Bridge Energy ASA. Corporate Presentation June 2013

Transcription

1 Bridge Energy ASA Corporate Presentation June 2013

2 Disclaimer This presentation and its appendices (together the Presentation ) have been prepared and delivered by Bridge Energy ASA ( Bridge Energy or the Company ). The Presentation and its contents are strictly confidential and may not be reproduced or redistributed, in whole or in part, to any other person than the intended recipient. The Presentation is prepared for discussion purposes only. The Presentation does not constitute, and should not be construed as, any offer or invitation or recommendation to buy or sell any of the securities issued by the Company and does and will not constitute or form or be part of any offering material. The Presentation contains information which has been sourced from third parties believed to be reliable, but without independent verification. The Presentation contains certain forward-looking statements relating to the business, financial performance and results of the relevant issuers and/or industries and markets. These statements may contain words as will, expects, anticipates, believes, estimates and words of similar import. Any forward-looking statements and other information contained in this Presentation, including assumptions, opinions and views cited from third party sources are solely opinions and forecasts which are subject to risks, uncertainties and other factors that may cause actual events to differ materially from any anticipated development. As such by the nature of any forward looking statement, relying on such statements involves risk. This Presentation has not been reviewed or registered with any public authority, stock exchange or regulated market place, hereunder the Oslo Stock Exchange and the UK Financial Services Authority. The shares of the Company have not and will not be registered under the U.S. Securities Act or any state securities laws, and may not be offered or sold within the United States, or to the account or benefit of U.S. Persons. No part of this document may be copied or duplicated in any form or by any means or redistributed without the written consent of the Company. The distribution of this Presentation is in certain jurisdictions is restricted by law, including (but not limited to) USA, Canada, Japan, Australia and Hong Kong. Persons into whose possession this Presentation may come are required to inform themselves about and to comply with all applicable laws and regulations in force in any jurisdiction in or from which it invests or receives or possesses this Presentation and must obtain any consent, approval or permission required under the laws and regulations in force in such jurisdiction. By attending or receiving this Presentation you acknowledge that you will be solely responsible for your own assessment of the information herein, the market and the market position of the Company and the relevant securities and that you will conduct your own analysis and be solely responsible for forming your own view of the potential future performance of any relevant investments. Neither Bridge Energy nor any subsidiary undertakings or any such person s affiliates makes any undertaking, representation or warranty (express or implied) as to the accuracy or completeness of the information (whether written or oral and whether or not included in this Presentation) concerning the matters described herein. Neither Bridge Energy nor any subsidiary undertakings or any such person s affiliates accepts any liability whatsoever as to any errors, omissions or misstatements contained herein and, accordingly, neither Bridge Energy nor any subsidiary undertakings or any such person s affiliates, officers, employees, accepts any liability whatsoever arising directly or indirectly from the use of this Presentation or the information included herein. The Presentation speaks and reflects prevailing conditions and views as of. It may be subject to corrections and change at any time without notice. Neither Bridge Energy nor any subsidiary undertakings or any such person s affiliates intend to, and neither the delivery of this Presentation or any further discussions with any recipient shall, under any circumstances, not create any implication that the Company assumes any obligation to, update or correct the information herein. Nor is this Presentation an implication that there has been no change in the affairs of the Company since such date. This Presentation is subject to Norwegian law and the exclusive jurisdiction of the Norwegian courts. 2

3 Table of contents Corporate overview Producing assets Asha discovery & PL457 options Development potential Exploration programme Summary

4 Introduction Bridge Energy ASA ( Bridge ) is a Norwegian and UK listed full cycle oil & gas company Exploration & Production company holding production assets in the UKCS and exploration assets in both NCS and UKCS 4 producing assets, which currently contribute c.1,100 boepd Victoria field has been on production since 2008 Duart interest (acquired December 2011) Boa interest (acquired October 2012) Cormorant East interest commenced production January 2013 Production projected to exceed 10,000 boepd within 5 years from existing portfolio Bridge has 37 licences (8 as operator) and has drilled 17 E&A wells, including 10 discoveries High impact exploration portfolio underpinned by existing production, along with a strong inventory of undeveloped discoveries 4

5 Bridge a self-sustaining E&P business Listed Oslo 21 May 2010 (OSE: BRIDGE) Listed London AIM 27 September 2012 (AIM: BRDG.L) Analyst Coverage Analyst Pareto Thomas Aarrestad First Securities Teodor Sveen Nilsen DNB Markets Helge-Andre Martinesen ABG Sundal Collier Anders Holte Carnegie ASA Martin Vold Artic Securities Christian Yggeseth Sparebank Markets Kristoffer Dahlberg Fondsfinans ASA Morten Lindbaek Cenkos Securities Ashley Kelty Edison Research Ian McClelland RS Platou Alex Gheorge Fearnley Securities AS Jonas Gamre Share structure 4.8% 1.0% 8.5% % 28.1% Float AIMCo Lime Rock Storebrand KLP Mgt Share Price *11.45 NOK 1.26 Shares in issue 63,429,169 Consensus TP Market cap 20 NOK 726 MNOK 80m *5 June

6 2012- a transformational year Production 2P reserves increase by 22% & value increase to NPV m Acquisition of Boa Interest Oct 2012 RRR 221% Exploration 4 wells drilled with 3 discoveries 23mmboe of 2C resource added through drill-bit 37mmboe 2C in total- 140% increase Additional targets de-risked & further licence awards in 2012 Development upside Asha pre-unitisation agreement Good progress made on Duart and Boa Maturing development concepts within Vulcan area Liquidity & access to capital AIM listing Sep 2012 Transfer to Oslo Børs Oct 2012 Strong underlying institutional support 6

7 Keeping it simple - clear paths to growth Production - growth through existing reserves base and acquisition Boa stock sold in Jan 2013, realising USD$9.2mm, equivalent to 55%+ of asset purchase price Active in the A&D market to identify additional targets meeting Bridge criteria Exploration added resources, value and licences PL457 Asha discovery, 13.4mmboe net to Bridge. Pre-unitisation with Ivar Aasen JV ongoing. PL554 Garantiana discovery, 10 mmboe net. Further drilling expected in Significant inventory of targets in both the NCS and UKCS, with 3-4 exploration wells targeted per year Developments- significant upside within existing asset base Good progress made on Duart South discovery and Duart East prospect with project recommendation potentially in 2013 budget cycle. Infill drilling opportunities currently identified in Boa field with drilling likely 2015 Maturing development concepts for the Vulcan area, with discussions ongoing with potential partners. Outcome of discussions and timings aligned with Vulcan South partner divestment Grow liquidity and access to capital 2013 exploration drilling programme is fully funded Forecast to accumulate cash through

8 Table of contents Corporate overview Producing assets Asha discovery & PL457 options Development potential Exploration programme Summary

9 Overview of UK producing assets Victoria gas field operated 75% interest First gas in October P reserves of 2.1 mmboe NPV10 26m Cormorant East Boa Duart 50% interest (Talisman operator) First oil in 2007 Net 2p reserves of 0.75 mmbbl NPV m Duart Boa 1.55% interest (Marathon operator) First oil in 2008 Net 2p reserves of 0.42 mmbbl NPV m Victoria Cormorant East- 4% interest (TAQA operator) First oil January 2013 Currently in depletion phase Upside potential within wider area Total value within producing assets million (c 9.5NOK/106p share) Note: Reserve and contingent resources are based on reserve report 31 st December

10 Acquisition - releasing value, increasing cash Price Stock Net Price LOF Cash Net Cash Consistent same investment criteria low opex high margin low decommissioning costs Leverage balance sheet- tax loss pool provides value driver Tax loss pool also optimises cash flow (lowers net opex) to fund portfolio growth Funded through current cash and an expansion of existing RBL facility Combination of tax shelter and strong debt capacity provides very attractive return Further upside potential not just base cash flow 10

11 Table of contents Corporate overview Producing assets Asha discovery & PL457 options Development potential Exploration programme Summary

12 PL457 area Asha discovery Mukta Asha discovery: mmboe (gross within PL457) Aglaja Ivar Aasen Asha Amol (Preliminary) Tellus (E. Grieg) Southern Utsira High area Note: Reserve and contingent and prospective resources are based on reserve report 31st December

13 Key Points of Pre-unitisation agreement Pre-unitisation Agreement Sets out principles for working towards an initial unitisation split Allows development plan to be co-ordinated Defined timeline Initial split to be agreed by 30 June 2014 If no split has been agreed by then, the Ministry of Petroleum and Energy ( MPE ) will determine a split on behalf of the licence owners Unitisation An initial split will be agreed, which sets the share of capex and initial allocation of production between the two licence groups Likely to be subject to subsequent re-determination 13

14 Key points of Pre-unitisation agreement Ivar Aasen PDO Plan for development and Operation : development plan Submitted to MPE by Det Norske in December 2012 Expected to be approved by the Norwegian Parliament imminently Investment decision by PL457 Asha group PL457 group only exposed to Ivar Aasen costs once initial split has been agreed and the PL457 group has taken a positive decision to participate in the Ivar Aasen PDO Co-ordination subsurface work ongoing including well & seismic analysis Optimisation of PDO will be considered taking account of increased resources 14

15 Development timescale for Ivar Aasen The discovery of Asha in PL457 will add volumes to the Ivar Aasen development, reduce the investments per barrel and improve project economics Ivar Aasen Progress plan 2012 PDO submitted 1H13 Main contracts awarded 2H13 Start building steel jacket 1H14 Start building topside 1H14 Finalise unitisation 2H14 Start building living quarter 1H15 Installation of jacket offshore 2H15 Drilling production wells 1H16 Installing platform topside 2H16 Operational center functional» First oil From Det norske: Presentation for the first quarter

16 Bridge Asha interest valuable property Option remains to invest and participate in the development Material development with production expected within 36 months Once unitisation agreed and PDO approved Asha will support incremental debt capacity Opportunities exist to monetise the asset Options to swap for production assets - increasing cash flow Ability to sell for cash and efficiently re-invest capital in other projects Indicative valuation of Asha AGR Tracs reserve report confirms 13 mmboe contingent resource (net) Market benchmarks indicate value range of USD$5-$8 per boe RWE sold Edvard Grieg interest in 2012 for estimated $8.5/bbl Indicative value for Bridge Asha interest $ million ( NOK/share) 16

17 Table of contents Corporate overview Producing assets Asha discovery & PL457 options Development potential Exploration programme Summary

18 Duart area - further development and prospectivity Duart South viable development 2C 2.23mmbbl (gross) Investment $50M (gross) Value $100M (gross) Duart East very significant prospect Scapa sand target STOIIP mmbbls (gross) Value c. $200M (gross) Development options being reviewed, with study work scheduled to be completed H Drilling anticipated 2014 Note: Reserve and contingent resources are based on Reserve Report 31 st December 2012 Both prospects offer near-term potential 18

19 Boa: Infill targets are well defined... 19

20 Vulcan satellites 48/20b-6 Vulcan NNW RWE Discovered BCF GIIP Recent 26 th Rd Award 48/25a Vulcan NW Bridge Energy 100%, Operator BCF GIIP - 2C 131 BCF (22 mmboe) Appraised (3 rd well) 2008 Horizontal multi-frac development 48/19c Clipper South RWE 180 BCF recoverable Horizontal multi-frac development Phase 1 currently on-line 49/21-8a Vulcan South Bridge Energy 66.6%, Operator BCF GIIP - 2C 112 BCF (19 mmboe gross) - 2C 75 BCF (12.3 mmboe net) Discovered by 49/21-8, /21-10a Vulcan East Bridge Energy 100%, Operator BCF GIIP - 2P 73 BCF (12.1 mmboe) Discovered by 49/21-10a, 2007 Horizontal multi-frac development 20

21 GBP million Vulcan satellites economics Key valuation metrics* Gross probable resource: 525 BSCF GIIP 319 BSCF Recoverable 1000 Gas price: 50p/th 500 Gross revenues: 1,800mm 0 Revenue Dev. Ex LOF Opex Abex Net Cash Before Tax Tax Net Cash After Tax Net Cash before tax: 1,000mm -500 NPV10 (before tax): 500mm NPV10 (after tax) 250mm *The above forecasts are based on certain management estimates and assumptions believed to be reasonable at the date of this presentation. 21

22 Base production growth to 2017 (excl. acquisitions) Production boepd *The above forecasts are based on certain management estimates and assumptions believed to be reasonable at the date of this presentation Note: Reserve and contingent resources are based on Reserve Report 31 st December

23 Table of contents Corporate overview Producing assets Asha discovery & PL457 options Development potential Exploration programme Summary

24 2012 exploration success PL554 Garantiana, Oil discovery discovery 20% share Net resources added: 8.6mmboe* Net cost: USD 4.5 million N - North Sea PL457 Asha, Oil discovery 20% share Net resources added: 13.4mmboe* Net cost: USD 3.5 million (prelim.) P1915 Vulcan South, licence award 66% share Net resources added: 12.3 mmboe* Cormorant East- Oil discovery 4% share Net 2C resource added: 1.3mmboe* Nominal exploration cost *Reserve and contingent resources are based on reserve report dated 31 st December

25 Cormorant East Field Well spud 24th August Oil discovery announced 22nd October Well put on production early January 2013 and was developed under the field name Cormorant East, 85 days after discovery. Cormorant East Net 2C resource of 1.3mmboe added in 2012 Ongoing work to further define the size of the field and further development options N Cormorant Bridge has 4% interest 25

26 PL554 Garantiana discovery Garantiana Maximum remaining potential in Garantiana and Updip prospects (Bridge 2013) Oil discovery in Cook Formation Stabilized flow rate of 4,300 bbl/day, through 28/64 choke. No OWC encountered in main well bore OWC encountered in sidetrack well Recoverable gross volumes estimated to mmbbl Resource numbers are based on CPR 31st December

27 PL554 discovery de-risks area potential Unrisked net resources (post-drill) Garantiana North mmboe POS (%) Brent % Cook % Statfjord % Lunde % Garantiana* Brent % Cook 8.6 discovery Statfjord 11.3 Lunde 18.3 Updip Brent % Cook % Statfjord % Lunde % Angulata Brent % Cook % Statfjord % Lunde % Reserve and contingent and prospective resources are based on CPR 31st December

28 Exploration drilling programme Note well timings are subject to change due to changes in operator programmes 28

29 Exploration targets Planned wells Mid Norway PL511 Mjøsa (N), Ongoing PL554 Garantiana area (N), 2014 UK Northern North Sea North Sea P1763 Aragon (UK), 2014 PL457 Amol (N), 2013 PL494 Hercules (N), 2014 P2082 Skerryvore (UK), 2015 UK Central North Sea PL337 Relinquised February 9 29

30 PL511 Mjøsa drilling commenced Mjøsa Linnorm Noatun Njord Bridge benefits from significant cost carry Target level middle Jurassic Net unrisked potential 14 mmboe POS 14% Reserve and contingent and prospective resources are based on CPR 31st December

31 PL457 area Amol prospect Q Mukta pre-drill values, unrisked million boe net to Bridge Aglaja Ivar Aasen Amol Asha 6 Amol Southern Utsira High area (NPD FactMaps) Tellus Asha volumes: mmboe gross recov. in PL457 Amol volumes (mean from CPR): 30 mmboe gross rec. in PL457 Reserve and contingent and prospective resources are based on CPR 31st December

32 PL494 Hercules APA 2008 Round licence operated by Det norske Target prospect at Upper Jurassic level Net unrisked potential 94 mmboe POS 20% Reserve and contingent and prospective resources are based on CPR 31st December

33 P1763 Aragon S N Bridge benefits from cost carry Target prospect at Heather level Net unrisked potential 9 mmboe POS 21% Reserve and contingent and prospective resources are based on CPR 31st December 2012

34 P2082 Skerryvore Seismic amplitude Tor level Dual target prospect at Mey and Tor level Net unrisked potential ~16.5 mmboe POS 32% Reserve and contingent and prospective resources are based on CPR 31st December

35 exploration drilling targets PL511 Mjøsa PL457 Amol PL494 Hercules P1763 Aragon PL2082 Skerryvore PL554 Garantiana Area PL554 Garantiana Area Net risked cumulative MMBOE Net unrisked MMBOE Note: Reserve and contingent resources are based on Reserve Report 31 st December 2012 Note well timings are subject to change due to changes in operator programmes 35

36 Table of contents Corporate overview Producing assets Asha discovery & PL457 options Development potential Exploration programme Summary

37 Summary 2013 exploration drilling programme started in April with the PL511 Mjøsa well spud We continue to build on the significant value created in exploration wells planned H2 2013, with c. 40+ mmboe of prospective risked resources being tested over the next 24-months Significant development potential within existing asset base, with ability to bring additional production on-stream in the near-term Core activity funded from existing cash flow Continue to pursue transactional opportunities 37