Investor Presentation Q4 2016 Revised 13.12.2016 Building a - - PowerPoint PPT Presentation
Investor Presentation Q4 2016 Revised 13.12.2016 Building a - - PowerPoint PPT Presentation
Investor Presentation Q4 2016 Revised 13.12.2016 Building a Mid-cap African & European Gas Company I T A L Regional gas strategy underpinned by Balanced and evolving portfolio, including Y low cost potential multi Tcf development
I T A L Y M O R O C C O
Investor Presentation Q4 2016 Slide 1
Building a Mid-cap African & European Gas Company
Acquisition of Moroccan onshore gas portfolio Introduction of Cornerstone Investor Securing cost covering production Acquisition of Italian onshore gas portfolio Introduction
- f Strategic
Partner Successful drilling in Eastern Morocco
Rapagnano Schlumberger (Tendrara, Badile) TE6 & TE7 Continental Investment Partners Tendrara, Sidi Moktar, Meridja
Journey so far...
Regional gas strategy underpinned by
→
Strong European gas demand and local pricing
→
Pan European / African Strategic Partnership with Schlumberger
→
Supportive Cornerstone Investor
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
→
Significant opportunities in distressed oil sector
→
Limited competition from cash constrained peers
Investor Presentation Q4 2016 Slide 2
The Team
James Parsons
Chief Executive Officer Over 20 years in Oil & Gas strategy, general management, M&A and finance across Europe, South America and Central America 12 years with Royal Dutch Shell Specialist in restructuring, funding and growing small listed upstream companies; qualified 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
10 years upstream experience with Gulf Keystone and Deloitte. Qualified Chartered Accountant and Chartered Company Secretary
Will Holland
EVP, Business Development
Over 20 years upstream experience across a range of operational, commercial and financial
- 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
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 Production Assets Low risk discoveries High upside exploration = Other Assets
Investor Presentation Q4 2016 Slide 3
Compelling Regional Case for Gas
Growing gas penetration Morocco Italy
→ 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
- f domestic hydrocarbons
→ 10 year tax holiday → Thereafter 35% net government
take (30% Corporation tax and 5% royalty after 10.6 Bscf)
→ 37.9% government net take
(24% corporation tax, 3.9% regional income tax plus 10% royalty above 0.9 Bscfannually)
Disadvantaged supply position Top quartile fiscal terms
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 T L A N T I C
Rabat Tahaddart Power 2 x 400 MW
Investor Presentation Q4 2016 Slide 4
Tendrara
(27.5% interest; 25% paying; Operated)
Meridja (55% interest; Operated*)
→ 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
- bjectives
→ Tendrara, eight exploration permits 14,500
km2 acreage, seven wells drilled; Meridja
- ne reconnaissance licence 9,000km 2
→ First well (TE-6): 28m net pay, flow achieved
pre stimulation, 17mmscf/d on test
→ Potential for super-giant (multi Tcf)
connected gas field
→ TE-7: 32mmscf/d after clean up → TE-8 (step out appraisal well) early 2017
TENDRARA
MERIDJA TENDRARA 120km
Eastern Morocco:
Flagship development with multi Tcf potential
* Subject to the completion of option exercise ** Subject to ministerial approval of the additional 17.5% transfer
Investor Presentation Q4 2016 Slide 5
All volumetric estimates are 100% - Gross
MERIDJA TENDRARA
Long Term Upside Potential
Showcase Tendrara: Illustrative Aerial View (TAGI Only)
40 80km TE-2 (AGIP:1967) TE-9 (2018)
Provisional location
1 ,800 km2
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 Bcf 17km2
TE4 data unreliable; requires re-entry.
Near Term Potential Pressure Depth Plot
TE-7
PRESSURE (KG/CM2) TVDSS (M)
- 2500
- 2000
- 1500
- 1000
- 500
300 350 400 450 500
TE-2
WATER GRADIENT 1.23KG/CM2/10M GAS GRADIENT
TE-6, TE-5 TE-3 TE-1 600-700 mt Potential Gas Column
Investor Presentation Q4 2016 Slide 6
Self funding exploration & development
Finalise Development plan & Concession application FIRST GAS
Return to Shareholders
Pathway to Commercialisation
2017 & 2018 2019 Current phase
Material Cash flows
TE-7 TE-8
Horizontal development well Step-out appraisal
- EPC Facilities
- EPC Pipeline
- Development wells
- Further step out wells
& re-entry
- Seismic acquisition
I T A L Y M O R O C C O
Dora / Dalla Rapagnano SMG Zibido Badile Tendrara I Tendrara Tendrara II Sidi Moktar Sidi Moktar Laura
Pavia Lacchiarella
SNAM Gas Pipeline Badile Permit 3D Seismic Coverage
Badile Zibido Milano
Z O O M
→
k Badile 3D seismic = Pipeline
Lacchiarella 2 Badile drill site
Investor Presentation Q4 2016 Slide 7
Northern Italy Strategic Play
Badile
Net effective ownership 80%; operated
→ Po Valley (Northern Italy); 45 km SW of
analogous ‘Malossa’ gas field
→ 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 first well in exchange for an option
- n 20% of the licence
Recoverable resource 538 Bscf Low EUR 88m Best +EUR 308m Low 37 Best +105 High +EUR 1,008m High +396 Recoverable resource (Bscf) NPV10 (Eurocent 31/cbm)
Up to EUR 1,404 m NPV10 (Best Estimate EUR 396 m)
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 A
Rabat Tahaddart Power 2 x 400 MW Jorf Lasfar Power Plant Safi Chemicals Plant Chichaoua Sidi Moktar I State owned Phosphate Plant (OCP) Sidi Moktar II Planned New Phosphate Plant Meskala Plant
Z O O M
Investor Presentation Q4 2016 Slide 8
Southern Morocco Strategic Play
Sidi Moktar
Net Effective 25% interest, carried for first USD 18 m gross; operated*
→ 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 field
→ 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
Investor Presentation Q4 2016 Slide 9
Upcoming Newsflow
Extended well test results Target: prove up to 1 – 1.5 Tscf field in TAGI and demonstrate gas in Paleozoic Re-entry and test; feasibility currently being determined Concession application Exploration well in Italy - 34% chance of success; 178 Bscfe gross Commencement of development works (facilities) Introduction of partners to Sidi Moktar Workover of Koba-1 and Komar-1 (Sidi Moktar wells) followed by extended well test 2D seismic over the remainder of the block - to determine prospects and give better indication on volumes
Tendrara Tendrara Tendrara Tendrara Badile Tendrara Sidi Moktar Sidi Moktar Tendrara
- TE-7
- TE-8
- TE-2 &
TE-4
- Concession
- Badile
- FDP
- Sidi-Moktar
- Sidi-Moktar
- 2D Seismic
January 2017 February 2017
Q2 2017 Q2 2017 1H 2017 Q3-4 2017 Q1 2017 1H 2017 2H 2017 - 1H 2018
Investor Presentation Q4 2016 Slide 10
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 first 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 field and deliver wells
→
Strong retail shareholder base credibility
→
Institutional investors recently introduced
Strong corporate governance
→
Industry experienced Board with balance of technical, commercial and financial skills
Underpinned by industry partnerships
→
Schlumberger as strategic partner: enabling scale, technically de-risking assets and providing funding
Investor Presentation Q4 2016 Slide 11
Appendix
Investor Presentation Q4 2016 Slide 12
Capital Structure as at 13 December 2016
Current shares in issue Shares to be issued Leadership equity stake Total fully diluted shares 836.2 million
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
34.0 million 51.4 million 55.1 million 31.1 million £48.3 million £24.2 million £1.0 million
664.6 million
20 30 40 50 60 70
Investor Presentation Q4 2016 Slide 13
Broader Portfolio
Cost Covering Production* (2 licences)
Multiple producing onshore assets (0.5 MMscf/d)
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 Sidi Moktar Sidi Moktar Laura
Appraisal (6 licences, excluding Strategic Plays)
Laura
→ Gulf of Taranto (4 km offshore, 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 offshore → 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
* Excludes two concessions awaiting abandonment
Investor Presentation Q4 2016 Slide 14
Dora / Dalla Rapagnano SMG Zibido Badile Laura
High pressure gas pipeline network
Italian high pressure gas pipeline network Moroccan gas pipeline network
Meridja
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
Power station project Permit Meridja Online power station Gas Maghreb-Europe Pipeline Gas pipeline project
Sidi Moktar
Strong Regional Infrastructure
Investor Presentation Q4 2016 Slide 15
James Parsons Chief Executive Officer j.parsons@soundenergyplc.com
Detailed information on our investor website:
www.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 offer or solicitation to buy or sell securities. Past performance is not necessarily indicative of future performance and the value of investments may fall as well as rise and the income from them may fluctuate 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.
Mary Hood EVP, Finance / CFO m.hood@soundenergyplc.com
For more information please contact:
Investor Presentation Q4 2016 Slide 16
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 offered 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
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Investor Presentation Q4 2016 Slide 17
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