Good Oil Conference 2010 Disclaimer This Presentation is provided on - - PowerPoint PPT Presentation

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Good Oil Conference 2010 Disclaimer This Presentation is provided on - - PowerPoint PPT Presentation

Good Oil Conference 2009 Good Oil Conference 2010 Disclaimer This Presentation is provided on the basis that none of the Company nor its respective officers, shareholders, related bodies corporate, partners, affiliates, employees, representatives


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Good Oil Conference 2009

Good Oil Conference 2010

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SLIDE 2

Disclaimer

This Presentation is provided on the basis that none of the Company nor its respective officers, shareholders, related bodies corporate, partners, affiliates, employees, representatives and advisers make any representation or warranty (express or implied) as to the accuracy, reliability, relevance or completeness of the material contained in the Presentation and nothing contained in the Presentation is, or may be relied upon as, a promise, representation or warranty, whether as to the past or the future. The Company hereby excludes all warranties that can be excluded by law. The Presentation contains prospective financial material which is predictive in nature and may be affected by inaccurate assumptions or by known or unknown risks and uncertainties, and may differ materially from results ultimately achieved. All persons should consider seeking appropriate professional advice in reviewing the Presentation and all other information with respect to the Company and evaluating the business, financial performance and operations of the

  • Company. Neither the provision of the Presentation nor any information contained in the Presentation or

subsequently communicated to any person in connection with the Presentation is, or should be taken as, constituting the giving of investment advice to any person.

NOTE: In accordance with ASX Listing Rules, any hydrocarbon reserves and/or drilling update information in this report has been reviewed and signed off by Mr Laurence Roe, B Sc, Managing Director of Target Energy, who is a member of the Society of Exploration Geophysicists and has at least 5 years experience in the

  • sector. He consents to that information in the form and context in which it appears.
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SLIDE 3

Since the last Good Oil Conference…

 Target increased its interest in East Chalkley Oil Field (Nov 09)  Snapper A‐3 completed for production and brought online (Nov 09)  East Chalkley field electrification completed / SWD well drilled / Pine Pasture #1 well brought back online (Dec 09)  Highway 71 prospect drilled (Merta #1; Oct‐Dec 09)  Chris Rowe joined Target as Chairman (Jan 10)  Merta #1 completed for production and brought online (June 10)

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SLIDE 4

Corporate

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SLIDE 5

Corporate Corporate

Objective Objective “ “To create shareholder wealth through building a world To create shareholder wealth through building a world‐ ‐class independent class independent exploration and production company. exploration and production company.” ” Strategy Strategy Balance low risk opportunities alongside high risk Balance low risk opportunities alongside high risk‐ ‐high reward prospects. high reward prospects. Explore in known active, producing areas close to producing infr Explore in known active, producing areas close to producing infrastructure. astructure. Partner with successful explorers and producers. Partner with successful explorers and producers. Use technology to reduce exploration risk. Use technology to reduce exploration risk.

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Corporate Snapshot Corporate Snapshot

Directors & Management Directors & Management Chris Rowe Chairman Laurence Roe Managing Director Mike Martin Non Executive Director Paul Lloyd Non Executive Director Rowan Caren Company Secretary Stephen Morris Development Advisor Shares on issue (TEX) 157.3m Listed options TEXOB (exp 31/10/12; 10c) 53.0m Recent Share price 2.2c Market Cap A$3.5m Cash (31/8/10) A$1.1m

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SLIDE 7

Activity

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SLIDE 8

Projects Projects

Texas & Louisiana Texas & Louisiana

Highway 71 Prospect Section 28 Field East Chalkley Oil Field

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Projects ‐ Exploration

Texas Texas ‐ ‐ Highway 71 Prospect, Wharton County Highway 71 Prospect, Wharton County

  • Target has 25% working interest
  • Prospect was tested in Q4 last year with

the Merta #1 well (drilling finished in early December)

  • Primary target proved to be tight ‐

well was completed as a gas producer from the Cook Mountain Sandstone

  • Merta #1 brought on‐line in June 2010
  • Fracture stimulation planned for

September (subject to availability of equipment / crews)

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SLIDE 10

Projects Projects – – Production, Appraisal & Development Production, Appraisal & Development

East Chalkley Field, Cameron Parish, Louisiana East Chalkley Field, Cameron Parish, Louisiana

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SLIDE 11

East Chalkley Tank Battery

Projects Projects – – Production, Appraisal & Development Production, Appraisal & Development

East Chalkley Field, Cameron Parish, Louisiana East Chalkley Field, Cameron Parish, Louisiana

  • Target Energy Working Interest 35%
  • 2009 Independent Technical Specialist (RISC Pty Ltd) report on East Chalkley assessed most likely technically

recoverable reserves and resources (“2P/2C”) of 1.7 MMBO with an upside (“3P/3C”) estimate of 4 MMBO.

  • Field producing approx 100 BOPD from Pine Pasture #1, #2 wells.
  • Pine Pasture #3 Development well scheduled Sept

2010 – potential Initial Production of 200‐300 BOPD.

  • Potential for up to 6 appraisal/development wells + 2

injectors to develop down dip sector plus additional development well + 1 injector updip from existing production.

  • Based on reserves from RISC report, Target estimates

East Chalkley’s (“most likely”) NPV10 value at US$12.1 million net to Target with a (“upside”) PV10 value of US$31.8 million net to Target.

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SLIDE 12

Development scenario - 2: P50 (2C) case Development scenario - 3: P10 (3C) case Initial Reserves, Mstb 594 2P Initial Reserves, Mstb 1087 3P Ultimate Recoverable Resource, Mstb 1700 P50 (2C) Ultimate Recoverable Resource, Mstb 4000 P10 (3C) Development scenario - 2: P50 (2C) case Development scenario - 3: P10 (3C) case Remaining Resource, Mstb 1106 Incremental Remaining Resource, Mstb 2913 Oil Recovery, Mstb 500 Well average Oil Recovery, Mstb 500 Well average Well Initial rate, bopd 300 Well average Well Initial rate, bopd 300 Well average Prod Wells 2 Horizontal Prod Wells 6 Horizontal Dry hole 1 Horizontal dry holes 2 Horizontal Injector 1 Horizontal Injectors 2 Horizontal Total Wells drilled 4 Additional Incremental Wells drilled 10 Additional

Projects Projects – – Production, Appraisal & Development Production, Appraisal & Development

Potential Development Scenarios (RISC 2009 Report)

East Chalkley Field, Cameron Parish, Louisiana East Chalkley Field, Cameron Parish, Louisiana

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SLIDE 13

Present Development – 2 existing producers. Estimated Ultimate Recovery (EUR): 0.27 mmBO

Depth Alliance W2 (feet)

Proposed Pine Pasture #3 Alliance Oil Producer

Projects Projects – – Production, Appraisal & Development Production, Appraisal & Development

East Chalkley Field, Cameron Parish, Louisiana East Chalkley Field, Cameron Parish, Louisiana

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SLIDE 14

Depth Alliance W2 (feet)/Google Earth Image 1 mile

Projects Projects – – Production, Appraisal & Development Production, Appraisal & Development

East Chalkley Field, Cameron Parish, Louisiana East Chalkley Field, Cameron Parish, Louisiana

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Full field (3P/3C) Development – 8 new producers + 3 injectors. EUR: 3.8 mmBO

Depth Alliance W2 (feet)

Projects Projects – – Production, Appraisal & Development Production, Appraisal & Development

East Chalkley Field, Cameron Parish, Louisiana East Chalkley Field, Cameron Parish, Louisiana

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EC Monthly Production 0.0 10000.0 20000.0 30000.0 40000.0 50000.0 60000.0 70000.0

Year 2012.0 2015.0 2018.0 2021.0 2024.0 2027.0 2030.0

Year

BO/mo

3P/3C 2P/2C 2P

Max production potentially in excess of 60,000 BO per month Potential Development Production Forecasts (Target modelling aft Potential Development Production Forecasts (Target modelling after RISC report) er RISC report)

East Chalkley Field, Cameron Parish, Louisiana East Chalkley Field, Cameron Parish, Louisiana

Projects Projects – – Production, Appraisal & Development Production, Appraisal & Development

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2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 3P/ 3C 2P

  • $20,000

$0 $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 $140,000 $160,000 US$000 Year Cum Net Revenue - 100% 3P/3C 2P/2C 2P

Target Energy Target Energy Modelling Modelling ‐ ‐ Potential Project Cash Flow (Cumulative Net Revenue) Potential Project Cash Flow (Cumulative Net Revenue)

East Chalkley Field, Cameron Parish, Louisiana East Chalkley Field, Cameron Parish, Louisiana

Projects Projects – – Production, Appraisal & Development Production, Appraisal & Development

US$151 million US$151 million US$53 million US$53 million US$16 million US$16 million

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SLIDE 18

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 3P/ 3C 2P

  • $20,000

$0 $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 $140,000 $160,000 US$000 Year Cum PV10 Net Revenue - 100% 3P/3C 2P/2C 2P

US$91 million US$35 million US$9 million Target Energy Target Energy Modelling Modelling ‐ ‐ Potential Project Cash Flow (Cumulative Net Revenue) Potential Project Cash Flow (Cumulative Net Revenue)

East Chalkley Field, Cameron Parish, Louisiana East Chalkley Field, Cameron Parish, Louisiana

Projects Projects – – Production, Appraisal & Development Production, Appraisal & Development

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Louisiana – Section 28 Program, St Martin Parish

Louisiana

Projects Projects – – Production Production

Section 28 Field

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Louisiana – Section 28 Program, St Martin Parish

Projects Projects – – Production Production

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  • 3 wells in production

3 wells in production

  • Snapper A

Snapper A‐ ‐1 (2007) 1 (2007)

  • Snapper A

Snapper A‐ ‐2 (2008) 2 (2008)

  • Snapper A

Snapper A‐ ‐3 (2009) 3 (2009)

  • All wells encountered pay in multiple zones

All wells encountered pay in multiple zones

  • Snapper A

Snapper A‐ ‐3 brought on 3 brought on‐ ‐line in November 2009 line in November 2009

  • Wells currently producing total approx

Wells currently producing total approx 1.4mmcfgd + 35 BOPD 1.4mmcfgd + 35 BOPD

  • Target working interest

Target working interest ‐ ‐ 25%. 25%.

Louisiana – Section 28 Program, St Martin Parish

Projects Projects – – Production Production

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SLIDE 22

Sand Snapper A1 Snapper A3 Snapper A2 Marg Howie Yet to be produced Not Intersected Yet to be produced 1st Camerina Yet to be produced Yet to be produced Yet to be produced 3rd Marg Tex In Production Yet to be produced* In Production Lower 3rd Marg Tex Not Intersected Yet to be produced Not Intersected 4th Marg Tex Produced Tight In Production Hackberry A1 Not Reached Not Intersected Produced Hackberry A4 Not Reached In Production Produced

*Likely to be depleted by production from Snapper A-1

Louisiana – Section 28 Program, St Martin Parish

Projects Projects – – Production Production

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Production & Revenue

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Production and Revenue Production and Revenue

East Chalkley Oil Field – Cameron Ph, La TEX WI: 35% Production: Alliance W2 sands – approx 100 BOPD Pine Pasture #1 Pine Pasture #2 (2008) Section 28 Project – St Martin Ph, La TEX WI: 25% Production: Marg Tex/Hackberry – approx 1400 mcfgd + 35 BOPD. Snapper #A‐1 (2007) Snapper #A‐2 (2008) Snapper #A‐3 (2009) Multiple pay zones in all wells. Highway 71 ‐ Wharton Co, Texas TEX WI: 25% Production: Cook Mountain – approx 400 mcfgd + 5 BOPD (awaiting frac) Merta #1 (2009)

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SLIDE 25

Target Energy production (BOEPD, net TEX WI) Target Energy production (BOEPD, net TEX WI)

Sales Revenue 1/7/09 to 30/06/10 Sales Revenue 1/7/09 to 30/06/10 A$1.27m A$1.27m Production (net WI) currently average Production (net WI) currently average 105 BOEPD 105 BOEPD

Production and Revenue Production and Revenue

Ave Monthly Production (Net TEX)

  • 20

40 60 80 100 120 140 160 180 200 J u n 7 J u l 7 A u g 7 S e p 7 O c t 7 N

  • v

7 D e c 7 J a n 8 F e b 8 M a r 8 A p r 8 M a y 8 J u n 8 J u l 8 A u g 8 S e p 8 O c t 8 N

  • v

8 D e c 8 J a n 9 F e b 9 M a r 9 A p r 9 M a y 9 J u n 9 J u l 9 A u g 9 S e p 9 O c t 9 N

  • v

9 D e c 9 J a n 1 F e b 1 M a r 1 A p r 1 M a y 1 J u n 1 J u l 1 A u g 1 S e p 1 O c t 1 N

  • v

1 D e c 1 J a n 1 1 F e b 1 1 M a r 1 1 A p r 1 1 M a y 1 1 J u n 1 1 Date BOEPD

2007 2008 2009 2010 2011

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SLIDE 26

Audited Reserves & Exploration Potential (net to WI/NRI) Audited Reserves & Exploration Potential (net to WI/NRI)

*1. East Chalkley: Audited Reserves updated to 31/12/09 2. SML A1, A2, A3: Audited Reserves update to 31/12/09 is underway. Present estimate derived from 31/12/08 audit 3. Highway 71: Not included

Audited Reserves* (000 BOE) Proved & Probable Possible Contingent (Best Estimate) Contingent (High Estimate) Prospective Resources Total

31/12/09 241.2 177.6 265.1 433.2 80.6 1197.9

22.5% increase over the 2008 reserves total

Production and Revenue Production and Revenue

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What’s coming up for Target Energy

Ongoing Production: Section 28 Project Area East Chalkley Oil Field Highway 71 (Merta #1) East Chalkley Oil Field Development: Pine Pasture #3 Development Well (September 2010) Further Appraisal/Development Drilling 2011 Continue evaluation of new opportunities: Corporate Technical

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Good Oil Conference 2009

Good Oil Conference 2010

Level 2, 46 Ord Street, West Perth WA 6005 Ph 08 9476 9000 Fax 08 9476 9099 www.targetenergy.com.au