In Introduction to to In Independent Oil il & Gas plc lc - - PowerPoint PPT Presentation

In Introduction to to In Independent Oil il & Gas plc lc

Ju July ly 2014 2014

This page is intentionally left blank

Di Disclaimer

3

The information contained in this confidential document (“Presentation”) has been prepared by Independent Oil and Gas plc (the “Company”). 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,

• fficers, agents, employees or advisers take any responsibility for, or will accept any liability whether direct or indirect, express or implied, contractual, tortious, statutory or
• therwise, 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

• bligation 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. 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.

www.independentoilandgas.com

Su Summary

4

• Cle

Clearly ly de defined str trategy – Develop production hubs with only modest exploration near to the hubs

• Proven Bo

Board an and Management Tea eam – History of delivering excellent shareholder returns, first class technical team

• Fu

Funding Fle Flexibilit ity – Senior loan, junior loan potential, Darwin equity funding, farm down potential

• Gr

Growth Str Strategy – 28th Round potentially transformational – Corporate combinations / M&A

• News flow

– 28th Round, Operatorship, Cronx completion, Cronx and Skipper wells, Blythe FDP

The team and assets are in place to grow into a significant North Sea player

5,000 10,000 15,000 20,000 25,000 30,000 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Boepd Year

Ten Year Production Target

Target Blythe (3.0 MMBoe) Cronx (3.4 MMBoe) Skipper (13.1 MMBbls)

Key Eve vents si since AIM IM Admis ission

• Dec

December 2013 – ‘Blythe East Area’ licence awarded including the Harvey discovery and Truman prospect

• Fe

February 20 2014 14 – Sale and refinancing of Blythe & Skipper operator completed – 18 month licence extensions granted on Blythe & Skipper – Gas sales agreement for Blythe with BP Gas Marketing – $50m debt facility approved with a substantial US financial institution†

• Mar

arch 20 2014 14 – Charles Stanley initiates research on IOG at a target price of 100.4p – Acquisition of Cronx* licence announced – Subject to the Cronx acquisition Charles Stanley updates IOG target price to 105.6p – Operatorship application submitted to DECC – New Non-exec Director Paul Murray appointed

• Apri

April 20 2014 14 – Cronx Licence extension to 31st December 2014 – Applications for three licences in the 28th Licensing Round

• June 20

2014 14 – Skipper appraisal well now scheduled in summer 2015 subject to partner confirmation – Equity swap and loan agreed with Darwin Strategic

5

*Acquisition of Cronx subject to completion † Debt facility subject to final documentation

In Introduction to to IO IOG

6

EXP XPERIENCED TEAM NO NORTH SE SEA FOCUS

Development

Production Development

5 North Sea Licences* 2P: 3 MMBOE, 2C: 16.5 MMBOE

Hub Strategy

• nearby fields to be tied back
• small fields to be developed

with improved economics

IOG is a development and production company with a modest exploration exposure

39. 39.4 4 MMBOE

Expl plor

• rat

ation Expl plor

• rat

ation

Toda

• day

2016 2016

Man anagement own wns 55 55.8% of f IOG

Blythe, Cronx* & Skipper CPR NPV10: £211.4 Million

*Acquisition of Cronx subject to completion

IO IOG Str Strategy

7

IOG IOG will ll unl unlock sha sharehold lder r va valu lue by by:

Cro ronx* Blythe

3D seismic 1st

st Disc

scov

• ver

ery Appr prai aisal FID FID First st Produ duction

• n

Lif Life Cy Cycle of

• f E&

E&P Valu alue

Skipper

IOG’s primary focus: Develo lopment & Prod

• duction
• n

IOG’s Current Portfolio

The heakston Mo Moorhouse Tru ruman Ha Harvey Skipper Mau Maureen & Dor Dornoch ch

* Acquisition of Cronx subject to completion † Debt facility subject to final documentation ‡ Significant discoveries applied for in 28th Round

• Fundin

Funding at at cor corporate or

• r as

asset set level level (farm arm-downs ns)

• Gr

Growin ing or

• rganic

ically lly and and via ia Lice Licenc nce Rou

• und

nds‡

• Usi

sing ng the he de debt bt faci acility lity† to

• acqui

acquire re pr prod

• ducin

ing as assets sets

• Conve

Converting ng con contin ingent resou sources s int into

• pr

prov

• ven

n rese serv rves

• Br

Bring ingin ing pr prov

• ven rese

serv rves int into

• pr

prod

• ductio

ion

• Cor

Corpora rate com combin bination ions s / / M& M&A

Ope perations Di Direct ctor

Richard Jam ameson

Project management experience with Hess & others

IO IOG Boa

• ard & Operational

l Team

8

• An experienced management team with a strong and knowledgeable board

Tech chnical Di Direct ctor

Chris is Brown

Former Exploration Manager for Enterprise Oil

Chie hief Geosci cientist

Bria ian Oldfie field

Formerly with Conoco, Zapata, Total, Statoil & Agip

Pe Petr troleum En Engi gineer

Coli

• lin Jon
• nes

Former Chairman of Oslo Society of Petroleum Engineers

Dr Drilling Ma Manager

Joh

• hn Boyl
• yle

Also Drilling Manager with Cairn Energy

IOG Board

Non

• n-Execu

cutive Di Direct ctor

Mar arie ie-Louis ise Cla layt yton

Former CFO of Venture Production

CEO Mar ark k Rou

• uth

Former founder and MD of CH4 Energy Ltd*

Non

• n-Execu

cutive Chairman

Mehdi i Var arzi

Former Vice-Chairman of Gulf Keystone

Non

• n-Execu

cutive Di Direct ctor

Mike Jor

• rdan

CEO of Acura Investments Ltd

CFO Peter Young

Former oil & gas banker at Standard Chartered, Mitsui & RBS

*CH4 Energy was formed with £1M from 3i + Management in 2002 & sold for £154.4M in 2006 to Venture Production

Non

• n-Execu

cutive Di Direct ctor

Paul l Mur urray

Former FD of Lasmo & Carlton Chair of Audit Royal Mail & QinetiQ

IO IOG Por

• rtfolio

9

Skipper 9/21a (50%) Blythe 48/22b & 48/23a (50%)

Map: Wood Mackenzie PathFinder

Skipper West Area – 8/20a & 8/25a (100%) Blythe East Area - 48/23c & 48/24b (100%) IOG 27th Round Award IOG Developments IOG 27th Round Award IOG Developments Cronx 48/22a (100%) IOG Acquisition (terms agreed)

In Indicativ ive De Development an and Apprais isal l Sc Schedule les

10

Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Skipper (50%)

EWT* Development* Development Drilling* First* Oil

Cronx (100%)

(subject to completion)

Site Survey Development Drilling First Gas

Blythe (50%)

Site Survey Development Drilling First Gas

Truman & Harvey

(Blythe East Area - 100%) Seismic Reprocessing / Studies Drill or Drop

Theakston & Moorhouse

(Skipper West Area - 100%) Seismic Reprocessing / Studies Drill or Drop

FDP + EIA Application FDP Approval Appraisal Well Extended Well Test

* Subject to successful Skipper appraisal well

2017 2018 2014 2015 2016

Blyt lythe Hub – Blyt lythe, Cro ronx, Tru ruman & Har arvey

11

Opp pportunity

• Defines IOG’s first Hub
• Blythe is a proven discovery with gross 2P reserves of

34.3 BCF (17.2 BCF net to IOG)[1]

• Cronx (IOG 100%) is a discovery with 2C resources
• f 17.6 BCF[2] which may be tied back to Blythe
• Truman & Harvey (Blythe East Area - 100% IOG) have

gross 2C resources of 41 BCF[3] which may be tied back to Blythe

• Economics boosted from shared infrastructure and

joint development

• All fields benefit from small field allowance
• Blythe + Cronx NPV10 net to IOG = £74.4m[1],[2]

Upsi side

• Further upside potential to frack the Carboniferous

beneath Blythe (70 – 310 BCF GIIP)[4]

• Oil was also tested from the Hauptdolomite above

Blythe at rates of up to 1,000 bopd, estimated STOIIP

• f 2-4MMBbls[4]

Sources: [1] Competent Person's Report: ERC Equipoise - September 2013 [2] ERC Equipoise CPR July 2012 [3] IOG internal estimate [4] Tullow 48/23a Relinquishment Report May 2009

Zone 1 Weissliegende A1 A2 A3 A4 A5 B C D1 D2 E1 E2 E3

Zones

Possible Top Residual Hydrocarbons 7200 ft ss (Palaeo Gas Oil Contact)

Gas as Water Co Contact 7283 ft ft ss Top

• p Rotl
• tlie

iegendes 7130 ft ft ss

Blyt Blythe Ho Horizontal Tri ri-la lateral De Development Well ll

A4 A4 A5 A5 A3 A3 B C D1 D1

A2 A2 A1 A1 W

SE SE NW NW

Source: ERC Equipoise – Blythe Reservoir Development Study July 2012 Source: IOG internal estimates

6 12 18 24 30 36 1,000 2,000 3,000 4,000 5,000 6,000 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

MMcfd Boepd Year

Blythe Production (6.1 MMBoe)

IOG Net (50%) 3.0 MMBoe Alpha Net (50%) 3.0 MMBoe

Blyt lythe

12

Loca

• cation

Southern North Sea - Blocks 48/22b and 48/23a (P1736) Pa Partn tners Alpha Petroleum Resources 50% (Operator), IOG 50% Gro ross Re Reserves[1

[1]

1P/2P/3P : 22.3/34.3/47.5 BCF. Two wells tested at 15 MMcfd from the Rotliegendes Gro ross GIIP[1] P90/P50/P10 : 38.8/52.3/84.2 BCF Gro ross NPV PV10[1] £56.0m (2P reserves, @60p/therm) Ups pside[2

[2]

Prospective GIIP of 70 – 310 BCF in Carboniferous – tested at 0.9MMcfd Lice cence ce Sta tatus Commitment to submit Field Development Plan before 30th September 2015 FDP DP[3] Field Development Plan submission targeted Q4 2014 First Gas Target end Q2 2016.[3] Long term gas sales agreement with BP Gas Marketing De Development t Pl Plan Small unmanned platform, single tri-lateral horizontal well. Export expected via a 1km pipeline to LAPS hot-tap. Net Capex £35.1m[1] Tax Small field allowance provides tax benefit of £150m

Sources: [1] Competent Person's Report: ERC Equipoise - September 2013 [2] Tullow 48/23a Relinquishment Report May 2009 [3] IOG internal estimate

Cronx Harvey Truman

Expected export Route : LAPS (Perenco) Hot Tap from Blythe NUI into 20” Lancelot - Bacton pipeline : < 1 km

Map: Wood Mackenzie PathFinder/IOG [1] 1]

3 6 9 12 15 18 21 24 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

MMcfd Boepd Year

Cronx Production (3.4 MMBoe)

IOG Net (100%) 3.4 MMBoe

Cro ronx (P

(Pending Com

• mpletion)

13

Loca

• cation

Southern North Sea - Block 48/22a (P1737) Pa Partn tners IOG 100% Gro ross Re Resources es[1] 1C/2C/3C : 7.7/17.6/40.4 BCF Contingent Resources Gro ross GIIP[1] P90/P50/P10 : 10.9/24.9/56.3 BCF Gr Gross NP NPV10[1] £46.4m (2C resources, @60p/therm) net of staged payments to Swift Ups pside[2

[2]

Connection with the 48/22-4 discovery (10-20 BCF) Lice cence ce Sta tatus Extended to 31st December 2014. Acquisition contingent upon IOG Operatorship approval and well commitment Field Wor Work[2] Targeting pilot well in late 2014 / early 2015 – cost estimate £6.25m. Re-mapping, reservoir modelling & well design FDP DP[2] Field Development Plan submission targeted Q4 2015 First Gas[2

[2]

Targeting Q1 2017 De Development t Pl Plan Single multi-lateral horizontal well drilled from suspended pilot well, tie back to Blythe. Capex estimate extra £22m[1],[2] Tax Small field allowance provides tax benefit of £150m

Sources: [1] ERC Equipoise CPR July 2012 [2] IOG internal estimate

[1] 1] Cronx Harvey Truman

Export Route : Subsea well tied back 15 km to Blythe NUI

Map: Wood Mackenzie PathFinder/IOG

Blyt lythe Eas ast Are rea – Tru ruman & Har arvey

14

*Source: IOG internal estimates

Loc Locati tion Southern North Sea – 48/23c & 48/24b (P2085) App pplic licatio ion Ratio ionale le Blythe Hub tie-back on successful appraisal Promote Licence IOG 100% Working Interest IOG Mid Cas ase GIIP Es Estim timate* Truman 36 BCF Harvey 22 BCF IOG Mid Cas ase Con

• ntin

tingent Resource Es Esti timate* Truman 25 BCF - CoS 36% Harvey 16 BCF - CoS 36% Water Depth th* 24m Well ll Com

• mmit

itment Commit to drill one well to 2500m by February 2016 or drop the licence Prop

• pos
• sed Wor
• rk

k Prog

• gramme

Acquisition & reprocessing of 85 km2 of existing 3D seismic data Pot

• tentia

ial Cap apex* ≈£12m for well Tax ax Small field allowances would provide net tax benefit of £150m

Cronx Harvey Truman

Export Route : Subsea well tied back 11 km to Blythe NUI Map: Wood Mackenzie PathFinder/IOG

Sk Skip ipper Hub

15

Opp pportunity

• Defines IOG’s 2nd hub
• Skipper is a discovery with 2C resources
• f 26.2 MMBbls (13.1 MMBbls net to

IOG)[1]

• Appraisal well in Q2/Q3 2015 to confirm

commerciality – Well cost approximately £13m (£6.5m net to IOG)[2] – Will also test exploration targets beneath Skipper that could add another 4.4 MMBbls net reserves[2]

• Theakston and Moorhouse (IOG 100%)

to the west of Skipper have mid-case contingent resources of 28 MMBbls net to IOG[2]

• All fields benefit from heavy oil field

allowance

3,447 ft Nominal OWC 3,810 ft 3,745 ft 5,214 ft ~ 5,600 ft 9/21a-C 9/21-2 4,157 ft OWC 3,567 ft 3,518 ft 3,816 ft 5,597 ft 5,904 ft 4,228 ft LCC 5,340 ft 70 ft 412 ft 307 ft

N S

3,588 ft

• NB. Not to scale

Maureen Formation Skipper Sand Dornoch Sand 11,165 ft (2.1 miles) 3,517 ft 1990 Discovery Well 2014 Appraisal Well

Sources: [1] AGR Tracs Competent Person's Report - September 2013 [2] IOG internal estimate

Source: Skipper Operating Committee Meeting June 2011

2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000 2015 2016 2017 2018 2019 2020 2021 2022 2023

Bopd Year

Skipper Production (26.2 MMBbls)

IOG Net (50%) 13.1 MMBbls Alpha Net (50%) 13.1 MMBbls

Sk Skip ipper

16

Loca

• cation

Northern North Sea : East of Shetlands - Block 9/21a (P1609) Pa Partn tners Alpha Petroleum Resources 50% (Operator), IOG 50% (1.5% carried interest with a third party) Gro ross Re Resource ces[1] 1C/2C/3C : 17.9/26.2/34.9 MMBbls Contingent Resources. Low recovery factor (19%) in Competent Person's Report Gro ross STOI OIIP[1

[1]

P90/P50/P10 : 123.1/136.5/150.8 MMBbls Gro ross NPV PV10[1] £274m (2C resources @ $81/Bbl =10% discount to $90/Bbl Brent) Ups pside[1

[1]

Appraisal well will also explore deeper Dornoch & Maureen sands, P50 STOIIP 46 MMBbls Lice cence ce sta tatus Commitment to drill an appraisal well before 30th September 2015 Field Wor Work[2] Appraisal well: target Q2/Q3 2015. Net cost £6.5m. FDP DP[2] Submission targeted Q3 2016. Contingent development 13 wells (11 producers, 2 injectors), platform or FPSO. Net cost ≈ £200.6m[2] First Oil[2

[2]

Q3 2018. Offtake via FSU. Crude offtake agreement agreed with BP Oil Cru rude Quality[2

[2]

Believed to be approximately 15° API. Viscosity uncertain, expected range 50 -150cP Tax Heavy Oil field allowance provides tax benefit of £800m

Sources: [1] AGR Tracs Competent Person's Report - September 2013 [2] IOG internal estimate

Theakston Moorhouse

Map: Wood Mackenzie PathFinder/IOG

[1] 1]

Sk Skip ipper West Are rea – Theakston & Moorhouse

17

*Source: IOG internal estimates

Loc Locati tion Northern North Sea – 8/20a & 8/25a (P1941) App pplic licatio ion Ratio ionale le Skipper Hub tie-back on successful exploration Promote Licence IOG 100% Working Interest IOG STOIIP Es Estim timates* Theakston Low/Mid/High 5/20/120 MMBbls Moorhouse Low/Mid/High 64/119/157 MMBbls IOG IOG Con

• ntin

ingent t Resource Es Estim timates* Theakston 1/ 4/24 MMBbls - CoS 23% Moorhouse 13/24/31 MMBbls - CoS 49% Water Depth th* 110m – 130m Well ll Com

• mmit

itment Commit to one well to 1700m by May 2015

• r drop the licence

Wor

• rk

k Prog

• gramme

Acquisition & reprocessing of 300 km2 of released 3D seismic data Oil migration study Pot

• tentia

ial Cap apex* ≈£15m for well Tax ax Heavy Oil field allowances would provide net tax benefit of £800m

Theakston Moorhouse

Export Route : Subsea well tied back 4.5 km to Skipper Map: Wood Mackenzie PathFinder/IOG

Su Summary

18

• Cle

Clearly ly de defined str trategy – Develop production hubs with only modest exploration near to the hubs

• Proven Bo

Board an and Management Tea eam – History of delivering excellent shareholder returns, first class technical team

• Fu

Funding Fle Flexibilit ity – Senior loan, junior loan potential, Darwin equity funding, farm down potential

• Gr

Growth Str Strategy – 28th Round potentially transformational – Corporate combinations / M&A

• News flow

– 28th Round, Operatorship, Cronx completion, Cronx and Skipper wells, Blythe FDP

The team and assets are in place to grow into a significant North Sea player

5,000 10,000 15,000 20,000 25,000 30,000 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Boepd Year

Ten Year Production Target

Target Blythe (3.0 MMBoe) Cronx (3.4 MMBoe) Skipper (13.1 MMBbls)