November 2015
President Energy
Corporate Presentation
November 2015
1
Corporate Presentation November 2015 1 November 2015 Disclaimer - - PowerPoint PPT Presentation
November 2015 President Energy Corporate Presentation November 2015 1 November 2015 Disclaimer The information contained in this confidential document ( Presentation ) has been prepared by President Energy plc (the Company ) . It
November 2015
President Energy
November 2015
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November 2015
Disclaimer
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The information contained in this confidential document (“Presentation”) has been prepared by President Energy plc (the “Company”). It has not been fully verified and is subject to material updating, revision and further amendment. This Presentation has not been approved by an authorised person in accordance with Section 21 of the Financial Services and Markets Act 2000 (“FSMA”) and therefore it is being delivered for information purposes only to a very limited number of persons and companies who are persons who have professional experience in matters relating to investments and who fall within the category of person set out in Article 19 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) or are high net worth companies within the meaning set out in Article 49 of the Order or are otherwise permitted to receive it. Any other person who receives this Presentation should not rely or act upon it. By accepting this Presentation and not immediately returning it, the recipient represents and warrants that they are a person who falls within the above description of persons entitled to receive the Presentation. This Presentation is not to be disclosed to any other person or used for any other purpose. Please note that the information in this Presentation has yet to be announced or otherwise made public and as such constitutes relevant information for the purposes of section 118 of FSMA and non-public price sensitive information for the purposes of the Criminal Justice Act 1993. You should not therefore deal in any way in the securities of the Company until after the formal release of an announcement by the Company as to do so may result in civil and/or criminal liability. While the information contained herein has been prepared in good faith, neither the Company nor any of its shareholders, directors, officers, agents, employees or advisers give, have given or have authority to give, any representations or warranties (express or implied) as to, or in relation to, the accuracy, reliability or completeness of the information in this Presentation, or any revision thereof, or of any other written or oral information made or to be made available to any interested party or its advisers (all such information being referred to as “Information”) and liability therefore is expressly disclaimed. Accordingly, neither the Company nor any of its shareholders, directors, officers, agents, employees or advisers take any responsibility for, or will accept any liability whether direct or indirect, express or implied, contractual, tortious, statutory or otherwise, in respect of, the accuracy or completeness of the Information or for any of the opinions contained herein or for any errors, omissions or misstatements or for any loss, howsoever arising, from the use of this Presentation. This Presentation may contain forward-looking statements that involve substantial risks and uncertainties, and actual results and developments may differ materially from those expressed or implied by these statements. These forward-looking statements are 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 because they relate to events and depend on circumstances that may or may not occur in the future. These forward-looking statements speak only as of the date of this Presentation and the Company does not undertake any obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of this Presentation. Neither the issue of this Presentation nor any part of its contents is to be taken as any form of commitment on the part of the Company to proceed with any transaction and the right is reserved to terminate any discussions or negotiations with any prospective investors. In no circumstances will the Company be responsible for any costs, losses or expenses incurred in connection with any appraisal or investigation of the Company. In furnishing this Presentation, the Company does not undertake or agree to any obligation to provide the recipient with access to any additional information or to update this Presentation or to correct any inaccuracies in, or omissions from, this Presentation which may become apparent. This Presentation should not be considered as the giving of investment advice by the Company or any of its shareholders, directors, officers, agents, employees or advisers. In particular, this Presentation does not constitute an offer or invitation to subscribe for or purchase any securities and neither this Presentation nor anything contained herein shall form the basis of any contract or commitment whatsoever. Each party to whom this Presentation is made available must make its own independent assessment of the Company after making such investigations and taking such advice as may be deemed necessary. In particular, any estimates or projections or opinions contained herein necessarily involve significant elements of subjective judgment, analysis and assumptions and each recipient should satisfy itself in relation to such matters. You should be aware of the risks associated with this type of investment and that in emerging markets such as Argentina and Paraguay; the risks are far greater than in more developed markets (including significant legal, economic and political risks) and that the Company could potentially lose the benefit of its assets in Argentina and Paraguay. You acknowledge the high number of expenses and difficulties frequently encountered by companies in the early stages of development, particularly companies operating in emerging markets and you should be aware that this may lead to the loss of your entire investment. Neither this Presentation nor any copy of it may be (a) taken or transmitted into Australia, Canada, Japan, the Republic of Ireland, the Republic of South Africa or the United States of America (each a “Restricted Territory”), their territories or possessions; (b) distributed to any U.S. person (as defined in Regulation S under the United States Securities Act of 1933 (as amended)) or (c) distributed to any individual outside a Restricted Territory who is a resident thereof in any such case for the purpose of offer for sale or solicitation or invitation to buy or subscribe any securities or in the context where its distribution may be construed as such offer, solicitation or invitation, in any such case except in compliance with any applicable exemption. The distribution of this document in or to persons subject to other jurisdictions may be restricted by law and persons into whose possession this document comes should inform themselves about, and observe, any such restrictions. Any failure to comply with these restrictions may constitute a violation of the laws of the relevant jurisdiction.
November 2015
“OUR TWO OBJECTIVES ARE BLACK AND WHITE” (1)“Unlock the true worth of our significant core assets by increasing production of our reserves and superior capital discipline to build financial strength (2)Create exponential growth in shareholder value through the blue sky potential of our unique portfolio of on-shore exploration assets in high return energy countries“ Peter Levine CHAIRMAN
Mission Statement
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Section 1 – Company Overview
Section 2 – The Core Reserves and Producing Asset Base
Section 3 – Blue Sky Potential
Section 4 – Corporate and Social Responsibility
Notes, Glossary and Image Index Appendices
Index
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November 2015
potential for significant near term growth
addition to that*
Louisiana
unrisked mean Prospective Gas Resources and 676.6 MMBbls
9 selected prospects only **
promising potential exponential shareholder returns
subsidiary reflects that the Company adopts world standard corporate governance, health and safety standards and environmental protections
Paraguay and exploration assets in Argentina***
Investment Highlights
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*Argentina per Gaffney Cline & Associates Report Sep 23 2015 and Louisiana per PPC 2014 Annual Report **Management estimates on an un-risked mean basis for 3 prospects in Argentina and 6 prospects in
***RBC analyst note dated October 2015
November 2015
Market Statistics
Symbol PPC Share Price 7.00p** Number of Shares Issued Share Cap Diluted Share Cap 525,320,628 635,407,136 Market Capitalisation GBP36.8M** Enterprise Value GBP40.8M** Core Net Asset Value 20p per share excluding all exploration*** Brokers RBC / Peel Hunt Analysts Nathan Piper / Werner Riding
Production and Reserves*
NPV 10 Value (Argentina Only) US$329 Million Production 585 bopd**** Reserves (Argentina Only) 1P 11 MMbbls 2P 18.1 MMbbls 3P 23.1 MMbbls
Company Overview
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*Gaffney Cline & Associates report Sept 2015 **Amounts correct as at 12 November 2015 ***RBC analyst note October 2015 ****Information correct as at Interim Report and Accounts RNS of 30 September 2015
Financial
The latest financial reports are available on the Company’s website www.presidentenergyplc.com
November 2015
Directors & Senior Management
Peter Levine
Chairman & CEO
and served as Executive Chairman until its US$2.4 Bln sale in 2009
Plc and also Keltbray Plc
Miles Biggins
Chief Operating Officer
years focused on business development
Development Manager at Northern Petroleum since 2004
Ben Wilkinson
Group Finance Director
Economics
Oil & Gas Corporate Finance with ABN Amro before joining President
Dr David A L Jenkins
Deputy Chairman & Senior Independent Non-Executive Director
exploration and went on to become Chief Executive Technology and Chief Technology Advisor to the CEO
Rob Shepherd
Non-Executive Director
ABN-Amro
Petroleum
Significant Shareholders* %
Peter Levine / PLLG Investments 22.32 International Finance Corporation 14.16 Schroders Investment Management 9.89 Michinoko Limited 8.97
Substantial Shareholders*
PLLG IFC Michinoko Schroders Other
Management & Significant Shareholders
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* As notified to the Company as at 12 November 2015
November 2015
Core Net Asset Value and Netbacks
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$50/bbl $70
0%
10 20 30 40 50 60 70 Current SP RBC Total NAV*
Pence Per Share
Valuation per share
Example Price Royalty Other Tax Transport Opex Corp Tax** Net Back /bbl
$30/bbl $50
Example Price Transport Opex Corp Tax Net Back /bbl
Core NAV NAV Exploration
Argentina – Per Barrel Net Back Actual
(of each incremental barrel)***
Paraguay – Per Barrel Net Back Projected
(Hernandarias Block Example)
*RBC Analysts note October 2015 **Corporation tax 0% due to carried forward tax losses
Louisiana – Per Barrel Net Back Actual
$28/bbl $50
0%
Example Price Severance Tax Corp Tax** Net Back /bbl Opex Royalty
*** Current Production covers base costs
November 2015
Production – Near Term Plans
Argentina
Increase Production by;
and enhance existing wells
independently assessed 2P field production peak of 4,500 bopd and to benefit from high oil prices in Argentina and a 35 year concession term**
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*Management estimates on an un-risked mean basis for 3 prospects in Argentina and 6 prospects in Paraguay. President equity assumed 80% in Hernandarias Block **The 4,500 bopd is the independently assessed 2P production peak evaluated in Gaffney Cline & Associates Report 23 Sep 2015
Exploration – Future Plans
Overview
President has a number of world class on-shore exploration prospects with blue sky potential in Argentina and Paraguay each energy hungry countries with combined unrisked mean Prospective Resources of 13.68 Tcf gas and 676.6 MMBbls oil and condensate*, any one of which will have a ‘seismic’ difference to the value of the Company. The objective whether alone or in conjunction with other parties is to make focused, cost efficient exploration, discoveries catalysing exponential growth and shareholder value.
Paraguay
6 key prospects whether solely or through consideration of strategic partnership / farm-out
being evaluated
Argentina
deep gas prospects whether solely or through consideration of strategic partnership / farm-out
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The Fields
Argentina
633 SqKm
with 10 year renewals thereafter
SqKm provides protection acreage to deep gas prospect in MDT (see later)
Chronology Date Event
1937 Discovery of field by YPF 1980’s Peak production of 9,000 bopd achieved 2011 President buys 50% non-operated interest 2013 President awarded 100% of Matorras and Ocultar exploration licences 2014 President buys remaining 50% interest and gains operational control 2015 President achieves Concession extension to 2050 First successful workovers carried out under President’s operatorship
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Argentina
*Gaffney Cline & Associates Report 2015
November 2015
Production with Premium Potential
9,000 bopd with old technology in the 1980’s
US$329M*
producing a peak of 4,500 bopd on a 2P basis with projected future development scheme of President*
production of US$70 per barrel
Prospective Resources of 7.68 Tcf of Gas and 194 MMBbls Condensate*** with a realisable gas price of US$7.5 per MMbtu
Independent Central Processing Units capable of processing 6,000 bofpd in aggregate
Argentina
2 4 6 8 10 12 14 16 18 20 2011 2012 2013 2014 2015
Reserves (MMbbls)
300% Increase in Independently Assessed 2P Oil Reserves Over 4 years
*Gaffney Cline & Associates report 23 September 2015 ** Information correct as at the date of the Interim Report and Accounts RNS of 30 September 2015 ***Management estimates for 3 deep gas prospects
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20 40 60 80 100 120 2011 2012 2013 2014 2015
US$ Per Bbl
Argentina Realised Price V’s WTI Premium to Current World Prices
Brent WTI Argentina Average Realised Price $/bbl
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Argentina Work Over Programme 2015/16
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Well On stream Date Initial Production Rate (bopd) Shut-in Date Cumulative Production (kbbl) Last Production Rate (bopd) Action DP-12 1985 270 2015 224.4 40 Simple recompletion DP-10 1986 500 2006 503.4 20 Stimulation trial of shut-in well
PART I – FIRM PROGRAM PART II – FURTHER WORKOVERS
Wells Action 9 Subject to successful stimulation trial in DP10 follow on program in producing wells and newly worked over wells. Production potential of 200bopd (included in high case)
giving a net back of US$50/bbl
contingent on success of a stimulation trial
investment for further growth
Production (30 day WI) (bopd)*
High**
Part I Firm Program Capex 68 88 356
Low Mid
US$1.5m*** Part I Firm Program Each new barrel gives a net back after opex and tax of US$50
MDT-11 1976 500 1979 79.4 92 Follow on recompletion from successful MTD-12 workover Q2 2015 PG-13 1981 1470 2011 1909.3 72 Milling stuck packer
PART I – CONTINGENT PROGRAM
*All production ranges are Management Estimates **High case production includes 200bopd potential from Contingent Program requiring further re-investment from successful Firm Program above Firm Program Capex *** Funded by Company’s available resources
November 2015
Argentina Reserves Work Programme 2016-2020
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*Timing and capital cost subject to availability of equipment and financing. After first US$20M/30M spend targeted to be self financing thereafter from cashflow **Management Estimates of gross unrisked mean prospective resources
Booked Reserves & Resources Activity Plan Category MMB
Program Capital Cost Proved Undeveloped 9.5 17 Drilling program to bring reserves into long term production US$20-30M* Probable and Possible 12.1 21 Extended drilling program TBC MDT Gas Prospect 519.8 MMBoe** 1 Exploration Deeper leg of one of proved undeveloped wells US$3M extra cost for deeper leg
PART III – NEAR TERM DRILLING PROGRAM
independently assessed 2P field production peak of 4,500 bopd
development drilling. This funding is targeted to come out of development lending and/or farm-out, particularly taking into account President’s 100% ownership of the reserves and the MDT large gas prospect (see below)
designs, particularly in the carbonate reservoirs, as well as pressure support in field areas where it is required.
economy and to minimise exploration costs
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Work Over Performance (2013-2015)
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Well On stream Date Initial Production Rate (bopd) Shut-in Date Cumulative Production (kbbl) Last Production Rate (bopd) Frac 30 day WI (bopd) Frac 22 month average (bopd) Workover & Frac cost* (USD MM) PE-7 1982 206 1986 110 20 193 92 1.75
EXAMPLE – Q3 2013 FRAC PROGRAM WELL
economics and crestal reservoirs (away from water)
* Cost is per well including pre and post frac workovers as part of a 3 well campaign if carried out in 2015
Well On stream Date Initial Production Rate (bopd) Shut-in Date Cumulative Production (kbbl) Last Production Rate (bopd) Workover 30 day WI (bopd) Workover 4 month average (bopd) Workover cost (USD MM) MDT-12 1977 140 1979 48.3 56 47 42 0.49
EXAMPLE – Q2 2015 RECOMPLETION PROGRAM WELL
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Louisiana
Low Cost Profitable Production
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* Information correct as at Interim Report and Accounts RNS of 30 September 2015
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Paraguay Asset Overview
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Macro
hungry Western facing democratic country with excellent fiscal terms and a pro-energy government
hydrocarbons and a negligible amount of gas production from one small well in the North
Hernandarias, Pirity and Demattei blocks represent a contigunous land block of 34,507 Km2 covering almost the entire prospective Pirity Rift Basin in NW Paraguay
the Argentine side of the border
the extension into Paraguay of Paleozoic source and reservoir rocks analogous to those proven in NW Argentina and in Bolivia
incentives and a 10% corporate tax rate Paraguay is a most promising country for exploration Micro
with reprocessing of old seismic President drilled two exploration wells on Pirity block in 2014
identified the presence of mobile hydrocarbons in Paleozoic formations
significant Cretaceous prospects defined by President’s 2013 3D seismic survey, being the Jurumi Complex with one of these prospects, Tapir now drill ready
prospects in the Hernandarias block and there has been identified a further large Paleozoic structural prospect which is a compelling target to drill on a risk reward ratio
resources for the 6 main prospects in Pirity and Hernandarias are 6 Tcf Gas and 482.6 MMBbls oil and condensate
Appendices
November 2015
Paraguay
November 2015
Paraguay
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Date Event
2012 President farms in to Pirity & Demattei Concession 2013 780 SqKm of 3D seismic data and over 1,000 Km of 2D seismic data acquired with old seismic reprocessed 2014 President farms in to Hernandarias Block and initially acquires 40% with further 40% to earn-in Drilled the Jacaranda and Lapacho exploration wells in Pirity Concession President completes earn-in and acquires in total 64% of Pirity Concession 2015 603Km of 2D seismic data acquired in Hernandarias Block and old seismic reprocessed President acquires full 100% interest in Pirity Concession
Name Interest Held Future Actions
Hernandarias 40% with further 40% to earn-in on further US$10.5M
before 2019 Further analyse geological and geophysical aspects Drill the Boqueron target Pirity 100% Further consideration of Palezoic re-entry wells / prospects Tapir Cretaceous prospect to drill Demattei 10% with 54% remaining to be farmed-in Geological and geophysical review
The Paraguay Concessions
Boqueron Prospect Jacaranda x-1 Well Lapacho x-1 well
Chronology – 3 Years of Rapid Action
November 2015
Paraguay Selected Key Resources*
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Product Markets
Crude Oil Exports
Natural Gas Exports
Country Key Prospect Net Mean Unrisked MMboe Pirity Concession* Lapacho / Paleozoic (1 prospect) 1,023.5 Jurumi Complex Cretaceous (4 prospects) 342.5 Hernandarias Concession** Boqueron (1 prospect) 116.0
TOTAL 1,482.0 Routes to Market
*Management Estimates for 6 key prospects only based on seismic and RPS Report 23 January 2014 for the Jurumi Complex **Management estimate on basis of gas case and full earn in of 80% of Block (for oil case with net mean unrisked 294.4 Mmboe refer to appendices)
November 2015
Argentina Deep Gas Prospect Summary
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Overview
condensate Paleozoic prospect sits directly below proven and probable oil reserves in the MDT field, Puesto Guardian Concession
and Ocultar licence areas
analysis including reprocessing of seismic and outcrop studies have now been made
this work and the identification of Paleozoic source rock and hydrocarbons in the two wells drilled by President in 2014 across the border in Paraguay
the table on the next slide, initially published in September 2015
costs and reducing risk
making the multi-Tcf prospect compelling as to the size of the prize on a risk reward ratio
appendices
Well location
November 2015
Argentina Resources Summary
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License President Energy Prospect Mean Unrisked MMBoe Mean Risked MMBoe Puesto Guardian 100% Martinez del Tineo - Deep 519.8 130.6 Matorras 100% Lomas de Olmedo Deep - South 477.7 120.9 Matorras 100% Lomas de Olmedo Deep - North 476.4 120.6
TOTAL 100% 1473.9 372.1 Statement of Hydrocarbon Prospective Resource Volumes Puesto Guardián Area & Matorras, Argentina
The Total Prospective Resource numbers shown above as at 30 June 2015 are Management Estimates and reflect the standalone Resources for each Prospect, which are then aggregated.
Routes to Market
Gas Monetisation Options
Pipeline Sales Gas Tie-in Options
Oil Monetisation Options
refinery) as existing transport
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Corporate Governance and Social Responsibility
and maintains to world standards of corporate governance within the subjective parameters of the needs of the business and shareholders
imposed by the IFC in its subscription agreement President is committed subject to the above, to comply with the broad principles of the Combined Code for AIM listed companies
all its oil and gas exploration and development operations. Our aim is to create a well governed, sustainable business with a strong sense of social responsibility which has a positive impact in the countries in which we operate.
the fact that we are visitors in each of the areas of our operations and behaves as a good corporate citizen on each relevant level
website
November 2015
Notes and Glossary of Terms
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AAPG American Association of Petroleum Geologists AIM Guidelines Guidance covering the preparation of documentation for Disclosure purposes for Mining, Oil and Gas Companies dated June 2009 (the “AIM Guidance Note”) AVO Amplitude variation with offset B Billion bbls Barrels bofpd Barrels of fluid per day DHI Direct hydrocarbon indicator EAGE European Association of Geoscientists and Engineers EI The Energy Institute Km Kilometre m metres M Thousand MM Million Mstb Thousand stock tank barrels MMstb Million stock tank barrels MMscf/d Millions of standard cubit feet per day MMstb Million stock tank barrels sq km Square kilometres stb Stock tank barrels scf Standard cubic feet SPE Society of Petroleum Engineers SPEE Society of Petroleum Evaluation Engineers TD Total Depth TVD True vertical depth TVDSS True vertical depth (sub-sea) WPC World Petroleum Council PROSPECTIVE RESOURCES Those quantities of petroleum which are estimated, as of a given date, to be potentially recoverable from undiscovered accumulations. Potential accumulations are evaluated according to their chance of discovery and, assuming a discovery, the estimated quantities that would be recoverable under defined development projects. It is recognised that the development programs will be of significantly less detail and depend more heavily on analog developments in the earlier phases of exploration. Prospect A project associated with a potential accumulation that is sufficiently well defined to represent a viable drilling target. Project activities are focused on assessing the chance of discovery and, assuming discovery, the range of potential recoverable quantities under a commercial development program. The full text of the SPE PRMS Definitions and Guidelines can be viewed at: www.spe.org IMAGE INDEX Page 1 – Puesto Guardian Main Production Facility, Argentina Page 4 – PG1001 Well, Argentina Page 6 – Oil Storage tanks at MDT12 field Argentina Page 7 – Inspection at PG1001, Argentina Page 11 – Drilling rig at Puesto Guardian, Argentina Page 17 – Production Facility, East Lake Verret, Louisiana Page 19 – Entrance to Puesto Guardian Facility, Argentina Page 25 – Watering hole in the Chaco, Paraguay
November 2015
Appendices
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> Investor Presentations
Investor Presentations (other previous technical information is located in the same section)