Energy to deliver RBS Morgans Breakfast Presentation 17 July 2013 - - PowerPoint PPT Presentation

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Energy to deliver RBS Morgans Breakfast Presentation 17 July 2013 - - PowerPoint PPT Presentation

Energy to deliver RBS Morgans Breakfast Presentation 17 July 2013 Important notice and disclaimer Important information This Presentation has been prepared by Senex Energy Limited ( Senex ). It is current as at the date of this Presentation.


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Energy to deliver

RBS Morgans Breakfast Presentation

17 July 2013

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Important notice and disclaimer

Important information This Presentation has been prepared by Senex Energy Limited (Senex). It is current as at the date of this Presentation. It contains information in a summary form and should be read in conjunction with Senex’s other periodic and continuous disclosure announcements to the Australian Securities Exchange (ASX) available at: www.asx.com.au. Risk and assumptions - An investment in Senex shares is subject to known and unknown risks, many of which are beyond the control of

  • Senex. In considering an investment in Senex shares, investors should have regard to (amongst other things) the risks outlined in this

presentation and in other disclosures and announcements made by Senex to the ASX. This presentation contains statements, opinions, projections, forecasts and other material, based on various assumptions. Those assumptions may or may not prove to be correct. No investment advice - The information contained in this presentation does not take into account the investment objectives, financial situation or particular needs of any recipient and is not financial advice or financial product advice. Before making an investment decision, recipients of this presentation should consider their own needs and situation, satisfy themselves as to the accuracy of all information contained herein and, if necessary, seek independent professional advice. Disclaimer - To the extent permitted by law, Senex, its directors, officers, employees, agents, advisers and any person named in this presentation: give no warranty, representation or guarantee as to the accuracy or likelihood of fulfilment of any assumptions upon which any part of this presentation is based or the accuracy, completeness or reliability of the information contained in this presentation; and accept no responsibility for any loss, claim, damages, costs or expenses arising out of, or in connection with, the information contained in this presentation. Reserve and resource estimates Unless otherwise indicated, the statements contained in this presentation about Senex’s reserves estimates have been compiled by Mr James Crowley BSc (Hons), who is General Manager – Exploration and Development, a full time employee of Senex, in accordance with the definitions and guidelines in the 2007 Petroleum Resources Management System approved by the Society of Petroleum Engineers (SPE PRMS). Mr Crowley consents to the inclusion of the estimates in the form and context in which they appear. Senex’s reserves and resources are consistent with the SPE PRMS.

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Since our last RBS Morgans breakfast…

March 2012 July 2013 Permits 65,584 km2 71,933 km2 People 52 170 Net profit after tax $1.9 million for 1H FY12 $23.5 million for 1H FY13 Oil Production 601,000 barrels for FY12 1.24 million barrels for FY13 Drilling program 11 wells 30+ wells 2P reserves 6.9 million barrels1 10.8 million barrels Pipelines Proposed Complete and operational Gas Activity Drilling first Cooper Basin gas well Discovered Hornet gas field and basin centred gas play Cooper Basin resources Nil 2C: 1.9 Tcf 3C: 5.5 Tcf Surat Basin 2P reserves 13 mmboe (79 Bcf)1 26 mmboe (157 Bcf) 2017 gas price estimate A$6-9/GJ A$8-11/GJ2

1 As at 30 June 2011 2 Source: EnergyQuest

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Focus on cash generation and balance sheet strength

OIL

  • FY14 production guidance:

1.4 million to 1.6 million barrels, up 13% to 28%

  • FY14 2P reserves growth guidance1:

4 million to 6 million barrels, generating a reserves replacement ratio of over 300%2 GAS

  • Focus on early commercialisation of

2.4 Tcf Hornet gas discovery

  • Monetisation of coal seam gas assets

2013/14 guidance

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1 Before production and divestments 2 At midpoint of production and 2P oil reserves growth guidance

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Cooper Basin Gas Business

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LNG 1,720PJ Domestic 630PJ

2017 (2,350 PJ/a)

CSG 1,590PJ Otway and

  • ther

115PJ Gippsland 260PJ Cooper 105PJ Forecast shortfall and required third party supply 280PJ

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LNG demand set to outstrip CSG supply

Power 210PJ Major Industrial 110PJ Utility 400PJ

2012 (720 PJ/a)

Demand

CSG 270PJ Cooper 94PJ Otway 105PJ Gippsland 258PJ Other 4PJ

Supply

Source: EnergyQuest

Domestic

  • LNG gas demand to

dwarf the domestic gas market

  • Domestic market to

soften, however large uncontracted positions forecast

  • 2017 price estimate:

$8-11 per gigajoule

  • Coal seam gas

production must grow more than five fold in five years

  • Third party supply

critical to meeting LNG demand

  • Cooper Basin perfectly

placed to meet shortfall

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Cooper Basin is the solution for gas supply

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Early success with Hornet gas discovery

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Program objectives so far:

 Gas to surface  Resource definition  Continual cost reduction

Next steps:

  • Confirm project economics
  • Progress field appraisal and

development plan

Focused on commercialising Hornet…

Hornet contingent resources1 Prospective resource1,2 1C 2C 3C High Bcf mmboe Bcf mmboe Bcf mmboe Bcf mmboe 1533 26 835 139 2,374 396 3,686 614

1 Estimated gross raw gas. 1,000 Bcf = 1 Tcf. 1 barrel of oil equivalent = 6,000 cubic feet 2 Prospective resource includes contingent resource. 3 100% share. Senex has entered into an agreement to acquire the 20% share of PEL 115 held by Orca Energy Limited – refer ASX announcement dated 13 June 2013

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Intensifying interest in monetisation opportunities

  • Located in the Gladstone LNG

feedstock heartland

  • CSG to LNG projects will require

additional third party gas supplies

  • Seven successful appraisal wells

drilled in 2012/13

  • Reserves upgraded:

– 2P reserves 156.6 PJ – 3P reserves 357.7 PJ – 598 PJ of reserves and resources (~102.8 mmboe)

  • Planning underway for further

eleven exploration and appraisal wells across eastern and western permits

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… and monetising CSG

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Cooper Basin oil business

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Track record for production growth:

  • 106% increase to 1.24 million barrels in 2012/13
  • 2013/14 production guidance of 1.4 million to

1.6 million barrels, an increase of 13% to 28%

  • Majority equity and operatorship across all Senex

interests in the Cooper Basin Western Flank

200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 1,600,000 1,800,000

2009/10 2010/11 2011/12 2012/13 FY14 guidance

Barrels of oil

Annual oil production (net)

Oil production underpins financial strength

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  • 1. Midpoint of guidance
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Net oil reserves upgraded:

  • 2P reserves 10.8 mmbbls
  • 3P reserves 21.4 mmbbls
  • Reserves growth guidance of

4 to 6 million barrels1 in 2013/14

  • High quality 3D seismic is the

key exploration tool Drilling underway:

  • More than 30 exploration, appraisal and

development targets to be drilled in 2013/14

  • Underexplored historically
  • Working petroleum system throughout the

region provides increased confidence

Senex continues to deliver oil reserves growth

4.5 16.2 14.0 21.4 5 10 15 20 25 2009/10 2010/11 2011/12 2012/13 CAGR: 68% 0.0 3.3 4.2 5.1 1 2 3 4 5 6 7 8 2009/10 2010/11 2011/12 2012/13 1.6 6.4 8.2 10.8 2 4 6 8 10 12 14 2009/10 2010/11 2011/12 2012/13 CAGR: 89%

Net 3P reserves (mmbbls) Net 2P reserves (mmbbls) Net 1P reserves (mmbbls)

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1 Before production and divestments

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The Cooper Basin has a long history…

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Source: APPEA, DMITRE (South Australia) and Senex estimates

5 10 15 20 25 mmbbls/year

The Cooper Basin has already produced 158 million barrels of oil

DECLINE 1986 to 2000 STABILISATION 2000 to 2011 REVITALISATION 2011 onwards

Estimated total Cooper Basin FY14 oil production

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  • Majority of past exploration

targeted structural traps

  • 20% 3D seismic coverage
  • Low well density
  • Majority of gas and oil reservoirs

NOT fracture stimulated

  • Rare use of secondary or

tertiary recovery

  • Concentrated and low number
  • f contractors

…by global standards it is immature

  • Majority of current exploration

targets are stratigraphic traps

  • 70%+ 3D seismic coverage
  • High well density
  • Production enhancement

methods are the norm

  • Extensive use of secondary

and tertiary recovery methods

  • Highly competitive contractor

market

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Mature Basin Cooper Basin

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There is massive potential to “innovate”…

Bringing old ideas to new areas and new ideas to old areas:

  • Fracture stimulation of both oil

and gas reservoirs

  • Application of horizontal wells
  • Underbalanced and at-balance

drilling

  • Drilling with casing
  • Patterned water-flooding
  • And more…

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…with transformational 3D seismic

2D seismic only provides vertical sections of the earth in one direction 3D seismic provides sections in any direction for better definition of traps Exploration is all about “seeing” the subsurface to minimise risk

2D seismic line near Skipton-1 3D seismic image of Worrior oil field 17

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Summary

Oil is our strength

  • Production guidance for 2013/14:

1.4 million to 1.6 million barrels

  • Oil reserves growth guidance of 4 million

to 6 million barrels1 for 2013/14

  • Material drilling program underway

Gas is our game changer

  • Focus on early commercialisation of

Hornet gas field

  • Monetisation of coal seam gas

1 Before production and divestments

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Telephone +61 7 3837 9900 Email info@senexenergy.com.au Registered Office Level 14, 144 Edward Street GPO Box 2233 Brisbane Queensland 4000 Australia