Oil Capital Conference Colin Hutchinson, Chief Executive Officer 1 - - PowerPoint PPT Presentation

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Oil Capital Conference Colin Hutchinson, Chief Executive Officer 1 - - PowerPoint PPT Presentation

Oil Capital Conference Colin Hutchinson, Chief Executive Officer 1 February 2018 Disclaimer The information contained in these slides and this presentation is being supplied to you by Ascent Resources plc on behalf of itself and its subsidiaries


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SLIDE 1

Oil Capital Conference

Colin Hutchinson, Chief Executive Officer 1 February 2018

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SLIDE 2

Disclaimer

The information contained in these slides and this presentation is being supplied to you by Ascent Resources plc on behalf of itself and its subsidiaries (together “the Company”) solely for your information and may not be reproduced or redistributed in whole or in part to any other person. This document has not been approved by a person authorised under the Financial Services and Markets Act 2000 (as amended) ("FSMA") for the purposes of section 21 FSMA and therefore these slides and this presentation is being delivered and made only to a limited number of persons and companies who are persons who have professional experience in matters relating to investments and who fall within the category of person set out in Article 19 of the FSMA (Financial Promotion) Order 2005 (the “Order”) or are high net worth persons within the meaning set out in Article 49 of the Order or are otherwise permitted to receive it. By accepting the slides and attending this presentation and not immediately returning the slides, the recipient represents and warrants that they are a person who falls within the above description of persons entitled to receive the slides and attend the presentation. These slides and this presentation do not constitute, or form part of, a prospectus relating to the Company nor do they constitute or contain any invitation or offer to any person to underwrite, subscribe for, otherwise acquire, or dispose of any shares in the Company or advise persons to do so in any jurisdiction, nor shall they, or any part of them, form the basis of or be relied on in any connection with any contract or commitment whatsoever. Recipients of these slides and/or persons attending this presentation who are considering a purchase of ordinary shares in the Company are reminded that any such purchase must be made solely on the basis of the information that the Company has officially released into the public domain. Whilst all reasonable care has been taken to ensure that the facts stated in these slides and this presentation are accurate and the forecasts, opinions and expectations contained in these slides and this presentation are fair and reasonable, the information contained in this document has not been independently verified and accordingly no representation or warranty, express or implied, is made as to the accuracy, fairness or completeness of the information or opinions contained in these slides or this presentation and no reliance should be placed on the accuracy, fairness or completeness of the information contained in these slides and this presentation. Some of the statements are the

  • pinions of the directors of the Company. None of the Company, its shareholders or any of their respective advisers, parents or subsidiaries nor any of their respective directors,
  • fficers or employees or agents (including those of their parents or subsidiaries) accepts any liability or responsibility for any loss howsoever arising, directly or indirectly, from any

use of these slides or this presentation or their contents. These slides and this presentation do not constitute a recommendation regarding the shares of the Company nor should the slides or the presentation be considered as the giving of investment advice by the Company or any of its shareholders, directors, officers, agents, employees or advisers. Recipients of these slides and this presentation should conduct their own investigation, evaluation and analysis of the business, data and property described therein. If you are in any doubt about the information contained in these slides or this presentation, you should contact a person authorised by the Financial Services Authority who specialises in advising on securities of the kind described in these slides and presentation. Certain statements within this presentation constitute forward looking statements. Such forward looking statements involve risks and other factors which may cause the actual results, achievements or performance expressed or implied by such forward looking statements. Such risks and other factors include, but are not limited to, general economic and business conditions, changes in government regulations, currency fluctuations, the oil price, the Company's ability to recover its reserves or develop new reserves, competition, changes in development plans and other risks. There can be no assurance that the results and events contemplated by the forward looking statements contained in this presentation will, in fact, occur. These forward-looking statements are correct or represent honestly held views only as at the date of delivery of this presentation. The Company will not undertake any obligation to release publicly any revisions to these forward looking statements to reflect events, circumstances and unanticipated events

  • ccurring after the date of this presentation except as required by law or by regulatory authority.

By accepting these slides and/or attending this presentation, you agree to be bound by the provisions and the limitations set out in this disclaimer. You agree to keep permanently confidential the information contained in these slides or this presentation or made available in connection with further enquiries to the extent such information is not made publicly available (otherwise through a breach by you of this provision). Neither the slides 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.

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SLIDE 3

Summary

▪ AIM listed, exploration & production company focused on onshore European gas. ▪ Operator of the Petišovci concession in Slovenia. ▪ De-risked asset over the past 12 months on financial, operational and regulatory level. ▪ Debt free & cash generative. ▪ Potential for material increases in production and pricing over the next 24 months.

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SLIDE 4

PLC Board of Directors

Clive Carver, Non-executive Chairman

  • Clive Carver has worked in the City since 1986 and focused exclusively on the small cap sector since 1994.
  • Chairman of Caspian Sunrise plc, an AIM listed oil and gas exploration and production company operating in

Kazakhstan.

  • Also Non-executive Chairman of Tax Systems plc, appScatter Group plc, 365 Agile plc and Non-executive Director of

Darwin Strategic Limited & Primary Bid Limited

  • Fellow of the Institute of Chartered Accountants in England and Wales and is a qualified Corporate Treasurer.

Colin Hutchinson, Chief Executive Officer

  • Fellow of the Institute of Chartered Accountants in Ireland, law graduate with an MBA from Warwick Business

School.

  • Previously served as the Company's Finance Director.
  • Prior to joining Ascent, he was Group Financial Controller at Lochard Energy plc.
  • CEO since September 2015, has overseen the rebalancing of the financial structure, positioning for growth and first

gas sales Nigel Moore, Non-executive Director

  • Chartered Accountant and previously a partner at Ernst & Young for 30 years where he specialised in the oil and gas

sector, advising a wide range of client companies.

  • Chairman of the audit committee

Cameron Davies, Non-executive Director

  • Cameron Davies is an international energy sector specialist and the former Chief Executive of Alkane Energy plc.
  • Also Non-executive Chairman of PowerHouse Energy plc.
  • A geologist, Dr Davies has over thirty-five years’ experience in the oil and gas sectors.
  • PhD from Imperial College, is a Fellow of the Geological Society of London and a member of the European

Petroleum Negotiators Group and the PESGB.

  • Chairman of the Remuneration Committee.

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SLIDE 5

Financials

▪ First revenue since 2013 reported in the interims to H1 2017. ▪ Reduction in debt from £11.2m at Dec 2015 to £2.4m at June 2017. ▪ Current convertible debt: £49k (announced 31 July 2017).

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six mths to twelve mths to six mths to twelve mths to six mths to 30-Jun-17 31-Dec-16 30-Jun-16 31-Dec-15 30-Jun-15

unaudited audited unaudited audited unaudited £000s £000s £000s £000s £000s

Balance sheet Exploration assets 40,024 37,541 35,214 32,711 31,455 Property, plant & equipment 4 4 4 3 2 Trade and other receivables 556 32 23 61 142 Bank and cash 2,708 3,153 860 32 239 TOTAL ASSETS 43,292 40,730 36,101 32,807 31,838 Trade and other payables (292) (254) (297) (508) (535) Borrowings (2,392) (6,162) (9,424) (11,239) (9,691) Other current liabilities (2,779) Provisions (460) (447) (434) (386) (370) TOTAL LIABILITIES (3,144) (6,863) (10,155) (12,133) (13,375) TOTAL EQUITY 40,148 33,867 25,946 20,674 18,463 Income statement Revenue 154 Cost of sales (154) Gross profit Administrative expenses (921) (1,382) (675) (1,888) (1,011) Operating loss (921) (1,382) (676) (1,888) (1,011) Net Finance costs (298) (1,294) (668) (1,756) (1,673) Loss (1,219) (2,676) (1,344) (3,644) (2,684)

30-Jun-15 31-Dec-15 30-Jun-16 31-Dec-16 30-Jun-17 Net cash (9.5) (11.2) (8.6) (3.0) 0.3 (12.0) (10.0) (8.0) (6.0) (4.0) (2.0) 0.0 2.0 GB£ millions

Net cash

31 33 35 38 40 18 21 26 34 40 5 10 15 20 25 30 35 40 45 30-Jun-15 31-Dec-15 30-Jun-16 31-Dec-16 30-Jun-17 GB£ millions

Assets

Exploration assets Net asset value

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SLIDE 6

Slovenia

EU Member Since 2004 Schengen Member Since 2007 Currency Euro Capital Ljubljana Government Parliamentary representative democratic

  • republic. Last elections were 2014; next

should be 2018. Population 2 million Language Slovenian Religion 58% Catholic GDP Composition as of 2016 Services 65%, Industry 33%, Agriculture 2% Annual gas consumption as of 2016 761m cubic metres / 27 Bcf (99.9% imported)

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SLIDE 7

Shares & shareholders

▪ 52 week range 1.0p to 3.74p. ▪ Average volume 34.6m. ▪ 2,268m shares in issue. ▪ £49k of convertible debt

  • utstanding at 1p – potentially

5m shares. ▪ 50 million shares potentially due under the Trameta SPA. ▪ 152 million options outstanding at an average price of 2.4p. Share price significantly below analysts target of 3p+.

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Source: yahoo.com 24 January 2018 Source: Computershare 12 January 2018

50 100 150 200 250 300 350 400 0.5 1 1.5 2 2.5 3 3.5

Volume traded (Millions) Share Price (PENCE)

Share Price

Hargreaves Lansdown (Nominees) Limited (15942) 258,213,766 11.38% Interactive Investor Services Nominees Limited (SMKTNOMS) 220,889,767 9.74% Barclays Direct Investing Nominees Limited (Client1) 187,862,391 8.28% Hargreaves Lansdown (Nominees) Limited (HLNOM) 157,760,068 6.95% Hargreaves Lansdown (Nominees) Limited (VRA) 149,448,768 6.59% HSDL Nominees Limited 137,920,379 6.08% Interactive Investor Services Nominees Limited (SMKTISA) 92,597,603 4.08% HSDL Nominees Limited (Maxi) 80,865,307 3.56% JIM Nominees Limited (Jarvis Investment Management) 76,085,311 3.35% Other shareholders 907,106,960 39.98% Shares in issue 2,268,750,320 100.00%

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SLIDE 8

Achievements in 2017

▪ Revenues for the year of close to €1 million. ▪ Debt reduced from £8.7 million to £49k. ▪ Commenced production locally in April & export in November. ▪ Executed the work programme:

✓ Recompleted two wells. ✓ Constructed flow lines. ✓ Refurbished existing processing equipment. ✓ Installed metering & pigging station. ✓ Recertified export pipeline.

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SLIDE 9

Targets for 2018

▪ Increase production from Pg-10 and Pg-11A. ▪ Acquire permits to re-enter Pg-7, Pg-9, Pg-6 & Pg-8. ▪ Receive IPPC permit in full. ▪ Extend INA gas sales agreement. ▪ Develop other value enhancing opportunities: ▪ Petišovci ▪ Slovenia ▪ Wider Region

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SLIDE 10

Production to date

▪ Production to local industrial company from April. ▪ Production suspended in October while export infrastructure put in place. ▪ Export production rate for November at 2.1 MMscfd rising to 2.6 MMscfd for January. ▪ Revenues to Ascent for last three months of close to €1 million. ▪ Figures for January 2018 are estimates.

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0.0 0.5 1.0 1.5 2.0 2.5 3.0 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18

Production rates - MMscfd

MMscfd 50,000 100,000 150,000 200,000 250,000 300,000 350,000 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18

Ascent revenue - €

Revenue (€)

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SLIDE 11

Petišovci Joint Venture

Petišovci Joint Venture

Service provider to the Joint Venture. Owns infrastructure and drilling equipment. Concession holder. Operator

11 100% 100% 50% 50% 25% 75%

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SLIDE 12

Asset

▪ Pannonian basin. ▪ Production of oil & gas from shallower zones since 1940’s – these are pressure depleted but there remains oil in place. ▪ Ascent and partners’ main focus has been the deep gas reservoirs. ▪ Two wells drilled in 2011 proved commercial production was viable. ▪ P50 reserves 88 BCF plus best estimate recoverable resources 76 BCF to Ascent. Valued by the Company at c£200m.

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SLIDE 13

Structure

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▪ Re-enter existing wells to boost production. ▪ Recomplete upwards as reservoirs deplete, getting multiple uses from each well structure.

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SLIDE 14

Subsurface map

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Strictly private & confidential – not for distribution

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SLIDE 15

Well locations

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▪ Existing well locations to be re-completed during the five year field development plan. ▪ All wells are already connected to the CPP via intra-field pipelines. ▪ All wells drilled to 2,000+ metres.

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SLIDE 16

Export production

▪ Significant technical and operational challenges have been overcome. ▪ Export agreement with INA for untreated gas. ▪ Initial 12 month agreement, scope to extend term and materially increased volumes. ▪ Initial revenues expected at around €300k per month based on 2.5 – 3 MMscfd.

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SLIDE 17

Gas to grid

▪ Our plan remains to construct our own treatment facility and sell gas into the national grid, achieving highest possible price ▪ Acquiring IPPC Permit needed to construct our own gas treatment facility has been a lengthy process. ▪ Administrative court dismissed final appeal in November 2017, ruling in favour of Ascent and partners. ▪ Permit expected from Environment Agency in 2018. ▪ Debt & cash flow expected to fund new plant.

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SLIDE 18

Petisovci development plan

▪ Increase gas sales to INA from current levels. ▪ Install our own gas treatment facility to increase pricing and capacity. ▪ Deepen 7 existing wells to increase production up to 35 MMscfd. ▪ First re-entries in early 2019 – Pg-7 & Pg-9. ▪ Drill 6 infill wells to maintain production at plateau of 35 MMscfd. ▪ Applied for water re-injection permit. ▪ Investigate enhanced oil recovery in shallow reservoirs – seismic review in progress.

New treatment facility ready Existing wells deepened Infill wells drilled

Source: internal management estimates.

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0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0

0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034

wells producing MMscfd

Production

Average wells producing Average daily MMscfd

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SLIDE 19

Petisovci economics

Source: internal management estimates.

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0.0 10.0 20.0 30.0 40.0 50.0 60.0 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

GB£ millions

Revenues & operating cash flow

Revenues Operating cash flow

  • 20.0
  • 18.0
  • 16.0
  • 14.0
  • 12.0
  • 10.0
  • 8.0
  • 6.0
  • 4.0
  • 2.0

0.0 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

GB£ millions

CAPEX

Summary NPV10 219 € £199 Millions Gross cash flow Revenue £730 Millions Preferential recovery £44 Millions CAPEX

  • £108

Millions Other costs

  • £81

Millions Tax

  • £85

Millions Net Cash £500 Millions Total Production 4,939 174 38% MMm3 BCF Recovery Total wells 15 Current 2 Old wells deepened 7 New wells drilled 6 18 years to 2035

2 4 6 9 10 12 12 11 13 14 13

1 4 2 3 2 4 2 2 3 3 5

2 4 6 8 10 12 14 16 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0

Wells Production (MMscfd)

Average MMscfd & average wells producing

Wells active (eop) Wells drilled or worked over Average daily production (MMscfd)

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SLIDE 20

Growth strategy

Within Petišovci ▪ Increase production from high value gas asset to 35 MMscfd over five year period. ▪ Investigate shallow oil reservoirs. Within Slovenia ▪ Target other concession areas – seismic acquired in the past during a previous joint venture. Within the region ▪ Actively reviewing three value-enhancing transactions.

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SLIDE 21

Summary

▪ Producing from our high value gas asset. ▪ Profitable and cash generative. ▪ Virtually debt free. ▪ Potential to grow through acquisition. ▪ Supportive retail shareholder base. ▪ Share price significantly below analyst’s and company target.

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SLIDE 22

Thank you