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. 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. 2

Since our last RBS Morgans breakfast… March 2012 July 2013 65,584 km 2 71,933 km 2 Permits 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 6.9 million barrels 1 2P reserves 10.8 million barrels Pipelines Proposed Complete and operational Gas Drilling first Cooper Basin gas Discovered Hornet gas field Activity well and basin centred gas play Nil 2C: 1.9 Tcf 3C: 5.5 Tcf Cooper Basin resources 13 mmboe (79 Bcf) 1 26 mmboe (157 Bcf) Surat Basin 2P reserves A$6-9/GJ A$8-11/GJ 2 2017 gas price estimate 1 As at 30 June 2011 2 Source: EnergyQuest 3

2013/14 guidance 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 guidance 1 : • 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 4 1 Before production and divestments 2 At midpoint of production and 2P oil reserves growth guidance

Cooper Basin Gas Business 5

LNG demand set to outstrip CSG supply • LNG gas demand to 2012 (720 PJ/a) 2017 (2,350 PJ/a) dwarf the domestic gas market Demand • Domestic market to Power soften, however large 210PJ uncontracted positions Domestic Domestic LNG 630PJ forecast 1,720PJ Major Industrial 110PJ Utility • 2017 price estimate: 400PJ $8-11 per gigajoule • Coal seam gas Supply production must grow CSG 1,590PJ Forecast more than five fold in shortfall and Other five years required third 4PJ party supply 280PJ Gippsland • Third party supply 258PJ CSG 270PJ critical to meeting LNG demand Cooper Otway 105PJ Cooper • Cooper Basin perfectly 105PJ 94PJ Gippsland placed to meet shortfall 260PJ Otway and other 6 Source: EnergyQuest 115PJ

Cooper Basin is the solution for gas supply 7

Early success with Hornet gas discovery 8

Focused on commercialising Hornet… Program objectives so far:  Gas to surface  Resource definition  Continual cost reduction Next steps : • Confirm project economics • Progress field appraisal and development plan Hornet contingent resources 1 Prospective resource 1,2 1C 2C 3C High Bcf mmboe Bcf mmboe Bcf mmboe Bcf mmboe 153 3 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. 9 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

… and monetising CSG 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 10

Cooper Basin oil business 11

Oil production underpins financial strength 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 Annual oil production (net) 1,800,000 1,600,000 1,400,000 1,200,000 Barrels of oil 1,000,000 800,000 600,000 400,000 200,000 0 2009/10 2010/11 2011/12 2012/13 FY14 guidance 12 1. Midpoint of guidance

Senex continues to deliver oil reserves growth Net 1P reserves (mmbbls) Net 2P reserves (mmbbls) Net 3P reserves (mmbbls) 14 8 25 CAGR: 89% CAGR: 68% 21.4 7 12 10.8 20 6 10 16.2 5.1 8.2 5 15 14.0 8 4.2 6.4 4 3.3 6 10 3 4 2 4.5 5 1.6 2 1 0.0 0 0 0 2009/10 2010/11 2011/12 2012/13 2009/10 2010/11 2011/12 2012/13 2009/10 2010/11 2011/12 2012/13 Net oil reserves upgraded: Drilling underway: • 2P reserves 10.8 mmbbls • More than 30 exploration, appraisal and development targets to be drilled in 2013/14 • 3P reserves 21.4 mmbbls • Underexplored historically • Reserves growth guidance of 4 to 6 million barrels 1 in 2013/14 • Working petroleum system throughout the • High quality 3D seismic is the region provides increased confidence key exploration tool 13 1 Before production and divestments

The Cooper Basin has a long history… The Cooper Basin has already produced 158 million barrels of oil 25 DECLINE STABILISATION REVITALISATION 1986 to 2000 2000 to 2011 2011 onwards 20 Estimated total Cooper Basin FY14 oil production mmbbls/year 15 10 5 0 14 Source: APPEA, DMITRE (South Australia) and Senex estimates

…by global standards it is immature Mature Basin Cooper Basin • Majority of past exploration • Majority of current exploration targeted structural traps targets are stratigraphic traps • 20% 3D seismic coverage • 70%+ 3D seismic coverage • Low well density • High well density • Majority of gas and oil reservoirs • Production enhancement NOT fracture stimulated methods are the norm • Rare use of secondary or • Extensive use of secondary tertiary recovery and tertiary recovery methods • Concentrated and low number • Highly competitive contractor of contractors market 15

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… 16

…with transformational 3D seismic Exploration is all about “seeing” the subsurface to minimise risk 3D seismic image of Worrior oil field 2D seismic line near Skipton-1 2D seismic only provides vertical 3D seismic provides sections in any sections of the earth in one direction direction for better definition of traps 17

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 barrels 1 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 18 1 Before production and divestments

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