CORPORATE PRESENTATION
July 2015
CORPORATE PRESENTATION July 2015 DISCLAIMER THIS DOCUMENT IS - - PowerPoint PPT Presentation
CORPORATE PRESENTATION July 2015 DISCLAIMER THIS DOCUMENT IS CONFIDENTIAL This document has been prepared and issued by and is the sole responsibility of Ophir Energy plc (the Company ) and its subsidiaries for selected recipients. It
July 2015
Corporate Presentation – July 2015 Slide 2
THIS DOCUMENT IS CONFIDENTIAL This document has been prepared and issued by and is the sole responsibility of Ophir Energy plc (the “Company”) and its subsidiaries for selected recipients. It comprises the written materials for a presentation to investors and/or industry professionals concerning the Company’s business activities. By attending this presentation and/or accepting a copy of this document, you agree to be bound by the following conditions and will be taken to have represented, warranted and undertaken that you have agreed to the following conditions. This presentation is strictly confidential and may not be copied, published, distributed or transmitted. If you do not accept these conditions, you should immediately destroy, delete or return this document. The document is being supplied to you solely for your information and for use at the Company’s presentation to investors and/or industry professionals concerning the Company’s business activities. It is not an offer or invitation to subscribe for or purchase any securities and nothing contained herein shall form the basis of any contract or commitment
Company in any jurisdiction nor shall it or any part of it nor the fact of its distribution form the basis of, or be relied on in connection with, any contract commitment or investment decision in relation thereto nor does it constitute a recommendation regarding the securities of the Company. This presentation is for informational purposes only and may not be used for any other purposes. The distribution of this presentation in jurisdictions other than the United Kingdom may be restricted by law and therefore persons into whose possession this presentation comes should inform themselves about and observe such restrictions. Any failure to comply with these restrictions may constitute a violation of securities laws of any such jurisdictions. This presentation and any materials distributed in connection with this presentation may include certain forward-looking statements, beliefs or opinions, including, without limitation, statements with respect to the Company’s business, financial condition, results of operations, plans, objectives and estimates, including, among others, resource estimates. These statements, which contain the words “anticipate”, “believe”, “intend”, “estimate”, “expect” and words of similar meaning, reflect the Directors’ beliefs and expectations and involve a number of risks and uncertainties because they relate to events and depend on circumstances that will occur in the future. No representation is made that any of these statements or forecasts will come to pass or that any forecast results will be achieved. There are a number of known and unknown risks, uncertainties and other factors that could cause actual results, performance and developments of the Company or industry results to differ materially from those expressed or implied by such forward looking statements, therefore, undue reliance should not be placed on forward looking statements. Past performance of the Company cannot be relied on as a guide to future performance. Forward-looking statements speak only as at the date of this presentation and the Company expressly disclaims any obligations or undertaking to release any update of, or revisions to, any forward-looking statements in this presentation, whether as a result of new information or future events. No statement in this presentation is intended to be a profit forecast or should be interpreted to mean that future earnings per share of the Company will necessarily match or exceed its historical published earnings per share. As a result, you are cautioned not to place any undue reliance on such forward-looking statements. Certain data in this presentation was obtained from various external data sources, and the Company has not verified such data with independent sources. Accordingly, no representation or warranty, express or implied, is made and no reliance should be placed, on the fairness, accuracy, correctness, completeness or reliability of that data, and such data involves risks and uncertainties and is subject to change based on various factors. No reliance may be placed for any purposes whatsoever on the information contained in this presentation or on its completeness. The Company and its members, directors, officers and employees are under no obligation to update or keep current information contained in this presentation, to correct any inaccuracies which may become apparent, or to publicly announce the result of any revision to the statements made herein except where they would be required to do so under applicable law, and any opinions expressed in them are subject to change without notice, whether as a result of new information or future events. No representation or warranty, express or implied, is given by the Company or any of its subsidiaries undertakings or affiliates or directors, officers or any other person as to the fairness, accuracy, correctness, completeness or reliability of the information or opinions contained in this presentation, nor have they independently verified such information, and any reliance you place thereon will be at your sole risk. Without prejudice to the foregoing, no liability whatsoever (in negligence or otherwise) for any loss howsoever arising, directly or indirectly, from any use of this presentation or its contents or otherwise arising in connection therewith is accepted by any such person in relation to such information.
Corporate Presentation – July 2015 Slide 3
Positioned to thrive in uncertain times
Slide 4
VALUE CREATION THROUGH EXPLORATION FOCUS ON ROCE THROUGH CAPITAL ALLOCATION AND COST MANAGEMENT ACTIVE PORTFOLIO AND RISK MANAGEMENT
Corporate Presentation – July 2015
Ophir is BIG E and little p
Corporate Presentation – July 2015 Slide 5
creation of shareholder value
high graded portfolio due to strong balance sheet and minimal well commitments
development activity
will be deployed to developments
stream for E&A activity
and production growth are not key metrics
even at low oil price
EXPLORATION DEVELOPMENT
RETURN TO SHAREHOLDERS
PRODUCTION
CASH
A SELF-SUSTAINING EXPLORER DELIVERING SUPERIOR RETURNS TO SHAREHOLDERS
Corporate Presentation – July 2015 Slide 6
STAGE 1: ENTRY STAGE 2: SEISMIC STAGE 3: DRILLING
High Signature Bonus Seismic Multiple Wells High costs High cost Mainly commitment Wells
Small/No Signature Bonus Seismic inherited Costs down c. 50% Rig costs down c. 30% Only drill top ranked prospects
TOP OF CYCLE BOTTOM OF CYCLE
DROP DROP DROP DROP
ALL THREE COST COMPONENTS DROPPED IN PRICE - RISK OF ROCKS IS UNCHANGED
Minimal commitments, low cost entry
Corporate Presentation – July 2015 Slide 7
MATURING PLAYS FOR HIGH GRADING
Aru Trough (oil) EG (oil) G4/50 (oil) Gabon pre-salt (oil) Gabon post-salt (oil) Gabon conjugate margin (oil) Kenya (oil/gas) Kerendan (gas) Makassar Straights (oil/gas) Myanmar (gas) Seychelles (oil) Western Birds Head (oil)
preferred prospects
commercialisation
2 Established 3 New tests
FINAL WELLS IN IPO PORTFOLIO
to build IPO portfolio
DRILLING ON HIGH GRADED PLAYS
ONLY PROGRESS TOP RANKED PROSPECTS CAPITAL DISCIPLINE WALK AWAY FROM PROSPECTS THAT WON’T WORK
SELF FUND
No fresh capital deployed to development
Corporate Presentation – July 2015 Slide 8
PRODUCTION
TOTAL VOLUME 2C: 1152 MMboe
EQUATORIAL GUINEA
W.I. 80%
KERENDAN
W.I. 75%
BUALUANG
W.I. 100%
TANZANIA
W.I. 20% CASH FOR E&A
First gas 2022 First gas 2020 First gas 2016
2nd phase of dev.
On production
3rd phase of dev.
2P RESERVES
SELF FUND
2014 2015 2016 2017 2018 2019 2020
Providing value and basis for significant production growth
Material resource base offering significant and predictable cash flow
production start estimated for 2019
commerciality Kerendan Fortuna FLNG Tanzania LNG
10-12 mboepd
Total production in 2020 above 35 mboepd Salamander acquired ‘15 Bualuang Expansion
Additional volumes if current equity in Fortuna FLNG is retained
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2015 2016 2017 2018 2019 2020
Cash Flow Composition by Asset
Corporate Presentation – July 2015 Slide 9
Low levels of commitment spend, strong balance sheet, high degree of flexibility
Slide 10
through end 2017; c. 9% of YE 2014 cash
Discretionary 85% Commitment 15% Pre-Development 35% Development 25% E&A 40%
2015 CAPEX – E&P Vs P&D 2015 CAPEX - Discretionary vs Commitment
Corporate Presentation – July 2015
Four key things required to make an LNG project work
MILESTONES LAND / MIDSTREAM JV PARTNER ALIGNMENT FISCAL TERMS RESOURCES
be formally awarded
to be finalised
Award of Land Bringing in Upstream partner
TANZANIA EQUATORIAL GUINEA
Corporate Presentation – July 2015 Slide 12
Why FLNG appropriate solution
simple
Why Ophir can be the Upstream operator
relatively straightforward
Slide 13
Corporate Presentation – July 2015
Slide 14
UPSTREAM PSC
Government
MIDSTREAM SHIPPERS LNG BUYERS
FOB DES
NETBACK
$ CASHFLOW LNG (GAS) FLOW
$8.5/MMbtu $5.0/MMbtu $10.00/MMbtu $1.5/mmbtu $3.5/mmbtu
CASH Paid by LNG Buyer to OPHIR/SONAGAS for LNG Cargo at FOB Price Delivered LNG Cargo price LNG Buyer pays for Shipping CASH Paid for Liquefaction Tariff by Contractor (Ophir/GEPetrol) & Government to FLNG
Netback Price used in PSC for calculating and valuing Royalty, Cost Recovery and Profit Gas
Royalty 7%-17% GEPetrol Profit Share MMIE Profit Share Income Tax paid by Ophir Cost Recovery (Ophir/GEPetrol) Ophir Profit Share
Corporate Presentation – July 2015
20 40 60 80 100 120 2 4 6 8 10 12 14 16 Additional demand (mmtpa) Delivered price $/MMbtu FOB Break Even $/mmbtu Shipping to Toyko Bay $/mmbtu Cumulative mmtpa
Additional demand required by 2025
EG costs reduction of c.$1/MMbtu following Golar appointment not reflected here
1 Data taken from IHS Waterborne – General assumption that upstream requires 15% and Liquefaction 12%
US Liquefaction based on $4/mmbtu HH and a tolling fee of between $3.00-4.00/mmbtu
Breakeven cost stack of projects yet to take FID
Slide 15 Corporate Presentation – July 2015
Step out from Bualuang oil field
Ophir reviewing prospect inventory
Low cost drilling
Duen Chai West Bua Nin Soy Siam Rak NW2 B8/38-2 Deep
Slide 17 Corporate Presentation – July 2015
Building on learnings from 2014
New oil play emerging
previous acreage
3D seismic survey shot in 4Q 2014
Looking for prospects between 250 – 500 MMbo
Slide 18 Corporate Presentation – July 2015
95% operated interest in Block AD-03
3D seismic survey commenced March 2015
First mover advantage
weather window
terms of work programme
Preliminary mapping on existing 2D indicates prospects of up to 40 Tcf
Slide 19 Corporate Presentation – July 2015
FORTUNE FAVOURS THE BRAVE!
Slide 20 Corporate Presentation – July 2015
For further information contact: Head of IR and Corporate Communications Investor.relations@ophir-energy.com
Geoff Callow
Level 4 123 Victoria Street London SW1E 6DE UNITED KINGDOM Tel: +44 (0)29 7811 2400 Fax: +44 (0)20 7811 2421
Slide 22
Fortuna Complex Viscata Lykos Undrilled Silenus Hub prospects Silenus East Estrella De Mar Tonel Oreja Marina
Six commercial gas discoveries have been made within Block R Appraisal Area (green):
Exploration Area (red):
Recoverable Resources (TCF): 1C 2C 3C Ophir Discovery 2.4 2.7 3.2 Ophir Discovery + Risked Silenus Hub 3.0 3.4 4.1
Corporate Presentation – July 2015
Slide 23
Silenus
Corporate Presentation – July 2015
$970m
$0 $200 $400 $600 $800 $1,000 $1,200 $1,400 Cash YE'14 OCF Capex Other Cash YE 2015
~ $150m $700m - $750m
$250m-$300m
Fully funded for next 3 years, high degree of financial flexibility
Slide 24
Only $35m
commitment spend
Corporate Presentation – July 2015