Fastnet Oil & Gas Plc Corporate Presentation. January 2015

Transcription

1 Fastnet Oil & Gas Plc Corporate Presentation January 2015

2 Disclaimer This document is confidential and is being supplied to you solely for your information and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or published in whole or in part, for any purpose. In particular, neither this document nor any copy of it (or any part of it) may be sent to or taken into the United States, Canada, Australia, Republic of South Africa or Japan (or any of their respective territories or possessions, or to any resident thereof or any other corporation, partnership or other such entity created or organised under the law thereof), nor may it be distributed to or for the account or on behalf of any US person (within the meaning of regulation S under the US Securities Act of 1933, as amended). The distribution of this presentation in other jurisdictions may also be restricted by law and persons into whose possession this presentation comes (or a copy hereof) should inform themselves about, and observe, any such restriction. Any failure to comply with these restrictions may constitute a violation of the laws of any such other jurisdiction. This document does not constitute or form any part of any offer or invitation or other solicitation or recommendation to purchase any securities and contains information designed only to provide a broad overview for discussion purposes. As such, all information and research material provided herein is subject to change and this document does not purport to provide a complete description of the investment opportunity. All expressions of opinion are subject to change without notice and do not constitute advice and should not be relied upon. Fastnet Oil & Gas plc (the Company ) does not undertake any obligation to update or revise the information in or contents of this document. Recipients of this document who may consider acquiring shares in the Company are reminded that any such acquisition should not be made on the basis of the information contained in this document. This document is being distributed in the UK only to, and is directed only at persons who are: (i) investment professionals as defined in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) FPO 2005 ( the Promotion Order ); (ii) are persons of a kind described in Article 49(2) of the Promotion Order; (iii) are persons to whom this document may otherwise lawfully be issued or passed on and/or (iv) persons outside the United Kingdom (in accordance with any applicable legal requirements) (all such persons together being referred to as Relevant Persons ). Any person who is not a Relevant Person should not act or rely on this presentation or any of its contents and any investment or investment activity to which it relates will only be available to Relevant Persons. Any person who is unsure of their position should seek independent advice. This communication is exempt from the financial promotion restriction in section 21 of the Financial Services and Markets Act 2000 ( FSMA ) on the basis that it is only directed at and being sent to the categories of investor described above. This communication has not been approved by a person authorised by the Financial Services Authority under FSMA. This document is being distributed in Ireland only to and is directed only at persons who are qualified investors within the meaning of the Prospectus (Directive 2003/71/EC) Regulations 2005 of Ireland. Neither the Company, nor its employees, advisers or representatives nor any other person makes any guarantee, representation, undertaking or warranty, express or implied as to the accuracy, completeness, correctness or fairness of the information and opinions contained in this document (or as to the reasonableness of any assumptions on which any of the same is based or the use of any of the same), nor does the Company nor its employees, advisers or representatives nor any other person accept any responsibility or liability whatsoever for any loss howsoever arising from any use of this document or its contents or otherwise arising in connection therewith. The information set out herein may be subject to updating, completion, revision, verification and amendment and such information may change materially. If you rely on this communication to make an investment you may be exposed to a significant risk of losing all of your investment. This communication does not constitute either advice or a recommendation regarding any securities. Any person who is in any doubt about the subject matter of this communication should consult a duly authorised person specialising in advising on such investments. This communication includes forward-looking statements. These forward-looking statements include all matters that are not historical facts, statements regarding the Company's intentions, beliefs or current expectations concerning, among other things, the Company's results of operations, financial condition, prospects, growth, strategies, and the industry in which the Company operates. By their nature, forward-looking statements involve risks and uncertainties. You are cautioned that forward-looking statements are not guarantees of future performance and that the Company's actual results of operations, financial condition and the development of the industry in which the Company operates may differ materially from those made in or suggested by the forward-looking statements contained in this communication. Past performance is not a guide to future performance. 2

3 Company Overview Irish Assets Company Overview Moroccan Assets Outlook Moroccan Assets Irish Assets Outlook

4 OVERVIEW Overview and Company Funding Current Portfolio Focus: Offshore Ireland and Offshore Morocco Cash balance USD 18 mm at 30 November 2014 Carol Law appointed as CEO in December 2014 Running Costs General and Administration - ongoing review of spending and staff changes forecasting < USD 2.3mm p.a. in 2015 All current licence phase commitments have all been met fully funded for discretionary spending going forward 2014 Highlight - FA-1 well reached TD May 14, under budget. Numerous oil and gas shows encountered in well. Full prognosed section not penetrated due to salt occurring shallower than predicted. Well proved evidence of active petroleum system on the block Technical work continues to enhance value Foum Assaka - integration of FA-1 well data, trade for other operators well data, rework interpretation Celtic Sea working regional linkage to Flemish Pass, detailed petroleum systems work to reduce risk and high-grade portfolio Continually enhance shareholder value through Farm downs to recover past costs and fund future activity Evaluation of new opportunities for strategic fit Focused review of potential acquisition candidates 4

5 OVERVIEW Exploration Asset Overview Strategic focus on frontier acreage with excellent fiscal terms in proven petroleum systems Average Commercial Discovery Size in MMBoe by Type of Hydrocarbon Province Mature 95 Standard 283 Frontier Note: Information from September 2012 Bernstein Research Report Licence Name Region Area Fastnet Interest Gross Net Partner Operator Foum Assaka Offshore Morocco 6,478 km % 9.375% Kosmos, BP, SK Kosmos Mizzen Basin Offshore Ireland 787 km 2 100% 100% n/a Fastnet Mizzen East Offshore Ireland 1,155 km 2 100% 100% n/a Fastnet Deep Kinsale Offshore Ireland 285 km 2 60% 60% PETRONAS Fastnet Shanagarry Offshore Ireland 881 km % 82.35% Adriatic Oil, Carob, Petro Celtex Fastnet Molly Malone Offshore Ireland 648km 2 100% 100% n/a Fastnet Block 49/13 Offshore Ireland 272 km 2 85% 85% Carob ltd, Petro Celtex Fastnet Total Area 10,506 km 2 5

6 OVERVIEW Business Model Health Check ACQUIRE ACQUIRE 10,506 sq. km. under licence and exclusive options Continually reviewing and seeking out new niche opportunities Opportunistic M&A to leverage a strong cash balance in a distressed environment ANALYSE ANALYSE 1,910 sq. km. of 3D seismic acquired in Ireland Up to 5,000 sq. km. of 3D seismic acquired/reprocessed offshore Morocco Fully integrate FA-1 well data into ongoing prospect generation FARM DOWN FARM DOWN EXPLORE EXPLORE MONETISE MONETISE Foum Assaka farmed out to SK Innovation in 2014 resulted in a carry in up to 2 wells plus back costs Total cost to Fastnet from licence acquisition to completion of the FA-1 well was USD 2.75m Celtic Sea technical work continues to enhance value / reduce risk for potential farminees FA-1 first well tested the high risk, deepwater, acreage in the portfolio De-risked petroleum system oil shows encountered, sand presence confirmed but thickness/quality remains issue Celtic Sea 3D / Interpretation has identified and de-risked very large oil and gas prospects FA-1 significantly de-risked petroleum system on the block, well data being fully integrated towards further exploration on the License. Farm down Celtic Sea portfolio; seek opportunity for synergy with other Celtic Sea Operators 6

7 THE TEAM Experienced Board & Senior Management Carol Law, Chief Executive Officer Former Exploration Manager, Anadarko East Africa Responsible for the play finding Prosperidade gas complex in Rovuma Area 1, offshore Mozambique Also member of teams responsible for discoveries in Ghana (Jubilee), Brazil (multiple Campos Basin discoveries) 30 years Experience in oil and gas industry 100 TCF + Carol led the Anadarko team that discovered over 100 TCF of natural gas in the Area 1 Block, Offshore Mozambique $2.64 billion Sale price of a 10% stake in Anadarko s Area 1 Block, Offshore Mozambique Cathal Friel, Non-Executive Chairman Managing Director and one of the founders of Raglan Capital in 2007 Former founding partner and Director of Merrion Capital MBA from University of Ulster 25+ years Managerial Corporate Finance experience 100 million One of the founding directors of Merrion Capital, where he was part of the small team that built the business and sold it for c. 100m in 2006 $2.5 billion Value of successful corporate transactions on which Cathal has advised Michael Edelson, Non-Executive Director Non-executive Chairman of Sterling Green Group plc since he founded the Company. He has been a member of the board of Manchester United Football Club since 1982 Angel investor, venture capitalist and philanthropist 40+ years Experience as a Director of several AIM listed PLCs 5p to 22 Founder of ASOS, the global online fashion and beauty retailer Value Creation Originated 20-plus AIM and PLUS listed vehicles, delivering significant returns to shareholders Michael Nolan, Non-Executive Director Former Founder and Group Finance Director of Cove Energy PLC Currently CFO of Discover Exploration and Non-executive director of Rathdowney Resources plc and Orogen Gold plc Fellow of the Chartered Accountants Ireland 18+ years Experience in resource exploration sector +1900% Share price increase between the Cove Energy IPO in June 2009 and its sale in Aug 2012 $1.9 billion Cove Energy was sold to PTTEP in Aug 2012 after a competitive auction process Company plans to add new director in 2015

8 OVERVIEW Changing Times - New Ideas: Potential Acquisition Strategy Opportunity AIM E&P Sector down 40% Since September 1, 2014 Many E&P Companies are under funded for commitments going forward Capital constrained Market place Low Oil Price = Low Valuations = Opportunity Fastnet Strategy Seek assets with core value and upside potential Leverage Board s experience / expertise Enhance Shareholder Value 8

9 Company Overview Irish Assets Company Overview Moroccan Assets Outlook Moroccan Assets Irish Assets Outlook

10 IRELAND Celtic Sea Offshore Portfolio of Opportunities in highly prospective basin capable of delivering significant near-term production Large Structures = Major reserve potential Access to Gas production facility at largest Irish producing gas field at Kinsale Head Proven oil and gas petroleum systems Large prospects with wellunderstood analogues Underexplored, Excellent Fiscal Terms Politically Stable Shallow water prospects: easier to monetise than deepwater opportunities: especially attractive in current commodity environment Modern 3D seismic surveys Mizzen 1,400km 2 - Kinsale 510km 2 Tectonics link to Flemish Pass Statoil 2013 discovery - potentially 600 MBO recoverable and growing DEEP KINSALE MOLLY MALONE MIZZEN & Mizzen East SHANAGARRY BLOCK 49/13 AREA 285 km km km km km 2 WATER DEPTH c. 100 m c. 100 m c. 100 m c. 100 m c. 100 m FASTNET INTEREST 60% 100% 100% 82.35% 85% 10

11 IRELAND Celtic Sea Offshore The Jeanne D Arc (JDB) and Flemish Pass (FPB) basins and their Lower Cretaceous to Jurassic Petroleum Systems link with the Celtic Sea and Mizzen Basins Offshore Ireland. The East Orphan Basin (EOB) is the conjugate pair of the Porcupine Basin. Eastern Canada Fields and Discoveries - Flemish Pass Basin Bay Du Nord (2013) Mizzen mmbbls mmbls - Jeanne D Arc Basin Hibernia 884 mmbbls TCF mmbbls NGL Terra Nova 406 mmbbls +14 mmbbls NGL BCF Hebron 325 mmbbls Ireland - Canada Geologically Linked Basins Pre-Atlantic Opening Map (Lowe et al 2011)) Shows Canadian and Irish Conjugate Basins Note: Jeanne D Arc and Flemish Pass basins are paired with the Celtic Sea. Eastern Canada Fields and Discoveries (Statoil Website Nov 2013) 11

12 IRELAND Celtic Sea Offshore Why Mizzen? Celtic Sea Frontier Basin Conjugate Margin Equivalent is Flemish Pass/Jeanne D Arc Late Jurassic/Early Cretaceous Proven Petroleum System Good Thick Reservoir Development (Based on Proximity to Fastnet High) Potentially less compartmentalisation compared to Barryroe Potential for Mature Purbeck (56/12-1) and Lower Jurassic (47/29-1) Source Rocks Discovered Light Non-waxy Oil (Lias Source) Exists Immediately to South in Fastnet Basin 3D Seismic Indicates Potential Gas DHI s conforming to structure de-risks migration & charge 3D Seismic Confirms Potential for Material Structural/Stratigraphic Traps Running Room & Diverse Geological Plays Attractive commercial terms for potential farminee for 2016 multi-well drilling programme Risked economics are attractive based on realistic farmout terms widespread industry interest 13 companies (mostly majors) carried out data review in 2014, number of interested parties prior to commodity price collapse. 12

13 IRELAND Mizzen - Multiple Plays and Trapping Configurations West East Fault Crestal Carbonate Play SB Fan Delta Progrades UC UC Tertiary Stratigraphic Wedge Play SB SB UC UC Top Chalk Chalk UC Base Chalk UC Null Point Intra-Formational Seal Bright amplitudes Aptian UC Hauterivian Intra-Formational Seal UC Purbeck Sst Lower Cretaceous Basement/Trias/Lower Jurassic Deep Sand Play Source? Basement & Triassic Play UC Local Source? BCU? W Jurassic & Triassic E 13

14 IRELAND Mizzen: Structure / Sand / Proven Hydrocarbons Top Basal Wealden Sands Depth Map 56/12-1 Depth Feet Low Contours 100ft 14

15 IRELAND Mizzen 3D Seismic Defines Large Amplitude Anomaly 91.9 km 2 Over Prospect A TCF (P50) to 2 TCF (P10) Recoverable Gas RMS Amplitude Extraction, TDW 40 mins 100ms Inline 728 Basis for Maximum closure at Primary Prospect A High amplitudes over crest 15 Inline 728

16 IRELAND Mizzen Proven Reservoir and HC Charge on flanks of large Structure Top Basal Wealden Sands 6650 ft Basal Wealden Sand Oil Shows Throughout Gross 460 ft Net 127 ft N/G 28% Average PHIE 16% PHIE up to 20%. Average Oil Saturations 20% Upper Purbeck Sand Top Purbeck 7110 ft Gross 1,352 ft Net 278 ft N/G 21% Average PHIE 15% Average Oil Saturations 26% o Shows Net Reservoir Flag Calculated Hydrocarbons 56/12-1 Composite Log and Conventional Petrophysical Results Basal Wealden Section 460 ft thick 16 Circa 2x gross (and net) thickness as equivalent main reservoir (interval at Barryroe)

17 IRELAND Mizzen East Mizzen Blocks Offer Potential for World Class Field Sizes Jeanne D Arc Basin Oil and Gas Fields showing Rotated Overlay of Fastnet s Celtic Sea Mizzen and Mizzen East Licence Option Areas (1,950 km 2 ) for Scale 884 MMBO 325 MMBO 406 MMBO 274 MMBO RESOURCES Hibernia 884 MMBbls Oil TCF MMBBLS NGL Terra Nova 406 MMBbls Oil BCF + 14 MMBBLS NGL Hebron 325 MMBbls Oil 17

18 IRELAND Deep Kinsale - Large Untested Closure Below Shallow Producing Gas Field Exclusive Farmin Option (the Option ) restricted to below 4,000 feet subsea North South East 500 sq. km. 3D seismic was acquired by 31 December 2013 The Option must be exercised before 31 March 2015 Northern Bounding Fault Base Chalk Kinsale Field 1.7 TCF Gas Southern Bounding Fault Farmin Well to be commenced before 31 December 2016 Approx. Licence Limit (4000ft) Deep Kinsale Primary Prospect A Primary geological objectives are the Purbecko-Wealden reservoirs present in Barryroe Farmin Well to be drilled to a Provisional Depth of 8,000 feet subsea Prospect E Middle Wealden MFS Reservoir Prone Mounding in Upper Purbeck 48/25-1 Discovery Fastnet to earn 60% equity by paying 100% of the costs of one well, including testing Upper Purbeck Sands Source North Potential reservoir bearing packages thicken into active Late Jurassic to Early Cretaceous Faults Upper Jurassic SE Upper-Middle Jurassic 49/9-2 Helvick Oil & Gas Play Deep Liassic Source? 18

19 IRELAND Deep Kinsale P50 Closures Basal Wealden Sands Nutech Petrophysics Prospect A P50 151mmbls / P10 339mmbls Recoverable High Additional potential closures Primary Prospect A Basal Wealden 46 sq. km. Prospect B Lower Wealden 46.7 sq. km. Logged Live Oil 48/ feet net oil pay 19

20 IRELAND Deep Kinsale P50 Closures Upper Purbeck Sands NuTech Petrophysics Prospect A P50 273mmbls / P10 630mmbls Recoverable High Primary Prospect A Upper Purbeck 46.2 sq. km. Logged Live Oil 48/ feet net oil pay 20

21 IRELAND Celtic Sea Offshore Running Room Shanagarry Gas Discovered on Block Close proximity to Kinsale facility Numerous discoveries surrounding Block Definite Interest in Farmout Process 49 /13 Heavy Oil recovered in well 49/13-2 Close proximity to Kinsale facility Potential activity on adjacent block, 49/9-2 Helvick Oil Field (Middle/Basal Upper Jurassic) High API oil - tested at 10,000 bopd Molly Malone Oil and gas shows in close proximity Potentially very large structure indicated on limited 2D data Proven Sherwood sandstone reservoir Main structure has mid-case prospective oil resource potential of 125 million barrels Existing Seismic Coverage 21

22 Company Overview Irish Assets Company Overview Moroccan Assets Outlook Moroccan Assets Irish Assets Outlook

23 MOROCCO Energy Prices and Fiscal Regime The gas and oil prices in Morocco are indexed to international prices. Fiscal Incentives 25% State participation Royalty: Oil 10%; Gas 5% 10 year corporate tax holiday on discovery Morocco Libya UK Argentina Canada Indonesia Norway Egypt 0% 20% 40% 60% 80% 100% Gov t Take (%) Profit Value of 1bbl of Oil in Morocco Producing 1bbl of oil in Morocco is equivalent to 13bbl in Algeria 7bbl in Nigeria Source: EY Global and tax guide,

24 MOROCCO Offshore Morocco Play Fairway Analysis FA-1 well data trade for recent wells drilled by other Operators provides valuable insight into an ongoing analysis of the potential of the under-explored offshore FA-1 well results highlight a new play based on the oil shows in reservoir quality sands which were not a primary target pre well Wells to be drilled in 2015 /2016 in offshore blocks will continue to expand the understanding of the active petroleum systems FA-1 Well Post well technical work will focus on mapping new play potential as well as high grading existing prospect portfolio 24

25 MOROCCO FA-1 Preliminary Well Post Mortem Pre-Drill Fastnet Primary Wedge Target Post-Drill Fastnet Primary Wedge Target Tagged but not Penetrated FA-1 SALT Untested potential down dip Non-prognosed Aptian Barreminan Sands with oil shows Potential Source encountered in well Geochemistry data providing excellent calibration for basin Live Oil Shows Flat Spot?? High Amplitude Package Recalibrate with Well Results 25

26 MOROCCO FA-1 Sidewall Cores Live Oil Under UV Light Source: CoreLab 26

27 Company Overview Irish Assets Moroccan Assets Outlook 27

28 OUTLOOK Near Term Share Price Catalysts Strong uncommitted cash balance = protection during Industry downturn Reviewing G&A with sharp scissors preserving balance sheet Carol Law appointed as CEO in December 2014 Recent confirmation that a rig will be drilling in the Celtic Sea increases attraction of the area; Continue with farm out process Identification of additional prospects / second well location for Foum Assaka Business development major opportunity now exists for those with strong balance sheets 28

29 Fastnet Oil & Gas Appendices Appendices 29

30 IRELAND Deep Kinsale New 3D Seismic De-risk Potential Untested Thicker Sand Intervals North South East Northern Bounding Fault Base Chalk Southern Bounding Fault Deep Kinsale Prospect A Middle Wealden Prospect E Mounding in Upper Purbeck Prospect K Upper Purbeck Sands Purbeck Shale North Upper Jurassic 49/9-2 Helvick Oil & Gas Play SE Upper-Middle Jurassic 30

31 IRELAND Comparison 56/12-1 Purbeck to Egret Source Rock of Jeanne D Arc. Proprietary Fastnet Oil and Gas study versus IGI Paper from Conjugate Margins Conference, St. Johns, Aug

32 IRELAND Preliminary Top Middle Purbeck TWT Sealing Fault Required Sealing Fault? 32

33 IRELAND Molly Malone 2D Seismic and Well Database 49/29-1 Oil Shows in Rhaetic-Hettangian 102/29-1 Wet Gas Shows in Lower Jurassic 93/2 Oil Shows in Rhaetic-Hettangian Surveys TRIST-91 MP-84-CD MP-84CE MPCR-84 Marathon 69,71,72 UK Lines on Order (March 2013) 33

34 IRELAND Molly 2D Seismic Dip-Line MP84CE-01-1 NW Tilted fault blocks pre-inversion trap with Triassic Sherwood Sandstone sealed by salt Fault throw large enough to effect juxtaposition with mature source rocks CYAN PROSPECT SE 34

35 TRIASSIC Sherwood Sandstone Group Molly Triassic Sherwood Sandstone is a World Class Reservoir Top Sherwood Sstn ft MD GR Resistivity Sonic (-7729 ft) 93/2-2 Sherwood Sandstone Petrophysical Summary Gross 1184 ft Net 796 ft N:G 0.67 Average Porosity 18% Sonic Porosity up to 25% Top Palaeozoic 8985 ft MD (-8913 ft) 35

36 IRELAND 49/13 2D & 3D Seismic and Well Data 49/13 49/9-2 Helvick Oil Field (Middle/Basal Upper Jurassic) Tested at 10,000 bopd 49/13-2 Heavy Oil Discovery (Upper Jurassic) DST extrapolated flow rate 250 bopd Shanagarry Legacy Gulf 3D seismic coverage Molly Malone 36

37 MOROCCO: FOUM ASSAKA Fastnet farm-out agreement with SK Innovation About SK Deal Terms SK Innovation is part of SK Group, the third largest conglomerate in South Korea behind Samsung and Hyundai with 56,000 employees USD $130 billion in Annual Revenue (Energy/Chemicals Division comprises 56%) SK is Korea s number one and Asia s fourth largest oil refining company with 1.1 million boepd capacity As of Q1 14, SK s E&P portfolio consists of 19 blocks in 13 countries 5 production blocks, 14 exploration blocks, 4 LNG projects across countries such as Peru, Columbia, Kazakhstan, Libya, Australia, Oman Yemen, Vietnam, Cote d Ivoire, Madagascar Daily production of 70,000 boepd 619mm BOE Proven Reserves SK acquired a 12.5% Gross interest (9.375% Net) in Foum Assaka licence in December 2013 Up to two well carry comprised of a carry in the first exploration well on the Eagle-1 Prospect and first appraisal well (capped at USD $100 million per well) or at SK Innovations discretion a carry in a second exploration well (capped at gross USD $100 million) Reimbursement of past costs of USD $3.2 million and a further payment of 25% of Fastnet s back costs relating to the period from 1 October to 1 January 2014 Fastnet now retains a 12.5% gross interest (9.375% - net) 37

38 APPENDIX Analyst Coverage Name Harry Stevenson Sam Wahab Job Langbroek Ian McLelland Tao Ly Gerry Hennigan Richard Savage Stuart Amor Craig Howie Company Beaufort Securities Cantor Fitzgerald Davy Edison Research GMP Securities Goodbody Mirabaud RFC Ambrian Shore Capital 38