Matt Kay - CEO Dawn Summers - Chief Operating Officer Jeff Schrull - Group Executive Exploration and Appraisal

James Byrne - Citi Adam Martin - Morgan Stanley James Redfern - Merrill Lynch Andrew Hodge - Macquarie Ewe Jin Tan - Churchill Capital

Thanks, Christine. Good morning, all and welcome to our third quarter results call for FY18. With me is Matt Kay, Chief Executive Officer; Dawn Summers, Chief Operating Officer; and Jeff Schrull, Group Executive Exploration and Appraisal; and other members of the executive team. We will discuss our results and then open the line for Q&A. Matt, I will hand over to you to start with an overview of the quarter.

Thanks, Mark, and welcome, everyone to the call. It’s been another extreme and active quarter for Beach. A historic quarter in fact as financial close of Lattice completed. Reporting on the new asset portfolio for the full third quarter, Beach delivered record production of 6.6 million barrels of oil equivalent, record sales volumes of 6.8 million barrels of oil equivalent and record sales revenue of $393 million. $133 million of free cash was generated by the business, helping to decrease net gearing to 29% at the end of March, well ahead of our original estimate of 35%. At quarter end, Beach held cash reserves of $147 million and had available liquidity of $647 million. Clearly putting us in a position of financial strength which as you know is a core pillar of our strategy. The transformation of Beach is evident in the reported results. But by no means is it complete. Work is well underway and we’re on track to achieve our synergy targets of $50 million per annum by the end of FY19. Turning to our operations, safety is integral to what we do at Beach. So, I’m very pleased to report the safe and seamless transition of ownership assets onshore and offshore. Through this transition, our offshore assets have delivered steady performance, continuing to perform in line with expectations over the quarter. This included an increase in average daily production from our offshore Otway Basin asset. We undersaw field work at the Yolla gas field in the Perth Basin which saw 4 to 5 TJ/day uplift in production at the end of the quarter. And in New Zealand, Kupe had a nice steady quarter with stable operations and an overall increase in gross average daily production. Moving onshore, the Kupe Basin continues to deliver. Not only that you see the step-change from increased ownership with the Kupe Basin joint-venture but underlying that is the reward of dedicated and active fieldworks across both operated and non-operated impairments. We recorded a 20% increase in oil production from our 100% owned PEL 106 acreage, achieved lastly through the artificial lift campaign with seven artificial lifts we installed over Q2 and Q3. In our liquids rich ex-PEL 106 we recorded a 6% increase in production even while under processing restrictions in March. This clearly demonstrates the value Beach can add as an operator. During the quarter construction also commenced on the Phase 1 expansion with Middleton facility from 25 to 40 million scfs of raw gas per day. This is well on track to completion in FY18. With another solid production result and steady operations across onshore and offshore assets, we are able target our pro forma, meaning 12 months Beach plus 12 months Lattice full year production guidance range to 26 million to 27 million of barrels of oil equivalent, this is previously 25.5 million to 27.6 million barrels of oil equivalent. It’s important to note that Beach will consolidate the Lattice assets from 1 January 2019 and on this basis reported production guidance translate to a range 18.1 million to 19.1 million barrels of oil equivalent. Moving onto exploration and development. In the onshore Otway Basin, initial testing of Haselgrove completed during the quarter. Flow rates achieved during the production test were generally in line with right previously reported and we remain encouraged by the discovery. We were beneficiaries of the $6 million grant from the Central Government under the gas acceleration program also known as a Gas Grant. This grant will assist Beach in efforts to commercial the house of growth discovery and supply gas to these case market. In the Cooper Basin, we continue to perform well with the drill bit, we achieved an 89% drilling success rate for the quarter bringing out success rate to 85% for the financial year today. Drilling success in the quarter included three horizontal oil development wells. You have hopefully noticed the increase in horizontal drilling activity in the Cooper in recent quarters with financial incorporating four horizontal wells into Kinley food development program Beach drilling to down town horizontal wells and Senex drilling the ground on horizontal. This drilling technique applied to the right target and executed successfully is able to achieve superior economics to a vertical well development plan and with the result today supporting the concept we are focused on identifying as many targets as possible for FY 19, we have more detail when we release the FY19 guidance in July. To this extend Beach is undertaking its annual asset review and reserve order process. This is always a fulsome process that this year is even more so within new expanded portfolio and opportunity fit from which to drive our value. A focus of the asset review is to apply Beach’s low cost, fix to focus operating model, to all of our assets including the new offshore asset base. We will determine the optimal capital programs project ranking and secreting to our portfolio. While the asset review is underway, we have prudently deferring non-core maintenance capital projects at our offshore locations. While of course ensuring safety and stable approach are not compromised. This in conjunction with continued drilling and capital efficiencies across the Kupe has helped us to reduced out FY18 pro forma, capital expenditure guidance to $370 million to $400 million down from the previous $405 million to $455 million. We consider this reduction to be value additives to the business. The results to the review will feed into our FY19 guidance reporting which we expect to release at end of July and our reserves and resource reporting at the end of August. At Beach reporting events, you can expect further updates on our Perth Basin and Otway basin development plans. Both are well underway and a key focus for our team. Finally, I want to mention the agreement reached subsequent to quarter with Senex. Beach and Senex have agreed to redirect up to $43 million of committed expenditure associated with the Senex broadest CBOS joint venture, transferring that spends to the ex PEL 104/111 acreage. This acreage has proven producers and most recently achieved exploration success with a broader oil discovery in 2017. This agreement is a strong win-win for both parties. And on that note, I will pass to our Chief Operating Officer, Dawn Summers, to discuss the operations in more detail.

It’s a pleasure to be here this morning and to talk about a very strong quarter for operations. Production for the quarter was 6.6 million barrels of oil equivalent and we achieved this whilst maintaining safe and reliable operations across all of our onshore and offshore assets. Our priority during the transition was on continuing to be to ensure our teams remain focused and do not become complete if anything distracts us from safety, always a number one priority. So, let’s talk about some of the best practice in the quarter. Our Cooper Basin performance was a key highlight where we hit an all-time production high in the Western Flank of around 14,000 barrels of oil per day net. Thanks to the integrated active management of the asset focusing on efficiently well below the implementation of enhanced oil recovery options and maximizing facility uptake. And I want to present Beach owned ex PEL acreage at the 91 acreages, primarily the Bauer and Hanson fields. The work undertaken over the last two quarters which comprises four artificial lift installations in Q2 and a further 3 in Q3 supported by the incremental impact of new wells to 20% increase in our oil production, a fantastic result. Meantime, we are currently installing artificial lift in our Stunsail-6 and -7 wells for our additional artificial lift opportunities across the basin. And our operated Middleton acreage we continue to optimize production in line with current restrictions imposed by the Moomba facility for repair and maintenance work on one of the CO2 processing trains. And as such, operating was reduced processing capability. Important to note that Beach had some high liquids content in our ex PEL 106 Middleton which allows us to optimize the mix of our producing well to maximize liquids production and reduce the amount of raw gas processing at Moomba during this period. This active management has helped produce a 6% increase in liquids production for Middleton with liquids production reaching 1,000 barrels per day mark. Another great result. As Matt mentioned, construction work has commenced on the turning of the Middleton to Moonanga export pipeline, which will increase gas processing capacity in the Middleton facility from 25 million to 40 million tanks bcfe. This is on track to reach the size at the end of this financial year. And the Cooper Basin JV we are seeing the results of the third drill rig and the production optimization work. Gross acreage daily oil production increased by 7% and gross daily gas and liquids production almost offset natural sales decline, recording a small 2% decline over the quarter. On a net basis, production net to Beach from Cooper Basin JV increased by 59% due to the increased ownership stake in joint venture. Moving to the newly acquired assets, the third quarter is characterized by very safe production, delivering in line with our expectations. At Victoria, average daily production acreage at Otway Basin was up 4% on a quarter-over-quarter despite # days' unplanned downtime at the Otway gas plant for [molecular server] maintenance and further impacts resulting from the unfortunate bushfires in Southwest Victoria, causing some unplanned power outages. BassGas, a successful well in Cooper, undertaken some production from the Yolla field of the Yolla well, resulted in a nice uplift in production late in the quarter with added a bonus of approximately 4 to 5 TJes per day. And the work being completed ahead of budget on schedule. Over the water in New Zealand, our Kupe asset continues to experience high customer demand and improved condensate yields gas and liquid export during the quarter. Looking ahead to 4Q, as Matt mentioned, the operations performing with expectations, we have confidence in tightening our pro forma FY18 production guidance to 26 million to 27 million barrels of oil equivalent, reflecting our continued focus on maximizing productivity while maintaining safe and reliable operations. As we continue to implement Beach's low-cost fit-for-purpose operating model with focus on agency, our people, productivity and performance. We have made good progress in the third quarter in identifying opportunities to reduce our direct operating costs and our sustained business capital, improving our overall cost performance, while at the same maintaining our safety and production performance. In last quarter’s call, I communicated that on top of the integration synergy savings, we have set $15 million operating cost reduction target for FY19. We’re making good progress here and some examples of what we’ve achieved so far are, organizational efficiencies, where we’ve integrated the South Australia and Western Australia operating business with the intent of implementing the successful Beach operator in model across our WA asset. We’ve also re-tendered a number of key high-value operations and maintenance support projects across South Victoria and New Zealand assets. And we prevent a best-in-class risk base review of our equipment and maintenance strategies which are resulting in a number of activities being either eliminated or defied from our planning budget. And finally, identification and implementation of synergies with our partners, example of such as logistics optimization, i.e., our helicopter and boat sharing across the back seat with other operators and including the Taranaki Basin and also operational improvements with our Cooper Basin JV partners. So, in 4Q, in FY19 and beyond, we’ll continue the journey to become sustainably cost competitive. That's all for me. so, I'll now hand over to Jeff to talk about exploration and appraisal.

And Development. Good morning, everyone. It really is a pleasure to discuss Beach's new asset base. I’ll start with the technical integration and the way we're going to organize ourselves going forward. We're putting together combined teams of ups development and ENA personnel to put together basin development plans for our new, five new basins and also the Cooper basin and the focus is to sustain and grow production in our fields in a highly profitable manner. Matt mentioned the reserve review is currently underway and I'm working with Jeff Parker and his team to identify projects where we can move 2P undeveloped to developed 2C and 3P reserves to 2P developed and undeveloped, big focus on the fields growing at a sustaining production and also ENA drilling programs to add production in a profitable manner. So, every basin will have its aim this completely dedicated to one of those three things. Now, I’d just like to go through each of our basins and give you some highlights that may outline. In the Cooper Basin is only added 27 meters AEMO of wells both operated and non-operated. On the Western Flank and congrats to Don and Kevin and the team for the new production record years, production I think in the Western Flank, we had a record than happens very often, it’s great to see. The focus for drilling was on field development drilling is un-sale and also appraisal drilling. We drill two vertical and the more producers that were pilot holes for two horizontal wells one in the Birkhead formation and one in the McKinlay formation this nutshell six wells had a 34% net over 585-meter drain, the first circuit well we drill in horizontal fashion that was a great result look forward to get it online. The McKinlay well was an amazing result the GST worked well, to where we had 96% growth over carbon of 28-meter drain, so it’s a great move. On the appraisal front that the three north extended the McKinlay play quite a distance north of our added reserves, its added the development projects and less than calibrated our new high-tech conversion methodology which we spend a lot of time and money on and we’ve discussed that in the past. And the Senex, operating one of four or one of 11 area the [indiscernible] meter drain which came online at 1850 a day double the field production really good moves, they also drill an appraisal well which shows that the accumulation wasn’t as big as we hoped, but it was side tracking will be a second producer on the Morara field. A bit a detail about the sea bar scale where we move up to $43 million and to basically a drilling front with Senex for 104 and 1011, two other highlights to be on the low cost four Beharra and Flank exploration wells which are hot off the press from the new liberator survey, it’s always great when we get the new 3D and we get some high impact wells. And those are combination of Nomura and Birkhead structures and also, we’ll be using some of the money to drill some more horizontal development wells at Grover. So, look for landmark here for 104 and 1011 next year. The Cooper Basin JV Santos have their three rigs busy, busy, busy 20 new producers some of the highlights we drilled four well coach in an area oil development and appraisal program at AEMO at 800 meters of gross oil production, four wells at granny that added 8 million to 10 million cubic feet a day we are not sure about some of the rights of the wells. And then new another horizontal technology and the formation which a deep very high formation they beautifully landed and on time and on budget a 1,000-meter drain and they are planning a 10 stage frac, so this will be the first horizontal frac Tier 1 wells and several of our fields have this as an opportunity. And I think it’s good now that the JV with two parties we’ve discussed in the past our strengthening or corporative technical approach with Santos and we will continue to do that. So, moving onto the Otway, we put together first past is fairly close to what the final answers is going to be for the out way offshore development, field basin development plan it involves five development wells and two exploration wells and the intention is to mix every drilling campaign with an exploration and a development opportunity. And as Matt said earlier we’re looking for a partner to fund down the 30%, that wants to take part of this very exciting business opportunity. Importantly in the first quarter, we moved enterprise in the two exploration wells into the drill ready category, both have chances of success of greater than 50% and we are excited about them. Can’t give you the volume metric but hopefully we can do that in very near future. And right now, we are moving Enterprise and Blackwatch as development well and enterprise will be exploration well. We are planning that to be our first upgrade drilling. In the Penola Trough, where we majorly have three discovery, we are currently taking remapping the field. So, we have paved two different levels and come out with a drilling strategy to appraise the accumulation and come up with a long-term development strategy based on the appraisal outcomes. And part of that appraisal strategy will be when and the timing of hooking up Haselgrove-3. The plan is to integrate potentially any appraisal drilling and come up with exploration drilling that we have planned, Dombey was a PACE -- a well we got an exploration grant for. We're [already] looking at other deep Sawpit exploration targets in the basin. So, looking forward to some really exciting drilling in the Penola Trough in the coming couple of years. In the Bass Basin the oil field added 5 million a day production from one of the in-fill wells. We are going to -- Trefoil is a potential and Yolla is a late life field, there’s several discoveries including Trefoil, nearby that we are going to look at different development options and see if we can make those commercial developments. Moving to New Zealand in the Taranaki Basin, the focus is on the phase 2 development which at a minimum will include compression installation. We will move into field in Fy19 in the focused areas to sustain production. We have got a fixed term contract and the compression will help us extend the plateau for quite some time. But what I am excited about is the new seismic repo we’ve got. David will be here probably in about two months, all the activities that you need for a field like this and we’re going to be looking at nearfield exploration and in-fill development and appraisal opportunities to see if we can find some more gas with the high condensate rates that we see in the Taranaki to put to our plan. In the Perth Basin the team is working on with the operator and we are putting together a basin development plan. It includes all types of development concepts, include the exploration potential in the basin, especially Beharra Springs and also how we maximize the utilization of the two existing plants at Beharra Springs and Xyris. Moving on to our frontier exploration portfolio, starting with the Ironbark prospect, our farm-in deal with Cue is contingent on BT exercising an occupancy to take [49%] of the well, they recently announced an extension until October 2018 to exercise that option. And we remain very hopeful that the Ironbark well will be fully funded before the end of this calendar year, really exciting prospect. The two basins that we augmented are frontier exploration portfolio, be it the Lattice acquisition or New Zealand where we have three permits. One in the Taranaki, two in the Canterbury, and also Bonaparte where we have four permits with our predominant JV partner Santos. And each of those basins have potential for programs targeting process and different multiple types of plays, some wells are liquids rich, some gas, some LNG, backfills, some standalone. And we are busily trying to work those basins and see if any of those opportunities meet our technical and commercial thresholds. So, in a nutshell what the future looks like for Beach, I see us continuing to be very successful with the drill bit. It’s always a good way go on oil and gas company and adding maximum shareholder value in the process.

Thanks, Jeff. And with that Christian, we’ll open the line to take questions.

Wonderful. Thank you very much. Ladies and gentlemen, we’ll now begin the question-and-answer session. [Operator Instructions] Your first question today comes from the line of James Byrne from Citi. Please go ahead.

Good morning, guys and well done and a good quarter. Just wanted to ask that free cash flow number of $133 million a bit, just noting some of the moving pieces around Lattice. So, should I assume that that is free cash flow from first of January onwards including Lattice? Or is it from February onwards and adjusted for the closing adjustment, how should I think about that number?

That’s combined Beach and Lattice for the full quarter.

Got it. Alright.

Obviously, the cash transfer to the point is over the last year. So, we’ve been receiving all the cash since first of July, but free cash flow that you’re seeing this quarter is from beginning of the quarter to the end.

Got it. Alright. Thanks very much. And with the gearing having come back down under 30% quite quickly, your share price also at 3.5 year highest. How should we think about inorganic growth at the moment? in light of the asset review as well?

Yeah, James, we’re really pleased with obviously the way the assets are performing, the acquisition has performed. Obviously, we made a number of commitments to the market when they came out that gearing ratios and we’ve outperformed those, which is really pleasing. It shows how well the business is performing. We still got a lot of work, frankly to do to optimize this portfolio. A, from a synergistic point of view, but also, from a number of developments that Jeff was just talking about. So, we’ve got a lot of activity happening right now. So, I don’t think you should think about it as being heavy loaded on the acquisition front, right now. Are we opportunistic in terms of bolt-ons and other things, of course, we are, but right now we’ve got a lot of delivery to happen on our core acreage. I wouldn't expect this to do a lot of Lattice acquisition in the near term.

Yeah, got it. Alright. And when should we be expecting out that on the asset review?

When we come out with our capital guidance for next year. So, in July, we’ll give you some more guidance on where our planning is around, spend for next year, which will obviously give you more guidance around, obviously appraisal development and exploration going forward in the near-term.

Got it. Alright.

And then reserves will be in August.

Yeah.

Alright. That’s very clear. Thanks very much.

Thanks, James.

Your next question comes from the line of Adam Martin from Morgan Stanley. Please go ahead.

Good morning. Can you just update on the Otway asset of the production up a little bit, the last quarter was down a lot, so, [indiscernible] trending a bit below [indiscernible], can you just provide sort of update there and that asset will that risk more rest of '18?

Yeah. Hi. So, Otway, in terms of Q3, obviously we’ve had some unplanned things that are associated with the bushfire in Victoria, which impacted on our production. However, we are actually up in our production from the previous quarter. And in certain period, this half production until last half production that weak performance evenly ready similar, so there is 20 PDs of deduction from first half of last year. And we’ve actually produced the theme in the first half of FY 2018. So, Q3 production was unfortunately lower due to the ongoing basis, but we are then with trust and have fund. And I would expect the 4Q as we head into the winter months, we expect our customers to know meter contracts towards the lower seasonal demand and that we’ve all deliver according to our gas contracts.

So, on a full year basis the asset is roughly during what you said last year that you outline -

Yeah. Absolutely. Yeah, if you look at the numbers are very, very cost over 20.5 for the first half of PGs equivalent of the first half of FY17 and 20.6 for the first half of FY18. And as I mentioned Q3 this last quarter has been unfortunate given the downtime that we experienced but we are very much on track to deliver our FY18 target and hopefully we’ll prove that production and optimize in some areas and as mentioned the gas contracts we’re then delivering outstand ATT and duly and nomination to private sector. Hopefully that answers.

Okay. That’s good. Maybe as an onshore portion to grow, I think you initially provided floor right they look pretty good are other compression is being further. Can you give us a sense of where those sort of just came in that?

Can you repeat the question, I got the first part?

So, just on the floor right. Can you provide the licenses that has grow was the reduction or where they still as high levels?

At the end of low period, we float the well for six days. And it was still over 20 million cubic feet a day at the end of the low period.

Okay. Okay. And when do you expect to update on the size of the resource?

Well, when we have an appraisal plan that we’re going forward with and an idea. The growth volume is still the same size as we announced pre-drill which I think was 32 Bcf something like that, then it’s just a matter of how much of the total accumulation this one well would have been at accessing. The key to the well is the first ever salted discovery in the --, it’s a big the closure that we drill that has a deep as is quite a big closure get hold considerable volume, it just what sort of development plan and there is also exploration targets at both Donley and - for the salt pit. So, what’s got it they try to about to play is kind of basin opening play wide in the middle of the bunch of infrastructure that’s connected to the east coast gas market.

Okay. Okay. And just final question moving over to WI, can you just sort of update there obviously corporate transaction et cetera. Can you update on the next six months what’s the plan is? What you are focused on?

Yeah. We’ll come out with more guidance on that in July when we come out with the wood part level there has been some corporate activity there. We’re really pleased to see new invention in the venture. Having dealt with Mitsui a number of times personally, they're a quality company and they will be focused on probably what been just as we are and I’m certainly looking forward to working with them. So, I think it’s probably best to wait until it would be further when we come out with the capital guidance for next year to give you some more guidance on that. I think the technical word you can make sure it obviously is still progressing as we would expect.

Your next question comes from the line of James Redfern from Merrill Lynch. Please go ahead.

All of my questions have been asked already but I just wanted to go back to Waitsia. Just wondering if you could provide a bit more detail around when we can expect some news on the GSOs to be signed for Waitsia stage 2 and when a decision we made on whether to choose the EBT or build an upgrade model for the development? And I’ve got another follow-up? Thanks.

Good question James. Probably I’d just refer back to the answer I just gave Adam which is obviously there’s been co-productivity there. The technical work and commission work has been continuing despite that activity and we are very keen to work closely to witness really there a quality outfit. So, I think you would see more coming from us in coming months, particularly when we come out in July, stand forecasts and the outlooks and some of more of that development plans. So, you’ll just have to hold on for few months and that one I think is the best way to think about it.

Yes, thank you. And timing for FID? Like is that still the second half calendar year?

Well that’s probably linked to the progress and discussions that we had with Mitsui. So again, I think I'll get back to you in August. But we're still targeting similar first gas base…

Reaching to 2020?

Well that’s FY2021 number. It’s a quality asset, it’s really full resource with B2B part of it and no surprise, that’s across we saw a number of parties claiming for, it’s a high-quality resource.

Now just in terms of the planned timeout of the gas project, can you remind me what percentage of the sell down or the timing of that is?

I think it's something that for the reason for that down is really just to balance that portfolio. As you see from our net debt levels there’s no need for us to actually to do it from a financial perspective. And given these are material development and with material opportunities going forward, our preference is that our partner will ask to collaborate and support us technically and commercially. So, we are probably thinking it’s around 30% mark that we signed down. The process is underway. We have got two of quality parties talking to us right now, and as that progresses to the market on time.

Your next question comes from the line of [Daniel Butcha] from CLSA. Please go ahead.

I was just curious whether you care to -- I know you’ve been under the hood probably for a couple of months, if you can give an update on the nuance around your synergies target and whether you think there is more upside to that and to what areas specifically you might see more potential to come out there? And secondly related to that, what you think on restructuring costs timing and that around for the second half of this year and into next financial year?

Yes, thanks Daniel look in terms of the synergies we came out with an early number of around 20 million. We had expected and hoped that there would be more but we really didn’t want to come out with a higher number until we’d had a chance to I think have the case and fully have discussions with people who were working the Lattice assets and sitting in a lot of shoes, but now that we’ve done that we are very confident about seeking in dollar target per annum end of the FY '19. We're making very good progress in terms of integrating the business, restructuring the business and some office closures and other things. So, we’re putting the right people in the right places for the right resources. So, I think, at the moment, the best I can say to you that we are very confident with our 50 number, we wouldn’t have come out with otherwise. Do we think there can be more that, yes, we do? That's just about continual optimization across all of our assets. As you have seen what we’ve done in the Cooper, now we still think there’s more in the Cooper, I think it's fair to say it's done an outstanding job to get the Cooper to where it is. But there’s still some more there and we’re going to take that same approach to every single asset frankly to drive value.

Sure. And FY '19, just wondering whether that’s your next target, somewhere you’re going to start shaping some of those synergies we offset by restructuring costs or is it just a matter of long process to get there in the restructuring costs to be taken out on top of that?

Yeah. Some of those targets are already starting to be achieved. But, yes, that is the net target.

Sure.

But that’s the run rate -- per annum run rate for that period.

Sure, sure. I was just curious with the Cooper Basin, Western Flank. Obviously, a great boost in production this quarter, artificial lift, give a sense to how long that boost will last before it goes back into sort of a faster decline?

Well, I think the key thing to remember is that we have very extensive development in appraisal programs, plan for all of our Western Flank fields. But obviously as these wells produce in the local area, the water contacts are going to go up and the individual wells are going to go down, but our plan is to fully develop the Mckinlay and Birkhead and then a more over the coming couple of years to hopefully not only to sustain but grow production.

One of the areas --- obviously, we've got artificial lift targets, there’s another two Stunsail horizontals that we're planning to have on pump coming out and then there’s another three existing targets beyond that. So, there’s already far further artificial lift targets. And I think the other thing to note for the Western Flank is obviously the horizontal drilling, changing the game.

Yeah. And we’re also hoping as I said earlier that with this up to $43 million drilling funds for PEL that we can turn that into a growth business as well with Senex, or Senex can turn it into the growth business for the operator.

Your next question comes from the line of Andrew Hodge from Macquarie. Please go ahead.

Thanks, guys. First question just about CapEx, and I just wanted to ask about, you guys have got to able to try and put in the new gas plants Haselgrove-3. Is that money mentally spend in FY '19 and I noted that it’s targeted for the plants and I just wanted to see, is that potentially upward from that just given your comment before about it being potentially basing up in well?

Maybe just a quick comment on that, so it’s not necessarily FY '19 spend, we're still working with government on when the timing of that takes place. So, we don’t have a definitive timing clearly right now.

Okay. And then the second part of that question, is they’re potential to, I guess spend more about what was initially there, if you guys think that there’s an enquiry of the size, then what that plant could be?

Well, as I said earlier, we’re linked pretty closely to the gas market on the East Coast of Australia. So, our plan will be, there’s size of project that’s commensurate with how much gas refine and can tell, but we’re quite close to the sea gas pipeline that goes from Victoria to South Australia so that we could potentially have a material project size.

Yeah. I guess just kind of thinking about there is a lot of other guide need to who is drilling and just thinking about the potential upside for you guys, if you see the bigger plan to tie another result?

Yeah. That’s always the possibility. And we’ll be trying to do a rig share with Ross who is the operator of the rig is going to be drill also with some pace grant handling in the same campaign that we’re going to drill whatever drilling around growth that we decide to do.

Okay. And then the second part tied into the CapEx. Just talking the Cera with CapEx I think you guys have said that the half year deferred a lot of long items already. And so, I just wanted to get kind of an idea about what was your commitments that you guys deferred with some of this Senex carry from this year. Just to get kind of the breakdown at some what’s going on.

So, I think the capital expenditure I’m talking on behalf of both Jeff -- [Jeff, Mark and myself here]. We're doing a deep dive into all of our capital spend to understand what's being spend, what’s the value that we get back from as we delivered to invest. And from a FYB capital perspective, we have actually taken some actions to the fast of capital into FY19. And an example of that would be that going to be carry offshore company probably something that actually deferred in the FY19. So, we’re looking at everything from a volume perspective and get some criteria in terms of what we get back for every dollar that we invest.

That’s it. The sea bar money was actually deferral it’s just because I think that made it to be spend by the middle of 2019 there is something. It was just a transfer of the funding obligation from the basin into gas play to the Western Flank oil.

Yeah. Yeah. Okay. I don’t know if I’m sure if there was any that was being included in this year versus next year. And then I guess as part basin find it out later on, but just any kind of update around potential middle expansion?

Well certainly there is some track at the moment, so basically it will commence by the end of FY19, we expect up to sort of 40 million barrels a day of gas we are continuing to asses given drilling results whether we go beyond that well but right now we’re very confident by the end of FY18, will be at 40.

Yeah. Something that is for new producer with the drilling campaign this year. The rigs are currently drilling at the Permian edge exploration play and we’re moving from [Lady Bay] to [Alledalla] after that we have four more wells which is in the right in the Middleton area. So, fingers crossed that we’re hoping that somewhere between two and four new producers that these other four wells that we’re going drilling in the remainder of this financial year.

Okay. And I was just wanted to check the artificial lift are you guys, is that being powered by sort of burning gas, diesel. Just that they have stop burning their own gas and sort of on taking mines power and that try and get extra gas?

We are considering somehow -- group's considering getting the Middleton gas somehow to the Western Flank to power, but right now, we're just burning our crude, as Dawn said.

As you could imagine given the uptick without really getting in production out of the artificial lift that’s playing out in say six months.

Okay. I guess the last question, just Jeff I just wanted to say, it sounds like you are kind of most excited about Sawpit as opposed to Pretty Hill so looking at Haselgrove in the surrounding area?

The Pretty Hill is a mature target in the field that was a primary producer at Katnook and Ladbroke Grove and Haselgrove. We found the lower Pretty Hill formation at Haselgrove-3 a well hadn’t been drilled that deep, but the Pretty Hill is an objective at Dombey because that’s a completely under of …

Okay.

I am excited of any gas that we found to be honest at Pretty Hill or the Sawpit.

Yes, gas is $9, $10 it would here. Okay, awesome. Thanks guys.

Your next question comes from the line of Ewe Jin Tan from Churchill Capital. Please go ahead.

Just on the Cooper Basin if I may, that’s basically pretty diverse, some of the assets that are currently operated by Santos?

We can’t comment on the terms in our commercial agreement, so unfortunate I’m going to have to pass on Ewe Jin.

No worries. And I guess my second question, you’re currently looking at essentially acquiring any of the Cooper Basin assets from Santos?

Obviously Santos is in a process at the moment with a harder and moving through JV, obviously given that a core part of our business we are keeping a close eye on that and obviously for us the key is that we want to deliver to the basin to be focused on value and delivering on value is over the operator in the last two years so that’s the main thing that we want to keep up before some planning value out of Cooper.

[Operator Instructions]. There are no further questions at this time. I would like to hand the conference back to today’s presenters. Please continue.

Thanks everyone for joining the call.