INVESTOR PRESENTATION Q1 2017 Updated 19/1/17 BUILDING A MID-CAP - - PowerPoint PPT Presentation
INVESTOR PRESENTATION Q1 2017 Updated 19/1/17 BUILDING A MID-CAP - - PowerPoint PPT Presentation
INVESTOR PRESENTATION Q1 2017 Updated 19/1/17 BUILDING A MID-CAP AFRICAN & EUROPEAN GAS COMPANY REGIONAL GAS STRATEGY TWO REMAINING STRATEGIC I T A UNDERPINNED BY PLAYS L Y Strong European gas demand and local pricing
I T A L Y M O R O C C O
01
Slide Investor Presentation 2017 Acquisition of Italian onshore gas portfolio Securing cost covering production Introduction of Cornerstone Investor
Tendrara, Sidi Moktar, Meridja Schlumberger (Tendrara, Badile) TE6 & TE7 Continental Investment Partners, Oil and Gas Investment Fund (OGIF) Rapagnano
Acquisition of Moroccan onshore gas portfolio Introduction
- f Strategic
Partner Successful drilling and extended well test in Eastern Morocco
JOURNEY SO FAR...
BUILDING A MID-CAP AFRICAN & EUROPEAN GAS COMPANY
REGIONAL GAS STRATEGY UNDERPINNED BY
Strong European gas demand and local pricing Pan European / African Strategic Partnership with Schlumberger Supportive Cornerstone Investors
STRONG THEMATIC POSITIONING
Sheltered from recent oil price decline Carbon consciousness and global warming driving transition to gas
BALANCED AND EVOLVING PORTFOLIO, INCLUDING LOW COST POTENTIAL MULTI TCF DEVELOPMENT (TENDRARA: EASTERN MOROCCO) TWO REMAINING STRATEGIC PLAYS
Badile (Italy) and Sidi Moktar (Morocco)
BOLD GROWTH AGENDA
Signifjcant opportunities in distressed oil sector Limited competition from cash constrained peers
James Parsons
Chief Executive Offjcer
Over 20 years in Oil & Gas strategy, general management, M&A and fjnance across Europe, South America and Central America 12 years with Royal Dutch Shell Specialist in restructuring, funding and growing small listed upstream companies; qualifjed accountant Joined Sound Energy in 2011
Leonardo Spicci
EVP , Production & Development
Over 25 years experience in Oil & Gas management and operations across Kazakhstan, north Africa and Italy. Reservoir geologist background with 23 years with ENI E&P
Brian Mitchener
EVP , Exploration
Over 36 years experience in Oil & Gas exploration including as Regional General Manager Exploration at BG, Vice President International Exploration for Africa at Statoil and 22 years with BP Exploration. Chartered Geologist, and a past President of the Geological Society’s Petroleum Group
Mary Hood
EVP , Finance/CFO
Mary has over 10 years upstream experience in fjnance and management working across Europe, Africa and the Middle East for Gulf Keystone Petroleum (most recently as Deputy CFO) and for Deloitte, in its Energy and Resource practice. A Chartered Accountant and Company Secretary.
Will Holland
EVP , Business Development
Over 20 years upstream experience across a range of operational, commercial and fjnancial
- roles. 10 years as an engineer with Halliburton.
Subsequently Director in Macquarie’s Oil & Gas team
Leonardo Salvadori
Managing Director, Italy
Over 30 years upstream experience with ENI and Dana Gas in exploration, business development and general management
Luca Madeddu
Managing Director, Morocco
Over 25 years managerial experience across Europe, Asia and South America. Reservoir geologist background with 22 years with ENI E&P
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Slide Investor Presentation 2017
THE TEAM
I T A L Y M O R O C C O
Dora / Dalla Rapagnano SMG Zibido Badile Tendrara I Tendrara Meridja Tendrara II Exploration Sidi Moktar Laura
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Slide Investor Presentation 2017
COMPELLING REGIONAL CASE FOR GAS
Growing gas penetration
- Low risk emerging market
(7% annual growth)
- Gas increasingly
replacing other fuels
- Stable demand with high gas
dependency
- Strong domestic gas network
- Circa 90% hydrocarbons
imported from Algeria
- GME pipeline ownership
transitions to Morocco in 2021
- New Gas Agency under
discussion
- Circa 90% hydrocarbons
imported from Algeria and Russia
- Recently introduced energy
policy to encourage commercialisation of domestic hydrocarbons
- 10 year tax holiday
- Thereafter 35% net government
take (30% Corporation tax and 5% royalty after 10.6 Bcf)
- 37.9% government net take
(24% corporation tax ((FY2017
- nwards)), 3.9% regional
income tax plus 10% royalty above 0.9 Bcf annually) Disadvantaged supply position Top quartile fiscal terms
Morocco Italy
Gas Maghreb-Europe Pipeline Gas Pipeline Project
Oued El Makhazine 2 x 400 MW Al Wahda 4 x 400 MW Dhar Doum 4 x 400 MW Oujda Casablanca Marrakech
M O R O C C O
M E D I T E R R A N E A N
A L G E R I A
A T L A N T I C
Rabat Tahaddart Power 2 x 400 MW Tendrara Meridja 120km
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Slide Investor Presentation 2017
Strategic Partnership where Schlumberger co-fund and technically de-risk the asset (Schlumberger 27.5% interest in Tendrara and paying 80% on 1st well; 75% on 2nd and 3rd wells.) Continuity of the Algerian Triassic Province and Saharan Hercynian platform Play type: gas discovery with condensate- light oil shows in the Lower Triassic sequence; TAGI and Paleozoic sand objectives Tendrara, eight exploration permits 14,500 km2 acreage, seven wells drilled; Meridja one reconnaissance licence 9,000km2 First well (TE-6): 28m net pay, fmow achieved pre stimulation, 17 mmscf/d on test Potential for super-giant (multi Tcf) connected gas fjeld TE-7: 32 mmscf/d after clean up: Successful Extended Well Test TE-8 (step out appraisal well) early 2017
EASTERN MOROCCO
FLAGSHIP DEVELOPMENT WITH MULTI TCF POTENTIAL TENDRARA* (47.5% interest; Operated) MERIDJA* (75% interest; Operated)
* Subject to completion of OGIF transaction
05
Slide Investor Presentation 2017 MERIDJA TENDRARA
LONG TERM UPSIDE POTENTIAL
TE-2 (AGIP:1967) TE-9 (2018)
Provisional location
TE-7 (Sound Energy: 2016) TE-6 (Sound Energy: 2016) TE-8 (Sound Energy: 2017) TE-5 (MPE: 2006) TE-1 (AGIP: 1966) TE-4 (MPE: 2006) TE-3 (ONHYM: 1984)
3-4 Tcf, 250km2 1-1.5 Tcf 75km2
300–500 Bcf 17km2
NEAR TERM POTENTIAL PRESSURE DEPTH PLOT
1,800 KM2
SHOWCASE TENDRARA: ILLUSTRATIVE AERIAL VIEW (TAGI ONLY)
All volumetric estimates are 100% - Gross TE4 data unreliable; requires re-entry.
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Investor Presentation 2017 Slide
2017 & 2018
PATHWAY TO COMMERCIALISATION
2019 CURRENT PHASE
FIRST GAS TE-8
Step-Out Appraisal
Finalise Development plan & Concession application
EPC Facilities EPC Pipeline Development wells Further step out wells & re-entry Seismic acquisition
MATERIAL CASH FLOWS
Self funding exploration & development Return to Shareholders
T A L Y M O R O C C O
Dora / Dalla Rapagnano SMG Laura
Pavia Lacchiarella SNAM Gas Pipeline Badile Permit 3D Seismic Coverage Badile Zibido
M I L A N O
Badile 3D Seismic Pipeline
Zibido Badile
Up to EUR 1,404 m NPV10 (Best Estimate EUR 396 m)
Recoverable resource 538 Bscf Low EUR 88m Best +EUR 308m Low 37 Best +105 High +EUR 1,008m High +396
- cent 31/cbm)
Po Valley (Northern Italy); 45 km SW of analogous ‘Malossa’ gas fjeld Permit located close to Milan, with a tie-in available
- c. 2 km from the Badile permit
Play type: Inverted fault block; gas-condensate in Mesozoic (TD c. 4,600 m) All permissions to drill secured Well cost of EUR 25 m (100%; tested and completed); chance of success 34% 142 Bscfe: 85 Bscf gas and 10 mmboe condensate (net best-case prospective resources) Farm-out secured with Schlumberger funding EUR 7.5 m of fjrst well in exchange for an option on 20%
- f the licence
NORTHERN ITALY
STRATEGIC PLAY: BADILE Net efgective ownership 80%; operated
Recoverable resource (Bscf) NPV10 (Eurocent 31/cbm)
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Investor Presentation 2017 Slide
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Slide Investor Presentation 2017
SOUTHERN MOROCCO
STRATEGIC PLAY: SIDI MOKTAR Net Efgective 25% interest, carried for fjrst USD 18 m gross; operated*
Gas Maghreb-Europe Pipeline Gas Pipeline Project Oued El Makhazine 2 x 400 MW Al Wahda 4 x 400 MW Dhar Doum 4 x 400 MW Casablanca Marrakech
M O R O C C O
Rabat Tahaddart Power 2 x 400 MW Jorf Lasfar Power Plant Safi Chemicals Plant Chichaoua State owned Phosphate Plant (OCP) Planned New Phosphate Plant Meskala Plant Sidi Moktar I Sidi Moktar II
Play type: gas discovery (Kechoula) in the Lower Liassic sequence, (73 Bscf net to Sound, initial estimate, single accumulation most likely) Two wells drilled with positive gas indications from log and gas shows in the Liassic; extended well test planned in 2017 Triassic across multiple blocks considered analogous to the adjacent Meskala fjeld 211 Bscf exploration potential targeting the Triassic (TAGI) objective; net to Sound Asset is located 10km from the Meskala gas processing plant
* Heads of Terms for Partnership arrangements announced 10 March 2016
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Slide Investor Presentation 2017
Q1 2017 H1 2017 Q3–4 2017 Feb 2017 H1 2017 H1 2017
H2 2017– H1 2018 H2 2017– H1 2018
UPCOMING NEWSFLOW
Target: prove 1.5 Tcf fjeld in the TAGI and explore the Paleozoic Introduction of partners to Sidi Moktar Re-entry and test; feasibility currently being determined Exploration well in Italy Workover of Koba-1 and Kamar-1(Sidi Moktar wells) followed by extended well test Concession application 2D seismic over the remainder of the block - to determine prospects and give better indication on volumes Commencement of development works (facilities)
OGIF TENDRARA SIDI MOKTAR TENDRARA BADILE SIDI MOKTAR TENDRARA TENDRARA TENDRARA
- TE-8
- Sidi-Moktar
- TE-2 & TE-4
- Badile
- Koba-1 & Kamar-1
- Concession
- 2D Seismic
- FDP
Signature of binding agreements with OGIF
Jan 2017
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Slide Investor Presentation 2017
SUMMARY
ACCESS TO LOW COST ONSHORE GAS PLAY IN TOP TIER EMERGING MARKET (MOROCCO)
Recent potential multi Tcf onshore gas discovery in Morocco Strong domestic demand and infrastructure connecting Morocco to strong European gas markets Priority remains securing 2019 fjrst gas
SCALE, LIQUIDITY AND NEWSFLOW
Multiple near term catalysts (Badile, TE8) High liquidity
TEAM TRACK RECORD
Demonstrated deal making pre-discovery (with potential to apply same skills to gas commercialisation and exit) Demonstrated capability to discover major fjeld and deliver wells Strong retail shareholder base credibility Institutional investors and second cornerstone investor recently introduced
STRONG CORPORATE GOVERNANCE
Industry experienced Board with balance of technical, commercial and fjnancial skills
UNDERPINNED BY INDUSTRY PARTNERSHIPS
Schlumberger as strategic partner: enabling scale, technically de-risking assets and providing funding Cornerstone Investor with Board representation
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Investor Presentation 2017
APPENDIX
OGIF
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Slide Investor Presentation 2017
CAPITAL STRUCTURE AS AT 23 DECEMBER 2016
Current shares in issue Shares to be issued
LEADERSHIP EQUITY STAKE
Total fully diluted shares 1.108 billion
10.4p warrants (expiry 28-Jul-17) 24.0p warrants (expiry 22-May-2020) 30.0p warrants (expiry 21-Jun-2021) Management options
- No. direct shares (millions)
0.5 CHIEF EXECUTIVE OFFICER CONTINENTAL INVESTMENT PARTNERS 1 1.5 2 10
Cash and cash equivalents €28.8 million corporate bonds
- 5% coupon
- Due 21 June 2021
- Secured on Sound Energy Italy
Holdings share capital
£1 million corporate loan notes
- 10% coupon
- Due 28 July 2017
- Secured on Sound Energy Morocco
South share capital
£48.3 million £25.4 million £1.0 million
670.4 million
20 30 40 50 60 70
OGIF 34.0 million 48.9 million 53.9 million 31.1 million 272.0 million
275 ...
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BROADER PORTFOLIO
COST COVERING PRODUCTION* (2 LICENCES)
- Multiple producing onshore assets
APPRAISAL (6 LICENCES, EXCLUDING STRATEGIC PLAYS) – LAURA
- Gulf of Taranto (4 km ofgshore, 200 m water depth)
- Play type: inverted fault block, gas in Pleistocene
(MVD 1,300 m)
- Long reach deviated well from onshore
- EUR 16.2 m well cost; under review
– DORA / DALLA
- Adriatic Sea; majority of licence >12 miles ofgshore
- Play type: faulted anticline, gas-condensate in
Scaglia Formation (TD 1,400 m)
- Dora gas discovery previously drilled 1972, tested 20
mmscf/d
- Well cost of EUR 13 m
- Exploration potential from Dalla prospect
EXPLORATION (4 LICENCES EXCLUDING STRATEGIC PLAYS) – ZIBIDO
- Po Valley; Zibido is adjacent to Badile prospect
- Play type: Downthrown fault terrace gas/oil in
Mesozoic (TD 5,600 m)
I T A L Y M O R O C C O
Dora / Dalla Rapagnano SMG Zibido Badile Tendrara I Tendrara Meridja Tendrara II Exploration Sidi Moktar Laura
* Excludes two concessions awaiting abandonment
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Slide Investor Presentation 2017
STRONG REGIONAL INFRASTRUCTURE
Zibido Badile Dora / Dalla Rapagnano SMG Laura High pressure gas pipeline network
Gas Maghreb-Europe Pipeline Gas Pipeline Project
Oued El Makhazine 2 x 400 MW Al Wahda 4 x 400 MW Dhar Doum 4 x 400 MW Oujda Casablanca Marrakech
M O R O C C O
M E D I T E R R A N E A N
A L G E R I A
A T L A N T I C
Rabat Tahaddart Power 2 x 400 MW Tendrara Meridja 120km Sidi Moktar
ITALIAN HIGH PRESSURE GAS PIPELINE NETWORK MOROCCAN GAS PIPELINE NETWORK
For more information please contact: Detailed information on
- ur investor website:
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Investor Presentation 2017
www.soundenergyplc.com
James Parsons
Chief Executive Offjcer j.parsons@soundenergyplc.com
Mary Hood
EVP , Finance / CFO m.hood@soundenergyplc.com
Disclaimer: The investment mentioned in this document may not be suitable for all recipients or be appropriate for their personal circumstances. The information in this document is believed to be correct but cannot be guaranteed. Opinions constitute our judgment as of this date and are subject to change without warning. This document is not intended as an ofger or solicitation to buy or sell securities. Past performance is not necessarily indicative
- f future performance and the value of investments may fall as well as rise and the income from them may fmuctuate and is not guaranteed. Investors may
not recover the amount invested. Some securities carry a higher degree of risk than others. The levels and basis of taxation can change. The contents of this document have been prepared by, are the sole responsibility of, and have been issued by the Company.
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Investor Presentation 2017
Disclaimer: This presentation and any additional documents handed out at any meeting (together the “Presentation Materials”) have not been approved by (i) the London Stock Exchange plc or by any authority which could be a competent authority for the purposes of the Prospectus Directive (Directive 2003/71/EC); or (ii) an authorised person within the meaning of the Financial Services and Markets Act 2000 (“FSMA”). The securities mentioned herein have not been and will not be, registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), or under any U.S. State securities laws, and may not be ofgered or sold in the United States unless they are registered under the Securities Act or pursuant to an exemption from or in a transaction not subject to the registration requirements of the Securities Act. Neither the U.S. Securities and Exchange Commission nor any U.S. state regulatory authority has approved the securities to be ofgered or the terms of such ofgering or passed upon the accuracy or adequacy of the presentation and these Presentation Materials. Any representation to the contrary is a criminal ofgence. The Presentation Materials are being supplied to you for information purposes only by Sound Energy Plc (the “Company”, “SOU” or “Sound”). References to the Company, SOU or Sound will also be deemed to include its subsidiaries, both directly and indirectly held (including through nominees) all wholly owned. These Presentation Materials have been prepared by and are the sole responsibility of the Company. The Directors of the Company have taken all reasonable care to ensure that the facts stated herein are true to the best of their knowledge, information and belief. Investing in the Company may expose an individual to signifjcant risk of losing all of the property or other assets invested. These Presentation Materials, being this presentation and any additional documents handed out in the meeting, are being issued on a strictly private and confjdential basis and solely to and directed (i) at persons in the UK (a) who have professional experience in matters relating to investments, being investment professionals as defjned in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “FPO”), (b) high net worth companies as defjned in Article 49(2) of the FPO, (c) certifjed sophisticated investors as defjned in Article 50(1) of the FPO or (d) persons to whom it may otherwise lawfully be communicated or (ii) persons in the United States or who are U.S. persons, who are “accredited investors” as defjned in Rule 501 of Regulation D promulgated under the Securities Act (“Accredited Investors”) (together “Relevant Persons”). In order to qualify as a certifjed sophisticated investor you must have a current certifjcate signed by a person authorized by the Financial Conduct Authority to the efgect that you are suffjciently knowledgeable to understand the risks associated with this particular type of investment and you must have signed within the last 12 months a statement in the terms set out in Article 50(1)(b) of the FPO. The ordinary shares are available only to, and any invitation, ofger or agreement to subscribe, purchase or otherwise acquire the ordinary shares will be engaged in only with, Relevant Persons. Any person who is not a Relevant Person should not rely on this document nor take any action upon it, but should return it immediately to the Company. These Presentation Materials do not constitute, or form part of, a prospectus relating to the Company, nor do they constitute or contain any invitation or ofger to any person to subscribe for, purchase or otherwise acquire any shares in the Company or advise persons to do so in any jurisdiction, nor shall it, or any part of it form the basis of or be relied on in connection with any contract or as any inducement to enter into a contract or commitment with the Company. No reliance may be placed for any purpose whatsoever on the information or opinions contained in the Presentation Materials or on their completeness. No representation or warranty, express or implied, is given by the Company as to the accuracy of the information or opinions contained in the Presentation Materials, or any further written or oral information made available to you or your advisors, and is subject to updating, completion, revision, amendment or verifjcation, which may result in material changes. The information contained in these Presentation Materials has not be independently verifjed.
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Investor Presentation 2017
Disclaimer continued: Any recipient of these Presentation Materials who is in any doubt about the investment to which this presentation relates should consult an authorized person specializing in advising on investments of this kind. These Presentation Materials do not constitute a recommendation regarding the shares of the Company, and should not be construed as legal, business, tax or investment advice. Prospective investors are encouraged to obtain separate and independent verifjcation of information and
- pinions contained in the Presentation Materials as part of their own due diligence. By accepting these Presentation Materials, the Recipient agrees to keep permanently
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