The next billion barrels of oil in East Africa?

Transcription

1 The next billion barrels of oil in East Africa?

2 Disclaimer The sole purpose of the information contained herein (the Relevant Information ) is to provide background information to assist you in obtaining a general understanding of the business of Octant Energy Plc ( Octant Energy ). The Relevant Information does not constitute an offer to sell, or a solicitation of an offer to buy or subscribe for, securities of Octant Energy in any jurisdiction. It is not intended to provide the basis of any investment decision, financing or any other evaluation and is not to be considered as a recommendation by Octant Energy, any broker acting on behalf of Octant Energy, or their respective affiliates, agents or advisers that any recipient of such Relevant Information purchase or subscribe for any securities in Octant Energy. Any recipient of the Relevant Information contemplating any investment in Octant Energy is required to make and will be deemed to have made its own independent investigation and appraisal of the business, results of operations, financial condition, liquidity, performance and prospects of Octant Energy and the merits and risks of an investment in the securities of Octant Energy. No representation or warranty, express or implied, is given by or on behalf of Octant Energy, any of its directors, any broker acting on behalf of Octant Energy or their respective subsidiary undertakings, affiliates, agents or advisers (together, the Identified Persons ) or any other person as to the accuracy or completeness of the information or opinions given in any Relevant Information and no liability is accepted for any such information or opinions. The Relevant Information may include certain forward looking statements, beliefs or opinions, including statements with respect to the business, financial condition, results of operations and plans of Octant Energy and/or its group. Forward-looking statements are sometimes identified by the use of forward-looking terminology such as "believes", "expects", "may", "will", "could", "should", "shall", "risk", "intends", "estimates", "aims", "plans", "predicts", "continues", "assumes", "positions" or "anticipates" or the negative thereof, other variations thereon or comparable terminology. Forward-looking statements in the Relevant Information reflect Octant Energy s beliefs and expectations and involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. No representation is made that any of these statements or forecasts will come to pass or that any forecast results will be achieved. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by these statements and forecasts. Past performance cannot be relied on as a guide to future performance. Forward-looking statements speak only as the date of the Relevant Information and each of the Identified Persons expressly disclaims any obligations or undertaking to release any update of, or revisions to, any forward looking statements in this presentation. No statement in the Relevant Information is intended as a profit forecast or a profit estimate. As a result, you are cautioned not to place any undue reliance on such forward-looking statements. The Identified Persons are under no obligation to: (i) update or keep current the information contained in the Relevant Information; (ii) correct any inaccuracies which may become apparent; or (iii) publicly announce the result of any revision to the statements made herein except to the extent they would be required to do so under applicable law or regulation. Any opinions expressed in the Relevant Information are subject to change without notice. 1 1

3 Octant Energy Octant is an exploration Company focused on unlocking value from its drill ready portfolio in East Africa Portfolio of 11 drill ready prospects and leads in Kenya and Tanzania Assets on trend with existing discoveries in the region and within tie-in distance to existing oil export infrastructure Assets have received continuous investment for 10 years and are well known to management 2 2

4 Strategy Near Term Long Term Focus on drill ready prospects L17/18 Further Block 1 seismic Continue Tanga discussions Develop assets towards production Leverage Management s East Africa experience Identify further projects and identify exit points 3

5 Investment Highlights Drill Ready Work Programme Portfolio includes 11 drill ready prospects and leads containing >3 billion boe (p10) gross prospective resources Additional seismic programme to mature El Wak on Kenya Block 1 Initial 4 well drilling programme targeting > 1 billion boe (p10) Existing infrastructure East Africa Experienced Management Extensive experience operating oil and gas projects in East Africa; deep local relationships A leading geological understanding of East Africa rift plays Strong track record of value creation for private and public market investors Asset Investments 10 years of continuous investment to date on the assets Bought assets at low of market downturn with all the data from those investments Cornerstone investor expressed interest for 10% of IPO financing 4

6 Geological Setting Gondwanaland and EARS East Africa Hydrocarbon Occurrences USGS 2016 Figures for remaining EARS Potential 13.4 Bbo Note: EARS East African Rift System 5

7 EARS: Tertiary Rift Play with Oil Albertine Graben (Tullow, Total, CNOOC) Oil Discovered far from market Lokichar Basin (Tullow, Africa Oil, Total) Oil Discovered far from market Pemba-Tembo Next Oil Discovery? Marine Basin qualities include Low Wax Crude Reservoir quality An Octant discovery would be adjacent to market! 6

8 Kenya Oil Industry today 1st oil discovery in Kenya by Africa Oil and Tullow in 2012 Pipeline originally proposed for target sanction 2015/ development studies still underway; needs a ~1000 km heated pipeline Vs. Early Production scheme now planned for 2018/19 6 years after discovery Developed Infrastructure on Octant blocks already there 7

9 Management History with Assets Assets were originally part of TSXV listed Black Marlin Energy Entire Company sold to Afren for >$100m in 2010 by management/founders of Octant Continuous expenditures on licenses since sale of company Octant entered into SPA s in Oct 2015 with Afren subsidiaries, securing the most promising East Africa assets as selected by Octant management Octant now ready to execute near-term drilling 8

10 Management s Persistence Pays Off Finalized purchase agreements for assets as oil prices declined late 2015 Raised acquisition financing ( $10m) early 2017 Negotiations with Governments over 2 years to preserve attractive terms Positioned for the stable rebound in oil price and an increase in exploration 9

11 Management RICHARD SCHMITT President & CEO, Director, Founder Geologist 40 years experience in Africa President of Occidental Yemen 1 st President of Africa Oil President/CEO of Black Marlin Energy Former Director COPL & Wentworth Energy BARRY SADREHASHEMI Chief Financial Officer Chartered Accountant 40 years Arakis Energy Talisman Energy ATB Financial University of Calgary Professor Auditor General Office, Alberta CHRISTOPHER MCLEAN Executive Director, Founder Africa focused for last 18 years International Investment Banker, Head of Capital Markets Independent Director of Black Marlin Energy Former Director and CFO at COPL CEO/CIO Stonechair Capital 10

12 Non-Executive Directors STEPHEN FOSS JON TAYLOR TREVOR PETERS WISHART ROBSON Non-Executive Director Chairman of the Board Non-Executive Director Non-Executive Director AmerisurResources, Director - AIM listed Former Head of RBC CM International Equities Sales & Trading. Director RBC European Ltd. (London) Five years within RBC CM Investment Banking Natural Resources practice (London) Former Head of Equities Sales, BMO Capital Markets (London) Geophysicist Amerada Hess, Clyde Petroleum Fusion Oil & Gas plc, Exploration Director- AIM listed Ophir Energy, Technical Director & Founder FTSE listed Helium One, Non-Executive Director Calima Energy Ltd, Technical Director ASX listed Founder Torenco Energy CFO Caracal Energy; assets in Chad- LSE listed Orion Oil & Gas cofounder- TSX listed Nexen 17 years special situations for Executive office Haliburton Nigeria Petro Canada 15 yrs Frontier and International division 45 years focused on business development, government relations, regulatory approvals and operational support 11

13 Asset >3bn BOE (p10) gross prospective resources Block 1 Located on the western margin of the Mandera-Lugh basin 22,335 km 2 in area 80% Working Interest Prospect PMean P10 (mboe) (mboe) Khorof 187, ,523 El Wak? (additional potential) Total?? Block L17/L18 Tanga Block Located onshore and offshore in the Tembo coastal basin 4,845 km 2 in area with water depths up to 500m 100% working interest Prospect / Lead PMean (mboe) Pending Government approvals 1,935 km 2 in Tanzania offshore area 74% working interest P10 (mboe) Total Prospects & Leads 656,020 1,537,472 Prospect PMean (mboe) P10 (mboe) Total 548,082 1,237,794 12

14 Kenya Block L17 / 18 PSC valid until April 23, 2019; 1 well committed Port of Mombasa within block boundaries Area of 4,845 km 2 Multiple targets accessible onshore Sunbird-1 oil/gas discovery 20 km east of block Ultimate culmination on migration path out of basin located in block 100% Working Interest; 2018 well (EIA permit in hand) 13

15 Pemba-Tembo Basin Morphology 14

16 Kenya Block L17/18 Mombasa South is the ultimate culmination of the Tembo and Pemba Troughs It is the ultimate migration focus at the Jurassic and Eocene levels 15

17 Kenya L17/18 Gross Prospect Summary Prospect / Lead P90 PMean P10 ( mboe) (mboe) (mboe) Prospects Wasin 18, , ,146 Ksite 19, , ,822 Leads Mombasa NE 29, , ,770 2 play types <50 km s to Mombasa infrastructure 4 independent prospects & leads Mombasa SW 17, , ,733 Total Prospects & Leads 85, ,020 1,537,472 Source: McDaniel & Associates Consultants Ltd. 16

18 Tanzania Tanga Block Multiple offshore targets Area of 1,935 km 2 10 years of work completed 74% Working Interest SPA current; government approvals pending Oil seeps onshore and on Pemba 6 prospects defined by seismic Northern culmination of Pemba Basin within block 17

19 Chungwa and Nanasi seismic section 18

20 Tanga AVO Analysis Gathers show some degradation beyond -35 degrees A strong Class III event is seen at Mid Miocene level, interpreted as a gas response Using this benchmark for reflectivity we see a more muted Class III response at many levels within the Tertiary This is consistent with the modelled oil response 19

21 Tanga Gross Prospect Summary Prospect P90 PMean P10 (mboe) (mboe) (mboe) 4 independent prospects 2 plays Nanasi 16,228 95, ,271 Nanasi Wedge 5, , ,030 Mkonge 16, , ,191 Chungwa 14, , ,185 Chungwa W 7,434 58, ,539 Hercules 14, , ,577 Tanga port within block Nanasi and Mkonge covered by 3D Acquisition completion pending government approvals Total 207, ,082 1,237,794 Source: McDaniel & Associates Consultants Ltd. 20

22 Kenya Block 1 Overview PSC valid until Jan 7, 2020 More 2D seismic required over EL WAK Largely untested basin 22,335sq km block Multiple leads Two leads already identified EL WAK & MANDERA Surface anticline with seeps Oil seeps and discoveries along contiguous basin margin A Drillable prospect on KOROF EIA permit in hand 21

23 Kenya Block 1 Basin Architecture 22

24 Kenya Block 1 Prospect Summary Prospect P90 PMean P10 (mboe) (mboe) (mboe) Khorof 48, , ,523 El Wak Total El Wak structure identified as >1,000 sq km surface anticline; the largest in East Africa still untested 2 play types Primary is structural Secondary stratigraphic Oil seeps prevalent all around Source: McDaniel & Associates Consultants Ltd. 23

25 Near Term Work Programme Asset W.I Q1 Q2 Q3 Q4 Q1 Q2 Blocks L17/L18 100% Mombasa 1 Mombasa 2 Block 1 80% El Wak El Wak Korof Tanga (pending) 74% Advance Farm-Out Discussions Nanasi Note: Work programme subject to change Exploration Well Onshore Seismic 24

26 Appendix 25

27 Tanzania Overview Established hydrocarbon producer; 13 th largest oil and gas producer in Sub-Saharan Africa Current production sourced from onshore and shallow water oil and gas fields BG (now Shell) and Ophir Energy discovered material quantities of gas in offshore, deep water blocks 1, 3 and 4 The upstream oil and gas industry is regulated by the Petroleum Upstream Regulatory Authority (PURA) Tanzania Petroleum Development Corporation (TPDC) has the right to participate in development Fiscal terms are based on production sharing agreement (1) Source: Wood Mackenzie (000's sq.km) 50,000 37,500 25,000 12, Key Upstream Players (1) Fiscal Terms (1) Contract Type PSA- Tanga Block Royalty 12.5% Cost Recovery 50% (net of Royalty) Daily Prod. (mbbl/d) TPDC Contractor Profit Share Corporate Tax 30% Motherland Homes Onshore NOR Energy Offshore < % 65% % 60% % 65% % 45% > % 35% 26

28 Pemba-Tembo Basin Outline 27

29 Pemba-Tembo Basins Source Maturity 28

30 Kenya Overview Africa Oil and Tullow Oil discoveries in the onshore North-Central Gregory Rift and Lockichar Basins are the country s only commercial oil resources Further non-commercial hydrocarbon accumulations have been discovered both onshore and offshore Kenya The upstream oil and gas industry is regulated by the Ministry of Energy National Oil Corporation of Kenya (NOCK) has the right to participate in developments Fiscal terms are based on production sharing contracts Contract Type PSC - Block L17/L18 Cost Recovery 55% Daily Production Government Contractor Profit Share First 10,000 50% 50% Next 20,000 60% 40% Next 30,000 65% 35% Next 40,000 79% 30% More than 1000,000 75% 25% Corporate Tax 30% Windfall Tax Fiscal Terms CSPO x 25% x (V P) CSPO: Contractor share of profit oil V: Crude oil price P: Threshold crude ($50/bbl, 2007 terms) (000's sq.km) 50,000 37,500 25,000 12, (1) Source: Wood Mackenzie Key Upstream Players (1) Contract Type PSC - Block 1 Cost Recovery 55% Onshore Offshore Daily Production Government Contractor Profit Share 0-20,000 55% 45% 20,001-30,000 60% 40% 30,001-50,000 63% 37% 50, ,000 68% 32% over 150,000 78% 22% Corporate Tax 30% Windfall Tax CSPO x 26% x (V P) CSPO: Contractor share of profit oil V: Crude oil price P: Threshold crude ($50/bbl, 2007 terms) 29

31 Source of Seeping Oil? Tarbaj Hill Extensive Fluid Inclusions and Surface Seepage El Wak Surface Anticline and Gravity High 30

32 Kenya Block 1 El Wak Seismic New Program Area filling the area between the previous 1900 km of seismic shown by Dark Blue lines This is why others thought this was a volcano. It is a surface anticline! El Wak Lead/ Bur Wein Dome Large 4-way dip closure 300sq km surface expression of anticline Gravity data implies feature is 1200sq km in area with a seep recorded at crest Southern limb of El Wak 4-way dip closure 31

33 Kenya Infrastructure Already Exists Coastal assets in Kenya and Tanzania are optimally located Export route and marketing point in close vicinity Octant can monetize its hydrocarbons quickly and profitably 32