Company Presentation November 2017

Transcription

1 Company Presentation November 2017

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3 Investment Highlights 1 Focus, scale and resources to unlock Argentina oil & gas potential: Independent Board, strong management and proven operating capability 2 Argentina is a prolific hydrocarbon region with world class shale in Vaca Muerta and an improved political and investment climate 3 Over 480,000 working interest acres in the Vaca Muerta shale 4 Profitable asset base and growing production supporting a transformational growth strategy 1

4 A Leading Independent Argentinian E&P Company Listing Information 1 Noroeste Basin London Stock Exchange AIM:PGR Buenos Aires Stock Exchange BCBA:PGR Issued Share Capital 2.5 bn Operational Statistics Neuquén Basin Vaca Muerta Shale Cuyo Basin 2P Reserves Average Daily Production (H1 2017) Realised Average Oil Price (H1 2017) 61.7 mmboe 11,537 boepd $51.95 /bbl Netbacks (H1 2017) $18.59 /bbl Scale in Argentina Working Interest Acres 6,430,000 Golfo San Jorge Basin Vaca Muerta Shale Potential, Working Interest Acres Contingent Resources (2C + 2P) >480, mmboe Austral Basin Prospective Resources (3C + 3P) 1,794 mmboe 2

5 Governance Strong and Independent Board 1 Led by Sir Michael Rake as Chairman with four additional independent Non- Executive Directors Executive Directors Intention to comply with full UK Corporate Governance Guidelines in due course Anuj Sharma Chief Executive Officer Non-Executive Directors Philip Wolfe Chief Financial Officer Sir Michael Rake Non- Executive Chairman David Jackson NED (Independent) Javier Alvarez NED (Independent) John Bentley NED (Independent) Garrett Soden NED (Independent) Nicolas Mallo Huergo NED Matthieu Milandri NED Guillaume Vermersch NED 3

6 Experienced Management and Operating Team 1 Argentina focused deep long-standing relationships developed over decades Proven record of success track record of growing reserves, production and cash flows Experienced team over 200 years of combined experience operating oil & gas assets Javier Vallesi Chief Operating Officer 22 Years experience Anuj Sharma Chief Executive Officer ~20 Years experience Philip Wolfe Chief Financial Officer ~27 Years experience Juan Carlos Esteban Special Operations Erico Stahlschmidt Senior Manager; Subsurface Jorge Gonzalez Senior Manager; Drilling & Completion Pablo Varetto Head of Finance and Controller 30 Years experience 37 Years experience 26 Years experience ~25 Years experience Pablo Prado Zalazar Production, Maintenance and Facilities Manager Greg Easley Senior Manager: Reservoir & Engineering Nicolas Garcia Senior Completion Engineer Pablo Arias Manager; Business Development 22 Years experience 10 Years experience 14 Years experience >12 Years experience 4

7 Argentine 10yr Govt Bond Spread to 10yr Treasury Bond (bps) Argentina an Improving Investment Climate 2 New Government elected in December 2015 has focused on market reforms and communicating strategy to encourage investment into the country and in particular to the energy sector Mid term legislative elections results on 22 October 2017 have strengthened the position of Cambiemos/ the Government and allow them to continue with investor friendly reforms Improved political climate reflected in reduced bond spreads and strong stock market performance Argentine 10 year Bond Spread 1100 Merval Index Sep-14 Mar-15 Oct-15 Apr-16 Nov-16 May Jan 13 Jul 13 Feb 14 Aug 14 Mar 15 Sep 15 Apr 16 Nov 16 May 17 5

8 Argentina An Established Oil and Gas Country 2 Established oil and gas producing region that has become a net importer Established oil producing region with over 1 million boepd of production Argentine Production & Consumption of Hydrocarbons 600 Extensive oil & gas infrastructure in place 3,171 km of oil and 17,884 km of gas pipelines 10 oil refineries, 639,000 bpd total capacity Substantial Vaca Muerta infrastructure '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 Exports Imports Hydrocarbon Consumption Well established services industry Key Majors and NOC Operators & Investors Active presence of all major oil field service companies including Halliburton, Baker Hughes, and Schlumberger Sources: BP Statistical Review 2016, Argentina Investment Agency, Ministry of Energy and Mining and CAMMESA. 6

9 Vaca Muerta A World Class Shale Play 2 Vaca Muerta is currently the only oil producing shale outside of North America Current production in excess of 65,000 boepd Recoverable Shale Gas Resources (Tcf) Recoverable Shale Oil Resources (BnBbl) 1, USA Russia China Arg Libya Sources: EIA, Chevron, and AAPG. 7

10 Vaca Muerta A World Class Shale Play 2 Strong analogues with producing US shale plays including Eagle Ford and Wolfcamp Higher total oil content Higher pressure providing higher levels of recovery Greater thickness than the majority of the US shale plays Strong Analogues with Producing US Shale Plays Play Vaca Muerta Wolfcamp Eagle Ford Mississippi Lime Haynesville Marcellus Fluids Oil & Liquid Rich Gas Oil Oil & Liquid Rich Gas Oil Gas Gas Area (million acres) TOC (%) Reservoir Pressure (kpsi) Thickness (ft) ~1,000 ~900 ~130 ~400 ~250 ~200 Sources: EIA, Chevron, and AAPG. 8

11 Recently Announced Investments into Vaca Muerta 2 Buyer Seller Announced Value (US$MM) US$/acre Commentary July 2013 $1,240 $12,900 Continuation of previous joint operations Initial outlays of US$1.24Bn September 2013 $120 $11,000 Initial 16 well programme 50:50 joint venture with YPF operating April 2014 $140 $2,800 Four-year 50:50 exploration project drill and analyse 7 vertical and 2 horizontal wells December 2014 $550 N/A March 2015 $475 $10,000 February 2017 $300 $6,950 April 2017 $500 N/A April 2017 $390 $6,900 Two investments of US$250MM and US$300MM from the partners Includes both drilling and processing facilities Petronas contributing US$475MM of US$550MM over 3 annual phases 30 wells planned in 3 year pilot 50:50 JV (YPF operator) Pilot programme agreed in the block located northeast of Loma Campana 50:50 JV (Shell operator) MOU for development of the area in which partners will invest US$300MM in the AP East block and US$200MM in AP West Agreement includes unitisation of blocks and redistribution of P.I.s MOU to develop field with the drilling of 26 wells and construction of new infrastructure 49:51 JV (YPF operator) Source: Based on company announcement, publicly available information, and other company disclosures. 9

12 Vaca Muerta Attracting Investment from Majors 2 Sources: EIA, Chevron, and AAPG. 10

13 Enhancing Operating Efficiency in Vaca Muerta 2 Case Study: Loma Campana Well Productivity Ahead Of Key US Analogues And Improving Rapidly Boe of Estimated Ultimate Recovery (EUR) / Foot of lateral length Cumulative Production from Unconventional Wells % % % 70 % wells 2014 wells 2015 wells 2015 wells 2016 wells 2016 wells Loma Campana 2015 Loma Campana 2016 Bone Spring Eagle Ford Wolfcamp Bakken Whilst Improved Drilling Performance Is Driving Costs Down Drilling Days vs Depth (Loma Campana ) Drilling and Completion Costs of YPF Wells MUSD Fractures +15M USD 47% 8M USD Source: YPF public document

14 480,000 net acres with exposure to Vaca Muerta 3 Phoenix Vaca Muerta Acreage Overview Rio Atuel La Paloma Vega Grande Mina Baku Los Buitres Cerro Mollar Norte Cerro del Alquitran Cerro Mollar Oeste Puesto Rojas La Brea Malargue Cajon de los Caballos EX El Manzano Cajon de los Caballos PROD Neuquen Chachahuen Corralera Key Acreages Puesto Rojas Cerro Mollar Successful unconventional drilling in early D seismic tied to well data to support successful drilling undertaken W.D. Von Gonten has provided estimates of 1 bn Boe of resources Corralera and Mata Mora Pilot wells drilled by operator YPF found productive Vaca Muerta source rocks and are highly prospective Negotiating with government and other stakeholders to convert non-operated positions into operated Net WI acreage position Oil Window Condensate Window Gas Window Mata Mora Laguna el Loro 164k 47k 27k1k 72k 26k 36k 24k 15k 77k 8MZK: _1.wor Vega Grande El Manzano La Brea Corralera Mata Mora Malargue Rio Atuel Puesto Rojas Cerro Mollar Oeste Cerro Mollar Norte 12

15 Puesto Rojas Cerro Mollar Overview 3 Up to ~1 Billion Barrels of Prospective Resources Over ~47,000 Acres in the Northernmost Vaca Muerta Acreage to Date The successful drilling of the CP-1010 well in 2016 Puesto Rojas Wells relative to Other Vaca Muerta Wells Four further unconventional wells drilled and completed in Puesto Rojas in 2017 Shallower and lower cost wells versus Neuquen province Significant opportunity to deploy capital to advance the unconventional resources for horizontal development In addition, the successful Cerro del Medio well in the Tight Agrio suggests applying new completion technology could unlock significant conventional resources Neuquén Loma Campana YPF-Chevron ( ) Horizontal Vertical Oil Window Condensate Window Gas Window Basin Mendoza 95 km 90 km CP-1010 Puesto Rojas Thickness 219 m (Mercuria 2016) LVx1 El Manzano Oeste Thickness 115 m (YPF 2014) NLaFi.x1 Payún Oeste (YPF 2012) 13 (8MZK) _1

16 Cumulative Production (bbl) Puesto Rojas Well Analysis 3 CP-1010 Vertical Well Performance May Potentially Be Uplifted by 3-5 Times as a Horizontal Well CP-1010 Vertical Well Vaca Muerta Cumulative Production Vertical vs. Horizontal Well Type Curve Comparison Neuquén Basin Wells in the Oil & Condensates Window 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5, Days Online Cum Oil Cum Boe 370 MBoe Type Well Profile 14

17 4 Leading Argentine Independent E&P Company W.I. 2P Oil Reserves Noroeste Basin 10% 20% 44.7 MMBbl 70% Cuyo Basin Austral Basin Neuquen Basin Cuyo Basin Neuquén Basin W.I. 2P Gas Reserves 1% 0% W.I. 2016A Production 23% 0% 11.3 MBoe/d 36% 41% Austral Basin Neuquen Basin Cuyo Basin Other Net Acreage 332k 529k 101k 794k Bcf San Jorge Gulf Basin 99% Austral Basin Neuquen Basin Cuyo Basin Austral Basin 8MZK: 8MZK: _1.wor _1.wor 15 4,590k Austral Basin Cuyo Basin Neuquen Basin Noroeste Basin San Jorge Basin

18 Austral Neuquén Cuyo Key Conventional Assets Overview 4 Basin W.I. 2P Reserves Basin 2016A Production Tupungato Tupungato 100% W.I., and operator 53% 8.8 MMBoe 47% 58% 2,557 Boepd 42% TUP Other Cuyo TUP Other Cuyo Puesto Rojas Cerro Mollar Norte Puesto Rojas - Cerro Mollar 100% W.I., and operator 27% 11% Cerro Mollar Oes te 31.4 MMBoe 53% 33% 4,615 Boepd 56% 20% El Manzano Chachahuen Chachahuen 20% W.I., YPF is the operator PR-CM Chachahuen Other Neuquen PR-CM Chachahuen Other Neuquen Corralera Moy Aike Block 1 9% 19% Tupungato Oceano (CA-9 M) Santa Cruz Sur Block Group 70 % W.I., Roch S.A. operator 21.5 MMboe 91% 4,073 Boepd 81% Chorrillos Block 1 SCS Other Austral SCS Other Austral 16

19 Financial Overview 4 Production (Argentina) Pro-forma Revenue Bbl/day 12,000 8,848 9,000 9,950 11,284 11,300 10,577 $200m $150m $100m $50m $154m $172m $184m $95m $82m 6,000 $0m H H ,000 Pro-forma EBITDA H H 2017 Netbacks (US$/Boe) (1) $60m $40m $20m $31m $52m $45m $32m $26m $46.85 ($7.29) ($0.41) ($19.19) $0m H H 2017 Financial Position ($1.37) $18.59 Strong financial backing from Mercuria Group US$160 MM debt facility in place Net debt of US$132.4 million, as of 30 September 2017 Combined Revenues Royalties Treatment, Storage & Transp. Lease Operating Turnover Tax Combined Netback Available cash and undrawn facilities of US$45 million Additional debt capacity in the local bank market (1) Argentina operations only. Excluding InterOil, and non-oil and gas activity. (2) Adjusted EBITDA (continuing) excluding one-time charges (US$2.4MM). 17

20 Investment Highlights 1 Focus, scale and resources to unlock Argentina oil & gas potential: Independent Board, strong management and proven operating capability 2 Argentina is a prolific hydrocarbon region with world class shale in Vaca Muerta and an improved political and investment climate 3 Over 480,000 working interest acres in the Vaca Muerta shale 4 Profitable asset base and growing production supporting a transformational growth strategy 18

21 Appendices

22 Mata Mora & Corralera Well Analysis Map Target Assets Production by Study Area Mata Mora Corralera Others Recent Drilling Activity in the Area Has Shown Above Average Results in Mata Mora Note: Analysis performed using publicly available data provided by the Secretary of Energy of Argentina. 19

23 Puesto Rojas Stratigraphy Potential Upside with Planned Seismic Acquisitions, and Robust Horizontal Unconventional Drilling Programme Overview of Puesto Rojas Geologic Setting Through the successful vertical test and additional petrophysical work, the company has been able to demonstrate the presence of the stacked Vaca Muerta play with six different horizons for potential development To assist in its development, the company is planning to acquire additional 3D seismic data in 2018 The company is engaged in the drilling of vertical wells which allows it to acquire the data needed for future horizontal development while at the same time providing significant economic benefits Once sufficient core and other technical data is acquired, the company plans to start its horizontal unconventional drilling programme which will have a state of the art multiple transverse fracture completion resistivity gamma ray SALT Agrio Superior Avile Agrio Inferior Passey Chachao RHOB VM1 VM2 VM3 VM4 VM5 VM6 Tordillo Conventional Unconventional 20

24 Puesto Rojas Cross-Section Analysis Cross-Section Demonstrates the Correlatability and Thickness of Vaca Muerta in the Area CP-1010 CP-1010 Block Acreage Puesto Rojas 46,950 Cerro Mollar Oeste 26,934 Corro Mollar Norte 1,236 Total Acreage 75,120 Geologic characterisation of the CP-1010 well extends to other areas across the Puesto Rojas block The Vaca Muerta has an interval range from approximately 200 to 400 m in thickness across the concession area The Vaca Muerta in the concession area ranges from a depth of 1,600 to 2,600 m The play is thermally matured and been proven to be the hydrocarbon source for shallower historical conventional plays The Lower Vaca Muerta (VM5/VM6) have very high TOC, as much as 6.5%, resulting in high quality reservoir properties The Upper Vaca Muerta (VM1-4) have similar TOC and pressure gradient as the Wolfcamp play in the USA Multiple wells have penetrated and logged petrophysical properties across the formation 21

25 Puesto Rojas Seismic Petrophysics 3D-Seismic in the Block and Petrophysical Data from Deeper Wells Reveal Significant Contingent and Prospective Resources NW TOP TORDILLO TOP VM SE 3D-Seismic data available across the northern half of the concession Utilised by W.D. Von Gonten (WDVG) to help identify the prospective areas and apply proper risking Both the Top of the VM and the Base of the VM (Top of Tordillo) can be well imaged Contingent Resources are assigned in areas where well penetrations exist and relatively undisturbed on the 3D- Seismic data Prospective Resources are assigned to areas where 3D- Seismic data not available Recent CP-1010 modern petrophysical data indicates the high quality of the VM reservoir properties WDVG analysis indicates substantial OOIP in the VM The Lower VM (VM5/6) is estimated to have 49 to 93 MMBbl/section The Upper VM (VM1-4) is estimated to have another 78 to 178 MMBbl/section Potential for multi-zone stacked play development WDVG estimated volumetric recoverable resources Contingent Resources (P50) of 36 MMBbl in 4 areas totaling ~6,400 acres Prospective Resources (P50) of 394 MMBbl in 6 areas totaling ~33,700 acres CP-1010 Petrophysical Analysis by WDVG 22