Investor Presentation Sami Zouari, CFO 12 March 2015
overview Shaikan commercial production and sales pending projects outlook
A leading Kurdistan independent E&P company • Public company, moved to Standard Segment of Official List in March 2014 One of the largest acreage holders in Kurdistan, 1,632 km 2 across four • contiguous blocks • Total investment in Kurdistan of over USD 800 million • All 2P reserves and majority of contingent resources within GKP’s operated assets Shaikan and Sheikh Adi • Five discoveries since 2009 with four declared commercial • Shaikan Field Development Plan (“FDP”) approved by the KRG’s is Ministry of Natural Resources (“MNR”) in June 2013 • Net 2P reserves of 163 mmbbls and net contingent resources of 518 mmbbls from GKP’s first independent reserve assessment • In December 2014, production and sales reached 40 kbopd (gross) from two Shaikan production facilities • Company expects production to stabilize at 40 kbopd (gross) in 2015 and then increase to 70 kbopd and 100 kbopd once decision on further Key assets investment has been made Blocks WI Diluted Operator Partner • Shaikan crude oil export deliveries to the Turkish coast by truck Shaikan (1) 51% (3) MOL (20%), TKI (5%) (2) 75% GKP continued uninterrupted from January 2014 until February 2015 Sheikh Adi 80% 80% GKP KRG (20%) • A payment cycle is currently being established for Shaikan crude oil Ber Bahr 40% 40% Genel Genel (40%), KRG (20%) sales with payments received in December 2014 and February 2015 Akri-Bijeel (1) 20% 12.8% MOL MOL (80%) (1) GKP holding subject to third party and KRG back-in rights (2) Texas Keystone Inc. (TKI) holds its interest in trust for GKP, pending transfer of its interest to GKP (3) Inclusive of TKI’s holding increases to 54.4% 2
Management team Simon Murray– Non-Executive Chairman Joined the Company as Independent Non-Executive Chairman and Senior Independent Director in July 2013 • Over 40 years of international business experience and a strong network of contacts globally and across the Far East, built up over four decades with specific Oil & Gas experience including positions within Essar Energy, Hutchinson Whampoa and Glencore International John Gerstenlauer – Chief Executive Officer Joined the Company as Chief Operating Officer in October 2008 from BASF’s Wintershall Nederland Group and was appointed Chief Executive Officer in July 2014 • Started his oil and gas career with Shell in 1978 • Significant international experience with Pecten, Canadian Occidental Yemen, UMC Petroleum and Wintershall Sami Zouari– Chief Financial Officer Joined the Company in January 2015 following careers in both the oil & gas industry and investment banking with particular focus on the Energy and Commodities sectors in the Middle East and North Africa. • Previous roles: Regional Head of Corporate & Investment Banking for North Africa, Iraq and Oman at BNP Paribas; Total EP Libya Holds a BA in Economics from Columbia University (New York, NY), and a Masters from Harvard University (Cambridge, MA). • Tony Peart – Legal and Commercial Director Joined the Company in 2008. Has over 32 years of legal, commercial and management experience in the oil and gas industry • Previous positions with African Arabian Petroleum, Petrokazakhstan, Bula Resources, MMS Petroleum, Lasmo, Ultramar Exploration and Veba Oil and Gas Mary Hood – Deputy Chief Financial Officer Joined the Company in 2011 as Financial Controller and was appointed Interim Chief Financial Officer in June 2014, before assuming the role of Deputy CFO in January 2015 • Qualified as a Chartered Accountant with Deloitte and is also a Chartered Company Secretary • Holds a Ph.D. and MA obtained from the University of Cambridge John Stafford – Vice President Operations Joined the Company in early 2009 as manager, Geology & Geophysics and was appointed VP operations in May 2014 • Has over 30 years of experience in roles within the oil and gas industry • Experience includes particular exposure to field development, reserve certification and reporting and equity redetermination Umur Eminkahyagil – Country Manager, Kurdistan Joined the Company in March 2012 as Development and Production Manager and subsequently appointed Kurdistan Country Manager • Spent 11 years holding various reservoir engineering positions with Shell prior to joining Expro in 2002 and subsequently becoming Vice President for MB Petroleum Services 3
Proven drilling track record 4 Shaikan-1 Bijell-1 Shaikan-3 Shaikan-2 Shaikan-4 Shaikan-5 Sheikh Adi-2 Bakrman-1 Ber Bahr-1 Discovery Discovery Appraisal Discovery Discovery Discovery Appraisal Appraisal Appraisal Aug-09 Mar-10 Mar-11 Nov-12 Feb-13 May-13 Jan-11 Dec-11 Dec-11 Spud Spud Spud Spud Spud Spud Spud Spud Spud Apr-09 Dec-09 Sep-10 Dec-10 May-11 Oct-11 May-12 May-12 Oct-11 Flow rate Flow rate Flow rate Flow rate Flow rate Flow rate Flow rate Flow rate Flow rate 18,038bopd 3,488bopd 9,805bopd 16,786bopd 14,205bopd 4,450bopd 4,345bopd 2,616bopd 2,100bopd
Reserves and resources summary • 12,506 mmbbls of gross hydrocarbons in place Reserves and resources Net, diluted WI to GKP • Gross 2P + 2C of 1,219 mmbbls GKP diluted STOIIP/GIIP Oil (mmbbls) Gas (bcf) mmboe (1) WI Shaikan 54.4% (2) 5,013 537 5,103 • 3P + 3C unrisked valuation 1,805 - 1,805 Sheikh Adi 80.0% Ber Bahr 40.0% 262 - 262 47 - 47 Bijell 12.8% • Implied recovery factor for 2P and 2C approximately 12%, Bakrman 12.8% 1 - 1 with scope for considerable improvement Total 7,129 537 7,218 2P reserves 54.4% (2) 163 Shaikan - 163 • Shaikan 2P reserves of 163 mmbbls (net) relates to 26 2C resources production well Phase 1 development plan 54.4% (2) 382 313 434 Shaikan Sheikh Adi 80.0% 122 29 127 9 2 9 Ber Bahr 40.0% • Phase 1 focuses on a limited number of wells only. The Bijell 12.8% 5 1 5 - - - Bakrman 12.8% majority of these wells will target only three of the Jurassic Total 518 345 576 intervals Total 2P + 2C 681 345 739 Total 3P + 3C 1,351 706 1,469 • During Phase 1 there will be limited development of the 1,500 Cretaceous and Triassic, with the objective being to gauge 1,200 reservoir response before further development of these mmboe 900 intervals 5 9 1,257 127 576 600 434 300 Note: Reserves and resources as at 1 January 2014 212 163 163 (1) 6 bcf of gas = 1 mmboe - (2) Includes 5% interest (undiluted) held by TKI in trust for GKP Shaikan Sheikh Adi Ber Bahr Bijell Total 3P + 3C Source: February 2014 ERC Equipoise CPR 2P reserves 2C resources 3P reserves 3C resources 5
Company strategy Ramp-up commercial oil production from Shaikan Reinvestment of cash flows Become a cash generating Increase reserves and production business and maintain financial through further exploration and flexibility appraisal across the portfolio Monetisation proceeds Exit non-core assets/operations Transitioning towards becoming a major Kurdistan oil producer 6
overview Shaikan commercial production and sales pending projects outlook
Shaikan commercial production since July 2013 PF-1 PF-2 Shaikan Shaikan Shaikan 2 Shaikan 5 Shaikan 10 Shaikan 1 Shaikan 3 Shaikan 4 7 and 8 Well Well Well 11 Well Well Well Well Wells 25000 20000 barrel/day barrel/day 15000 10000 5000 0 24/04/14 08/05/14 22/05/14 05/06/14 19/06/14 03/07/14 17/07/14 31/07/14 14/08/14 28/08/14 11/09/14 25/09/14 09/10/14 23/10/14 06/11/14 20/11/14 04/12/14 18/12/14 8
40,000 ibopd and ibeyond • 40,000 bopd reached in December 2014 – Total commercial production from Shaikan is nearly 9 mln barrels – Two production facilities PF-1 and PF-2 and 8 production wells – Shaikan-11, an additional producer is currently being completed – Focus on ensuring a stable daily production rate of 40,000 bopd (gross) in 2015 – Debottlenecking work on PF-1 and PF-2 is expected to increase current production capacity beyond 40,000 bopd in 2015 – Working with the MNR to establish the best route for the Shaikan crude to export market – Trucked deliveries to the Turkish coast under improved commercial terms and pipeline access through injection at Fishkabour • Looking forward to the FDP Phase 1 target – Shaikan Central Processing Facility (CPF) will allow to achieve at least 70,000 bopd of production 20-24 months after commitment to invest – The commitment will be made after a stable payment cycle for Shaikan export crude oil sales has been established 9
Current Export Route Shaikan 10
Potential export routes Possible injection point Possible twinned Heavy Oil Line 11
getting Shaikan into the pipeline 12
overview Shaikan commercial production and sales pending projects outlook
Priorities versus pending projects Priorities Maintain stable production and sales of 40,000 bopd and beyond through debottlenecking Finalize a pipeline access solution for Shaikan Establish a steady flow of revenues before making decision on further investment Pending projects Drilling of a Shaikan exploration well into the deep Triassic and the Permian Side-track and re-test of Shaikan-6 Investment in Shaikan CPF and its associated development drilling and infrastructure Review of the Shaikan FDP to include Cretacious, Triassic and potentially Permian developments Completion of the appraisal of the Sheikh Adi discovery and decision on early development 14
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