Navitas Petroleum Capital Market Presentation January 2018 1 - - PowerPoint PPT Presentation

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Navitas Petroleum Capital Market Presentation January 2018 1 - - PowerPoint PPT Presentation

Navitas Petroleum Capital Market Presentation January 2018 1 Disclaimer Disclaimer This presentation does not constitute and is not to be interpreted as an invitation and/or offer to purchase and/or allocate securities in Navitas Petroleum


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SLIDE 1

1

Navitas Petroleum

Capital Market Presentation

January 2018

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SLIDE 2

This presentation does not constitute and is not to be interpreted as an invitation and/or offer to purchase and/or allocate securities in Navitas Petroleum – Limited Partnership (the “Partnership”) and/or Navitas Buckskin Financing Ltd. (hereinafter: “the Company” and jointly “the Corporations”). The Corporations are a reporting corporation asdefined in the Securities Law, 5728-1968 (hereinafter: “the Law”). As such, they are governed bythe provisions of theLaw,includingtherestrictionsandprohibitionsset forththerein. Thispresentation andthe informationherein are the exclusiveproperty ofthe Corporations. Distribution and/or usethereof incontravention of anylaw and withoutprior,explicitand writtenapprovalfromtheCorporationsisstrictlyprohibited. This presentation was prepared solely for purposes of concision and convenience . The presentation cannot replace perusal of the draft public prospectus or the prospectus that has received permission from the ISA, which include the full and binding information about the Corporations and the securities offered thereby, including a full description of the risk factors to which the Corporations are exposed, prior to making a decision on an investment in the securities of the Corporations. In any event of discrepancy between the presentation and the draft prospectus and/or the prospectus and/or reports to be released by the Corporationsinthefutureasrequiredbylaw,suchdocumentswillprevail. The business strategy of the Corporations and their subsidiaries as presented in the presentation is true as of the date of the presentation and may change in thefuture,interalia,consideringmarketconditionsandthedecisionsoftheCorporations’boardofdirectors. The presentation includes forward-looking information, as defined in the law. Such information includes, inter alia, forecasts, objectives, assessments and estimates, includinginformationpresentedbyway of illustrationsand/or graphsand/ortables, whichrefer tofuture matters and/or events, the materialization

  • fwhichisneithercertainnorwithinthecontroloftheCorporations.

Forward-looking information is based on assessments by Corporation management, which are based, inter alia, on information known to the management of the Corporations on the date of preparation of this presentation, including estimations of the business markets of the Corporations, public and statistical publications and data released by various authorities and bodies, the contents of which have not been independently examined by the Corporations are thereforenotresponsibleforthecorrectnessthereof. The materialization of forward-looking information, in whole or in part or differently than expected, or the non-materialization thereof, will be affected, inter alia, by the risk factors that characterize the business of the Corporations as well as the developments in the economic environment and exogenous factors that affect the Corporationsin their business segments,which cannot be estimated in advance and are not within the Corporations’ control. The Corporations have no certainty that their estimations, plans and expectations will materialize and, consequently, the business results may materially differ from the results estimatedorimpliedbythisinformation.

Disclaimer

2

Disclaimer

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SLIDE 3

3

Israel Gulf of Mexico East Canada

Navitas Petroleum Partnership

Buckskin – “auto-pilot” value generator Attractive entry pricing Established activity Right place and time for purchasing value creating assets

Houston

Navitas Petroleum Partnership

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SLIDE 4

4

Navitas Assets

Navitas has developed a balanced asset portfolio generating quick cash flow in the short term

AssetsValue Time Cash flow from discoveriesunder development 1 Low cost & short timeline to production

10projects in the Gulf of Mexico Area

Discoveries under Development Buckskin High Impact Assets Explorationlicense off the East Coastof Canada

  • High impact exploration projects with huge

upside potantial

  • Significant value generation overtime
  • No need for immediate capital investments
  • Projects joined post-discovery andunder

development on opportunityterms

  • Non-recourse projectfinancing
  • Quick and substantial cash flowgeneration
  • Low-risk explorationprojects
  • Economically andgeologically

provenarea

  • Inexpensive andswift

development

  • Quick cash flow generation
  • 1. Cash flow attributed to the development of Phase 1A of the Buckskin Project and in case of discoveries –to PL16 and Bayou Fer Blanc projects
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SLIDE 5

Labrador and Newfoundland Canada

Navitas Assets

Total potential for Navitas -~660 million barrels¹

Block 7

427 MMBOE

  • St. John

Montreal

Houston

Gulf of Mexico USA

Drilling scheduled for 2018³ Discovery Discovery under development EB 832 -3 MMBOE EB 876 -3 MMBOE EB 915 -6 MMBOE

BFB

25 MMBOE

PL 16

30 MMBOE

EC 158

66 MMBOE

EC 228

23 MMBOE

EB 252

4 MMBOE

EC 228

2 MMBOE²

High Island A403

8 MMBOE

GC 82

24 MMBOE²

Buckskin

39 MMBOE

1. Navitasshareofthepotentialreservesandresourcesintheprojects(whichincludethecategoriesofProspectiveResources(BestEstimates)and/orContingentResources(2C)and/orReserves(2P),accordingtoNSAIreportsof8September2017,accordingtoBOE (BarrelsofOilEquivalent)calculation. GasunitperBOE:6MCF=1BBL. NSAIestimatesofthequantitiesofoilandnaturalgasresources bywhichpetroleumassetsconstituteforward-lookinginformationasdefinedwithintheSecuritiesLaw. Theestimatesaboveare based, inter alia, ongeological, geophysical, engineering and other information obtained from wellsand the reservoir operator and/or expert consultants in the field, and merely comprise NSAI estimatesand conjecture regarding which there is no certainty. The quantitiesofnaturalgasand/oroiltobeactuallyproducedmaydifferfromsuchestimationsandconjectures,interalia,asaresultofoperatingandtechnicalconditionsand/orregulatorychangesand/orconditionsofsupplyanddemandinthenaturalgasand/oroil marketand/orcommercialconditionsand/orasaresultoftheactualperformanceofthereservoirs.Suchestimationsandconjecturesmaybeupdatedinsofarasadditionalknowledgeaccumulatesand/orasaresultofagamutoffactorsrelatedtothepetroleumasset andtheproductionofoilandnaturalgas. 2. Includingdiscoveryandexploration. 3. Theaboveconstitutesforward-lookinginformation,asthematerializationthereof,inwholeorinpart,isuncertain,interalia,sinceitiscontingentondevelopmentsintheeconomicenvironmentandonexogenousfactorsthatarenotwithinthePartnership’scontrol. Insofarassuchdrillingisperformed,thereisnocertaintythatanypartofthespecifiedresourceswillindeedbediscovered,andifdiscovered–thereisnocertaintythatitwillbecommerciallyfeasibletoproduceanypartoftheresources.

New York
  • St. John

USA

Houston

Canada

Navitas Assets

Total existing potential – 660 million barrels1

5

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SLIDE 6

6

Net DCF based on NSAI reports¹

($mm)

Geological Chance

  • f Success²

Reserves and Resources

(mmboe)¹

Assets

Discoveries Under Development

1153 Discovery 17.8 Buckskin north Proved+Probable (2P) Discovery 1.4 Buckskin north Contingent NA Discovery 19.3 Buckskin south Contingent

Low cost Projects with short timeline to production 1075 29% -48% 12.5

PL 16

765 48% 7.6

PL 16s

NA 29% -31% 9.8

PL16 (additional prospects)

825 42% -45% 24.9

Bayou Fer Blanc (BFB)

NA 19% until discovery 139.2

Other U.S. licenses

High Impact Assets NA 15% 427.4

Canada License 14

1.Navitasshareofthepotentialreservesandresourcesintheprojects(whichincludethecategoriesofProspectiveResources(BestEstimates)and/orContingentResources(2C)and/orReserves(2P),accordingtoNSAIreportsof8September2017,unrisked,accordingtoBOE(BarrelsofOilEquivalent). 2.InaccordancewithNSAIreportsof8September,2017. 3.TheshareofNavitasinthediscountedcashflowof2Pscenarioin8wellsaccordingtoNSAIreportof9November,2017,withaquantityof178millionbarrelsofoil.10%discountratepost6%royaltiesand35%taxes.Theaforesaidconstitutesforward-lookinginformation.Withrespecttothewarning regardingforward-lookinginformationondiscountedcashflowofreserves,seethewarningregardingforward-lookinginformationinSlide8. 4.TheshareofNavitasinthediscountedcashflowofa2CscenarioaccordingtoNSAI’sreportof9November,2017.Withrespecttothewarningregardingforward-lookinginformationondiscountedcashflowofreserves,seethewarningregardingforward-lookinginformationinSlide8. 5.DiscountedcashflowaccordingtoFootnote1assumingsuccessfulexplorationwell(s)andcommercialdiscovery. ThePartnershipchosetospecifydiscountedcashflowfigureswithrespecttotheProspectiveResourcesintheassetinrespectofwhichanin-principledecisionhasbeenmadebythe Partnershiptodrillawell,subjecttotheexistenceofsufficientfinancialsourcesatthepartnershiplevel,andnottopresentdiscountedcashflowfigureswithrespecttotheotherpetroleumassetsofthePartnership,includingwithrespecttoassetsinwhich,assumingsuccessfulexplorationdrillings,there areContingentResources,sincenoundertakingtodrillawelloradecisionasaforesaidhasyetbeenmadeinrespectthereof.Theaforesaidconstitutesforward-lookinginformation.Withrespecttothewarningregardingforward-lookinginformationondiscountedcashflowofProspectiveResources, seethewarningregardingforward-lookinginformationinSlide8.

Navitas Assets

Discounted cashflow by project (prior to U.S. corporate tax deduction)

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SLIDE 7

7 ▪ In July 2017, Navitas completed bonds offering of 472mm NIS under a European financing model toward financing the development of the Buckskin project ▪ In December 2017, Navitas completed bonds offering of another 248mm NIS, by expansion of the current series towards financing of the project development, where Navitas’ share increased to 7.5% project ownership ▪ Budget Update

̶ Since the bonds issuance, the development budget was reduced by ~22% ($697mm to $541mm)

▪ Operational Update

‒ Development plan progressing on track ‒ Commence drilling of production wells – January 2018 ‒ Forecast for Initial Production – July 2019

▪ Bonds impact on future transaction flow

‒ Navitas is considered as a new and active player in the Gulf of Mexico, US ‒ Following the offerings success, Navitas was approached by leading companies in the are for potential collaboration

▪ Development plan progress forecast¹ –

Order and procurement of production platform equipment Installation of subsea facilities Commence drilling of production wells Connect to production platform and initiate production

Financial closing of development financing 07/2017

Order and procurement of subsea facilities Complete drilling of production wells

Value creating events along development of the Buckskin project1

07/2019 48 116 202 01/2018 IPO

Buckskin – value generator on auto-pilot²

Navitas share in DCF ($mm)

Modification of production platform

  • 1. The aforesaid constitutes forward-looking information. In this regard, see the warning regarding forward-looking information in Slide 2.
  • 2. Please see Slides 6 and 11.

Activity Update

Buckskin project

Closing of development financing 07/2019 Initial Production

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SLIDE 8

Ownership Resources¹ (mmboe) Operator Water depth (meters) Castex 32.5% 24.9 5,640 2

Bayou Fer Blanc (BFB)

Navitas 100% 7.6 4,115 17

PL 16s

100% 12.5 4,115 17 Navitas

PL 16

42%-45% 6.0 48% 7.5 48%2 7.5 Geological Chance of Success Dry HoleCost³ ($mm) 2018 26 years 2019 9 years 2018 17 years Target first oil Years of production 82 76 107 NPV104 ($mm)

Low risk at low price Fast track to years’-long production High profitability

Activity Update

2018 drilling plan

8

1.NavitasshareintheProspectiveResources(BestEstimate),accordingtotheNSAIreportof8September,2017.accordingtoBOE(BarrelsofOilEquivalent). 2.ChanceofSuccessforthemaintarget,accordingtotheNSAIreportof8September,2017. 3.Navitasshare(approximately). 4.Intheeventofadiscovery,NavitasshareaccordingtotheNSAIreportof8September2017,usingacashflowdiscountrateof10%(asisstandardinthe sector),fortheproductionofprospectiveresourcesundertheBestEstimatecategory,unrisked,aftertaxesandroyaltiesandunderNavitas’assumptionsregardingdevelopmentandproductioncosts. Caution–itisclarifiedthatthediscountedcashflowinformation,whethercalculatedunderaspecificdiscountrateorwithoutadiscountrate,representcurrentvaluebutnotnecessarilyfairvalue.ThereisnocertaintythatanypartofthespecifiedProspectiveResourceswillindeedbediscovered. Ifdiscovered,thereisnocertaintythatitwillbecommerciallyfeasibletoproduceanypartoftheresources.TheprospectiveinformationisnotanestimationofReservesandContingentResources,whichmaybeestimatedonlyaftertheexplorationdrilling,ifatall. Cautionregardingforward-lookinginformation–theaforesaiddiscountedcashflowinformationconstituteforward-lookinginformation,withinthemeaningthereofintheLaw.Theabovedataarebasedonvariousassumptions,includingwithrespecttothequantitiesofgasandoiltobe produced,therateanddurationofnaturalgassalesfromtheproject,operatingcosts,capitalexpenditures,abandonmentexpenses,royaltyratesandsaleprices,thematerializationofwhichiscompletelyuncertain.Itisnotedthatthequantitiesofnaturalgasand/oroiltobeactuallyproduced,if any,theaforesaidexpensesandtheaforesaidrevenuesmaymateriallydifferfromtheaforesaidestimationsandconjectures,interalia,duetothefactthatnobindingcontractshavebeensignedyetinrelationtothesaleofoiland/ornaturalgasfromtheproject/s,andasaresultofoperating andtechnicalconditionsand/orregulatorychangesand/orthepricesofoilontheglobalmarketand/ornaturalgaspricesontheU.S.marketand/ortheproject’sactualperformanceand/orasaresultofthesalepricesandthequantitiesactuallydeterminedincontractstobesignedforthesale

  • foilorgasfromtheproject/s,ifsigned,and/orasaresultofgeopoliticalchangestooccur.

T

  • tal depth (meters)

Activity Update

2018 drilling plan

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SLIDE 9

9

  • St. John

New York Montreal

Block 3 BP Noble Energy Hess Block 4 BP Noble Energy Hess Block 8 BP Noble Energy Hess Canada

Block 7 Navitas

Delek Group

▪ Navitas led its joint bid (30%) with Delek Group (70%) for Block 7, consisting of ~2,000 km², in the West Orphan basin

  • ffshore east coast of Canada

▪ A Beicip² report presented potential of ~25.5 billion barrels of petroleum and ~20.6 TCF of natural gas for the West Orphan basin ▪ Some of the world’s largest oil and gas companies, including BP, Shell, Chevron, ExxonMobil and Statoil are investing billions of dollars in exploration and development in east Canada - ~3 billion barrels have been developed in the east Canada region thus far³ ▪ Hess, BP and Noble Energy won the three blocks adjacent to the Navitas block, undertaking total commitments of ~CAD 413 million⁴ ▪ Navitas and Delek won Block 7 in consideration for a CAD 48 million operations commitment ▪ Navitas purchased a 2D seismic survey for the main prospect area. After processing and interpreting the information, Navitas mapped out a 400 km² prospect with potential of ~1.4 billion barrels¹

  • 1. Out of which approx. 1.2 billion barrels of oil (100% of the prospect), in accordance with NSAI’s report of 8 September, 2017, according to a BOE calculation.
  • 2. International Oil and Gas Consulting and Software Solutions Provider, a report that was released on August 16, 2016.
  • 3. For further information, see the website C-NLOPB, http://www.capp.ca/canadian-oil-and-natural-gas/industry-across-canada/newfoundland-and-labrador.
  • 4. For further information, see the website C-NLOPB, http://www.cnlopb.ca/news/nr20161109.php.

Activity Update

Block 7, Canada – Prospect of ~1.4 billion barrels¹

▪ Navitas is having discussions to purchase 3D seismic survey in collaboration with working interest owners of nearby blocks

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SLIDE 10

Undeveloped discovery³

Houston

Navitas prepares together with partners to purchase

  • ther development assets (“Cherry Picking”)

Gulf of Mexico USA

Crisis in oil and gas prices Cheap assets – Formation of a buyers’ market Decrease of development and production costs Preparing for oil price recovery¹ Resurgence

  • f drilling
  • perations

in the U.S.² 10

1.ThePartnershipestimationsdescribedaboveconstituteforward-lookinginformation, based,interalia,oninformationknowntothePartnershipmanagementatthetimeofpreparationofthispresentation,includingestimationsofthePartnershipbusinessmarkets,publicandstatistical publicationsanddata,thecontentsofwhichhavenotbeenindependentlyexaminedbythePartnership,andthePartnershipisthereforenotresponsibleforthecorrectnessthereof.Thematerializationofforward-lookinginformation,inwholeorinpartordifferentlythanexpected,orthenon- materializationthereof,willbeaffected,interalia,bythedevelopmentsintheeconomicenvironmentandexogenousfactorsthataffectthePartnershipinitsoperatingsegments,whichcannotbeestimatedinadvanceandwhicharenotwithinthePartnership’scontrol.

  • 2. For further details, see Chapter 7.6.4 of the Partnership prospectus.
  • 3. Illustration for simulation purposes only

Current Window of Opportunity

Exploiting a unique opportunity for purchasing development assets

The successful project financing of the Buckskin development created a relative advantage for Navitas

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SLIDE 11

1 1

Time Value Exploration and Evaluation Development Production

Financial Closing

$116mm²

Refinance Value

$202mm³ Example – Buckskin North (excl. south section)

Initial Production FID

Value creation curve for assets under Navitas’ core focus

1.Illustrationforsimulationpurposesonly. 2.PleaseseeSlide6. 3.TheshareofNavitasina8%discountedcashflow asofcommencingproduction(July2019),inaccordancewithNSAIreportof9November2017.

Current Window of Opportunity

Navitas identifies a unique situation for generating value by acquiring assets in the development phase

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SLIDE 12

1 2

Jan.-Mar. 2017 July 2017 Sept. 2017 Dec. 2017

Positive developments since bonds IPO

472 60 60 248 840

Debt

Total

Capital Debt Capital

Navitas successfully raised 840mm NIS in 2017

5% Buckskin Project Positive updates from Buckskin’s operator Additional 2.5% Buckskin Project U.S. corp. tax reform completed Expand activities to include producing assets WTI oil barrel price exceeds $60

2017 Summary

Successful bonds and equity offerings in addition to other positive developments

60 60 472 248

840

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SLIDE 13

Thank you!