Annual General Meeting 2009 Brian O Cathain, Chief Executive, 3 rd - - PowerPoint PPT Presentation

Annual General Meeting 2009

Brian O’ Cathain, Chief Executive, 3rd June 2009 , ,

Annual General Meeting 2009

www.petroceltic.com

Foundations for growth in place

• Drilling of 5/ 7 well programme started in Algeria
• Finance in place for drilling in 2009/ 10
• Strong technical & operational team

R b t t t i t Ib d l

• Robust strategic partner – Iberdrola
• In Italy, Adriatic/ Po Valley material prospects ready for drilling in

y, y p p y g 2010/ 2011

Annual General Meeting 2009

Slide 1

Business Highlights 2008

• Award of rig contracts for up to seven wells in Algeria
• Successful completion of a large 3D seismic programme in Algeria
• Strengthening of management at Board and operational levels

St t i t hi ith Ib d l

• Strategic partnership with Iberdrola
• US$55m investment by Iberdrola in Petroceltic

$ y

• Year end cash of US $43.4 million
• Paid $5.6 million advance funding towards 2009 drilling costs

Annual General Meeting 2009

Slide 2

Highlights to date in 2009

• Further US $7.3 million option fee received from Iberdrola
• Successful US $40 million of new equity placing completed*
• Isarene drilling programme commenced with INE-2 on 16th May

2009

• Funding secured to advance Italian portfolio
• Significant strengthening of institutional shareholding base
• Market performance - PCI up over 250% year to date
• Market performance

PCI up over 250% year to date

Annual General Meeting 2009

Slide 3

* S ubj ect t o 2009 AGM

Company background and strategy

Background

• Re-launched as Oil & Gas company in 2002 and quoted on AIM

Re launched as Oil & Gas company in 2002 and quoted on AIM and IEX

• 25 full time employees supported by a network of over fifty

experienced consultants experienced consultants

• Operated assets in Algeria, Italy and Tunisia
• Headquartered in Dublin, Ireland with offices in Rome, Italy and

Algie s Alge ia Algiers, Algeria Strategy

• Maghreb/ Southern Europe Exploration focus
• Low cost drilling close to infrastructure
• High initial equity with operator status preferred
• High initial equity with operator status preferred
• Early stage work programmes funded internally or by farming out
• Longer term growth through potential Acquisition / Merger and

d illbit

Annual General Meeting 2009

drillbit success

Slide 4

Business Overview - Algeria

Annual General Meeting 2009

Slide 5

Development of Natural Gas S upplies in the EU

10% 23%

525-560 590-640 560-605

supply gap

Billion m ³

11% 7% 13% 9% 11% 12% 9% 23% 11%

478

supply gap advanced projects 24% 15% 22% 9% 21% 8% 10% 7% Algeria

• ther non-EU imports*

uction

9% 15% 6% 8% 14% 12% 10% 20% 4% 5% Norway Russia

• ther internal EU trade

EU Prod

2 5 2 1 2 1 5 2 2

28% 21% 19% 17% indigenous production for domestic use Netherlands

• ther internal EU trade

2 5 2 1 2 1 5 2 2

* of which: Nigeria 3%, Qatar 3% Basis for imports: Contracted volumes and prospective contract prolongations

LNG-share (in imports)

10% 20% 20% 22%

Annual General Meeting 2009

Russia without volumes via North European Gas Pipeline (NEGP) which are included in advanced projects Source: Eurogas

Proved Gas Reserves, Algeria & Comparisons

200

007

159 187 160 180

rves TCF 20

159 100 120 140

roven Reser

73 100 105 60 80 100

Pr

53 20 40 Algeria Egypt Libya Nigeria EU Norway

Annual General Meeting 2009

Slide 7

S

• urce: BP S

t at ist ical Review of World Energy 2008

Petroceltic : North African Assets

Annual General Meeting 2009

Slide 8

Isarene Drilling History

4 Dry Appraisal wells in italics 3 Dry Shows Oil Gas Appraisal wells in italics French exploration 2 r of wells

TXB-1

Sonatrach exploration Repsol appraisal Petroceltic Appraisal 2 Number

TTY-1 TXAN-1 NCL-2 TXA-1 NCL-1 ISAS-1

1

LR-1 NE-1 NW-1 TMZ-1 TTN-1 SI-1bis TT-2 TT-1 R-1 TT-1 HTT-2

1 9 5 8 1 9 6 1 9 6 2 1 9 6 4 1 9 6 6 1 9 6 8 1 9 7 1 9 7 2 1 9 7 4 1 9 7 6 1 9 7 8 1 9 8 1 9 8 2 1 9 8 4 1 9 8 6 1 9 8 8 1 9 9 1 9 9 2 1 9 9 4 1 9 9 6 1 9 9 8 2 2 2 2 4 2 6

Year

C IN IN HT TS G G I HT

Annual General Meeting 2009 Year

Slide 9

Source: Sonatrach, Petroceltic analysis

Total’s TFT 8 TCF gas, 840 MMBBLS liquids recoverable Circa 80 km from Isarene BP’s In Amenas Cluster

• f Fields

5.2 TCF gas & 264 MMBBLS liquids Repsol’s Tifernine oil

• il

15 km GTT-1 recoverable

HTT & ISAS Discovery Areas Areas

Ain Ain Tsila Tsila Ridge Ridge Prospect Prospect

BP’s Tin Zaouatene-1 Illizi Basin. BP 49% and Operator. Flowed 9.5 mmscf/d

Source: IHS,

Annual General Meeting 2009

Slide 10

1.5 1.5-

• 6 TCF

6 TCF potential potential

Slide 10

Flowed 9.5 mmscf/d

Petroceltic analysis

Asset Overview – Isarene Permit

• 2 gas discoveries drilled & tested in 2006
• > 5000 kms 2D seismic reprocessed 2006-2008
• 900 km 2 Wide Azimuth 3D Seismic acquired & processed 2008
• 900 km 2 Wide Azimuth 3D Seismic acquired & processed 2008
• Drilling contract to KCA Deutag for 5/ 7 well campaign
• Well Services contract to Schlumberger/ Sonatrach JV
• Drilling started 16th May 2009
• Capture resources for appraisal/ development in 2010 2012
• Capture resources for appraisal/ development in 2010-2012

Annual General Meeting 2009

Slide 11

PS C key dates and obj ectives

• 26th April 2008 – 30% Relinquishment
• 26th April 2010 – Expiry of 2nd Exploration Period
• 26th April 2012 – Expiry of any Extension Period
• Delineate & Capture Resources in 4 areas
• Ain Tsila Ridge

g

• ISAS area
• Hassi TabTab (Already proved in 2006)
• El Biod (Exploration)

Annual General Meeting 2009

Slide 12

Isarene well locations and target areas

AinTsila Ridge 3 wells ISAS Area 2/3 Shallow wells

AT-1

GTT-3

wells

AT-1 AT-2 AT 3

INE-2 INW-2 GTT 3

AT-3

HTT-2 flowed 15.3 ISAS-1 flowed 1.1 mmscf/ d

El Biod exploration

EB-1

mmscf/ d

Annual General Meeting 2009

El Biod exploration

Isarene - Top Ordovician S tructure Map

Isarene Planned Drilling and Testing S equence

CIVIL WORK Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jan-10 Jul-09 Aug-09 Jan-09 Sep-09 Oct-09 Nov-09 Dec-09 Mar-10 Feb-10 In Country Mobilisation Rig Up on Location INE-2 (Drill/Test) AT-1 (Move/Drill/Test) AT-2 (Move/Drill/Test) El Biod (Move/Drill/Test) INW-2 (Move/Drill/Test) GTT-3 (Move/Drill/Test) AT-3 (Move/Drill/Test) Rig Demobilisation

Key

Mobilisation

Feb-09 Mar-09 Apr-09 May-09 Jun-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Jul-09 Aug-09 Jan-09

Drilling Rig Move Rigless Well Test/ Fracing Annual General Meeting 2009

Slide 14

g g

Isarene Permit Unrisked potential contingent resources Unrisked potential contingent resources

Wells Area Devonian‐Carboniferous (mmboe)* Ordovician (Bcf) Total (mmboe) P90 Pmean P10 P90 Pmean P10 P90 Pmean P10 Shallow Targets 21 64 113 21 64 113 HTT‐2, INE‐2, GTT‐3, INW‐2 Wells Area (mmboe)* Ordovician (Bcf) Total (mmboe) Ain Tsila Ridge 279 2,354 5,231 50 420 934 AT‐1,2,3 El Biod East** 30 81 143 10 101 235 32 99 185 EBE‐1 TOTAL 51 145 256 289 2,455 5,466 103 583 1,232 TOTAL TOTAL 51 145 256 289 2,455 5,466 103 583 1,232 TOTAL * Includes Carboniferous, Devonian F2/F6 oil and gas potential ** El Biod East ‐ Does not include the El Biod upthrown side

• Ain Tsila Ridge is main area of prospectivity
• Shallow Devonian prospects add additional resources
• El Biod East is exploration oil play

Annual General Meeting 2009

Slide 15 Current Petroceltic estimates, post 3D interpretation

KCA Deutag Rig T-212 at INE-2 location

Annual General Meeting 2009

Slide 16

Business Overview Italy Italy

7 Permits (3 operated) 7 Permits (3 operated) 11 Offshore Exclusive Applications Applications 1 Onshore Exclusive Application pp 2-3 wells planned for 2010/2011 High Equity Interests Oil & Gas

Annual General Meeting 2009

Asset Review 20th October 2008 Slide 17

Italian Oil Production Growth

160 Kbopd Italy is the 3rd largest producer in the EU 120 140 80 100 Italy Netherlands 60 80 Romania Tunisia France 20 40 ‐ 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

S

• urce: ENI World Oil & Gas Review 2008

Annual General Meeting 2009

Slide 18

Central Adriatic Area Petroceltic Acreage Position & Prospects g p

Elsa Discovery: Potential Contingent Resources 80 MMbbls

PCI 100% Equity

S angiovese Prospect: S angiovese Prospect: Potential Contingent Resources 180 MMbbls

Annual General Meeting 2009 S lide 19

Italy – BR 268RG – Proven Early Cretaceous Play Miglianico-1 & Elsa-1 Discoveries g

Miglianico -1 (2001) TD 4966m Elsa -1 (1992) TD 4841m 75m logged oil column 966 tested 2,900 bopd 34ο api Tested oil on DS T

Annual General Meeting 2009

Italy: Po Valley licenses & prospects

Gaggiano Field Triassic Villafortuna- Trecate Fields 265 MMbbls + 250 BCF 100 MMbbls Rovasenda Triassic Oil Prospect: Potential Contingent Resources 200 MMbbls

Annual General Meeting 2009

Slide 21 Slide 21

Carisio Permit: Rovasenda Prospect

PCI 47.5% ; ENI 47.5% ; Condotte 5%

Potential Reserves 200-300 MMbbls

Prospect Type ‘Trap Door’ Fault Block h Target Depth ~ 3000-4000m Reservoir Jurassic/ Trias Lst. HC Type Oil HC Column 250-1500m Vertical Closure 2500m ML Area 32 km 2 Max Area 32 km 2 STOOIP (Mean) 680 MMbbls Reservoir Param eters Gross Reservoir 40-60% Net/ Gross 40-60% / Porosity 3-12% (Avg. 6% ) Sw 20-60% Recovery Factor 40%

Annual General Meeting 2009

Recovery Factor 40%

S trategy and obj ectives for Italy 2009 - 2011

• Drill 1 to 3 Wells, on material prospects:
• Drill Elsa Appraisal well in 2010/ 11

P2 potential resources 80mmbbls, upside 180 mmbbls

• Seismic and drilling on Carisio Rovasenda Triassic oil play

(Villafortuna trend) 2010/ 2011 P2 potential resources 200-300 mmbbls p

• New Seismic on Adriatic 100% acreage, fund drilling via farm-out

Annual General Meeting 2009

Slide 23 Slide 23

Business Overview Tunisia – Ksar Hadada license

Petroceltic 57% Independent 40%

Oryx Structure

Independent 40% Derwent & GA.I.A. New seismic interpretation Complete – additional Verenex Accacus successes p Prospects identified

Area 5600 km2

In western Libya >5000 bopd/well Storm Ventures success Storm Ventures success In TT-2, tested 300 bopd from the Ordovician, 170 MMbbls STOIIP discovered in April 2009

Annual General Meeting 2009

Slide 24

STOIIP discovered in April 2009

S

• urce: Madalena Vent ures

Tunisia plans

• Licence in 2nd Period April 2008-April 2011
• 2 wells planned in 2009/ 10, contingent on farm-out to:

F lfill t t di it t – Fulfill outstanding commitments – Test Oryx and South Salah prospects – Wells costs approximately US $5 million each pp y $

• The block is currently under evaluation for potential farm-out
• Petroceltic interest 57% , paying 60%
• Fiscal terms good, 45% cost oil and 40% profit oil, no other taxes

Annual General Meeting 2009

Slide 25

Funding & Corporate

Annual General Meeting 2009

Slide 26

Iberdrola transaction overview

• Strategic alliance with Spanish Energy Group Iberdrola to facilitate development of

Petroceltic’s attractive portfolio and underpin the inherent value of our oil and gas b asset base – Iberdrola invested $55m in Petroceltic through placing of approximately 216m shares at £0.13 / share. Three year standstill in place, and non-blocking provisions provisions – Iberdrola has paid $7.3m for option to invest a further $47.7m to acquire 49% financing interest in Algerian asset (subject to regulatory & partner approval,

• ption runs to 1st May 2010)

– 1 non-executive director appointed to Petroceltic’s board

• Subscription price underlines significant upside potential in Petroceltic’s share price
• Joint business committee to examine further upstream co-operation in a focused area

f N th Af i / M dit

• f North Africa / Mediterranean area
• Represents Iberdrola’s first investment in upstream oil and gas
• Petroceltic gains access to gas marketing expertise

Strategic alliance highlights intrinsic value in Petroceltic’s attractive exploration and appraisal portfolio

Annual General Meeting 2009

Slide 27

exploration and appraisal portfolio

Placing – of £27.5 million (US $ 40.0 million) Use of Funds Use of Funds Use of funds

• S

ecures Algerian drilling programme irrespective of Iberdrola farm-in outcome

• Allows continuation of Algerian appraisal in a success case
• Accelerates drilling and seismic programmes in Italy
• Allows development of Italian portfolio

Allows development of Italian portfolio

Highlights

• Placing was oversubscribed
• Allocation approximately 50/ 50%

between new & existing holders

• High quality new investors

g q y

• Placed at a premium to average market over preceeding weeks

Annual General Meeting 2009

Slide 28

Recent Investment Research Valuations

Country D Mi b d D Mi b d Risked Unrisked Upside Davy Mirabaud Davy Mirabaud 11/05/2009 12/05/2009 11/05/2009 12/05/2009 Algeria 6.1 7.4 43 34 Italy 10.1 24.7 141 188 Tunisia 3.2 1.6 40 10 Corporate 5.0 6.6 5 7 Value 24.4 40.3 229 239 Target 24.2 15.0

All values in p/ share

Annual General Meeting 2009

Slide 29

S

• urce: Invest ment Research Report s published by Davy & Mirabaud, May 2009

Petroceltic: Conclusions

• Foundations for Grow th in Place

– Drilling of 5/ 7 well programme started – Finance in place for drilling in 2009/ 10 – Strong technical & operational team g p – Robust strategic partner – Iberdrola – In Italy, Adriatic/ Po Valley material prospects ready for drilling in 2010/ 2011

• New sflow

– Drilling started 16th May 2009 – 5/ 7 wells planned for Algeria 2009/ 10 – Up to 3 wells planned for Italy 2010/ 11 bl d ll / – Possible seismic & drilling in Tunisia 2009/ 10 – Additional farm-in funds potential before end Q1 2010, bringing further $55 million cash Acquisition screening ongoing

Annual General Meeting 2009

Slide 30

– Acquisition screening ongoing

Annual General Meeting 2009

Slide 31