Beach Energy Limited (BPT.AX) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, and welcome to the 2022 Beach Energy Annual General Meeting. The quorum is present, so I declare the meeting open. It's good to see you again at our first AGM in the traditional format since 2019. Thankfully, the COVID interruptions are behind us, and it's just lovely to see shareholders in person here with us today. So thanks for joining us. I'd like to start with the safety message, as I do every year. In the unlikely event of an emergency evacuation, you'll hear an alarm. On hearing the alarm, please evacuate in a calm manner through the doors to my left and follow the instructions from the Crowne Plaza staff who will direct you to a safe assembly point until the emergency is passed. As you know, respect is one of our core values at Beach, and we pay our respects to the traditional custodians across Australia and New Zealand. We acknowledge that we meet today on the traditional country of the Kaurna people of the Adelaide Plain, and we pay our respect to their elders past and present. We also recognize and respect their cultural heritage, beliefs and spiritual relationship with the land and acknowledge that there are of continuing importance to the Kaurna people today. Our compliance statement is behind me, so you can have a review of that later if you would like to. A few quick housekeeping matters. If you haven't already done so, could you please just turn your mobile phone to silent. I'd also ask you to note that any unauthorized recording or photography during the course of the meeting today is prohibited. And lastly, the presentation is being webcast, and a recording will be available on our website after the meeting. And I welcome to those who are joining us on the webcast. I'm joined today by our Chief Executive Officer, Morne Engelbrecht, who will address you shortly, along with fellow continuing directors, Phil Bainbridge, Sally-Anne Layman, Margaret Hall, Peter Moore and Richard Richards. Also in attendance today is Anthony Jones from our auditor EY who is available for questions in relation to the 2022 financial accounts and remuneration report. It is Anthony's last AGM with us as he rotates off as required, so please ask him a question, he hasn't had one in his 5 years. We've received a number of questions from shareholders in advance of the meeting, and I'll address those in question time later on this morning. So with those introductions behind us, let's move into the formal part of the meeting. It's hard to read the media today without a story about energy security, gas supply and energy demand and pricing. What sense can we make of it all? There are a few fundamentals that you, as shareholders, should hold on to. National energy security is a live, relevant and critical issue. If you're looking for some evidence, just ask anybody living in Europe. Gas is going to play a critical role in Australia's energy mix for decades to come. And within the foreseeable future, there are real risks of shortfalls on both the East and West Coast. In terms of evidence, just look at the statements from our federal government, the statements from the Australian Energy Market Operator and also the Australian Competition and Consumer Commission. Energy pricing is, not surprisingly, a function of supply and demand. And given the potential shortfalls, we need to get more gas developed and into the market. Again, look to the words of the Australian government, AEMO and the ACCC. Yes, the world will decarbonize, and we support that. How and over what period of time remains unclear, and it will remain unclear for many years to come. In terms of evidence, just have a look at the International Energy Agency's World Energy Outlook 2022. In a decarbonizing world, what we produce remains important and demand will remain that outstrips current supply, especially having regard to natural field decline. So more resources need to be found and developed and brought to market. Again, the evidence lies in the statements from our federal government, AEMO, the ACCC and in this regard, even the International Energy Agency. Some will disagree with these facts, but the truth, which I accept is uncomfortable for some, remains in these fundamentals. Beach has a role to play in addressing these fundamentals and our strategy is aligned with them. We're contributing to Australian energy security supplying critical domestic gas into the East Coast and the West Coast markets and that will increase on the East Coast in the short term as we connect further wells to the Otway Gas Plant this year. We're playing our part in increasing supply. Waitsia start-up on the West Coast is targeted for late 2023, calendar year 2023. Perth Basin and Cooper Basin exploration and appraisal programs will be delivered this financial year. As I mentioned, further gas connections to the Otway Gas Plant will be online soon. And there are further opportunities in all of our basins, which are under active consideration. We're also active in moving toward our aspiration to be net 0 in Scope 1 and 2 emissions by 2050. We're committed to the Moomba Carbon Capture and Storage project with our joint venture operator, Santos. We're active in reviewing further opportunities for CCS in the Otway. We're pursuing fuel, flair and vent projects, CO2 membrane replacement projects and electrification where practicable. And where logically adjacent to our operations or infrastructure, we're investigating new energy opportunities in the form of wind in New Zealand, hydrogen and hydrogen storage in the Otway and low-carbon energy in the Cooper Basin. Beach plays an important role in significantly contributing to Australia's energy security, energy supply and the pathway to decarbonization, and it will continue to do so. In playing that role, Beach needs and has a team of high-quality and committed people, led by our CEO, Morne. Our people recently delivered the Otway Basin's largest ever drilling campaign, delivering 1 new discovery, 6 development wells, 2 connections and more connections to come, as I've just mentioned. And in delivering that work program, our core value of safety was at the forefront throughout. The project was delivered safely and was recognized with the 2021 IADC Safety Award. Congratulations to everybody involved, both staff and contractors on delivering a great project safely. The team is also working hard on the delivery of the Waitsia Stage 2 project, further drilling in the Cooper Basin, further refinement of our opportunities and pathway in the Bass Basin, potential drilling in New Zealand and carbon abatement and new energy projects across the entire portfolio. They're doing great work, and they're playing their role in the energy security, reliability and supply that Australia, New Zealand and the globe critically need at the moment. I want to thank all of you for your hard work and your commitment, which I know will continue. In relation to people, I also need to mention 2 directors leaving us today. Firstly, Rob Jager. Rob, our very best wishes to you and your family. Secondly, Colin Beckett. Colin joined Beach coming on 8 years ago, and he's been through a lot in those 8 years, including the Drillsearch and Lattice acquisitions that we undertook. Colin, thank you for your wise counsel, guidance and commitment to Beach over those 8 years, and we wish you very well in your retirement. And of course in terms of people, thank you to you, our shareholders. Without you, we can't play our part in underpinning energy security, reliability and supply. So thank you for supporting us and fulfilling that important role. On that note, I'll hand over to Morne. Thank you.

Thank you, Glenn. Good morning, and welcome, everyone. First of all, it's my great honor and privilege to have been appointed CEO of Beach Energy. I recognize and honor the proud 60-year history of this company and those that have come before me. I'm passionate about our people, and the future of this company and the great team we have to deliver our strategy. I've been a part of the journey for Beach for the last 6 years, and I look forward to leading the team through the next exciting phase of growth. I'd briefly like to take the opportunity to pass on my views on our current strengths here at Beach as well as some of our focus areas. Let's begin with our strengths. First, Beach represents a unique value proposition for you, our shareholders and investors. It's my view that our exposure to the East Coast gas market and global LNG markets puts us in an enviable position, while at the same time, we pursue a sustainable, low emissions future. Second, we have demonstrated that we possess the core competencies to deliver major projects, both on and offshore. As Glenn mentioned, our delivery of the Otway offshore drilling campaign demonstrates Beach's -- that Beach can deliver on the big stage. It was a tremendous success, and I too would like to add my congratulations to the team. Third, we believe we have the right strategy in place to grow and evolve. We have drilling planned in all our basins across the portfolio, and we continue to assess CCS, new energy and growth opportunities in various forms. Fourth, we will soon be supplying a total of 5 markets with strong fundamentals with the addition of LNG. It is clear that our products remain in high demand across Australia, New Zealand and internationally, with Beach in a prime position to deliver. And finally, our financial position continues to be strong, providing Beach with optionality when it comes to growth and capital management. As for my key focus areas in the short term, as Glenn also acknowledged, we are fortunate to have great people at Beach, and I want to have a culture where we can be proud of. Beach should be a place for everyone in our industry wants to work. I want to lead and further grow that environment. The team and I remain focused on completing our major projects in the Otway Basin and Perth Basin and deliver on our FY '24 production target. These major growth projects are progressing, and our team is working very hard to deliver them on time and on budget. Third, by delivering these major projects, Beach is setting up the base for future growth. With growing production and free cash flow profile, we will be ready to take the next step in our growth journey. Our balance sheet allows us to keep our options open on all opportunities to add value to our portfolio. Fourth, I want to make sure we take a disciplined approach to new energy opportunities. This means doing the rigor, doing the desktop studies, assessing commercial opportunities with our partners and making sure we are ready to take the right steps at the right time. Lastly, I look forward to formalizing a dividend policy with the Board, which will provide clarity on how we will determine dividend payments once major projects have been delivered and free cash flow has strengthened. I would also like to reiterate our Chairman's message that Beach is playing a critical role in supporting local energy security. We are doing this by executing our strategy to deliver sustainable growth in gas supply. In the Otway Basin, our offshore well connections will deliver more than 30% increase in our share of supplying East Coast demand from 12% currently to 16% by FY '24. We are proud to say that Beach is the only gas producer of scale, increasing its share of the East Coast gas market. And it's coming at a time when new supply is desperately needed. In the Perth Basin, the Waitsia Stage 2 project will deliver a transformational LNG revenue for Beach and see us become a new entrant in the global LNG market. To deliver our corporate strategy, we are enabled by our talented people and the Beach culture, which represent the foundation of our growth and success. As well as developing our existing assets, inorganic growth has always been a part of our strategy. On this front, you may have seen that we've entered into a Scheme Implementation Deed to acquire Warrego Energy. There is still a way to go, but if we complete the acquisition as planned, we will add an exciting and complementary gas development asset to our Perth Basin portfolio, which will help accelerate gas development for WA. Warrego has a 50% interest in West Erregulla. This is a fully appraised and developed-ready gas discovery. A final investment decision is yet to be taken, meaning we can deploy our gas development expertise for optimal commercialization. As well as being compelling for Beach, we believe the offer provides full and fair value for Warrego shareholders. We're offering $0.20 per share in cash, which delivers immediate and certain value and represents a 36% premium to the 1-month volume weighted average Warrego share price at 9 November. I note there was a competing offer for Warrego. The inferior all-share nonbinding proposal from Strike Energy. Strike's nonbinding proposal was valued by Strike, before our binding offer moved the market prices at $0.186 per share. Our cash offer is binding and superior at $0.20 per share. There are a few points I would like to make on the relative merits of our offers. Beach's objective for the Perth Basin and West Erregulla and current speculation in the market. Firstly, a quick comparison of our offer versus Strike's offer. Our offer is binding. Strike's offer is indicative and nonbinding. Our offer is all cash. It delivers immediate and certain value to Warrego shareholders. Strike's offer is all shares, which creates inherent volatility in the offer value from movements in Strike's share price. We know Strike's share price has been as low as $0.145 over the last 12 months. Warrego's Board of Directors has unanimously recommended Beach's cash offer to its shareholders and the Directors intend to vote their shares in favor of our cash offer. Beach will bring financial strength to the West Erregulla joint venture to achieve faster delivery of the project relative to its current pathway. We would welcome Warrego shareholders to invest their sale proceeds if they so choose in Beach and be part of our compelling, exciting growth story. Second, to reiterate our objectives for the Perth Basin and West Erregulla. Our strategy is to sustainably develop new gas for the WA market. We are excited to work swiftly to develop West Erregulla in the best interests of the joint venture. We have the expertise, access to infrastructure and the balance sheet to support and accelerate gas development for WA, which in turn support WA energy security. We don't need to raise capital to deliver our current growth projects or opportunities like Warrego. Third, to set the record straight on some speculation currently in the market, we have no intention to make an offer for Strike Energy. If you apply our Warrego offer on a look-through basis to Strike's 2P reserves, you'll realize we believe Strike is not something we would acquire at its current share price. We intend to develop West Erregulla as quickly as we can. We are not bidding for Warrego to backfill Waitsia Stage 2 volumes with the West Erregulla volumes not permitted to be exported. In closing, the offer to acquire Warrego is a great example of how our strong balance sheet and disciplined approach to inorganic growth puts us in a great shape to pursue such value accretive growth opportunities. I mentioned briefly that the Otway offshore project demonstrates our core competencies for delivering major projects. While this was the most significant milestones achieved in FY '22, it was not the only highlight. Others include taking a final investment decision on the enterprise nearshore project in the Otway Basin, which will deliver more gas in the East Coast gas market. Delivering the Kupe compression project in New Zealand, which brought the plant back to full capacity. Signing the sales agreement with BP for our Waitsia Stage 2 volumes, with plant construction progressing and 6 wells drilled out of a total of 14 currently planned. Taking a final investment decision for Moomba CCS, which is now under construction, and delivering the Yolla wireline campaign in the Bass Basin and mitigating Western Flank oil decline with an exploration campaign delivering new discoveries. Delivering these milestones demonstrate our ability to deliver projects safely, on time, on budget and brings us closer to our FY '24 production target. Safety takes precedence and everything we do at Beach. We recorded pleasing outcomes this year, particularly given it was a year of record hours worked across the organization, more than 3.3 million hours. Highlights included a number of safety awards, extended injury-free periods and significant reduction in spills. Safety performance did unfortunately show an uptick in minor incidents. This is disappointing and we're addressing this through ongoing safety campaigns and training. We maintain our focus on continual improvement, and I thank all of our people for their dedication and demonstration through action that safety, does take precedence in everything we do. You may have seen that Beach's recent announcement that we are investigating several initiatives to reduce our Scope 1 and 2 emissions as well as pursuing opportunities in new energy markets. Moomba CCS is just the beginning. We have several feasibility studies underway, including Otway CCS, which is earmarked as the next most likely asset to deploy CCS following Moomba. Meanwhile, we continue further assessments on electrification at BassGas and Kupe, and we're investigating ammonia production possibilities to name a few. Beach ended FY '22 in a strengthened financial position. We had $165 million in cash and $765 million in available liquidity. We also successfully refinanced and upsized our debt facility to $600 million during the financial year. This means we are well placed to balance capital management initiatives with future growth opportunities. With our free cash flow expected to increase materially from FY '24, we plan to release a formal dividend policy with our FY '23 half year results. This will provide transparency on how we plan to determine dividend payments following this current period of higher capital expenditure for our major growth projects. You will have no doubt I've seen that we started the new financial year with strong momentum across our operations and major growth projects. In the Otway Basin, connection of the Thylacine wells is underway and tracking to our target of first gas by mid-2023. As I mentioned, this will be a key driver of more than 30% increase in our East Coast gas market share and would deliver much-needed volumes. Construction of the Waitsia Stage 2 gas plant is well underway, and we have drilled 6 of the 14 planned development wells needed for the development. The rig has since mobilized for exploration drilling and the first exploration well is underway, which we are all very excited about. We also had a successful first quarter drilling in the Cooper Basin. Operations there have been impacted by severe wet weather. However, we have managed that as well as we can be expected, and we look forward to working through our backlog of well connections and workover activities. To conclude, the message I want you to take away from today is that your company is delivering the foundations for sustainable growth and increasing much needed gas supply at a time when energy security is paramount. First, Beach's entrance into the global LNG market is truly transformational. We are doing this with our share volumes sold to an excellent customer in BP, with attractive LNG pricing. The Waitsia Stage 2 project is progressing well, and we have a very exciting Perth Basin exploration campaign that is now underway. Second, we are increasing our share of the East Coast gas market by more than 30% by middle of next year. We have 674 petajoules of reserves to be produced with an increasing uncontracted gas profile as gas prices are strengthening. Third, we will grow while we focus on reducing our emissions through proven technologies like CCS, while we investigate future energy opportunities and markets. We are already a participant in the Moomba CCS project, one of the nation's biggest. In summary, we believe that Beach represents a unique value proposition and is primed for growth as we deliver our major projects. Once again, I'm really excited about the future of Beach Energy, and I'm fortunate to have a great team in place, supported by a very experienced Board of Directors. I will now hand back to Glenn. Thank you.

Thanks, Morne. We'll now take some time to address questions on this morning's presentation or our operations generally. To begin with, though, we did receive some questions in advance of the meeting in writing. So I'm just going to read those questions and answer them before we give you an opportunity to ask questions from the floor. The first comes from [ Dr. Joseph Blow ], will you be raising money from shareholders in the next 6 months? Is the company planning to sell anything to related parties in the next 6 months? So we've been very careful to maintain a very strong balance sheet after we acquired the Lattice assets. On average, we've been spending $825 million in CapEx per annum to develop those assets and bring new gas to market. During that really capital-intensive phase, we've preserved the balance sheet, which we think is prudent and it remains in great shape. There is no immediate need for us to raise capital whatsoever. And no, we have no plans to sell anything to a related party. A question from Mr. [ David Hanneman ]. We note that the existing directors are due for reelection and trust that each of them will be afforded an opportunity to speak briefly before a vote is taken? Yes, each director will have an opportunity to address you today before I put the resolution for their reelection. Mr. [ Leonid Derbinsky ] As Australia navigates out of gas, what kind of company does Beach Energy wish to become and will it share its plans with shareholders? I don't think Australia is navigating out of gas, quite frankly, and Beach Energy certainly isn't navigating out of gas. In fact, I think it would be socially irresponsible not to develop our gas reserves at the moment. Consistent with what I said earlier in my opening remarks, our plans are as stated, we intend to continue to develop our assets to supply Australia with the energy security that it needs. We will continue on our decarbonization pathway in the Cooper Basin but also across our other basins. And we'll investigate and develop logically adjacent opportunities for us and shareholders in new energy across the entire portfolio. Mr. [ Robert Lee Peterson ]. In the Otway Gas Project presentation on the 24th of September 2019, at Page 55, Beach mentioned that they will look into debottlenecking the Otway gas plant and subsequently mentioned in a more recent presentation that the Otway gas plant can be expanded to 250 TJs per day. Now that the Otway gas campaign has been proven to be successful, is Beach Energy considering the expansion of the gas plant now that it has more gas than the Otway plant can process. If not, is it cost consideration or is the gas founded enterprise not big enough to justify the expansion of the Otway gas plant? So our objective with the offshore drilling campaign in the Otway Basin was to get the plant to full capacity, which is 205 terajoules a day, when we connect the Thylacine wells in the middle of 2023, which is our target date. The plant will be at full capacity, and our strategy moving forward will be to maintain that plant at that full capacity, but there is no present plan or strategy to extend the Otway gas plant. Two questions from [indiscernible]. The first, would the company comment on the recent press report where the CEO of Mitsui Australia said Mitsui is seriously considering production of blue ammonia in partnership with Beach Energy using gas from the Perth Basin? So Mitsui, we did announce the establishment of some joint ventures in relation to blue ammonia in the Perth Basin, but we are not a party to those joint ventures today. We are continuing to look at that opportunity in the Perth Basin. And if we think it makes sense for you as shareholders, and we see line of sight to value down the track, then blue ammonia in that basin may be something we participate in. Second question from [indiscernible]. In light of the recent takeover proposed for Origin Energy, has the company received any expressions of interest for Beach? There is no offer on the table today from anybody for Beach Energy. But obviously, if we did receive an offer that we thought was in the best interest of shareholders, we would communicate that to you immediately. That's the end of the questions we received before the meeting. So if there are questions from the floor, I'd ask you to raise your hand and then someone will come and find you with a microphone and we can go from there. [ James Hahn ] from the Australian Shareholders Association is first cab off the rank.

Yes. My name is [ James Hahn ]. I represent 1.4 million proxy shares on behalf of the Australian Shareholders Association. I'd like to thank you for meeting with us and discussing issues of interest. Although the present production figures are disappointing from our point of view, we accept that the future years may be better, particularly Waitsia so that's clarified. We'll be voting our proxies for all resolutions. I actually have 3.5 questions. May I do them now or...

Of course.

Okay. We would like clarification on the future composition of the Board. Will it have the same number of directors? And if so, when will new nominations take place? You used to have 9. I think you're down to 7, yes?

We're down to 6 as of the close of this meeting today, James.

Are you willing to discuss that to the -- with the shareholders, the future plans for the Board and perhaps, whilst doing that, maybe discuss future plans for yourself?

So in terms of the Board, we are looking at increasing the number of directors on the Board, and we're in a process at the moment. Where that will lead, it's too early for me to tell, but you should expect some Board change in the not-too-distant future in terms of numbers. In terms of myself, I've been here a long time, James. I've been chairing this company for a decade. There are mixed views about whether I should continue or not. I serve at the pleasure of shareholders and I fulfill the role as Chairman at the pleasure of my colleagues on the Board. So I will take the feedback from shareholders and my Board colleagues about whether this time next year, when I'm up for reelection, I should put myself up or that would be an appropriate time to transition. If we go into transition then, there will be a process well in advance of me departing. It won't be me just walking out the door and leaving...

Okay. That's good. This is -- the next -- well, this one is a discussion point. Do you guys have views on the government's possible changes to pricing policy with caps or tax or anything? Has it been discussed at the Board level? Or is there anything you're willing to express to shareholders on those possible issues?

By all means, look, we do discuss at a Board level, as you can imagine, James. But our view of all of the different mechanisms that are being discussed is that they're all flawed. None of them are going to solve the problem and all of them potentially have significant ramifications for energy supply going forward for Australia. So I haven't to agree with the South Australian Minister for Energy, Minister Goods and [indiscernible] the way to fix the problem, get more gas, and that's what we intend to do. All the other mechanisms, they're going to create problems. And the government, I think, realizes that. That's why they're struggling with it so much.

Okay. And the final 1, the Waitsia contractor [indiscernible] has been in the news of late. Do you have any comments on whether the project at Waitsia will be completed on time and on budget?

So [indiscernible] is the subject of an offer from its partner, we build to buy them. I think they're talking about a completion early in the New Year in terms of that transaction. We have a fixed price turnkey contract with [ Clough ] that's being executed at the moment. There's 250 people on site in the Perth Basin at the Waitsia project at the moment working away. And at the moment, we still expect completion to be in accordance with our contract and in accordance with our schedule. If there are other questions on the floor, as people raise their hand, we'll get a microphone to you. Yes, sir.

[ Neal McGallis ] is my name. I travel down to the Gulf Coast every year for the Beach Energy meetings.

Welcome back, [ Neal ]. We're great to see you every year, although we didn't see you for 2 years running.

That's right. And I've got a lot of questions to build up for the 2 years.

Okay. Go ahead then.

Well, when the results were announced this year, like I listened to them [ drop and upward ] well, wow, that's good, $605 million because a couple of bean counters like we weren't happy with that, they're expecting $660 million, I think. And as usual, our share price got [indiscernible]. Do the Directors ever look at what these analysts are expecting not that I wouldn't blame as if you didn't? But like -- yes, like all this company, all these good things we do, all these -- with everything looks good, every presentation is looking better, but man, our share doesn't take much to give out Beach a flogging in the share price.

Yes. So look, it won't surprise you to learn, we do pay reasonably close attention to what the analysts and the market are saying about us and their expectations. And we do try to help them in terms of their expectations, help them to understand our business. I think overall, FY '22, you can't say that it was a bad year, like $1.75 billion in turnover, $1.2 billion in operating cash flow, $504 million in underlying NPAT. It's hardly a set of numbers to be sneezed at. I think where we missed from an analyst perspective was on production, 21.8 million BOEs. Yes, they were expecting more. We would always like more, but the fact of the matter is that we're really focused on building out these big projects in the Otway and in the Perth Basin. When we've built out those projects, we still think we're on track for our target of 28 million BOEs in FY '24. The free cash flow that's going to be generated from that, we think, shareholders, we accept they have been really patient with us. We have been very, very capital-intensive phase. That will then present us with the opportunity to -- in the dividend policy that will be announced at the half year next year, reward shareholders for their patience. And we hope that, that will put some wind under the wings of the share price.

Well, exactly what I mean by that, like I just can't understand why the Directors couldn't relay that at the end of the financial year? Like so yes, we have to be prudent because most people understand that. And then there will be something in the capital management as time goes on because I think [ Quintas ], they announced their results on the same day or the next day, now they've got $5 billion in debt. They had a loss of $2 billion, but they announced the $400 million share buyback and their share price went up. So I just can't understand why the Directors can't so -- why you just can't give something more to the market?

We give the market really transparent information about our operations and what we're doing and how we see the world going forward. Not everybody agrees with us in terms of what we say, obviously, and people form their own opinions and they publish analyst reports on that basis. So -- but we do engage heavily. But in the end, there's only one thing that's going to get their share price moving north, which is what we all want, and that's performance, and we've got to continue to perform. I think the capital-intensive phase has made that difficult in terms of getting momentum in the share price, but we think it's coming soon.

This last thing about the takeover of Warrego Energy. That's actually a surprise for me because it's actually been a kangaroo island for the last couple of days, and there's been very limited communications down there. But I've seen a thing in Australia in a while back. I never got to read the full story, where it said where Beach investors might need some convincing to take over Cooper Energy. Did anybody else read that story?

I didn't read it, but if I had a dollar for every time someone ask me whether Beach Energy was buying Cooper Energy, I probably wouldn't have to be here today, I suspect. We have no -- we've got no intention of taking Cooper Energy although John Conde and David Maxwell, they're doing a good job in doing their thing. And -- but we just have no intention of taking over Cooper Energy. Warrego, from our perspective, it's right next door to what we're doing in the Perth Basin. There's 211 petajoules of developed gas ready to go to the WA domestic market. We've got the capability and the capacity to bring that to market really quickly, and we think it's a really good opportunity for Beach and our shareholders.

I don't know how many of these directors are on the Board now. But if we look back now, and I'm going back a long time now, when we took over the Adelaide Energy and the Impress Energy, looking back now were they good deals? Have they ever produced anything?

Yes, they were good acquisitions. I think Beach has got a good track record of disciplined M&A activity, and the Warrego acquisition is no different. We've been very patient. We've taken our time. When we see an opportunity that we think is really value accretive for our shareholders, then we move. And I think we've got a good track record of doing that over the years, including the acquisitions that you referred to, the Drillsearch acquisition, the Lattice acquisition and now potentially the Warrego acquisition. As Morne said in his presentation, there's still a lot of water to pass under the bridge in relation to where we go. But if we complete next year, it makes a lot of sense from a Beach perspective and also from a Warrego perspective and its shareholders.

Well, and I suppose -- and it's something that really still pays me off. And I don't know how many of the current Board are there now as when we did the Drillsearch takeover. Now it was only just before the Drillsearch takeover, I put my hand in my pocket to help fund the money to do the Lattice takeover. And the Board sort of said, "No, don't do that, keep your money in your pocket and just buy Drillsearch shares because you get 25% extra shareholding?

Yes. I just can't give you investment advice, unfortunately.

Yes, I know that. I get that. But the thing is, when you did the Drillsearch acquisition, it never really shifted the needle ever.

It didn't, but it did shift the needle in terms of the cash flows that we're able to generate out of the Western Flank, which is what has underpinned a large part of our growth in our expansion. I know people view the Western Flank these days in various lights, but it has been a tremendous asset for Beach. The Drillsearch acquisition was a good acquisition for Beach, and that asset has quite frankly funded a lot of our growth in our development activity. It would have been very hard to do without it other than coming to you again and asking you to put your hand in your pocket, which we've not wanted to do.

Yes. Look, I get that. And I know you've had to do that to do the acquisition. But from a shareholder's point of view, for every 100,000 shares in Beach Energy you have, like you would have had 125,000 if you're a Drillsearch shareholder, do you get that?

No, I understand what you're saying, but I just don't see that we're in a position to give you some investment advice [indiscernible] up to the Drillsearch transaction.

Yes. It's not the investment advice I want. If I had investment adviser, I would have got out of Beach Energy shares for $2.86, I think after our last share meeting, but we didn't because we were on the up and up then. But yes, no, that's just my point is we always talk about how they're doing the right thing by the shareholders. And then as I said, if I would have had 100,000 Drillsearch shares, we will have picked up -- because that's how it worked out. You got 1.25 Beach Energy shares for every 1 Drillsearch share. That's how it worked out. So if you're a Drillsearch Energy holder in the room -- your laughing. Anyway, that's it.

Other questions from the floor, ladies and gentlemen? Anybody else this morning? Being led off lightly this year. Thanks, ladies and gentlemen. We'll move on to the formal items of business if there's no other questions. The Notice of Meeting dated 14 October 2022 has been available to all shareholders and is also available on our website. There being no objection, the notice of meeting will be taken as read. All resolutions will be voted on by poll rather than a show of hands today as Chairman, I've called that poll. I propose to put all resolutions to the meeting and then conduct the poll on all resolutions together at the end of the meeting. Shareholders and proxy holders would have received on registration a blue voting paper that provides for the holding of a poll on today's resolutions. I'll provide more detail shortly when the poll is to be conducted. All results will be determined by our share registry after the close of the meeting and then announced on ASX. The company has received 1,060,017,500 proxy votes, representing 46.46% of valid securities voted. As we move through each resolution today, you'll see on the screens behind me, the proxies in relation to each resolution. The proxies has been reviewed by our share registry, Computershare Investor Services, and I note that I've casted undirected proxy votes given to me as Chairman in favorable resolutions today. The first item of business this morning is the receipt in consideration of the financial report, the Directors report and the auditor's report of the company and the group for the financial year ended 30 June 2022. There's no requirement to approve the financial statements, so I might be putting a resolution to the meeting. But does anybody have any questions on the accounts or any questions of our auditor in relation to the audit? No, then I'll move on to the resolutions. The first resolution to be put is a nonbinding ordinary resolution in respect of the remuneration report for the financial year ended 30 June 2022. The remuneration report is found in the 2022 annual report on Pages 57 to 71 and contains information about the remuneration arrangements of the nonexecutive directors and senior executives who are key management personnel. The proxy results for the resolution are shown on the screen. I'll note that there's a voting exclusion in respect to this resolution as set out in the Notice of Meeting. I now move Resolution 1 as set out in the notice of meeting that for the purposes of Section 250R(2) of the Corporations Act, the remuneration report for the financial year ended 30 June 2022 as set out in Beach's 2022 annual report, be adopted. Does anybody have any questions on the motion this morning? If not, I'll move to the next resolution. The second resolution is an ordinary resolution regarding the reelection of Mr. Bainbridge as a Director. Mr. Bainbridge's biography is set out in the Notice of Meeting. But before I put the resolution, I'll ask Phil to briefly address the meeting.

Good morning, everyone, and thank you, Glenn. I'm an engineer by background and have spent most of my executive life in the oil and gas industry in technical and commercial roles across exploration, development, production in many jurisdictions around the world. I've been on the Board since March 2016 and [ gained ] courtesy of the Drillsearch merger. In addition to Beach, I also serve as Chairman of the Global Carbon Capture and Storage Institute, as a Non-Executive Director of Newcrest Mining, as a Non-Executive Director of Sims Limited and as Chairman of privately held Sino Gas & Energy. I'm hoping that in addition to good governance, strategic thinking and industry experience, I can continue to add value to Beach by assisting Beach in its essential decarbonization and new energy journey, and also supporting an environment where we can attract and retain top talent, where everyone wants to contribute to their full capacity. Many thanks for your time today and to those who have voted in support. Thank you.

Thanks, Phil. The proxy results for the resolution are shown on the screen. I'll now put the resolution that Philip Bainbridge who retires by rotation pursuant to clause 6.1 of the Beach Constitution and ASX Listing Rule 14.4 and being eligible, offers himself for reelection, is reelected as a Director of Beach. Does anybody have any questions on the motion? If not, I'll move to the next one. The third resolution is an ordinary resolution regarding the reelection of Dr. Moore as a Director. Dr. Moore's biography is set out in the Notice of Meeting. But again, before I put the resolution, I'll ask Peter to just briefly address you.

Thanks, Glenn, and good morning, everyone. I've been a Director of Beach Energy now for 5 years. I'm a geologist by training. And I actually started my career in the Cooper Basin, where I spent 6 years exploring for oil and gas. I spent 12 years after that with Exxon and Esso. Obviously, with Esso offshore, Western Australian exploration and around the country. And then with Exxon, I was Head of Global Study. So looking for new oil and gas all over the world. Next 14 years with Woodside, and I started there as Chief Geologist and ended up as the Head of Exploration worldwide. So as a geoscientist, I bring that experience to the Board. I am the only geoscientist on the Board. So I think it's a useful skill set. I think since leaving Woodside now 9 years, and I've developed a career as a company director first with Central Petroleum, which of course, was bringing buying assets and bringing gas to the East Coast market. Then with Carnarvon Energy, offshore Western Australia and more recently as Beach. Obviously, in that time, in that 9 years, I've served on a variety of committees of the Board, both as a member and as chairs. And so I'm very familiar with the way medium and large companies operate, function and are governed. I must say I've got great faith in Beach as a company, and I would actually be honored to continue to serve you as shareholders for another turn. So thank you.

Thanks, Peter. The proxy results for the resolution are shown on the screen. I'll now put the resolution that Peter Moore, who retires by rotation pursuant to clause 6.1 of the Beach Constitution and ASX Listing Rule 14.4 and being eligible, offers himself for reelection, is reelected as a Director of Beach. Are there any questions on the motion? If not, I'll move to the next resolution. The fourth resolution is an ordinary resolution regarding the reelection of Ms. Sally-Anne Layman as a Director. Ms. Layman's biography is set out in the Notice of Meeting. And again, before I put the resolution formally, I'll just ask Sally-Anne to briefly address you.

Thank you, Glenn. Good morning, ladies and gentlemen. My name is Sally-Anne Layman. I have been an independent Non-Executive Director of your company since 2019. I've spent my career in adverse range of roles in mining, energy, mining technology and finance. My qualifications and experience, as Glenn has said, have been set out in the Notice of Meeting and are available on our website, so I won't go through those here today. What I did want to talk to you very briefly about was some of the value and focus that I bring to the Board. The diversity of my skills and experience are well placed to oversee the good governance of your company, and I've got a passion for that in my role as Chair of the Audit Committee. The ever-evolving challenges and opportunities of ESG are also of particular interest to me. And it's more than just about climate change. It's about the safety and fulfillment of our people. It's about the communities in which we work, who have placed their trust in us to do the right thing. And it's about the environment in which we operate and have the responsibility to be good stewards of. And of course, our core business, which is committed to sustainably delivering energy to communities through our oil and gas assets in Australia and New Zealand. I'd like to thank you for the opportunity to serve as a Director of Beach Energy to represent you, our shareholders. And I look forward to further contributing to Beach's success in the future. Thank you.

Thanks, Sally-Anne. The proxy results for the resolution are shown on the screen. I'll now put the resolution that Sally-Anne Layman who retires by rotation pursuant to clause 6.1 of the Beach Constitution and ASX Listing Rule 14.4 and being eligible, offers herself for reelection, and is reelected as a Director of Beach. Does anybody have any questions on the motion? No. I will move to the next resolution. The fifth resolution relates to the reinstatement of the partial takeover provisions in our constitution. The resolution is set out in the Notice of Meeting. Under the Corporations Act, this type of vision must be reinstated every 3 years. A detailed explanation regarding the operation of clause 14 of our constitution is set out in the Notice of Meeting. But broadly speaking, the clause provides that if someone makes a partial takeover offer for Beach, the offer can't proceed without shareholder approval. It prevents someone getting control of the company without a full takeover offer by all of your shares unless you approve it in a general meeting. In our opinion, as a Board, the provision provides shareholder protections. The proxy results for the resolution are shown on the screen. I'll now put the resolution that for the purposes of Section 648G of the Corporations Act and for all other purposes, clause 14 of the constitution is renewed for further 3 years after the date of this Annual General Meeting. Does anybody have any questions on the motion this morning? If not, we'll now move to the poll on all resolutions, ladies and gentlemen. If nobody has any final questions, we'll run the poll on all of the resolutions, 1 to 5. Firstly, if there's anyone present who believes they're entitled to vote but hasn't registered to vote, would you please raise your hand for assistance. You should have received material at the time you registered with the Computershare staff prior to the meeting. The people entitled to vote on the poll are all shareholders, representatives and attorneys of shareholders and proxy holders who hold blue admission cards. On the reverse side of your blue admission card is your voting paper and instructions. I'll now go through the procedures for filling in the voting papers. Proxy holders have attached to their admission card a summary of proxy votes, which details the voting instructions for each item of business. By completing the voting paper, when instructed to vote in a particular manner, you are deemed to have voted in accordance with those instructions. In respect of any open votes, a proxy holder may be entitled to cast, you need to mark a box beside the motion to indicate how you wish to cast your open votes. Proxy holders should refer to the summary of proxy votes form attached to your voting paper for further information, if you need it. Shareholders also need to mark a box beside the motion to indicate how you wish to cast your votes. Please ensure you print your name where indicated and sign the voting paper. When you finished filling in your voting paper, please leave the auditorium and lodge your voting paper in a ballot box held by our share registry staff at the exit to make sure your vote is counted. Hopefully, you can then lean to join us for some brief refreshments that are waiting outside for us. If you need any assistance in anything in terms of voting, could you please just raise your hand and we'll make sure you get some help. Everybody is okay? Nobody needs a hand in terms of their voting? Has everybody had enough time to complete their votes? If not, raise your hand, and I'll give you a little bit more time. Do you need some assistance, sir? That would make it easier for you, I'm sure. Thanks, Richard. We just have a couple of queries on the poll, ladies and gentlemen, from a couple of people. So if you just give us a moment, we'll sort those out before I close the poll. So sir, are you sorted out in terms of your voting? It's yes. And sir, are you fine in terms of your voting on the poll sir? All good? So Derek or somebody, this gentleman, just need some assistance or -- please? All sorted, Derek? [ Neal ], you have a question on the poll? Yes? Derek will help you. Has everybody completed their voting? Does anybody need any further assistance? No? In that case, thank you, ladies and gentlemen. I'll now formally close the poll. The poll results will be collated and released to the ASX and posted on our website later today when they're available. On behalf of the Board, thank you very much for attending today and participating in the AGM. We really appreciate it. And as I said, we hope you can join us for a couple of tea outside. With that, ladies and gentlemen, I'll declare the meeting closed. Thank you.