Proactive Investors 18 September 2014

Transcription

1 Proactive Investors 18 September 2014 Sarah Sweeney

2 Disclaimer This presentation contains certain forward-looking statements that are subject to the usual risk factors and uncertainties associated with the oil and gas exploration and production business. Whilst Petroceltic believes the expectations reflected herein to be reasonable in light of the information available to them at this time, the actual outcome may be materially different owing to factors beyond the Group s control or within the Group s control where, for example, the Group decides on a change of plan or strategy. The Group undertakes no obligation to revise any such forward-looking statements to reflect any changes in the Group s expectations or any change in circumstances, events or the Group s plans and strategy. Accordingly no reliance may be placed on the figures contained in such forward looking statements. 1

3 Petroceltic corporate overview (AIM: PCI) Share in issue and market capitalisation Shares in Issue Million Market Cap 170p 590 $Million Enterprise Value 760 $Million EV/BOE 2.92 $/boe Proven and Probable Reserves 31 Dec 2013, working interest 1) Gas MMBOE Oil and Condensate 82.4 MMBO Total MMBOE Core development and production assets in Algeria, Egypt and Bulgaria High impact exploration in Kurdistan Region of Iraq, Romania, Egypt, Italy and Greece $100 million raised via share placing in May/June 2 Notes: 1) Reserves are Working interest at 31 December 2013, adjusted for second farmout

4 Producing and Development Assets Algeria, Egypt, Bulgaria 3

5 Sustainable long term production profile Mboepd, Working Interest basis Gas Liquids 2014 production guidance Mboepd, H actual >25 Mboepd Producing Reserve Life of >10 years as at 1/1/ Note: Based on proven and probable reserves in Algeria, Egypt and Bulgaria at 31 December 2013 and assumes no further exploration success

6 Algeria Overview- Ain Tsila World class development with many regional analogues 5

7 Ain Tsila- development timeline Groupement established FEED Tender FEED Awarded Gas Sales Agreement Signed Award EPC Drilling and ongoing facilities Infrastructure Liquids marketing Commissioning First gas 38.25%* operated working interest partners Sonatrach (43.375%*), Enel (18.375%) 2nd farm-out of % to Sonatrach complete $20m cash, $140m development carry two contingent payments ($10m each) Development Plan approved in December MMcfpd production plateau (14 years) Gross Reserves 2.1 Tcf gas and 175 MMbbls condensate and LPG Joint Operating Organisation established PCI with key appointments. FEED award signed in September- awarded to Chicago Bridge and Iron Fully termed Gas Sales Contract signed in September 6 * Following farmout to Sonatrach

8 US$ Algeria - Ain Tsila Value growth through execution Petroceltic has managed financial exposure to Ain Tsila through farmouts These transactions have clearly demonstrated growing asset value Gas Sales contract and 14 year plateau - predictable cash flow profile Progressive operational derisking through development drilling from 2015, first gas 2018 Bank facility milestones scheduled in advance of related drawdowns WoodMac NPV 10 at 1/1/2018 more than 2x current Petroceltic Market Capitalisation $1.5 billion gross pre-production capex (c.$570 million net to Petroceltic) capital phasing concentrated in 2015/16/ Petroceltic interest valuation* 0 Enel 2011 Sonatrach 2013 WoodMac 2014 (1) Funding the pre production costs Woodmac 2018 (2) 7 *Based on post farm-out interest of 38.25% (1) based on Wood Mackenzie NPV 10 valuation at 1/1/2014 (2) Based on Wood Mackenzie NPV 10 valuation at 1/1/2018

9 Wet Gas Rate (MMcfpd) Indicative upside production profile 800 Enhanced Plateau >700 mmscfd wet gas Upside Production Profile Initial Production Profile Plateau rate 355mmscfd Years From Production Start Potential for material uplift in long term field recovery based on field performance 8

10 US$ m Egypt - portfolio geared to long term growth Operated assets onshore Nile Delta (100% working interest) 15 development leases, 12 fields on production Two key assets with long term production South Idku, exploration concessions Low cost operating environment with established infrastructure EGPC receivable reduced by over 30% since June 2013 Growing long term exploration position during period of low industry competition 3 recent EGAS/EGPC awards Acreage increased by over 300% Gas price upside potential driving exploration strategy EGPC receivable 0 Apr-11 Jun-11 Dec-11 Jun-12 Dec-12 Jun-13 Dec-13 9

11 $/liter PETROCELTIC INTERNATIONAL PLC Egyptian Political and Economic Situation Political stability returning New constitution approved in January Presidential elections won by President El Sisi Government focus on stability, security and economy Parliamentary elections within three months Economic challenges remain to be addressed Direct foreign investment and tourism revenue low Energy supplies becoming critical due to reduced production and rising demand New Government progressively reducing fuel subsidies Petroceltic business largely unaffected by change Operations running smoothly with no disruption 30 June receivables reduced to $80 million from $118 million at June Egypt: July's Price Hikes for Oil Products Was Now 0.00 Gasoline 80 Gasoline 92 Gasoline 95 Diesel Food Ind Cement March 2010 Slide 26

12 Renewing the Egypt portfolio- South Idku - Back to the Future.. Licence ratified February Petroceltic 75% and operator, Edison 25% Replicating historically successful onshore Nile Delta exploration strategy Post 3D seismic acquisition, drilling increased Mansoura/SE Mansoura reserves by 700% South Idku is comparatively underexplored Sparse 2D seismic data coverage 3 exploration wells on block (compared to 35 on Mansoura/SE Mansoura with similar Miocene targets) 3D Mansoura Strategy to pursue plays and reservoir types already well understood by Petroceltic team 3D SE Mansoura Leverage existing operational skills and community liaison strategy 11

13 North Thekah Highly prospective new offshore acreage Offshore Nile Delta Large deepwater licence (3,750km2) Straddles the Nile Delta and Egyptian extension of the Levantine Basin Over 30 Tcf discovered in Israeli/Cypriot part of the Levantine Edison 50% (operator), Petroceltic 50% 3 year initial term, 3D seismic, no well obligation Multi-Tcf potential identified on existing leads- Petroceltic will consider farmout prior to any drilling Further regional applications also likely recent licencing round * WoodMac July 2014 ** Pre-drill estimate of 6tcf net to BG s 60% and 4tcf net to BP s 40% 12

14 El Qa a Plain- Underexplored oil prone onshore acreage Gulf of Suez Dana 37.5% operator, PCI 37.5%, Beach 25% Underexplored 1824 km 2 onshore block (with 2D seismic/2 wells drilled in target sub basin) Lower Cretaceous (Nubian) oil play in with a proven regional hydrocarbon system Two main prospects - combined unrisked mean prospective resources of circa 140 mmbo Four year first licence period - work commitment 450 km 2 3D seismic and one well Seismic planned Q2/3 2015, one well

15 Egypt is becoming a net gas importer.. Base domestic gas price is set at $2.76/mcf LNG production and consumption Approximately 30% of domestic gas production achieves enhanced prices to permit development (up to $5.80/mcf) Price incentives to date limited to deep water and marginal offshore developments Recent price enhancement offered for RWE onshore field EGAS s stated price objective for industry is $6.18/mcf Further upward pressure on prices LNG / gas imports become a reality 14

16 Cash generative Bulgaria production Galata Block (100% WI) located in shallow water (<100m) in the Western Black Sea Three producing fields, another scheduled Galata (field development hub - platform pipeline and onshore plant) Kavarna and Kaliakra (single well subsea tie-backs) Kavarna East development in 2015 Majority of gas sold to Bulgargaz (state utility). Average H price c.$8.50/mcf Competitive fiscal terms; 10% average Royalty and 10% Corporation Tax Reviewing prospect inventory for potential exploration drilling 15

17 Exploration portfolio Kurdistan, Romania, Italy, Greece Growth potential for the future scale of the business 16

18 Active exploration, appraisal and development programme * Egypt - Nile Delta WD 8 WO EAK 1 ST SOUTH DIKIRNIS WORK OVERS WK1 ST WK 10 SK 3 WD 15 HZ FACILITY INTEGRATION AND SAFETY UPGRADES Egypt - New licences Bulgaria EL QA A PLAIN SOUTH IDKU/NORTH THEKAH (CONT) KAVARNA EAST COMP Romania MURIDAVA-1 COBALCESCU (CONT) Algeria AIN TSILA DEVELOPMENT Kurdistan SHAKROK & SHIREEN DRILL & TEST PIRES Greece PATRIAKOS SEISMIC (CONT) Italy ELSA (CONT) CARPIGNANO SESIA (CONT) Seismic Exploration Well Development Well Field Development New Activity 17 *Preliminary indicative plan

19 Kurdistan Region of Iraq- High Impact campaign in progress Hess Operator, 64%, Petroceltic 16%, KRG 20% (carried) Situated adjacent to existing discoveries in northern Kurdistan Taq Taq, Bina Bawi, Shaikan, Atrush, Swara Tika, Mirawa Multiple structures s MMbbls potential in each structure First exploration well in each block (150 day wells) Shakrok-1 unsuccessful, written off Shireen well (on Dinarta block) spudded on 11 June operations likely to resume in early October 18

20 Kurdistan - Dinarta 3 Independent structures with >1.9 Bboe potential Shireen Anticline: Simple Fold Geometry Jurassic-Triassic Reservoirs Shireen-1 well spudded June way dip closed prospect Oil prone in Jurassic and Triassic seeps analysed Well cost US$110 million (incl tests) Shireen PMean 706MMBO - Jurassic & Triassic horizons Planned 2014 well on Pires prospect PMean 622 MMBO Analogues to regional discoveries Civils in progress Accelerated appraisal and early production plan in Shireen success case Oil-Filled Matrix in Upper Cretaceous outcrops in Chinara Anticline 19

21 Romania exploration- Shallow Water Potential Muridava (Ex27): Petroceltic 40%, Sterling 40%, Petromar 20% Est Cobalcescu (Ex28): Petroceltic 40% Beach 30%, Petromar 30% Mainly shallow water (jack-up) with multiple proven exploration plays Under-explored due to historic maritime boundary dispute Competitive fiscal terms: maximum 13.5% Royalty and 16% CT Gas market progressively liberalising Two wells drilled in 2013/14- without success 20

22 Italy - Key appraisal / development asset: Elsa field Petroceltic operated asset (55% WI) (1) discovered in 1992 Gross 2C contingent resource 95 MMbbls (2) 65 metre oil pay zone identified in Cretaceous dolomites, but not tested Key technical issues: fluid viscosity and reservoir deliverability EIA re-submitted July new Renzi Government supports renewal of E&P business Planned Elsa-2 well to establish productivity and fluid type Highly prospective regional acreage position provides multiple follow-up opportunities 21 (1) Post drilling Elsa-2 (2) AGR-TRACS CPR

23 Italy exploration: Po Valley, Carpignano Sesia Thrusted structure identified to west of producing 250MMbbls Trecate / Villafortuna field Triassic fractured carbonate targets - P50 prospective resources 230 MMbbls (1) Stakeholder consultation, permitting and well planning ongoing Extension of licence approved 2013 pending new well location Petroceltic 47.5%, Eni (Operator) 47.5%, Condotte 5% Petroceltic plan to farm-out to achieve full carry on first well Carpignano Sesia Prospect 230 MMboe Villafortuna field 250 MMboe 22 (1) De Golyer and Mc Naughton CPR 2012

24 23 Corporate activity and conclusions

25 Interim Results 2014 Revenue of $96.3m from production in Egypt ($61.2m) and Bulgaria ($34.9m) First half WI Production of 25.2Mboepd significantly ahead of guidance Revised 2014 full year guidance of mboepd Exploration write-off of $64.3m ($51m Kurdistan, $8m Romania, $4m Egypt) First half 2014 capex of $68m relating to Exploration $36m and Development $32m Net debt at 30 June of $169m EGPC receivable reduced to $79m Income Statement June 2014 $ m June 2013 $ m Revenue EBITDAX Gross profit Operating profit before exploration Operating Profit /(Loss) (39.9) 5.8 Loss before tax (48.5) (5.0) Loss for the period (57.4) (16.1) 24

26 PETROCELTIC INTERNATIONAL PLC Planned step up to Official List Proposed application for UK Standard Listing intention to apply for Premium listing at a later date secondary listing on the Irish Stock Exchange Simultaneously establish new holding company for the Group more efficient group tax and operating structure no change of control and no impact on listing process process subject to shareholder approval UK Standard Listing and Corporate Restructuring scheduled for Q publication of Prospectus and related documentation in October scheme of arrangement to effect corporate restructuring in Irish High Court March Slide 26

27 PETROCELTIC INTERNATIONAL PLC Well positioned for growth Balanced portfolio of exploration, development and production assets Algeria development project on track, experienced team, financing strategy in place Well positioned for long term Egypt growth via new acreage and partnerships, building on existing team, operating experience and technical understanding Kurdistan Region of Iraq - active drilling programme to target >1 billion barrels gross Onshore Italy making material progress towards potential 2015 drilling Active multi-play Romania programme in progress $100m raised via share placing in May/June New strategic shareholder with long term investment horizon 2 new directors appointed to the board Bank facility provides support for long term business strategy March Slide 26

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