Hurricane. Annual General Meeting. 6 th June Basement Reservoir Specialists HUR-COR-SHA-PRS

Transcription

1 Hurricane Basement Reservoir Specialists Annual General Meeting 6 th June 2018 HUR-COR-SHA-PRS

2 Disclaimer The information contained in this presentation (the Presentation) has been prepared by Hurricane Energy plc (the Company). This Presentation has not been approved by an authorised person in accordance with section 21 of the Financial Services and Markets Act 2000 and therefore it is being delivered for information purposes only. This Presentation may contain certain forward-looking statements with respect to the Company's expectations and plans, strategy, management s objectives, future performance, production, costs, revenues, and other trend information. These statements and forecasts involve risk, uncertainties and assumptions about the Company, its assets, its subsidiaries and investments, including, among other things, the development of its business, trends in its operating industry, and future capital expenditures and acquisitions. In light of these risks, uncertainties and assumptions, the Company's actual results could differ materially from those included in this document or as otherwise discussed at the Presentation. The statements have been made with reference to forecast price changes, economic conditions and the current regulatory environment. Nothing in this Presentation should be construed as a profit forecast. Past share performance cannot be relied on as a guide to future performance. These forward-looking statements speak only as at the date of this Presentation. No representation or warranty, express or implied, is made or given by or on behalf of the Company or any of its members, directors, officers or employees or any other person as to the accuracy, correctness, completeness or fairness of the information, including estimates, opinions, targets and other forward looking statements, contained in this Presentation and no reliance should be placed on it. Neither the Company or any of its members, directors, officers or employees nor any other person accepts liability whatsoever for any loss howsoever arising from any use of this Presentation or its contents or otherwise arising in connection herewith, or undertakes to publicly update, review, correct any inaccuracies which may become apparent, or revise any forwardlooking statement whether as a result of new information, future developments or otherwise. The Company is not under any obligation to update or keep current the information contained in this Presentation and any opinions expressed in it are subject to change without notice. The Company's securities have not be registered under the US Securities Act of 1933, as amended (the Securities Act) and may not be offered or sold in the United States absent registration or an exemption from the registration requirements of the Securities Act. No public offering of the Company's securities is or will be made in the United States. In addition, the Company s securities have not been and will not be registered under the applicable laws of Australia, Canada, Japan and South Africa and, subject to certain exceptions, may not be offered or sold within Australia, Canada, Japan or South Africa or to any national, resident or citizen of Australia, Canada, Japan or South Africa. Hurricane AGM Presentation

3 Agenda 1 Chairman s Statement 2 CEO s Review 3 Q&A 4 Resolutions Hurricane AGM Presentation

4 Emergency Procedures No fire drills are expected today YOU ARE HERE In the event of a fire alarm: Exit the building the way that you came in Make your way directly to the fire assembly area (statue of Sir Joshua Reynolds in the courtyard) Wait at the assembly area until further instructions are received by a fire officer or the Facilities Manager Hurricane AGM Presentation

5 Chairman s Statement - Steven McTiernan Hurricane AGM 06 June 2018

6 Agenda 1 Chairman s Statement 2 CEO s Review 3 Q&A 4 Resolutions Hurricane AGM Presentation

7 CEO s Review - Dr Robert Trice Hurricane AGM 06 June 2018

8 2017 Highlights Note: See Annual Report 2017 for further details 8

9 2017 Highlights Subsurface Halifax discovery well Note: See Annual Report 2017 for further details 9

10 2017 Highlights GREATER WARWICK AREA Lancaster 523 mmstb 2P + 2C GREATER LANCASTER AREA Subsurface Halifax discovery well Lancaster Halifax Reserves and Resources (mmboe RPS Energy May/Dec 2017) ,235 Combined GLA: 1,758 mmboe 2 CPRs Lincoln Warwick Combined GWA: 1,539 mmboe 2.6 billion barrels 2P + 2C Whirlwind 205 2P Reserves 2C Contingent Resources Best Case Prospective Resources Note: See Annual Report 2017 for further details 10

11 Recoverable Volume (mmboe) Amount Raised ( m) 2017 Highlights AIM E&P Placing Ranking Largest Ever AIM E&P Placing Lancaster EPS Sanction $547 million capital raised UK FDP Approvals Final Investment Decision Culzean Tie-backs to Existing Infrastructure FDP approval Edradour / Glenlivet Crathes / Scolty Arundel Callater Utgard (Norway) Lancaster EPS - Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 Note: See Annual Report 2017 for further details; AIM E&P ranking Source: London Stock Exchange at Jun-18, all AIM new issues and follow-on placings for E&Ps > 10m over AIM s life; FDP Approval chart Source: OGA, Wood Mackenzie (recoverable volumes), accessed Jun- 18, database does not include follow-on consents such as Captain EOR 11

12 2017 Highlights Project Commencement Project documents signed Long lead items ordered Aoka Mizu arrived in Dubai Note: See Annual Report 2017 for further details 12

13 2017 Highlights Subsurface Lancaster EPS Sanction Project Commencement Halifax discovery well $547 million capital raised Project documents signed 2 CPRs Final Investment Decision Long lead items ordered 2.6 billion barrels 2P + 2C FDP approval Aoka Mizu arrived in Dubai Note: See Annual Report 2017 for further details 13

14 2018 YTD Highlights FPSO / Buoy FPSO upgrade & life extension progress Buoy trial fit, testing, and sailaway First Oil Wells / Subsea Delivery and installation of Xmas trees Mooring and SURF installation on track on Schedule for 1H Corporate Organisational growth Expanded Annual Report disclosures 2019 Note: See Annual Report 2017 and recent press releases for further details 14

15 Health, Safety and the Environment Hurricane adopts an integrated approach to Health, Safety, the Environment and Quality (HSE&Q) All Lancaster EPS Tier 1 contractors have signed up to HSE&Q commitment charter Zero LTIs in 2017 Zero LTIs 2018 year-to-date EPS Manhours YTD Over 1 million manhours year-to-date 350, , , , , ,000 50,000 Jan-18 Feb-18 Mar-18 Apr-18 Note: EPS manhours includes Hurricane staff, Tier 1 contractors and certain subcontractors; LTI = Lost Time Incident May-18 15

16 Operational Update Buoy Note: Photos subject to copyright and not to be reproduced elsewhere 16

17 Operational Update FPSO Note: Photos subject to copyright and not to be reproduced elsewhere 17

18 Operational Update Mooring/Wells/SURF Note: Photos subject to copyright and not to be reproduced elsewhere 18

19 Timeline Complete FEED 1 LLI Commitment (Trees and Controls) FEED 2 GeoTech and GeoPhys Surveys LLI Commitment (FPSO & SURF) FPSO Upgrade Yard Contract Award FPSO Aoka Mizu arrival in Upgrade Yard Boulder Relocation Re-enter & Complete Wells 6&7Z (Window) Delivery of Mooring System Mooring System Installation (Window) SURF Installation (Window) FPSO Ready for Sail Away FPSO Arrival in Field (Window) Buoy Hook-Up and Commissioning First Oil Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Current Status Complete Complete Complete Complete Complete Complete Aoka Mizu arrived in Dubai on 30 September Complete Operations have commenced with Paul B Loyd Jr rig Piles, chains and wires delivered; buoy en route Installation ongoing Delivery and expected installation on schedule Windows tightened Note: Indicative development timeframe (as originally proposed in Environmental Statement); Current status as at June

20 Observations on Monetisation Hurricane AGM 06 June

21 Daily Production Rate (bopd) Revenue generation outlook Base case EPS production outlook Cash flow sensitivities 25,000 Ramp-up to 85% operating efficiency over 6 months No decline forecasted within 6 year EPS period 2019 Cash flow from operations Flat Brent price 20,000 1 st Oil $50/bbl $60/bbl $70/bbl 85% 01-Jan $93m $136m $180m 15,000 65% 30-Mar $62m $92m $121m 30-Jun $18m $32m $47m 10,000 45% 17,000 bopd full year economics 5,000 Flat Brent price $50/bbl $60/bbl $70/bbl Sales 6.2 million barrels - 12 mths 24mths 36 mths 48 mths 60 mths 72 mths Revenue $283m $345m $407m Op. Cash Flow $159m $216m $272m Average Net Production Rate Production Rate Note: Based on company model using Hurricane base case profile (same as RPS Energy 2P profile for 6 years of EPS) with Hurricane base case ramp-up assumptions; 2019 cash flow from operations sensitivity is net operating cash flow generated during producing portion of the year; 17,000 bopd full year economics figures are from first full plateau year (with no workovers); revenue is net of marketing fee and assuming Lancaster crude discount to Brent; operating cash flow is prior to debt service, discretionary capex and funding of reserve accounts 21

22 - 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90, , , , , , , , , ,000 Pressure (psi) Reasons for Confidence 5 Hurricane wells on Lancaster Well # Drilled Drill stem test (DST) ESP flow rate Productivity index Both production wells have been tested World-class productivity index 205/21a ,800 stb/d 160 stb/d/psi 205/21a-7Z ,375 stb/d 147 stb/d/psi Very low drawdowns required 2,000 1,800 1,600 Bubble point pressure equates to 43,000 stb/d for a single well Wells are ~430m above OWC 1,400 1,200 1, EPS targeting just 12% of 2P + 2C Single well could produce 20,000 stb/d at drawdown of only 120psi Rate (stb/d) Note: Distance from wells to oil water contact (OWC) is based on Hurricane management base case OWC / high case OWC in RPS May-17 CPR, and depth of beginning of 6/7Z horizontal sections; IPR (Inflow Performance Relationship) plot is 3 rd party analysis (Schlumberger); ESP = Electrical Submersible Pump 22

23 Future Drilling GREATER WARWICK AREA GREATER LANCASTER AREA EPS Objectives Timing Location 1 2 Long term production data to enhance reservoir understanding and optimise planning for further development Commence development of the resources in a phased manner Will not risk funds before EPS first oil Organic cash flow expected to fund future wells Further Greater Lancaster Area appraisal drilling will benefit from EPS results additional lead time Appraisal wells may be tied back to the Aoka Mizu for long-term production testing Flow assurance may impact length of tie-backs Warwick exploration well could convert 935mmboe from prospective to contingent 3 Deliver an acceptable return EPS data will determine future Greater Lancaster Area targets Note: These considerations are for information only, future guidance on operations is subject to change. 23

24 Gas Disposal 1 2 Tie-in to WOSPS Tie-in to new pipeline 2 3 Gas reinjection 1 Lancaster 3 Note: These considerations are for information only, future guidance on operations is subject to change; Map Source: Wood Mackenzie 24

25 Summary 2 5

26 Agenda 1 Chairman s Statement 2 CEO s Review 3 Q&A 4 Resolutions Hurricane AGM Presentation

27 Q&A - Hurricane Board Hurricane AGM 06 June 2018

28 Agenda 1 Chairman s Statement 2 CEO s Review 3 Q&A 4 Resolutions Hurricane AGM Presentation

29 Resolutions Hurricane AGM 06 June 2018