Macquarie Explorers Conference

Transcription

1 Macquarie Explorers Conference Shareholders Preliminary Results Regional Presentation Meeting For the year ended 30 June September 2014 London, 12 January 2015

2 Disclaimer Important Notice Nothing in this presentation or in any accompanying management discussion of this presentation (the "Presentation") constitutes, nor is it intended to constitute: (i) an invitation or inducement to engage in any investment activity, whether in the United Kingdom or in any other jurisdiction; (ii) any recommendation or advice in respect of the ordinary shares (the "Shares") in Bowleven plc (the "Company"); or (iii) any offer for the sale, purchase or subscription of any Shares. The Shares are not registered under the US Securities Act of 1933 (as amended) (the "Securities Act") and may not be offered, sold or transferred except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with any other applicable state securities laws. The Presentation may include statements that are, or may be deemed to be "forward-looking statements". These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "anticipates", "projects", "expects", "intends", "may", "will", "seeks" or "should" or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. These forward-looking statements include all matters that are not historical facts. They include statements regarding the Company's intentions, beliefs or current expectations concerning, amongst other things, the results of operations, financial conditions, liquidity, prospects, growth and strategies of the Company and its direct and indirect subsidiaries (the Group ) and the industry in which the Group operates. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance. The Group s actual results of operations, financial conditions and liquidity, and the development of the industry in which the Group operates, may differ materially from those suggested by the forward-looking statements contained in the Presentation. In addition, even if the Group s results of operations, financial conditions and liquidity, and the development of the industry in which the Group operates, are consistent with the forward-looking statements contained in the Presentation, those results or developments may not be indicative of results or developments in subsequent periods. In light of those risks, uncertainties and assumptions, the events described in the forward-looking statements in the Presentation may not occur. Other than in accordance with the Company's obligations under the AIM Rules for Companies, the Company undertakes no obligation to update or revise publicly any forward-looking statement, whether as a result of new information, future events or otherwise. All written and oral forward-looking statements attributable to the Company or to persons acting on the Company's behalf are expressly qualified in their entirety by the cautionary statements referred to above and contained elsewhere in the Presentation. Bowleven, EurOil and the Bowleven logo are trade marks of Bowleven plc and copyright in the content of this document is owned by Bowleven plc. They should not be used without permission. 12 January 2015 Macquarie Explorers Conference 2

3 Company Overview Vision It is our vision to build an African focused exploration and production company which in time becomes renowned for its ability to consistently create and realise material shareholder value through exploration led organic growth and niche acquisitions. Strategy Focus on Africa Strategy focused on creating and realising value through material exploration success and development. Seek value adding partnerships and niche acquisitions as appropriate. Fostering strong external partnerships and in-country relationships. Targeted approach to technical, commercial and political risk. Resources to Reserves. 12 January 2015 Macquarie Explorers Conference 3

4 Asset Overview - Balanced Portfolio Early Stage Exploration Development Blocks 25, 28 & 29 Zambia Block 11B Kenya Bomono Cameroon Etinde Cameroon. 3 blocks covering Three ~16,250k blocks 3 covering blocks ~16,250km². covering ~16,250km² Application m² for further two blocks pending. Early stage exploration. 3 blocks covering ~16,250km² Block 11B onshore Kenya covering ~14,200km². New hydrocarbon province. FTG survey completed. 2D seismic activities commenced. Onshore extension of Douala Basin. Series of structural prospects. Two well exploration drilling programme planned. Exploitation Authorisation over MLHP-7. Gas sales agreement (GSA) negotiations well advanced. Farm-out to LUKOIL/NewAge. Two well appraisal drilling programme on Intra Isongo planned. Early Stage Exploration New PSC application over MLHP-5&6 Development submitted. 12 January 2015 Macquarie Explorers Conference 4

5 Etinde Farm-out Transaction Transaction Overview Farm-out of 40% interest (post government back in) in Etinde to LUKOIL and NewAge. Remaining condition to transaction completion is the gazetting of the signed Presidential decree. Consideration: ~$170 million cash at completion. $40 million (net) carry for two appraisal wells. $40 million staged deferred cash payment. Revised participating interests: Bowleven 20%, LUKOIL 30%, NewAge 30%, SNH 20%. Operatorship to transfer to NewAge. Key benefits of transaction: Strengthened balance sheet. Accelerated appraisal drilling programme. Value added partner with significant experience and expertise. 12 January 2015 Macquarie Explorers Conference 5

6 Etinde Development Exploitation Authorisation (EA) awarded July EA gives development and exploitation rights over block MLHP-7 for an initial period of 20 years. Hub and Spoke development concept: Oil, condensate and wet gas to onshore hub*. Liquids stripping and NGL extraction at hub. Liquids marketable internationally. IM field (Intra Isongo) to deliver first phase of liquids & gas. Initial dry gas sales to fertiliser plant. IM-5 well confirmed sufficient gas volumes to support fertiliser plant. Significant upside potential additional offtake solutions being considered including CLNG. Shape and timing of development will be influenced by new partner/operator. ** IM-5 Well Results Upper Isongo Intra Isongo Middle Isongo IM-5 Condensate-rich gas flowed on test. Combined max. flow rates: 60mmscfd & 7,819 bcpd (Total>17,800 boepd). Upper Isongo 32m (net) encountered; wet as prognosed pre-drill. Intra Isongo Log evaluated net pay of approximately 70m. Intra Isongo DST Tested >10,800 boepd from 29m net pay. (37mmscfd & 4,664 bcpd) Middle Isongo Log evaluated net pay of approximately 25m. Middle Isongo DST Tested >7,000 boepd from 14m net pay. (23mmscfd & 3,155 bcpd) *Offshore processing concept being contemplated subject to cost/benefit review. **Operator s estimates 12 January 2015 Macquarie Explorers Conference 6

7 Etinde Development Stage 1 - Fertiliser Sufficient gas volumes to support fertiliser plant. Dry gas to fertiliser plant: 70mmscfd. Gas sales agreement (GSA) negotiations well advanced (20 year supply). Initial liquids production: ~ 14k-16k boepd* (inc LPGs). Represents a committed total gas volume of approximately 500bcf and expected liquids production of approximately 100mmboe. First production integrated with fertiliser timetable. Gross development capex : Pre first production: estimated $650 million - $700 million (EEAA case). To be further refined during FEED. * Operator projections. Operator estimates (Class III & Class IV estimates). 12 January 2015 Macquarie Explorers Conference 7

8 Etinde Development Further Opportunity Indicative Supply Profile including CLNG Further drilling planned to prove up additional resources. Additional gas offtake solutions being considered. EEAA includes full field development concepts - LNG. Momentum building behind Cameroon LNG (CLNG), led by GDF Suez and SNH. Award of FEED anticipated Q Gas supply capacity allocation discussions commenced for supply of Etinde gas (subject to appraisal/development drilling). CLNG Illustrative pipeline route Expanded joint venture will work together to realise considerable resource and potential of Etinde acreage. 12 January 2015 Macquarie Explorers Conference 8

9 Intra Isongo Potential Material Upside Access through transaction to drill two appraisal wells. Drilling expected to commence H IM-5 IM-5 well has considerably de-risked the Isongo play. Seismic response correlates with thick, reservoir quality sands. A number of amplitude based prospects are defined at the same horizon as the Intra Isongo discovery. Further prospects also defined in the intervals immediately above and below Intra Isongo horizon - greater interval. IE-3 well tested gas condensate and oil from 4 intervals equivalent to the Intra Isongo interval. Gross Unrisked In-Place Prospect Volumes* WGIIP (bcf) P90 P50 P10 Mean Intra Isongo discovery horizon , Greater interval , TOTAL (bcf) 599 1,308 2,943 1,591 CIIP (mmbbl) P90 P50 P10 Mean Intra Isongo discovery horizon Intra Isongo Horizon Greater Interval Sand Greater interval TOTAL (mmbbl) Km Greater Interval Sand *Operator s estimates. Volumes are presented as gross figures. The WGIIP figures include NGLs, which comprise condensate and LPGs. Volumes have been derived on a probabilistic basis but totals have been arithmetically summed. Totalling anything other than mean is statistically incorrect and is provided for illustrative purposes only. Source: Operator 12 January 2015 Macquarie Explorers Conference 9

10 Intra Isongo Potential Intra Isongo Amplitude response indicates sandstone distribution. Depositional systems revealed, wide extent. Relationship with IE / ID field discoveries being examined. Hydrocarbon fluid samples at IM3 / IM5. 12 January 2015 Macquarie Explorers Conference 10

11 Bomono Operational Update Rig contract signed with Fortesa for two well exploration programme. Rig has been mobilised to Cameroon. Conductor driven, rig assembly underway with spud to follow. Vintage 2D Seeps Identification of Gas Sales Opportunities Bowleven 2D Acquisition Ideally located adjacent to Douala City. Actis acquisition of AES/Sonel brings new momentum to growth of the local power market. Talks initiated with potential power producers. Opportunity for rapid installation of gas-fired generators at the well sites, with cabling to local consumers. VOG: Gas and condensate production. Early phase liquids trucked to Limbe refinery. Source: Operator 12 January 2015 Macquarie Explorers Conference 11

12 Exploration Targets Oil Potential Focused on the deeper D&E sands. Zingana and Moambe targeting medium risk mbbl* STOIIP pools (P50-Mean range) in each sand. SW Bo-03 (yellow) gas in B & C sds Zingana-1 Moambe-1 NE Oil seep and borehole data encouraging for liquids; albeit lower risk for gas/condensate. Gas/Condensate Shallower B&C sands. Historic well data indicates high chance of success 1953 wells tested gas in B and C sands near Zingana location. Two wells targeting 5-40bcf* GIIP pools (P90-P50 range) in each sand, with associated condensate. If successful, subsequent appraisal to prove volume will be fast-tracked, potentially by scaled early production system (gas to power). Cretaceous Deeper, higher pressure targets will not be tested by the initial exploration programme. B Sand twt Structure Map Line No: BOM Potential for 2-3tcf (in place) but high pressure, high temperature. * Operator estimates. Zingana Prospect Moambe Prospect 12 January 2015 Macquarie Explorers Conference 12

13 Kenya Overview New hydrocarbon province. Multiple oil discoveries to the south (Lokichar Basin). High level of industry activity multi-well drilling campaigns ongoing and infrastructure planning underway (including pipeline pre-feed study) e.g. Tullow Oil, Africa Oil. South Sudan Ethiopia Block 11B Significant acreage ~14,200km 2 in highly prospective East African Rift system. Licence extended to 26 May Intersection of Tertiary and Cretaceous rift systems. Existing data suggests basins similar form to Lokichar Basin. Block-wide high density airborne gravity gradient survey (FTG) now complete. Multiple basins identified from FTG survey. 2D seismic activities commenced. Uganda Kenya Source: Bowleven 12 January 2015 Macquarie Explorers Conference 13

14 Kenya Block 11B FTG Results NE gravity low possible sub-basin to the South Omo Basin field work and interpreted FTG results has greatly increased the geological understanding of the area. Greatly assisted in the design of seismic programme. Terrain Regional Gravity FTG dataset 12 January 2015 Macquarie Explorers Conference 14

15 Zambia Overview Luangwa Valley Karoo basin total area ~42,000 km². Five blocks applied for: Three blocks awarded (25, 28 and 29) ~16,250km² and applications for two blocks pending (26 and 27). Previous exploration 1980 s (Placid) acquired 3,000km 2D seismic and drilled 2 wells (primary objectives were never reached). Thermally immature Coal measures are widely known around the basin margins. It is considered that more liquids rich, mature lacustrine source rocks could be present deeper into the basin. Four year exploration period. Minimum committed work programme estimated ~$500k. Coal Occurrences 1980 s exploration well 12 January 2015 Macquarie Explorers Conference 15

16 Funding Overview Current Portfolio Fully Funded Cash at end December 2014 ~$7 million, no debt. $30 million bridge facility available and undrawn pending farm-out completion (utilisation not anticipated). Consideration from LUKOIL/NewAge farm-out: ~$170 million cash at completion (including ~$5 million working capital adjustment). $40 million (net) carry for two appraisal wells. $40 million deferred cash payment. Potential for development funding at FID. Options include project debt, development bank finance and mezzanine finance. Fortesa farm-in to Bomono. Use of Transaction Proceeds Disciplined Capital Approach Use of Transaction Proceeds $170m at completion Proceeds (~$250m) Equity Etinde Placing Expenditure (~$110m) $40m carry - 2 appraisal wells $15m on completion of appraisal wells $25m at FID $40m - two appraisal wells First $140m share of Production Etinde development expenditure (likely 50% equity and 50% debt funding) Discussions ongoing regarding further Bomono farmdown. First Oil strategic partnership provides funding towards exploration activity in Kenya. Financing Flexibility (~$140m) Petrofac fee ($9m) Bomono exploration & appraisal Kenya phase 2? G&A 12 January 2015 Macquarie Explorers Conference 16

17 Conclusion Strengthened balance sheet post completion of Etinde farm-out. Balanced portfolio. Accelerated appraisal of the extensive Intra Isongo reservoir interval. Expanded joint venture will work together to realise considerable resource and potential of Etinde acreage. Exploration and appraisal activities continuing. Well-positioned to both fund our share of Etinde s ongoing appraisal and development programme and also to progress the potential of our exploration portfolio in Cameroon, Kenya and Zambia. 12 January 2015 Macquarie Explorers Conference 17

18 Principal Contact: Kerry Crawford Tel: Kevin Hart Tel: Bowleven Plc. The Cube 45 Leith Street Edinburgh EH1 3AT United Kingdom