Beach Energy : Notice of 2016 Annual General Meeting and Proxy Form

ACN 007 617 969 (Beach or Company)

Beach will hold its 55th Annual General Meeting at the Convention Centre, North Terrace Adelaide South Australia, 5000 on Thursday 10 November 2016 at 10.30am (Adelaide time).

ORDINARY BUSINESS

To receive and consider the financial statements and the reports of the directors and auditors for the financial year ended 30 June 2016.

These statements and reports can be viewed in Beach's 2016 annual report which is available at www.beachenergy.com.au.

Note: There is no requirement for shareholders to approve the financial statements and reports and accordingly no resolution will be put to shareholders regarding this item of business.

To consider and put to a non-binding vote the following resolution:

"That the remuneration report for the financial year ended

30 June 2016 be adopted."

Voting Exclusion Statement (Corporations Act): Beach will disregard any votes cast on resolution 1:

• by or on behalf of a member of the key management personnel (KMP), details of whose remuneration are included in the remuneration report for the year ended 30 June 2016, or a closely related party of a member of the KMP, in any capacity, or

• as a proxy by a person who has become a member of the KMP by the time of the annual general meeting, or by any closely related party of a member of the KMP,

  unless the vote is cast as proxy for a person who is entitled to vote on resolution 1 and:

• the vote is cast in accordance with directions on the proxy form specifying how the proxy is to vote; or

• the vote is cast by the chairman of the meeting and the proxy form authorises him to vote as he decides on resolution 1.

  Resolution 2 - Re-election of G S Davis as a director

  To consider and, if thought fit, pass the following resolution as an ordinary resolution:

  "That Glenn Stuart Davis, who retires by rotation pursuant to clause 13.3 of the constitution of Beach and ASX Listing Rule 14.4 and who, being eligible, offers himself for re- election, is re-elected as a director of Beach."

  Resolution 3 - Election of P J Bainbridge as a director

  To consider and, if thought fit, pass the following resolution as an ordinary resolution:

  "That Philip James Bainbridge, who was appointed as a director subsequent to the last annual general meeting of Beach and being eligible, offers himself for re-election, is elected as a director of Beach."

  Resolution 4 - Election of J D McKerlie as a director

  To consider and, if thought fit, pass the following resolution as an ordinary resolution:

  "That James David McKerlie, who was appointed as a director subsequent to the last annual general meeting of Beach and being eligible, offers himself for re-election, is elected as a director of Beach."

  Resolution 5 - Election of R K Stokes as a director

  To consider and if thought fit, pass the following resolution as an ordinary resolution:

  "That Ryan Kerry Stokes, who was appointed as a director subsequent to the last annual general meeting of Beach and being eligible, offers himself for re-election, is elected as a director of Beach."

  SPECIAL BUSINESS Resolution 6 - Renewal of approval of the Beach Executive Incentive Plan

  To consider, and if thought fit, pass the following resolution as an ordinary resolution:

  "That issues of securities by Beach under the Beach Executive Incentive Plan, the key terms of which are set out in the Explanatory Statement, be approved as an exception to ASX Listing Rule 7.1."

  Voting Exclusion Statement (Corporations Act): Beach will disregard any votes cast on resolution 6:

• by or on behalf of a member of the key management personnel (KMP), details of whose remuneration are included in the remuneration report for the year ended 30 June 2016, or a closely related party of a member of the KMP, in any capacity, or

• as a proxy by a person who has become a member of the KMP by the time of the annual general meeting, or by any closely related party of a member of the KMP,

  unless the vote is cast as proxy for a person who is entitled to vote on resolution 6 and:

• the vote is cast in accordance with directions on the proxy form specifying how the proxy is to vote; or

• the vote is cast by the chairman of the meeting and the proxy form authorises him to vote as he decides on resolution 6.

  Resolution 7 - Increase number of directors

  To consider, and if thought fit, pass the following resolution as an ordinary resolution:

  "That for the purpose of clause 13.2 of the constitution of Beach, the maximum number of directors shall be increased from seven to nine."

  Resolution 8 - Remuneration of non-executive directors

  To consider and, if thought fit, pass the following as an ordinary resolution:

  "That, for the purposes of ASX Listing Rule 10.17, clause

  13.9.2 of the constitution of Beach and for all other purposes, the maximum aggregate remuneration of the non-executive directors of Beach be increased to

  $1,500,000 per year."

  Voting Exclusion Statement (ASX Listing Rules):

  Beach will disregard any votes cast on resolution 8 by any

  director of Beach and the associates of any director of Beach.

  However, Beach need not disregard a vote if it is cast:

• by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or

• by the chairman of the meeting as proxy for a person who is entitled to vote in accordance with a direction on the proxy form to vote as the proxy decides.

  Voting Exclusion Statement (Corporations Act): Beach will disregard any votes cast on resolution 8:

• by or on behalf of a member of the key management personnel (KMP), details of whose remuneration are included in the remuneration report for the year ended 30 June 2016, or a closely related party of a member of the KMP, in any capacity, or

• as a proxy by a person who has become a member of the KMP by the time of the annual general meeting, or by any closely related party of a member of the KMP,

  unless the vote is cast as proxy for a person who is entitled to vote on resolution 8 and:

• the vote is cast in accordance with directions on the proxy form specifying how the proxy is to vote; or

• the vote is cast by the chairman of the meeting and the proxy form authorises him to vote as he decides on resolution 8.

To consider, and if thought fit, pass the following resolution as a special resolution:

"That the Company approve the giving by Drillsearch Energy Pty Limited and Great Artesian Oil and Gas Pty Ltd (Specified Drillsearch Subsidiaries) of financial assistance that may result from their entry into and performance under the following documents (Documents):

1. the Syndicated Debt Facility Agreement dated 4 December 2015 between Beach Energy Limited and various subsidiaries, Australia and New Zealand Banking Group Limited, Commonwealth Bank of Australia, The HongKong and Shanghai Banking Corporation Limited and National Australia Bank Limited (Syndicated Debt Facility Agreement) which the Specified Drillsearch Subsidiaries will accede to (by way of accession deed or otherwise) or be a party to in the capacity as a Guarantor and Obligor (each as defined in the Syndicated Debt Facility Agreement) and under which the Specified Drillsearch Subsidiaries provide guarantees and indemnities of the obligations of the Obligors in connection with the Finance Documents (in each case as defined in the Syndicated Debt Facility Agreement);

2. any agreement granting or any arrangement otherwise granting a security interest over all of the assets of the Specified Drillsearch Subsidiaries in favour of the Beach Security Trustee (as defined in the Syndicated Debt Facility Agreement) on the same terms and conditions as the general security deed granted by Beach Energy Limited in favour of the Beach Security Trustee dated 31 July 2013; and

3. any document in any way connected with or related to any of the above documents or in respect of any matter arising out of or in relation to the above documents,

(Financial Assistance) provided that the members of each of the Specified Drillsearch Subsidiaries (by way of unanimous resolution) and of Beach Energy Limited (by way of special resolution) approve the giving of Financial Assistance in accordance with Sections 260B(1) and 260B(2) of the Corporations Act 2001 (Cth) (Corporations Act) and the financing of the recent acquisition of the shares in Drillsearch Energy Pty Limited by Beach Energy Limited."

A disclosure statement made in accordance with section 260B(4) of the Corporations Act is enclosed with this notice.

Signed for and on behalf of Beach Energy Limited by:

1. Voting on all items of business will be conducted by a poll.

2. A shareholder entitled to attend and vote at this meeting is entitled to appoint not more than two proxies to attend and vote instead of the shareholder.

3. Where more than one proxy is appointed, a shareholder may specify the percentage or number of votes each proxy can exercise. If the proxy form does not specify the percentage or number of votes each proxy may exercise, each proxy may exercise half of the shareholders votes on a poll. Fractions will be disregarded.

4. A proxy need not be a shareholder of Beach.

5. A proxy form accompanies this notice of meeting and contains additional information.

6. If your proxy chooses to vote, he/she must vote in accordance with your directions. If you have directed your proxy to vote, and they fail to attend the meeting or they choose to not vote on a poll, then the chairman of the meeting will vote your proxies as directed by you.

7. If you do not mark a box, your proxy may vote as they choose on that item. However, note that if the chairman of the meeting is your proxy, you expressly authorise the chairman to vote undirected proxies on resolutions 1, 6 and 8 even though the resolutions are connected directly or indirectly with the remuneration of a member of the KMP. The chairman of the meeting intends to vote undirected proxies in favour of each of the resolutions.

8. To be valid, duly completed proxy forms and any proxy appointment authorities under which a proxy form is signed, such as a power of attorney, must be received by Beach at an address specified on the proxy form no later than 48 hours before the time, in Adelaide, of the commencement of the meeting.

9. For the purpose of the meeting, shares in Beach will be taken to be held by those persons who are registered holders at 7.30pm (Adelaide time) Tuesday 8 November 2016. Accordingly, transactions registered after that time will be disregarded in determining entitlements to attend and vote at the meeting.

10. The constitution of Beach provides that three shareholders present in person, by proxy, attorney or representative shall be a quorum for a general meeting of Beach.

This explanatory statement is provided to shareholders of Beach in relation to resolutions to be proposed at the 2016 annual general meeting.

ORDINARY BUSINESS

In accordance with section 317 of the Corporations Act, the business of an annual general meeting must include the receipt and consideration of the financial statements and reports required by law for the past financial year. They are found in Beach's 2016 annual report which is available for shareholders to access and can be downloaded from the Beach website www.beachenergy.com.au. If you would like to receive a hard copy of the annual report free of charge you can contact Beach's Share Registry on 1300 556 161 (inside Australia) or + 61 3 9415 4000 (outside Australia).

There is no requirement for shareholders to approve these statements or reports. During this item of business, the chairman of the meeting will allow a reasonable opportunity to ask questions and make comments on these financial statements and reports. KPMG conducted the audit of Beach for the last financial year. KPMG has been invited to attend this meeting and Beach has been advised that a suitably qualified member of the audit team of KPMG, who conducted the audit of Beach for the last financial year, will attend the meeting.

Shareholders as a whole will be allowed a reasonable opportunity at the meeting to ask the auditor's representative questions relevant to the conduct of the audit, the preparation and content of the auditor's report, the accounting policies adopted by Beach in the preparation of the financial statements and the independence of the auditor in relation to the conduct of the audit.

Shareholders who are entitled to vote at the meeting may submit a written question to the auditor that is relevant to the content of the auditor's report to be considered at the meeting or the conduct of the audit of the annual financial report to be considered at the meeting. Written questions may be submitted by sending them to Beach. Questions must be submitted no later than the fifth business day before the meeting is held. Shareholders can use the form accompanying this notice of meeting.

At the meeting, there will be reasonable opportunity for shareholders to ask questions about, or make comments on, the remuneration report. The remuneration report of Beach is included in the annual report and appears on pages 63 to 82 of the report. It is also available for shareholders to access and download from Beach's website www.beachenergy.com. au. The remuneration report sets out Beach's remuneration arrangements for its non-executive directors and senior executives.

The law requires that a resolution, that the remuneration report be adopted, be put to the vote at Beach's annual general meeting. The vote on the resolution is advisory only and does not bind the directors or Beach. However, the board will take the outcome of the vote into consideration when reviewing the remuneration practices and policies of Beach.

Shareholders should also note that in accordance with the "two strikes rule", the result of the vote on this item may affect next year's annual general meeting - if 25% or more of the votes cast on this resolution are "against", a "spill resolution" will be included in the 2017 notice of annual general meeting as required by the Corporations Act. A "spill resolution" is a resolution proposing that an extraordinary general meeting of shareholders be called to consider the election of directors. If 25% or more of the votes cast on the remuneration resolution at the 2017 annual general meeting are against the remuneration resolution, shareholders would then be required to consider the "spill resolution". If 50% or more of the votes cast on the spill resolution are "for", a further separate "spill meeting" would need to be held within 90 days.

Beach received more than 98% of "yes" votes on its remuneration report for the 2015 financial year. The company did not receive any specific feedback at the 2015 annual general meeting on its remuneration practices.

Clause 13.3 of Beach's constitution states that at each annual general meeting, one-third of the directors (not taking into account the directors who have been appointed as an addition or to fill a casual vacancy since the last annual general meeting) must retire. There is a similar requirement in the ASX Listing Rules. Mr Davis has served as a director since his election at the annual general meeting in November 2014. Directors who retire from office in this manner are eligible for re-election. Mr Davis has offered himself for re- election. His details are set out below.

A description of Mr Davis' experience, qualifications and competencies follows:

Independent non-executive Chairman - LLB, BEc, FAICD

Mr Davis is a solicitor and principal of DMAW Lawyers, a firm he founded. He joined Beach in July 2007 as a non-executive director and was appointed non-executive Deputy Chairman in June 2009 and Chairman in November 2012. Mr Davis is a director of ASX listed company Monax Mining Limited (since 2004) and is a former director of Marmota Energy Limited (from 2007 to June 2015). His special responsibilities include membership of the Remuneration and Nomination Committee. The board considers that Mr Davis brings to the board his expertise in the execution of large legal and commercial transactions and his expertise and experience in