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Fastnet Oil & Gas Plc Ladenburg Thalmann Africa Upstream Conference February 2014
Fastnet Oil & Gas Plc Corporate Presentation
April 2014
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Corporate Presentation Africa Upstream Conference February 2014 - - PowerPoint PPT Presentation
Fastnet Oil & Gas Plc Fastnet Oil & Gas Plc Ladenburg Thalmann Corporate Presentation Africa Upstream Conference February 2014 April 2014 www.fastnetoilandgas.com www.fastnetoilandgas.com Disclaimer This document is confidential
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April 2014
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This document is confidential and is being supplied to you solely for your information and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or published in whole or in part, for any purpose. In particular, neither this document nor any copy of it (or any part of it) may be sent to or taken into the United States, Canada, Australia, Republic of South Africa or Japan (or any of their respective territories or possessions, or to any resident thereof or any other corporation, partnership or
under the US Securities Act of 1933, as amended). The distribution of this presentation in other jurisdictions may also be restricted by law and persons into whose possession this presentation comes (or a copy hereof) should inform themselves about, and observe, any such restriction. Any failure to comply with these restrictions may constitute a violation of the laws of any such other jurisdiction. This document does not constitute or form any part of any offer or invitation or other solicitation or recommendation to purchase any securities and contains information designed only to provide a broad overview for discussion purposes. As such, all information and research material provided herein is subject to change and this document does not purport to provide a complete description of the investment opportunity. All expressions of opinion are subject to change without notice and do not constitute advice and should not be relied upon. Fastnet Oil & Gas plc (the “Company”) does not undertake any obligation to update or revise the information in or contents of this document. Recipients of this document who may consider acquiring shares in the Company are reminded that any such acquisition should not be made on the basis of the information contained in this document. This document is being distributed in the UK only to, and is directed only at persons who are: (i) investment professionals as defined in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) FPO 2005 (“the Promotion Order”); (ii) are persons of a kind described in Article 49(2) of the Promotion Order; (iii) are persons to whom this document may otherwise lawfully be issued or passed on and/or (iv) persons outside the United Kingdom (in accordance with any applicable legal requirements) (all such persons together being referred to as “Relevant Persons”). Any person who is not a Relevant Person should not act or rely on this presentation or any of its contents and any investment or investment activity to which it relates will only be available to Relevant Persons. Any person who is unsure of their position should seek independent
directed at and being sent to the categories of investor described above. This communication has not been approved by a person authorised by the Financial Services Authority under FSMA. This document is being distributed in Ireland only to and is directed only at persons who are “qualified investors” within the meaning of the Prospectus (Directive 2003/71/EC) Regulations 2005 of Ireland. Neither the Company, nor its employees, advisers or representatives nor any other person makes any guarantee, representation, undertaking or warranty, express or implied as to the accuracy, completeness, correctness or fairness of the information and opinions contained in this document (or as to the reasonableness of any assumptions on which any of the same is based or the use of any of the same), nor does the Company nor its employees, advisers or representatives nor any other person accept any responsibility or liability whatsoever for any loss howsoever arising from any use of this document or its contents or otherwise arising in connection therewith. The information set out herein may be subject to updating, completion, revision, verification and amendment and such information may change materially. If you rely on this communication to make an investment you may be exposed to a significant risk of losing all of your investment. This communication does not constitute either advice or a recommendation regarding any securities. Any person who is in any doubt about the subject matter of this communication should consult a duly authorised person specialising in advising on such investments. This communication includes forward-looking statements. These forward-looking statements include all matters that are not historical facts, statements regarding the Company's intentions, beliefs or current expectations concerning, among other things, the Company's results of operations, financial condition, prospects, growth, strategies, and the industry in which the Company operates. By their nature, forward-looking statements involve risks and uncertainties. You are cautioned that forward-looking statements are not guarantees of future performance and that the Company's actual results of operations, financial condition and the development of the industry in which the Company operates may differ materially from those made in or suggested by the forward-looking statements contained in this communication. Past performance is not a guide to future performance.
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Fastnet is an oil & gas Company primarily focused on exploration in frontier regions. Strategy
through identifying early entry
exploration opportunities and near term value adding appraisal in frontier regions
technical expertise and to bring in high calibre partners
a return of cash to shareholders on an asset by asset basis Listed in London on the AIM (‘FAST’) and the Irish Stock Exchange (‘FOI’)
OVERVIEW
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impact exploration and lower risk near term appraisal opportunities
calibre partners
house technical expertise, local relationships and proven ability to attract high calibre partners
required to further develop exploration / appraisal success.
OVERVIEW
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Paul Griffiths, Managing Director
Leon Energy Plc in 2009
2012
and Mediterranean Region and Gulf R&D in Pittsburgh
the Royal School of Mines Carol Law, Executive Director
Alaska at Kerr McGee
complex in Rovuma Area 1, offshore Mozambique
Ghana (Jubilee), Brazil (multiple Campos Basin discoveries) Cathal Friel, Executive Chairman
Capital in 2007
Michael Nolan, Non-Executive Director
Energy PLC
director of Rathdowney Resources plc and Orogen Gold plc
Value Creation
Sold IPDL to DNO ASA, after reverse takeover of Providence Resources Plc collapsed in 2002, for an exit price of $34 mm after investing approx. $1.5 mm
100 TCF +
Carol led the Anadarko team that discovered over 100 TCF of natural gas in the Area 1 Block, Offshore Mozambique
100%
100% exploration success rate offshore Ireland with Island Oil & Gas: 4 wells drilled, two commercial gas fields
$2.64 billion
Sale price of a 10% stake in Anadarko’s Area 1 Block, Offshore Mozambique
38+ years
Experience in oil and gas exploration and near term field appraisal
30 years
Experience in oil and gas industry
25+ years
Managerial Corporate Finance experience
18+ years
Experience in resource exploration sector
€100 million
One of the founding directors of Merrion Capital, where he was part
built the business and sold it for
$1 billion +
Value of successful corporate transactions
advised
+1900%
Share price increase between the Cove Energy IPO in June 2009 and its sale in Aug 2012
$1.9 billion
Cove Energy was sold to PTTEP in Aug 2012 after a competitive auction process
THE TEAM
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Cathal Friel Chairman Paul Griffiths MD Carol Law Executive Director Michael Nolan Michael Edelson Executive Directors Non - Executive Directors
Robert Murphy* Senior Project Geologist John Tingas* Reservoir Engineer Ross Crockett Finance and Back Office Support Paul Griggs* Commercial Contracts Advisor Brendan Tuohy* Licensing Consultant
Armira Zylyftari Licence Administration
Morocco Country Manager Carl Kindinger* UK based Commercial / Financial Consultant Moroccan Focused Team
Christian Klinkenberg Commercial & Operations Manager Dennis Krahn* Morocco Drilling Manager Bob Graham* Consulting Geophysicist Michael Lynch Investor Relations Manager
Technical Advisor
*Consultants and Advisors time writing to specific projects only
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in Morocco is equivalent to the value of producing 13bbl in Algeria or 7bbl in Nigeria
attractive pricing
Europe
Cairn, Genel and Glencore
democratically elected Government
months: 5 offshore and 4 onshore wells already scheduled for drilling in Morocco in 2014
beginning 2006
Near Term Drilling Activity
Fastnet “first mover” strategy prelude to industry recognising Morocco as a key frontier exploration area (yellow)
MOROCCO
seismic acquired
drilling base at Agadir
commences in Ghana on Jubilee Discovery
Draa and Rimella Licences
Griffiths enters Moroccan
Licence award
Licence awarded to Island Oil & Gas
Discovery in Ghana
Moroccan offshore with Sidi Moussa & Foum Draa Licence awards
with Pathfinder on Foum Assaka
and expands exploration acreage in West Africa
equity in Q3 2011
10
announced that it has entered into a farm-out agreement with BP plc., to earn a 26.325% stake in the Foum Assaka permit
agreement with SK Innovation Ltd for half of Fastnet’s interest in Foum Assaka, Offshore Morocco
www.fastnetoilandgas.com MOROCCO
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Background
Triassic reservoir which is productive in Algeria and is also an analogous producing reservoir in the Meskala field in the Essaouira Basin to the West
years from reservoirs similar in quality to those tested in TE-5
Overview
Near term Prospectivity
Triassic reservoirs
by fault close to well bore (based on 2D seismic interpretation)
Equity & Partners
MOROCCO
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TE5-Lakbir Structure: Gross and Net Contingent Resources LOW BEST HIGH Recoverable BCF (100%) 30.1 310.5 891.9 Recoverable BCF (37.5% Net) 11.3 116.4 334.5 NPV per BCF (US$mm) 2.29 Chance of Success 22% Risked Value (ENPV US$mm) 58.3 Source: SLR CPR November 2013
Running Room has also been identified in five additional gas prospects
MOROCCO
TAGI Sand consistent with good potential gas flow rates from a gross gas-bearing interval in TE-5 of 82.2 meters
development cases, subject to a successful validation of flow rates in an appraisal well to the TE-5 discovery and a step-out appraisal well to the northeast of the TE-5 discovery
historical published estimates, that were not previously validated by an independent Competent Persons Report, give resource estimates as follows:
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has identified significant potential for increasing gas flow rates relative to those achieved previously (which were hampered by poor operating conditions and procedures)
defined by strong seismic amplitudes
TAGI reservoir parameters are comparable to those for the producing Meskala Field in Morocco
substantial amounts of gas already encountered in the TE-5 Structure and the exploration upside, allowing Fastnet to commission an updated independent CPR report
MOROCCO
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MOROCCO
TE-6 PROVISIONAL LOCATION
Lakbir: TE-6 Provisional Well Location (Area of Closure 16,600 Acres)
also prove up a resources case that will allow approximately 130 BCF of the 310.5 BCF Best Estimate Prospective Contingent Resources to be moved to Proven Case that will allow an initial development case to be economically viable Derisked Value to Fastnet: c.19 pence per share*
an opportune time, a second appraisal well would establish up to 891.9 BCF of the high estimate Contingent Resource to provide the economic case for a much larger development scenario. Derisked Value to Fastnet: c.133 pence per share*
TE-5 LOCATION
* Source: Management Estimates and SLR CPR November 2013
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Monetisation of a commercial gas development can be achieved through two main routes:
increasingly dependent upon electricity generated by gas. OGIF, Fastnet’s partner, is owned by some
Morocco who would help finance gas-to-power projects
(GME) is a key piece of North African infrastructure and currently transports gas from Algeria to
transport capacity rights which is significantly under-utilized. Fastnet could build an interconnector to the GME which is located only 120km’s from the TE-5 Lakbir structure MOROCCO
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target: Albo-Aptian deepwater turbidite fan
spudded on March 16th 2014 and drilling is expected to take up to 3 months
Kosmos, to contain 360 mmboe of Pmean resources
Programme (based on gross budget cap of $16.2 million)
successfully testing salt structures (e.g. Gulf of Mexico)
Cretaceous deep water channels and fan types
geological objectives
Eagle Complex
MOROCCO
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MOROCCO
targeting a new play concept that is untested in the Agadir Basin
in sweet spot for reservoir development and salt evolution is at lowest risk in the Agadir Basin
Morocco has historically focused
commercial discoveries as yet
Analysis of 32 Wells drilled in Morocco FA-1 Well
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2014 with designated “Tight Hole” status
meters and could take up to 3 months to complete depending on drilling efficiencies
major (BP) in the Agadir Basin for 10 years and their significant commitment to our area of operations reflects the medium-term potential of this specific area of offshore Morocco
MOROCCO
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MOROCCO
FA-1 Eagle Prospect with multiple potential
multiple Tertiary and Base Cretaceous Prospects and Leads that will be re-ranked following the results of the FA-1 well Prospect Risk Criteria: 1. Untested fairway – good reservoir potential (discontinuous salt barrier) 2. Albo-Aptian turbidite sands “sweet spot” – not developed elsewhere 3. Clear pathways for charging traps with oil 4. Direct Hydrocarbon Indicators on seismic support vertical migration and potential to charge sands
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MOROCCO
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Jubilee Field reservoir in Ghana – Pmean Resources quoted by Kosmos for the upper sand only are 360mm BO recoverable
Prospect, for which Shell’s estimate of potential recoverable resources was 220 MMBO, which is located immediately to the east of the FA-1 well location
to determine the potential for a downdip stratigraphic pinch-out play at the base of the Cretaceous to the east of FA-1
Albo-Aptian Sand Objective, for which Fastnet is carried by SK up to a gross cap of USD 100mm, or drill a second exploration well on one of the 3 different geological plays being evaluated by the FA-1 well, for which Fastnet is also carried by SK up to a cap of USD 100 mm, at their discretion as currently there is no licence commitment to drill a further well after FA-1
MOROCCO
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MOROCCO
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About SK
conglomerate in South Korea behind Samsung and Hyundai with 56,000 employees
(Energy/Chemicals Division comprises 56%)
in 13 countries – 5 production blocks, 14 exploration blocks, 4 LNG projects across countries such as Peru, Columbia, Kazakhstan, Libya, Australia, Oman Yemen, Vietnam, Cote d’Ivoire, Madagascar – Daily production of 70,000 boepd – 619mm BOE Proven Reserves
MOROCCO
Deal Terms
Assaka licence in December 2013
exploration well on the Eagle-1 Prospect and first appraisal well (capped at US$100 million per well) or at SK Innovations’ discretion a carry in a second exploration well (capped at gross US$100 million)
further payment of 25% of Fastnet’s back costs relating to the period from 1 October to 1 January 2014
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experience in exploring for prospective traps in areas of salt tectonics
regulatory authorities are working to deliver the approvals during March
allows Fastnet to budget for a P50 gross well cost of USD 140 mm in a Success Case Scenario
16.5m
programme and to advance the potential for early monetisation. Expected cash balance at year end 2014 is c. $10m following completion of both the onshore and offshore wells.
MOROCCO
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Pre-Atlantic opening tectonic elements showing important discoveries/fields and locations of Licensing Options Areas chosen for:
with modern processing
specific areas
recent Flemish Pass Basin discovery
Statoil’s 2013 Flemish Basin Discovery
IRELAND
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Highly prospective basin capable of delivering significant near-term production
major reserves potential: largest producing gas field at Kinsale Head, large prospects with well- understood large-field analogues and existing infrastructure
applying new technologies to de-risk by analogy with surrounding oil and gas discoveries
monetise than deepwater Irish Atlantic Margin
undertaken in Summer 2013 (1,910km2)
DEEP KINSALE MOLLY MALONE MIZZEN & Mizzen East SHANAGARRY BLOCK 49/13
AREA 285 km2 648 km2 1942 km2 881 km2 272 km2 WATER DEPTH
FASTNET INTEREST 60% 100% 100% 82.35% 85% DEEP KINSALE
IRELAND
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sand in Barryroe
(Houston based) log analysis confirms oil in 48/25-1
majors interested in the single asset of Barryroe
drilling partners
prospects
Energy, a subsidiary of Petronas
Kinsale Gas Field Structure
IRELAND
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BC Base Chalk MWS Middle Wealden Sands DT Deep Target (Upper Purbeck?) MP Middle Purbeck Unconformity LP Middle or Lower Purbeck?
ALPHA PLATFORM
BC MWS DT MP LP
Prograding Delta “Sweet Spot” Post-unconformity Fill
IRELAND
www.fastnetoilandgas.com 30 BLUE P90 CLOSURE 8,757 acres Four-way Dip Closure PINK P50 CLOSURE 19,934 acres Four-way Dip Closure GREEN P10 CLOSURE 35,930 acres Minor fault seal element against upthrown Purbeck Shale
48/24-4 oil shows in Base Wealden Sands HANGING WALL 49/17-1 oil shows in Base Wealden and Upper SYN RIFT FOOTWALL 48/25-1 NU TECH Petrophysics 270 ft. net pay in Base Wealden 262 feet net pay in Upper Purbeck HANGING WALL
NO OTHER WELLS PENETRATED BASE WEALDEN/UPPER JURASSIC
IRELAND
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56/12-1
Prospect 1 – 114 sq. km
IRELAND
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1,812 feet 6,650 – 8,462 feet KB
405 feet
22%
15%
75%
140 Reservoirs between 4,000 – 6000 feet in Prospect
P90 14,944 Acres – Base of Reservoirs P10 28,158 Acres – Top of Reservoirs
4,150 BCF
7,820 BCF
IRELAND *Management Estimates. Not validated by CPR
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Mizzen Prospect 1: Structural Nose with Lower Wealden & Purbeck Reservoir pinch-outs and subcrop at Base Barremian Shale & Chalk unconformities Mizzen Lead 2: Structural Lead/Alluvial Fan with Lower Wealden & Purbeck Sand Overlain by Barremian Shale Mizzen Lead 3: Structural Nose with Lower Wealden & Purbeck Sand Overlain by Barremian Shale
Mizzen Prospect 1 = 114 sq. km. Mizzen Lead 2 = 32 sq. km. Mizzen Lead 3 = 127 sq. km.
C.I. = 20 msecs
Top Lower Wealden Sands Subcrops Barremian Shale Top Lower Wealden Sands Subcrops Aptian Unconformity/Base Chalk?
IRELAND
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the Celtic Sea – 2013 industry attention was focussed only on resolution of the Barryroe farmout
gas) – exploration for gas in the Celtic Sea is attractive given the presence of infrastructure
closures prospective for gas and oil
challenging geology & seismic data quality issues of the Celtic Sea – establishes Market credibility in the ability to attract partners
IRELAND
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www.fastnetoilandgas.com 36 OUTLOOK
Prospect Activity 2014 2015 Q2 Q3 Q4 Q1 Q2 Q3 Q4
OFFSHORE MOROCCO (Foum Assaka)
Drill First Well Evaluate FA-1 Well Results CPR for FA-1 Well & New Prospect Inventory Drill Second Non Obligation Well Appraisal or exploration subject to FA-1 Evaluate Well Results
ONSHORE MOROCCO (Tendrara Lakbir)
Complete Farm in Rig Contract Drilling Preparation EIS Study Complete seismic pre-stack depth migration Mature Prospect Portfolio Drill First Appraisal Well/strengthen partnership Drill Second Appraisal Well/POD Submission
OFFSHORE IRELAND (Celtic Sea)
Celtic Sea Farmout/workshop (Joint Initiative by Celtic Sea operators) 3D Seismic Interpretation/AVO Processing Stage 1 & Stage 2 Farm Outs Multi-Well Programme Planning for 2015/2016
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maintain a balanced risk-reward exposure to protect and enhance current cash resources
monetisation
additional partner for Tendrara Lakbir to advance the scope for early monetisation of the TE-5 gas discovery
OUTLOOK
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drove initial shareholder value in emerging industry “hot spot”
into proven gas discovery onshore Morocco yet to be fully factored in to the share price
active drilling programme offshore and onshore Morocco
current work programme commitments whilst allowing for partial monetisation of the portfolio through ongoing farm down discussions for carries in drilling and past costs
KEY INFORMATION AIM FAST ESM FOI TOTAL ORDINARY SHARES IN ISSUE 345,369,071
APPENDIX
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Licence Name Region Area Fastnet Interest Gross Net Partner Operator
Tendrara Lakbir Onshore Morocco 14,687 km2 50% 37.5% ONHYM, OGIF Fastnet Foum Assaka Offshore Morocco 6,478 km2 25% 18.75% Kosmos, BP (pending), SK (pending) Kosmos Mizzen Basin Offshore Ireland 787 km2 100% 100% n/a Fastnet Mizzen East Offshore Ireland 1,155 km2 100% 100% n/a Fastnet Deep Kinsale Offshore Ireland 285 km2 60% 60% PETRONAS Fastnet Shanagarry Offshore Ireland 881 km2 82.35% 82.35% Adriatic Oil, Carob, Petro Celtex Fastnet Molly Malone Offshore Ireland 647 km2 100% 100% n/a Fastnet Block 49/13 Offshore Ireland 272 km2 85% 85% Carob ltd, Petro Celtex Fastnet Total Area 25,192 km2 771 283 95 100 200 300 400 500 600 700 800 Frontier Standard Mature
Strategic focus on high-volume, high- value, frontier petroleum systems
Average Commercial Discovery Size in MMBoe 2010-2012 by Type
Note: Information from September 2012 Bernstein Research Report
APPENDIX
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Mizzen 3D Seismic – 1,400 km2 Deep Kinsale 3D Seismic – 510 km2 CGG Vantage
Mizzen 3D Area - Full Fold (3 km sail in) Mizzen 3D Area
Total Option Area
Deep Kinsale Seismic & Undershoot APPENDIX
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Best Estimate High Case CoS Oil or Gas Case Foum Assaka Shell Legacy Prospects Only 4.930 BBO – 11% OIL Tendrara Lakbir TE-5 Lakbir Structure 310.5 BCF 0.892 TCF 22% GAS Other Prospects and Leads 1, 345.8 BCF 4.284 TCF 11 - 18% GAS Shanagarry Upper Wealden 135.9 BCF – 10% GAS Lower Wealden 796.6 MMBO – 14% OIL Purbeck 501.6 MMBO – 12% OIL Kimmeridgian-Portlandian 885.7 BCF – 5% GAS Upper/Middle Jurassic 321.1 BCF – 5% GAS Mizzen Basin Shallow Lower Cretaceous 2.075 TCF 4.724 TCF 12% GAS Cretaceous Prospect 1.799 BBO 3.899 BBO 4% OIL Deep Triassic Prospect 3.108 TCF 9.356 TCF 5% GAS Molly Malone Basin Triassic Prospect - North 6.677 BBO – 9% OIL Triassic Prospect - South 5.833 BBO – 5% OIL Deep Kinsale Wealden Oil 1651.4 MMBO 3.306 BBO 15% OIL Purbeck 713.6 MMBO 1.556 BBO 15% OIL Total Oil 22.911 BBO OIL Total Gas 8.182 TCF GAS
APPENDIX
Contingent Resources
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APPENDIX
Name Company
Sam Wahab Cantor Fitzgerald Michael Alsford Citi Job Langbroek Davy Ian McLelland Edison Research Tao Ly GMP Securities Gerry Hennigan Goodbody Matthew Lambourne Jefferies Richard Savage Mirabaud Stuart Amor RFC Ambrian Craig Howie Shore Capital Oswald Clint Sanford Bernstein