Investor Presentation. Sami Zouari, CFO 12 March 2015

Transcription

1 Investor Presentation Sami Zouari, CFO 12 March 2015

2 overview Shaikan commercial production and sales pending projects outlook

3 A leading Kurdistan independent E&P company Public company, moved to Standard Segment of Official List in March 2014 One of the largest acreage holders in Kurdistan, 1,632 km 2 across four contiguous blocks Total investment in Kurdistan of over USD 800 million All 2P reserves and majority of contingent resources within GKP s operated assets Shaikan and Sheikh Adi Five discoveries since 2009 with four declared commercial Shaikan Field Development Plan ( FDP ) approved by the KRG s Ministry of Natural Resources ( MNR ) in June 2013 Net 2P reserves of 163 mmbbls and net contingent resources of 518 mmbbls from GKP s first independent reserve assessment In December 2014, production and sales reached 40 kbopd (gross) from two Shaikan production facilities Company expects production to stabilise at 40 kbopd (gross) in 2015 and then increase to 70 kbopd and 100 kbopd once a decision on further investment has been made Shaikan crude oil export deliveries to the Turkish coast by truck continued uninterrupted from January 2014 until February 2015 A payment cycle is currently being established for Shaikan crude oil sales with payments received in December 2014 and February 2015 (1) GKP holding subject to third party and KRG back-in rights (2) Texas Keystone Inc. (TKI) holds its interest in trust for GKP, pending transfer of its interest to GKP (3) Inclusive of TKI s holding increases to 54.4% Key assets Blocks WI Diluted Operator Partner Shaikan (1) 75% 51% (3) GKP MOL (20%), TKI (5%) (2) Sheikh Adi 80% 80% GKP KRG (20%) Ber Bahr 40% 40% Genel Genel (40%), KRG (20%) Akri-Bijeel (1) 20% 12.8% MOL MOL (80%) 2

4 Management team Simon Murray Non-Executive Chairman Joined the Company as Independent Non-Executive Chairman and Senior Independent Director in July 2013 Over 40 years of international business experience and a strong network of contacts globally and across the Far East, built up over four decades. Specific Oil & Gas experience includes positions within Essar Energy, Hutchinson Whampoa and Glencore International John Gerstenlauer Chief Executive Officer Joined the Company as Chief Operating Officer in October 2008 and was appointed Chief Executive Officer in July 2014 Started his oil and gas career with Shell in 1978 Significant international experience with Pecten, Canadian Occidental Yemen, UMC Petroleum and Wintershall Sami Zouari Chief Financial Officer Joined the Company in January 2015 following careers in both the oil & gas industry and investment banking with particular focus on the Energy and Commodities sectors in the Middle East and North Africa. Previous roles: Regional Head of Corporate & Investment Banking for North Africa, Iraq and Oman at BNP Paribas; Total EP Libya Holds a BA in Economics from Columbia University (New York, NY), and a Masters from Harvard University (Cambridge, MA). Tony Peart Legal and Commercial Director Joined the Company in Has 34 years of legal, commercial and management experience in the oil and gas industry Previous positions with African Arabian Petroleum, Petrokazakhstan, Bula Resources, MMS Petroleum, Lasmo, Ultramar Exploration and Veba Oil and Gas Mary Hood Deputy Chief Financial Officer Joined the Company in 2011 as Financial Controller and was appointed Interim Chief Financial Officer in June 2014, before assuming the role of Deputy CFO in January 2015 Qualified as a Chartered Accountant with Deloitte and is also a Chartered Company Secretary Holds a Ph.D. and MA obtained from the University of Cambridge John Stafford Vice President Operations Joined the Company in early 2009 as Manager of Geology & Geophysics and was appointed VP operations in May 2014 Has over 30 years of experience in roles within the oil and gas industry Experience includes particular exposure to field development, reserve certification and reporting and equity redetermination Umur Eminkahyagil Country Manager, Kurdistan Joined the Company in March 2012 as Development and Production Manager and was subsequently appointed Kurdistan Country Manager Spent 11 years holding various reservoir engineering positions with Shell prior to joining Expro in 2002 and subsequently becoming Vice President for MB Petroleum Services 3

5 Proven drilling track record 4 Shaikan-1 Bijell-1 Shaikan-3 Shaikan-2 Shaikan-4 Shaikan-5 Sheikh Adi-2 Bakrman-1 Ber Bahr-1 Discovery Aug-09 Discovery Mar-10 Appraisal Jan-11 Appraisal Mar-11 Appraisal Dec-11 Appraisal Dec-11 Discovery Nov-12 Discovery Feb-13 Discovery May-13 Spud Apr-09 Spud Dec-09 Spud Sep-10 Spud Dec-10 Spud May-11 Spud Oct-11 Spud May-12 Spud May-12 Spud Oct-11 Flow rate 18,038bopd Flow rate 3,488bopd Flow rate 9,805bopd Flow rate 16,786bopd Flow rate 14,205bopd Flow rate 4,450bopd Flow rate 4,345bopd Flow rate 2,616bopd Flow rate 2,100bopd

6 mmboe Reserves and resources summary Reserves and resources Net, diluted WI to GKP STOIIP/GIIP GKP diluted Oil (mmbbls) WI Gas (bcf) mmboe (1) Shaikan 54.4% (2) 5, ,103 Sheikh Adi 80.0% 1,805-1,805 Ber Bahr 40.0% Bijell 12.8% Bakrman 12.8% 1-1 Total 7, ,218 2P reserves Shaikan 54.4% (2) C resources Shaikan 54.4% (2) Sheikh Adi 80.0% Ber Bahr 40.0% Bijell 12.8% Bakrman 12.8% Total Total 2P + 2C Total 3P + 3C 1, ,469 1,500 1, , Shaikan Sheikh Adi Ber Bahr Bijell Total 3P + 3C 2P reserves 2C resources 3P reserves 3C resources 12,506 mmbbls of gross hydrocarbons in place Gross 2P + 2C of 1,219 mmbbls 3P + 3C unrisked valuation Implied recovery factor for 2P and 2C approximately 12%, with scope for considerable improvement Shaikan 2P reserves of 163 mmbbls (net) relates to 26 production well Phase 1 development plan Phase 1 focuses on a limited number of wells only. The majority of these wells will target only three of the Jurassic intervals During Phase 1 there will be limited development of the Cretaceous and Triassic, with the objective being to gauge reservoir response before further development of these intervals Note: Reserves and resources as at 1 January 2014 (1) 6 bcf of gas = 1 mmboe (2) Includes 5% interest (undiluted) held by TKI in trust for GKP Source: February 2014 ERC Equipoise CPR 5

7 Company strategy Ramp-up commercial oil production from Shaikan Become a cash generating business and maintain financial flexibility Reinvestment of cash flows Increase reserves and production through further exploration and appraisal across the portfolio Monetisation proceeds Exit non-core assets/operations Transitioning towards becoming a major Kurdistan oil producer 6

8 overview Shaikan commercial production and sales pending projects outlook

9 barrel/day barrel/day Shaikan commercial production since July 2013 PF-1 PF-2 Shaikan 1 Well Shaikan 3 Well Shaikan 4 Well Shaikan 7 and 8 Wells Shaikan 2 Well Shaikan 5 Well Shaikan 10 Well Shaikan 11 Well /04/14 08/05/14 22/05/14 05/06/14 19/06/14 03/07/14 17/07/14 31/07/14 14/08/14 28/08/14 11/09/14 25/09/14 09/10/14 23/10/14 06/11/14 20/11/14 04/12/14 18/12/14 8

10 40,000 ibopd and ibeyond 40,000 bopd reached in December 2014 Total commercial production from Shaikan is nearly 9 mln barrels Two production facilities PF-1 and PF-2 and 8 production wells Shaikan-11, an additional producer is currently being completed Focus on ensuring a stable daily production rate of 40,000 bopd (gross) in 2015 Debottlenecking work on PF-1 and PF-2 is expected to increase current production capacity beyond 40,000 bopd in 2015 Working with the MNR to establish the best route for the Shaikan crude to export market Trucked deliveries to the Turkish coast under improved commercial terms and pipeline access through injection at Fyshkhabour Looking forward to the FDP Phase 1 target Shaikan Central Processing Facility (CPF) will allow to achieve at least 70,000 bopd of production months after commitment to invest The commitment will be made after a stable payment cycle for Shaikan export crude oil sales has been established 9

11 Current Export Route Shaikan 10

12 Potential export routes Possible injection point Possible twinned Heavy Oil Line 11

13 getting Shaikan into the pipeline 12

14 overview Shaikan commercial production and sales pending projects outlook

15 Priorities versus pending projects Priorities Maintain stable production and sales of 40,000 bopd and beyond through debottlenecking Finalize a pipeline access solution for Shaikan Establish a steady flow of revenues before making decision on further investment Pending projects Drilling of a Shaikan exploration well into the deep Triassic and the Permian Side-track and re-test of Shaikan-6 Investment in Shaikan CPF and its associated development drilling and infrastructure Review of the Shaikan FDP to include Cretacious, Triassic and potentially Permian developments Completion of the appraisal of the Sheikh Adi discovery and decision on early development 14

16 Shaikan: Phase 1 (CPR 2P) Wells 15 Shaikan Phase 1 is focused on the first 26 development wells targeting 299MMstb of 2P reserves Flowline Source: GKP

17 Shaikan: Full field development: IbeyOnd phase 1 16 Shaikan Full Field Development envisages approximately 109 wells targeting 1,001MMstb of 2P + 2C reserves and contingent resources Further reserves are fully expected in time Full field development well Flowline Well locations are approximate Source: GKP

18 overview Shaikan commercial production and sales pending projects outlook

19 Provisional Capex schedule 18 (US$m net to GKP) 2015 firm 2015 Contingent 2016 contingent Comments Shaikan Shaikan Drilling of an additional well to tie into PF-2 PF 1 Change orders and debottlenecking PF 2 Change orders and debottlenecking Ongoing development studies and FEED Maximising capacity & sustaining plant operation Maximising capacity & sustaining plant operation Continuing subsurface analysis and engineering design FEED relating to pipeline spur First stage of Shaikan spur to export pipeline Pipeline spur Requirement for blending facility tbd. CPF construction and associated wells Includes acid gas injection Sheikh Adi Additional test on SA-3 and appraisal report/fdp preparation Ber Bahr * Continuing subsurface analysis and drilling of BB-2 Akri Bijeel * ** ** ** ** Capex budget under review Total capex NB: Contingent costs are indicative only, further work currently being undertaken to firm-up cost estimates * GKP non-operated; capex within operator control

20 Funding development 19 Source 1H 2014 gross FY 2014(E) gross 1H 2014 net FY 2014(E) net Notes Unrecognised revenues $44m $128m $35m $102m Value depends on pricing assumptions used. Assumed $23/bbl Shaikan crude discount to Brent and $22/bbl transportation costs throughout 2014 Further clarity required on price achieved and exact amounts lifted at port in addition to payment schedule Shaikan Government option past costs $66m $84m $53m $67m Amounts subject to year end adjustments Shaikan Third party option past costs $95m $105m $76m $84m Amounts subject to year end adjustments. Past costs due should the Third party option be exercised by the government or a third party Total $205m $317m $164m $253m All amounts subject to audit Cash balance of $95.3 million at 25 th February 2015, following receipt of $26 million payment Continuing to discuss regular payment cycle with the Kurdistan Regional Government Further investment to increase production to 70 kbopd and then 100 kbopd dependent on agreed payment plan

21 Outlook Maintain and improved Shaikan production capacity at and beyond 40,000 bopd Establish a regular payment cycle for past and future Shaikan crude oil export sales to generate steady revenues Manage expenditure in a responsible manner, continuing to review and control capital commitments Once a steady flow of revenues has been established, make decisions on investment in an additional production facility (CPF) and associated development drilling and infrastructure to increase production to 70k bopd and further to 100k bopd in line with Shaikan FDP Complete exiting the non-core Akri-Bijeel Block Complete appraisal of the Sheikh Adi discovery, submit the appraisal report and make a decision regarding early production and development 20

22 Strong stakeholder relationships Stakeholder relationships Over 300 employees and contractors in the Kurdistan Region of Iraq 93% of employees are Kurdish nationals, receiving regular training in the region and abroad Approximately 30% of expenditure represents business done with local vendors Health, safety, security and environment HSSE a key focus area integral to day-to-day operations with robust safety processes and procedures, overseen by a Board-level HSSE committee and corporate HSE manager Corporate social responsibility Long term CSR plan in place Strong relationships with local community through involvement in infrastructure, education and humanitarian relief programs Environmental improvement programs are in place, including waste management, bio-remediation, evaporation and de-watering systems Humanitarian aid relief Delivery and distribution of humanitarian aid provisions to support the relief effort of the Kurdistan Region, now host to a large number internally displaced persons seeking refuge 21

23 Thank you 22

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25 Investor Presentation Sami Zouari, CFO 12 March 2015