Fastnet Oil & Gas Plc Corporate Presentation
August 2014
Corporate Presentation August 2014 Disclaimer This document is - - PowerPoint PPT Presentation
Fastnet Oil & Gas Plc Corporate Presentation August 2014 Disclaimer 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
August 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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prospects matured for drilling
PETRONAS
project economics. Significant interest from industry majors recognizing additional upside in unconventional shale gas play.
penetrated due to salt occurring shallower than predicted. FA-1 results have significantly de-risked the Foum Assaka license area. OVERVIEW
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ACQUIRE
ANALYSE
FARM DOWN
EXPLORE
thickness/quality remains issue
MONETISE
future prospect evaluation.
down/drilling
OVERVIEW
ACQUIRE ANALYSE FARM DOWN EXPLORE MONETISE
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Net Asset Value (GBp)
Tendrara Farmout & 2015 Drilling Programme
and disproportionate share of the cost of two wells to be drilled in 2015
Estimate Case of 892 BCF which provides substantial upside to current NAV estimates
Celtic Sea Farmout
licences following results of 3D seismic interpretation
Fastnet’s portfolio and crystallise value with back costs of up to USD 22 mm repayable
carried interest in multi-well drilling programme in 2016
Source – Shore Capital March 2014 *Management estimates based on re-risking of CPR, volumes Nov 2013. *Unrisked P50 value: 30p **Value of the carry in 2nd exploration well
Tendrara* Celtic Sea Foum Assaka** Cash Implied value of Exploration and Appraisal Portfolio Cash Balance Fastnet Risked Net Asset Value 41.5p
OVERVIEW
Price: 5.05p as at 06/08/14
Paul Griffiths, Managing Director
Energy Plc in 2009
Mediterranean Region and Gulf R&D in Pittsburgh
Carol Law, Executive Director
Rovuma Area 1, offshore Mozambique
(Jubilee), Brazil (multiple Campos Basin discoveries)
Cathal Friel, Executive Chairman
2007
Will Holland, Chief Financial Officer
structured and managed equity and debt investments in small-cap E&P companies.
technical & business development roles based in Africa & Europe
Michael Nolan, Non-Executive Director
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
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
20+ years
Experience in oil and gas industry
€100 million
One of the founding directors
was part of the small team that built the business and sold it for c. €100m in 2006
$2.5 billion
Value of successful corporate transactions
advised
+$110 million
Managed Macquarie interest in over $110 million of debt and equity investments
Internal Control
Lead teams of internal auditors at Halliburton assessing accounting &
THE TEAM
18+ years
Experience in resource exploration sector
+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
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Scale
tax
explored Palaeozoic prospectivity (extension of proven Algeria/Libya petroleum systems; unconventional Carboniferous & Silurian/Tannezuft shale gas: economics enhanced by TE-5 gas development)
Equity & Partners
Option
MOROCCO
Deal Terms & Legacy Database
3D seismic and Reservoir Engineering (Pathfinder Option Period work programme)
reflect the materiality and “running room” and comprehensive legacy database
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MOROCCO
Fiscal Incentives
Profit Value of 1bbl of Oil in Morocco
Morocco Canada Argentina UK Libya Egypt Norway Indonesia
0% 20% 40% 60% 80% 100%
Gov’t Take (%) Morocco Algeria Nigeria Egypt
Source: EY Global oil and gas tax guide, 2013
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MOROCCO
Source: Marrakesh Conference May 2014
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MOROCCO
Capacity in Morocco (Population 33 million)
Gas Power Capacity (requiring 600 mm cfgpd)
Electricity Generation Forecast by 2023
400 MW Al Wahda Power Station
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MOROCCO
BCF/year)
Morocco
million m3/year Pipeline building estimated costs
back to Maghreb Pipeline)
LNG Terminal Initial Capacity 5 Billions M3 ( 176.55 BCF) > 5 years before operational (at very early planning stage)
Source: CPR, November 2013
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MOROCCO
488 sq. km. 3D & 4,110 kms. 2D seismic
3 month EWT – no pressure depletion in TAGI I Formation damage – stabilised rate 1.5 mm cfgpd
TAGI tight gas reservoir
Gas shows in Lias limestone and Carboniferous
TAGI tight gas reservoir
TAGI II tested at 5 mm cfgpd
Declined to 2.5 mm cfgpd (fault barrier/no 3D) Condensate shows in Lias dolomites & Trias basalts 300 bcf GIIP Best Estimate
Structural & Stratigraphic Pinchout
Possible downdip extension TE-5 Structure
NE area of the Block
Basinwide
Carboniferous – basin centre play
62 TCF (Source ONHYM) Silurian/Tannezuft – NE area
NW-SE LINE OF SECTION
Legacy 2D Seismic
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MOROCCO
Gamma
Flags Lith/Fluid Analysis Resistivity Porosity Curves Visual Matrix
Pore Size
Por/Fluid Perm Textural Params Comment Zone Ratings Fracturing Test Interval
“Sweet Spot” Better sorted NuTech Shows good k Not contributing to flow Core k up to 55 mD Thin layers sub NuTech log resolution
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P50 CLOSURE: 40 sq. km. GAS-DOWN-TO 2451 meters subsea 88 meters gross gas column in TE-5 No water leg encountered Meskala Field pressure data supports single column
FAULT “A” MAY EXTEND ENE AS SHOWN BELOW
Fault “A”
Testing 10 sq. km. updip 350 BCF GIIP Provisional TE-7 Testing P50 40 sq. km. 1.4 TCF GIIP TE-5 P90 35 BCF GIIP from EWT interpretation Radius of investigation < 1 sq. km. TE-1 New Petrophysical Analysis 43.8 meters of gas pay now recognised Upside to Extend TE-5 Gas Column 400 meters Downdip
MOROCCO
processing (depth mapping in progress on reprocessed seismic data)
and TE-7 to Test P50 GIIP Volumes
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(Case “A” 9.1 mm cfgpd with all zones in 22.5m perforated; S = 0)
( Original Well Test k – Only top 11.5m contributing; S = 30)
(EWT Well Test k – Only top 11.5m contributing; S = 0)
MOROCCO
TE-5 Well – inflow Performance Rates TE-6 Well to test well deliverability case “A” – 9mm cfgpd
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MOROCCO Exploration History
MKL-101 Reservoir Characteristics and Test Results
well bore. Liquid content 85 barrels per mm cfgpd (3 barrels at Tendrara)
Reservoir Geometry
GIIP Per Well
for a variable net pay thickness of 135 to 200 feet and a drainage area of between 200 and 300 acres per well Source: World Bank Report No. 4283-MOR 4 Apr 1983
TE-5 Gas Structure
Meskala Gas Feld
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MOROCCO
62,214 TCF Missour Basin TENDRARA LICENCE
Area : 11000 Km² Age : Carboniferous Maximum depth : 4363 m TOC : 1 – 11.44 %
OSD-1 TAJ-1
Distribution of Silurian Hot Shales: NW Africa
OSD-1 (Carboniferous)
TAJ-1 (Silurian)
Field
Based on Legacy 2D Seismic Data
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Flat Spot?? Pre-Drill Fastnet Primary “Wedge” Target
Post-Drill Fastnet Primary “Wedge”
Target Tagged but not Penetrated FA-1 Live Oil Shows High Amplitude Package Recalibrate with Well Results SALT
MOROCCO
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Source: CoreLab
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MOROCCO
give valuable insight into an ongoing analysis of the potential of the under- explored offshore
Fastnet and a target for Chevron and BP offshore Nova Scotia remains a key target in Foum Assaka following the FA- 1 well
has historically focused on the Carbonate Shelf with no commercial discoveries as yet Analysis of 32 Wells drilled in Morocco FA-1 Well
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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%
IRELAND
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600 MBO Recoverable made in summer 2013
Charlie Gibbs FZ CGFZ Splay
Qualitative Interpretation – AOI + HP100km Bouguer
IRELAND
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Gas Chimney? Bright Spots Stratigraphic Prospect “B”
TDW 40 Aptian TDW 50 Barremian Chalk
Primary Prospect “A” Higher amplitude events (Clastics?)
IRELAND
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RMS Amplitude Extraction, TDW 40 mins 100ms
IRELAND
Basis for Maximum closure at Primary Prospect A
High amplitudes over crest
Inline 728
Inline 728
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IRELAND
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Commercial Considerations
accelerates First Gas
Kinsale Platforms
creates tariffing issues
Kinsale Assumptions
Mizzen Assumptions
terminal at Bantry
IRELAND
155 kms to Bantry Bay Oil Terminal Infrastructure 34 kms to connect to
185 kms to connect to Kinsale Platform and Shore Terminal
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IRELAND
Prospect E Deep Kinsale Primary Prospect “A” 49/9-2 “Helvick” Oil & Gas Play
Base Chalk Upper Purbeck Sands Middle Wealden Upper Jurassic Upper-Middle Jurassic
Mounding in Upper Purbeck
Northern Bounding Fault
Kinsale Field 1.7 TCF Gas
MFS
48/25-1 Discovery
Southern Bounding Fault
Source Reservoir Prone Deep Liassic Source?
Limit (4000ft)
North SE North South East
Potential reservoir bearing packages thicken into active Late Jurassic to Early Cretaceous Faults
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IRELAND
Southern Bounding Fault
Prospect E Deep Kinsale Prospect A
49/9-2 “Helvick” Oil & Gas Play Base Chalk Upper Purbeck Sands Middle Wealden Upper Jurassic Upper-Middle Jurassic
Mounding in Upper Purbeck Prospect K
Northern Bounding Fault North South East North SE Purbeck Shale
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48/25-1 Logged 532 feet of net oil pay The Lower Wealden interval from 6600-7060ft is sst with 270 feet of net pay. The characteristics of this interval are: average porosity of 15.3%, average SW of 43.3%, average permeability of 114 millidarcies, There are several zones with permeability above several hundred
hydrocarbon at a good rate. The Upper Purbeck interval from 7060-7600 feet is sst. with 262ft of net pay. With average porosity of 12.5%, average SW of 36.9%, average permeability of 45.6 millidarcies, There are several zones with permeability
expected to produce hydrocarbon at a fair to good rate.
Seal Interval
Upper Purbeck – Lower Wealden Reservoir Interval Mid Purbeck Lacustrine Source Rock
Oil-Bearing IRELAND
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Primary Prospect “A” Upper Purbeck 46km²
Logged Live Oil 48/25-1 262 feet net oil pay
IRELAND
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IRELAND
Good Continuity of Barryroe Tested Sands Over 10’s of Kilometres
Seal Interval
Upper Purbeck Lacustrine Shale Reservoirs in Deep Kinsale Lower Wealden Reservoir Interval
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Primary Prospect “A” Basal Wealden 46 sq. km. 48/25-1 Oil Discovery Lower Wealden 46.7 sq. km. Logged Live Oil 48/25-1 270 feet net oil pay
IRELAND
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Sea Nova Jack-Up Example (Reusable Platform)
IRELAND
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www.fastnetoilandgas.com 38 OUTLOOK
Prospect Activity 2014 2015 Q2 Q3 Q4 Q1 Q2 Q3 Q4
ONSHORE MOROCCO (Tendrara Lakbir)
Farmout Exercising Option Agreement (Dec 2014) Rig contract Drilling preparation EIS Study Complete seismic pre-stack depth migration mature prospect portfolio Drill first appraisal well Drill second non obligatory appraisal well/POD submission
OFFSHORE MOROCCO (Foum Assaka)
Drill first well Evaluate FA-1 well results Drill second FA-1 carried well subject to partners approving location & timing Evaluate well results
OFFSHORE IRELAND (Celtic Sea)
Celtic Sea Farmout/workshop (Joint Initiative by Celtic Sea operators) 3D Seismic Interpretation/AVO Processing Stage 1 & Stage 2 Farmouts Multi-Well programme planning for 2016
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risk through value-adding seismic acquisition, reprocessing and desk top studies
change in exploration investment strategy to lower capex onshore and shallow water projects in areas of proven hydrocarbons
JV partner sufficiently qualified to carry project through to gas development and monetisation)
export route to Europe assumes greater significance in order to mitigate against long-term dependency on Russian gas
OUTLOOK
Tendrara Lakbir Onshore Morocco
reservoir continuity and flow assurance issues – attractive to farminees Deep Kinsale Celtic Sea
seismic – previously held back farmout success Mizzen Prospect Celtic Sea
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Cathal Friel Executive Chairman Paul Griffiths Managing Director 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 for specific projects only
Will Holland Chief Financial Officer
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Licence Name Region Area Fastnet Interest Gross Net Partner Operator
Tendrara Lakbir Onshore Morocco 14,548 km2 66.7% 50% ONHYM, OGIF Fastnet Foum Assaka Offshore Morocco 6,478 km2 12.5% 9.375% Kosmos, BP, SK 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 25,053 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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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: FOUM ASSAKA
Deal Terms
Assaka licence in December 2013
exploration well on the Eagle-1 Prospect and first appraisal well (capped at USD $100 million per well) or at SK Innovations’ discretion a carry in a second exploration well (capped at gross USD $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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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
FASTNET PORTFOLIO
Contingent Resources
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APPENDIX Name Company
Harry Stevenson Beaufort Securities Sam Wahab Cantor Fitzgerald Job Langbroek Davy Ian McLelland Edison Research Tao Ly GMP Securities Gerry Hennigan Goodbody Richard Savage Mirabaud Stuart Amor RFC Ambrian Craig Howie Shore Capital