Otway Basin, Victoria

Annual Report 2020Managing Director’s Letter

We are committed
to being a growth
company.

Dear Shareholder,

FY20 has been a year like no other.
Fortunately for Beach it was a year in
which the strength of our balance sheet,
our gas business revenues and our people
came to the fore as we dealt with the
sudden emergence of COVID-19 and its
impact on operations and oil prices.

As an energy company, the health and
safety of our people and communities is
paramount. Safety takes precedence in
everything we do. That took on a broader
meaning in FY20 as the COVID-19
pandemic swept the world, causing us all
to experience circumstances and challenges
like we haven’t experienced before.

I am very proud of the swift and decisive
way our business reacted to the
emergence of this pandemic. We moved
early to trigger the procedures we have in
place for such emergencies, starting with
the activation of our Crisis Management
Team in February. Our response included
early engagement with key contractors
and suppliers, and the implementation of
health and business continuity plans which
saw strict new site access arrangements
put in place. These measures helped
ensure the health of our workers and
the continued supply of energy into the
communities we serve.

Making a positive contribution to the
communities in which we operate is of
great importance to everyone at Beach
and we take pride in being an active and
leading member in our communities.
We value our relationships and the
support we both receive and provide
because we know our business is critical
in delivering the energy our society
needs. To that end, during the year Beach
rewrote its purpose to more accurately
reflect what we strive to do each day. This
resulted in the roll out of our updated
business purpose: Sustainably deliver
energy for communities.

The emergence of COVID-19 also saw a
significant shock to the global economy
and oil price environment. Brent oil prices
declined from over US$65/bbl at the start
of calendar year 2020 to under US$20/bbl
in April. The speed and depth of the
decline was the likes of which I haven’t
seen in my career.

These circumstances highlight the
importance of maintaining financial
strength as a core strategic pillar. Our
financial strength is led by our large
gas business. Our gas and ethane sales
revenue in FY20 was $605 million, this
covered all of Beach’s stay in business
costs, while we forecast that FY21 gas
sales revenue will cover all group operating
and stay-in-business costs. The gas
business underpins our prudent financial
management which saw Beach entering
this downturn with a very strong balance
sheet and ending the year in a net cash
position with $500 million of liquidity.

FY20 Review

Even through challenging external factors,
FY20 was another year of achievement
for Beach. Today we have reported:

– Underlying NPAT of $461 million, a
very strong result after selling down
40% of our Victorian Otway Basin
working interest at the end of FY19 and
oil price headwinds in Q4 FY20.
– Record net to Beach oil production

from the Western Flank of 7.5 MMbbl.

– Record investment in the Beach

business with capital expenditure
of $863 million.

– Closing out the year in a net cash
position with available liquidity of
$500 million.

– A world class return on capital
employed of 19.2%, reflecting
disciplined financial management and
diligent execution on our portfolio of
organic investment opportunities.

– A 214% organic 2P reserves

replacement ratio.

At the start of FY20, in a totally different
macro-economic environment, we
set ourselves ambitious goals as we
progressed our multi-year, portfolio-wide
investment program including an
incredibly active year with the drill bit.

In the Victorian Otway Basin we
successfully commenced the multi-year
drilling program with the completion
and tie-in of the 7.2km Black Watch gas
development well. This is the longest
well drilled in Australia from an onshore
location and the first well connected to
supply the Otway Gas Plant in over four
years – we are thrilled with this result.

In the Cooper Basin, Beach participated
in drilling programs involving four
non-operated and three operated drilling
rigs during peak activity.

This resulted in the highest ever number
of Beach-participated Cooper Basin wells
at 172, up from 134 in FY19 and helped
drive the record production result from
our Western Flank oil business.

Western Flank oil production was
7.5 MMbbls, a 44% increase over FY19,
underpinned by record gross operated
oil production from Beach-operated ex
PEL 91 and ex PEL 92. This was achieved
thanks to a combination of ongoing
horizontal drilling activity and hard work
to identify opportunities to debottleneck
and optimise our infrastructure to achieve
higher fluid production. A continued focus
on operating costs saw field operating
costs again under $5/bbl, despite
30 additional development wells being
brought online during FY20.

Beach also participated in six wells
outside of the Cooper Basin, in the Perth
Basin, SA and Victorian Otway Basin and
Great South Basin in New Zealand.

The well drilled in the Perth Basin was
the successful Beharra Springs Deep 1
exploration well. This was an outstanding
exploration result with flow rates of up to
46 MMscfd observed on test, constrained
by tubing size and at 30 June 2020, we
added 29 MMboe of Perth Basin 2P
reserves. The Perth Basin is a key growth
asset for Beach, both in our exciting
operated permits like Beharra Springs
Deep and at the Waitsia gas project,
where along with our partner and operator
Mitsui E&P Australia (MEPAU) we took
final investment decision on Waitsia Stage
1 expansion. This project will expand
capacity of the Xyris facility from
10 TJ/day to 20 TJ/day and connect the
facility to the DBNGP via a large diameter
pipeline with capacity for future Waitsia
Gas Project Stage 2 production volumes.
The MEPAU-operated joint venture
continues to progress Waitsia Stage 2.

At another of our growth assets, in the SA
Otway Basin, we had exploration success
with the Dombey 1 gas exploration well
(which received funding from the South
Australian Government’s PACE gas
program) and appraisal success with
the Haselgrove 4 DW1 well. Drilling
success complemented the start-up of
the 10TJ/day Katnook Gas Processing
Facility. This facility was constructed
with the assistance of a Commonwealth
Government GAP grant, meeting its
objective of bringing new gas to the
Australian domestic market.

Beach Energy LimitedFY21 Outlook

In recognition of the changing
macro-economic circumstances and oil
price environment, and with maintaining
financial strength as a core pillar, we
have announced plans to moderate the
pace of our multi-year, portfolio-wide,
investment program.

In previous years we talked of accelerating
investment as opportunities continued to
present and the market dynamics were
supportive. This doesn’t mean any of the
investment opportunity set is lost, rather
even at lower oil prices these projects
still pass our internal investment hurdles.
But in a time of heightened uncertainty,
both economically and operationally, we
are taking the prudent path to moderate
our pace.

A key strength of this business is the
ability to be nimble and now is the time
to utilise that strength and, to use an auto
analogy, move from fifth gear to third.

In New Zealand, the Kupe asset again
showed its strength, operating at 99%
facility reliability over the entire year.
The team also completed the first full
statutory shutdown of the Kupe plant
under Beach ownership, which was
completed on time and on budget, with
over 80,000 hours of work executed with
no recordable HSE incidents. A fantastic
team effort.

A key highlight in FY20 was the
achievement of average reliability across the
operated assets 98%. Low operating costs,
high asset reliability and strong operating
safety performance are key facets of the
way Beach operates. High facility reliability
ensured our product was available to our
customers when they needed it, maximising
our sales volumes through the year.
A commendable achievement, particularly
in the COVID-19 world.

Most importantly, these achievements
were obtained all while maintaining strong
operating safety performance. In FY20 we
reported a TRIFR of 3.7. This is in line with
previous years even with the increased
activity level occurring around the business,
a commendable effort. Nonetheless, the
business has taken steps to ensure a
continued focus on safety and to recognise
periods of heightened risk as safety takes
precedence in everything we do.

Cooper Basin, South Australia

Managing Director’s Letter

Environmental, Social, Governance

Gas is expected to play a key role in
the global transition away from coal to
renewables. As a key supplier of gas
into the east coast gas market, Beach is
playing its role in this transition process.

FY20 was an important year for Beach as
we completed baseline emissions studies
across all of our sites and identified
opportunities for emission reductions.
I am pleased to announce that our
board has approved plans to target a
25% reduction in emissions by FY25,
measured from when Beach acquired its
Lattice assets in 2018. A corresponding
emissions intensity reduction of 13% is
expected over this period. This target
will be achieved through a combination
of activities including a proposed hybrid
power project in the Western Flank,
improved flare management planning
and fugitive emission reduction and
prevention projects.

Conclusion

To close, I want to reiterate that this
remains an exciting time for Beach.
We are committed to being a growth
company. Our balance sheet is in great
shape, we have the benefit of a large,
stable gas business which provides
significant revenue certainty and we
have the people and culture to continue
to sustainably deliver energy for
communities.

Matt Kay
Managing Director &
Chief Executive Officer

17 August 2020

Annual Report 2020Executive Team

3. Ian Grant
Chief Operating Officer
MSc, CMgr FCMI

Mr Grant commenced as Beach’s Chief
Operating Officer in July 2020, and
brings with him over 25 years’ experience
in the energy industry, having held
senior leadership and executive roles in
operations, projects, drilling and supply
chain functions.

Born in Scotland, Mr Grant has extensive
North Sea experience and has worked
in Europe and Australia with companies
such as Mobil, ARCO/BP, Apache,
Quadrant Energy and Santos.

Most recently Mr Grant was Chief
Operating Officer for Quadrant Energy
and Vice President of Production
Operations for Santos based in Perth.

He is passionate about delivering safety,
operational and commercial performance in
both onshore and offshore environments.

1. Matthew Kay
Managing Director &
Chief Executive Officer
BEc, MBA, FCPA, GAICD

Mr Kay joined Beach in May 2016 as Chief
Executive Officer and was appointed
to the Board as Managing Director in
February 2019. In November 2018, he
was elected to the Australian Petroleum
Production & Exploration Association
(APPEA) Board.

Mr Kay brings over 25 years’ experience in
the Oil and Gas industry to Beach. Before
joining Beach, he served as Executive
General Manager, Strategy and Commercial
at Oil Search, a position he held for two
years. In that role he was a member of
the Executive team and led the strategy,
commercial, supply chain, economics,
marketing, M&A and legal functions.

Prior to Oil Search, Mr Kay spent 12 years
with Woodside Energy in various
leadership roles, including Vice President
of Corporate Development, General
Manager of Production Planning and
General Manager of Commercial for
Middle East and Africa. In these roles
Mr Kay developed extensive leadership
skills across LNG, pipeline gas and oil joint
ventures, and developments in Australia
and internationally.

Since joining Beach, Mr Kay has
approximately tripled the company’s
production, reserves and market
capitalisation having successfully led the
company through the transformational
acquisition of Lattice Energy. This has
seen Beach enter the ASX 100 and
solidify its position there.

2. Morné Engelbrecht
Chief Financial Officer
BCom (Hons), CA (ANZ & South Africa),
MAICD

Mr Engelbrecht joined Beach in
September 2016 as Chief Financial
Officer and is responsible for the finance,
tax, treasury, information technology,
contracts & procurement, insurance
and investor relations functions. He
is a Chartered Accountant with more
than 19 years’ experience in the oil, gas
and resource sectors across various
jurisdictions including Australia, South
Africa, the United Kingdom, Papua New
Guinea and China.

Prior to his role with Beach, he held
the position of Managing Director and
Chief Executive Officer of an ASX-listed
company. Prior to this he held various
financial, commercial and advisory
senior management positions at InterOil,
Newcrest (formerly LGL), Harmony
Gold and PwC. Mr Engelbrecht also has
extensive experience in strategy and
planning, capital management, debt and
equity markets, M&A and joint venture
management and operations.

We have the people
and culture to continue
to sustainably
deliver energy for
communities.

Beach Energy LimitedExecutive Team

4. Jeff Schrull
Group Executive Exploration and Appraisal
BSc Geophysics (Maths, Geology,
Physics), M.S Geophysics

Mr Schrull joined Beach in January 2017
in the position of Group Executive
Exploration and Development bringing to
Beach over 30 years of upstream oil and
gas experience. Prior to this, Mr Schrull
held the position of General Manager
Exploration and Production at Cue Energy.

He previously held several senior
international positions with Chevron over
a 19 year period, and was subsequently at
Addax Petroleum in the role of Corporate
General Manager of Exploration. He has
a strong track record in creating and
delivering growth through exploration,
development, operations and M&A.

5. Lee Marshall
Group Executive Corporate Strategy
and Commercial
BE Commerce (Economics and Finance)

Mr Marshall joined Beach in January 2018
as Group Executive Corporate Strategy
and Commercial. Prior to joining
Beach, Mr Marshall was most recently
General Manager UK for Woodside
Energy. Based in London, Mr Marshall
managed exploration assets and business
development opportunities in the Atlantic
Basin and Africa. He has over 20 years
of Australian and global commercial,
business development and financial
management experience across upstream
oil and gas and LNG.

Mr Marshall is responsible for upstream
commercial, strategy, economics, M&A,
business development and marketing.

6. Sheree Ford
General Counsel
BA, LLB, MBA

Ms Ford joined Beach in March 2018
bringing over 25 years’ experience as a
corporate lawyer primarily in the upstream
oil and gas industry. Prior to joining Beach,
Ms Ford worked for over 10 years as in-
house counsel at BHP Limited, primarily in
the oil and gas business and was General
Counsel and Company Secretary at listed
oil and gas companies including InterOil
Corporation, Oil Search Limited and Roc
Company Limited.

As well as extensive experience in the
upstream oil and gas business across
Australia, Asia, Africa and the United
Kingdom, Ms Ford has been involved in
numerous large company transactions
including M&A.

7. Geoff Barker
Group Executive Development
BSc, MEng (Pet Eng)

Mr Barker joined Beach in February 2018
as Group Executive Development bringing
to Beach over 30 years of upstream
oil and gas experience. Prior to joining
Beach, Mr Barker was a partner at
leading oil and gas consulting firm RISC
where he managed development and
value enhancement studies on a wide
range of onshore and offshore major
projects internationally and within the
Australasian region. Mr Barker has
held senior management and technical
positions in development and operations
at Woodside, Shell and Bridge Oil.

8. Brett Doherty
Group Executive Health, Safety,
Environment and Risk
BEng (Electrical), LLB (Hons)

Mr Doherty joined Beach in
February 2018 as Group Executive Health,
Safety, Environment and Risk, bringing
over 30 years of upstream oil and gas
experience to Beach. His career includes
extensive exposure to both offshore and
onshore development and operations.

Prior to Beach, Mr Doherty was
General Manager of Health, Safety and
Environment at INPEX Australia. He has
held several senior international positions
during his career, including ten years
as the Chief HSEQ Officer at RasGas
Company Limited, in the State of Qatar.

9. Lesley Adams
Group Executive, Human Resources

Ms Adams commenced with Beach in
October 2019 as Group Executive, Human
Resources. She is an experienced executive
with more than 25 years’ experience within
the international and Australian oil and
gas industry, with business experience
in Human Resources, Strategic Planning,
Joint Venture Management, Emergency
Management, Sustainability, Indigenous
and Government Affairs and M&A.

Prior to Beach, Ms Adams was Group
Executive Corporate Services for Quadrant
Energy and assisted the integration post-
acquisition by Santos Ltd. Ms Adams has
previously worked for Santos, Woodside,
AMEC and Schlumberger.

Ms Adams is recognised as a strategic and
successful leader across a range of different
disciplines and functional areas and brings
a track record of delivering efficient and
effective business outcomes that drive
performance. Holding qualifications from
the CIPD (UK), Ms Adams is a Fellow of
the Australian Human Resources Institute
and a Graduate of the Australian Institute
of Company Directors.

Annual Report 2020Our Strategy

We continue to
execute and deliver
against our well
defined strategy.

Optimise our operated and non-operated
producing assets

Pursue other compatible growth
opportunities

– Achieved average facility reliability

– Waitsia Gas Project Stage 2 further

target of 98%.

– Record oil production, net to Beach,
achieved from the Western Flank.

– Western Flank oil surface

infrastructure investment has delivered
an installed capacity of approximately
23,000 bopd enabling oil production
to be doubled over the past 18 months.
– Construction commenced on the Kupe

compression project.

progressed. Stage 1 expansion includes
a connection to the DBNGP with
capacity for future Stage 2 volumes.

– Frontier exploration drilling

commenced with the first of three
currently planned wells. Ironbark and
Wherry are progressing towards drill
ready status.

Strengthen our complementary
gas businesses

Maintain financial strength

– Net cash position at 30 June 2020,

– Commenced construction of Waitsia

with $500 million in liquidity.

Gas Project Stage 1.

– Exploration success in the Perth Basin

at Beharra Springs Deep 1.

– Black Watch 1 onshore-to-offshore gas
development well drilled and tied-in
to Otway Gas Plant, for first new gas
supply in over four years.

– First gas achieved from the new

10 TJ/day Katnook gas processing
facility.

– No debt maturity until November 2022.
– Realised the $30 million reduction

in direct controllable operating costs
from FY18 baseline.

– Achieved ~15% reduction in field

operating costs on a dollar per boe
basis since acquisition of Lattice.
– Flexibility in growth portfolio enables

business to reduce FY21 capital
investment by up to 30% from
previously planned levels.

– Reported ROCE of 19% in FY20.

Our people and culture

– COVID-19 plans put in place at all
operational sites, including tighter
site access controls and protocols
regarding hygiene, social distancing,
case management, isolation,
evacuation and assurance.

– Activated work-from-home for all
office locations during COVID-19
pandemic.

– Launched a Workplace Giving program
to match charitable donations made
by our people.

– Launched partnerships with Zoos SA
to sponsor the Southern White Rhinos
at Monarto Safari Park and South
Australian Health and Medical Research
Institute (SAHMRI) to be the major
sponsor of the Science, Technology,
Engineering and Mathematics (STEM)
Pathways Program which aims to
support Aboriginal and Torres Strait
Islanders develop skills, training and
experiences within the health and
medical research sector.

Average facility reliability

98%

Net cash position

$50m

at 30 June 2020

Beach Energy LimitedOperating Review

Operating Review

Performance overview

Production

2P reserves

2C contingent resources

Sales revenue

Net profit after tax

Underlying net profit after tax

Earnings per share

Underlying earnings per share

Cash flow from operating activities

Net assets

Net debt/(cash)

Gross gearing ratio

Fully franked dividends declared per share

Shares on issue

Share price at year end

MMboe

$ million

cps

$ million

cents

million

Market capitalisation at year end

$ million

FY16

9.7

205

558

(589)

(39.6)

2.4

233

1,075

(49)

13.5

0.5

1,861

0.61

1,135

FY17

10.6

153

653

388

162

20.4

8.5

319

1,402

(198)

11.8

2.0

1,874

0.575

1,077

FY18

19.0

313

207

1,251

199

302

9.2

13.9

663

1,838

639

34.2

2.0

2,277

1.755

3,995

FY19

29.4

326

185

1,925

577

560

25.4

24.6

1,038

2,374

(172)

2.0

2,278

1.985

4,522

FY20

26.7

352

180

1,650

501

461

22.0

20.2

874

2,820

(50)

2.0

2,281

1.52

3,467

Production

Western Flank

Cooper Basin JV

Other Cooper Basin

SA Otway Basin

Perth Basin

SAWA

Vic Otway Basin

Bass Basin

Victoria

New Zealand

Total Production

FY19

Oil
equivalent
(MMboe)

FY20

Oil
(MMbbl)

Gas liquids
(MMboe)

Gas
(PJ)

Oil Equivalent
(MMboe)

Year-on-year
change
(%)

7.1

8.1

0.2

0.7

16.1

8.4

1.7

10.1

3.2

7.5

1.3

–

8.8

–

29.4

8.8

0.6

1.2

0.0

1.8

0.4

0.3

0.8

3.4

8.6

36.3

0.3

0.9

2.3

48.4

18.4

6.1

24.5

11.6

84.5

9.6

8.7

0.1

0.2

0.4

18.9

3.6

1.4

5.0

2.8

26.7

(78)

(42)

(57)

(19)

(51)

(11)

(9)

Annual Report 2020
Operating Review

Finance
A key facet of Beach’s strategy is to
maintain financial strength to help
ensure the company can withstand
unpredictable economic shocks such as
those witnessed in FY20.

After completing the Lattice acquisition
in January 2018, our focus was to
integrate the assets within the Beach
portfolio, reduce costs and rapidly pay
down our debt. Our prudent approach
to balance sheet management included
repaying almost $1 billion of debt in
under 18 months, realising $60 million
in synergies and this year achieving
further reduction in direct controllable
operating costs leading to a reduction in
field operating costs by approximately
15% on a dollar per boe basis since the
acquisition of Lattice. The outcome being
a business in a net cash position, with a low
cost operating model, a flexible portfolio
of growth opportunities and well placed to
take fast and prudent action when oil prices
rapidly fell in March and April this year.

We entered the downturn in a net cash
position, with a $450 million revolving
credit facility and no debt maturity
until November 2022. We finished the
year ended 30 June 2020 with liquidity
of $500 million. Our goal is to retain
our strong financial position over the
coming years.

Achieved debt repayment

$1 billion

Our goal is to retain
our strong financial
position over the
coming years.

Our portfolio of flexible capital project
investment opportunities allowed us to
quickly move to defer a portion of our
planned growth investment to ensure
the company continues to live within its
means. It’s important to note that our
planned growth investment strategy
is essentially unchanged; what has
changed is the pace of this investment,
which has been moderated to target our
highest returning opportunities first while
ensuring we retain our financial strength.

Despite the impact of lower commodity
prices in the second half of FY20, the
company was able to achieve a Return
on Capital Employed of 19.2% in FY20,
again meeting our target range of 17-20%.
This is a great result for the company and
shareholders, though we acknowledge the
challenge of achieving this outcome going
forward if oil prices remain subdued.

Part of our financial strength is derived
from our increasing gas exposure. More
than 99% of our FY20 gas production
was contracted and sold at fixed prices
or protection against oil price downside.
Revenue from the gas business in FY20
covered all group operating costs.

Our conservative approach to balance
sheet management means that we
can take advantage of new investment
opportunities as they arise, with all
growth investment judged against our
strict investment screening criteria. We
remain committed to our mantra of being
a growth-oriented company.

Field Operating cost reduction since
Lattice acquisition

Morné Engelbrecht
Chief Financial Officer

15%

Beach Energy LimitedOperating Review

Adelaide Head Office

Annual Report 2020Operating Review

Exploration and Appraisal
At Beach a key five-year goal is to more
than replace our 2P reserves on average
over this period. In FY20 we once again
achieved our goal, with a 214% 2P organic
reserves replacement and 263% 2P
organic reserves replacement over the
past three years. Our exploration and
appraisal strategy is one of the keys to
achieving this goal.

Our appraisal strategy is designed to
optimise ultimate recovery from our
fields in the most cost-effective way,
achieved via delineation of field size
as early as possible in the field life and
then formation of an efficient field
development plan for the life of each field.

Our exploration strategy is designed to
find new pools of hydrocarbons, either
within tie-back distance to existing
surface processing facilities, or large
enough to justify new infrastructure
investment. In FY20 Beach enjoyed
exploration success at Beharra Springs
Deep 1 in the Perth Basin, at Dombey
1 in the South Australian Otway Basin
and across the Cooper Basin JV,
particularly in South West Queensland.

Appraisal drilling
of the Bauer Field
continues to exceed
expectations.

1 Refer to ASX announcement #044/19 dated 16 December 2019.

Perth Basin

Victorian Otway Basin

In the Perth Basin, we announced the
Beharra Springs Deep gas discovery.
Beharra Springs Deep 1 targeted the
same Kingia formation that has proven
to be prolific at the nearby Waitsia gas
field. The result confirmed the extension
of the Kingia play, with the well flowing
up to 46 MMscfd on test1, constrained
by tubing. Planning is underway to
appraise the discovery and undertake
further exploration drilling in the Perth
Basin. The Trieste 3D seismic survey
was acquired during the year, which will
be used to high grade conventional gas
prospects for future drilling.

Cooper Basin

We continued applying our appraisal
strategy across the Western Flank
in FY20. The “Bauer Strategy” calls
for the drilling of appraisal wells with
larger step out distances from existing
wells to provide early definition of the
boundaries in our producing oil and gas
fields. Once field limits are defined, full
field development plans are formulated,
focussed on both horizontal and
vertical in-fill drilling and infrastructure
requirements to fully monetise the asset.

Appraisal drilling of the Bauer Field
continues to exceed expectations, with
year-on-year conversion of 3P reserves
to 2P reserves resulting in new oil
production wells being added and field
extensions identified in both the northern
and southern parts of the field.

This strategy has also been effective in
refining field development plans in fields
such as Balgowan, Butlers, Callawonga,
Parsons and Congony-Kalladeina. For
example, the Balgowan oil field has
been transformed from a field with a
single vertical well field to one in which
infrastructure expansion and multi-well
horizontal drilling is being planned to
maximise the recovery of a much larger
reserve base.

While in the Cooper Basin JV, we
worked closely with operator Santos
as exploration and appraisal activities
were ramped up, with a strong focus
on oil appraisal in South Australia and
gas exploration and appraisal in South
West Queensland. Notable successful
well outcomes were at the Merchant,
Leghorn and Cherokee fields.

We continued to mature our exploration
prospects in the Victorian Otway
Basin to be drill-ready. The Enterprise
onshore-to-offshore and Artisan offshore
prospects are expected to be the first
exploration prospects drilled. The impact
of COVID-19 and changes to our rig
contracts has meant these wells are
now expected to be drilled in FY21.

SA Otway Basin

In the SA Otway Basin, a gas discovery
was made at the Dombey gas field with
exploration well Dombey 1 (Beach 70%
and operator, Cooper Energy 30%).
The joint venture is considering the
acquisition of a 3D seismic survey to gain
a better understanding of the field, before
follow-up appraisal drilling is undertaken.

Frontier

Beach participated in the Tawhaki 1
exploration well in permit PEP50119 in
the Great South Basin, offshore New
Zealand. This was the first of three
currently proposed frontier exploration
wells. Although Tawhaki 1 intersected
reservoir, there were no hydrocarbon
shows and hence the well was plugged
and abandoned.

Jeff Schrull
Group Executive – Exploration
and Appraisal

Beharra Springs Deep flow rate up to

46
MMscfd

Beach Energy LimitedOperating Review

Development
In FY20 we made good progress under
our multi-year investment program which
is designed to unlock the reserves within
our existing oil and gas fields.

COVID-19

Like many businesses across the globe,
Beach has had to adapt to the impact
of COVID-19. Beach undertook early
engagement with key contractors and
suppliers, reviewing supply chains and
identifying areas of greater risk and what
that meant for the safe and efficient
execution of each development project
being undertaken. The ability to identify
and adapt to changing risk profiles is
a key attribute of the Beach team –
Creativity and Performance are two of our
core values – and this year, showing both
was key to our success in a challenging
environment.

Victorian Otway

One of Beach’s key development projects
is the Victorian Otway program. This
program started strongly with the
drilling and tie-in of the Black Watch 1
onshore-to-offshore development well.
At 7.2 kilometres measured depth, Black
Watch 1 was the longest well drilled in
Australia using an onshore rig. Pleasingly,
the well result met pre-drill expectations
and was subsequently tied-in to the
Otway Gas Plant by the end of FY20. This
represents the first new gas production
well drilled in the Victorian Otway Basin
in more than five years.

The offshore development program was
further progressed with engineering
and testing undertaken and long lead
items ordered. Despite termination of
the rig contract with Diamond Offshore
for the Ocean Onyx semi-submersible
drill rig, Beach remains committed to
the execution of the Victorian Otway
Development program.

Western Flank

In Western Flank, Beach participated in
36 oil development wells at a success rate
of 97%. This included 27 horizontal oil
development wells. The breadth of this
development program and the success
of these horizontal wells was a key driver
of the record production achieved from
the Beach-operated ex PEL 91 and ex
PEL 92 assets, achieving gross operated
production rates in the second half of
FY20 as high as 23,000 bopd.

A highlight was the Bauer 39 horizontal
development well, which was the longest
McKinlay horizontal well drilled to date.
This means that the well was drilled
into the McKinlay reservoir and that our
geo-steering team was able to manoeuvre
through the reservoir for over 1.5kms, with
90% net pay. The well was brought online
during the year and its first full month of
ESP production produced at an average
rate of 3,500 bopd. An exceptional result
and a great illustration of the potential of
horizontal drilling in the Western Flank.

Basin

Target

Type

Wells drilled

Successful

Rate (%)

Cooper/
Eromanga Basins

Oil

Exploration

Appraisal

Development

Gas

Exploration

Appraisal

Development

SA Otway Basin

Gas

Exploration

Appraisal

Vic Otway Basin

Perth Basin

Gas

Development

Exploration

Great South Basin

Gas/Oil Exploration

Total wells drilled

178

144

100

Perth Basin

The Perth Basin represents a key growth
asset for the company. The Waitsia Joint
Venture led by operator MEPAU, took FID
on the Waitsia Gas Project Stage 1 (Stage 1
expansion) in July 2019, which will expand
the Xyris gas processing facility capacity
from 10 to 20 TJ/day. The Xyris facility was
shut in on 1 January 2020 for construction
to commence and is expected to be online
in the first quarter of FY21.

Stage 1 expansion also incorporates a large
diameter pipeline (with capacity for future
Waitsia Gas Project Stage 2 production
volumes) connecting the Xyris facility to the
Dampier to Bunbury Natural Gas Pipeline. To
that end, the Waitsia Joint Venture continues
to make good progress towards FID on
Waitsia Gas Project Stage 2, with FEED being
completed and EPC being finalised. The
Project is expected to add up to 250 TJ/day
of processing capacity to the field.

The Beharra Springs Deep 1 discovery will
be connected to the existing facilities in
FY21 bringing capacity up to the nameplate
of 25 MMSCF/d and additional gas
contracts have been secured to monetise
the reserves.

Studies into re-lifing and expansion
have commenced and concept select
will be carried out in FY21 to both local
businesses and the east coast gas market.

New Zealand

In New Zealand, development activities
focussed on the Kupe onshore
compression project, with FID taken in
July 2019. The project is expected to
be completed by the end of FY21 and
is expected to support the extension of
plateau production until FY24.

SA Otway Basin

Completion and commissioning of the
10 TJ/day Katnook Gas Processing Facility
was completed in FY20 with the facility
supplying new gas to local businesses and
the east coast gas market.

Bass Basin

Beach continued the Trefoil “Concept
Select” phase, which aims to reduce
subsurface and development uncertainties
to a point where an investment decision
can be undertaken, with Beach targeting
FEED entry in FY21. Concurrently, work
commenced on the assessment of nearby
gas fields Rockhopper, White Ibis and Bass
in the adjacent retention licences.

Geoff Barker
Group Executive – Development

Annual Report 2020Operating Review

Western Flank Oil and Gas

FY20 production

9.6MMboe

36% of Beach’s total production

2P reserves1

61.6MMboe

Operations

Development

Western Flank oil operations accounted
for 28% of Beach’s FY20 production.
The connection of new oil wells and
artificial lift saw Beach’s share of Western
Flank oil production increase to a record
7.5 MMbbl, representing a 44% increase
on FY19’s record levels.

Strong performance was underpinned
by the results of the horizontal drilling
program, focus on well online times to
enable early production, appropriate
artificial lift installation and targeted
expansion of surface infrastructure.

Western Flank gas operations accounted
for 8% of Beach’s FY20 production.
Western Flank gas/gas liquids production
of 2.1 MMboe was a 12% increase on
FY19 levels. The increase in gas and gas
liquids output was underpinned by higher
facility reliability.

Beach participated in 36 Western Flank
oil and gas development wells with an
overall success rate of 97%.

Notable outcomes were:

– 27 Beach-operated horizontal oil wells
drilled across the Bauer, Chiton and
Kalladeina-Congony fields in ex PEL 91.
All wells were successfully cased and
suspended as future producers.

– A Bauer Field horizontal well achieved
the longest lateral length drilled by
Beach in the Western Flank to date
at 1,629 metres. That well, Bauer 39
was brought online in FY20 and in its
first month on pump produced at an
average 3,500 bopd.

– FY20 infrastructure investment has
delivered an installed capacity of
approximately 23,000 bopd, enabling
oil production to be doubled over the
past 18 months.

FY20 Highlights

FY21 Focus

Western Flank oil production (MMbbl)

Record oil production from the Western
Flank, with Beach share of oil production
7.5 MMbbl, a 44% increase on FY19.

78 wells drilled on the Western Flank in
FY20, an 86% increase on FY19.

28 horizontal oil wells successfully drilled.

Field extensions at Bauer, Balgowan,
Congony, Kalladeina and Hanson oil fields
resulted in 12MMbbl of 2P reserve adds.

Western Flank achieved 2P reserves
replacement of 137%.

Optimised drilling program in
place designed to maintain oil
production levels and minimise
drilling expenditure.

Primary focus on development
drilling, with selected appraisal and
exploration investment.

Maintain focus on low cost
operator model.

1 Refer to Reserves Statement for the year ended 30 June 2020 on pages 28 – 33 of this report for additional disclosures.

7.5

5.2

FY19

FY20

44%

Beach Energy LimitedOperating Review

2. David Bessen, IT Systems Engineer

Cooper Basin Supply Base, South Australia

Exploration and Appraisal

Beach participated in 42 Western Flank
oil and gas exploration and appraisal wells
with 21 wells cased and suspended as
future producers (19 oil and two gas wells),
equivalent to a success rate of 50%.

Beach undertook operated appraisal
campaigns on Bauer, Chiton, Hanson,
Arno, Balgowan, Congony and Kalladeina
fields in ex PEL 91 and Parsons,
Callawonga, Butlers, and Rincon fields
in ex PEL 92. Field limits were defined at
Parsons, Callawonga, Butlers, Arno and
Hanson fields, while field extensions were
identified at Bauer, Chiton, Congony and
Kalladeina fields. Further potential for
appraisal and development drilling is to
be evaluated utilising production data
from the wells.

Beach successfully drilled two gas
appraisal wells in early FY20 at Crockery
West 1 and Ralgnal East 1 – both were
kept as production wells contributing
to full export capacity through the
Middleton facility.

In the non-operated program, Beach
participated in three Senex-operated
appraisal wells in ex PEL 104/111, at a
success rate of 67% which included
horizontal oil appraisal well Growler
Northeast 2. Beach’s CBOS drilling
commitments with Senex were completed
during the first half FY20 drilling campaign.

Commercial

Beach has executed GSAs with customers
for supply of its Western Flank gas in 2020.

Description

Western Flank oil producing areas are ex
PEL 91 (Beach 100%), ex PEL 92 (Beach
75% and operator, Cooper Energy 25%)
and ex PEL 104/111 (Beach 40%, Senex
60% and operator).

Western Flank gas producing areas are
ex PEL 106 (Beach 100%), ex PEL 91
(Beach 100%) and the Udacha Block —
PRL 26 (Beach 100%). Other licences
include ex PEL 107 (Beach 100%) and
PEL 630 (Beach 50% and operator,
Bridgeport 50%).

Annual Report 2020Operating Review

Cooper Basin Joint Venture

Operations

Commercial

Cooper Basin JV partners, Beach and
Santos, agreed an extension of ethane
gas supply to Qenos, Australia’s sole
manufacturer of polyethylene and leading
supplier of world-class polymers. The
agreement runs from 1 January 2020
to 31 December 2025 and is expected
to supply up to 15 petajoules of ethane
per annum.

Description

Beach owns non-operated interests in
the South Australian Cooper Basin joint
ventures (collectively 33.40% in SA Unit
and 27.68% in Patchawarra East), the
South West Queensland joint ventures
(various interests of 30% to 52.2%) and
ATP 299 (Tintaburra) (Beach 40%),
which are collectively referred to as the
Cooper Basin JV. Santos is operator.

The Cooper Basin JV operations
accounted for 33% of Beach’s FY20
production. Net gas and gas liquids
production of 7.4 MMboe was up 14%
from the prior year and comprised sales
gas of 6.2 MMboe and gas liquids of
1.2 MMboe. This was driven by new well
connections after higher drilling activity,
more than offsetting natural field decline.

Net oil production of 1.3 MMbbl was
down 16% on the prior year driven by
natural field decline, partly offset by
additional oil development wells.

Exploration, Appraisal and Development

Beach participated in 94 Cooper Basin JV
wells, 11 gas exploration, 14 gas appraisal,
45 gas development, one oil exploration, 19
oil appraisal and four oil development wells.

Highlights from the FY20 drilling
program included:
– Overall success rate of 88%.
– Four drilling campaigns targeting the
Toolachee formation in South West
Queensland culminated in eight wells
that demonstrated the high rate
potential of the formation. Production
rates from the wells exceeded pre-drill
expectations, flowing with a 30-day
average initial production rate of
3 – 14 MMscfd.

– On the Coolah Field in South West
Queensland, Coolah 9 and 10
were drilled using underbalanced
drilling techniques. The wells had
30-day average IP rates of 7.6 and
10.3 MMscfd respectively.

FY20 production

8.7MMboe

33% of Beach’s total production

2P reserves1

85.0MMboe

FY20 Highlights

FY21 Focus

Cooper Basin JV production, net to
Beach, grew 8% in FY20.

Initial flow rates of 3-14 MMscfd
from eight exploration wells drilled in
South West Queensland targeting the
Toolachee formation.

High grading drilling opportunities as
we prioritise investment in wells with
fastest payback.

Participation in the FEED work being
carried out by the operator, Santos, to
evaluate the opportunity for carbon
capture and storage (CCS) in the
Cooper Basin.

Cooper Basin JV production (MMboe)

8.7

8.1

FY19

FY20

1 Refer to Reserves Statement for the year ended 30 June 2020 on pages 28 – 33 of this report for additional disclosures.

Beach Energy LimitedOperating Review

Victorian Otway Basin

Operations

Commercial

Beach and Origin commenced the
agreed process to determine the new
price for Victorian Otway gas sales
under the existing Lattice GSA (i.e.
excluding the GSA for the sale of gas
from the 5% interest previously held by
Toyota Tsusho). At the time of writing,
the process was in the arbitration
phase. Once resolved, the new price
will be applied against gas sold by
Beach to Origin from 1 July 2020 until
30 June 2023 after which a new market
price will again be determined.

Description

Victorian Otway Basin (Beach 60% and
operator, O.G. Energy 40%) includes
producing license VIC/L1(v) which
contains the Halladale, Black Watch
and Speculant near shore gas fields and
licences VIC/L23, T/L2 and T/L3 which
contain the Geographe and Thylacine
offshore gas fields. The Victorian Otway
Basin also includes non-producing
nearshore VIC/P42(v) and offshore
licenses VIC/P43 and VIC/P73 (Beach
60% and operator, O.G. Energy 40%) and
T/30P (Beach 100% and operator). Gas
from all producing fields is processed at
the Otway Gas Plant.

Victorian Otway Basin operations
accounted for 13% of Beach’s FY20
production. Net Victorian Otway Basin
production was 3.6 MMboe, 57% lower
than FY19 due to reporting a 60%
working interest for the full 12 months
of FY20 in conjunction with natural field
decline. On a gross basis, production from
the Victorian Otway Basin was down 31%.

Development

During the year, the 7.2 km Black Watch
1 gas development well was drilled and
connected to the Otway Gas Plant.
This was the longest well drilled from
an onshore location in Australia. It
intersected the target Waarre C reservoir
in-line with pre-drill expectations.

Exploration and Appraisal

A comprehensive interpretation project
based on the super cube dataset covering
all of the 3D seismic data in the Victorian
Otway Basin was progressed in FY20. This
super cube product was further enhanced
using proprietary Beach processing
techniques to deliver a best-in-class
product. As a result, Beach is well underway
with generating a new prospect and lead
inventory that will leverage the results of the
forth-coming exploration wells.

Beach is also planning for the
commencement of the Enterprise 1
exploration well, which is to be drilled
onshore targeting an offshore reservoir
near Port Campbell.

FY20 production

3.6MMboe

13% of Beach’s total production

2P reserves1

55.2MMboe

FY20 Highlights

FY21 Focus

Victorian Otway Basin production (MMboe)

Completion, connection and
commissioning of the Black Watch 1
extended reach gas development well.

Facility reliability high at 98%. Major
turnaround deferred to FY21 saving
downtime and cost.

Maturation of exploration opportunities
in offshore acreage.

Drilling of Enterprise 1
onshore-to-offshore gas
exploration well.

Commencement of offshore
drilling campaign.

Execution of a safe and efficient
facility shutdown.

Execution of an offshore wireline
program on Thylacine.

8.4

3.6

FY19

FY20

57%

1 Refer to Reserves Statement for the year ended 30 June 2020 on pages 28 – 33 of this report for additional disclosures.

Annual Report 2020Operating Review

Perth Basin

Operations

Development

Perth Basin operations accounted for 1%
of Beach’s FY20 production. Net Perth
Basin production of 0.4 MMboe was 42%
lower than the prior year due to the Xyris
gas facility being shut in for the entirety
of H2 FY20, lower customer nominations
and the completion of the alignment
transaction with MEPAU reducing Beach’s
working interest to 50% at Beharra
Springs from November 2019.

Exploration and Appraisal

A new gas discovery was announced
at Beharra Springs Deep 1 in the Kingia
Sandstone, which is the main objective
reservoir in the nearby Waitsia Field. Flow
testing was undertaken in December2
with flow rates of up to 46 MMscfd
observed on test, constrained by tubing
size. The 96 hour main flow period
was conducted at a rate of 35 MMscfd
with flow rates and flowing well head
pressures stable throughout. The flow
testing demonstrates similar well
productivity characteristics to the Waitsia
3 and Waitsia 4 wells.

In EP 320 the Trieste 3D seismic survey
was undertaken. The survey covered
a 200 km2 area to the south east of
Beharra Springs. The survey data is now
being processed.

Planning and preparations commenced
for future Perth Basin exploration and
appraisal activities.

FID was taken and construction
commenced on Waitsia Gas Project Stage
1 (Stage 1 expansion) which will see the
capacity of the Xyris gas facility expanded
from 10 TJ/day to 20 TJ/day. The facility
was shut in on 1 January 2020 to allow
construction activities to commence. The
joint venture continued to progress the
Waitsia Gas Project Stage 2 towards FID.

Long lead items and other engineering
work was progressed for the future
connection of the Beharra Springs Deep
1 gas well to the Beharra Springs gas
facility. Beharra Springs Deep will produce
from the Kingia Sandstone which sits
deeper than the currently producing
formations at Beharra Springs. First
gas sales are expected to commence in
Q3 FY21.

The Beharra Springs Deep 1 discovery
will be hooked up to the existing facilities
in FY21 bringing capacity up the to
nameplate of 25 MMSCF/d and additional
gas contracts have been secured to
monetise the reserves.

Studies into re-lifing and expansion were
kicked off and concept select will be
carried out in FY21 to identify the optimal
development pathway for these material
new reserves.

FY20 production

0.4MMboe

1% of Beach’s total production

2P reserves1

101.4MMboe

FY20 Highlights

FY21 Focus

Perth Basin production (MMboe)

Gas discovery in the Kingia Sandstone at
Beharra Springs Deep 1 exploration well.
Initial 2P reserves booking of 29 MMboe.

Construction of Waitsia Stage 1
expansion commenced.

Trieste 3D seismic survey undertaken.

Progress to FID of Waitsia Gas
Project Stage 2.

Completion of Waitsia Stage 1
expansion.

First gas sales from Beharra Springs
Deep Field.

Progress Perth Basin exploration
and appraisal plans.

0.7

0.4

FY19

FY20

42%

1 Refer to Reserves Statement for the year ended 30 June 2020 on pages 28 – 33 of this report for additional disclosures.
2 Refer to ASX Announcement #44 dated 16 December 2019.

Beach Energy LimitedOperating Review

3. Jay Golley, Production Superintendent WA

Beharra Springs, Western Australia

Commercial

Beach and MEPAU completed the
alignment of participating interests on
29 November 2019, resulting in the two
entities moving to a 50% interest in
Beach-operated production licences L11
and L22, exploration permit EP 320 and
pipeline licence PL18. MEPAU and Beach
each hold a 50% interest across all joint
Perth Basin interests. MEPAU remains
operator of licences L1 and L2, containing
the Waitsia gas field.

Beach, together with MEPAU, signed a
gas sales agreement with Alinta Energy
for the supply of up to 20 TJ/day of gas
from the Waitsia Field due to commence
deliveries in first half of FY21 for a
duration of 4.5 years.

In addition, Beach, together with MEPAU,
signed gas sales agreements with Alinta
Energy for supply of gas from Beharra
Springs Deep. The agreement is for supply
of 10 TJ/d over a period of up to two years.
First gas sales are expected to commence
in Q3 FY21.

Description

Producing licence areas are Waitsia
(Beach 50%, MEPAU 50% and operator)
in licence L1/L2 and Beharra Springs
(Beach 50% and operator, MEPAU 50%),
in licences L11 and L22. Other license and
permit areas include EP 320 where Beach
undertook the Trieste 3D seismic survey.

Annual Report 2020Operating Review

BassGas

Operations

Commercial

A new GSA was executed with Alinta
Energy in FY20. Beach’s share of gas
production from the BassGas Project
is now fully contracted for calendar years
2020 and 2021.

Description

The BassGas Project (Beach 53.75% and
operator, MEPAU 35%, Prize Petroleum
International 11.25%), produces gas from
the Yolla field, situated approximately
140 kilometres off the Gippsland coast
in production licence T/L1. Gas from
Yolla is piped to a gas processing facility
located near the township of Lang Lang
approximately 70 kilometres southeast
of Melbourne. Beach also holds a
50.25% operated interest in licenses
TR/L2, TR/L3, TR/L4 and TR/L5.

BassGas accounted for 5% of Beach’s
FY20 production. BassGas production
was 1.4 MMboe, down 19% over FY19 due
to natural field decline and lower market
demand early in the year, offset by facility
reliability and increased productivity after
a wireline campaign.

Development

“Concept select” activities continued
on the proposed Trefoil gas field
development. An engineering review of
the development concepts and costs was
also carried out, evaluating well head
jacket and subsea options. Subject to
JV approval, the preferred concept will
be taken forward to the “Define Phase”
incorporating FEED, with FID currently
targeted in FY22.

Exploration and Appraisal

Full re-evaluation of the discovered
resources at Rockhopper, Bass and White
Ibis was undertaken with the results
over White Ibis and Bass being used in
the design and planning of a 3D seismic
survey covering those fields.

FY20 production

1.4MMboe

5% of Beach’s total production

2P reserves1

18.8MMboe

FY20 Highlights

FY21 Focus

BassGas production (MMboe)

Successful wireline works undertaken on
the producing Yolla gas fields.

Reach FEED on Trefoil
development project.

Higher facility reliability achieved at
BassGas.

Trefoil development project progressing
through “Concept Select” stage.

Planning for seismic surveys covering
Bass and White Ibis undeveloped
gas fields.

1.7

1.4

FY19

FY20

19%

1 Refer to Reserves Statement for the year ended 30 June 2020 on pages 28 – 33 of this report for additional disclosures.

Beach Energy LimitedOperating Review

New Zealand – Kupe

Operations

Description

New Zealand operations comprises Kupe
(Beach 50% and operator, Genesis 46%,
NZOG 4%) in the Taranaki Basin. Kupe
produces gas from the Kupe field, situated
approximately 30 kilometres off the New
Zealand North Island, in licence PML38146.
Gas from the Kupe field is piped to the
onshore Kupe production station.

New Zealand operations accounted
for 10% of Beach’s FY20 production.
Net New Zealand production in FY20
was 2.8 MMboe, down 11% over FY19
with the 30-day planned shutdown
and natural field decline offsetting
strong customer demand and high
facility reliability. A well intervention
campaign was undertaken during the
summer which resulted in improved
production volumes prior to the onshore
compression project coming on line,
expected by the end of FY21.

Development, Exploration and Appraisal

The priority focus for FY20 was taking FID
and commencing construction of the Kupe
compression project. The project is being
undertaken to extend the field production
plateau and ultimately field life.

Alongside the delivery of the onshore
compression project at the Kupe
production station, subsurface work
was undertaken in support of the
wireline intervention program in the
Kupe Field. This saw the field remapped
which has resulted in a 2P reserves
uplift and much better definition of
the field structure to support in-fill
drilling locations. Near field exploration
prospects were also progressed.

FY20 production

2.8MMboe

10% of Beach’s total production

2P reserves1

29.5MMboe

FY20 Highlights

FY21 Focus

New Zealand production (MMboe)

Construction commenced on the Kupe
compression project.

Facility reliability of 99% achieved
at Kupe.

30-day shutdown turnaround undertaken
successfully at the Kupe production station.

Completion of the compression project.

Maintaining high facility reliability.

Evaluation of near field exploration
opportunities and potential for another
Kupe development well.

3.2

2.8

FY19

FY20

11%

1 Refer to Reserves Statement for the year ended 30 June 2020 on pages 28 – 33 of this report for additional disclosures.

Annual Report 2020Operating Review

SA Otway Basin

FY20 production

0.2MMboe

1% of Beach’s total production

2P reserves1

0.7MMboe

Operations and Development

The SA Otway Basin is Beach’s newest
production facility, achieved with
completion and commissioning of the
new 10 TJ/day Katnook Gas Processing
Facility in February 2020. This facility
was constructed with the assistance of a
Commonwealth Government GAP grant.

SA Otway gas operations accounted for
1% of Beach’s FY20 production.

Exploration and Appraisal

Exploration and appraisal saw both a new
discovery at the Dombey gas field and
further appraisal of the Haselgrove Field.

Gas appraisal well Haselgrove 4 was
drilled in PPL 62 (Beach 100%). After
mechanical issues with the Haselgrove
4 well, the rig returned to the site in
the second half of FY20 to sidetrack
the well. The flow test of Haselgrove
4 DW1 supports future tie back and
connection of the well to the Katnook gas
processing facility.

Conventional gas exploration well
Dombey 1 was drilled in PEL 494 (Beach
70% and operator, Cooper Energy 30%)
and announced as a new gas discovery
in the first half of FY20. The joint venture
is planning acquiring 3D seismic data to
better define the gas field from which
future Dombey appraisal plans, and
exploration of the greater permit, may be
based. Dombey 1 is part-funded through a
$6.89 million PACE Gas Round 2 grant by
the South Australian Government.

Commercial

During the year, a volume-based GSA was
signed with Origin for supply of gas from
the Katnook gas processing facility in
2020 and into 2021.

Description

SA Otway gas producing area is PPL 62
(Beach 100%). Other licences include
PEL 494 (Beach 70% and operator,
Cooper Energy 30%) which contains
the Dombey gas field.

FY20 Highlights

FY21 Focus

First gas achieved from the new 10 TJ/day
Katnook Gas Processing Facility.

Gas discovery at the Dombey gas field.

Success in the Haselgrove gas appraisal
campaign, with Haselgrove 4 DW1 being
completed as a future production well.

Tie-back and connection of Haselgrove
4 DW1 to the Katnook gas processing
facility.

Progress planning for 3D seismic
survey over Dombey gas field and
surrounding area.

Beach’s newest
production facility.

1 Refer to Reserves Statement for the year ended 30 June 2020 on pages 28 – 33 of this report for additional disclosures.

Beach Energy LimitedOperating Review

Frontier Exploration

Carnarvon Basin

Canterbury Basin

Great South Basin

During FY20, the farm out transaction
was completed in relation to PEP38264
(Beach 37.5% and operator, O.G. Energy
37.5% and Discover Exploration 25%) in
the Canterbury Basin, New Zealand which
contains the Wherry and Gondola gas
prospects. The joint venture made further
progress to advance the Wherry prospect
to drill-ready status, with the final well
location being agreed and approvals
being progressed with the New Zealand
regulators. Significant progress was also
made on well design, subsurface mapping
and community engagement activities.

During FY20, Beach acquired a 30%
interest in exploration permit PEP50119
(OMV 52.93% and operator, Beach
30%, MEPAU 17.07%) in the Great
South Basin, offshore New Zealand,
which contained the Tawhaki exploration
prospect. Exploration well Tawhaki 1
was drilled in the third quarter of FY20.
Data obtained during the drilling phase
indicated no hydrocarbons were present
in the target reservoir. The well was
plugged and abandoned.

Progress was made in the Carnarvon
Basin, offshore Western Australia where
the WA-349-P joint venture (BP 42.5%
and operator, Cue 21.5%, Beach 21%
and NZOG 15%), continued to progress
the Ironbark gas exploration prospect
for drilling. The Ocean Apex rig was
contracted and other long lead items
ordered. The joint venture continues to
finalise plans ahead of drilling the well,
currently planned for the fourth quarter
of calendar year 2020.

Bonaparte Basin

Beach and Santos continued to progress
drill-ready targets across the four Bonaparte
Basin exploration blocks (Santos 50% and
operator, Beach 50%). Activities included
interpretation of the new Bethany 3D
seismic survey for the two northern
permits, geological and geophysical
studies and updating of the prospects
and leads inventory across the portfolio.

Mount Taranaki overlooking our Kupe
production facility, New Zealand

Annual Report 2020Reserves Statement
Net to Beach at 30 June 2020

Beach ended FY20 with 2P oil and gas reserves of 352 MMboe

Proved plus probable (2P) reserves
increased by 26 MMboe to 352 MMboe
at 30 June 2020, reflecting a 214%
organic reserves replacement ratio.

A material reserves addition of 29 MMboe
(2P) has been made due to the results
of Beharra Springs Deep-1 in Western
Australia. Western Flank oil and gas had
total 2P revisions of 12 MMboe resulting
from exploration and appraisal success,
migration from 2C contingent resources to
2P reserves and reservoir performance.

Divestments of 2P reserves were made
at La Bella (3.3 MMboe) and Beharra
Springs (0.6 MMboe) due to the

completion of farmdowns to OGOG and
Mitsui as previewed in the FY19 annual
report. This results in a 200% inorganic
2P reserves replacement ratio.

2C contingent resources reduced by
5 MMboe to 180 MMboe, with the
majority of the change due to divestment
of 18 MMboe from the Innamincka
Dome offset by a 13 MMboe increase
in the Cooper Basin due to inclusion of
Moomba South.

Key metrics

Note

FY18
(MMboe)

FY19
(MMboe)

FY20
(MMboe)

Proved reserves (1P)

Proved plus probable reserves (2P)

Proved plus probable plus possible
reserves (3P)

2C contingent resources

Organic 2P reserves replacement ratio

Inorganic 2P reserves replacement ratio

2P reserves life (years)

190

313

491

207

368%

938%

11.0

201

326

514

185

204%

141%

12.4

202

352

576

180

214%

200%

13.2

1P Reserves (MMboe)

2P Reserves (MMboe)

2P Reserves Life (Years)

201

202

190

313

326

352

FY16 FY17 FY18 FY19 FY20

Beach Energy LimitedReserves Statement

Proved reserves (1P)

Note

FY19

Prod.

Western Flank Oil

Western Flank Gas

Cooper Basin JV

Other Cooper Basin

Perth Basin

Otway Basin

Bass Basin

Taranaki Basin

Total

8, 9

10, 11

201

All products (MMboe)

Acquisitions/
divestments

Exploration/
Appraisal

Contingent
Resources
to Reserves

(1)

(2)

(3)

(0)

(3)

Other

(2)

(1)

Total
Revisions

FY20

(1)

202

LPG
(kt)

Condensate
(MMbbl)

Oil
(MMbbl)

Total
(MMboe)

Developed

Undeveloped

All products (MMboe)

Proved reserves (1P)

Note

Western Flank Oil

Western Flank Gas

Cooper Basin JV

Other Cooper Basin

Perth Basin

Otway Basin

Bass Basin

Taranaki Basin

Total

8, 9

10, 11

Gas
(PJ)

200

321

176

423

326

148

400

877

1,474

202

104

Annual Report 2020Reserves Statement

Proved plus probable
reserves (2P)

Western Flank Oil

Western Flank Gas

Cooper Basin JV

Other Cooper Basin

Perth Basin

Otway Basin

Bass Basin

Taranaki Basin

Total

Note

FY19

Prod.

Acquisitions/
divestments

Exploration/
Appraisal

Contingent
Resources
to Reserves

All products (MMboe)

8, 9

10, 11

(1)

(3)

326

(4)

(0)

(6)

(1)

Other

(3)

(0)

Total
Revisions

FY20

(0)

(3)

101

352

Proved plus probable
reserves (2P)

Note

Western Flank Oil

Western Flank Gas

Cooper Basin JV

Other Cooper Basin

Perth Basin

Otway Basin

Bass Basin

Taranaki Basin

Total

8, 9

10, 11

Gas
(PJ)

376

589

282

125

LPG
(kt)

Condensate
(MMbbl)

Oil
(MMbbl)

Total
(MMboe)

Developed Undeveloped

All products (MMboe)

329

801

491

218

544

101

1,513

2,385

352

167

185

Beach Energy LimitedReserves Statement

2C contingent
resources

Note

FY19

Acquisitions/
divestments

Cont to

Res Revisions

FY20

Gas
(PJ)

LPG
(kt)

Condensate
(MMbbl)

Oil
(MMbbl)

Total
(MMboe)

All products (MMboe)

Western Flank Oil

Western Flank Gas

Cooper Basin JV

Other Cooper Basin

14, 15

Perth Basin

8, 9

Otway Basin

Bass Basin

Taranaki Basin

Bonaparte Basin

Total Conventional 2C
Contingent Resources

Cooper Basin JV
(Unconventional)

Total 2C Contingent
Resources

Notes

164

(18)

(1)

(18)

185

(18)

(0)

(6)

(1)

(0)

(4)

259

231

225

104

128

157

755

511

104

228

157

180

858

739

180

1. FY20 organic 2P reserves replacement ratio calculated as 2P reserves additions, excluding acquisitions and divestments, of 57 MMboe divided by FY20 reported production of 26.7 MMboe.
2. FY20 inorganic 2P reserves replacement ratio calculated as 2P reserves additions of 54 MMboe divided by FY20 reported production of 26.7 MMboe.
3. FY20 2P reserves life calculated as 352 MMboe 2P reserves, divided by FY20 production of 26.7 MMboe.
4. Western Flank Oil comprises ex PEL 91 (Beach 100%), ex PEL 92 (Beach 75%) and ex PEL 104/111 (Beach 40%). 1P reserves at 30 June 2020 are split 77% ex PEL 91, 16% ex PEL 92, 7% ex PEL104/111.

2P reserves at 30 June 2020 are split 77% ex PEL 91, 17% ex PEL 92, 6% ex PEL104/111. Probabilistic and deterministic methodologies are used.

5. Western Flank Gas comprises ex PEL 106 (Beach 100%), PRL 26 (Beach 100%) and the Mokami Field in ex PEL 91 (Beach 100%). 1P reserves at 30 June 2020 are split 97% ex PEL 106, 3% PRL 26,

0% ex PEL91. 2P reserves at 30 June 2020 are split 98% ex PEL 106, 2% PRL 26, 0% ex PEL91. Probabilistic and deterministic methodologies are used.

6. The Cooper Basin JV comprises the South Australian Cooper Basin joint ventures where Beach equity interests are 27.68% and 33.40%, the South West Queensland joint ventures where Beach equity

interests range from 20.76% to 45.00% and Tintaburra JV where Beach equity interest is 40%. Deterministic methodology is used.

7. Other Cooper Basin includes ex PEL 513/632 (SWJV) (Beach 40%) and PRL 135 (Vanessa) (Beach 43%). Deterministic methodology is used.
8. Perth Basin comprises Waitsia (Beach 50%) and Beharra Springs (Beach 50%). Probabilistic and deterministic methodologies are used.
9. Beharra Springs farmdown from 67% to 50% completed 29 November 2019. Refer announcement within Quarterly Report released 29 Jan 2020.
10. Otway Basin comprises Thylacine and Geographe (Beach 60%), Halladale, Black Watch and Speculant (HBWS)(Beach 60%), LaBella (Beach 100% FY19, Divested to 60% FY20) and Hazelgrove
(Beach 100%). 1P reserves at 30 June 2020 are split 81% Thylacine and Geographe, 7% HBWS, 10% LaBella, 1% Hazelgrove. 2P reserves at 30 June 2020 are split 84% Thylacine and Geographe,
6% HBWS, 9% LaBella, 1% Hazelgrove. Probabilistic and deterministic methodologies are used.
11. LaBella farmdown from 100% to 60% completed (refer ASX announcement #016/19, 31 May 2020).
12. Bass Basin comprises BassGas producing permits (Beach 53.75%) and BassGas retention licences (Beach 50.25%). Probabilistic and deterministic methodologies are used.
13. Taranaki Basin comprises Kupe Gas Project (Beach 50%). Deterministic methodologies are used.
14. Other Cooper Basin includes ex PEL 513/632 (SWJV) (Beach 40%), PRL 135 (Vanessa) (Beach 43%) and PRL14/18 (Flax), PRL18 (Juniper), PRL 17 (Yarrow)(FY19 100%, Divested FY20).
15. Divestment of 100% of PRL14/18 (Flax), PRL18 (Juniper), PRL 17 (Yarrow) completed.
16. Bonaparte Basin comprises NT/RL 1 (Petrel) (Beach 5.75%).

Annual Report 2020Reserves Statement

Notes to the Reserves Statement

Beach’s reserves are prepared in
accordance with the 2018 update to the
Petroleum Resources Management System
(PRMS) by, or under the supervision of
Qualified Petroleum Reserve and Resource
Evaluators (QPREE).

The reserves statement presents
estimates of petroleum reserves and
contingent resources as at 30 June 2020
and unless noted represents Beach’s
net share. The estimates contained in
the reserves statement are based on,
and fairly represents, the supporting
information and documentation prepared
by Beach staff who are either QPREEs
or under the supervision of the named
QPREEs. Beach’s QPREEs who have
prepared or supervised the preparation
of the reserves estimates reported within
this statement are Mark Pitkin, Mark
Sales, Trevor Wadham and David Capon,
all employed by Beach Energy Ltd and
members of the SPE.

The reserves statement as a whole is
approved by Mr David Capon (General
Manager – Offshore Victoria and New
Zealand). Mr Capon is a full time
employee of Beach and a member of
the SPE; he has a Bachelor of Science
(Honours) from the University of
Adelaide and in excess of 25 years
of relevant experience. The reserves

statement has been issued with the prior
written consent of Mr Capon as to the
form and context in which the estimates
and information are presented.

Contingent resource estimates have not
been audited. Beach has categorised the
contingent resource estimates in line with
the 2018 update to the PRMS.

Conversion factors used to evaluate oil
equivalent quantities are sales gas and
ethane 171.94 kboe per PJ, LPG 8.458
kboe per kT, condensate: 0.935 kboe
per kbbl and oil 1 kboe per kbbl. Beach’s
reserves are stated net of fuel, flare and
vent at reference points defined for each
asset. The reference point is typically
the point at which production operations
cease and products are transferred to
the customer.

Estimates of reserves and resources
have been aggregated by arithmetic
summation at the different category
levels, consequently 1P summations
may be conservative due to the portfolio
effects of arithmetic summation.

Beach prepares it’s reserve and resource
estimates annually in line with the Beach
reserves policy. The policy lays out
the external auditing requirements for
reserves estimates. The policy is overseen
by the Beach Reserves Committee.

Beach’s reserve estimates are prepared
using deterministic and probabilistic
methods as appropriate with the
methodology used approved by the
relevant QPREE for the asset. An
independent audit of Beach’s reserves
as at 30 June 2020 was conducted by
RISC Advisory Pty Ltd (RISC). The audit
report states “It is RISC’s opinion that, in
aggregate, Beach’s reserves estimates
are reasonable and have been prepared
in accordance with the definitions and
guidelines contained within the Petroleum
Resources Management System
(PRMS 2018) and generally accepted
petroleum engineering and evaluation
principles.” The audit covered 75% of
the 2P reserves in line with the Beach
reserves policy which requires at least
50% of 2P reserves to be audited. The
audit included 91% of developed reserves
and 60% of undeveloped reserves.

Otway Gas Plant, Victoria

Beach Energy LimitedMaterial Reserves Change

Beach advises of a material reserves
change due to the booking of volumes
in the Beharra Springs Project, following
the successful drilling of Beharra
Springs Deep-1 in production licence L11
approximately 300 kilometres north of
Perth. Beach is the Operator of the Project
with a 50% working interest. The other
JV party is Mitsui.

Beach has booked 29 MMboe of 2P
reserves for Beharra Springs (9 MMboe
developed and 20 MMboe undeveloped).
Gas flowed from Beharra Springs Deep-1
at rates up to 46 MMscf/d constrained
by tubing dimensions. Results of the
well have been previously announced
in ASX releases 044/19 and 037/19 on
16 December 2019 and 28 October 2019
respectively).

The reserves from the Beharra Springs Deep
field are able to be processed through the
existing Beharra Springs gas processing
facilities which are connected to the WA
domestic gas market. Beharra Springs
Deep-1 is expected to be connected to the

existing Beharra Springs gas processing
facility in Q3 FY21 with initial production
of up to 20 TJ/day expected following the
connection. Beach previously announced
in ASX release 021/20 on 22 July 2020
that together with MEPAU it has signed a
GSA with Alinta Energy for supply of gas
from the Beharra Springs Project, including
gas from Beharra Springs Deep-1. The
agreement is for the supply of 10 TJ/d over
a period of up to two (2) years. First gas
sales are expected to commence in Q3
FY21. Additional gas sales agreements are
in advanced stages of negotiation.

The timing of future development drilling
will depend on market demand and rate
of reservoir depletion. The future wells are
economic at reasonable estimates of costs
and product sale prices. Planned appraisal
drilling could lead to a decision to expand or
build new gas processing facilities.

Geologic models of the field have been built
and used in conjunction with probabilistic
estimates to determine OGIP for the field.
Reserves estimates were generated using a
combination of material balance methods
and analogue estimates.

Beharra Springs Kingia net reserves at 30 June 2020

Classification

Gas
(PJ)

169

LPG
(kTonnes)

Condensate
(MMbbls)

Total
(MMboe)

–

6.1

29.1

Reserves Statement

Material Contingent Resources Change

Beach has divested 100% of it’s
contingent resources in the Innamincka
Dome region in the Cooper Basin to Red
Sky. This divestment of 17.7 MMboe 2C
contingent resource was previewed in
Beach’s FY19 annual report.

Annual Report 2020Sustainability
Sustainability

Climate change

Other Environmental Highlights:

Beach recognises that climate change
is one of the global challenges of this
century. As a member of the energy
industry we have a role to play in
managing carbon emissions.

We believe that a variety of energy
sources are required to meet global
energy demand. We also support global
efforts to reduce climate change through
the implementation of clear and stable
climate change policies and market
mechanisms.

In FY19 we finished the development
of an emissions reduction strategy and
identified several projects to help reduce
greenhouse gas emissions from our
operations. This work has enabled Beach
to set itself an emissions reduction target.

Beach’s emissions reduction target

25% reduction in emissions by FY251.

Our climate change policy commitment

Beach Energy is committed to:

– Identifying, managing and mitigating
material climate risks to business;
– Measuring and reporting carbon
emissions as required by the
regulatory requirements of the regions
we operate in;

– Ensuring that our practices and

procedures align and integrate climate
risks into project decision-making;
– Where economically practicable,

integrate low emissions technologies
in our operations, and identify
opportunities for carbon emission
reduction;

– Evaluating the resilience of our

portfolio and investment decisions to
potential changes in global climate
policy and changes in climate; and

– Setting targets to encourage

innovation and drive reductions in our
carbon emissions as well as modelling
an internal carbon price to help guide
our business decisions.

– Offset 8557.56 SEB points (equivalent
to offsetting 1,150 ha of land). The
points were purchased through
Gidgealpa Station SEB offset project.

– NZ operations recognised for high
environmental performance by
Taranaki Council.

Our community

Beach’s emphasis is to become a trusted,
respected and accepted member of
the communities in which we operate.
We do this by demonstrating to local
communities the Beach values, our
commitment to safe operations, respect
for each other, the communities and
environment.

Community partnerships

Beach announced several key community
partnerships in FY20, including:

– Supporting the Rotokare Scenic

Reserve Trust’s Kiwi release program
and bush classroom concept in NZ,
which includes the addition of six
outdoor learning stations to boost
educational capacity for more than
2,000 students learning about
conservation and the environment.

– Supporting Zoos South Australia
and its Southern White Rhinos
conservation program at Monarto
Safari Park.

– Supporting the South Australian
Health and Medical Research
Institute’s (SAHMRI) Science,
Technology, Engineering and
Mathematics (STEM) Pathways
Program for Aboriginal and Torres
Strait Islanders to develop skills,
training and experiences within the
health and medical research sector.
– A Workplace Giving program was
launched to match charitable
donations made by our people.

We support global
efforts to reduce
climate change through
the implementation
of clear and stable
climate change
policies and market
mechanisms.

Other highlights:

– Beach’s purpose revised from

‘To deliver sustainable growth in
shareholder value’ to ‘Sustainably
deliver energy for communities’.

– Released a tax transparency report for

the first time.

– Taxation Policy developed and

available on the company website.
– Modern Slavery risk assessment for

inclusion in the corporate risk register.
Modern Slavery contractual provisions
are now included in new goods and
services contracts.

– A $250,000 contribution to Greening
Australia in support of a long-term
native seed and plant supply program
to kick start landscape restoration in
areas destroyed by the bushfires.
– Additional contribution to the South
Australian State Emergency Relief
Fund, Kangaroo Island Mayoral Relief
Fund, Victorian State Bushfire Appeal
and Zoos Victoria Bushfire Wildlife
Emergency Fund to provide additional
funding and support for bushfire
impacted communities.

Reduction in emissions by FY251

25%

1 Measured from when Beach acquired its Lattice assets in 2018.

Beach Energy LimitedSustainability

4. David Sanderson, Supply Base Specialist, BPS Supply Chain SAWA

As a member of the energy
industry we recognise the
role we play in managing
carbon emissions.

Cooper Basin, South Australia

People and Culture

Our people continue to be Beach’s
greatest asset. The adaptability
shown by the team this year has been
commendable, whether that be at our
sites or in our offices, and all done
whilst living our Values. The Beach team
understood the need for some of our work
practices to change, and did so safely and
swiftly and whilst continuing to deliver on
our work program.

Beach is also pleased that we continued
to improve our focus on Gender Diversity,
with over 30% of new recruits being
female and 64% of the graduate intake
also being female. Some key highlights
from FY20 below:

Employee Engagement

The 2020 Employee Engagement and
Enablement Survey resulted in significant
improvements across all areas at Beach.
Of note was the recognition by our

employees that Beach demonstrates a
clear vision and future to our people,
Beach demonstrates care and concern,
and our leaders provide ongoing
leadership and coaching on the job to
support employees in their role and build
their career at Beach.

Competency and Career Development

Beach continues to build technical
excellence by embedding a globally
benchmarked Technical Competency
Framework with supporting training
and development opportunities for its
technical community. Throughout FY21 the
competency frameworks will be expanded
further to include all leadership roles
and incorporate the Beach Leadership
expectations. In addition, Beach has
launched 534 e-learning and webinar
modules since February, across technical,
leadership and personal development
areas to support out employees develop
in a self-paced manner.

Wellbeing and Resilience

Beach has long maintained a focus on
workforce wellbeing and resilience,
however, with the COVID-19 situation
unfolding in 2020 the level of support to
our workforce increased significantly.

Modules were developed in-house to
support remote working, leading virtual
teams, managing personal anxiety and
staying both physically and mentally
healthy during uncertain times. This
increased level of support will continue
throughout the FY21 year.

For more information:

See the 2020 Beach Energy Sustainability
Report, to be released later this year.

Annual Report 2020Board of Directors

1. Glenn Davis
Independent Non-Executive Chairman
LLB, BEc, FAICD

Mr Davis has practiced as a solicitor in
corporate and risk throughout Australia
for over 30 years initially in a national
firm and then a firm he founded. He has
expertise and experience in the execution
of large transactions, risk management
and in corporate activity regulated by
the Corporations Act and ASX Limited.
Mr Davis has worked in the oil and gas
industry as an advisor and director for
over 25 years.

Mr Davis’s special responsibilities include
membership of the Remuneration and
Nomination Committee. Mr Davis joined
Beach on 6 July 2007 as a non-executive
director. He was appointed non-executive
Deputy Chairman in June 2009 and
Chairman in November 2012. He
was last re-elected to the Board on
23 November 2018.

2. Matthew Kay
Managing Director & Chief Executive
Officer
BEc, MBA, FCPA, GAICD

Prior to Oil Search, Mr Kay spent 12
years with Woodside Energy in various
leadership roles, including Vice President
of Corporate Development, General
Manager of Production Planning and
General Manager of Commercial for
Middle East and Africa. In these roles
Mr Kay developed extensive leadership
skills across LNG, pipeline gas and oil joint
ventures, and developments in Australia
and internationally.

Since joining Beach, Mr Kay has
approximately tripled the company’s
production, reserves and market
capitalisation having successfully led the
company through the transformational
acquisition of Lattice Energy. This has seen
Beach enter the ASX 100 and solidify its
position there.

In addition to his role as Managing
Director of Beach Energy, Mr Kay is
currently a Director at the Australian
Petroleum Production and Exploration
Association (APPEA).

Mr Kay was appointed to the Board on
25 February 2019 and formally elected to
the Board on 26 November 2019.

3. Colin Beckett AO
Independent Non-Executive Deputy
Chairman

Mr Beckett is an experienced
non-executive director and previously held
senior executive positions in Australia with
Chevron, Mobil, and BP. His experience in
engineering design, project management,
commercial negotiations and gas
marketing provides him with a diverse and
complementary set of skills relevant to the
oil and gas industry.

Mr Beckett read engineering at Cambridge
University and has a Master of Arts. He
was awarded an honorary doctorate from
Curtin University in 2019. He was previously
a fellow of the Australian Institute of
Engineers. He is a graduate member of the
Institute of Company Directors.

He is currently Chair of Western Power
and was the Chancellor of Curtin
University until end 2018. He is a past
Chairman of both Perth Airport Pty Ltd
and the Australian Petroleum Production
and Exploration Association (APPEA).
Mr Beckett’s special responsibilities include
chairmanship of the Remuneration and
Nomination Committee and membership
of the Risk, Corporate Governance
and Sustainability Committee. He was
appointed to the Board on 2 April 2015,
last having been re-elected to the Board
on 26 November 2019.

Beach Energy Limited6. Ryan Stokes AO
Non-Executive Director
BComm FAIM

Mr Stokes is the Managing Director and
Chief Executive Officer of Seven Group
Holdings Limited (SGH). SGH is a listed
diverse investment company involved in
Industrial Services, Media, and Energy.
SGH interests include 28.52% of Beach
Energy, WesTrac, Coates Hire and 41% of
Seven West Media Limited. Mr Stokes is a
director of WesTrac, Chairman of Coates
Hire, and a director of Seven West Media.

His previous roles include Chairman
of the National Library of Australia,
member of the Prime Ministerial Advisory
Council on Veterans’ Mental Health,
Founding Chair Headspace, Youth Mental
Health Foundation.

Mr Stokes is a member of the
Remuneration and Nomination Committee.
He was appointed by the Board on
20 July 2016, last having been re-elected
to the Board on 23 November 2018.

7. Richard Richards
Non-Executive Director
BComs/Law (Hons), LLM, MAppFin, CA,
Admitted Solicitor

Mr Richards is currently Chief Financial
Officer of Seven Group Holdings
Limited (SGH) (since October 2013).
He is responsible for Finance across the
diversified conglomerate (equipment
manufacture, sales and service, equipment
hire, investments, property, media and oil
and gas). Mr Richards is a member of the
Board of Directors of WesTrac, SGH Energy,
is a Director and Chair of the Audit and
Risk Committee of Coates Hire Pty Limited,
a Director and member of KU Children
Services (NFP) and a member of the Marcia
Burgess Foundation Committee (DGR). He
had held senior finance roles with Downer
EDI, the Lowy Family Group and Qantas.

Mr Richards is both a Chartered
Accountant and admitted solicitor with
over 30 years experience in business and
complex financial structures, corporate
governance, risk management and audit.

Mr Richards’ special responsibilities
include membership of the Audit
Committee. He was appointed to the
Board on 4 February 2017 and then elected
to the Board on 23 November 2017.

4. Philip Bainbridge
Independent Non-Executive Director
BSc (Hons) Mechanical Engineering,
MAICD

Mr Bainbridge has extensive industry
experience having worked for the BP
Group for 23 years in a range of petroleum
engineering, development, commercial
and senior management roles in the UK,
Australia and USA. From 2006, he has
worked at Oil Search, initially as Chief
Operating Officer, then Executive General
Manager LNG, responsible for all aspects
of Oil Search’s interests in the $19 billion
PNG LNG project, then EGM Growth
responsible for gas growth and exploration.

He is currently the non-executive chairman
of the PNG Sustainable Development
Program and a non-executive director of
the Global Institute of Carbon Capture
and Storage. He was formerly the
non-executive chairman of Sino Gas
and Energy Holdings until 2018 and a
non-executive director of Drillsearch
Energy Limited from 2013 to 2016.

Mr Bainbridge’s special responsibilities
include chairmanship of the Risk, Corporate
Governance and Sustainability Committee.
He was appointed by the Board on
1 March 2016, last having been re-elected
to the Board on 26 November 2019.

5. Joycelyn Morton
Independent Non-Executive Director
BEc, FCA, FCPA, FIPA, FCIS, FAICD

Ms Morton has extensive experience in
finance and taxation having begun her
career with Coopers & Lybrand (now
PwC), followed by senior management
roles with Woolworths Limited and
global leadership roles in Australia and
internationally within the Shell Group of
companies.

Her other current ASX listed board
positions are Argo Investments Limited
and Argo Global Listed Infrastructure
Limited. She is also a non-executive
director of ASC Pty Ltd and Snowy
Hydro Limited. She has valuable
board experience across a range of
industries, including previous roles as a
non-executive director and Chair of both
Thorn Group Limited and Noni B Limited
and a non-executive director of Crane
Group Limited, Count Financial Limited
and InvoCare Limited.

Ms Morton’s special responsibilities
include membership of the Audit
Committee. She was appointed a
non-executive director of Beach Energy
Limited on 21 February 2018 and then
elected to the Board on 23 November 2018.

Board of Directors

8. Dr Peter Moore
Independent Non-Executive Director
PhD, BSc (Hons), MBA, GAICD

Dr Moore has over 40 years of oil and
gas industry experience. His career
commenced at the Geological Survey
of Western Australia, with subsequent
appointments at Delhi Petroleum Pty Ltd,
Esso Australia, ExxonMobil and Woodside.
Dr Moore joined Woodside as Geological
Manager in 1998 and progressed through
the roles of Head of Evaluation, Exploration
Manager Gulf of Mexico, Manager
Geoscience Technology Organisation and
Vice President Exploration Australia. From
2009 to 2013, Dr Moore led Woodside’s
global exploration efforts as Executive
Vice President Exploration. In this
capacity, he was a member of Woodside’s
Executive Committee and Opportunities
Management Committee, a leader of its
Crisis Management Team, Head of the
Geoscience function and a director of ten
subsidiary companies. From 2014 to 2018,
Dr Moore was a Professor and Executive
Director of Strategic Engagement at Curtin
University’s Business School. He has his
own consulting company, Norris Strategic
Investments Pty Ltd. Dr Moore is currently
a non-executive director of Carnarvon
Petroleum Ltd (since 2015).

Dr Moore’s special responsibilities include
membership of the Risk, Corporate
Governance and Sustainability Committee
and the Remuneration and Nomination
Committee. Dr Moore was appointed by
the Board on 1 July 2017 and last re-elected
to the Board on 26 November 2019.

9. Sally-Anne Layman
Independent Non-Executive Director
B Eng (Mining) Hon, B Com

Ms Layman is a company director with
diverse international experience in the
resources sector and financial markets,
including 14 years with Macquarie Group
where she was a division director and
Joint Head of the Perth Office for the
Metals, Mining & Agriculture Division.

Prior to moving into finance, Ms Layman
undertook various roles with resource
companies including Mount Isa Mines,
Great Central Mines and Normandy Yandal.
Ms Layman holds a WA First Class Mine
Manager’s Certificate of Competency.

Ms Layman is also a Non-Executive
Director of Perseus Mining Ltd, Imdex
Ltd and Pilbara Minerals Ltd.

Ms Layman is a Certified Practicing
Accountant, and is a member of the
Australian Institute of Company Directors.

Ms Layman’s special responsibilities
include chair of the Audit Committee.
She was appointed to the Board on
25 February 2019 and formally elected
to the Board on 26 November 2019.

Annual Report 2020Independent Auditor’s Report
Glossary of Terms
Schedule of Tenements
Subsidiary Companies
Shareholder Information
Corporate Information & Directory

125

132

134

138

139

141

Full Financial Report

Directors’ Report
Auditor’s Independence Declaration
2020 Remuneration In Brief (Unaudited)
Remuneration Report (Audited)
Directors’ Declaration

Financial Statements
Consolidated Statement of Profit or Loss and
Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows

Notes To The Financial Statements
Basis of preparation
Results for the year
1. Operating segments
2. Revenue from contracts with customers

and other income

3. Expenses
4. Employee benefits
5. Taxation
6. Earnings per share (EPS)
Capital employed
7. Inventories
8. Property, plant and equipment (PPE)
9. Petroleum assets
10. Exploration and evaluation assets
11. Interests in joint operations
12. Provisions
13. Leases
14. Commitments for expenditure
Financial and risk management
15. Finances and borrowings
16. Cash flow reconciliation
17. Financial risk management
Equity and group structure
18. Contributed equity
19. Reserves
20. Dividends
21. Subsidiaries
22. Deed of cross guarantee
23. Parent entity financial information
24. Related party disclosures
25. Disposal group held for sale
26. Business combination
Other information
27. Accounting policies
28. Contingent liabilities
29. Remuneration of auditors
30. Subsequent events

100

102

104

105

106

107

111

112

113

115

117

118

119

121

124

Beach Energy LimitedDirectors’ Report

For the year ended 30 June 2020

Directors’ Report

Your directors present their report for Beach Energy Limited (Beach or Company) on the consolidated accounts for the financial year
ended 30 June 2020. Beach is a company limited by shares that is incorporated and domiciled in Australia.

The directors of the Company during the year ended 30 June 2020 and up to the date of this report are:

Surname

Davis

Beckett

Bainbridge

Kay

Layman

Moore

Morton

Richards

Stokes

Other Names

Glenn Stuart

Colin David

Philip James

Matthew Vincent

Sally-Anne Georgina

Peter Stanley

Joycelyn Cheryl

Richard Joseph

Ryan Kerry

Position

Independent non-executive Chairman

Independent non-executive Deputy
Chairman

Independent non-executive director

Managing director

Independent non-executive director

Non-executive director

Directors Interests in shares, options and rights

The relevant interest of each director in the ordinary share capital of Beach at the date of this report is:

Shares held in Beach Energy Limited

Name

G S Davis

C D Beckett

P J Bainbridge

M V Kay

S G Layman

P S Moore

J C Morton

R J Richards(3)

R K Stokes(3)

(1) Held directly.
(2) Held by entities in which a relevant interest is held.
(3) Mr Stokes does not hold a relevant interest in Beach shares but he was nominated as a director by Beach’s largest shareholder Seven Group Holdings Limited (SGH) and related corporations

who collectively have a relevant interest in 28.52% of Beach shares. He is Managing Director and Chief Executive Officer of SGH. Mr Richards was also nominated as a director by SGH. He is the
Chief Financial Officer of SGH.

Details of the qualifications, experience, special responsibilities and meeting attendance of each of the directors are set out later in the
Directors’ Report.

Rights

243,226(2)

81,694(1)

118,090(2)

–

3,918,255(1)

2,310,543(1)

–

44,200(2)

50,000(1)(2)

188,053(2)

–

Annual Report 2020Principal activities
Beach Energy is an ASX listed, oil and gas, exploration and production company headquartered in Adelaide, South Australia. It has
operated and non-operated, onshore and offshore, oil and gas production from five producing basins across Australia and New Zealand
and is a key supplier to the Australian east coast gas market. Beach’s asset portfolio includes ownership interests in strategic oil and gas
infrastructure, such as the Moomba processing facility and Otway Gas Plant, as well as a suite of high potential exploration prospects.
Beach is focused on maintaining the highest health, safety and environmental standards.

Operating and Financial Review
A review of operations of Beach Energy during the financial year are set out on pages 13 to 27.

Financial results from FY20 are summarised below:

– Group profit attributable to equity holders of Beach was $500.8 million (FY19 $577.3 million).
– Sales revenue was down 14% from FY19 to $1,650.3 million due to lower oil and liquids prices attributed to the impact of COVID-19
as well as a 40% reduction in Victorian Otway working interest to 60% through FY20 as a result of the farm-down to O.G Energy
completed in H2 FY19 (FY19 100% to 31 May 2019).

– Cost of sales were down 12% from FY19 to $1,056.7 million, mainly as a result of the Victorian Otway farm-down as well as lower third

party purchases, royalties and inventory movements, partly offset by higher tariffs and tolls.

– A net profit after tax of $500.8 million was reported reflecting a solid underlying operating performance despite the impact of lower

oil and liquids prices attributed to the impact of COVID-19.

Key Results

Operations

Production

Sales

Capital expenditure

Income

Sales revenue

Total revenue

Cost of sales

Gross profit

Other income

Net profit after tax (NPAT)

Underlying NPAT*

Dividends paid

Dividends announced

Basic EPS

Underlying EPS*

Cash flows

Operating cash flow

Investing cash flow

Financial position

Net assets

Cash balance

2020

2019

Change

MMboe

26.7

27.7

29.4

31.2

(9%)

(11%)

(863.0)

(447.0)

(93%)

cps

1,650.3

1,728.2

1,925.4

2,077.7

(1,056.7)

(1,207.4)

671.5

76.6

500.8

461.0

2.00

1.00

21.97

20.22

870.3

41.8

577.3

560.2

2.00

1.00

25.35

24.59

(14%)

(17%)

12%

(23%)

83%

(13%)

(18%)

(13%)

(18%)

873.9

1,038.2

(16%)

(899.2)

(187.6)

(379%)

2,819.8

2,374.4

109.9

171.9

19%

(36%)

* Underlying results in the table above are categorised as non-IFRS financial information provided to assist readers to better understand the financial performance of the underlying operating business.

They have not been subject to audit or review by Beach’s external auditors. Please refer to the table on page 42 for a reconciliation of this information to the financial report.

Beach Energy LimitedDirectors’ Report

Revenue
Sales revenue of $1,650 million in FY20 was $275 million (14%) lower than FY19, driven by lower realised liquids prices attributed to the
impact of COVID-19, the Victorian Otway farm-down and lower third party sales, partly offset by a higher proportion of oil in the sales
mix, lower FX rates and higher realised gas and ethane prices.

Higher oil volumes in the sales mix contributed an additional $113.2 million on FY19, driven by higher Western Flank oil production.
A lower A$/US$ exchange rate in FY20 resulted in a $64.2 million increase in revenue on FY19. Higher gas and ethane prices increased
revenue by $34.4million. Sales from third party product decreased revenue by $39.4 million. Lower US dollar oil and liquids prices were
experienced in FY20 attributable to the impact of COVID-19, impacting revenue by $309.4 million in comparison to FY19, with the
average realised liquids price decreasing to US$52.4/boe, down US$16.7/boe from FY19.

Sales Revenue Comparison ($m)

2,500

2,000

1,500

1,000

500

1,925.4

64.2

FX rates

113.2

Volume/
mix

34.4

(39.4)

(138.2)

Gas/ethane
prices

Third party
sales

Vic Otway
Farm-down

A$/US$
FY19 $0.715
FY20 $0.671

A$/GJ
FY19 $6.81
FY20 $7.29

14%

$275.1 million
total decrease

FY19

Average price
A$61.76/boe

1,650.3

(309.4)

Oil and
liquids
prices

US$/boe
FY19 $69.1
FY20 $52.4

FY20

Average price
A$59.66/boe

Gross Profit
Gross profit for FY20 of $671.5 million (FY19 $870.3 million) was down 23% driven by lower sales and other revenue, the Victorian
Otway farm-down and higher cash production costs, partly offset by lower third party purchases and inventory movements.

The decrease in cost of sales down 12% from FY19 to $1,056.7 million is due principally to the Victorian Otway farm-down. Lower
third party purchases of $46.3 million are the result of lower crude prices and crude volumes. The decrease in inventory charges of
$11.4 million reflects timing of shipments and movement in gas inventory. The increase in cash production costs of $11.2 million is due
to higher tariffs and tolls partly offset by lower royalties across Cooper Basin and New Zealand assets.

Gross Proﬁt Comparison ($m)

1000

870.3

46.3

11.4

(0.8)

(11.2)

(74.1)

800

600

400

200

FY19

Inventory

Depreciation

Third party
purchases

Cash
production
costs

Vic Otway
Farm-down

23%

$198.8 million
total decrease

(170.4)

Sales and
other
revenue

671.5

FY20

Annual Report 2020Net Profit Result
Other income of $76.6 million is $34.8 million higher than FY19, and includes a $37.8m gain on the reversal of an onerous
commitment provision booked upon the Lattice acquisition for the commitment to drill an exploration well in Victorian Otway, which
is no longer deemed onerous. Other income also includes joint venture lease recoveries of $15.5 million following the implementation
of AASB 16. In the prior period an unrealised gain on 3-way collar oil price hedging of $13.6 million was reported.

Other expenses of $41.0 million were down $2.6 million from FY19 due to lower corporate expenses, partly offset by the exploration
expense incurred in H2 FY20 in relation to the Tawhaki well drilled in New Zealand.

The reported net profit after income tax of $500.8 million is $76.5 million lower than FY19 due to the lower gross profit resulting from
lower sales revenue attributed to the impact of COVID-19 and the Victorian Otway farm-down, partly offset by lower financing expenses
and tax expenses.

By adjusting the FY20 profit to exclude non-recurring gains on asset sales and reversal of an onerous commitment provision and
impairment, Beach’s underlying net profit after tax is $461.0 million.

Comparison of underlying profit

Net profit after tax

Adjusted for:

Gain on asset disposals

Gain on reversal of provision for onerous commitment

Impairment of assets

Tax impact of above changes

Underlying net profit after tax

FY20
$ million

FY19
$ million

Movement
from PCP
$ million

500.8

577.3

(76.5)

(13%)

(17.6)

(37.8)

1.6

14.0

(20.5)

–

3.4

2.9

(37.8)

1.6

10.6

461.0

560.2

(99.2)

(18%)

* Underlying results in this report are categorised as non-IFRS financial information provided to assist readers to better understand the financial performance of the underlying operating business.
They have not been subject to audit or review by Beach’s external auditors. All of the items being adjusted pre-tax are separately identified within Notes 2(b) and 3(b) to the financial statements.

Underlying Net Proﬁt After Tax Comparison ($m)

560.2

32.8

Tax

31.4

Net
ﬁnancing
costs

4.1

(42.9)

Other expenses
and income

Vic Otway
Farm-down

(124.6)

Gross proﬁt

461.0

18%

$99.2 million
total decrease

FY19

FY20

800

700

600

500

400

300

200

100

Beach Energy LimitedFinancial Position
Assets
Total assets increased by $301.3 million to $4,215.2 million.

Cash balances decreased by $62.0 million to $109.9 million,
primarily due to:

– Cash inflow from operations of $873.9 million, offset by
– Cash outflow from investing activities of $899.2 million,
– Cash outflow from financing activities of $39.4 million.

Receivables decreased by $69.1 million due to timing of
settlements from Joint Venture partners and lower sales accruals
driven by lower prices at period end. Inventories increased by
$7.4 million. Assets held for sale decreased by $6.7 million, as
a result of the finalisation of the farm-down of Beharra Springs,
which completed in November 2019. Other assets increased by
$53.3 million, driven by higher prepayments as a result of the
ramp up in the Victorian Otway development campaign.

Property, plant & equipment, petroleum assets and exploration
and evaluation assets increased by $374.3 million. Capital
additions of $837.2 million and the capitalisation of depreciation
of lease assets under AASB 16 Leases of $35.4 million were partly
offset by depreciation and amortisation of $433.6 million and
decreases in restoration of $42.0 million. Deferred tax assets
decreased by $46.2 million. Lease assets of $58.7 million are the
result of adoption of AASB 16 Leases.

Liabilities
Total current and non-current liabilities decreased by $144.1 million
to $1,395.4 million, due to a reduction in current tax liabilities of
$115.0 million, the unwind of contract liabilities of $54.4 million,
decrease in current payables of $48.0 million and decrease in
non-current provisions of $43.9 million, offset by the inclusion of
current and non-current lease liabilities as a result of the adoption of
AASB 16 Leases of $62.1 million and new non-current borrowings net
of debt issuance costs of $56.7 million.

Equity
Total equity increased by $445.4 million, due to net profit after
tax of $500.8 million partly offset by dividends paid during the
year of $45.6 million.

Dividends
During the financial year the Company paid an FY19 fully franked
final dividend of 1.0 cent per share as well as an interim FY20 fully
franked dividend of 1.0 cent per share. The Company will also pay
an FY20 fully franked final dividend of 1.0 cent per share from the
profit distribution reserve.

State of affairs
In the opinion of the directors, other than the effect of the
movement in oil prices summarised below and the company’s
response to COVID-19, there were no significant changes in the
state of affairs of the Group that occurred during the financial year
under review not disclosed elsewhere in the Directors’ Report.

Directors’ Report

Funding and capital management
As at 30 June 2020, Beach held cash and cash equivalents of
$110 million. On 23 November 2017, Beach executed a Syndicated
Debt Facility Agreement for a $1,475 million Senior Secured Debt
Facility in order to fund the acquisition of Lattice. The facility
is comprised of a $475 million three year term debt facility
(Facility A), $475 million five year term debt facility (Facility B),
$450 million five year revolving debt facility (Facility C), and
$75 million Letter of Credit facility (Facility D). During FY19, Beach
voluntarily prepaid and cancelled the Facility A and Facility B
commitments of $950 million.

As at 30 June 2020, $60 million of Facility C was drawn with
$390 million remaining undrawn, and $71.5 million of Facility D
being utilised predominantly by way of bank guarantees.

Beach anticipates that its current funding to be adequate for
capital expenditure anticipated for FY21.

Material Business Risks
Beach recognises that the management of risk is a critical
component in Beach achieving its purpose of delivering
sustainable growth in shareholder value.

The Company has a framework to identify, understand, manage
and report risks. As specified in its Board Charter, the Board has
responsibility for overseeing Beach’s risk management framework
and monitoring its material business risks.

Given the nature of Beach’s operations, there are many factors
that could impact Beach’s operations and results. The material
business risks that could have an adverse impact on Beach’s
financial prospects or performance include economic risks,
health, safety and environmental risks, community and social
licence risks and legal risks. These may be further categorised
as strategic risks, operational risks, commercial risks, regulatory
risks, reputational risks and financial risks. A description of the
nature of the risk and how such risks are managed is set out
below. The impacts of COVID-19 have been considered in the
preparation of the company’s material business risks. This list is
neither exhaustive nor in order of importance.

Annual Report 2020Economic risks
Exposure to oil and gas prices
A decline in the price of oil and gas may have a material adverse
effect on Beach’s financial performance. Historically, international
crude oil prices have been very volatile. A sustained period of
low or declining crude oil prices could adversely affect Beach’s
operations, financial position and ability to finance developments.
Beach has a policy for hedging oil price and currency risks. Beach
uses a structured framework for capital allocation decisions.
The process provides rigorous value and risk assessment
against a broad range of business metrics and stringent hurdles
to maximise return on capital. This process is a significant
development in Beach’s continuing focus on reducing capital and
operating expenditure and improving business efficiency.

The price of oil and gas has fallen dramatically in recent months
for a number of reasons, including the economic slowdown
resulting from the COVID-19 pandemic, an increase in supply
from certain oil-producing countries resulting from geopolitical
disagreements, and other macroeconomic factors. The economic
slowdown combined with the increase in oil supply can also lead
to a situation whereby Beach is unable to sell part of its products
due to a lack of demand or available storage capacity. Beach has
no control over these factors.

Declines in the price of oil and continuing price volatility may
also lead to revisions of the medium and longer term price
assumptions for oil from future production, which, in turn, may
lead to a revision of the carrying value of some of Beach’s assets.

The valuation of oil and gas assets is affected by a number of
assumptions, including the quantity of reserves and resources
booked in relation to these oil and gas assets and their expected
cash flows. An extended or substantial decline in oil and/or
gas prices or demand, or an expectation of such a decline, may
reduce the expected cash flows and/or quantity of reserves and
resources booked in relation to the associated oil and gas assets,
which may lead to a reduction in the valuation of these assets. If
the valuation of an oil and gas asset is below its carrying value, a
non-cash impairment adjustment to reduce the historical book
value of these assets will be made with a subsequent reduction in
the reported net profit in the same reporting period.

COVID-I9
The ongoing COVID-19 pandemic has had a significant impact on
the global, Australian and New Zealand economies and the ability
of businesses, individuals, and governments to operate with
some restrictions to the movement of people and goods within
both Australia and Overseas. There continues to be considerable
uncertainty as to the duration and further impact of COVID-19,
including (but not limited to) in relation to government, regulatory
or health authority actions, work stoppages, lockdowns,
quarantines, and travel restrictions. The impact of some or all
of these factors could cause significant disruption to Beach’s
operations and financial performance. It is also possible that
relevant governments may shut down some or all operating work
sites. Any suspension of business operations or quarantining of
any of Beach’s employees may affect Beach’s overall operations
and operating results.

The curtailment of all non-essential travel globally and within
Australia could significantly impair Beach’s ability to manage
the business effectively, respond to emergencies, and continue
operations. For example, Beach may not be able to send
specialists to specific sites to respond to operational or safety
issues or to develop existing projects if such specialists cannot
travel. A continuation or escalation of the COVID-19 pandemic
could also materially affect demand for oil and gas, which could
affect Beach in a manner set out below.

A continuation or escalation of the COVID-19 pandemic could
also materially affect the ability of Beach’s suppliers (or suppliers
to joint venture partners (JVPs) managing Beach’s assets)
to provide products and services and threaten their ability to
continue trading. If either Beach or its JVPs are unable to source
spare parts for machinery and operations or other products and
services, including personnel, then Beach and the JVPs may need
to suspend certain operations on a temporary or a prolonged
basis. Furthermore, Beach’s financial position may be adversely
impacted if certain of its, or its JVPs’, suppliers (including its
insurers, suppliers of IT services, and other suppliers of goods and
services) are unable to continue as going concerns as a result of
the economic impact of COVID-19.

These factors are beyond Beach’s control and could have
an adverse effect on the overall business sentiment and
environment, causing material uncertainties in the regions where
Beach conducts its business, cause Beach’s business to suffer in
ways that cannot be predicted with any reasonable certainty, and
which may materially adversely impact Beach’s business, financial
condition and results of operations.

In order to mitigate the potential impact of COVID-19 on
the health and wellbeing of Beach’s employees and other
stakeholders, and on Beach’s business, Beach has been
monitoring the COVID-19 developments and has established
a multi-disciplinary task force to proactively prepare
comprehensive plans to ensure business continuity, including
isolating essential staff. Further details regarding the financial
impacts of COVID-19 on the Group are disclosed in the Basis of
Preparation section of the financial statements.

Beach Energy LimitedDirectors’ Report

Foreign exchange and hedging risk
Beach’s financial report is presented in Australian dollars. Beach
converts funds to foreign currencies as its payment obligations
in those jurisdictions where the Australian dollar is not an
accepted currency become due. Certain of Beach’s costs will be
incurred in currencies other than Australian dollars, including
the US dollar and the New Zealand dollar. Accordingly, Beach
is subject to fluctuations in the rates of currency exchange
between these currencies.

The Company may use derivative financial instruments such as
foreign exchange contracts, commodity contracts and interest
rate swaps to hedge certain risk exposures, including commodity
price fluctuations through the sale of petroleum productions and
other oil-linked contracts.

Ability to access funding
The oil and gas business involves significant capital expenditure
on exploration and development, production, processing and
transportation. Beach relies on cash flows from operating
activities and bank borrowings and offerings of debt or equity
securities to finance capital expenditure.

If cash flows decrease or Beach is unable to access necessary
financing, this may result in postponement of or reduction in
planned capital expenditure, relinquishment of rights in relation
to assets, or an inability to take advantage of opportunities or
otherwise respond to market conditions. Any of these outcomes
could have a material adverse effect on Beach’s ability to expand
its business and/or maintain operations at current levels, which
in turn could have a material adverse effect on Beach’s business,
financial condition and operations.

Beach has a Board approved financial risk management policy
covering areas such as liquidity, investment management,
debt management, interest rate risk, foreign exchange risk,
commodity risk and counterparty credit risk. The policy sets out
the organisational structure to support this policy. Beach has a
treasury function and clear delegations and reporting obligations.
The annual capital and operating budgeting processes approved
by the Board ensure appropriate allocation of resources.

A dispute, or a breakdown in the relationship, between Beach
and its JVPs, suppliers or customers, a failure to reach a suitable
arrangement with a particular JVP, supplier or customer, or the
failure of a JVP, supplier or customer to pay or otherwise satisfy
its contractual obligations (including as a result of insolvency,
financial stress or the impacts of COVID-19), could have an
adverse effect on the reputation and/or the financial performance
of Beach. Beach may also be adversely affected if a counterparty
seeks to amend the terms (including pricing) of an existing
contract, whether in anticipation of a potential breach of contract
by such counterparty or otherwise.

Operational risks
Joint Venture Operations
Beach participates in a number of joint ventures for its business
activities. This is a common form of business arrangement designed
to share risk and other costs. Under certain joint venture operating
agreements, Beach may not control the approval of work programs
and budgets and a joint venture partner may vote to participate in
certain activities without the approval of Beach. As a result, Beach
may experience a dilution of its interest or may not gain the benefit
of the activity, except at a significant cost penalty later in time.

Failure to reach agreement on exploration, development and
production activities may have a material impact on Beach’s
business. Failure of Beach’s joint venture partners to meet
financial and other obligations may have an adverse impact on
Beach’s business.

Beach works closely with its joint venture partners to minimise
joint venture misalignment.

Material change to reserves and resources
Underground oil and gas reserves and resources estimates are
expressions of judgement based on knowledge, experience and
industry practice. Estimates which are valid at a certain point
in time may alter significantly or become uncertain when new
oil and gas reservoir information becomes available through
additional drilling, or reservoir engineering over the life of the field.
As reserves and resources estimates change, development and
production plans may be altered in a way that may adversely affect
Beach’s operations and financial results.

Beach prepares its petroleum reserves and contingent resources
estimates in accordance with the Petroleum Resources
Management System (PRMS 2018) published by the Society
of Petroleum Engineers and are subject to periodic external
review or audit.

Exploration and development
Success in oil and gas production is key and in the normal course
of business Beach depends on the following factors: successful
exploration, establishment of commercial oil and gas reserves,
finding commercial solutions for exploitation of reserves, ability
to design and construct efficient production, gathering and
processing facilities, efficient transportation and marketing of
hydrocarbons and sound management of operations. Oil and
gas exploration is a speculative endeavour and the nature of
the business carries a degree of risk associated with failure to
find hydrocarbons in commercial quantities or at all. Individual
projects being undertaken by Beach may be affected by any
restrictions relating to the COVID-19 pandemic.

Beach utilises well-established prospect evaluation and ranking
methodology to manage exploration and development risks.

Annual Report 2020Production risks
Any oil or gas project, including off-shore activity, may be
exposed to production decrease or stoppage, which may be
the result of facility shut-downs, mechanical or technical failure,
climatic events and other unforeseeable events. A significant
failure to maintain production could result in Beach lowering
production forecasts, loss of revenue and additional operational
costs to bring production back online.

There may be occasions where loss of production may incur
significant capital expenditure, resulting in the requirement
for Beach to seek additional funding, through equity or debt.
Beach’s approach to facility design, process safety and integrity
management is critical to mitigating production risks.

Beach and its JVPs may face such disruptions as a result of
the restrictions on the movement and supply of personnel and
products in response to the COVID-19 pandemic. A significant
failure to meet production targets could compromise Beach’s
production and sales deliverability obligations, impact operating
cash flows through loss of revenue and/or from incurring
additional costs needed to reinstate production to required levels.

Cyber Risk
The integrity, availability and reliability of data within Beach’s
information and operational technology systems may be subject
to intentional or unintentional disruption (for example, cyber
security attack). Beach continues to invest in robust systems to
prevent such attacks and to optimise response should one occur.

This risk may be escalated as a result of COVID-19 and the
increase in remote working by our staff and contractors,
notwithstanding Beach’s efforts to mitigate this threat.

Social licence to operate risks
Regulatory risk
Changes in government policy (such as in relation to taxation,
environmental protection and the methodologies permitted to
be used in oil and gas exploration and production activity such
as produced water disposal) or statutory changes may affect
Beach’s business operations and its financial position. A change
in government regime may significantly result in changes to fiscal,
monetary, property rights and other issues which may result in a
material adverse impact on Beach’s business and its operations.

Companies in the oil and gas industry may also be required to pay
direct and indirect taxes, royalties and other imposts in addition
to normal company taxes. Beach currently has operations
or interests in Australia and New Zealand. Accordingly its
profitability may be affected by changes in government taxation
and royalty policies or in the interpretation or application of such
policies in each of these jurisdictions.

Beach monitors changes in relevant regulations and engages with
regulators and governments to ensure policy and law changes are
appropriately influenced and understood.

Permitting risk
All petroleum licences held by Beach are subject to the granting
and approval of relevant government bodies and ongoing
compliance with licence terms and conditions.

Tenure management processes and standard operating
procedures are utilised to minimise the risk of losing tenure.

Land access and Native Title
Beach is required to obtain the consent of owners and occupiers
of land within its licence areas. Compensation may be required to
be paid to the owners and occupiers of land in order to carry out
exploration activities.

Beach operates in a number of areas within Australia that are
or may become subject to claims or applications for native title
determinations or other third party access. Although Beach has
experience in dealing with native title claims in Australia in relation
to some of its existing Cooper Basin licences, native title claims
have the potential to introduce delays in the granting of petroleum
and other licences and, consequently, may have an effect on the
timing and cost of exploration, development and production.

Native or indigenous title and land rights may also apply or
be implemented in other jurisdictions in which Beach operates
outside of Australia.

Beach’s standard operating procedures and stakeholder
engagement processes are used to manage land access
and native title risks.

Beach Energy LimitedHealth, safety and environmental risks
The business of exploration, development, production and
transportation of hydrocarbons involves a variety of risks which
may impact the health and safety of personnel, the community
and the environment.

Oil and gas production and transportation can be impacted by
natural disasters, operational error or other occurrences which
can result in hydrocarbon leaks or spills, equipment failure and
loss of well control. Potential failure to manage these risks could
result in injury or loss of life, damage or destruction of wells,
production facilities, pipelines and other property, damage to the
environment, legal liability and damage to Beach’s reputation.

Losses and liabilities arising from such events could significantly
reduce revenues or increase costs and have a material adverse
effect on the operations and/or financial conditions of Beach.

Beach employs a health, safety and environment management
system to identify and manage risks in this area. Insurance
policies, standard operating procedures, contractor management
processes and facility design and integrity management systems,
amongst other things, are important elements of the system that
supports mitigation of these risks.

Beach seeks to maintain appropriate policies of insurance
consistent with those customarily carried by organisations in the
energy sector. Any future increase in the cost of such insurance
policies, or an inability to fully renew or claim against insurance
policies as a result of the current economic environment and the
impact of COVID-19 (for example, due to a deterioration in an
insurers ability to honour claims), could adversely affect Beach’s
business, financial position and operational results.

Beach’s ability to mitigate these risks and effectively respond to
health and safety incidents may be also impaired by restrictions
on the movement of products and personnel relating to the
COVID-19 pandemic.

Pandemic risk
Large scale pandemic outbreak of a communicable disease has the
potential to affect personnel, production and delivery of projects.
The Company employs its crisis and emergency management plans,
health emergency plans and business continuity plans to manage
this risk including ongoing monitoring and response to government
directions and advice. This enables the Company to take active
steps to manage risks to the Company’s staff and stakeholders and
to mitigate risks to production and progress of growth projects.

Climate change
Beach is likely to be subject to increasing regulations and costs
associated with climate change and management of carbon
emissions. Strategic, regulatory and operational risks and
opportunities associated with climate change are incorporated
into Company policy, strategy and risk management processes and
practices. The Company actively monitors current and potential
areas of climate change risk and takes actions to prevent and/or
mitigate any impacts on its objectives and activities. Reduction
of waste and emissions is an integral part of delivery of cost
efficiencies and forms part of the Company’s routine operations.

Directors’ Report

Forward Looking Statements
This report contains forward-looking statements, including
statements of current intention, opinion and predictions regarding
the Company’s present and future operations, possible future
events and future financial prospects. While these statements
reflect expectations at the date of this report, they are, by their
nature, not certain and are susceptible to change. Beach makes
no representation, assurance or guarantee as to the accuracy
or likelihood of fulfilling of such forward looking statements
(whether expressed or implied), and except as required by
applicable law or the ASX Listing Rules, disclaims any obligation
or undertaking to publicly update such forward-looking
statements.

Material Prejudice
As permitted by sections 299(3) and 299A(3) of the
Corporations Act 2001, Beach has omitted some information
from the above Operating and Financial Review in relation to
the Company’s business strategy, future prospects and likely
developments in operations and the expected results of those
operations in future financial years on the basis that such
information, if disclosed, would be likely to result in unreasonable
prejudice (for example, because the information is premature,
commercially sensitive, confidential or could give a third party
a commercial advantage). The omitted information typically
relates to internal budgets, forecasts and estimates, details of the
business strategy, and contractual pricing.

Annual Report 2020Environmental regulations and performance statement
Beach participates in projects and production activities that are subject to the relevant exploration and development licences prescribed
by government. These licences specify the environmental regulations applicable to the exploration, construction and operations of
petroleum activities as appropriate. For licences operated by other companies, this is achieved by monitoring the performance of these
companies against these regulations.

There have been no known significant breaches of the environmental obligations of Beach’s operated contracts or licences during the
financial year.

Beach reports under the National Greenhouse and Energy Reporting Act for its Australian operations and the Climate Change Response
Act 2002 for its New Zealand operations.

Dividends paid or recommended
Since the end of the financial year the directors have resolved to pay a fully franked dividend of 1.0 cent per share on
30 September 2020. The record date for entitlement to this dividend is 31 August 2020. The financial impact of this dividend,
amounting to $22.8 million has not been recognised in the Financial Statements for the year ended 30 June 2020 and will be
recognised in subsequent Financial Statements.

The details in relation to dividends paid during the reporting period are set out below:

Dividend

FY19 Final

30 August 2019

30 September 2019

Record Date

Date of payment

Cents per share

Total Dividends

1.0

$22.8 million

FY20 Interim

28 February 2020

31 March 2020

For Australian income tax purposes, all dividends were fully franked and were not sourced from foreign income.

Share options and rights
Beach does not have any options on issue at the end of financial year and has not issued any during FY20.

Share rights holders do not have any right to participate in any issue of shares or other interests in the Company or any other entity.
There have been no unissued shares or interests under option of any controlled entity within the Group during or since the reporting date.
For details of performance rights issued to executives as remuneration, refer to the Remuneration Report. During the financial year, the
following movement in share rights to acquire fully paid shares occurred:

Beach Energy LimitedDirectors’ Report

Executive Performance Rights
On 19 December 2019, Beach issued 711,358 Short Term Incentive (STI) unlisted performance rights under the Executive Incentive Plan
(EIP). These performance rights are exercisable for nil consideration and are not exercisable before 1 July 2020 and 1 July 2021.

On 19 December 2019, Beach also issued 1,926,496 Long Term Incentive (LTI) unlisted performance rights under the Executive Incentive
Plan (EIP). 141,950 performance rights, which expire on 30 November 2023, are exercisable for nil consideration and are not exercisable
before 1 December 2021. 1,784,546 performance rights, which expire on 30 November 2024, are exercisable for nil consideration and are
not exercisable before 1 December 2022.

Rights

2016 LTI unlisted rights
Issued 1 December 2016

2016 LTI unlisted rights
Issued 21 February 2017

2016 STI unlisted rights
Issued 1 December 2017

2017 LTI unlisted rights
Issued 1 December 2017

2017 LTI unlisted rights
Issued 9 April 2018

2017 STI unlisted rights
Issued 6 December 2018

2018 LTI unlisted rights
Issued 14 December 2018

2018 LTI unlisted rights
Issued 19 December 2019

2018 STI unlisted rights
Issued 19 December 2019

2019 LTI unlisted rights
Issued 19 December 2019

Total

Balance at
beginning
of financial
year

Issued
during the
financial
year

Vested/
Exercised
during the
financial
year

1,604,006

– (1,604,006)

Expired/
lapsed
during the
financial
year
and not
exercised

Balance
at end of
financial
year

–

1,641,429

(320,960)

642,515

(275,843)

(460,262)

–

(218,962)

(12,119)

206,847

–

(278,047) 2,050,885

–

141,950

(74,099)

637,259

(182,531)

1,602,015

275,843

460,262

1,641,429

963,475

437,928

2,328,932

–

141,950

711,358

1,784,546

7,711,875

2,637,854 (2,559,073)

(867,756) 6,922,900

Employee share plan
A new employee share plan was approved by shareholders during the year where Employees who buy shares under the Plan will
have those shares matched by Beach, provided any relevant conditions determined by the Board are satisfied. Eligible Employees are
employees of the Group, other than a non-executive director and any other person determined by the Board as ineligible to participate
in the Plan. The Board has the discretion to set an annual limit on the value of shares that participants may purchase under the Plan, not
exceeding $5,000. Purchased Shares have been acquired periodically at the prevailing market price. Participants pay for their Purchased
Shares using their own funds which may include salary sacrifice. To receive Matched Shares, a participant must satisfy the conditions
determined by the Board at the time of the invitation.

Rights

FY20 Employee share plan

Issued up to 30 June 2020

Total

Balance at
beginning
of financial
year

Issued
during the
financial
year

Converted
during the
financial
year

Expired/
lapsed
during the
financial
year

Balance
at end of
financial
year

–

541,053

(20,728)

(6,090)

514,235

541,053

(20,728)

(6,090)

514,235

Annual Report 2020Information on Directors
The names of the directors of Beach who held office during the financial year and at the date of this report are:

Glenn Stuart Davis

Philip James Bainbridge

Independent non-executive Chairman – LLB, BEc, FAICD
Experience and expertise
Mr Davis has practiced as a solicitor in corporate and risk
throughout Australia for over 30 years initially in a national firm
and then a firm he founded. He has expertise and experience
in the execution of large transactions, risk management and in
corporate activity regulated by the Corporations Act and ASX
Limited. Mr Davis has worked in the oil and gas industry as an
advisor and director for over 25 years.

Current and former listed company directorships in the last 3 years
Mr Davis is a former director of ASX listed company Auteco
Minerals (previously called Monax Mining Limited) (from 2004
to November 2018).

Responsibilities
His special responsibilities include Chairmanship of the Board and
membership of the Remuneration and Nomination Committee.

Date of appointment
Mr Davis joined Beach on 6 July 2007 as a non-executive director.
He was appointed non-executive Deputy Chairman in June 2009
and Chairman in November 2012. He was last re-elected to the
Board on 23 November 2018.

Colin David Beckett, AO

Independent non-executive Deputy Chairman – FIEA, MICE,
GAICD
Experience and expertise
Mr Beckett is an experienced non-executive director and
previously held senior executive positions in Australia with
Chevron, Mobil, and BP. His experience in engineering design,
project management, commercial negotiations and gas marketing
provides him with a diverse and complementary set of skills
relevant to the oil and gas industry. Mr Beckett read engineering
at Cambridge University and has a Master of Arts. He was
awarded an honorary doctorate from Curtin University in 2019.
He was previously a fellow of the Australian Institute of Engineers.
He is a graduate member of the Institute of Company Directors.
He is currently Chair of Western Power. He was the Chancellor of
Curtin University until end 2018. He is a past Chairman of Perth
Airport Pty Ltd and past Chairman of the Australian Petroleum
Producers and Explorers Association (APPEA).

Current and former listed company directorships in the last 3 years
Nil

Responsibilities
His special responsibilities include chairmanship of the
Remuneration and Nomination Committee and membership of
the Risk, Corporate Governance and Sustainability Committee.

Date of appointment
Mr Beckett was appointed to the Board on 2 April 2015 and last
re-elected to the Board on 26 November 2019.

Independent non-executive director – BSc (Hons) Mechanical
Engineering, MAICD
Experience and expertise
Mr Bainbridge has extensive industry experience having worked
for the BP Group for 23 years in a range of petroleum engineering,
development, commercial and senior management roles in the
UK, Australia and USA. From 2006, he has worked at Oil Search,
initially as Chief Operating Officer, then Executive General
Manager LNG, responsible for all aspects of Oil Search’s interests
in the $19 billion PNG LNG project, then EGM Growth responsible
for gas growth and exploration.

He is currently a non-executive chairman of the PNG Sustainable
Development Program and a non-executive director of the Global
Institute of Carbon Capture and Storage.

Current and former listed company directorships in the last 3 years
Mr Bainbridge was formerly the non-executive chairman of Sino
Gas and Energy Holdings (from 2014 until 2018).

Responsibilities
His special responsibilities include chairmanship of the Risk,
Corporate Governance and Sustainability Committee.

Date of appointment
Mr Bainbridge was appointed to the Board on 1 March 2016 and
then elected to the Board on 26 November 2019.

Matthew Vincent Kay

Managing director & Chief executive officer – BEc, MBA, FCPA,
GAICD
Experience and expertise
Mr Kay joined Beach in May 2016 as Chief Executive Officer.
Mr Kay has over 25 years’ experience in energy and resources
and prior to joining Beach, served as Executive General Manager,
Strategy and Commercial at Oil Search, a position he held for two
years. In that role he was a member of the executive team and led
the strategy, commercial, supply chain, economics, marketing,
M&A and legal functions.

Prior to Oil Search, Mr Kay spent 12 years with Woodside Energy
in various leadership roles, including Vice President of Corporate
Development, General Manager of Production Planning leading over
80 operations professionals, and General Manager of Commercial
for Middle East and Africa. In these roles Mr Kay developed
extensive leadership skills across LNG, pipeline gas and oil joint
ventures, and developments in Australia and internationally.

Current and former listed company directorships in the last 3 years
Nil

Responsibilities
Managing Director & Chief Executive Officer

Date of appointment
Mr Kay was appointed managing director of Beach Energy
Limited on 25 February 2019 and elected to the Board on
26 November 2019.

Beach Energy LimitedSally-Anne Layman

Independent non-executive director – B Eng (Mining) Hon, B Com,
CPA, MAICD
Experience and expertise
Sally-Anne Layman is a company director with diverse international
experience in the resources sector and financial markets, including
14 years with Macquarie Group where she was a division director
and Joint Head of the Perth Office for the Metals, Mining &
Agriculture Division. Prior to moving into finance, Ms Layman
undertook various roles with resource companies including Mount
Isa Mines, Great Central Mines and Normandy Yandal. Ms Layman
holds a WA First Class Mine Manager’s Certificate of Competency.

Ms Layman holds a Bachelor of Engineering (Mining) Hon from
Curtin University and a Bachelor of Commerce from the University
of Southern Queensland. Ms Layman is a Certified Practicing
Accountant and is a member of CPA Australia Ltd and the
Australian Institute of Company Directors.

Current and former listed company directorships in the last 3 years
Ms Layman is also on the board of Perseus Mining Ltd (since
September 2017), Imdex Ltd (since February 2017) and Pilbara
Minerals Ltd (since April 2018) and was previously on the board
of Gascoyne Resources Ltd (from June 2017 until May 2019).

Responsibilities
Her special responsibilities include Chairmanship of the
Audit Committee.

Date of appointment
Ms Layman was appointed to the Board on 25 February 2019 and
elected to the Board on 26 November 2019.

Peter Stanley Moore
Independent non-executive director – PhD, BSc (Hons), MBA,
GAICD
Experience and expertise
Dr Moore has over forty years of oil and gas industry experience.
His career commenced at the Geological Survey of Western
Australia, with subsequent appointments at Delhi Petroleum
Pty Ltd, Esso Australia, ExxonMobil and Woodside. Dr Moore
joined Woodside as Geological Manager in 1998 and progressed
through the roles of Head of Evaluation, Exploration Manager
Gulf of Mexico, Manager Geoscience Technology Organisation
and Vice President Exploration Australia. From 2009 to 2013,
Dr Moore led Woodside’s global exploration efforts as Executive
Vice President Exploration. In this capacity, he was a member
of Woodside’s Executive Committee and Opportunities
Management Committee, a leader of its Crisis Management
Team, Head of the Geoscience function and a director of ten
subsidiary companies. From 2014 to 2018, Dr Moore was a
Professor and Executive Director of Strategic Engagement at
Curtin University’s Business School. He has his own consulting
company, Norris Strategic Investments Pty Ltd.

Current and former listed company directorships in the last 3 years
Dr Moore is currently a non-executive director of Carnarvon
Petroleum Ltd (since 2015) and was previously a non-executive
director of Central Petroleum Ltd (from 2014 to November 2018).

Directors’ Report

Responsibilities
His special responsibilities include membership of the Risk,
Corporate Governance and Sustainability Committee and the
Remuneration and Nomination Committee.

Date of appointment
Dr Moore was appointed by the Board on 1 July 2017 and then
elected to the Board on 26 November 2019.

Joycelyn Cheryl Morton
Independent non-executive director – BEc, FCA, FCPA, FIPA,
FCIS, FAICD
Experience and expertise
Ms Morton has extensive experience in finance and taxation
having begun her career with Coopers & Lybrand (now PwC),
followed by senior management roles with Woolworths Limited
and global leadership roles in Australia and internationally within
the Shell Group of companies.

Ms Morton was National President of both CPA Australia and
Professions Australia, has served on many committees and
councils in the private, government and not-for-profit sectors and
held international advisory positions. In addition, Ms Morton has
valuable board experience across a range of industries and is a
non-executive director of ASC Pty Ltd (since 2017) and Snowy
Hydro (since 2012) – both government owned corporations.

Current and former listed company directorships in the last 3 years
Ms Morton is currently a non-executive director of Argo
Investments Limited (since 2012) and Argo Global Listed
Infrastructure Limited (since 2015). She previously was
non-executive director and Chair of Thorn Group Limited
(from 2011 to 2018) and non-executive director of InvoCare
Limited (from 2015 to 2018).

Responsibilities
Her special responsibilities include membership of the
Audit Committee.

Date of appointment
Ms Morton was appointed a non-executive director of Beach
Energy Limited on 21 February 2018 and then elected to the Board
on 23 November 2018.

Annual Report 2020Richard Joseph Richards

Ryan Kerry Stokes, AO

Non-executive director – BComs/Law (Hons), LLM, MAppFin, CA,
Admitted Solicitor
Experience and expertise
Mr Richards is currently Chief Financial Officer of Seven Group
Holdings Limited (SGH) (since October 2013). He is responsible
for Finance across the diversified conglomerate (equipment
manufacture, sales and service, equipment hire, investments,
property, media and oil and gas). Mr Richards is a member of the
Board of Directors of WesTrac, SGH Energy, is a Director and Chair
of the Audit and Risk Committee of Coates Hire Pty Limited, a
Director and Chair of the Audit and Risk Committee of KU Children
Services (NFP) and a member of the Marcia Burgess Foundation
Committee (DGR). He had held senior finance roles with Downer
EDI, the Lowy Family Group and Qantas. Mr Richards is both a
Chartered Accountant and admitted solicitor with over 30 years of
experience in business and complex financial structures, corporate
governance, risk management and audit.

Current and former listed company directorships in the last 3 years
Nil.

Responsibilities
His special responsibilities include membership of the
Audit Committee.

Date of appointment
Mr Richards was appointed to the Board on 4 February 2017 and
then elected to the Board on 23 November 2017.

Non-executive director – BComm, FAIM
Experience and expertise
Mr Stokes is the Managing Director and Chief Executive Officer
of Seven Group Holdings Limited (SGH). SGH is a listed diverse
investment company involved in Industrial Services, Media, and
Energy. SGH interests include 28.52% of Beach Energy, WesTrac,
Coates Hire and 41% of Seven West Media Limited. Mr Stokes is
a director of WesTrac, Chairman of Coates Hire, and a director of
Seven West Media.

Mr Stokes is Chief Executive Officer of Australian Capital Equity
Pty Limited (ACE). ACE is a private company with its primary
investment being an interest in SGH. Mr Stokes is Chairman of
the National Gallery of Australia and is an Officer of the Order
of Australia. He is also a member of the International Olympic
Committee Education Commission. His previous roles include
Chairman of the National Library of Australia, member of the
Prime Ministerial Advisory Council on Veterans’ Mental Health,
Founding Chair Headspace, Youth Mental Health Foundation.

Current and former listed company directorships in the last 3 years
Mr Stokes is an executive director of SGH (since 2010) and a
non-executive director of Seven West Media (since 2012).

Responsibilities
His special responsibilities include membership of the
Remuneration and Nomination Committee.

Date of appointment
Mr Stokes was appointed to the Board on 20 July 2016 and then
elected to the Board on 23 November 2018.

There are no directors of Beach who held office during the financial year and are no longer on the Board.

Directors’ meetings
The number of Directors’ meetings and meetings of Committees of Directors held during the financial year and the number of meetings
attended by each of the directors is set out below:

Name

G S Davis

C D Beckett

P J Bainbridge

M V Kay

S G Layman

P S Moore

J C Morton

R J Richards

R K Stokes

Directors’ Meetings

Audit Committee
Meetings

Remuneration and
Nomination Committee
Meetings

Risk, Corporate
Governance and
Sustainability
Committee Meetings

Held(1)

Attended

Held(1)

Attended

Held(1)

Attended

Held(1)

Attended

–

(1) Number of Meetings held during the time that the director was appointed to the Board or committee.

Beach Energy LimitedDirectors’ Report

Board Committees
Chairmanship and current membership of each of the board committees at the date of this report are as follows:

Committee

Audit

Chairman

S G Layman

Risk, Corporate Governance & Sustainability

P J Bainbridge

Members

J C Morton, R J Richards

C D Beckett, P S Moore

Remuneration and Nomination

C D Beckett

G S Davis, R K Stokes, P S Moore

Indemnity of Directors and Officers
Beach has arranged directors’ and officers’ liability insurance
policies that cover all the directors and officers of Beach and its
controlled entities. The terms of the policies prohibit disclosure of
details of the amount of the insurance cover, the nature thereof and
the premium paid.

Company Secretary
Daniel Murnane

Company Secretary – BA/LLB
Mr Murnane joined Beach in May 2018 as Senior Legal Counsel
and was appointed to Company Secretary on 2 March 2020.
He has more than 15 years’ experience, including over 11 years
advising resources companies. Mr Murnane has worked as a
senior associate in private legal practice predominately for energy
companies on mergers and acquisitions, major projects, capital
raisings and commercial disputes. In addition, Mr Murnane
has held various in-house roles spanning legal and corporate
governance environments, including with a NYSE listed oil and
gas company.

Mr Murnane is qualified as a solicitor in New South Wales and
Papua New Guinea and holds a Bachelor of Arts and a Bachelor
of Laws.

Non-audit services
Beach may decide to employ the external auditor on assignments
additional to their statutory audit duties where the auditor’s
expertise and experience with Beach are important.

The Board has considered the position and is satisfied that
the provision of the non-audit services is compatible with the
general standard of independence for auditors imposed by the
Corporations Act 2001. The directors are satisfied that the
provision of non-audit services by the auditor as set out below,
did not compromise the audit independence requirement of the
Corporations Act 2001 for the following reasons:

– All non-audit services have been reviewed by the Audit

Committee to ensure they do not impact the impartiality and
objectivity of the auditor.

– None of the services undermine the general principle relating
to auditor independence as set out in APES 110 Code – Code
of Ethics for Professional Accountants, including reviewing or
auditing the auditor’s own work, acting in a management or
a decision making capacity for Beach, acting as advocate for
Beach or jointly sharing economic risk and reward.

Details of the amounts paid or payable to the external auditors,
Ernst & Young, for audit and non-audit services provided during
the year are set out at Note 29 to the financial statements.

Rounding off of amounts
Beach is an entity to which ASIC Corporations (Rounding in
Financial/Directors’ Reports) Instrument 2016/191 issued by the
Australian Securities and Investments Commission applies relating
to the rounding off of amounts. Accordingly, amounts in the
directors’ report and the financial statements have been rounded
to the nearest hundred thousand dollars, unless shown otherwise.

Proceedings on behalf of Beach
No person has applied to the Court under Section 237 of the
Corporations Act 2001 for leave to bring proceedings on behalf
of Beach, or to intervene in any proceedings to which Beach is a
party, for the purpose of taking responsibility on behalf of Beach
for all or part of those proceedings.

No proceedings have been brought or intervened in on behalf
of Beach with leave of the Court under Section 237 of the
Corporations Act 2001.

Annual Report 2020Audit independence declaration
Section 307C of the Corporations Act 2001 requires our auditors,
Ernst & Young, to provide the directors of Beach with an
Independence Declaration in relation to the audit of the full year
financial statements. This Independence Declaration is made on
the following page and forms part of this Directors’ Report.

This Directors’ Report is signed in accordance with a resolution
of directors made pursuant to section 298(2) of the Corporations
Act 2001.

On behalf of the directors

G S Davis
Chairman

Adelaide, 17 August 2020

Matters arising subsequent to the end of the
financial year
On 17 August 2020 Beach announced that the company (through
its subsidiary Beach Energy (Operations) Limited) with support
from its joint venture partner O.G. Energy has executed a new
offshore drilling agreement (“Agreement”) with Diamond
Offshore General Company (“Diamond”) for the use of the
Ocean Onyx Semi-submersible rig to undertake Beach’s Victorian
Otway offshore drilling program. The Agreement provides for
the drilling of up to 9 wells (6 firm and 3 options), with drilling
operations expected to commence between December 2020
and March 2021 (subject to extension, should certain conditions
occur that impact on timing of commencement). Concurrent
with the signing of the Agreement, Beach and Diamond have
also signed a Settlement Agreement, which (following approval
by the Bankruptcy Court) dismisses all current legal proceedings
regarding the termination of the previous drilling agreement. The
Agreement remains subject to a number of conditions precedent
that are administrative in nature (including the Bankruptcy court
approval of the Settlement Agreement) which are expected to be
satisfied within the next few weeks.

Other than the matters described above, there has not arisen
in the interval between 30 June 2020 and up to the date of this
report, any item, transaction or event of a material and unusual
nature likely, in the opinion of the directors, to affect substantially
the operations of the Group, the results of those operations or the
state of affairs of the Group in subsequent financial years, unless
otherwise noted in the financial report.

Beach Energy LimitedAuditor’s Independence Declaration

Auditor’s Independence Declaration

Ernst & Young
121 King William Street
Adelaide SA 5000 Australia
GPO Box 1271 Adelaide SA 5001

Tel: +61 8 8417 1600
Fax: +61 8 8417 1775
ey.com/au

Auditor’s Independence Declaration to the Directors of Beach Energy
Limited

As lead auditor for the audit of the financial report of Beach Energy Limited for the financial year
ended 30 June 2020, I declare to the best of my knowledge and belief, there have been:

a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in

relation to the audit; and

b) no contraventions of any applicable code of professional conduct in relation to the audit.

This declaration is in respect of Beach Energy Limited and the entities it controlled during the financial
year.

Ernst & Young

Anthony Jones
Partner
Adelaide
17 August 2020

A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation

Annual Report 2020

2020 Remuneration in Brief (Unaudited)

For the financial year ended 30 June 2020

Remuneration to executive key management personnel in FY20
In arriving at the overall remuneration outcomes for FY20, Board and management have sought to balance and take account of the broader
economic conditions which have impacted Beach, whilst acknowledging the outcomes achieved by management during the whole of FY20.

In arriving at the remuneration outcomes, the Board took the following approach:
– No increases to senior executive (including KMP) fixed remunerations were agreed in respect of FY21;
– STI and LTI awards were broadly based on pre-pandemic outcomes and strong management performance in adapting the business to

respond to COVID-19 and a lower oil price environment;

– Notwithstanding the fact that both STI threshold hurdle measures had been achieved, given the industry downturn in FY20, the board

has elected to restrict the FY20 STI Award calculation to a 60% achievement basis rather than 100% which would otherwise have been
the case; and

– Both senior executives and non-executive directors have agreed to a 10% reduction in base remuneration for a period of 6 months

effective from 1 July 2020.

A summary of the audited cost to the Company of executive key management personnel (KMP) remuneration is provided in Table 8.

FY20 remuneration outcomes at a glance

Fixed Remuneration

BENCHMARK INCREASES FOR
SENIOR EXECUTIVES

Small Total fixed remuneration (TFR) increases for select senior
executives reflecting market changes were effective 1 October 2019.

Short Term Incentive (STI)

STI AWARDED

The board awarded an STI to senior executives.

Long Term Incentive (LTI)

LTI VESTED

Non-executive directors

BASE FEES INCREASED

2019 AGM Remuneration
Report

98.8% ‘YES VOTE’

The 2016 LTI performance rights fully vested following achievement of
the performance condition.

Fees payable to the Chair and the majority of board members
increased by $30,000 and $12,500 per annum respectively following
an external benchmarking exercise and were effective 1 July 2019. The
Deputy Chair received an increase of $1,500 effective the same date.

Beach received more than 98% of ‘yes’ votes on a poll to adopt its
Remuneration Report for the 2019 financial year. No specific feedback
on Beach’s remuneration practices was received at the 2019 annual
general meeting.

Disclosures required in the remuneration report by the Corporations Act, particularly the inclusion of accounting values for LTI performance rights
awarded but not vested, can vary significantly from the remuneration actually paid to senior executives. This is because the Accounting Standards
require a value to be placed on a right at the time it is granted to a senior executive and then reported as remuneration even if ultimately the senior
executive does not receive any actual value, for example because performance conditions are not met and the rights do not vest.

The following table is a summary of remuneration actually paid or payable to executive KMP for FY20. It is not audited.

Table 1: Remuneration to executive key management personnel (unaudited)

Name

M V Kay
Managing Director and Chief Executive Officer

M Engelbrecht
Chief Financial Officer
D Summers(2)
Chief Operating Officer
G J Barker
Group Executive Development
L Marshall
Group Executive Corporate Strategy & Commercial
J L Schrull
Group Executive Exploration & Appraisal

Total

TFR

Salary
$

Super
$

STI cash
bonus
$

1,241,000

25,000

143,808

572,886

25,000

44,388

Other(1)

–

Total Cash
$

1,409,808

642,274

565,265

20,867

–

8,524

594,656

461,591

25,000

28,243

–

514,834

461,591

25,000

33,498

60,000

580,089

511,947

21,003

36,690

–

569,640

3,814,280

141,870

286,627

68,524

4,311,301

(1) Other remuneration includes the payment of accrued employee entitlements and allowances paid under the terms and conditions of employment such as retention allowances.
(2) Ms Summers resigned with effect on 30 April 2020.

Beach Energy LimitedRemuneration Report (Audited)

For the financial year ended 30 June 2020

Remuneration Report (Audited)

This report has been prepared in accordance with section 300A of the Corporations Act 2001 (Cth) (Corporations Act) for the consolidated
entity for the financial year ended 30 June 2020. It has been audited as required by section 308(3C) of the Corporations Act and forms
part of the Directors’ Report.

Key management personnel
The Company’s KMP are listed in Table 2. They are the Company’s non-executive directors (NED) and executive KMP who have authority
and responsibility for planning, directing and controlling the activities of the Company, directly or indirectly.

Table 2: Key management personnel during FY20

Name

Executive KMP

M V Kay

M Engelbrecht

G J Barker

L Marshall

J L Schrull

Non-executive Directors

G S Davis

P J Bainbridge

C D Beckett

P S Moore

J C Morton

R J Richards

R K Stokes

S G Layman

Former KMP

D Summers

Position

Period as KMP during the year

Managing Director & Chief Executive Officer (CEO)

All of FY20

Chief Financial Officer

Group Executive Development

All of FY20

Group Executive Corporate Strategy and Commercial All of FY20

Group Executive Exploration and Appraisal

All of FY20

Independent Chairman

Non-executive Director

All of FY20

Chief Operating Officer

1 July 2019 – 30 April 2020

Beach’s remuneration policy framework
Beach’s vision is to be Australia’s premier multi-basin upstream oil and gas company.

Beach’s remuneration framework seeks to focus executives on delivering that purpose:

– Fixed remuneration aligns to market practice and prevailing economic conditions. It seeks to attract, motivate and retain executives

focused on delivering Beach’s purpose.

– ‘At risk’ performance based incentives link to shorter and longer term Company goals. The goals contribute to the achievement of

Beach’s purpose.

– Longer term ‘at risk’ incentives align with shareholder objectives and interests. Beach benchmarks shareholder returns against peers

considered to be alternative investments to Beach. Beach offers share based rather than all cash rewards to executives.

– Beach may recover remuneration benefits paid if there has been fraud or dishonesty.
– The Corporations Act and Beach’s Share Trading Policy prohibit hedging. Hedging is where a person enters a transaction to reduce
the risk of an ‘at risk’ incentive. Beach has a process to track compliance with its no hedging policy. Beach’s Share Trading Policy is
available at Beach’s website: www.beachenergy.com.au.

Annual Report 2020How Beach makes decisions about remuneration
The Board decides Beach’s KMP remuneration. It decides that remuneration based on recommendations by its Remuneration and
Nomination Committee. The Committee’s members are all non-executive directors. Its charter is available at Beach’s website:
www.beachenergy.com.au. Beach’s Managing Director & CEO may attend Committee meetings by invitation in an advisory capacity.
Other executives may also attend by invitation. The Committee excludes executives from any discussion about their own remuneration.

External advisers and remuneration advice
Beach follows a protocol to engage any adviser to make a remuneration recommendation. The protocol ensures the recommendation is
free from undue influence by management. The Board or Committee chair engages the adviser. The Board or Committee chair deals with
the adviser on all material matters. Management involvement is only to the extent necessary to coordinate the work.

The Board and Committee seek recommendations from the Managing Director & CEO about executive remuneration. The Managing
Director & CEO does not make any recommendation about his own remuneration.

The Board and Committee have regard to industry benchmarking information.

How Beach links performance to incentives
Beach’s remuneration policy includes short term and long term incentive plans. The plans seek to align management performance with
shareholder interests.

The LTI links to an increase in total shareholder return over an extended period.

The STI has equal proportions of cash and performance rights. Performance rights may convert to Beach shares.

The following table shows some key shareholder wealth indicators.

KPI and STI awards for FY19 and FY20 are detailed in Table 8.

Table 3: Shareholder wealth indicators FY16 – FY20

Total revenue

Net profit/(loss) after tax

Underlying net profit after tax

Share price at year-end

Dividends declared

Reserves

Production

FY16

FY17

FY18

FY19

FY20

$564.6m

$665.7m

$1,267.4m

$2,077.7m

$1,728.2m

($588.8m)

$387.5m

$35.7m

$161.7m

$198.8m

$301.5m

$577.3m

$500.8m

$560.2m

$461.0m

61.0 cents

57.5 cents

175.5 cents

198.5 cents

152.0 cents

0.50 cents

2.00 cents

70 MMboe

75 MMboe

313 MMboe

326 MMboe

352 MMboe

9.7 MMboe

10.6 MMboe

19.0 MMboe 29.4 MMboe 26.7 MMboe

Senior executive remuneration structure
This section details the remuneration structure for senior executives.

Remuneration mix
Remuneration for senior executives is a mix of a fixed cash salary component and an ‘at risk’ component. The ‘at risk’ component means
that specific targets or conditions must be met before a senior executive becomes entitled to it.

Beach Energy Limited
Remuneration Report (Audited)

What is the balance between fixed and ‘at risk’ remuneration?
The remuneration structure and packages offered to senior executives for the period were:

– Fixed remuneration.
– ‘At risk’ remuneration comprising:

– Short term incentive (STI) – an annual cash and equity based incentive, which may be offered at the discretion of the Board, linked

to Company and individual performance over a year.

– Long term incentive (LTI) – equity grants, which may be granted annually at the discretion of the Board, linked to performance

conditions measured over three years.

The balance between fixed and ‘at risk’ remuneration depends on the senior executive’s role. The CEO has the highest level of ‘at risk’
remuneration reflecting the greater level of responsibility of this role.

Table 4 sets out the relative proportions of the three elements of the executives KMP’s total remuneration packages for FY19 and FY20.

Table 4: Remuneration mix(1)

Position

CEO

2020

2019

Other Executive KMP

2020

2019

Performance based
remuneration

Fixed
Remuneration
%

STI
%

LTI
%

Total
‘at risk’
%

(1) The remuneration mix assumes maximum ‘at risk’ awards. Percentages shown later in this report reflect the actual incentives paid as a percentage of total fixed remuneration, movements in leave

balances and other benefits and share based payments calculated using the relevant accounting standards.

Fixed remuneration

What is fixed remuneration? Senior executives are entitled to a fixed cash remuneration amount inclusive of the guaranteed superannuation
contribution. The amount is not based upon performance. Senior executives may decide to salary sacrifice part
of their fixed remuneration for additional superannuation contributions and other benefits.

How is fixed remuneration
reviewed?

Fixed remuneration is determined by the Board based on independent external review or advice that takes
account of the role and responsibility of each senior executive. It is reviewed annually against industry
benchmarking information including the National Rewards Group Incorporated remuneration survey.

Fixed remuneration for the year
Total fixed remuneration (TFR) of KMP are provided in Table 1 and Table 8. Table 8 reports on the remuneration for KMP as required
under the Corporations Act. Table 1 shows the actual realised cash remuneration that KMP received.

Short Term Incentive (STI)

What is the STI?

How does the STI link to
Beach’s objectives?

The STI is part of ‘at risk’ remuneration offered to senior executives. It measures individual and Company
performance over a 12 month period. The period coincides with Beach’s financial year. It provides equal
parts of cash and equity that may vest subject to extra retention conditions. It is offered to senior executives
at the discretion of the Board.

The STI is an at risk opportunity for senior executives. It rewards senior executives for meeting or exceeding
key performance indicators. The key performance indicators link to Beach’s key purpose. The STI aims to
motivate senior executives to meet Company expectations for success. Beach can only achieve its purpose
if it attracts and retains high performing senior executives. An award made under the STI has a retention
component. Half is paid in cash and half is issued as performance rights with service conditions attached.

Annual Report 2020What are the performance
conditions or KPIs?

Beach’s key performance indicators (KPIs) are set by the Board for each 12 month period beginning at
the start of a financial year. They reflect Beach’s financial and operational goals that are essential to it
achieving its purpose. Senior executives also have individual KPIs to reflect their particular responsibilities.

For the reporting period, the performance measures comprised:

STI Measures

Company KPIs

Production

Statutory NPAT

Reserves replacement

All in cost/boe

Personal safety

Process safety

Environment

Individual KPIs

Weighting

CEO

75%

15%

25%

Other KMP

60%

12%

40%

Refer to Table 6 for more information.

Individual KPIs link to Beach’s strategy and strategic plan. Individual KPIs relate to areas where senior
executives are able to influence or control outcomes. KPIs may include: gender diversity targets; delivery of
cost savings; development of project specific plans to align with Beach’s strategic pillars; specific initiatives
for developing employee capability; funding capacity; improvements in systems to achieve efficiencies;
specific commercial or corporate milestones; or specific safety and environmental and sustainability targets.

Are there different
performance levels?

The Board sets KPI measures at threshold, target and stretch levels. A participant must achieve the
threshold level to entitle them to any payment for an individual KPI. The stretch level is the greatest
performance outcome for an individual KPI.

What is the value of the STI
award that can be earned?

Incentive payments are based on a percentage of a senior executive’s fixed remuneration.

The CEO can earn up to a maximum of 100% of his fixed remuneration.

How are the performance
conditions assessed?

Is there a threshold level
of performance or hurdle
before an STI is paid?

The value of the award that can be earned by other senior executives is up to a maximum of 45% of their
fixed remuneration.

The KPIs are reviewed against an agreed target.

The Board assesses the extent to which KPIs were met for the period after the close of the relevant
financial year and once results are finalised. The Board assesses senior executive performance on the CEOs
recommendation. The Board assesses the achievement of the KPIs for the CEO.

Yes. At the end of Beach’s financial year there is a calculation of return on capital. There is also a calculation
of a one year relative total shareholder return against the ASX 200 Energy Index. Refer to Table 5 below.

Table 5: Two-tiered test

Measures

One year Relative Total Shareholder Return against
the ASX 200 Energy Index for the Performance Period

Green

Red

> = Index return

< Index return

Return on capital(1)

> = 10%

< 10%

(1) Return on capital (ROC) is based on statutory NPAT/average total equity (being the average total equity at the beginning and end of the financial year).

What happens if an STI
is awarded?

On achievement of the relevant KPIs, Beach pays half of the STI award in cash. Beach includes cash awards
in its financial statements for the relevant financial year. Beach pays cash awards after the end of its
financial year, usually in October.

Beach issues the remaining half of the STI award value in performance rights. Performance rights vest
over one and two years if the senior executive remains employed by Beach at each vesting date. If a senior
executive leaves Beach before the vesting date the performance rights lapse. The Board may exercise its
discretion for early vesting if the senior executive leaves Beach due to death or disability. The Board may
exercise its discretion for early vesting in the event of a change of control of Beach. The Board also has a
general discretion to allow early vesting of performance rights. The Board needs exceptional circumstances
to consider exercising that general discretion.

Beach Energy LimitedRemuneration Report (Audited)

STI Performance for the year

At the completion of the financial year the Board tested each senior executive’s performance against the STI performance conditions set
for the year after exercising its discretion in relation to the hurdle measures. The results of the two hurdle measures were:

FY20 measures

One year Relative Total Shareholder Return against ASX 200 Energy Total Return Index (Index Return) at the
end of the Performance Period

Return on capital at the end of the Performance Period

Outcome

Hurdle

(22.4%)

(28.7%)

19.2%

10.0%

Notwithstanding the fact that both hurdle measures had been achieved, given the industry downturn in FY20, the board has elected to
restrict the FY20 STI Award calculation to a 60% achievement basis rather than 100% which would otherwise have been the case. The
board exercised its discretion to reduce the award but still pay 60% on the following basis:

– the return on capital hurdle was met and well exceeded;
– whilst the relative TSR hurdle was achieved the Company TSR for the year was negative;
– negative TSR was primarily driven by external factors beyond the executives control;
– most metrics within the executives control were met; and
– In difficult market conditions as a result of COVID-19 and an oil market downturn the executives responded decisively and produced

sound operating and financial outcomes as well as adjusting the forward program and operating plan appropriately.

The percentage of the maximum STI that will be paid or forfeited for the period for each executive KMP was as follows (paid/forfeited):

Mr Kay 23%/77%, Mr Engelbrecht 33%/67%, Mr Marshall 31%/69%, Mr Barker 26%/74%, Mr Schrull 31%/69%.

The STI awards made reflect Beach’s performance for FY20, with outcomes of the Company related performance conditions that make
up a fixed percentage of the STI KPIs provided in Table 6.

Table 6: Outcome of FY20 STI Company KPIs

STI Measure

Production

Statutory NPAT

Link to Beach’s strategy

Performance and score

Production is fundamental to Beach’s earnings
and profit.

Beach’s full year production was 26.7 MMboe.
Score – threshold met.

Statutory NPAT reflects Beach’s earning
performance. Stretch performance is achieved
through strong sales revenue and cost reduction.

In FY20 Beach delivered NPAT of $501 million.
Score – threshold not met.

Reserves replacement

Replacing reserves is fundamental to Beach’s
longer term financial sustainability.

Beach’s reserves increased by 26 MMboe.
Score – target met.

All in cost/boe

Personal safety

Process safety

Environment

Maintaining a cost and efficiency focus in order to
optimise our core production hubs and maintain
financial strength are key strategic pillars.

Beach’s key value is that ‘Safety takes precedence
in everything we do’. Beach is focused on
ensuring it and its contractors operate in a safe
manner. Beach has included other safety and
reliability measures in the annual Sustainability
Report. The Sustainability Report is available on
Beach’s website.

Beach strives to reduce the environmental impact
of its activities.

Beach’s all in cost/boe for FY20 was $8.97.
Score – threshold met.

Beach achieved a total recordable injury frequency
rate (TRIFR) of 3.7.
Score – threshold not met.

Beach recorded one Loss of Primary Containment
events during the year.
Score – target met.

Beach recorded two loss of hydrocarbon events
in FY20.
Score – threshold met.

STI performance rights issued in 2018 and 2019 to senior executives converted automatically to shares because they remained employed
by the Company on 1 July 2020. A total of 525,479 shares were issued.

Annual Report 2020STI performance rights issued or in operation in FY20
The fair value of services received in return for STI rights (see Table 13) granted is measured by reference to the fair value of STI rights
granted calculated using the Binomial or Black-Scholes Option Pricing Models. The contractual life of the STI rights is used as an input
into the valuation model. The expected volatility is based on the historic volatility (calculated based on the weighted average remaining
life of the rights), adjusted for any expected changes to future volatility due to publicly available information. The risk free rate is based on
Commonwealth Government bond yields relevant to the term of the performance rights.

Long Term Incentive (LTI)

What is the LTI?

How does the LTI link to
Beach’s key purpose?

How are the number of
rights issued to senior
executives calculated

The LTI is an equity based ‘at risk’ incentive plan. The LTI aims to reward results that promote long term
growth in shareholder value or total shareholder return (TSR).
Beach offers LTIs to senior executives at the discretion of the Board.

The LTI links to Beach’s key purpose by aligning the longer term ‘at risk’ incentive rewards with outcomes
that match shareholder objectives and interests by:
– benchmarking shareholder returns against a group of companies considered alternative investments to Beach;
– giving share based rather than cash based rewards to executives. This links their own rewards to

shareholder expectations of dividends and share price growth.

The number of performance rights granted to the executives under the LTI is calculated as fixed remuneration
at 1 November of the Financial Year times the relevant percentage divided by the market value. The Market
Value is the market value of a fully paid ordinary share in the Company, calculated using a five day VWAP,
up to and including the date the performance rights are granted. This method of calculating the number of
performance rights does not discount for the value of anticipated dividends during the performance period.

What equity based grants
are given and are there plan
limits?

Beach grants performance rights using the formula set out above. If the performance conditions are met,
senior executives have the opportunity to acquire one Beach share for every vested performance right.
There are no plan limits as a whole for the LTI. This is due to the style of the plan and advice by external
remuneration consultants about individual plan limits. Individual limits for the plans that are currently
operational are set out in Table 7.

What is the performance
condition?

Why choose this
performance condition?

The performance condition is based on Beach’s Total Shareholder Return (TSR) relative to the ASX 200
Energy Total Return Index. The initial out-performance level is set at the Index return plus 5.5% compound
annual growth rate (CAGR) over the three year performance period, such that:
– < the Index return – 0% vesting;
– = the Index return – 50% vesting;
– Between the Index return and Index + 5.5% – a prorated number will vest;
– = or > Index return + 5.5% – 100% vesting.

TSR is a measure of the return to shareholders over a period of time through the change in share price and
any dividends paid over that time. The dividends are notionally reinvested to perform the calculation. Beach
chose this performance condition to align senior executive remuneration with increased shareholder value.
The Board has reinforced that alignment by imposing two more conditions. First, the Board sets a threshold
level for the executive to meet before making an award. Secondly, the Board will not make an award if
Beach’s TSR is negative.

Is shareholders equity
diluted when shares
are issued on vesting of
performance rights or
exercise of options?

The Board has not imposed dilution limits due to the structure of the LTI plan and the number of rights
on issue. Any dilution would be minimal. If all the current performance rights vested at 30 June 2020,
shareholders equity would have diluted by 0.27% (FY19 – 0.34%). It has been the practice of the Board
when there is an entitlement to shares on vesting of performance rights to issue new shares. There is
provision for the buying of shares on market if the Board considers that dilution of shareholder equity
may be material.

What happens to LTI
performance rights on a
change of control?

The Board reserves the discretion for early vesting in the event of a change of control of the Company.
Adjustments to a participant’s entitlements may also occur in the event of a company reconstruction and
certain share issues.

Beach Energy LimitedRemuneration Report (Audited)

Table 7: Details of LTI equity awards issued, in operation or tested during the year

Details

Type of grant

2016, 2017, 2018 and 2019 Performance Rights

Performance rights

Calculation of grant limits for senior executives Max LTI is 100% of Total Fixed Remuneration (TFR) for CEO

Max LTI is 50% of TFR for other senior executives

Grant date

2019 Performance Rights
19 Dec 2019
2018 Performance Rights
14 Dec 2018
2017 Performance Rights
1 Dec 2017/9 April 2018
2016 Performance Rights
1 Dec 2016/21 February 2017

Issue price of performance rights

Granted at no cost to the participant

Performance period
Note: the date immediately after the end of the
performance period is the first date that the
performance rights vest and become exercisable

2019 Performance Rights
1 Dec 2019 – 30 Nov 2022
2018 Performance Rights
1 Dec 2018 – 30 Nov 2021
2017 Performance Rights
1 Dec 2017 – 30 Nov 2020
2016 Performance Rights
1 Dec 2016 – 30 Nov 2019

Expiry/lapse

Expiry date

Performance rights lapse if vesting does not occur on testing of performance condition

2019 Performance Rights
30 Nov 2024
2018 Performance Rights
30 Nov 2023
2017 Performance Rights
30 Nov 2022
2016 Performance Rights
30 Nov 2021

Exercise price on vesting

Not applicable – provided at no cost

What is received upon vesting and exercise?

One ordinary share in Beach for every performance right

Status

2019 Performance Rights
In progress
2018 Performance Rights
In progress
2017 Performance Rights
In progress
2016 Performance Rights
Testing completed. Resulted in full vesting of performance rights.

Annual Report 2020Details of LTI performance rights issued or in operation in FY20
The fair value of services received in return for LTI performance rights (see Table 13) granted is measured by reference to the fair value
of LTI performance rights granted calculated using the Binomial or Black-Scholes Option Pricing Models. The estimate of the fair value
of the services received for the LTI performance rights and options issued are measured with reference to the expected outcome, which
may include the use of a Monte Carlo simulation. The contractual life of the LTI performance rights is used as an input into this model.
Expectations of early exercise are incorporated into a Monte Carlo simulation method where applicable. The expected volatility is based
on the historic volatility (calculated based on the weighted average remaining life of the rights or options), adjusted for any expected
changes to future volatility due to publicly available information. The risk free rate is based on Commonwealth Government bond yields
relevant to the term of the performance rights.

Employment agreements – senior executives
The senior executives have employment agreements with Beach.

The provisions relating to duration of employment, notice periods and termination entitlements of the senior executives are as follows:

Managing Director and Chief Executive Officer
The CEO’s employment agreement commenced with effect 2 May 2016 and is ongoing until terminated by either Beach or Mr Kay on
six months’ notice. Beach may terminate the CEO’s employment at any time for cause (for example, for serious breach) without notice.
In certain circumstances Beach may terminate the employment on notice of not less than three months for issues concerning the CEO’s
performance that have not been satisfactorily addressed.

Other senior executives
Other senior executives have employment agreements that are ongoing until terminated by either Beach upon six months’ notice or
the senior executive upon giving between three and six months’ notice. Beach may terminate a senior executive’s appointment for
cause (for example, for serious breach) without notice. Beach must pay any amount owing but unpaid to the employee whose services
have been terminated at the date of termination, such as accrued leave entitlements. In certain circumstances Beach may terminate
employment on notice of not less than between one and three months for issues concerning the senior executive’s performance that have
not been satisfactorily addressed. If Beach terminates the senior executive’s appointment other than for cause or he or she resigns due to
a permanent relocation of his or her workplace to a location other than Adelaide, then they are entitled to an amount up to one time their
final annual salary.

Beach Energy LimitedRemuneration Report (Audited)

Details of total remuneration for KMP calculated as required under the Corporations Act for FY19 and FY20
Legislative and IFRS reported remuneration for KMP
Details of the remuneration package by value and by component for senior executives in the reporting period and the previous period
are set out in Table 8. These details differ from the actual payments made to senior executives for the reporting period that are set out
in Table 1.

Table 8: Senior executives’ remuneration for FY19 and FY20 as required under the Corporations Act

Short Term Employee Benefits

Share based
payments(3)

Fixed
Remuner-
ation(1)
$

Year

Annual
Leave(5)
$

LTI
Rights
$

STI
Rights
$

STI(2)

Other
long term
benefits

Long
Service
Leave(5)
$

Total
at risk
%

Total
issued in
equity
%

Total
$

2020 1,266,000

35,358

143,808

658,367

502,645

(5,227) 2,600,951

2019 1,201,357

25,662

580,447

535,859

527,586

22,054 2,892,965

Name

M V Kay

M Engelbrecht

2020

597,886

(3,439)

44,388

165,574

109,380

(2,231)

911,558

2019

546,262

20,441

114,293

132,817

116,260

4,069

934,142

G J Barker

2020

486,591

10,577

28,243

140,167

82,760

(2,277)

746,061

2019

471,343

(265)

99,819

88,984

56,855

1,304

718,040

L Marshall

2020

546,591

2019

577,050

393

331

33,498

142,172

86,050

(2,277) 806,427

99,819

90,988

59,476

1,304

828,968

J L Schrull

2020

532,950

28,252

36,690

139,631

95,198

(1,924) 830,797

2019

482,124

19,378

100,881

97,273

89,584

2,978

792,218

Former Senior Executives

D. Summers(4)

2020

586,132

(12,726)

–

(180,191)

(72,547)

(22,983)

297,685

2019

690,201

(5,173)

144,419

130,283

81,789

9,569 1,051,088

TOTAL

2020 4,016,150

58,415

286,627 1,065,720

803,486

(36,919) 6,193,479

2019 3,968,337

60,374 1,139,678 1,076,204

931,550

41,278

7,217,421

n/a

(1) Fixed remuneration comprises base salary and superannuation and ad hoc payments treated as remuneration including retention payments, relocation and vehicle allowances where applicable.
(2) This amount represents the cash portion of the STI for FY20, which are expected to be paid in October 2020.
(3) In accordance with the requirements of the Australian Accounting Standards, remuneration includes a proportion of the notional value of equity compensation granted or outstanding during the year.

The fair value of equity instruments are determined as at the grant date and then progressively expensed over the vesting period. The amount included as remuneration is not related to or indicative
of the benefit (if any) that individuals may ultimately realise should the rights vest. The fair value of the rights as at the date of their grant has been determined in accordance with principles set out in
Note 4 to the Financial Statements.

(4) Ms Summers ceased to be a KMP on 30 April 2020. FY20 figures for Ms Summers are for the period 1 July 2019 to 30 April 2020.
(5) This amount represents the movement in the relevant leave entitlement provision during the year. In respect of long service leave, the probability weighting for employees with less than 7 years service

has been reduced during FY20 to better align with Beach’s current average workplace tenure which has resulted in a reduction in the provision for all KMP.

Annual Report 2020Remuneration policy for non-executive directors
The fees paid to non-executive directors are determined using the following guidelines. Fees are:

– not incentive or performance based but are fixed amounts;
– determined by reference to the nature of the role, responsibility and time commitment required for the performance of the role

including membership of board committees;

– are based on independent advice and industry benchmarking data; and
– driven by a need to attract a diverse and well-balanced group of individuals with relevant experience and knowledge.

Following a benchmarking analysis against Beach’s peers, the board approved an increase to board fees effective 1 July 2019. The
benchmarking analysis was conducted by comparing Beach non-executive director fees to those of a peer group comprising 24
ASX-listed companies of similar size. Beach’s market capitalisation was at the 49th percentile of the peer group. The analysis showed
Beach’s base board fees for non-executive directors were at the 11th percentile of the comparator group, and Beach’s base board fee
for the Chairman was at the 7th percentile of the comparator group. As a consequence, the Chair’s fee was increased by $30,000 per
annum, the deputy chair’s fee was aligned with the base board fee and the base board fee was increased by $12,500 per annum to ensure
Beach will be able to attract and retain quality board candidates. There was no increase to board committee fees.

The remuneration of Beach non-executive directors remains within the aggregate annual limit of $1,500,000 approved by shareholders at
the 2016 annual general meeting.

The remuneration for non-executive directors comprises directors’ fees, board committee fees and superannuation contributions to meet
Beach’s statutory superannuation obligations.

Directors who perform extra services for Beach or make any special exertions on behalf of Beach may be remunerated for those services
in addition to the usual directors’ fees. Non-executive directors are also entitled to be reimbursed for their reasonable expenses incurred
in the performance of their directors’ duties.

Details of the fees payable to non-executive directors for Board and committee membership for FY20 are set out in Table 9.

Table 9: FY20 non-executive directors’ fees and board committee fees per annum

Board(1)

Board Committee

Chairman/
Deputy
Chairman
$

305,000/122,500

Member
$

122,500

Chairman
Audit
$

25,000

Member
Audit
$

15,000

Chairman
Remuneration
and Nomination
$

Member
Remuneration
and Nomination
$

Chairman Risk,
Corporate
Governance and
Sustainability
$

Member Risk,
Corporate
Governance and
Sustainability
$

25,000

15,000

25,000

15,000

(1) The Chairman does not receive additional fees for committee work. The fees shown are inclusive of the statutory superannuation contribution.

Beach Energy LimitedRemuneration Report (Audited)

Table 10: Non-executive directors’ remuneration for FY19 and FY20

Name

G S Davis(1)

P J Bainbridge(2)

C D Beckett(3)

S G Layman (4)

P S Moore(5)

J C Morton(6)

R J Richards(7)

R K Stokes(8)

J D McKerlie(9)

Total

Directors Fees
(inc committee fees)
$

Superannuation
$

305,000

275,000

134,703

131,589

155,451

147,032

134,703

35,160

139,269

127,854

131,535

123,288

125,571

114,155

131,535

114,155

–

45,403

1,257,767

1,113,636

–

12,797

12,501

7,049

13,968

12,797

3,340

13,231

12,146

5,965

11,712

11,929

10,845

5,965

10,845

–

4,313

69,733

79,670

Year

2020

2019

2020

2019

2020

2019

2020

2019

2020

2019

2020

2019

2020

2019

2020

2019

2020

2019

2020

2019

Total
$

305,000

275,000

147,500

144,090

162,500

161,000

147,500

38,500

152,500

140,000

137,500

135,000

137,500

125,000

137,500

125,000

–

49,716

1,327,500

1,193,306

(1) No superannuation contributions were made on behalf of Mr Davis. Director’s fees for Mr Davis are paid to a related entity. Mr Davis does not receive additional fees for committee work.
(2) Mr Bainbridge is chair of the Risk, Corporate Governance and Sustainability Committee.
(3) Mr Beckett is Deputy Chairman and chair of the Remuneration and Nomination Committee. He is a member of the Risk, Corporate Governance and Sustainability Committee.
(4) Ms Layman is chair of the Audit Committee.
(5) Dr Moore is a member of both the Risk, Corporate Governance and Sustainability Committee and the Remuneration and Nomination Committee.
(6) Ms Morton is a member of the Audit Committee.
(7) Mr Richards is a member of the Audit Committee.
(8) Mr Stokes is a member of the Remuneration and Nomination Committee.
(9) Mr McKerlie retired as a director on 23 November 2018. Until his retirement he was a member of the Audit Committee.

Annual Report 2020Other KMP disclosures
The following three tables show the movements during the reporting period in shares and performance rights over ordinary shares in the
Company held directly, indirectly or beneficially by each KMP and their related entities.

Performance rights held by KMP
The following table details the movements during the reporting period in performance rights over ordinary shares in the Company held
directly, indirectly or beneficially by each KMP and their related entities.

Table 11: Movements in performance rights held by key management personnel

Rights

MD & CEO

M V Kay

Senior executives

M Engelbrecht

G J Barker

L Marshall

J L Schrull

Former senior executives

D Summers(2)

Total

Opening
balance

Granted

Rights
vested/
exercised

Other(1)

Closing
balance

3,187,585

828,636 (1,450,639)

–

2,565,582

848,731

184,603

(398,391)

390,400

153,729

(8,199)

402,301

153,729

(10,389)

741,799

163,490

(335,592)

–

634,943

535,930

545,641

569,697

571,126

222,416

(12,118)

(781,424)

–

6,141,942

1,706,603 (2,215,328)

(781,424) 4,851,793

(1) Relates to rights that did not vest due to performance conditions not being met and were forfeited during the year and changes resulting from individuals ceasing to be KMPs during the period.
(2) Ms Summers ceased being a KMP on 30 April 2020. Subsequently, 781,424 rights were cancelled.

Beach Energy LimitedRemuneration Report (Audited)

The following table details the movements during the reporting period in ordinary shares in the Company held directly, indirectly or
beneficially by each KMP and their related entities.

Table 12: Shareholdings of key management personnel

Ordinary Shares

Directors

G S Davis

P J Bainbridge

C D Beckett

S G Layman

P S Moore

J C Morton

R J Richards

R K Stokes

MD & CEO

M V Kay

Senior executives

M Engelbrecht

G J Barker

L Marshall

J L Schrull

Former senior executives

D Summers

Total

(1) Relates to changes resulting from individuals ceasing to be KMPs during the period.

Opening
balance

Purchased

Sold

218,226

25,000

118,090

–

77,694

39,000

(35,000)

–

22,000

(22,000)

Issued
upon the
conversion
of perform-
ance rights

Other(1)

Closing
balance

–

243,226

118,090

81,694

–

44,200

50,000

188,053

–

1,450,639

– 3,663,216

–

405,634

38,199

10,389

371,010

–

(41,390)

–

(58,000)

398,391

8,199

10,389

335,592

–

44,200

50,000

229,443

–

2,212,577

65,243

30,000

–

35,418

–

3,080,891

86,000

(156,390) 2,215,328

(12,118)

5,213,711

12,118

(12,118)

–

Specific details of the number of LTI and STI performance rights granted, vested/exercised and lapsed in FY20 for KMP are set out
in Table 13.

Annual Report 2020Performance
rights on
issue at
30 June 2020

Date
performance
rights vest
and become
exercisable

Lapsed

–

1 Dec 2019

1 Jul 2019

849,057

1 Dec 2020

–

1 Jul 2019

106,130

1 Jul 2020

781,759

1 Dec 2021

148,909

1 Jul 2020

148,909

1 Jul 2021

530,818

1 Dec 2022

2,565,582

–

1 Dec 2019

1 Jul 2019

247,642

1 Dec 2020

–

1 Jul 2019

28,268

1 Jul 2020

174,430

1 Dec 2021

29,321

1 Jul 2020

1 Jul 2021

125,961

1 Dec 2022

634,943

–

Vested/
Exercised

(1,049,112)

(295,397)

–

(106,130)

–

(304,879)

(65,244)

–

(28,268)

–

(398,391)

258,801

828,636

(1,450,639)

1,531,452

983,141

–

(320,960)

(12,118)

–

(12,119)

(225,929)

(37,050)

(37,049)

(148,317)

(12,118)

(781,424)

1 Dec 2020

1 Jul 2019

1 Jul 2020

1 Dec 2021

1 Jul 2020

1 Jul 2021

1 Dec 2022

–

404,754

18,854

910,003

–

148,909

530,818

–

29,321

125,961

184,603

332,854

–

37,050

37,049

148,317

222,416

Table 13: Details of LTI and STI Performance Rights

Performance
rights on
issue at
30 June 2019

Date of
grant

Fair
Value
$

Granted

Name

M V Kay

Total

Total ($)

1 Dec 2016

1,049,112

0.4667

1 Dec 2017

6 Dec 2018

14 Dec 2018

19 Dec 2019

295,397

849,057

106,130

781,759

–

3,187,585

1.1117

0.6161

1.5559

1.5314

1.0181

2.5500

2.5300

1.4600

M Engelbrecht

1 Dec 2016

304,879

0.4667

1.1117

0.6161

1.5559

1.5314

1.0181

2.5500

2.5300

1.4600

0.7997

1.5559

1.5314

1.0181

2.5500

2.5300

1.4600

1 Dec 2017

6 Dec 2018

65,244

247,642

28,268

14 Dec 2018

174,430

19 Dec 2019

–

848,731

Total

Total ($)

D Summers

9 Apr 2018

320,960

6 Dec 2018

12,118

12,119

14 Dec 2018

225,929

19 Dec 2019

–

571,126

Total

Total ($)

Beach Energy Limited
Remuneration Report (Audited)

Name

Performance
rights on
issue at
30 June 2019

Date of
grant

L Marshall

9 Apr 2018

225,365

6 Dec 2018

14 Dec 2018

19 Dec 2019

10,389

10,390

156,157

–

402,301

9 Apr 2018

217,845

6 Dec 2018

8,199

14 Dec 2018

156,157

19 Dec 2019

–

390,400

21 Feb 2017

275,843

1 Dec 2017

35,418

1 Dec 2017

224,057

6 Dec 2018

14 Dec 2018

19 Dec 2019

24,331

24,332

157,818

–

741,799

Total

Total ($)

G J Barker

Total

Total ($)

J L Schrull

Total

Total ($)

Fair
Value
$

0.7997

1.5559

1.5314

1.0181

2.5500

2.5300

1.4600

0.7997

1.5559

1.5314

1.0181

2.5500

2.5300

1.4600

0.2177

1.1117

0.6161

1.5559

1.5314

1.0181

2.5500

2.5300

1.4600

Granted

–

25,608

25,607

102,514

153,729

279,757

–

25,608

25,607

102,514

153,729

279,757

–

25,880

111,730

Vested/
Exercised

–

(10,389)

–

(10,389)

16,164

–

(8,199)

–

(8,199)

12,757

(275,843)

(35,418)

–

(24,331)

–

163,490

(335,592)

294,596

137,282

Performance
rights on
issue at
30 June 2020

Date
performance
rights vest
and become
exercisable

Lapsed

225,365

1 Dec 2020

–

1 Jul 2019

10,390

1 Jul 2020

156,157

1 Dec 2021

25,608

1 Jul 2020

25,607

1 Jul 2021

102,514

1 Dec 2022

545,641

217,845

1 Dec 2020

–

1 Jul 2019

8,199

1 Jul 2020

156,157

1 Dec 2021

25,608

1 Jul 2020

25,607

1 Jul 2021

102,514

1 Dec 2022

535,930

–

1 Dec 2019

1 Jul 2019

224,057

1 Dec 2020

–

1 Jul 2019

24,332

1 Jul 2020

157,818

1 Dec 2021

25,880

1 Jul 2020

1 Jul 2021

111,730

1 Dec 2022

569,697

–

Annual Report 2020
Looking ahead – Remuneration and related issues for 2021
Employee Engagement
The 2020 Employee Engagement and Enablement survey resulted in significant improvements across all areas at Beach. Of note was the
recognition by our employees that Beach demonstrates a clear vision and future to our people, Beach demonstrates care and concern
and our leaders provide ongoing leadership and coaching on the job to support employees in their role and build their career at Beach.
The results are particularly pleasing given the focus on driving Leadership for High Performance and Coaching for Performance programs
across the organisation during the previous year.

Values led leadership is fundamental to Beach’s culture and the achievement of our goals. A new values-based recognition program
has been implemented that drives the importance of a continuous improvement mindset and that our values and behaviours are of the
utmost importance in everything we do.

Competency and Career Development
Beach continues to build technical excellence by embedding a globally benchmarked Technical Competency Framework with supporting
training and development opportunities for its technical community. Throughout FY21 the competency frameworks will be expanded
further to include all leadership roles and incorporate the Beach Leadership expectations. In addition, Beach has launched 534 e-learning
and webinar modules since February, across technical, leadership and personal development areas to support out employees develop in a
self-paced manner. This supports career pathways, development and ongoing growth of competency and capability.

Wellbeing and Resilience
Beach has long maintained a focus on workforce wellbeing and resilience, however, with the COVID-19 situation unfolding in 2020 the
level of support to our workforce increased significantly. Modules were rapidly and effectively developed in-house to support remote
working, leading virtual teams, managing personal anxiety and staying both physically and mentally healthy during uncertain times.
This increased level of support will continue throughout the FY21 year.

Temporary reduction of senior executive fees
All senior executives, including KMPs as at 1 July 2020 have agreed to a 10% reduction to their base annual remuneration for a period
of 6 months commencing on 1 July 2020 and ceasing on 31 December 2020. At the completion of this period, senior executives’
remuneration will revert to the currently agreed rate of remuneration.

Temporary reduction of non-executive director fees
The directors agreed to a 10% reduction in the total remuneration payable to each of the non-executive directors for a period of 6 months
commencing on 1 July 2020 and ceasing on 31 December 2020. At the completion of this period, non-executive directors’ fees will revert
to the currently agreed rate of remuneration.

Beach Energy LimitedDirectors’ Declaration

Directors’ Declaration

(1) In the directors’ opinion:

(a) the financial statements and notes set out on pages 74 to 124 are in accordance with the Corporations Act 2001, including:
(i) complying with accounting standards, the Corporations Regulations 2001 and other mandatory professional reporting

requirements; and

(ii) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2020 and of its performance for the

financial year ended on that date; and

(b) there are reasonable grounds to believe that Beach will be able to pay its debts as and when they become due and payable.

(2) The attached financial statements are in compliance with International Financial Reporting Standards, as noted in the Basis of

Preparation which forms part of the financial statements.

(3) At the time of this declaration, there are reasonable grounds to believe that the members of the Extended Closed Group identified
in note 22 will be able to meet any obligations or liabilities to which they are, or may become, subject by virtue of the deed of cross
guarantee described in note 22.

(4) The directors have been given the declarations by the Chief Executive Officer and the Chief Financial Officer required by section

295A of the Corporations Act 2001.

Signed in accordance with a resolution of the directors made pursuant to section 295(5) of the Corporations Act 2001 on behalf of the directors.

G S Davis
Chairman

Adelaide
17 August 2020

Annual Report 2020Consolidated Statement of Profit or Loss and
Other Comprehensive Income

For the financial year ended 30 June 2020

Revenue

Cost of sales

Gross profit

Other income

Other expenses

Operating profit before financing costs

Interest income

Finance expenses

Profit before income tax expense

Income tax expense

Net profit after tax

Other comprehensive income/(loss)

Items that may be reclassified to profit or loss

FCTR release on cessation/disposal of overseas operations

Net change in hedging reserve

Net loss on translation of foreign operations

Tax effect relating to components of other comprehensive income

Other comprehensive income/(loss), net of tax

Total comprehensive income after tax

Basic earnings per share (cents per share)

Diluted earnings per share (cents per share)

The accompanying notes form part of these financial statements.

Consolidated

2020
$million

1,728.2

2019
$million

2,077.7

(1,056.7)

(1,207.4)

671.5

76.6

(41.0)

707.1

2.0

(16.0)

693.1

(192.3)

500.8

(8.7)

–

(4.9)

–

(13.6)

487.2

21.97¢

21.92¢

870.3

41.8

(43.6)

868.5

3.9

(62.0)

810.4

(233.1)

577.3

(7.0)

14.4

(2.1)

(4.3)

1.0

578.3

25.35¢

25.28¢

Note

2(a)

3(a)

2(b)

3(b)

Beach Energy LimitedConsolidated Statement of Financial Position

As at 30 June 2020

Current assets

Cash and cash equivalents

Receivables

Inventories

Contract assets

Assets held for sale

Other

Total current assets

Non-current assets

Property, plant and equipment

Petroleum assets

Exploration and evaluation assets

Goodwill

Deferred tax assets

Lease assets

Contract assets

Other

Total non-current assets

Total assets

Current liabilities

Payables

Provisions

Current tax liabilities

Lease liabilities

Contract liabilities

Liabilities associated with assets held for sale

Total current liabilities

Non-current liabilities

Payables

Provisions

Interest bearing liabilities

Deferred tax liabilities

Lease liabilities

Contract liabilities

Total non-current liabilities

Total liabilities

Net assets

Equity

Contributed equity

Reserves

Retained earnings

Total equity

The accompanying notes form part of these financial statements.

Consolidated

Note

2020
$million

2019
$million

109.9

215.8

106.9

16.0

–

59.0

507.6

171.9

284.9

99.5

14.1

6.7

21.4

598.5

34.2

26.8

2,986.5

2,726.7

462.4

355.3

57.1

33.6

58.7

49.3

25.8

57.1

79.8

–

59.6

10.1

3,707.6

4,215.2

3,315.4

3,913.9

276.4

30.9

86.4

26.8

35.7

–

456.2

5.6

798.9

56.7

30.2

35.3

12.5

939.2

1,395.4

2,819.8

324.4

25.4

201.4

–

60.6

1.5

613.3

6.3

842.8

–

35.1

–

42.0

926.2

1,539.5

2,374.4

1,861.2

1,860.6

911.9

46.7

167.9

345.9

2,819.8

2,374.4

Financial StatementsAnnual Report 2020Consolidated Statement of Changes in Equity

For the financial year ended 30 June 2020

Retained
earnings/
(accum-
ulated
losses)
$million

Share
based
payment
reserve
$million

Foreign
currency
translation
reserve
$million

Profit
distribution
reserve
$million

Contributed

equity
$million

Note

Hedging
reserve
$million

Total
$million

172.4

(10.1)

1,838.0

Balance as at
30 June 2018

Profit for the year

Other comprehensive income/(loss)

Total comprehensive income/(loss) for
the year

Transactions with owners in their
capacity as owners:

Shares issued during the year

Final dividend paid

Interim dividend paid

Increase in share based payments
reserve

Transactions with owners

Balance as at
30 June 2019

Profit for the year

Other comprehensive income/(loss)

Total comprehensive income/(loss) for
the year

Transactions with owners in their
capacity as owners:

Shares issued during
the year

Shares purchased on market, net of tax
(Treasury shares)

Final dividend paid

Interim dividend paid

Transfer to profit distribution reserve

Increase in share based payments
reserve

Transactions with owners

Balance as at
30 June 2020

1,859.1

(231.4)

30.6

–

1.5

–

1.5

577.3

–

577.3

–

1,860.6

–

345.9

500.8

–

500.8

1.3

(0.7)

–

(800.0)

–

0.6

(800.0)

–

2.2

32.8

–

3.2

17.4

–

(9.1)

–

8.3

–

(13.6)

–

(22.8)

–

(45.6)

126.8

–

(22.8)

800.0

–

754.4

1,861.2

46.7

36.0

(5.3)

881.2

–

10.1

577.3

1.0

10.1

578.3

–

1.5

(22.8)

2.2

(41.9)

2,374.4

500.8

(13.6)

487.2

1.3

(0.7)

(22.8)

–

3.2

(41.8)

2,819.8

The accompanying notes form part of these financial statements.

Beach Energy LimitedConsolidated Statement of Cash Flows

For the financial year ended 30 June 2020

Cash flows from operating activities

Receipts from customers and other

Payments to suppliers and employees

Payments for restoration

Interest received

Financing costs

Derivative payments

Income tax paid

Net cash provided by operating activities

Cash flows from investing activities

Payments for property, plant and equipment

Payments for petroleum assets

Payments for exploration and evaluation assets

Proceeds from government grants

Proceeds on sale of joint operations interests

Proceeds from sale of non-current assets

Payments received for future restoration liabilities

Acquisition of exploration tenements

Net cash used in investing activities

Cash flows from financing activities

Proceeds from borrowings

Repayment of borrowings

Payment of the principal portion of lease liabilities

Proceeds from employee incentive loans

Payment for shares purchased on market (Treasury shares)

Dividends paid

Net cash used in financing activities

Net decrease in cash held

Cash at beginning of financial year

Effects of exchange rate changes on the balances of cash held in foreign currencies

Cash at end of financial year

The accompanying notes form part of these financial statements.

Consolidated

Note

2020
$million

2019
$million

1,913.2

2,179.6

(761.7)

(948.0)

(7.9)

2.2

(7.2)

–

(264.7)

(16.6)

4.1

(31.1)

(18.7)

(131.1)

873.9

1,038.2

(10.9)

(643.1)

(266.1)

11.3

8.9

0.7

–

(28.1)

(353.6)

(97.6)

–

262.4

21.2

11.3

(3.2)

(899.2)

(187.6)

225.0

–

(165.0)

(950.0)

(54.2)

1.4

(1.0)

(45.6)

(39.4)

(64.7)

171.9

2.7

109.9

–

1.5

–

(45.5)

(994.0)

(143.4)

311.2

4.1

171.9

Financial StatementsAnnual Report 2020Notes to the Financial Statements

Notes to and forming part of the Financial Statements for the financial year ended 30 June 2020

Notes to the financial statements
The notes include information which is required to understand
the financial statements that is material and relevant to the
operations, financial position or performance of the Group.
Information is considered material and relevant where the
amount is significant in size or nature, it is important in
understanding changes to the operations or results of the
Group or it may significantly impact on future performance.

Key judgements and estimates
In the process of applying the Group’s accounting policies,
management has had to make judgements, estimates and
assumptions about future events that affect the reported
amounts of assets and liabilities, income and expense. Actual
results may differ from these estimates and in the current year
these estimates and judgements incorporate the impact of
uncertainties associated with COVID-19 as outlined below. The
reasonableness of these estimates and underlying assumptions
are reviewed on an ongoing basis. The areas involving a higher
degree of judgement or complexity, or areas where assumptions
and estimates are significant to the financial statements are
found in the following notes:

Note 2 – Revenue from contracts with customers

Note 5 – Taxation

Note 8 – Property, plant and equipment

Note 9 – Petroleum assets

Note 10 – Exploration and evaluation assets

Note 11 – Interests in joint operations

Note 12 – Provisions

Note 13 – Leases

Basis of preparation
This section sets out the basis upon which the Group’s
(comprising Beach and its subsidiaries) financial statements
are prepared as a whole. Significant accounting policies and key
judgements and estimates of the Group that summarise the
measurement basis used and assist in understanding the financial
statements are described in the relevant note to the financial
statements or are otherwise provided in this section.

Beach Energy Limited (Beach) is a for profit company limited by
shares, incorporated in Australia and whose shares are publicly
listed on the Australian Securities Exchange (ASX). The nature
of the Group’s operations are described in the segment note. The
consolidated general purpose financial report of the Group for the
financial year ended 30 June 2020 was authorised for issue in
accordance with a resolution of the directors on 17 August 2020.

This general purpose financial report:

– Has been prepared in accordance with Australian Accounting
Standards and other authoritative pronouncements of the
Australian Accounting Standards Board and the Corporations
Act 2001. The financial statements comply with International
Financial Reporting Standards (IFRSs) as issued by the
International Accounting Standards Board.

– Has been prepared on a going concern and accruals basis and
is based on the historical cost convention, except for derivative
financial instruments, debt and equity financial assets, and
contingent consideration that have been measured at fair value.
Refer to COVID-19 estimation uncertainty below for further
information in relation to the going concern basis of preparation.
– Is presented in Australian dollars with all amounts rounded to
the nearest hundred thousand dollars unless otherwise stated,
in accordance with ASIC (Rounding in Financial/Directors’
Reports) Instrument 2016/191 issued by the Australian
Securities and Investment Commission.

– Has been prepared by consistently applying all accounting policies

to all the financial years presented, unless otherwise stated.
– The consolidated financial statements provide comparative
information in respect of the previous period. Where there
has been a change in the classification of items in the financial
statements for the current period, the comparative for the
previous period has been reclassified to be consistent with the
classification of that item in the current period.

Beach Energy LimitedNotes to the Financial Statements

COVID-19 financial impacts
In March 2020, the World Health Organization declared a global pandemic related to COVID-19. With current and expected impacts
on the global economy there has been significant volatility in commodity and foreign exchange markets with some restrictions to the
movement of people and goods within both Australia and overseas and there remains ongoing uncertainty surrounding COVID-19 and
the extent and duration of the impacts that it may have on demand and prices for the petroleum products the Group produces and on
global financial markets.

Since then the Group has taken certain measures to reduce operating expenditures and work programs including the deferral of capital
expenditure for FY21. These measures, combined with commodity market fluctuations resulting from COVID-19, impacted our financial
results and may continue to have an impact on our results and liquidity levels for some time.

In February 2020, the Group activated its Crisis Management Team (CMT) in response to COVID-19 before it was officially declared a
pandemic. COVID-19 plans were put in place at all offices and operational sites including hygiene, social distancing, case management,
isolation, evacuation and assurance protocols and working from home for non-essential staff to ensure the safety of our people and that the
Group’s operations could safely continue their sustainable delivery of energy for communities which was deemed an essential service by
government. Notwithstanding these arrangements, the Group’s current year results were impacted in multiple ways relating to the movement
of staff and contractors to and from our operational sites, reducing activity levels, delays to new well connections, and other elements of the
Group’s capital work program relating to the timely delivery of equipment and other supplies and the extent of the program being completed.
These incremental costs have been fully reflected in the financial results of the company as presented in these financial statements.

The Group was eligible for deferral of certain government tax payments with income tax, employee PAYG withholding payments and
SA payroll tax deferred from April 2020. Up to 30 June 2020, a total of $44.1million in payments have been deferred which are payable
between September and October 2020.

Up to 30 June 2020, redundancy costs of approximately $2 million have been incurred as the Group has deferred part of its capital
program and worked to reduce its operating costs in response to the financial impacts of COVID-19 on the business.

Despite lower gas demand and Brent oil prices falling to unprecedented lows in March 2020, the Group’s response to COVID-19 ensured
minimal impact to production and sales volumes through the remainder of FY20. Revenues recorded through to 30 June 2020 were
impacted by lower oil prices, which also flowed through to prices for gas liquids. The market prices of both oil and gas liquids have since
come off these lows.

The table below shows Group’s sales volumes, sales revenue and average realised prices before (July 2019 – February 2020) and after
(March – June 2020) the COVID-19 impact. Note that oil revenue and realised prices for the period March 2020 – June 2020 includes
the impact of the fall in oil prices on the revaluation of provisionally priced sales.

Sales volumes by product

Oil (kbbl)

Sales Gas and Ethane (PJ)

LPG (kt)

Condensate (kbbl)

Total (kboe)

Total – Own Product (kboe)

Total – Third Party (kboe)

Own Product

Third Party

Total Oil

Own Product

Third Party

Total Gas

Own Product

Third Party

Total LPG

Own Product

Third Party

Total Condensate

FY20
Jul – Feb

FY20
Mar – Jun

FY20
Full year

5,452

686

6,138

54.8

0.3

55.1

127

128

1,352

1,354

17,959

17,216

743

3,127

387

3,514

27.4

0.4

27.8

720

721

9,702

9,223

469

8,579

1,073

9,652

82.2

0.7

82.9

211

214

2,066

2,075

27,661

26,444

1,217

Annual Report 2020Basis of preparation (continued)
COVID-19 financial impacts (continued)

Revenue ($ million)

Oil

Sales Gas and Ethane

LPG

Condensate

Total Sales Gas and Gas Liquids

Total oil and gas

Total – Own Product

Total – Third Party

Average realised price

All products ($/boe)

Oil ($/bbl)

Sales Gas and Ethane ($/GJ)

LPG ($/t)

Condensate ($/bbl)

FY20
Jul – Feb

FY20
Mar – Jun

FY20
Full year

640

397

116

589

1,229

1,150

141

208

280

421

407

781

605

119

145

869

1,650

1,557

FY20
Jul – Feb

FY20
Mar – Jun

FY20
Full year

68.4

104.2

7.2

591

85.9

43.5

40.3

7.5

506

40.0

59.7

80.9

7.3

557

70.0

Sales Gas and ethane sales volumes represented greater than 50% of the Group’s total oil and gas sales volumes for FY20 with sales gas
primarily being sold into term contracts with fixed and/or CPI linked prices or oil-linked prices with downside protection when oil prices
are low. The Group also has minimal spot gas price exposure with more than 97% of East Coast gas sales expected to be sold under term
contracts in FY21 and FY22. In contrast, the Group’s sales of crude oil, liquefied natural gas, ethane, condensate, and LPG are based on
market prices which are subject to fluctuation.

Going concern
The Group ended FY20 with $110 million in cash, drawn debt of $60 million and net working capital of $51 million (current assets less
current liabilities). Available liquidity was $500 million, comprising $110 million in cash and $390 million in undrawn debt facilities.

Guidance for Underlying EBITDA of $900-1,000 million and Capital expenditure of $650-750 million was released to the market for FY21
on 17 August 2020 in line with the Board approved plan for FY21.

Management has prepared cash flow forecast scenarios that represent reasonably possible downside scenarios relating to the business
from potential economic scenarios arising from the COVID-19 pandemic over the next 12 months, which have been reviewed by the
directors. These forecasts demonstrate that the Group has sufficient cash, other liquid resources and undrawn credit facilities to enable
the Group to meet its obligations as they fall due. As such the directors considered it appropriate to adopt the going concern basis of
accounting in preparing the full year financial statements.

Beach Energy LimitedImpairment
As disclosed in the basis of preparation to the financial
statements, there is significant ongoing uncertainty surrounding
COVID-19 and the extent and duration of the impact that it may
have on demand and prices for the petroleum products the Group
produces, on global financial markets and in the responses the
Group makes to manage the business. This leads to significant
uncertainty in the impairment considerations made by the Group.

The Group has taken actions to respond to the oil price downturn
targeting a deferral of up to 30% of FY21 capital expenditure from
prior expectations with capital reductions anticipated across all
basins. FY21 capital investment is being targeted on the highest
quality investment opportunities with fastest payback and further
operating cost reductions are being progressed.

The Group owns a diversified portfolio of producing assets
across 5 basins in Australia and New Zealand. Operated
Western Flank oil assets are high margin with current field
operating costs of less than A$5/bbl. Gas assets mainly
acquired through the Lattice acquisition transformed Beach
into a material supplier of gas to east coast markets with gas
primarily being sold into term contracts with fixed and/or CPI
linked prices or oil-linked prices with downside protection when
oil prices are low, and with minimal spot gas price exposure
as more than 97% of East Coast gas sales expected to be sold
under term contracts in FY21 and FY22.

The Group have assessed the potential impact of the current
oil and gas price environment, amended capital program and
the five year Board approved operational plans on the carrying
value of its production and exploration assets. Given the quality
of the underlying assets and the carrying value of these assets,
with the exception of the Taranaki Basin where exploration
and impairment costs of $1.6 million were expensed during the
year, there was no further impact to the carrying value of these
production and exploration assets which continue to be carried
at cost, net of impairments taken in previous reporting periods.
Whilst normal financial disclosures on the estimation uncertainty
relating to asset carrying values are disclosed in Notes 9 and
10, in concluding on the company’s asset values in the current
economic and health climate, the Group make the following
additional disclosure of information which was relevant to the
impairment consideration in FY20 with no impairment being
recognised on producing assets.

Notes to the Financial Statements

With respect to assets currently in production, from a quantitative
perspective:

– The assumptions made by the Group in performing its

impairment considerations, reflect conditions existing at
30 June 2020 and the directors best estimates of future
performance, including the impact of COVID-19, made as of
that date.

– The Group’s Operated Western Flank oil assets are high

margin with current field operating costs of less than A$5/bbl.

– The Group’s gas assets are currently primarily selling into term
contracts with fixed and/or CPI linked prices or oil-linked prices
with downside protection when oil prices are low. This can be
seen in the sales gas prices realised for the last 4 months of
FY20 which have been minimally impacted by COVID-19.
– The Group’s oil price assumptions have been reduced for

asset impairment testing consistent with independent market
consensus forecasts as per the table below.

Impairment
assessment

FY20 – Oil Price $US
(real)/ bbl

FY19 – Oil Price $US
(real)/ bbl

FY20

FY21

FY22

FY23+

n/a

41.25

52.50

60.00

62.50

70.00

– The Group has minimal spot gas price exposure with more

than 97% of East Coast gas sales expected to be sold under
contract in FY21 and FY22.

– 2P reserves increased by 8% from 326 MMboe to 352 MMboe
for FY20, representing 214% organic 2P reserves replacement
which is flowing through to increased production over asset
lives. As a sensitivity, a further 20% reduction in commodity
(oil and gas) price assumptions would reduce 2P reserves by
less than 3% reflecting the high margins attributable to the
Group’s assets.

– Sales of contracted gas volumes are based on a combination
of minimum contract quantities and projected customer
nominations taking into consideration current market
conditions. Sales of uncontracted gas volumes are based on
current demand with supply shortfalls expected in future years
in the markets the Group supplies.

– In the Eastern Australian Gas Market (EAGM) domestic
demand remained low compared to previous years with
demand dropping to the lowest levels in 5 years in April.
Demand picked up dramatically in May (relative to previous
years) due to a rapid rise in gas fired power generation and has
further increased since then in line with seasonal peak winter
demand. In March 2020, AEMO released the “2020 Gas
Statement of Opportunities” and EnergyQuest released the
“East Coast Gas Outlook to 2040” reports, with both reports
asserting a view that the market will re-balance in the near-
term. Both predict supply shortfalls in the EAGM by CY24/25.
The Group has maintained its medium to long term base
gas price assumption for uncontracted gas sales taking into
account independent market consensus forecasts.

– Guidance for Underlying EBITDA of $900–1,000 million and
Capital expenditure of $650–750 million was released to the
market for FY21 on 17 August 2020 in line with the Board
approved plan for FY21.

Annual Report 2020Basis of preparation (continued)
COVID-19 financial impacts (continued)
– Strategies to further reduce operating and capital costs

including contract renegotiations, labour cost reductions and
scope reviews are being progressed and have been factored
into impairment modelling where savings have already been
realised or where there is a high confidence of achieving them.
All such plans have been approved by the Board and are in
advanced stages of implementation.

– Impairment testing results reflect recoverable amounts that

remain higher than current carrying values, demonstrating that
price assumptions could be lowered further without causing
any significant impairment.

With respect to the company’s exploration assets:

– Rights to tenure and an active exploration program are in place
for all the Group’s current exploration areas of interest within
the Cooper, Otway, Bass, Perth, Canterbury and Carnarvon
basins but given the recent market downturn experienced
both as a result of COVID-19 and the global fall in oil prices,
some exploration activities have been deferred to FY22, with
planning activities to continue in FY21 in line with the Board
approved FY21 Budget exploration and appraisal program.

From a qualitative perspective the Group has a high quality
collection of oil and gas assets and the Group is currently well
positioned to manage the risks associated with COVID-19
conditions and sustain its operations through a low oil price
environment with:

– Gas and ethane sales representing over 35% of sales revenue
recorded in FY20 with gas sales alone covering all Group
operating costs and stay in business costs.

– Investment flexibility within the asset portfolio. Major growth
activity and lower priority capital has been deferred beyond
FY21 and can be restarted quickly subject to market and
COVID-19 conditions recovering.

Basis of consolidation
The consolidated financial statements are those of Beach and
its subsidiaries (detailed in Note 21). Subsidiaries are those
entities that Beach controls as it is exposed, or has rights, to
variable returns from its involvement with the subsidiary and
has the ability to affect those returns through its power over the
subsidiary. In preparing the consolidated financial statements,
all transactions and balances between Group companies are
eliminated on consolidation, including unrealised gains and losses
on transactions between Group companies. Where unrealised
losses on intra-group asset sales are reversed on consolidation,
the underlying asset is also tested for impairment from a Group
perspective. Profit or loss and other comprehensive income
of subsidiaries acquired or disposed of during the year are
recognised from the date Beach obtains control for acquisitions
and the date Beach loses control for disposals, as applicable. The
acquisition of subsidiaries is accounted for using the acquisition
method of accounting.

Foreign currency
Both the functional and presentation currency of Beach is
Australian dollars. Some subsidiaries have different functional
currencies which are translated to the presentation currency.
Transactions in foreign currencies are initially recorded in the
functional currency by applying the exchange rate ruling at
the date of the transaction. Monetary assets and liabilities
denominated in foreign currencies are retranslated at the foreign
exchange rate ruling at the reporting date. Foreign exchange
differences arising on translation are recognised in the profit
or loss. Non monetary assets and liabilities that are measured
in terms of historical cost in a foreign currency are translated
using the exchange rate at the date of the initial transaction.
Non monetary assets and liabilities denominated in foreign
currencies that are stated at fair value are translated to the
functional currency at foreign exchange rates ruling at the dates
the fair value was determined. Foreign exchange differences that
arise on the translation of monetary items that form part of the
net investment in a foreign operation are recognised in equity in
the consolidated financial statements. Revenues, expenses and
equity items of foreign operations are translated to Australian
dollars using the exchange rate at the date of transaction while
assets and liabilities are translated using the rate at balance
date with differences recognised directly in the Foreign Currency
Translation Reserve.

Beach Energy LimitedNotes to the Financial Statements

Results for the year
This section explains the results and performance of the Group including additional information about those individual line items in
the financial statements most relevant in the context of the operations of the Group, including accounting policies that are relevant for
understanding the items recognised in the financial statements and an analysis of the Group’s result for the year by reference to key
areas, including operating segments, revenue, expenses, employee costs, taxation and earnings per share.

1. Operating segments
The Group has identified its operating segments to be its South Australian and Western Australian (SAWA), Victorian and New Zealand
interests based on the different geographical regions and the similarity of assets within those regions. This is the basis on which internal
reports are provided to the Chief Executive Officer for assessing performance and determining the allocation of resources within the Group.

The Group operates primarily in one business, namely the exploration, development and production of hydrocarbons. Revenue is derived from
the sale of gas and liquid hydrocarbons. Gas sales contracts are spread across major Australian and New Zealand energy retailers and industrial
users with liquid hydrocarbon product sales being made to major multi-national energy companies based on international market pricing.

Details of the performance of each of these operating segments for the financial years ended 30 June 2020 and 30 June 2019 are set out
as follows:

SAWA

Victoria

New Zealand

Total

2020
$million

2019
$million

2020
$million

2019
$million

2020
$million

2019
$million

2020
$million

2019
$million

Segment revenue

Revenue from external
customers During the year
revenue from three customers
amounted to $1,231 million (2019:
$1,053 million from two customers)
arising from sales from SAWA and
Victoria segments.

1,288.1

1,304.6

222.3

446.8

139.9

174.0

1,650.3

1,925.4

Annual Report 20201. Operating segments (continued)

SAWA

Victoria

New Zealand

Total

2020
$million

2019
$million

2020
$million

2019
$million

2020
$million

2019
$million

2020
$million

2019
$million

Segment results
Gross segment result before
depreciation, amortisation and
impairment

813.2

782.0

Depreciation and amortisation

(329.1)

(257.9)

–

484.1

–

524.1

153.8

(90.1)

–

63.7

344.5

(242.4)

–

102.1

71.5

(25.7)

(1.6)

44.2

–

91.8

114.1

1,038.5

1,240.6

(22.3)

(444.9)

(522.6)

(1.6)

592.0

77.9

76.6

(14.0)

(39.4)

693.1

(192.3)

500.8

3,913.7

301.5

4,215.2

979.9

–

718.0

152.3

41.8

(58.1)

(43.6)

810.4

(233.1)

577.3

3,489.4

424.5

3,913.9

1,200.8

415.5

338.7

1,395.4

1,539.5

2,739.7

2,448.3

896.4

739.2

277.6

301.9

502.8

643.0

353.8

412.4

123.3

145.4

175.7

447.5

623.2

107.6

392.1

499.7

21.6

125.7

147.3

17.0

292.3

309.3

21.2

18.5

39.7

0.4

8.8

9.2

218.5

591.7

810.2

125.0

693.2

818.2

27.1

25.5

837.3

843.7

Australia

New Zealand

Total

2020
$million

3,410.6

2019
$million

2,959.3

2020
$million

237.6

2019
$million

266.2

2020
$million

3,648.2

2019
$million

3,225.5

Impairment expense

Other revenue

Other income

Net financing costs

Other expenses

Profit before tax

Income tax benefit

Net profit after tax

Segment assets

Total corporate and
unallocated assets

Total consolidated assets

Segment liabilities

Total corporate and
unallocated liabilities

Total consolidated liabilities

Additions and acquisitions
of non-current assets

Exploration and evaluation assets

Petroleum assets

Total corporate and
unallocated assets

Total additions and acquisitions
of non-current assets

Non-current assets*

*excluding financial assets and deferred taxes.

Beach Energy LimitedNotes to the Financial Statements

2. Revenue from contracts with customers and other income
Revenue from contracts with customers is recognised in the income statement when the performance obligations are considered met,
which is when control of the hydrocarbon products or services provided are transferred to the customer. Revenue is recognised at an
amount that reflects the consideration the Group expects to be entitled to, net of goods and services tax or similar taxes.

Product sales
Sales revenue is recognised using the “sales method” of accounting. The sales method results in revenue being recognised based
on volumes sold under contracts with customers, at the point in time where performance obligations are considered met. Generally,
regarding the sale of hydrocarbon products, the performance obligation will be met when the product is delivered to the specified
measurement point (gas) or point of loading/unloading (liquids).

The Group’s sales of crude oil, liquefied natural gas, ethane, condensate, LPG, and in some contractual arrangements, natural gas, are
based on market prices. In contractual arrangements with market base pricing, at the time of the delivery, there is only a minimal risk of
a change in transaction price to be allocated to the product sold. Accordingly, at the point of sale where there is not a significant risk
of revenue reversal relative to the cumulative revenue recognised, there is no constraining of variable consideration.

Where the sales price is not final at the point the performance obligations are met, any subsequent measurement of these provisionally
priced sales is not revenue from customers and has been recognised as other sales revenue.

Contract liabilities and contract assets
A contract liability for deferred revenue is recorded for obligations under sales contracts to deliver natural gas in future periods for
which payment has already been received. Where the period between when payment is received and performance obligations are
considered met, is more than 12 months, an assessment will be made for whether a significant financing component is required to
be accounted for. Deferred revenue liabilities unwind as “revenue from contracts with customers”, with reference to the performance
obligation, and if a significant financing component associated with deferred revenue exists, an interest expense will also be
recognised over the life of the contract.

On acquisition of the Lattice and Toyota Tsusho interests (refer note 26), pre-existing revenue contracts were fair valued, resulting in
contract assets and liabilities being recognised. Both the contract assets and liabilities represent the differential in contract pricing and
market price, and will be realised as performance obligations are considered met in the underlying revenue contract. To the extent a
contract asset or liability represents the fair value differential between contract price and market price, it will be unwound through “other
operating revenue or expense”.

Net contract assets and liabilities have increased by $46.0 million to $17.1 million, with $47.8 million included in other revenue, offset by
$0.5 million unwind of discount included in finance expenses and $1.3 million included in FCTR.

Annual Report 20202. Revenue from contracts with customers and other income (continued)

(a) Revenue

Crude oil(1)

Sales gas and ethane

Liquefied petroleum gas

Condensate

Gas and gas liquids

Revenue from contracts with customers

Crude oil – revaluation of provisionally priced sales

Sales Revenue(2)

Other operating revenue

Total revenue

(1) Inclusive of realised hedge settlements and premiums paid of $nil (FY19 $16.4 million).
(2) Provisionally priced oil sales revenue recorded as a receivable at 30 June 2020 totalled $89.1 million (FY19 $94.5 million).

(b) Other income

Gain on sale of joint operations interests (Note 25)

Gain on cessation/disposal of overseas operations (Note 25)

Gain on reversal of provision for onerous commitment

Gain on sale of non-current assets

Gain on derivative financial instruments

Other income related to joint venture lease recoveries

Government grants received

Foreign exchange gains

Other

Total other income

Consolidated

2020
$million

2019
$million

818.7

604.8

119.1

145.2

869.1

1,687.8

(37.5)

779.3

755.6

170.6

223.4

1,149.6

1,928.9

(3.5)

1,650.3

1,925.4

77.9

152.3

1,728.2

2,077.7

Consolidated

2020
$million

2019
$million

8.9

8.7

37.8

0.6

–

15.5

3.7

1.4

–

76.6

13.5

7.0

–

13.6

–

4.2

3.5

41.8

Beach Energy LimitedNotes to the Financial Statements

3. Expenses
The Group’s significant expenses in operating the business are described below split between cost of sales and other expenses including
impairment and corporate and other costs.

(a) Cost of sales

Operating costs

Royalties

Total operating costs

Depreciation and amortisation of petroleum assets (Note 9)

Depreciation of leased assets (Note 13)

Third party oil and gas purchases

Change in inventory

Total cost of sales

(b) Other expenses

Impairment

Impairment of exploration and evaluation assets (Note 10)

Total impairment expense

Other

Exploration expense

Loss on sale of non-current assets

Depreciation of leased assets (Note 13)

Acquisition and integration costs (Note 26)

Corporate expenses(i)

Other expenses

Total other expenses

Consolidated

2020
$million

2019
$million

401.3

124.3

525.6

427.1

17.8

93.0

(6.8)

385.1

155.9

541.0

522.6

–

139.3

4.5

1,056.7

1,207.4

Consolidated

2020
$million

2019
$million

1.6

20.7

–

3.5

–

15.2

39.4

41.0

–

0.1

–

1.6

41.9

43.6

(i) Includes depreciation of property, plant and equipment of $6.5 million (FY19 $3.9 million) as shown in Note 8, and share based payments expense of $3.3 million (FY19 $2.1 million).

Annual Report 20204. Employee benefits
Provision is made for the Group’s employee benefits liability arising from services rendered by employees to the end of the reporting
period. These benefits include wages, salaries, annual leave and long service leave. Where these benefits are expected to be settled
within 12 months of the reporting date, they are measured at the amounts expected to be paid when the liabilities are settled. Expenses
for non-vesting personal leave are recognised when the leave is taken and are measured at the rates paid or payable. Liabilities for long
service leave and annual leave that is not expected to be taken wholly before 12 months after the end of the reporting period in which
the employee rendered the related service, are recognised and measured as the present value of the estimated future cash outflows to
be made in respect of employees’ services up to the reporting date. The obligation is calculated using expected future increases in wage
and salary rates, experience of employee departures and periods of service. The estimated future payments have been discounted using
Australian corporate bond rates. The obligations are presented as current liabilities in the statement of financial position if the Group
does not have the unconditional right to defer settlement for at least 12 months after the reporting date, regardless of when the actual
settlement is expected to occur.

Superannuation commitments – Each employee nominates their own superannuation fund into which Beach contributes compulsory
superannuation amounts based on a percentage of their salary.

Termination benefits – Termination benefits may be payable when employment is terminated before the normal retirement date, without
cause, or when an employee accepts voluntary redundancy in exchange for these benefits. Beach recognises termination benefits when
it is demonstrably committed to making these payments.

Equity settled compensation
Employee Incentive Plan – The Group operates an Employee Incentive Plan, approved by shareholders. Shares are allotted to employees
under this plan at the Board’s discretion. Shares acquired by employees are funded by interest free non-recourse loans for a term of
10 years which are repayable on cessation of employment with the consolidated entity or expiry of the loan term. The fair value of the
equity to which employees become entitled is measured at grant date and recognised as an expense over the vesting period with a
corresponding increase in equity. The fair value of shares issued is determined with reference to the latest ASX share price. Rights are
valued using an appropriate valuation technique such as the Binomial or Black-Scholes Option Pricing Models which takes into account
the vesting conditions.

The following employee shares are currently on issue

Balance as at 30 June 2018

Loans repaid during 2019 financial year

Balance as at 30 June 2019

Loans repaid during 2020 financial year

Balance as at 30 June 2020

Number

3,681,658

(1,140,170)

2,541,488

(1,003,200)

1,538,288

Beach Energy LimitedNotes to the Financial Statements

No new shares were issued to employees during the financial year, pursuant to this plan.

The closing ASX share price of Beach fully paid ordinary shares at 30 June 2020 was $1.52 as compared to $1.985 as at 28 June 2019.

Employee Share Plan – A new employee share plan was approved by shareholders during the year where Employees who buy shares
under the Plan will have those shares matched by Beach, provided any relevant conditions determined by the Board are satisfied. Eligible
Employees are employees of the Group, other than a non-executive director and any other person determined by the Board as ineligible
to participate in the Plan. The Board has the discretion to set an annual limit on the value of shares that participants may purchase under
the Plan, not exceeding $5,000. Purchased Shares have been acquired periodically at the prevailing market price. Participants pay for
their Purchased Shares using their own funds which may include salary sacrifice. To receive Matched Shares, a participant must satisfy
the conditions determined by the Board at the time of the invitation. Details of shares purchased and utilised under this plan are detailed
in Note 18.

Incentive Rights – The Group operates an Executive Incentive Plan (EIP) providing both Short Term Incentives (STIs) and Long Term
Incentives (LTIs). The STI is part of ‘at risk’ remuneration offered to senior executives. It measures individual and Company performance
over a 12 month period coinciding with Beach’s financial year. It is provided in equal parts of cash and equity that may or may not vest
subject to additional retention conditions. It is offered annually to senior executives at the discretion of the Board. The LTI is an equity
based ‘at risk’ incentive plan. The LTI is intended to reward efforts and results that promote long term growth in shareholder value or total
shareholder return (TSR). LTIs are offered to senior executives at the discretion of the Board. The fair value of performance rights issued
are recognised as an employee benefits expense with a corresponding increase in equity. The fair value of the performance rights are
measured at grant date and recognised over the vesting period during which the senior executives become entitled to the performance
rights. The fair value of the STIs is measured using the Black-Scholes Option Pricing Model and the fair value of the LTIs is measured using
Monte Carlo simulation, taking into account the terms and conditions upon which these rights were issued.

Details of the key assumptions used in determining the valuation of unlisted performance rights issued during the year are outlined below.

Grant date

Vesting date

Expiry date

Share price at grant date (A$)

Exercise price (A$)

Expected volatility (average)

Vesting Period (years)

Risk free rate

Dividend yield

Number of securities issued

Fair value of security at grant date (A$)

Total fair value at grant date

2018
STI Rights

2018
LTI Rights

2019
LTI Rights

FY20

ESP(1)

19 Dec 2019

19 Dec 2019 Up to 30 Jun 2020

1 Jul 2020

1 Jul 2021

1 Dec 2021

1 Dec 2022

1 Jul 2022

n/a

2.560

Nil

n/a

0.5

n/a

0.74%

355,682

2.550

906,989

n/a

30 Nov 2023

30 Nov 2024

n/a

2.560

Nil

n/a

1.5

n/a

0.74%

355,676

2.530

899,860

2.560

Nil

41.75%

2.0

0.66%

0.74%

141,950

1.990

282,481

2.560

1.150 – 2.670

Nil

41.75%

3.0

0.80%

0.74%

Nil

n/a

2.0 – 2.9

n/a

0.75% – 1.74%

1,784,546

541,053

1.460

1.106 – 2.622

2,605,437

1,014,637

(1) Matched Share Rights under the Employee Share Plan are acquired periodically throughout the year. Details show the range of valuation inputs during the year.

Movements in unlisted performance rights are set out below:

Balance at beginning of period

Issued during the period

Forfeited during the period

Vested/Exercised during the period

Balance at end of period

Consolidated

2020
number

2019
number

7,711,875

6,623,901

3,178,907 2,766,860

(873,846)

–

(2,579,801) (1,678,886)

7,437,135

7,711,875

Annual Report 20205. Taxation
Taxation on the profit or loss for the year comprises current and deferred tax. Taxation is recognised in profit or loss except to the extent
that it relates to items recognised directly in equity or other comprehensive income.

Current tax is the expected tax payable on the taxable income for the year, using tax rates and laws enacted or substantively enacted at
the reporting date, and any adjustments to tax payable in respect of previous years.

Deferred tax is determined using the statement of financial position approach on temporary differences arising between the tax bases of
assets and liabilities and their carrying amounts in the statement of financial position. Deferred tax assets are recognised to the extent
that it is probable that future taxable profits will be available against which the temporary differences or unused tax losses and tax offsets
can be utilised.

Deferred tax is not recognised for temporary differences arising from goodwill or from the initial recognition of assets and liabilities (other
than a business combination) in a transaction that affects neither accounting profit nor taxable income.

Deferred tax assets and liabilities are measured at the tax rates that are expected to be applied when the asset is realised or the liability is
settled, based on the laws that have been enacted or substantively enacted at the reporting date.

Current and deferred tax assets and liabilities are offset when there is a legally enforceable right to offset and when the tax balances are
related to taxes levied by the same tax authority and the entity intends to settle its tax assets and liabilities on a net basis.

Petroleum Resource Rent Tax (PRRT)
PRRT is considered, for accounting purposes, to be a tax based on income. Accordingly, current and deferred PRRT expense is measured
and disclosed on the same basis as income tax.

The impact of future augmentation on expenditure is included in the determination of future taxable profits when assessing the extent to
which a deferred tax asset for PRRT can be recognised in the statement of financial position.

Australian income tax consolidation
Beach and its wholly owned Australian subsidiaries are consolidated for Australian income tax purposes with Beach responsible for
recognising the current and deferred tax assets and liabilities for the income tax consolidated group.

Beach is responsible for recognising the current tax liability, current tax assets and deferred tax assets arising from unused tax losses
and credits for the income tax consolidated group. The Group has applied the separate taxpayer approach in determining the appropriate
amount of current taxes and deferred taxes to allocate to members of the tax consolidated group.

Beach has entered into a tax sharing agreement with its wholly owned subsidiaries whereby each company in the Group contributes to
the income tax payable in proportion to their contribution to the net profit before tax of the tax consolidated group.

Goods and services tax
Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except:

– When the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST

is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and

– Receivables and payables, which are stated with the amount of GST included.

The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the
Statement of Financial Position.

Cash flows are included in the Consolidated Statement of Cash Flows on a gross basis.

Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority.

Beach Energy Limited
Notes to the Financial Statements

(a) Income tax expense
Income tax recognised in the statement of profit or loss of the Group is as follows:

Recognised in the statement of profit or loss

Current tax expense

Current year

Adjustments for prior years

Total current tax expense

Deferred tax expense

Origination and reversal of temporary differences

Adjustments for prior years

Derecognition of tax losses

Total deferred tax expense

Total income tax expense

Consolidated

2020
$million

2019
$million

173.5

(23.6)

149.9

30.0

12.4

–

42.4

192.3

242.5

(10.5)

232.0

1.7

(3.4)

2.8

1.1

233.1

(b) Numerical reconciliation between tax expense and prima facie tax expense
A reconciliation between income tax expense calculated on profit before tax to income tax expense included in the statement of profit or loss:

Accounting profit before income tax

Prima facie tax on accounting profit before tax at 30%

Adjustment to income tax expense due to:

Non-deductible expenditure

Losses of controlled foreign entities not recognised

Impact of tax rates applicable outside Australia

Derecognition of tax losses

Non assessable income

Over provision in prior years

Income tax expense reported in the Statement of Profit or Loss

Consolidated

2020
$million

2019
$million

693.1

207.9

1.5

–

(0.8)

–

(5.1)

(11.2)

192.3

810.4

243.1

0.7

2.0

(1.6)

2.8

–

(13.9)

233.1

Group

Hedging reserve

Exchange difference on translating foreign
controlled entities

2020

Tax
In Equity

–

Before
tax
amount

–

(4.9)

Net of
tax
amount

–

Before
tax
amount

14.4

2019

Tax
In Equity

(4.3)

Net of
tax
amount

10.1

(4.9)

(3.0)

–

(3.0)

Annual Report 20205. Taxation (continued)
(d) Movement in Group deferred tax balances ($million)

Current financial year

Oil & Gas Assets

Assets and Liabilities Held For Sale

Provisions

Employee benefits

Tax Losses

Inventories

Leases

Other Items

Tax assets/(liabilities) before set-off

Set-off of deferred tax assets in Australia

Net deferred tax asset/(liabilities)

Previous financial year

Oil & Gas Assets

Assets and Liabilities Held For Sale

Provisions

Employee benefits

Tax Losses

Inventories

Other Items

Tax assets/(liabilities) before set-off

Set-off of deferred tax assets in Australia

Net deferred tax asset/(liabilities)

Balance
1 July 2019

Recognised
in income

Acquired

Recognised
in OCI/
Equity

(212.6)

(20.6)

2.1

252.4

6.9

6.2

(0.8)

–

(9.5)

44.7

(2.1)

(11.3)

(1.5)

(2.4)

0.6

1.0

(6.1)

(42.4)

–

1.1

Balance
1 July 2018

Recognised
in income

Acquired

Recognised
in OCI/
Equity

(217.1)

(26.5)

0.5

232.4

5.2

–

(0.4)

2.4

23.0

–

32.0

1.2

6.2

(0.4)

(13.6)

(1.1)

31.0

1.6

(12.0)

0.5

–

6.3

27.4

–

(4.6)

(e) Deferred tax assets have not been recognised in respect of the following items:

Tax losses (capital)

Foreign tax losses (revenue)

PRRT (net of income tax)

Total

Balance
30 June
2020

(233.2)

–

Deferred
Tax Asset

7.3

–

Deferred
Tax
Liability

(240.5)

–

241.1

259.4

(18.3)

5.4

3.8

(0.2)

1.0

(14.5)

5.4

3.8

–

26.4

6.6

–

(0.2)

(25.4)

(21.1)

3.4

308.9

(305.5)

(275.3)

275.3

33.6

(30.2)

Balance
30 June
2019

(212.6)

2.1

252.4

6.9

6.2

(0.8)

(9.5)

44.7

Deferred
Tax Asset

82.0

2.1

272.2

6.9

6.2

–

11.4

380.8

(301.0)

79.8

Deferred
Tax
Liability

(294.6)

–

(19.8)

–

(0.8)

(20.9)

(336.1)

301.0

(35.1)

Consolidated

2020
$million

2019
$million

30.0

2.6

1,095.6

1,128.2

25.0

9.3

1,057.6

1,091.9

Beach Energy Limited

Notes to the Financial Statements

6. Earnings per share (EPS)
The Group presents basic and diluted EPS for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to
ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the year. Diluted EPS is
determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares for
the dilutive effect, if any, of outstanding share rights which have been issued to employees.

Earnings after tax used in the calculation of EPS is as follows:

Basic EPS and Diluted EPS

2020
$million

500.8

2019
$million

577.3

Weighted average number of ordinary shares and potential ordinary shares used in the calculation of EPS is as follows:

Basic EPS

Share rights

Diluted EPS

Calculation of EPS is as follows:

Basic earnings per share (cents per share)

Diluted earnings per share (cents per share)

2020
Number

2019
Number

2,279,909,473

2,277,720,328

5,277,121

6,436,398

2,285,186,594 2,284,156,726

21.97¢

21.92¢

25.35¢

25.28¢

1,602,015 (FY19 nil) potential ordinary shares relating to performance rights that were not considered dilutive during the period as
vesting would not have occurred based on the status of the required vesting conditions at the end of the relevant reporting period.
Accordingly, these have been excluded from the calculation of diluted EPS.

Subsequent to 30 June 2020, a further 525,479 shares were issued upon vesting of unlisted performance rights issued on
6 December 2018 and 19 December 2019 pursuant to the Beach Energy Ltd Executive Incentive Plan for the 2017 and 2018 Short Term
Incentive Offers following satisfaction of the retention condition.

Annual Report 2020Capital employed
This section details the investments made by the Group in exploring for and developing its petroleum business including inventories,
property plant and equipment, petroleum assets, joint operations, leases and any related restoration provisions as well as an assessment
of asset impairment and details of future commitments.

7. Inventories
Inventories are stated at the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary
course of business, less the estimated costs of completion and selling expenses. Cost is determined as follows:

(i) Drilling and maintenance stocks, which include plant spares, consumables, maintenance and drilling tools used for ongoing

operations, are valued at weighted average cost; and

(ii) Petroleum products, which comprise extracted crude oil, liquefied petroleum gas, condensate and naphtha stored in tanks and

pipeline systems and process sales gas and ethane stored in sub-surface reservoirs, are valued using the absorption cost method.

Petroleum products

Drilling and maintenance stocks

Less provision for obsolescence

Total current inventories at lower of cost and net realisable value

Petroleum products included above which are stated at net realisable value

Consolidated

2020
$million

2019
$million

63.4

48.0

(4.5)

106.9

22.9

66.5

41.4

(8.4)

99.5

–

8. Property, plant and equipment (PPE)
PPE is measured at cost less depreciation and impairment losses. The carrying amount of PPE is reviewed bi-annually for impairment
triggers. The cost of PPE constructed within the Group includes the cost of materials, direct labour, borrowing costs and an appropriate
proportion of fixed and variable overheads. Subsequent costs are included in the asset’s carrying amount or recognised as a separate
asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the
cost of the item can be measured reliably. All other repairs and maintenance are charged to the profit or loss during the financial period
in which they are incurred. The assets residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount and are included in the profit or loss.

The depreciable amount of all PPE is depreciated using a straight line basis over their useful lives commencing from the time the asset is
held ready for use. The depreciation rates used in the current and previous period for each class of depreciable asset are between 4–33%.

Property, plant and equipment

Plant and equipment

Plant and equipment under construction

Less accumulated depreciation

Total property, plant and equipment

Reconciliation of movement in property, plant and equipment:

Balance at beginning of financial year

Additions

Depreciation expense

Disposals

Total property, plant and equipment

Consolidated

2020
$million

2019
$million

47.6

7.1

(20.5)

34.2

26.8

13.9

(6.5)

–

34.2

33.3

7.5

(14.0)

26.8

5.5

25.5

(3.9)

(0.3)

26.8

Beach Energy LimitedNotes to the Financial Statements

9. Petroleum assets
Petroleum assets are stated at cost less accumulated depreciation and impairment charges. They include initial cost, with an appropriate
proportion of fixed and variable overheads, to acquire, construct, install or complete production and infrastructure facilities such as
pipelines and platforms, capitalised borrowing costs, transferred exploration and evaluation assets and development wells. Subsequent
capital costs, including major maintenance, are included in the asset’s carrying amount only when it is probable that future economic
benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The depreciable amount of all
onshore production facilities, field and other equipment excluding freehold land is depreciated using a straight line basis over the lesser
of their useful lives and the life of proved and probable reserves commencing from the time the asset is held ready for use. Offshore
production facilities and field equipment are depreciated based on a units of production method using proved and probable reserves. The
depreciation rates used in the current and previous period for each class of depreciable asset are 3–67% for onshore production facilities,
field and other equipment.

Subsurface assets are amortised using the units of production method over the life of the area according to the rate of depletion of the
proved and probable reserves. Retention of petroleum licences is subject to meeting certain work obligations/commitments as detailed in
Note 14. The assets residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date. Gains and losses on
disposals are determined by comparing proceeds with the carrying amount and are included in the profit or loss.

Estimates of reserve quantities
The estimated quantities of proved and probable hydrocarbon reserves reported by the Group are integral to the calculation of
amortisation (depletion), depreciation expense and to assessments of possible impairment or impairment reversal. Estimated reserve
quantities are based upon interpretations of geological and geophysical models and assessment of the technical feasibility and
commercial viability of producing the reserves. Beach prepares its petroleum reserves estimates in accordance with the Petroleum
Resources Management System (PRMS 2018) published by the Society of Petroleum Engineers. All estimates of petroleum reserves
reported by Beach are prepared by, or under the supervision of, a qualified petroleum reserves and resources evaluator. To ensure
the integrity and reliability of data used in the reserves estimation process, the raw data is reviewed and quality controlled by senior
professional staff at Beach. During each petroleum reserves review, this data is updated, analysed and checked against the previous
year’s data. These assessments require assumptions to be made regarding future development and production costs, commodity prices,
exchange rates and fiscal regimes. Approximately three quarters of Beach’s 2P (developed and undeveloped) Reserves at 30 June
2020 have been independently audited by RISC Advisory in accordance with Beach’s reserves policy. Estimates of reserves may change
from period to period as the economic assumptions used to estimate the reserves can change from period to period, and as additional
geological data is generated during the course of operations. Estimates are reviewed annually or when there are significant changes in
the circumstances impacting specific assets or asset groups. These changes may impact depreciation, asset carrying values, restoration
provisions and deferred tax balances. If proved and probable reserves estimates are revised downwards, earnings could be affected by
higher depreciation expense or an immediate write-down of the asset’s carrying value.

Field land and buildings

Land and buildings at cost

Less accumulated depreciation

Total land and buildings

Reconciliation of movement in field land and buildings:

Balance at beginning of financial year

Additions

Depreciation expense

Foreign exchange movement

Total field land and buildings

Production facilities and field equipment

Production facilities and field equipment under construction

Less accumulated depreciation

Total production facilities and field equipment

Consolidated

2020
$million

2019
$million

74.8

(20.0)

54.8

51.2

5.3

(1.4)

(0.3)

54.8

85.7

(34.5)

51.2

60.6

–

(10.0)

0.6

51.2

1,918.7

146.9

1,814.7

125.9

(898.8)

(851.8)

1,166.8

1,088.8

Annual Report 20209. Petroleum assets (continued)

Reconciliation of movement in production facilities, field and other equipment:

Balance at beginning of financial year

Additions

Acquisition of subsidiaries and joint operation interests(1)

Reclassification to assets held for sale (Note 25)

Transfer from exploration and evaluation assets

Depreciation expense

Disposals

Foreign exchange movement

Total production facilities and field equipment

Subsurface assets

Subsurface assets at cost

Subsurface assets under construction

Less accumulated depreciation

Total subsurface assets

Reconciliation of movement in subsurface assets

Balance at beginning of financial year

Additions

Acquisition of subsidiaries and joint operation interests(1)

Increase/(decrease) in restoration

Transfer from exploration and evaluation assets

Reclassification to assets held for sale (Note 25)

Borrowing costs capitalised

Foreign exchange movement

Amortisation expense

Disposals

Capitalised depreciation of lease assets

Total subsurface assets

Total petroleum assets

Consolidated

2020
$million

2019
$million

1,088.8

1,261.5

150.4

–

(67.5)

–

(4.9)

75.3

(53.3)

(3.9)

6.8

(77.6)

(127.3)

7.3

1,166.8

1,088.8

3,229.3

522.5

3,013.2

306.8

(1,986.9)

(1,733.3)

1,764.9

1,586.7

1,388.1

436.1

–

(32.5)

102.6

–

6.1

0.5

274.7

234.3

144.1

140.6

(1.3)

18.1

(0.1)

(358.2)

(435.0)

(0.4)

24.0

1,764.9

2,986.5

(176.8)

–

1,586.7

2,726.7

(1) Acquisitions of petroleum assets represent adjustments made in the previous financial year to the provisional purchase price accounting for the acquisition of the Lattice and Toyota interests booked in

FY18 as detailed in note 26.

Beach Energy LimitedNotes to the Financial Statements

The carrying amounts of petroleum assets are assessed half
yearly to determine whether there is an indication of impairment
or impairment reversal for those assets which have previously
been impaired. Indicators of impairment and impairment reversals
include changes in future selling prices, future costs and reserves.
When assessing potential indicators of impairment or reversals
the Group models scenarios and a range of possible future
commodity prices is considered. If any such indication exists,
the asset’s recoverable amount is estimated. Petroleum assets
are assessed for impairment indicators on a cash generating unit
(CGU) basis. Following review of interdependencies between
the various operations within the Group, it has been determined
that the operational CGUs are Cooper Basin, Perth Basin, Victoria
Otway, South Australia Otway, BassGas and Kupe. Where the
carrying value of a CGU includes goodwill, the recoverable
amount of the CGU is estimated regardless of whether there is an
indicator of impairment or not.

The recoverable amount of an asset or CGU is determined as
the higher of its value in use and fair value less costs of disposal.
Value in use is determined by estimating future cash flows after
taking into account the risks specific to the asset and discounting
it to its present value using an appropriate discount rate. If the
carrying amount of an asset or CGU exceeds its recoverable
amount, the asset or CGU is written down and an impairment
loss is recognised in the statement of profit or loss. For assets
previously impaired, if the recoverable amount exceeds the
carrying amount and the indicators driving the increase in value
are sustained for a period of time, the impairment loss is reversed,
except in relation to goodwill. The carrying amount of the asset
or CGU is increased to the revised estimate of its recoverable
amount, but only to the extent that the asset’s carrying amount
does not exceed the carrying amount that would have been
determined, net of depreciation or amortisation, if no impairment
loss had been recognised.

Future cash flow information used for the value in use calculation
is based on the Group’s latest reserves, budget, five-year plan
and project economic plans. The South Australia Otway has
been included as a producing CGU for the first time in FY20
with the Katnook plant commissioned and commencement of
production in H2 FY20 through the Haselgrove 3 field. As the SA
Otway is currently still in the growth phase of its life cycle with
the commissioning of the Katnook gas plant in early CY2020,
which was constructed to facilitate the processing of gas across
a number of fields, a conservative view of additional resources
for other wells and their development costs has been included
into the NPV calculation and assessed against a carrying value
including additional exploration transfers to development for
these further assumed resource conversions.

Impairment and impairment reversal indicator modelling
In determining whether there is an indicator of impairment,
in the absence of quoted market prices, estimates are made
regarding the present value of future cash flows for each CGU.
These estimates require significant management judgement
and are subject to risk and uncertainty, and hence changes in
economic conditions can also affect the assumptions used and
the rates used to discount future cash flow estimates. Current
climate change legislation is also factored into the calculation
and future uncertainty around climate change risks continue to
be monitored. These risks may include a proportion of a CGU’s
reserves becoming incapable of extraction in an economically
viable fashion; demand for the Group’s products decreasing, due
to policy, regulatory (including carbon pricing mechanisms), legal,
technological, market or societal responses to climate change and
physical impacts related to acute risks resulting from increased
severity of extreme weather events, and those related to chronic
risks resulting from longer-term changes in climate patterns.
In most cases, the present value of future cash flows is most
sensitive to the assumptions outlined below. Notwithstanding
that there is currently no price on carbon in Australia, the Group
has further assessed the carrying value of its producing assets in
Australia against NPVs including a carbon pricing slope ranging
from $25/tCO2e and increasing to A$50/tCO2e by 2040 (real)
which would also not result in any impairment being required
as at 30 June 2020 had this been in place. The present value
of future cash flows for each CGU were estimated using the
assumptions below with reference to external market forecasts
at least bi-annually. The assumptions applied have regard to
contracted prices and observable market data including forward
values and external market analyst’s forecasts.

For the current financial year, the following assumptions were
used in the assessment of the CGU’s recoverable amounts:

– Brent oil price (real) of US$41.25/bbl in FY21, US$52.50/bbl

for FY22 and US$60/bbl for FY23 and beyond.
– A$/US$ exchange rate of 0.70 for FY21 and beyond
– Post-tax real discount rate of 7%.

For impairment reversals, the present value of future cash flows
are considered using lower oil price scenarios based on a Monte-
Carlo simulation of Reuters Mean and a 10% reduction in life of
asset production, assuming production loss under a long-term
oil-price constrained environment.

No impairment or impairment reversal were required in the
current year.

Refer to the Basis of Preparation for further details on the financial
impacts of COVID-19 on impairment assessments.

Annual Report 202010. Exploration and evaluation assets
Expenditure on exploration and evaluation is accounted for in accordance with the area of interest method. Areas of interest are based
on a geological area. These costs are only carried forward to the extent that they are expected to be recouped through the successful
development or sale of the area or where activities in the area have not yet reached a stage that permits reasonable assessment of
the existence of proved and probable hydrocarbon reserves and where the rights to tenure of the area of interest are current. The costs
of acquiring interests in new exploration and evaluation licences are capitalised. The costs of drilling exploration wells are initially
capitalised pending the results of the well. Costs are expensed where the well does not result in the successful discovery of economically
recoverable hydrocarbons and the recognition of an area of interest. Subsequent to the recognition of an area of interest, all further
evaluation costs relating to that area of interest are capitalised. Upon approval for the commercial development of an area of interest,
accumulated expenditure for the area of interest is transferred to petroleum assets.

Area of interest
An area of interest (AOI) is defined by Beach as an area defined by major geological structural elements that has a discrete exploration
strategy and has largely independent costs for exploration and evaluation from other geological areas.

Impairment of exploration and evaluation assets
The recoverability of the carrying amount of the exploration and evaluation assets is dependent on successful development and
commercial exploitation, or alternatively, sale of the respective AOI. Each potential or recognised AOI is reviewed half-yearly to
determine whether economic quantities of reserves have been found or whether further exploration and evaluation work is underway or
planned to support continued carry forward of capitalised costs. Where a potential impairment is indicated, assessment is performed
using a fair value less costs to dispose method to determine the recoverable amount for each AOI to which the exploration and evaluation
expenditure is attributed.

This assessment requires management to make certain estimates and apply judgement in determining assumptions as to future events
and circumstances, in particular, the assessment of whether economic quantities of reserves have been found. Any such estimates
and assumptions may change as new information becomes available. If, after having capitalised expenditure under the policy, the
Group concludes that it is unlikely to recover the expenditure by future exploitation or sale, then the relevant capitalised amount will be
written off to the statement of profit or loss. Retention of exploration assets is subject to meeting certain work obligations/exploration
commitments as detailed in Note 14.

Government grants received in relation to the drilling of exploration wells are recognised as a reduction in the carrying value of the
exploration permit as expenditure is incurred.

Refer to the Basis of Preparation for further details on the financial impacts of COVID-19 on impairment assessments.

Exploration and evaluation assets at beginning of financial year

Additions

Increase/(decrease) in restoration

Acquisition of subsidiaries and joint operation interests (Note 26)

Transfer to petroleum assets

Reclassification to assets held for sale (Note 25)

Impairment of exploration and evaluation assets

Exploration and evaluation expenditure expensed

Disposal of joint operation interests

Borrowing costs capitalised

Foreign exchange movement

Capitalised depreciation of lease assets

Total exploration and evaluation assets

Consolidated

2020
$million

355.3

231.5

(9.5)

0.1

2019
$million

478.9

102.6

17.0

1.9

(102.6)

(147.4)

–

(1.6)

(20.7)

(2.2)

0.4

0.3

11.4

(1.5)

–

(99.7)

3.5

–

462.4

355.3

Beach Energy LimitedNotes to the Financial Statements

11. Interests in joint operations
Exploration and production activities are conducted through joint arrangements governed by joint operating agreements, production
sharing contracts or similar contractual relationships. A joint operation involves the joint control, and often the joint ownership, of one or
more assets contributed to, or acquired for the purpose of the joint operation and dedicated to the purposes of the joint operation. The
assets are used to obtain benefits for the parties to the joint operation. Each party may take a share of the output from the assets and
each bears an agreed share of expenses incurred. Each party has control over its share of future economic benefits through its share of
the joint operation. The interests of the Group in joint operations are brought to account by recognising in the financial statements the
Group’s share of jointly controlled assets, share of expenses and liabilities incurred, and the income from the sale or use of its share of
the production of the joint operation in accordance with the Group’s revenue policy.

Accounting for interests in other entities
Judgement is required in assessing the level of control obtained in a transaction to acquire an interest in another entity; depending
upon the facts and circumstances in each case, Beach may obtain control, joint control or significant influence over the entity or
arrangement. Judgement is applied when determining the relevant activities of a project and if joint control is held over them. Relevant
activities include, but are not limited to, work program and budget approval, investment decision approval, voting rights in joint operating
committees, amendments to permits and changes to joint arrangement participant holdings. Transactions which give Beach control of a
business are business combinations.

If Beach obtains joint control of an arrangement, judgement is also required to assess whether the arrangement is a joint operation or a
joint venture. If Beach has neither control nor joint control, it may be positioned to exercise significant influence over the entity, which is
then accounted for as an associate.

The Group has a direct interest in a number of unincorporated joint operations with those significant joint operation interests shown below.

Joint Operation

Oil and Gas interests

Australia

Cooper Basin (South Australia)

Ex PEL 92 (PRLs 85–104)

Ex PEL 104 (PRLs 15,136–141)

Ex PEL 513 (PRLs 191–206)

Ex PEL 632 (PRLs 131–134)

PEL 630

SA Fixed Factor Area

SA Unit

Cooper Basin (Queensland)

Naccowlah Block

ATP 299 (Tintaburra)

Total 66 Block

SWQ Unit

Otway Basin (Victoria/Tasmania)

Otway Gas Project

Bass Basin (Tasmania)

BassGas Project

Perth Basin (Western Australia)

Beharra Springs

Waitsia Gas Project

International

Taranaki Basin (New Zealand)

Kupe Gas Project

Principal activities

% interest

2020

2019

Oil production

Gas production and exploration

Oil and gas exploration

Oil and gas production

Oil production

Gas production

75.0

40.0

50.0

33.4

38.5

40.0

30.0

39.9

75.0

40.0

50.0

33.4

38.5

40.0

30.0

39.9

60.0

53.8

50.0

67.0

50.0

Gas production

50.0

Details of commitments for expenditure and contingent liabilities incorporating the Group’s interests in joint operations are shown in
Notes 14 and 28 respectively.

Annual Report 202012. Provisions
A provision for rehabilitation and restoration is provided by
the Group where there is a present obligation as a result of
exploration, development, production, transportation or storage
activities having been undertaken, and it is probable that an outflow
of economic benefits will be required to settle the obligation.
The estimated future obligations include the costs of removing
facilities, abandoning wells and restoring the affected areas
once petroleum reserves are exhausted. Restoration liabilities
are discounted to present value and capitalised as a component
part of petroleum assets and exploration and evaluation assets.
The capitalised costs are amortised over the life of the petroleum
assets and the provision revised at the end of each reporting
period through the profit or loss as the discounting of the liability
unwinds. The unwinding of discounting on the provision is
recognised as a finance cost.

Estimate of restoration costs
The Group holds provisions for the future removal costs of offshore
and onshore oil and gas platforms, production facilities and
pipelines at different stages of the development, construction and
end of their economic lives. Most of these decommissioning events
are many years in the future and the precise requirements that
will have to be met when the removal event occurs are uncertain.
Decommissioning technologies and costs are constantly changing,
as are political, environmental, safety and public expectations. The
timing and amounts of future cash flows are subject to significant
uncertainty and estimation is required in determining the amounts
of provisions to be recognised. Any changes in the expected future
costs are reflected in both the provision and the asset.

The provision for environmental liabilities represents the Group’s
best estimate based on current industry practice, current
regulations, technology, price levels and expected plans for end of
life remediation.

Within Beach’s provision the following costs have been provided:

– For offshore assets provision has been made for installation
of permanent well barriers, sever casings and conductors,
recovery of nearshore subsea flowlines, umbilicals and
manifolds, platform preparation, jacket and topside
removal, cutting of piles, removal and disposal of recovered
components. It is currently the Group’s intention to leave all
subsea piles in-situ.

– For onshore assets provision has been made for demolition
and removal of facilities, removal of aboveground pipelines
and services, flush and clean and leave in-situ below ground
pipelines, removal of contaminated soil, site contouring
and revegetation.

– For non-operated joint venture assets, the provision recorded
represents the Group’s share of the relevant Joint Venture
operator estimate as responsibility for the restoration will reside
with the operator who has the best knowledge and understanding
of the assets. The Group regularly assesses the operator
estimates with the assistance of Group appointed experts.

Actual costs and cash outflows can differ from current estimates
because of changes in laws and regulations, public expectations,
prices, discovery and analysis of site conditions and changes in
clean-up technology. The timing and amount of future expenditures
relating to decommissioning and environmental liabilities
are reviewed annually, together with the interest rate used in
discounting the cash flows. The interest rates used to determine
the balance sheet obligations at 30 June 2020 were within the
range 0.3% to 1.5% (2019 within the range 0.9% to 1.8%), and
were based on applicable government bonds with a tenure aligned
to the tenure of the liability. Given the continuing fall in the long
term bond rates and the current lack of correlation between long
term inflation rate forecasts and nominal long term bond rates,
management have revised their inflation rates to reflect the lower
long term bond rates in the current environment.

Changes in assumptions in relation to the Group’s provisions
could result in a material change in their carrying amounts within
the next financial year. A 0.5% change in the nominal discount
rate or inflation rate could have an impact of approximately
$60 million on the value of the Group’s provisions. The impact
on the Group income statement would not be significant as the
majority of the Group’s provisions relate to decommissioning
costs with adjustments recorded against the carrying value of the
Group’s assets.

100

Beach Energy LimitedNotes to the Financial Statements

Estimate of employee entitlements
Annual and long service leave is measured at the present value of benefits accumulated up to the end of the reporting period. The liability
is discounted using an appropriate discount rate. Management requires judgement to determine key assumptions used in the calculation
including future increases in salaries and wages, future on-cost rates and future settlement dates of employees’ departures.

Current

Employee entitlements

Restoration

Total

Non-Current

Employee entitlements

Restoration

Total

Movement in the Group’s provisions are set out below:

Balance at 1 July 2019

Provision made or reversed during the year

Provision paid/used during the year

Unwind of discount

Disposals

Foreign exchange movements

Balance at 30 June 2020

Consolidated

2020
$million

2019
$million

16.9

14.0

30.9

1.0

797.9

798.9

13.6

11.8

25.4

2.2

840.6

842.8

Restoration
$million

Employee
entitlements
$million

852.4

(42.0)

(1.9)

11.9

(6.6)

(1.9)

15.8

7.7

(5.6)

–

811.9

17.9

101

Annual Report 2020At the commencement date of the lease, the Group recognises
lease liabilities measured at the present value of lease payments
to be made over the lease term. In calculating the present value
of lease payments, the lease payments are discounted using
the interest rate implicit in the lease. If that rate cannot be
readily determined, which is generally the case for leases in the
Group, the Group’s incremental borrowing rate is used, being
the rate that the Group would have to pay to borrow the funds
necessary to obtain an asset of similar value to the lease asset in
a similar economic environment with similar terms, security and
conditions. After the commencement date, the amount of lease
liabilities is increased by the interest cost and reduced for the
lease payments made. In addition, the carrying amount of lease
liabilities is remeasured if there is a modification, a change in the
lease term, a change in the in-substance fixed lease payments
or a change in the assessment to purchase the underlying asset.
Lease liabilities include the net present value of the following
lease payments:

– Fixed payments (including in-substance fixed payments), less

any lease incentives receivable;

– Variable lease payment that are based on an index or a
rate, initially measured using the index or rate as at the
commencement date;

– Amounts expected to be payable by the Group under residual

value guarantees;

– The exercise price of a purchase option if the Group is

reasonably certain to exercise that option;

– Lease payments to be made under reasonably certain

extension options; and

– Payments of penalties for terminating the lease, if the lease

term reflects the Group exercising that option.

The Group is exposed to potential future increases in variable
lease payments based on an index or rate, which are not included
in the lease liability until they take effect. When adjustments to
lease payments based on an index or rate take effect, the lease
liability is reassessed and adjusted against the lease asset.

13. Leases
The Group has adopted AASB 16 on 1 July 2019. Refer to Note 27
for lease transition disclosures.

Recognition and measurement as a lessee
From 1 July 2019, leases are recognised as a lease asset and
a corresponding liability at the date at which the leased asset
is available for use by the Group. A lease is a contract (i.e., an
agreement between two or more parties that creates enforceable
rights and obligations), or part of a contract, that conveys
the right to use an asset for a period of time in exchange for
consideration. To be a lease, a contract must convey the right
to control the use of an identified asset. Contracts may contain
both lease and non-lease components. The Group allocates
the consideration in the contract to the lease and non-lease
components based on their relative stand-alone prices. The Group
has lease contracts for various items of plant, machinery, vehicles,
buildings and other equipment used in its operations. The Group
has several lease contracts that include extension and termination
options. These options are negotiated by management to provide
flexibility in managing the leased-asset portfolio and align with
the Group’s business needs. Management exercises significant
judgement in determining whether these extension and
termination options are reasonably certain to be exercised.

Lease assets are measured at cost, less any accumulated
depreciation, and adjusted for any remeasurement of lease
liabilities and for impairment losses, assessed in accordance
with the Group’s impairment policies. The cost of lease assets
includes the amount of lease liabilities recognised, initial direct
costs incurred, and lease payments made at or before the
commencement date less any lease incentives received. The
recognised lease assets are depreciated on a straight-line basis
over the shorter of its estimated useful life and the lease term.
Contracts may contain both lease and non-lease components.
The Group allocates the consideration in the contract to the
lease and non-lease components based on their relative stand-
alone prices. Judgement is required to determine the Group’s
rights and obligations for lease contracts within joint operations,
to assess whether lease liabilities are recognised gross (100%)
or in proportion to the Group’s participating interest in the
joint operation. This includes an evaluation of whether the
lease arrangement contains a sublease with the joint operation.
Instances where the payments regarding a lease contract are
part of a joint operations and the Group is the responsible
party for payment, the Group recognises the full lease liability,
and recognises other income for the portion of payment that
is recovered through other parties within the joint venture
arrangement.

102

Beach Energy LimitedNotes to the Financial Statements

Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period to
produce a constant periodic rate of interest on the remaining balance of the liability for each period. Instances where the underlying
costs regarding a lease contract would previously have been capitalised, the depreciation on the lease asset is capitalised. The Group
capitalisation of depreciation is $35m. Payments associated with short-term leases and all leases of assets considered to be of low value
are recognised on a straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less.

Set out below are the carrying amounts of lease assets recognised and the movements during the period:

Balance at transition

Additions

Lease remeasurement

Depreciation expense(i)

Total

Consolidated

2020
$million

2019
$million

96.8

30.1

(11.5)

(56.7)

58.7

–

(i) Instances where the underlying costs regarding a lease contract would previously have been capitalised, the depreciation on the lease asset is capitalised. The Group capitalisation of depreciation is $35.4m.

Set out below are the carrying amounts of lease liabilities and the movements during the period:

Balance at transition

Additions

Repayments(ii)

Lease remeasurement

Accretion of interest

Foreign exchange movements

Total

Current

Non-current

Consolidated

2020
$million

2019
$million

96.8

30.1

(57.6)

(11.5)

3.4

0.9

62.1

26.8

35.3

–

(ii) Instances where the payments regarding a lease contract are part of a joint arrangement and the Group is the responsible party for payment, the Group recognises the full lease liability, and recognises other

income for the portion of payment that is recovered through other parties within the joint venture arrangement. The Group recognised $15.5m of other income relating to joint venture recoveries.

Payments of $35 million for short-term leases (lease term of 12 months or less) and payments of $6 million for leases of low value assets
were expensed in the consolidated income statement for the year ended 30 June 2020.

Other income associated with lease arrangements
Where it has been determined that the Group directs the use of the leased asset, and is the only party with legal obligation to pay the
lessor, the Group recognises other income for any amount of the lease payments that are recoverable from other parties, representing
“other income related to joint venture lease recoveries” in other income. For the year ending 30 June 2020, the amount recognised
was $15.5 million.

103

Annual Report 202014. Commitments for expenditure

Capital Commitments

The Group has contracted the following amounts for capital expenditure at the end of the reporting period for
which no amounts have been provided for in the financial statements.

Due within 1 year

Due within 1–5 years

Due later than 5 years

Minimum Exploration Commitments

The Group is required to meet minimum expenditure requirements of various government regulatory bodies
and joint arrangements. These obligations may be subject to renegotiation, may be farmed out or may be
relinquished and have not been provided for in the financial statements.

Due within 1 year

Due within 1–5 years

Due later than 5 years

Consolidated

2020
$million

2019
$million

48.6

–

48.6

25.4

51.5

4.1

81.0

116.7

0.6

–

117.3

19.9

36.2

5.7

61.8

Default on permit commitments by other joint arrangement participants could increase the Group’s expenditure commitments over the
forthcoming 5 year period and/or result in relinquishment of tenements. Any increase in the Group’s commitments that arises from a
default by a joint arrangement party would be accompanied by a proportionate increase in the Group’s equity in the tenement concerned.

Lease Commitments
The Group has contracted the following amounts for lease commitments at the end of the reporting period for which no amounts have
been provided for in the financial statements.

Due within 1 year

Due within 1–5 years

Due later than 5 years

Consolidated

2020
$million

14.7

–

14.7

2019
$million

28.8

24.2

11.3

64.3

Refer to note 27 for a reconciliation of the Group’s lease commitments at 30 June 2019 to the transition lease liabilities recognised at
1 July 2019.

The Group’s share of the above commitments that relate to its interest in joint arrangements are $43.8 million (FY19 $109.1 million) for
capital commitments, $80.6 million (FY19 $57.3 million) for minimum exploration commitments, and $14.7 million (FY19 $38.0 million)
for lease commitments.

104

Beach Energy LimitedNotes to the Financial Statements

Financial and risk management
This section provides details on the Group’s debt and related financing costs, interest income, cash flows and the fair values of items in the
Group’s statement of financial position. It also provides details of the Group’s market, credit and liquidity risks and how they are managed.

15. Finances and borrowings
Borrowings are recognised initially at fair value, net of directly attributable transaction costs incurred. Subsequent to initial recognition,
borrowings are stated at amortised cost with any difference between cost and redemption being recognised in the profit or loss over
the period of the borrowings on an effective interest basis. Transaction costs are amortised on a straight line basis over the term of the
facility. The unwinding of present value discounting on debt and provisions is also recognised as a finance cost.

Borrowing costs relating to major oil and gas assets under development are capitalised as a component of the cost of development.
Where funds are borrowed specifically for qualifying projects, the actual borrowing costs incurred are capitalised. Where the projects
are funded through general borrowings, the borrowing costs are capitalised based on the weighted average cost of borrowing. Borrowing
costs incurred after commencement of commercial operations are expensed to the income statement.

Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least
12 months after the end of the reporting period. Interest income is recognised in the profit or loss as it accrues using the effective interest
method and if not received at balance date, is reflected in the balance sheet as a receivable.

Net finance expenses/(income)

Finance costs

Interest expense

Discount unwinding on net present value assets and liabilities

Finance costs associated with lease liabilities

Less borrowing costs capitalised

Total finance expenses

Interest income

Net finance expenses

Non-current Borrowings

Bank debt

Less debt issuance costs(1)

Total non-current borrowings

Consolidated

2020
$million

2019
$million

6.0

0.7

12.4

3.4

(6.5)

16.0

(2.0)

14.0

60.0

(3.3)

56.7

21.7

21.2

40.7

–

(21.6)

62.0

(3.9)

58.1

–

(1) Unamortised costs relating to the Syndicated Debt Facility were reclassified to other current and non-current assets in FY19.

On 23 November 2017, Beach executed a Syndicated Debt Facility Agreement for a $1,475 million Senior Secured Debt Facility in order to
fund the acquisition of Lattice. The facility is comprised of a $475 million three year term debt facility (Facility A), $475 million five year
term debt facility (Facility B), $450 million five year revolving debt facility (Facility C), and $75 million Letter of Credit facility (Facility D).
During FY19, Beach voluntarily prepaid and cancelled the Facility A and Facility B commitments of $950 million.

As at 30 June 2020, $60 million of Facility C was drawn with $390 million remaining undrawn, and $71.5 million of Facility D being
utilised predominantly by way of bank guarantees. Bank debt bears interest at the relevant reference rate plus a margin, with the effective
interest rate in FY20 of 2.06% (FY19 3.79%).

105

Annual Report 202016. Cash flow reconciliation
For the purpose of the statement of cash flows, cash and cash equivalents includes cash on hand, cash at bank, term deposits with banks,
and highly liquid investments in money market instruments, net of outstanding bank overdrafts subject to them being an insignificant risk
of change in value and a short term maturity.

(a) Reconciliation of cash and cash equivalents

Cash at bank

Cash and cash equivalents

(b) Reconciliation of net profit to net cash provided by operating activities

Net profit after tax

Less items classified as investing/financing activities:

– (Gain)/loss on disposal of non-current assets

– Gain on sale of joint operation interests

– Recognition of deferred tax assets/(liability) on items direct in equity

Add/(less) non-cash items:

– Share based payments

– Depreciation and amortisation

– Impairment expense

– Exploration expense

– Foreign exchange loss/(gain)

– Discount unwinding on provision for restoration

– Provision for stock obsolescence movement

– Gain on reversal of provision for onerous commitment

– Gain on cessation of overseas operations

– Capitalised borrowing costs

– Amortisation of borrowing costs

– Other

Consolidated

2020
$million

2019
$million

109.9

171.9

500.8

577.3

(0.6)

(8.9)

0.8

0.1

(13.5)

(4.4)

492.1

559.5

3.3

454.8

1.6

20.7

1.0

11.9

4.2

(37.8)

(8.7)

(6.5)

2.7

–

2.1

526.5

–

(0.3)

22.7

(13.8)

–

(7.0)

(21.6)

18.3

(3.5)

Net cash provided by operating activities before changes in assets and liabilities

939.3

1,082.9

Changes in assets and liabilities net of acquisitions/disposal of subsidiaries:

– Decrease/(increase) in trade and other receivables

– Decrease/(increase) in inventories

– Decrease/(increase) in other current assets

– Decrease/(increase) in other non-current assets

– Decrease/(increase) in deferred tax assets(1)

– Increase/(decrease) in provisions

– Increase/(decrease) in current tax liability

– Increase/(decrease) in deferred tax liability(1)

– Increase/(decrease) in trade and other payables

– Increase/(decrease) in net derivatives

– Increase/(decrease) in net contract liabilities

Net cash provided by operating activities

(1) Includes reclassification of FY19 acquisition balances.

106

61.7

(11.6)

(39.3)

(18.6)

46.1

(0.4)

(114.9)

(4.9)

63.9

–

(47.4)

873.9

(9.7)

6.4

(15.3)

1.0

(10.8)

(22.5)

101.2

16.0

9.1

(13.6)

(106.5)

1,038.2

Beach Energy LimitedNotes to the Financial Statements

Opening Balance

Financing cash flows(1)

Non-cash changes

Closing Balance

Consolidated

2020
$million

2019
$million

–

925.7

60.0

(3.3)

56.7

(950.0)

24.3

–

(1) Financing cash flows consist of the net amount of proceeds from borrowing ($225 million) and repayments of borrowings ($165 million) in the statement of cash flows.

17. Financial risk management
The Group’s activities expose it to a variety of financial risks including currency, commodity, interest rate, credit and liquidity risk.
Management identifies and evaluates all financial risks and may enter into financial risk instruments such as foreign exchange contracts,
commodity contracts and interest rate swaps to hedge certain risk exposures and minimise potential adverse effects of these risk
exposures in accordance with the Group’s financial risk management policy as approved by the Board. The Group does not trade in
derivative financial instruments for speculative purposes.

The Board actively reviews all financial risks and any hedging on a regular basis with updates provided to the Board from independent
consultants/banking analysts to keep them fully informed of the current status of the financial markets. Reports providing detailed
analysis of any hedging in place are monitored against the Group’s financial risk management policy on a regular basis.

The Group classifies its financial instruments in the following categories: financial assets at amortised cost, financial assets at fair
value through profit or loss (FVTPL), financial assets at fair value through other comprehensive income (FVOCI), financial liabilities at
amortised cost and derivative instruments. The classification depends on the purpose for which the financial instruments were acquired,
which is determined at initial recognition based upon the business model of the Group and the characteristics of the contractual cash
flows of the instrument.

With the exception of trade receivables, the Group initially measures a financial asset at its fair value plus, in the case of a financial asset not
at fair value through profit or loss, transaction costs. Trade receivables are measured at the transaction price determined under AASB 15.

Financial assets at amortised cost: A financial asset is classified in this category if the asset is held with the objective of collecting
contractual cash flows and the contractual terms give rise on specified dates to cash flows that are solely payments of principal and
interest. These assets are subsequently measured using the effective interest (EIR) method and are subject to impairment. Gains and
losses are recognised in profit or loss when the asset is derecognised, modified or impaired.

Financial assets at fair value through other comprehensive income: A financial asset is classified in this category if it relates to debt
securities where the contractual cash flows are solely principal and interest and the objective of the Group’s business model is achieved
both by collecting contractual cash flows and selling financial assets. Upon disposal, any balance within the OCI reserve for these debt
investments is reclassified to the statement of profit or loss.

Financial assets at fair value through profit or loss: A financial asset is classified in this category if it is held for trading, designated upon
initial recognition at fair value through profit or loss, or mandatorily required to be measured at fair value. Financial assets are classified
as held for trading if they are acquired for the purpose of selling or repurchasing in the near term. Derivatives are also classified as held
for trading unless they are designated as effective hedging instruments. Financial assets with cash flows that are not solely payments of
principal and interest are classified and measured at fair value through profit or loss, irrespective of the business model. A financial asset
is classified in this category if acquired principally for the purpose of selling in the near term. Realised and unrealised gains and losses
arising from changes in the fair value of these assets are included in profit or loss in the period in which they arise.

Financial liabilities: On initial recognition, the Group measures a financial liability at its fair value minus, in the case of a financial liability
not at fair value through profit or loss, transaction costs that are directly attributable to the issue of the financial liability. After initial
recognition, these financial liabilities are stated at amortised cost. Policies for the recognition and subsequent measurement of derivative
liabilities are as outlined below.

Derivative instruments: Derivative financial instruments entered into by the Group for the purpose of managing its exposures to market
risks arising in the normal course of business have been assessed for hedge accounting. The principal derivatives that may be used are
commodity derivatives, forward foreign exchange contracts and interest rate swaps. The use of derivative financial instruments is subject
to a set of policies, procedures and limits approved by the Board of Directors. The Group does not trade in derivative financial instruments
for speculative purposes.

107

Annual Report 202017. Financial risk management (continued)
(a) Fair values
Certain assets and liabilities of the Group are recognised in the statement of financial position at their fair value in accordance with
accounting standard AASB 13 Fair Value Measurement. The methods used in estimating fair value are made according to how the
available information to value the asset or liability fits with the following fair value hierarchy:

– Level 1 – the fair value is calculated using quoted prices in active markets for identical assets or liabilities;
– Level 2 – the fair value is estimated using inputs other than quoted prices included in Level 1 that are observable for substantially the

full term of the asset or liability; and

– Level 3 – the fair value is estimated using inputs for the asset or liability that are not based on observable market data.

The Group’s financial assets and financial liabilities measured and recognised at fair value is set out below:

Carrying amount

Financial assets

Cash and cash equivalents

Receivables

Lease assets

Other

Financial liabilities

Payables

Lease liabilities

Interest bearing liabilities

Financial assets/
financial liabilities
at amortised cost

Note

2020
$million

2019
$million

109.9

215.8

58.7

84.8

469.2

282.0

62.1

60.0

404.1

171.9

284.9

–

31.5

488.3

330.7

–

330.7

The methods and valuation techniques used for the purpose of measuring fair value are unchanged compared to the previous reporting period.

The following summarises the significant methods and assumptions used in estimating the fair values of financial instruments:

The Group did not measure any financial assets or financial liabilities at fair value on a non-recurring basis as at 30 June 2020 and there
have been no transfers between the levels of the fair value hierarchy during the year ended 30 June 2020.

The Group also has a number of other financial assets and liabilities including cash and cash equivalents, receivables and payables which
are recorded at their carrying value which is considered to be a reasonable approximation of their fair value.

108

Beach Energy LimitedNotes to the Financial Statements

(b) Market Risk
The Group is exposed to commodity price fluctuations through the sale of petroleum products and other oil-linked contracts. Derivatives
may be used by the Group to manage its forward commodity risk exposure. The Group policy is to manage commodity price exposure
by way of Australian dollar denominated oil options for up to 18 months. Changes in fair value of these derivatives are recognised
immediately in the profit or loss and other comprehensive income, having regard to whether they are defined as accounting hedges.

Foreign exchange risk arises when future commercial transactions and recognised assets and liabilities are denominated in a currency
that is not the entity’s functional currency. The Group sells a portion of its products and commits to some contracts in US dollars or
NZ dollars. Australian dollar oil option contracts may be used by the Group to manage its foreign currency risk exposure. Any foreign
currencies held which are surplus to forecast needs are converted to Australian dollars as required.

There were no commodity hedges outstanding at 30 June 2019 or 30 June 2020.

The Group’s interest rate risk arises from the interest bearing cash held on deposit and its bank loan facility which is subject to variable
interest rates. The interest rate profile of the Group’s interest-bearing financial instruments is as follows:

Variable rate instruments:

Cash and cash equivalents

Interest bearing liabilities

Consolidated

2020
$million

2019
$million

109.9

(60.0)

49.9

171.9

–

171.9

Sensitivity analysis for all market risks
The following table demonstrates the estimated sensitivity to changes in the relevant market parameter, with all variables held constant,
on post tax profit and equity, which are the same as the profit impact flows through to equity. These sensitivities should not be used to
forecast the future effect of a movement in these market parameters on future cash flows which may be different as a result of the Group
commodity hedge book.

Impact on post-tax profit and equity

A$/$US – 10% increase in Australian/US dollar exchange rate

A$/$US – 10% decrease in Australian/US dollar exchange rate

US$ oil price – increase of $10/bbl

US$ oil price – decrease of $10/bbl

Interest rates – increase of 1%

Interest rates – decrease of 1%

Consolidated

2020
$million

2019
$million

(52.4)

64.1

109.4

(109.4)

0.2

(0.2)

(51.3)

64.8

82.1

(83.2)

(2.3)

2.3

109

Annual Report 202017. Financial risk management (continued)
(c) Credit risk
Credit risk arises from cash and cash equivalents, derivative financial instruments and deposits with banks and financial institutions,
as well as credit exposures to customers, including outstanding receivables and committed transactions, and represents the potential
financial loss if counterparties fail to perform as contracted. Management monitors credit risk on an ongoing basis. Gas sales contracts
are spread across major Australian and New Zealand energy retailers and industrial users with liquid hydrocarbon products sales being
made to major multi-national energy companies based on international market pricing.

The Group applied the simplified approach to providing for expected credit losses prescribed by AASB 9, which permits the use of the
lifetime expected loss provision for all trade receivables and contract assets. Under this method, determination of the loss allowance
provision and expected loss rate incorporates past experience and forward-looking information, including the outlook for market
demand and forward-looking interest rates. As the expected loss rate at 30 June 2020 is 0.2% (2019 0.1%), a loss allowance has been
recorded at 30 June 2020 of $0.4 million (FY19 $0.4 million).

Ageing of Receivables:

Receivables not yet due

Receivables past due

Considered impaired

Total Receivables

Consolidated

2020
$million

2019
$million

215.8

284.9

0.4

(0.4)

0.4

(0.4)

215.8

284.9

The Group manages its credit risk on financial assets by predominantly dealing with counterparties with an investment grade credit
rating. Customers who wish to trade on unsecured credit terms are subject to credit verification procedures.

Cash is placed on deposit amongst a number of financial institutions to minimise the risk of counterparty default.

(d) Liquidity Risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of funding through an
adequate amount of committed credit facilities and the ability to close out market positions. The Group aims at maintaining flexibility in
funding to meet ongoing operational requirements, exploration and development expenditure, and small-to-medium-sized opportunistic
projects and investments, by keeping committed credit facilities available. Details of Beach’s financing facilities are outlined in Note 15.

The Group’s exposure to liquidity risk for each class of financial liabilities is set out below:

Carrying amount

Less than
1 year

1 to 5
years

Greater than
5 years

Total

Note

2020
$million

2019
$million

2020
$million

2019
$million

2020
$million

2019
$million

2020
$million

2019
$million

276.4

26.8

–

324.4

–

303.2

324.4

2.9

22.2

60.0

85.1

2.9

–

2.9

2.7

13.1

–

15.8

3.4

–

3.4

282.0

62.1

60.0

404.1

330.7

–

330.7

Financial liabilities

Payables

Lease liabilities

Interest bearing
liabilities

110

Beach Energy LimitedNotes to the Financial Statements

Equity and group structure
This section provides information which will help users understand the equity and group structure as a whole including information on
equity, reserves, dividends, subsidiaries, the parent company, related party transactions and other relevant information.

18. Contributed equity
Ordinary shares are classified as equity. Transaction costs of an equity transaction are accounted for as a reduction to the proceeds
received, net of any related income tax benefit. Transaction costs are the costs that are incurred directly in connection with the issue of
those equity instruments and which would not have been incurred had those instruments not been issued.

Issued and fully paid ordinary shares at 30 June 2018

Issued during the FY19 financial year

Shares issued on vesting/exercise of unlisted performance rights

Repayment of employee loans and sale of employee shares

Issued and fully paid ordinary shares at 30 June 2019

Issued during the FY20 financial year

Shares issued on vesting/exercise of unlisted performance rights

Repayment of employee loans and sale of employee shares

Shares purchased on market (Treasury shares), net of tax

Issued and fully paid ordinary shares at 30 June 2020

Number of Shares

2,276,570,218

$million

1,859.1

1,678,886

–

1.5

2,278,249,104

1,860.6

2,559,073

–

2,280,808,177

–

1.3

(0.7)

1,861.2

Treasury shares
Treasury shares are held to satisfy the obligations under the employee share schemes. Shares are accounted for at the weighted cost for
the period. During the period $1.0 million of Treasury shares were purchased on market.

Movement in Treasury shares

Balance at 30 June 2019

Shares purchased on market during FY20

Utilisation of Treasury shares on vesting of employee share scheme

Balance at 30 June 2020

Number

–

541,053

(20,728)

520,325

In accordance with changes to applicable corporations legislation effective from 1 July 1998, the shares issued do not have a par value
as there is no limit on the authorised share capital of the Company. All shares issued under the Company’s employee incentive plan
are accounted for as a share-based payment (refer Note 4 and 19 for further details). Shares issued under the Company’s dividend
reinvestment plan and employee incentive plan represent non-cash investing and financing activities. On a show of hands, every person
qualified to vote, whether as a member or proxy or attorney or representative, shall have one vote. Upon a poll, every member shall have
one vote for each ordinary share held.

Details of shares and rights issued and outstanding under the Employee Incentive Plan and Executive Incentive Plan are provided in Note 4.

Dividend Reinvestment Plan
The Board suspended the operation of the Dividend Reinvestment Plan on 21 August 2017 on the basis that this form of capital
management is not currently required at this time.

Capital management
Management is responsible for managing the capital of the Group, on behalf of the Board, in order to maintain an appropriate debt to
equity ratio, provide shareholders with adequate returns and ensure the Group can fund its operations with secure, cost-effective and
flexible sources of funding. The Group debt and capital includes ordinary shares, borrowings and financial liabilities including derivatives
supported by financial assets. Management effectively manages the capital of the Group by assessing the financial risks and adjusting
the capital structure in response to changes in these risks and in the market. The responses include the management of debt levels,
dividends to shareholders and share issues. Debt repayment is currently a key priority for the Group in order to bring net gearing levels in
line with market guidance. The Group net gearing ratio is nil (FY19 nil). Net gearing has been calculated as financial liabilities (including
borrowings and unsecured bank guarantees) less cash and cash equivalents, as a proportion of these items plus shareholder’s equity.

111

Annual Report 202019. Reserves
The Share based payments reserve is used to recognise the fair value of shares, options and rights issued to employees of the Company.

The Foreign currency translation reserve is used to record foreign exchange differences arising from the translation of the financial
statements of subsidiaries with functional currencies other than Australian dollars.

The Profit distribution reserve represents an amount allocated from retained earnings that is preserved for future dividend payments.

Share based payments reserve

Foreign currency translation reserve

Profit distribution reserve

Total reserves

Consolidated

2020
$million

2019
$million

36.0

(5.3)

881.2

911.9

32.8

8.3

126.8

167.9

20. Dividends
A provision is recognised for dividends when they have been announced, determined or publicly recommended by the directors on or
before the reporting date.

Final dividend of 1.0 cent (2019 1.0 cent)

Interim dividend of 1.0 cent (2019 1.0 cent)

Total dividends paid or payable

Franking credits available in subsequent financial years based on a tax rate of 30% (2019 30%)

Consolidated

2020
$million

2019
$million

22.8

45.6

354.5

22.8

45.6

142.2

112

Beach Energy Limited21. Subsidiaries

Name of Company

Beach Energy Limited(1)

Beach Petroleum (NZ) Pty Ltd

Beach Oil and Gas Pty Ltd

Beach Production Services Pty Ltd

Beach Petroleum (Cooper Basin) Pty Ltd

Beach (Tanzania) Pty Ltd

Beach Petroleum (Tanzania) Limited

Place of incorporation

South Australia

New South Wales

South Australia

Victoria

Tanzania

Beach Energy (Operations) Limited(1)(3)

South Australia

Beach Energy (Perth Basin) Pty Ltd(1)(4)

Australian Capital Territory

Beach Energy (Bonaparte) Pty Ltd(5)

South Australia

Beach Energy (Bass Gas) Limited(6)

Beach Energy Services Pty Ltd(7)

Beach Energy Finance Pty Ltd(8)

Victoria

Beach Energy (Offshore) Pty Ltd(2)

South Australia

Beach Energy (Otway) Limited(9)

Beach Petroleum (NT) Pty Ltd

Territory Oil & Gas Pty Ltd

Adelaide Energy Pty Ltd

Australian Unconventional Gas Pty Ltd

Deka Resources Pty Ltd

Well Traced Pty Ltd

Australian Petroleum Investments Pty Ltd(1)

Delhi Holdings Pty Ltd

Delhi Petroleum Pty Ltd(1)

Impress Energy Pty Ltd(1)

Impress (Cooper Basin) Pty Ltd(1)

Springfield Oil and Gas Pty Ltd(1)

Mazeley Ltd

Mawson Petroleum Pty Ltd

Victoria

Northern Territory

South Australia

Victoria

South Australia

Western Australia

Victoria

Western Australia

Liberia

Queensland

Notes to the Financial Statements

Percentage of shares held

%
2020

%
2019

100

–

100

113

Annual Report 2020

21. Subsidiaries (continued)

Name of Company

Drillsearch Energy Pty Ltd(1)

Place of incorporation

Victoria

Circumpacific Energy (Australia) Pty Ltd

New South Wales

Drillsearch Gas Pty Ltd

Drillsearch (Field Ops) Pty Ltd

Drillsearch (513) Pty Ltd

Drillsearch (Central) Pty Ltd

Ambassador Oil & Gas Pty Ltd

Ambassador (US) Oil & Gas LLC

Ambassador Exploration Pty Ltd

Acer Energy Pty Ltd

Great Artesian Oil & Gas Pty Ltd(1)

Beach Energy Resources NZ (Holdings) Limited

Beach Energy Resources NZ (Kupe) Limited

Beach Energy (Kupe) Limited

Kupe Mining (No.1) Limited

Beach Energy NZ (Clipper) Limited(2)

Queensland

New South Wales

Victoria

USA

Victoria

Queensland

New South Wales

New Zealand

Beach Energy Resources NZ (Tawhaki) Limited(2)

New Zealand

Beach Energy Resources NZ (Tawn) Limited

New Zealand

All shares held are ordinary shares, other than Mazeley Ltd which is held by a bearer share.
(1) Company in Closed Group in FY19 and FY20 (refer Note 22).
(2) Company created and registered during FY20.
(3) Previously Lattice Energy Limited.
(4) Previously Lattice Energy Resources (Perth Basin) Pty Ltd.
(5) Previously Lattice Energy Resources (Bonaparte) Pty Ltd.
(6) Previously Lattice Energy Resources (Bass Gas) Limited.
(7) Previously Lattice Energy Services Pty Ltd.
(8) Previously Lattice Energy Finance Pty Ltd.
(9) Previously Lattice Energy Resources (Otway) Limited.

Percentage of shares held

%
2020

%
2019

100

–

100

114

Beach Energy Limited

Notes to the Financial Statements

22. Deed of cross guarantee
Pursuant to ASIC (wholly-owned companies) Instrument 2016/785, certain wholly-owned subsidiaries can be relieved from the
Corporations Act 2001 requirements for preparation, audit and lodgement of their financial reports.

As a condition of the Class Order, Beach and each of the subsidiaries that opted for relief during the year (the Closed Group) entered into
a Deed of Cross Guarantee (Deed). The effect of the Deed is that Beach has guaranteed to pay any deficiency in the event of winding up
of any of the subsidiaries under certain provisions of the Corporations Act 2001. The Subsidiaries have also given a similar guarantee in
the event that Beach is wound up. Those companies in the Closed Group for each year are referred to in Note 21.

The consolidated statement of profit or loss and other comprehensive income, summary of movements in retained earnings/
(accumulated losses) and statement of financial position of the Closed Group are as follows:

Consolidated Statement of Profit or Loss and Other Comprehensive Income

Revenue

Cost of sales

Gross profit

Other income

Other expenses

Operating profit before financing costs

Interest income

Finance expenses

Profit before income tax expense

Income tax expense

Profit after tax for the year

Other comprehensive income/(loss)

Net change in hedging reserves

Tax effect relating to components of Other Comprehensive Income

Other comprehensive income/(loss) net of tax

Total comprehensive income/(loss) after tax

Summary of movements in the Closed Group’s retained earnings/(accumulated losses)

Retained earnings at beginning of the year

Net profit for the year

Transfer to profit distribution reserve

Retained earnings/(accumulated losses) at end of the year

Closed Group

2020
$million

2019
$million

1,542.9

1,861.2

(989.9)

(1,069.0)

553.0

172.0

792.2

89.7

(26.6)

(256.4)

698.4

1.1

(21.0)

678.5

(187.5)

491.0

–

625.5

2.9

(67.5)

560.9

(179.4)

381.5

14.4

(4.3)

10.1

491.0

391.6

72.4

491.0

(800.0)

(236.6)

(309.1)

381.5

–

72.4

115

Annual Report 202022. Deed of cross guarantee (continued)

Consolidated Statement of Financial Position

Current assets

Cash and cash equivalents

Receivables

Inventories

Other

Assets held for sale

Total current assets

Non-current assets

Property, plant and equipment

Petroleum assets

Exploration and evaluation assets

Lease assets

Goodwill

Deferred tax assets

Other financial assets

Total non-current assets

Total assets

Current liabilities

Payables

Provisions

Current tax liability

Lease liabilities

Contract liabilities

Liabilities held for sale

Total current liabilities

Non-current liabilities

Payables

Provisions

Lease liabilities

Contract liabilities

Interest bearing liabilities

Total non-current liabilities

Total liabilities

Net assets

Equity

Contributed equity

Reserves

Retained earnings/(accumulated losses)

Total equity

116

Closed Group

2020
$million

2019
$million

90.8

329.9

94.5

52.3

–

567.5

75.0

306.1

89.5

20.8

6.8

498.2

34.2

26.9

2,681.6

2,438.0

269.7

226.0

45.9

57.1

62.8

244.0

3,395.3

3,962.8

202.3

19.8

83.6

15.3

–

57.1

91.8

183.8

3,023.6

3,521.8

234.4

16.1

172.7

–

57.6

1.5

336.3

482.3

343.4

645.8

32.8

5.9

56.7

1,084.6

1,420.9

2,541.9

247.1

666.0

–

33.8

–

946.9

1,429.2

2,092.6

1,860.6

917.9

(236.6)

159.6

72.4

2,541.9

2,092.6

Beach Energy LimitedNotes to the Financial Statements

Parent

2020
$million

807.4

–

807.4

787.1

2019
$million

(273.8)

10.1

(263.7)

528.4

2,377.2

2,459.5

541.0

740.3

1,518.0

1,588.1

1,861.2

1,860.6

36.0

881.3

0.6

32.7

126.9

–

(1,141.4)

(1,148.8)

1,637.7

871.4

23. Parent entity financial information
Selected financial information of the parent entity, Beach Energy Limited, is set out below:

Financial performance

Net profit/(loss) after tax

Other comprehensive income/(loss), net of tax

Total comprehensive income/(loss) after tax

Total current assets

Total assets

Total current liabilities

Total liabilities

Issued capital

Share based payments reserve

Profits distribution reserve

Other reserve

Retained earnings

Total equity

Expenditure Commitments
The Company’s contracted expenditure at the end of the reporting period for which no amounts have been provided for in the
financial statements.

Capital expenditure commitments

Minimum exploration commitments

Operating commitments

Parent

2020
$million

2019
$million

3.4

0.2

–

9.8

7.2

44. 6

Contingent liabilities and guarantees
Details of contingent liabilities for the Company in respect of service agreements, bank guarantees and parent company guarantees
are disclosed in Note 28.

Beach Energy Limited and a number of its wholly owned subsidiaries are parties to a Deed of Cross Guarantee as disclosed in Note 22.
The effect of the Deed is that Beach Energy Limited has guaranteed to pay any deficiency in the event of winding up of any of the listed
subsidiary companies under certain provisions of the Corporations Act 2001.

Parent entity financial information has been prepared using the same accounting policies as the consolidated financial statements except
for investments in controlled entities which are included in other financial assets and are initially recorded in the financial statements
at cost. These investments may have subsequently been written down to their recoverable amount determined by reference to the net
assets of the controlled entities at the end of the reporting period where this is less than cost.

117

Annual Report 202024. Related party disclosures
Transactions with related parties are on normal commercial terms and conditions no more favourable than those available to other
parties unless otherwise stated.

Remuneration for Key Management Personnel

Short term benefits

Share based payments

Other long term benefits

Total

Subsidiaries
Interests in subsidiaries are set out in Note 21.

Consolidated

2020
$

2019
$

5,688,692

6,361,695

1,869,206

2,007,754

(36,919)

41,278

7,520,979

8,410,727

Transactions with other related parties
During the financial year ended 30 June 2020, Beach paid $369,936 (FY19 $179,782) to Coates Hire Operations Pty Ltd, an entity of
which Ryan Stokes is a director, for the hire of equipment on arm’s length commercial terms.

Directors fees payable to Mr Davis for the year ended 30 June 2020 of $305,000 (FY19 $275,000) were paid directly to DMAW
Lawyers. Beach has in previous years used the legal services of DMAW Lawyers, a legal firm of which the Chairman, Mr Davis is a
principal. No fees were paid to DMAW Lawyers for legal services in the current financial year (FY19 $64,861).

In FY19, Beach also paid US$1,199,933 to Central Petroleum Mereenie Pty Ltd, an entity of which director, Peter Moore was also a director,
for the purchase of crude oil on commercial terms. Peter Moore ceased to be a director of Central Petroleum Mereenie Pty Ltd on
13 November 2018.

25. Disposal group held for sale
In the prior financial year, Beach completed the sale of 40% of Beach’s Victorian Otway assets to O.G. Energy Holdings Ltd. (O.G.
Energy). The Otway assets includes the Otway Gas Plant, existing gas field Geographe, Thylacine, Halladale, Speculant and Black Watch
as well as exploration prospects Enterprise and Artisan. In each joint venture Beach (or its wholly owned subsidiaries) holds a 60%
interest and remains as operator, whilst O.G. Energy holds 40%. Beach received cash consideration of $262.4 million on completion
comprising the sale price of $344.0 million less completion adjustments of $81.6 million reflecting O.G. Energy’s share of net cashflow
from these assets between the effective date of the transaction being 1 July 2018 and the completion date. A receivable of $2.2m
was booked at 30 June 2019 comprising a final completion adjustment of $0.2m and a further amount for income tax payable by the
purchaser of $2.0m relating to earnings made during the interim period. Following finalisation of the FY19 income tax return, the income
tax payable by the purchaser increased by $0.4 million which has been recognised as a further gain on sale of joint operation interests in
FY20 with all remaining deferred amounts owing received in July 2020.

118

Beach Energy LimitedNotes to the Financial Statements

FY19
$million

344.0

(81.6)

2.2

264.6

410.6

(158.9)

251.7

12.9

344.0

(81.6)

262.4

Profit on sale

Cash consideration

Completion adjustments

Receivables

Total consideration received

Less assets and liabilities disposed

– Assets held for sale

– Liabilities held for sale

Net assets disposed

Profit on sale

Cash flow on disposal

Cash consideration

Completion adjustment

Net cash flow on disposal

On 3 July 2019, Beach announced that it had executed agreements with AWE (Beharra Springs) Pty Ltd, a related body corporate of
Mitsui E&P Australia (MEPAU), to move to 50:50 ownership of production licences L11 and L22 (Beharra Springs), exploration permit EP
320 and pipeline licence PL 18 in the Perth Basin. The previous ownership structure for these permits was Beach 67% and MEPAU 33%.
The transaction had an effective date of 1 January 2019 and was completed on 29 November 2019. Beach retained operatorship of the
permits. The interest held for sale at 30 June 2019 was part of the SAWA operating segment with assets of $6.7 million and liabilities
of $1.5 million shown at historic cost. Proceeds received on the sale including completion adjustments were $8.9 million resulting in the
recognition of a gain on sale of joint operation interests of $2.6 million in FY20.

The sale of Beach’s interest in ex PEL 103 (Innamincka Dome) was completed in H1 FY20 with Beach realising a net gain on sale of joint
operation interests of approximately $5.9 million from the removal of all associated liabilities.

Activities for Beach Petroleum (Tanzania) Limited have effectively ceased resulting in the release of a cumulative gain of $8.7 million
on the historic translation of this entity from other comprehensive income to the statement of profit or loss in FY20. In the previous
year, Beach Petroleum (CEE) s.r.l, a wholly owned Romanian subsidiary, was liquidated resulting in the release of a cumulative gain of
$7.0 million on the historic foreign currency translation of this entity from other comprehensive income to the statement of profit or loss.

The head office building was shown as held for sale at 30 June 2018 with its carrying value impaired by $1.2 million down to the sale price
less costs to sell of $21.2 million. The sale completed on 12 July 2018. Beach also entered into a sale agreement in FY18 for exploration
permit EP 126 in the Bonaparte Basin. This transaction was completed at the end of January 2019 which along with other joint venture
interests sold during FY19 resulted in a gain of $0.6 million.

26. Business combination
The acquisition method of accounting is used to account for all business combinations, including business combinations involving
entities or businesses under common control, regardless of whether equity instruments issued or liabilities incurred or assumed at the
date of exchange. Where equity instruments are issued in an acquisition, the fair value of the instruments is their published market price
as at the date of exchange unless, in rare circumstances, it can be demonstrated that the published price at the date of exchange is an
unreliable indicator of fair value and that other evidence and valuation methods provide a more reliable measure of fair value. Transaction
costs arising on the issue of equity instruments are recognised directly in equity. Identifiable assets acquired and liabilities and contingent
liabilities assumed in a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent
of any non-controlling interest. Transaction costs incurred in relation to the business combination are expensed as incurred to the
Statement of Profit or Loss. The excess of the cost of acquisition over the fair value of the consolidated entity’s share of the identifiable
net assets acquired is recorded as goodwill.

119

Annual Report 202026. Business combination (continued)
During the previous financial year, Beach finalised the acquisition accounting for the Lattice Energy Group, Benaris’ interest in the Otway
Gas Project and Toyota Tsusho corporations interest in the Otway Gas Project and the BassGas project. Beach acquired these interests for
$1,532 million in consideration with an effective accounting acquisition date of 1 January 2018. Lattice was Origin’s conventional upstream oil
and gas business that has interests in the offshore Victorian (OGP and BassGas), onshore Cooper Basin (SACB JV and SWQ JVs), onshore
Perth Basin (Waitsia development project and Beharra Springs) and offshore New Zealand (Kupe) operations, as well as exploration exposure
in the Bonaparte (offshore Western Australia) and Canterbury Basin (New Zealand). Lattice also has ownership interests in a number oil
and gas processing facilities, transportation flowlines and trunklines that deliver product to the Australian East Coast, West Coast and New
Zealand gas markets. The Lattice acquisition included the acquisition of Benaris’ 27.77% interest in OGP for which Origin had entered into a
binding purchase agreement and the Toyota Tsusho transaction increased Beach’s ownership in OGP to 100% and BassGas Project to 53.75%.

These acquisitions have transformed Beach from a Cooper Basin oil and gas producer and explorer to a multi-basin producer and explorer
with significant development potential and had the following effect on the consolidated entity. The provisional acquisition entries booked
in FY18 were further adjusted in FY19 as shown below following a further detailed review of the assets and liabilities acquired. There is no
impact of these changes in the current year and the impact on the prior year was not material.

Purchase consideration

Fair value of net assets acquired

Goodwill on acquisition

Fair Value of assets acquired

Assets and liabilities held at acquisition date:

– Cash

– Receivables

– Inventory

– Other current assets

– Other non-current assets

– Deferred tax assets

– Petroleum assets

– Exploration and evaluation assets

– Current payables

– Other current liabilities

– Current provisions

– Non current payables

– Other non-current liabilities

– Restoration liabilities

– Deferred tax liabilities

– Other non-current provisions

Net assets

Cash consideration

Less cash acquired on acquisition

Net cashflow on acquisition

Provisional
$million

1,532.0

1,448.1

83.9

Final
$million

1,532.0

1,474.9

57.1

79.0

93.8

57.7

4.8

–

1,594.5

436.3

(163.6)

–

(17.6)

(46.6)

–

(501.1)

(83.8)

(5.3)

79.0

93.8

57.7

17.8

66.6

1.5

1,775.5

435.0

(163.6)

(100.3)

(17.6)

(46.6)

(160.3)

(501.2)

(57.1)

(5.3)

1,448.1

1,474.9

(1,532.0)

79.0

(1,453.0)

The Statement of Profit or Loss includes integration costs incurred for FY20 of $nil (FY19 $1.6 million) for both acquisitions. Goodwill
arising from the acquisition has been recognised as the excess of the consideration paid above the fair value of the assets acquired and
liabilities assumed as a part of the business combination. The goodwill is attributable to the deferred tax liability recognised on the
acquisition. None of the goodwill recognised is expected to be deductible for tax purposes.

120

Beach Energy LimitedNotes to the Financial Statements

Other information
Additional information required to be disclosed under Australian Accounting Standards.

27. Accounting policies
Adoption of new and revised accounting standards
In the current year, the Group has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting
Standards Board that are relevant to its operations and effective for the current annual reporting period. Information on adoption of these
new standards is provided below.

AASB 16 Leases
The Group applies, for the first time, AASB 16 Leases from 1 July 2019. AASB 16 supersedes AASB 17 Leases, and AASB Interpretation
4 Determining whether an Arrangement contains a Lease. The standard sets out the principles for the recognition, measurement,
presentation and disclosure of leases and requires lessees to account for most leases under a single on-balance sheet model.

The Group has adopted the new standard using the modified retrospective approach. Lease liabilities are measured at the present value
of future payments on the initial date of application, being 1 July 2019. Accordingly, the comparative information presented for FY19 has
not been restated. The lease assets are initially measured to be equal to the lease liabilities and adjusted for any lease incentives received,
initial direct costs and estimates of costs to dismantle or remove the underlying leased asset. Subsequently the lease asset is measured
at cost less any accumulated depreciation and impairment losses, and adjusted for certain remeasurements of the lease liability.
The Group also elected to use the recognition exemptions for lease contracts that, at the commencement date, have a lease term of
12 months or less and do not contain a purchase option (short-term leases), and lease contracts for which the underlying asset is of low
value (low-value assets). Payments associated with short-term leases and all leases of low-value assets are recognised on a straight-line
basis as an expense in profit or loss.

The details of the change in accounting policy are disclosed below:
– Lease assets

Lease assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of
lease liabilities. The cost of lease assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments
made at or before the commencement date less any lease incentives received. The recognised lease assets are depreciated on a straight-
line basis over the shorter of its estimated useful life and the lease term. Contracts may contain both lease and non-lease components.
The Group allocates the consideration in the contract to the lease and non-lease components based on their relative stand-alone prices.

– Lease liabilities

At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments to be
made over the lease term. In calculating the present value of lease payments, the Group uses the incremental borrowing rate at the lease
commencement date if the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount
of lease liabilities is increased by the interest cost and reduced for the lease payments made. In addition, the carrying amount of lease
liabilities is remeasured if there is a modification, a change in the lease term, a change in the in-substance fixed lease payments or a
change in the assessment to purchase the underlying asset. Lease liabilities include the present value of the following lease payments:

– Fixed payments (including in-substance fixed payments), less any lease incentives receivable;
– Variable lease payment that are based on an index or a rate, initially measured using the index or rate as at the commencement date;
– Amounts expected to be payable by the Group under residual value guarantees;
– The exercise price of a purchase option if the Group is reasonably certain to exercise that option;
– Lease payments to be made under reasonably certain extension options; and
– Payments of penalties for terminating the lease, if the lease term reflects the Group exercising that option.

The impact on transition

Consolidated statement of financial position

Lease assets

Lease liabilities

Net impact on retained earnings, after tax

1 July 2019
$million

96.8

–

When measuring lease liabilities for leases that were previously classified as operating leases, the Group discounted lease payments
using its incremental borrowing rate at 1 July 2019. The weighted-average rate applied is 3.4%.

Before adoption of AASB 16, the Group classified each of its leases (as lessee) at the inception date as either a finance lease or an
operating lease. A lease was classified as a finance lease if it transferred substantially all the risks and regards incidental to ownership of
the leased asset to the Group; otherwise it was classified as an operating lease. Finance leases were capitalised at the commencement
of the lease at the present value of the minimum lease payments. In an operating lease, the lease was recognised as an expense on a
straight-line basis over the lease term.

121

Annual Report 202027. Accounting policies (continued)
AASB 16 Leases (continued)
The table below reconciles the Group’s operating lease commitments at 30 June 2019 to the transition lease liabilities recognised at
1 July 2019:

Operating lease commitments disclosed at 30 June 2019

Adjusted for:

Arrangements reassessed as service arrangements

Leases with commencement date post 1 July 2019

Arrangements reassessed as lease arrangements

Redetermination of lease term

Impact of discounting

Lease liabilities recognised on transition

$million

64.3

(19.5)

(0.1)

41.2

18.4

(7.5)

96.8

The table below states the impact of AASB 16 recognised in the consolidated statement of profit or loss and other comprehensive income
for the 12 month ended 30 June 2020:

Consolidated statement of profit or loss and other comprehensive income

Expenses

Depreciation expense on lease assets

Depreciation expense on lease assets, related to joint venture recoveries

Operating costs

Finance costs associated with lease liabilities

Foreign exchange loss

Income

Other income related to joint venture lease recoveries

Tax benefit

Net loss after income tax expense

Notes

June 2020
$million

(i)

(ii)

5.8

15.5

(6.8)

3.0

0.9

15.5

0.9

(2.0)

The table below states the impact of AASB 16 recognised in the consolidated statement of financial position at 30 June 2020:

Consolidated statement of financial position

Assets

Non-current assets

Lease assets

Deferred tax asset

Liabilities

Lease liabilities

Net impact on net assets

122

Notes

June 2020
$million

(ii)

0.5

58.7

0.9

62.1

(2.0)

Beach Energy LimitedNotes to the Financial Statements

The table below states the impact of AASB 16 recognised in the consolidated statement of financial position at 30 June 2020:

Consolidated statement of cash flows

Cash flows from operating activities

Cash flows from investing activities

Cash flows from financing activities

Net impact on cash flows

Notes

June 2020
$million

(iii)

(iv)

(v)

18.9

35.3

(54.2)

–

(i) Depreciation expense represents depreciation of $56.7m, offset by capitalised depreciation of $35.4m for leases working on projects capital in nature.
(ii) The movement to these accounts represents the costs that were previously incurred prior to AASB 16 implementation, that are now capitalised as lease assets which are then depreciated.
(iii) Represents impact of other income related to joint venture lease recoveries, removal of payments for operating lease costs incurred (previously under AASB 117), which were expensed through

operating costs, and payments of lease liability financing costs.

(iv) Represents impact of removal of payments for operating lease costs incurred (previously under AASB 117), which were capitalised to non-current assets.
(v) Represents impact of payments of principal portion of lease liabilities.

AASB Interpretation 23 Uncertainty over Income Tax Treatment
The Group has applied AASB interpretation 23 from 1 July 2019. This Interpretation addresses the accounting for income taxes when tax
treatments involve uncertainty that affects the application of AASB 112 and does not apply to taxes or levies outside the scope of AASB 112,
nor does it specifically include requirements relating to interest and penalties associated with uncertain tax treatments. The recognition,
measurement and disclosure requirements of the standard have been applied to any uncertain tax treatments.

Standards, amendments and interpretations to existing standards that are not yet effective and have not been adopted early by the Group:
At the date of authorisation of these financial statements, certain new standards, amendments and interpretations to existing standards
have been published but are not yet effective, and have not been adopted early by the Group. Management anticipates that all of the
relevant pronouncements will be adopted in the Group’s accounting policies for the first period beginning after the effective date of
the pronouncement. Information on new standards, amendments and interpretations that are expected to be relevant to the Group’s
financial statements is provided below.

AASB 2018–6 Amendments to Australian Accounting Standards – Definition of a Business
This amendment updates the definition of a business in AASB 3 Business Combinations to help determine whether an acquired set
of activities and assets is a business or not. The amendment requires prospective application and will provide further clarity on the
accounting treatment for future acquisition transactions. This amendment is applicable to annual reporting periods beginning on or
after 1 January 2020. The Group plans to adopt the new amendment on the required effective date.

AASB 2019–3 Amendments to Australian Accounting Standards – Interest Rate Benchmark Reform
These amendments to AASB 9 Financial Instruments were issued in response to the effects of Interbank Offered Rates reform on
financial reporting and provide mandatory temporary reliefs which enable hedge accounting to continue during the period of uncertainty
before the replacement of an existing interest rate benchmark with an alternative nearly risk-free interest rate. This amendment is
applicable to annual reporting periods beginning on or after 1 January 2020. The Group plans to adopt the new amendment on the
required effective date.

AASB 2014–10 Amendments to Australian Accounting Standards – Sale or Contribution of Assets between an Investor and its
Associate or Joint Venture
The amendments clarify that a full gain or loss is recognised when a transfer to an associate or joint venture involves a business as defined
in AASB 3 Business Combinations. Any gain or loss resulting from the sale or contribution of assets that does not constitute a business,
however, is recognised only to the extent of unrelated investors’ interests in the associate or joint venture. This amendment is applicable to
annual reporting periods beginning on or after 1 January 2022. The Group plans to adopt the new amendment on the required effective date.

123

Annual Report 202028. Contingent liabilities
The directors are of the opinion that the recognition of a provision
is not required in respect of the following matters, as it is not
probable that a future sacrifice of economic benefits will be
required or the amount of the obligation cannot be measured
with sufficient reliability.

Joint Venture Operations
In the ordinary course of business, the Group participates in a
number of joint ventures which is a common form of business
arrangement designed to share risk and other costs. Failure of
the Group’s joint venture partners to meet financial and other
obligations may have an adverse financial impact on the Group.

Service agreements
Service agreements exist with other executive officers under
which termination benefits may, in appropriate circumstances,
become payable. The maximum contingent liability at
30 June 2020 under the service agreements for the other
executive officers is $1,688,879 (FY19 $1,964,450).

Bank guarantees
As at 30 June 2020, Beach has been provided with a $75 million
letter of credit facility, of which $71.5 million had been utilised by way
of bank guarantees or letters of credit as security predominantly for
our environmental obligations and work programs (refer Note 15 for
further details on the corporate debt facility).

Tax obligations
In the ordinary course of business, the Group is subject to audits
from government revenue authorities which could result in an
amendment to historical tax positions.

Parent Company Guarantees
Beach has provided parent company guarantees in respect of
performance obligations for certain exploration interests.

Legal proceedings and claims
The Group may be involved in various other legal proceedings and
claims in the ordinary course of business, including contractual,
third party, contractor and regulatory claims. While the outcome
of these legal proceedings and claims cannot be predicted with
certainty, it is the directors’ opinion that as of the date of this
report, it is unlikely these claims will have a material adverse
impact on the Group.

29. Remuneration of auditors

Audit of statutory financial statements

Amounts received or due and receivable by Ernst & Young for:

– auditing or reviewing the financial statements of the Group

– auditing the financial statements for subsidiaries

Amounts received or due and receivable by other firms for:

– auditing the financial statements for subsidiaries

Total audit of statutory financial statements

Other assurance services performed by Ernst & Young

Other assurance services required by legislation to be performed by Ernst & Young

Other assurance services not required by legislation to be performed by Ernst & Young

Total audit and assurance services

Other services performed by Ernst & Young

Consolidated

2020
$000

2019
$000

801

135

955

145

1,135

1,275

135

1,427

1,549

143

30. Subsequent events
On 17 August 2020 Beach announced that the company (through its subsidiary Beach Energy (Operations) Limited) with support from
its joint venture partner O.G. Energy has executed a new offshore drilling agreement (“Agreement”) with Diamond Offshore General
Company (“Diamond”) for the use of the Ocean Onyx Semi-submersible rig to undertake Beach’s Victorian Otway offshore drilling program.
The Agreement provides for the drilling of up to 9 wells (6 firm and 3 options), with drilling operations expected to commence between
December 2020 and March 2021 (subject to extension, should certain conditions occur that impact on timing of commencement). Concurrent
with the signing of the Agreement, Beach and Diamond have also signed a Settlement Agreement, which (following approval by the Bankruptcy
Court) dismisses all current legal proceedings regarding the termination of the previous drilling agreement. The Agreement remains subject to a
number of conditions precedent that are administrative in nature (including the Bankruptcy court approval of the Settlement Agreement) which
are expected to be satisfied within the next few weeks.

Other than the matters described above, there has not arisen in the interval between 30 June 2020 and up to the date of this report, any item,
transaction or event of a material and unusual nature likely, in the opinion of the directors, to affect substantially the operations of the Group,
the results of those operations or the state of affairs of the Group in subsequent financial years, unless otherwise noted in the financial report.

124

Beach Energy Limited
Independent Auditor’s Report

Independent Auditor’s Report

Ernst & Young
121 King William Street
Adelaide SA 5000 Australia
GPO Box 1271 Adelaide SA 5001

Tel: +61 8 8417 1600
Fax: +61 8 8417 1775
ey.com/au

Independent Auditor's Report to the Members of Beach Energy Limited

Report on the Audit of the Financial Report

Opinion

We have audited the financial report of Beach Energy Limited (the Company) and its subsidiaries
(collectively the Group), which comprises the consolidated statement of financial position as at 30
June 2020, the consolidated statement of comprehensive income, consolidated statement of changes
in equity and consolidated statement of cash flows for the year then ended, notes to the financial
statements, including a summary of significant accounting policies, and the directors' declaration.

In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:

giving a true and fair view of the consolidated financial position of the Group as at 30 June
2020 and of its consolidated financial performance for the year ended on that date; and

complying with Australian Accounting Standards and the Corporations Regulations 2001.

Basis for Opinion

We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Report section of our report. We are independent of the Group in accordance with the auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (including Independence Standards) (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
the Code.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial report of the current year. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide
a separate opinion on these matters. For each matter below, our description of how our audit
addressed the matter is provided in that context.

We have fulfilled the responsibilities described in the Auditor’s Responsibilities for the Audit of the
Financial Report section of our report, including in relation to these matters. Accordingly, our audit
included the performance of procedures designed to respond to our assessment of the risks of
material misstatement of the financial report. The results of our audit procedures, including the
procedures performed to address the matters below, provide the basis for our audit opinion on the
accompanying financial report.

A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation

125

Annual Report 2020

1. Carrying value of petroleum assets

Why significant

How our audit addressed the key audit matter

At 30 June 2020 the Group had petroleum
assets of $2,987 million.

Australian Accounting Standards require the
Group to assess throughout the reporting period
whether there is any indication that an asset may
be impaired, or that reversal of a previously
recognised impairment may be required. If any
such indication exists an entity shall estimate the
recoverable amount of the asset.

The assessment of indicators of impairment and
reversal of impairment is judgmental and
includes an assessment of a range of external
and internal factors which could impact the
recoverable amount of the CGUs.

Where impairment indicators are identified, the
impairment testing process can be complex and
highly judgmental and is affected by expected
future performance and market conditions. The
key assumptions, judgments and estimates used
in the Group’s impairment assessment are set
out in the Financial Report in Note 9.

The Group’s performance has been affected by
economic uncertainty resulting from the COVID-
19 pandemic. The key assumptions used in the
impairment assessment referred to above are
inherently subjective and in times of economic
uncertainty the degree of subjectivity is higher
than it might otherwise be. At 30 June 2020,
reasonably possible changes in certain key
assumptions can result in significant changes to
the Group’s estimate of recoverable amount of
its petroleum assets.

In completing our audit procedures, we:

• Assessed the Group’s definition of cash

generating units in accordance with Australian
Accounting Standards.

• Evaluated the assumptions, methodologies and
conclusions used by the Group in assessing for
indicators of impairment and impairment
reversal, in particular, those relating to the
forecast cash flows and inputs used to formulate
them. This included assessing, in conjunction
with our valuation specialists, the discount rates,
foreign exchange rates and commodity prices
with reference to market prices (where
available), market research, market practice,
market indices, broker consensus and historical
performance.

• Used the work of the Group’s internal and

external experts with respect to the hydrocarbon
reserve assumptions used in the cash flow
forecasts. This included understanding the
reserve estimation processes carried out, and
assessing the qualifications, competence and
objectivity of the Group’s experts, the scope and
appropriateness of their work.

• Analysed forecast cost assumptions against

historical performance and the latest approved
budgets and forecasts.

• Considered the Group’s market capitalisation.

• Considered the carrying value of producing
assets against recent comparable market
transactions and the market value of comparable
companies, where available.

• Assessed the adequacy of the disclosures in Note
9 and basis of preparation of the financial report

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Beach Energy Limited

Independent Auditor’s Report

In this situation, the disclosures in the financial
report about the assumptions used in
impairment testing and sensitivity of recoverable
amount to those assumption is of heightened
importance. As such, we consider the
impairment assessment and the related
disclosures in the financial report to be a key
audit matter.

For the same reasons, we draw attention to the
information in Note 9 and basis of preparation.

2. Impairment assessment of capitalised exploration and evaluation expenditure

Why significant

How our audit addressed the key audit matter

At 30 June 2020 the Group had exploration and
evaluation assets of $462 million.

The carrying value of exploration and evaluation
assets is subjective based on the Group’s ability
and intention, to continue to explore the assets.
The carrying value may also be impacted by the
results of exploration work indicating that the oil
and gas resources may not be commercially
viable for extraction. The Group is required to
assess whether any indicators of impairment are
present.

Key assumptions, judgements and estimates
used in the impairment indicator assessment can
lead to significant changes in respect to whether
economic quantities of hydrocarbons can be
commercialised or whether further exploration
and evaluation work is underway or planned to
support the continued carry forward of
capitalised costs.

With the recent market downturn experienced
both as a result of COVID-19 and the global fall
in oil prices, the Group have reduced capital work
programs and deferred previously planned
expenditure. As such, we consider the
impairment assessment and the related
disclosures in the financial report to be a key
audit matter. For the same reasons, we draw
attention to the information in Note 10.

We evaluated the Group’s assessment of the carrying
value of exploration and evaluation assets. In
obtaining sufficient audit evidence, we:

• Assessed the Group’s definition of area of
interest in accordance with Australian
Accounting Standards.

• Considered the Group’s right to explore in the
relevant exploration area which included
obtaining and assessing supporting
documentation such as license agreements and
correspondence with relevant government
agencies.

• Considered the Group’s intention to carry out

significant exploration and evaluation activities in
relevant exploration areas, or plans to transfer
the assets to petroleum assets. This included
assessment of the Group’s budgets and enquiries
with senior management and directors as to the
intentions and strategy of the Group.

• Assessed the carrying value of exploration and
evaluation assets where recent exploration
activity, in a given licensed area, provided
negative indicators as to the recoverability of
amounts capitalised.

• Considered the commercial viability of results

relating to exploration and evaluation activities
carried out in the relevant licensed areas.

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The Group identified impairment indicators in
respect of certain exploration and evaluation
assets. Impairment testing was undertaken
which resulted in an impairment charge of $1.6
million being recorded during the year, as set out
in Note 10 of the Financial Report.

• Assessed the Group’s ability to finance any
planned future exploration and evaluation
activity.

• Assessed the adequacy of the disclosures in Note

10 of the financial report.

3. Provisionally priced oil revenue

Why significant

How our audit addressed the key audit matter

At 30 June 2020 the Group recorded $89.1
million of provisionally priced oil revenue (30
June 2019: 94.5 million), which represents a
significant portion (11%) of total annual oil
revenue (30 June 2019: 12%).

In accordance with contractual terms within the
Crude Oil Sale and Purchase Agreement
(‘COSPA’), risk and title of oil produced in the
Cooper Basin is transferred to the South
Australian Cooper Basin Joint Venture
(‘SACBJV’), when the oil reaches the Moomba
processing facility. The supply of oil to the
Moomba processing facility is the point the
Group satisfies the performance obligation to the
SACBJV in respect of the supply of oil. Revenue
is calculated using forecast oil price estimates
when title has passed with actual invoices not
raised until the oil has shipped from Port
Bonython.

Given the complexity in calculating volume of oil
supplied and judgment in the application of the
estimated transaction price, there can be
significant variations in the final revenue value
recorded on invoicing. As such, this was
considered a key audit matter.

Disclosure regarding this matter can be found in
Note 2 of the Financial Report.

In completing our audit procedures, we:

• Assessed the point and recognition of revenue
with reference to executed contracts between
the parties and the requirements of Australian
Accounting Standards.

• Obtained directly from the SACBJV an

independent confirmation of barrels of oil
received at the Moomba processing facility, but
not yet shipped via Port Bonython.

•

For all provisionally priced revenue barrels sold,
assessed the estimated sales price applied by the
Group to forward commodity price assumptions
together with estimates of quality premiums and
exchange rates for the period in which
settlement is likely to occur with reference to
contractual arrangements and Brent oil price
futures.

• Selected shipments which occurred close to the
period end and assessed whether revenue was
recorded in the correct period.

• Selected and examined subsequent cash receipts

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128

Beach Energy Limited

Independent Auditor’s Report

Information Other than the Financial Report and Auditor’s Report Thereon

The directors are responsible for the other information. The other information comprises the
information included in the Company’s 2020 Annual Report, but does not include the financial report
and our auditor’s report thereon.

Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon, with the exception of the Remuneration Report
and our related assurance opinion.

In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of the Directors for the Financial Report

The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.

In preparing the financial report, the directors are responsible for assessing the Group’s ability to
continue as a going concern, disclosing, as applicable, matters relating to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.

Auditor's Responsibilities for the Audit of the Financial Report

Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.

As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgment and maintain professional scepticism throughout the audit. We also:

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Annual Report 2020

•

Identify and assess the risks of material misstatement of the financial report, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.

Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Group’s internal control.

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.

Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Group’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in
our auditor’s report to the related disclosures in the financial report or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up
to the date of our auditor’s report. However, future events or conditions may cause the Group
to cease to continue as a going concern.

Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events
in a manner that achieves fair presentation.

Obtain sufficient appropriate audit evidence regarding the financial information of the entities
or business activities within the Group to express an opinion on the financial report. We are
responsible for the direction, supervision and performance of the Group audit. We remain solely
responsible for our audit opinion.

We communicate with the directors regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.

We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, actions
taken to eliminate threats or safeguards applied.

From the matters communicated to the directors, we determine those matters that were of most
significance in the audit of the financial report of the current year and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.

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130

Beach Energy Limited

Independent Auditor’s Report

Report on the Audit of the Remuneration Report

Opinion on the Remuneration Report

We have audited the Remuneration Report included in pages 57 to 72 of the directors' report for the
year ended 30 June 2020.

In our opinion, the Remuneration Report of Beach Energy Limited for the year ended 30 June 2020,
complies with section 300A of the Corporations Act 2001.

Responsibilities

The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.

Ernst & Young

Anthony Jones
Partner
Adelaide
17 August 2020

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131

Annual Report 2020

Glossary of terms

A$ or $

Australian dollars

AASB

AGM

AOI

ASX

ATP

Contingent resource low estimate(1)

Contingent resource best estimate(1)

Contingent resource high estimate(1)

Three dimensional

Proved reserve estimate(1)

Proved and probable reserve estimate(1)

Proved, probable and possible reserve
estimate(1)

Australian Accounting Standards Board

Annual General Meeting

Area of interest

Australian Securities Exchange

Authority To Prospect (QLD)

Adelaide Brighton

Adelaide Brighton Cement Ltd, a wholly
owned subsidiary of Adelaide Brighton
Limited (ASX: ABC)

Alinta Energy

Alinta Energy Retail Sales Pty Ltd

BassGas Project

bbl

Bcf

Beach

Beharra Springs

Benaris assets or
interests

boe

Board

Bridgeport

CAGR

CCS

CGU

Producing assets: Beach 53.75% and
operator, Mitsui 35%, Prize 11.25%;
Exploration permits: Beach 50.25% and
operator, Mitsui 40%, Prize 9.75%
Includes the producing Yolla field
(tenement T/L1), the BassGas pipeline and
Lang gas plant as well as separate retention
leases over the Trefoil, Rockhopper and
White Ibis discoveries (tenements T/RL2,
T/RL3, T/RL4 and T/RL5)

Barrels

Billion cubic feet

Beach Energy Limited

Beach 50% and operator, Mitsui 50%.
Consists of the Beharra Springs, Redback
Terrace and Tarantula gas fields and the
Beharra Springs gas processing facilities

Refers to 27.77% of OGP, acquired by
Lattice, as announced by Origin on 11
September 2017

Barrels of oil equivalent – the volume of
hydrocarbons expressed in terms of the
volume of oil which would contain an
equivalent volume of energy

Board of Directors of Beach

Bridgeport (Cooper Basin) Pty Ltd

Compounded annual growth rate

Carbon Capture and Storage

Cash generating unit

Company

Beach and its subsidiaries

Cooper Energy

Cooper Energy Ltd

132

Cooper Basin

CBJV (Cooper
Basin JV)

DBNGP

Delhi

Includes both Cooper and Eromanga
Basins

The various joint venture interests owned
by Beach’s wholly owned subsidiaries
Delhi and Lattice in the SACB JVs and
SWQ JVs

Dampier to Bunbury Natural Gas Pipeline

Delhi Petroleum Pty Ltd

Drillsearch

Drillsearch Energy Pty Ltd

DTA

EBITDA

EIP

Deferred tax assets

Earnings before interest, tax, depreciation
and amortisation

Executive Incentive Plan

Entitlement offer

$301 million 3 for 14 pro-rata accelerated
non-renounceable entitlement offer

EPS

Ex PEL 91

Ex PEL 92

Ex PEL 104 / 111

Ex PEL 106

Ex PEL 513

Ex PEL 632

Free cash flow

FY20

Genesis

Group

GSA

HBWS

Exploration Permit (NT)

Earnings per share

PRLs 151 to 172 and various production
licences

PRLs 85 to 104 and various production
licences

PRLs 136 to 150 and various production
licences

PRLs 129 and 130 and various production
licences

PRLs 191 and 206 and various production
licences

PRLs 131 to 134 and various production
licences

Operating cash flow less investing
cash flow (excluding acquisitions and
divestitures)

Financial year 2020

Genesis Energy Limited and its subsidiaries

Beach and its subsidiaries

Gas sales agreement

Gigajoule

Halladale/Black Watch/Speculant fields
in the offshore Otway Basin in licenses
VIC/L1(v) and VIC/P42(v)

H1 FY20

First half year period of FY20

IFRS

kbbl

kboe

KMP

KPI

International Financial Reporting Standards

Thousand barrels of oil

Thousand barrels of oil equivalent

Kilometre

Key management personnel

Key performance indicator

Thousand tonnes

Beach Energy LimitedAdditional information

Kupe

Lattice

LNG

LPG

LTI

Mitsui

MMbbl

MMboe

MMscf

MMscfd

Net Gearing

NPAT

NZOG

O.G. Energy

OGP

OMV

Origin

Otway Sale

PACE

PCP

PEL

PEP

PPL

Prize

PRL

Kupe Gas Project. Beach 50% and
operator, Genesis 46%, NZOG 4%.
Consists of offshore Kupe gas field in
the Taranaki Basin, the Kupe offshore
platform, Kupe gas plant and associated
infrastructure

Lattice Energy Limited

Liquefied natural gas

Liquefied petroleum gas

Long term incentive

Mitsui &Co., Ltd and its subsidiaries

Million barrels of oil

Million barrels of oil equivalent

Million standard cubic feet of gas

Million standard cubic feet of gas per day

The ratio of net debt/(cash) to the sum of
net debt/(cash) and total book equity

Net profit after tax

New Zealand

New Zealand Oil & Gas Limited and its
subsidiaries

O.G. Energy Holdings Limited, a member
of the Ofer Global group of companies

Otway Gas Project. Beach 60% and
operator. Consists of offshore gas fields
Thylacine and Geographe, the Thylacine
Well Head Platform, Otway Gas Plant and
associated infrastructure

OMV Group and its subsidiaries

Origin Energy Limited and its subsidiaries

Sale of 40% of Beach’s Victorian Otway
interests to O.G. Energy (for additional
information please refer to ASX
announcement REF: #047/18)

The South Australian Plan for Accelerating
Exploration gas grant scheme

Prior corresponding period

Petroleum Exploration Licence (SA)

Petroleum Exploration Permit (Victoria
and NZ)

Petroleum Lease (QLD)

Petroleum Production Licence (SA)

Petajoule

Prize Petroleum Licence

Petroleum Retention Licence (SA)

PRMS

PRRT

Q1 FY20

ROC

Red Sky

SACB JVs

Petroleum Resources Management System

Petroleum Resource Rent Tax

First quarter of FY20

Return on capital

Red Sky Energy Limited

South Australian Cooper Basin Joint
Ventures

South Australian
Cooper Basin Joint
Ventures

The Fixed Factor Area (Beach 33.4%,
Santos 66.6%) and the Patchawarra East
Block (Beach 27.68%, Santos 72.32%)

Santos

SAWA

Senex

SGH

SPE

STI

Santos Limited and its subsidiaries

South Australia Western Australia
reporting segment

Senex Energy Limited

Seven Group Holdings Limited

Society of Petroleum Engineers

Short Term Incentive

SWQ JVs

South West Queensland Joint Ventures

South West
Queensland Joint
Ventures

Includes the SWQ Gas Unit and exploration
and oil production licences – various equity
interests (Beach 30–52.2%)

Tcf

TFR

TJd

Trillion cubic feet

Total Fixed Remuneration

Terajoule

Terajoules per day

Toyota Tsusho

Toyota Tsusho Corporation and related
parties

Toyota Tsusho assets
or interests

TRIFR

TSR

Refers to 5% of OGP and 11.25% of the
BassGas Project. Refer Beach’s ASX
release #098/17 of 21 December 2017 for
further information

Total recordable injury frequency rate

Total shareholder return

Udacha Block

PRL 26

US$

Waitsia

United States $

Beach 50%, Mitsui 50% and operator. The
project consists of the Waitsia Gas Project,
an interest in the Xyris production facility
and other in-field pipelines

(1) Complete definitions for Reserves and contingent resources are contained within “Petroleum Resources Management Systems (revised June 2018) better known as PRMS 2018.

133

Annual Report 2020Schedule of Tenements

For the year ended 30 June 2020

Cooper/Eromanga – Queensland

Subsidiary Company

Tenement

Maw 6.50%
Delhi 32%

Delhi 22.5%
BEOL 25%

Delhi 20%
BEOL 25%

Delhi 25.2%
BEOL 27%

Delhi

Delhi 28.8%
BEOL 10%

Delhi

Delhi 23.2%
BEOL 16.7375%

ATP 1189 ex ATP 259
(Naccowlah Block)1

ATP 1189 ex ATP 259
(Aquitaine A Block)2

ATP 1189 ex ATP 259
(Aquitaine B Block)3

ATP 1189 ex ATP 259
(Aquitaine C Block)4

ATP 1189 ex ATP 259
(Innamincka Block)5

ATP 1189 ex ATP 259
(Total 66 Block)6

ATP 1189 ex ATP 259
(Wareena Block)7

PL 55 (50/40/10)

SWQ Gas Unit8

Circumpacific

ATP 940

Cooper/Eromanga – South Australia

Subsidiary Company

Tenement

38.5%

47.5%

45%

52.2%

30%

38.8%

40%

39.9375%

100%

75%

50%

100%

75%

100%

Subsidiary Company

Tenement

BPT

BPT 40%
GAOG 60%

BPT 50%
GAOG 50%

Springfield 15%
Impress (CB) 25%

BPT 40%
GAOG 60%

Springfield 15%
Impress (CB) 25%

Acer

BPT 40%
GAOG 60%

BPT

Acer

PPL 249 (Elliston Oil Field)

PPL 250 (Windmill Oil Field)

PPL 253 (Bauer/Bauer-North/
Chiton/Arno Oil Fields)

PPL 254 (Congony/Kalladeina
Oil Fields)

PPL 255 (Hanson/Snelling Oil
Fields)

75%

100%

PPL 256 (Sceale Oil Field)

100%

PPL 257 (Canunda/Coolawang
Fields)

100%

PPL 258 (Spitfire Oil Field)

40%

PPL 260 (Stunsail Oil Field)

100%

PPL 261 (Pennington Oil Field)

100%

PPL 262 (Balgowan Oil Field)

100%

PPL 263 (Martlett North Oil
Field)

40%

PPL 264 (Martlett Oil Field)

40%

PPL 265 (Marauder Oil Field)

40%

PPL 266 (Breguet Oil Field)

40%

PPL 268 (Vanessa Gas Field)

ex PEL 919

GSEL 648 (ex PEL 91)

ex PEL 9210

GSEL 634 (ex PEL 92)

PEL 94

PEL 95

ex PEL 10111

GSEL 652 (ex PEL 101)11

ex PEL 10414

PRL 15 (Growler Block)

43%

100%

40%

75%

50%

100%

40%

PPL 204 (Sellicks Oil Field)

PPL 205 (Christies Oil Field)

PPL 210 (Aldinga Oil Field)

PPL 212 (Kiana Oil Field)

PPL 220 (Callawonga Oil Field)

PPL 224 (Parsons Oil Field)

PPL 239 (Middleton/Brownlow
Fields)

PPL 240 (Snatcher Oil Field)

40%

PPL 242 (Growler Oil Field)

40%

PPL 243 (Mustang Oil Field)

40%

PPL 245 (Butlers Oil Field)

PPL 246 (Germein Oil Field)

PPL 247 (Perlubie Oil Field)

PPL 248 (Rincon Oil Field)

75%

Springfield 15%
Impress (CB) 25%

BPT

BPT 40%
DLS 30%
GAOG 30%

BPT

BPT 50%
GAOG 50%

Springfield 15%
Impress (CB) 25%

BPT

134

Beach Energy LimitedAdditional information

Otway – South Australia

Subsidiary Company

Tenement

ADE

PEL 494

GSEL 654

PPL 62 (Katnook)

PPL 168 (Redman)

PPL 202 (Haselgrove)

PRL 1 (Wynn)

PRL 2 (Limestone Ridge)

PRL 13 (Killanoola Field)

PRL 32 (ex PEL 255)

GSRL 27

Arrowie – South Australia

Subsidiary Company

Tenement

BPT

GEL 15621

Otway – Victoria – Onshore

Subsidiary Company

Tenement

BPT 10%
BEOL 90%

BPT

PPL 6 (McIntee Gas Field)

PPL 9 (Lavers Gas Field)

PEP 168

100%

40%

43%

100%

40%

47.5%

50%

40%

Subsidiary Company

Tenement

BPT 50%
GAOG 50%

BPT 40%
DLS 20%
GAOG 40%

BPT

ex PEL 10612

GSEL 646 (ex PEL 106)

ex PEL 10713

GSEL 653 (ex PEL 107)

Springfield 15%
Impress (CB) 25%

ex PEL 11114

PEL 182

ex PEL 18215

ex PEL 21816

ex PEL 51317

PEL 570

PEL 630

ex PEL 63218

Reg Sprigg West Unit

20.762%

PRL 26 (Udacha Unit)

100%

GSEL 645 (ex Udacha Unit)

100%

Acer

BPT

DLS (513)

Ambassador

BPT

GAOG

Delhi 12.86%
BEOL 7.902%

BPT 25%
DLS Gas 30%
GAOG 45%

Delhi 17.14%
BEOL 10.536%

Delhi

Delhi 20.21%
BEOL 13.19%

Patchawarra East19

27.676%

Otway – Victoria – Offshore/nearshore

Fixed Factor Agreement20

SA Unit

20.21%

33.4%

Subsidiary Company

Tenement

BEOL

BEOL 55%
BEOTL 5%

BEOL

Vic/P42(V)

Vic/P43

Vic/L23

Vic/L1(V)

Vic/P73

70%

100%

70%

100%

21%

10%

50%

60%

135

Annual Report 2020Browse – Western Australia

Subsidiary Company

Tenement

BPT

WA-80-R

Bonaparte Basin – Western Australia

Subsidiary Company

Tenement

BEOL

BEBPL

WA-454-P

WA-6-R (West Petrel)

Otway (Offshore) – Tasmania

Subsidiary Company

Tenement

BEOL

BEOL 55%
BEOTL 5%

T/30P

T/L2 (Thylacine)

T/L3 (Thylacine South)

Bass Basin – Tasmania

Subsidiary Company

Tenement

BEOL 37.5%
BEBGL 5%
BPT 11.25%

BEOL 39%
BPT 11.25%

T/L1 (Yolla)

TR/L2

TR/L3

TR/L4

TR/L5

Carnarvon – Western Australia

Subsidiary Company

Tenement

BPT

WA-359-P

Perth Basin – Western Australia

Subsidiary Company

Tenement

7.34%

50%

5.75%

100%

60%

53.75%

50.25%

BEPBPL

EP 320

L11/L22 (Beharra Springs)

L1/L2 (Waitsia Excluding
Dongara, Mondarra and
Yardarino)

Bonaparte – Northern Territory

Subsidiary Company

Tenement

BEOL

BEBPL

NT/P82

NT/P84

NT/P85

NT/RL1

Great South Basin – New Zealand

Subsidiary Company

Tenement

BERNZT 15%
BERNZHL 15%

PEP 50119

Canterbury – New Zealand

Subsidiary Company

Tenement

BPT (NZ)

BERNZHL

PEP 52717

PEP 3826422

Northern Taranaki Graben – New Zealand

Subsidiary Company

Tenement

50.25%

BPT (NZ)

PEP 5708023

Taranaki Basin – New Zealand

Subsidiary Company

Tenement

21%

BERNZKL
Kupe Mining No.1 Ltd

PML 38146 (Kupe)

50.00%

5.75%

30.00%

50%

37.50%

50%

136

Beach Energy LimitedAdditional information

1. The Naccowlah Block consists of ATP 1189 ex ATP 259 (Naccowlah) and PLs 23-26, 35, 36, 62, 76-79, 82, 87, 133, 149, 175, 181, 182, 189, 287, 302, 495, 496, PLA 1026. Note sub-leases of PLs (gas)

to SWQ Unit and PCAs 251, 269, 271.

2. The Aquitaine A Block consists of ATP 1189 ex ATP 259 (Aquitaine A) and PLs 86, 131, 146, 177, 208 and 254. Note sub-leases of part PLs (gas) to SWQ Unit and PCA 276.
3. The Aquitaine B Block consists of ATP 1189 ex ATP 259 (Aquitaine B) and PLs 59 – 61, 81, 83, 85, 108, 111, 112, 132, 135, 139, 147, 151, 152, 155, 205, 288, PL 508, 509, 1013, PLA 1014, PLA 1035.

Note sub-leases of part of PLs (gas) to SWQ Unit and PCA 248.

4. The Aquitaine C Block consists of ATP 1189 ex ATP 259 (Aquitaine C) and PLs 138 and 154.
5. The Innamincka Block consists of ATP 1189 ex ATP 259 (Innamincka) and PLs 58, 80, 136, 137, 156, 159 and 249. Note sub-leases of part PLs (gas) to SWQ Unit and PCAs 270, 278, 281, 282, 283.
6. The Total 66 Block consists of ATP 1189 ex ATP 259 (Total 66) and PLs 34, 37, 63, 68, 75, 84, 88, 110, 129, 130, 134, 140, 142 – 144, 150, 178, 186, 193, 241, 255, 301, 502 PLA 497 and PLA 513.

Note sub-leases of part of PLs (gas) to SWQ Unit and PCAs 252, 253, 254, 275, 279, 280.

7. The Wareena Block consists of ATP 1189 ex ATP 259 (Wareena) and PLs 113, 114, 141, 145, 148, 153, 157, 158, 187, 188, 411 and PL 1016. Note sub-leases of part of PLs (gas) to SWQ Unit and PCAs

250, 268, 272, 273, 274, 277.

8. The SWQ Gas Unit consists of subleases of PLs within the gas production area of Naccowlah Block, Aquitaine A Block, Aquitaine B Block, Innamincka Block, Wareena Block and Total 66 Block.
9. ex PEL 91 consists of PRLs 151, 152, 153, 154, 155, 156, 157, 158, 159, 160, 161, 162, 163, 164, 165, 166, 167, 168, 169, 170, 171 and 172.
10. ex PEL 92 consists of PRLs 85, 86, 87, 88, 89, 90, 91, 92, 93, 94, 95, 96, 97, 98, 99, 100, 101, 102, 103 and 104.
11. ex PEL 101 consists of PRLs 173 and 174.
12. ex PEL 106 consists of PRLs 129 and 130.
13. ex PEL 107 consists of PRLs 175, 176, 177, 178 and 179.
14. ex PEL 104/111 consists of PRLs 136, 137, 138, 139, 140, 141, 142, 143, 144, 145, 146, 147, 148, 149 and 150.
15. ex PEL 182 consists of PRLs 135, 238, 239, 240, 241, 242, 243 and 244.
16. ex PEL 218 (Permian) consists of Permian section of PRLs 35, 37, 38, 41, 43, 44, 45, 48 and 49.
17. ex PEL 513 consists of PRLs 191 and 206.
18. ex PEL 632 consists of PRLs 131, 132, 133 and 134.
19. Patchawarra East consists of PPLs 26, 76, 77, 118, 121 - 123, 125, 131, 136, 147, 152, 156, 158, 167, 182, 187, 194, 201 and 229.
20. The Fixed Factor Agreement consists of PPLs 6 – 20, 22 – 25, 27, 29 – 33, 35 – 48, 51 – 61, 63 – 70, 72 – 75, 78 – 81, 83, 84, 86 – 92, 94, 95, 98 – 111, 113 – 117, 119, 120, 124, 126 – 130, 132 – 135,

137 – 140, 143 – 146, 148 – 151, 153 – 155, 159 – 166, 172, 174 – 180, 189, 190, 193, 195, 196, 228 and 230 – 238.

21. Application to surrender in October 2019 subject to government approval.
22. Farm down of equity from 65% to 37.5%.
23. Application to transfer interest subject to government approval.

137

Annual Report 2020Subsidiary Companies

Acer

Ambassador

ADE

BEBGL

BEBPL

BPT (NZ)

BEOPL

BEOL

BEOTL

BEPBPL

BERNZCL

BERNZHL

BERNZKL

BERNZT

BPT

Acer Energy Pty Ltd

Ambassador Exploration Pty Ltd

Adelaide Energy Pty Ltd

Beach Energy (Bass Gas) Limited

Beach Energy (Bonaparte) Pty Limited

Beach Petroleum (NZ) Pty Ltd

Beach Energy (Offshore) Pty Ltd

Beach Energy (Operations) Limited

Beach Energy (Otway) Limited

Beach Energy (Perth Basin) Pty Limited

Beach Energy NZ (Clipper) Limited

Beach Energy Resources NZ (Holdings) Limited

Beach Energy Resources NZ (Kupe) Limited

Beach Energy Resources NZ (Tawhaki) Limited

Beach Energy Limited

Circumpacific

Circumpacific Energy (Australia) Pty Ltd

Delhi

DLS (513)

DLS

DLS Gas

GAOG

Impress (CB)

Maw

Springfield

Delhi Petroleum Pty Ltd

Drillsearch (513) Pty Ltd

Drillsearch Energy Pty Ltd

Drillsearch Gas Pty Ltd

Great Artesian Oil & Gas Pty Ltd

Impress (Cooper Basin) Pty Ltd

Mawson Petroleum Pty Ltd

Springfield Oil and Gas Pty Ltd

Tenements Acquired
PEP 50119.

Tenements Divested
n/a

138

Beach Energy LimitedShareholder information

Additional information

Share details – Distribution as at 3 August 2020

Range

1 – 1,000

1,001 – 5,000

5,001 – 10,000

10,001 – 100,000

100,001 Over

Rounding

Total

Unmarketable Parcels

Minimum $500.00 parcel at $1.4250 per unit

Total holders

Units

% Units

7,785

11,088

5,499

7,673

534

3,786,529

30,578,920

41,683,324

208,369,579

1,996,915,304

0.17

1.34

1.83

9.13

87.53

0.00

32,579

2,281,333,656

100.00

Minimum
Parcel Size

351

Holders

2,855

Units

384,530

Voting rights – fully paid ordinary shares
On a show of hands, every person qualified to vote, whether as a member or proxy or attorney or representative, shall have one vote.
On a poll, every member shall have one vote for each share held.

Substantial shareholders as disclosed by notices received by Beach as at 3 August 2020

Name

Seven Group Holdings Limited and others

Number of voting
shares held

Date of Notice

650,554,052 15 November 2018

Australian Capital Equity Pty Ltd, Wroxby Pty Ltd, North Aston Pty Ltd and others (ACE Group);
Ashblue Holdings Pty Ltd, Tiberius (Seven Investments) Pty Ltd, Tiberius Pty Ltd and others
(Tiberius Group); Mr Kerry Stokes AC and Kemast Investments Pty Ltd

650,554,052 15 November 2018

139

Annual Report 2020Twenty largest shareholders as at 3 August 2020

Rank Name

Units

% Units

HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED

NETWORK INVESTMENT HOLDINGS PTY LTD

J P MORGAN NOMINEES AUSTRALIA PTY LIMITED

CITICORP NOMINEES PTY LIMITED

NATIONAL NOMINEES LIMITED

NETWORK INVESTMENT HOLDINGS PTY LTD

BNP PARIBAS NOMINEES PTY LTD

BNP PARIBAS NOMS PTY LTD

NETWORK INVESTMENT HOLDINGS PTY LTD

HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED

MR ROBERT LEE PETERSEN

AYERSLAND PTY LTD

CITICORP NOMINEES PTY LIMITED

BNP PARIBAS NOMINEES PTY LTD HUB24 CUSTODIAL SERV LTD

HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED-GSCO ECA

MR MATTHEW VINCENT KAY

BNP PARIBAS NOMS PTY LTD

MR KENNETH JOSEPH HALL

Totals: Top 20 holders of FULLY PAID ORDINARY SHARES (Total)

Total Remaining Holders Balance

556,813,692

556,667,776

282,904,715

175,608,227

65,831,753

34,127,698

33,182,080

31,709,581

26,843,311

18,742,950

14,172,317

11,678,908

9,945,117

9,583,148

7,692,940

6,160,515

4,361,390

3,918,255

3,275,620

3,200,000

1,856,419,993

424,913,663

24.41

24.40

12.40

7.70

2.89

1.50

1.45

1.39

1.18

0.82

0.62

0.51

0.44

0.42

0.34

0.27

0.19

0.17

0.14

81.37

18.63

140

Beach Energy LimitedCorporate Information

Annual General Meeting
For information about the Annual General Meeting, please visit:
beachenergy.com.au/agm

Corporate Directory

Chairman
Glenn Stuart Davis
LLB, BEc, FAICD

Independent non-executive

Deputy Chairman
Colin David Beckett
FIEA, MICE, GAICD
Independent non-executive

Directors
Philip James Bainbridge
BSc (Hons) (Mechanical Engineering), MAICD
Independent non-executive

Matthew Kay
BEc, MBA, FCPA, GAICD
Managing Director

Sally-Anne Layman
B Eng (Mining) Hon, B Com, CPA, MAICD
Independent non-executive

Peter Stanley Moore
PhD, BSc (Hons), MBA, GAICD
Independent non-executive

Joycelyn Cheryl Morton
BEc, FCA, FCPA, FIPA, FCIS, FAICD
Independent non-executive

Richard Joseph Richards
BComs/Law (Hons), LLM, MAppFin
Non-executive

Ryan Kerry Stokes
BComm, FAIM
Non-executive

Additional information

Company Secretary
Daniel Murnane
BA/LLB

Registered Office
Level 8, 80 Flinders Street
ADELAIDE SA 5000

Telephone: (08) 8338 2833
Facsimile: (08) 8338 2336
Email: info@beachenergy.com.au

Share Registry – South Australia
Computershare Investor Services Pty Ltd
Level 5, 115 Grenfell St
ADELAIDE SA 5000

Telephone: (08) 8236 2300
Facsimile: (08) 8236 2305

Auditors
Ernst & Young

Level 12/121 King William Street
ADELAIDE SA 5000

Securities Exchange Listing
Beach Energy Limited shares are listed on the ASX Limited
(ASX Code: BPT)

Beach Energy Limited
ABN 20 007 617 969

Website
www.beachenergy.com.au

141

Annual Report 2020