Corporate Presentation. December 2017

Transcription

1 December 2017 TRINIDAD INDONESIA

2 Disclaimer This presentation has been prepared by Range Resources Limited ( Range or the "Company"). This presentation is for information purposes only and does not constitute or form part of an offer, solicitation or invitation of any offer, to buy or subscribe for any securities, nor should it or any part of it form the basis of, or be relied in any connection with, any contract or commitment whatsoever. The information contained in this presentation has not been independently verified. No representation or warranty expressed or implied is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained in this presentation. Neither the Company nor any of its respective officers, employees, affiliates, advisers or representatives accept any liability whatsoever (in negligence or otherwise) for any loss howsoever arising, whether directly or indirectly, from any use, reliance or distribution of this presentation or its contents or otherwise arising in connection with this presentation. This presentation includes forward-looking statements. These statements contain the words "anticipate", "believe", "intend", "estimate", "expect, plan and words of similar meaning. All statements other than statements of historical facts included in this presentation, including, without limitation, those regarding the Company s financial position, business strategy, plans and objectives of management for future operations (including development plans and objectives relating to the Company's business and services) are forwardlooking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of the Company to be materially different from results, performance or achievements expressed or implied by such forward-looking statements. These forward-looking statements speak only as at the date of this presentation. Predictions, projections or forecasts of the economy or economic trends of the markets are not necessarily indicative of the future or likely performance of the Company. Past performance is not necessarily indicative of future performance. The forecast financial performance of the Company is not guaranteed. You are cautioned not to place undue reliance on these forward-looking statements, which are based on the current views of the Company on future events. The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions, except as required by law, to any forward-looking statements contained herein to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. Resources estimates provided in presentation have been extracted from the competent persons reports prepared in respect of the Company's Trinidadian and Indonesian assets and which are available on the Company's website and conform to the ASX Listing Rules and AIM Rules for Companies. The Company is not aware of any new information or data that materially affects the assumptions and technical parameters underpinning the estimates of resources. The estimated quantities of petroleum that may potentially be recovered by the application of future development projects relate to undiscovered accumulations. These estimates have both an associated risk of discovery and a risk of development. Further exploration appraisal and evaluation is required to determine the existence of a significant quantity of potentially moveable hydrocarbons. Neither this presentation nor any copy or portion of it may be sent or taken, transmitted or distributed, directly or indirectly, into the United States, Japan, Canada or any other jurisdiction which prohibits the same. The securities of the Company have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), or the securities laws of any state or other jurisdiction of the United States or elsewhere, and the securities may not be offered or sold within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state or local securities laws. This presentation is not for distribution in, nor does it constitute an offer for sale of securities in the United States. The Company does not intend to conduct a public offering of its securities in the United States. 2

3 Exciting investment opportunity an oil and gas company with production, revenues, reserves TRINIDAD EXISTING OIL PRODUCTION 580 bopd (quarter ended 30 Sep 2017) SUBSTANTIAL RESERVES 16 million barrels (net 2P) FOCUSED ON PRODUCTION GROWTH OWN RIGS AND EQUIPMENT lower operating costs and operational flexibility INDONESIA LOW CAPITAL COMMITMENT NEAR TERM PRODUCTION from low-cost workover programme HIGH QUALITY ASSET previous production with significant upside potential CORPORATE ADOPTING AN INTEGRATED MODEL upstream plus oil services SIGNIFICANT GROWTH from existing assets and new opportunities STABLE FINANCIAL POSITION existing cash with medium-term debt maturity ENHANCED LIQUIDITY AIM and ASX-listed 3

4 Executing growth strategy Expand waterflood, grow production and revenues in Trinidad Complete workovers, commence production and firm up development plan in Indonesia Secure third party contracts and grow revenues of Oilfield Services (RRDSL) Continue to evaluate new asset acquisitions 4

5 2017 highlights Two significant assets acquired Successful waterflood programme implemented showing production increase (~35% of total production is now from waterflood) 2 new wells drilled, 233 workovers completed Continued HSE performance above industry standards Initial work programme in Indonesia underway CPRs on two assets completed (Trinidad and Indonesia) AIM re-admission completed 5

6 Trinidad operations production, reserves, revenue, opportunity Majority interest and operatorship across all blocks Production of 580 bopd (quarter ending 30 Sep 2017) Reserves of 16 million barrels (CPR, 2017) Over 100 wells have been drilled by Range in the last 5 years 180 wells are currently producing from zones ranging in depth from 400 to 4,000 feet Active work programme to increase production: waterflood, selective drilling, and workovers Focus on most prospective acreage Field Beach Marcelle Morne Diablo South Quarry Range s interest Status Licence expiry 100% Development 31/01/ % Development 31/12/ % Development 31/12/ St Mary s 80% Exploration 31/10/ Licence area (km2) 6

7 Trinidad reserves and resources summary solid and independently verified Reserves (net to Range) MMstb 1P 2P 3P C 2C 3C Recently completed CPR confirms large certified oil reserves base 70% of reserves are in waterflood projects Contingent Resources (net to Range) MMstb Independently certified by Rockflow Resources Ltd (June, 2017) 2. Includes reserves and resources for Morne Diablo, South Quarry and Beach Marcelle fields 3. Excludes highly prospective exploration acreage 7

8 Waterflood is key to growing production Beach Marcelle waterflood Range s largest waterflood project The field is closely connected to well developed infrastructure It has been split into a number of individual areas, based on fault blocks South East area successfully implemented Work completed to increase water injection rates (by additional 700 bwpd) Planned expansion During late 2018 / 2019, waterflood programme expected to expand to further areas: South Quarry South West (Beach Marcelle) North East (Beach Marcelle) Beach Marcelle waterflood areas 8

9 South East area current surface infrastructure Source: Google maps 9

10 New acquisitions completed during the year 1. Indonesia Perlak Field 2. Trinidad Oilfield Services 10

11 1. Perlak field a highly attractive acquisition Low acquisition cost Low level of commitment during MWO period A proven play surrounded by producing fields and infrastructure High prior drilling density (over 300 wells drilled) Only produced by primary depletion (c. 50 mmbbls to date) Very light oil with average API of degrees Very limited recent activity Significant potential for rapid return to production through planned workovers 15 year contract with Pertamina (Indonesian state-owned oil and gas corporation) 11

12 Perlak field a proven play surrounded by producing fields and infrastructure 12

13 Perlak low commitment obligation Year Completion date Activity Net cost to Range (US$ m) 1 Sep 2018 Geological, geophysical and reservoir studies Well surveying well workover 2 Sep D seismic data evaluation well workovers 3 Sep 2020 Geological, geophysical and reservoir studies 1 well drilling 1.4 TOTAL

14 Perlak field activity already underway Building the operational team key appointments underway Budget and work programme being agreed with Pertamina for 2018 Offices being established in Jakarta and at the field in Aceh Detailed scope being prepared for G&G studies, and surface checking at field Reviewing potential reopening of wells for the 2018 work programme Work underway to establish a service company in Indonesia (subsidiary of Range) Perlak field opening ceremony 28 November

15 Indonesia contingent resources summary independently verified 1C 2C 3C Net to Range (based on 23% interest) Associated Gas (Bscf) Oil (MMstb) Net to Range (based on 42% interest) Associated Gas (Bscf) Oil (MMstb) Independently certified by LEAP Energy Partners Sdn (August, 2017) 2. Range s interest will increase from 23% to 42% once the minimum work programme is completed at the end of the 3-year period 15

16 2. Trinidad oilfield services business (RRDSL) Why is it attractive for Range? One of the most modern rig fleets in the Caribbean capable of supporting a wide variety of oilfield operations Acquisition significantly lowers Range s operating and drilling costs, provides improved netback per barrel and a greater operational flexibility Provides an additional income stream from work undertaken for third parties Plans to grow the drilling business into a leading oilfield services provider in the Caribbean and LatAm Recent third party clients 16

17 2017 / 2018 active work programme and newsflow across all assets Trinidad development well results Trinidad waterflood programme progress update Indonesia commencement of work programme RRDSL activity update Trinidad development drilling Potential acquisitions of new assets Commitment to engaging with all shareholders: Investor Q & A sessions Webcasts Presentation forums Regular operational and corporate updates 17

18 Summary exciting period of results and growth Established assets with existing reserves and production Integrated model upstream and oil services Active work programme aimed at production uplift Ramp up in activity from three assets to provide regular newsflow Following a period of active investment, Range is well positioned to grow production, revenues and cashflows 18

19 Contact details:

20 Management team strong, experienced and focused Yan Liu CEO and Executive Director Nick Beattie CFO and Company Secretary Lijun Xiu Vice President of Operations and Production Dr Douglas Field Chief Petroleum Engineer Over 20 years of accounting and corporate advisory experience in China and Australia Previously, the Chief Financial Officer with China Rerun Chemical Group Limited, a China-based lubricant oil company Bachelor degree in Economics and a Master degree in Commerce Over 20 years of experience in finance working with a range of international banks Previously, Managing Director with BNP Paribas in the Upstream Oil & Gas team in London Associate Member of the Association of Corporate Treasurers and Fellow of the Chartered Institute of Bankers Geological career of over 30 years Previously worked for the Research Institute of Petroleum Exploration & Development as Deputy Chief Geologist Holds a number of professional titles, including Reserves Evaluation Specialist from the Ministry of Land and Resources of China Petroleum and reservoir engineer with over 30 years international exploration and production experience Previously held senior engineering and business development posts at Tullow Oil plc PhD in Organic Chemistry from the University of Leeds 20

21 Management Team strong, experienced and focused Evgenia Bezruchko Corporate Development Manager Extensive experience in corporate development and capital markets in natural resources sector Prior to joining Range in 2012, worked in corporate broking and equity sales for an independent merchant bank, covering a wide range of listed and private oil & gas and mining companies Theo Eleftheriades Group Financial Controller Chartered Accountant with over 6 years' experience, predominantly in the oil and gas sector Previously, was an Entity Controller at Gazprom. Prior to that, was a Group Financial Accountant at Seadrill, a leading listed offshore drilling contractor Karlene Ali Range Trinidad Deputy General Manager Over 10 years of oil industry experience, having held various finance, HSE and administrative positions with independent oil and gas companies in Trinidad Responsible for communications, government and stakeholder relations, corporate social responsibility and contract compliance 21

22 Board of Directors aligned with shareholders interests Zhiwei (Kerry) Gu Non-Executive Chairman Yan Liu CEO and Executive Director Lubing Liu Non-Executive Director Experienced corporate lawyer, currently a partner of Dentons, one of the largest global law firms Worked with numerous companies on various stock markets including Chinese A share, NASDAQ, TSX and HKSE Participated in several Venture Capital and Private Equity investment cases with large international funds Over 20 years of accounting and corporate advisory experience in China and Australia Previously, the Chief Financial Officer with China Rerun Chemical Group Limited, a China-based lubricant oil company Bachelor degree in Economics and a Master degree in Commerce Over 20 years extensive global experience in petroleum exploration, development, production, joint venture operations and new ventures Currently an independent consultant to Melbana Energy Limited, an ASX listed E&P company Prior to that, held various subsurface leader roles, including Sinopec 22

23 Board of Directors aligned with shareholders interests Dr Yi Zeng Non Executive Director Juan Wang Non-Executive Director Over 30 years of experience in the oil and gas and mining industries Held various technical and research positions with global companies, including BHP Billiton and Santos Asia Pacific PhD in Geophysics from the Victoria University, New Zealand Commercial banking background, having worked for Deutsche Bank and Bank of East Asia Previously, President of Energy Prospecting Technology USA, Inc. and LandOcean Energy Canada Ltd Prior to that, an investment manager and director at Anterra Energy Inc. responsible for Chinese investor liaisons 23

24 Corporate snapshot Share Price AU$0.004 (as at 12 December 2017) Market exchange Ticker AIM and ASX AIM: RRL, ASX: RRS Market Capitalisation A$30 m (as at 12 December 2017) Ordinary Shares in Issue Options in Issue 7,600 m c. 800 m Cash US$17 m (as at 30 Sep 17) Year End 30 June 24

25 Stable liquidity position existing cash with medium-term debt and payable maturity profile Range has cash on hand of approximately US$17 million (as at 30 September 2017 quarterly report) The payable and debt position has grown over the last few years principally as a result of investment into the Trinidad assets to establish long-term growth Competitive cost of finance at 6% (8% for convertible bond) No maturities until late 2019 (majority in 2020) No financial covenants or restrictive undertakings Range focused on growing production and cashflow and will also start review of maturing payable profile during 2018 Various means open to Range for refinancing Component Amount (US$ m) RRDSL Loans Remaining debt in RRDSL which is principally due to newly acquired rigs. Asset backed by rigs RRDSL Acquisition Payment Not due until end November 2020 allowing time to grow RRDSL into a profitable business Trinidad investment spend The sums incurred during the past 2-3 years covering Trinidad operations, drilling, waterflood investment etc. Repayable in April 2020 allowing time to grow production levels Convertible Bond Convertible at 0.008/share. Repayable in November

26 Capital structure balanced mix of shareholders Balanced mix of institutional, high net worth and private shareholders 9% Private individuals (59% shareholding) over 20,000 international high net worth individuals and smaller private investors Beijing Sibo Investment Management LP (32% shareholding) an investment fund headquartered in Beijing, China, comprised of institutional and high net worth individual investors Abraham Ltd (9% shareholding) a Hong- Kong based private investor Board Independence the majority of the Board are independent with no link to largest shareholders 32% 59% Private individuals Beijing Sibo Investment Management LP Abraham Ltd 26

27 Trinidad a world class oil and gas province Leading oil & gas producer in the Caribbean (net exporter of oil and gas) Prolific hydrocarbon basin that forms part of Eastern Venezuelan basin 11 km from the Venezuelan coast Long history of commercial oil production since 1910 Total production to date over 3 billion barrels of oil Proven reserves of 0.7 billion barrels of oil Oil & gas accounts for 40% of GDP and 80% of exports 168,000 bopd refinery (throughput c. 113,000 bopd) Well established extensive infrastructure and facilities Majors currently operating in Trinidad: Shell, BP, BHP, Perenco, EOG, Chevron 27

28 Indonesia significant player in the international oil and gas industry Indonesia, an OPEC-member country, has been active in the oil and gas sector for over 130 years after its first oil discovery in North Sumatra in 1885 Top 20 of the world s oil producers, 2016 oil production: 831,000 bopd Proven oil reserves: 3.7 billion barrels About 75% of exploration and production is located in Western Indonesia Before the fall in oil prices in 2013, the sector generated US$28 billion a year in foreign income, provided 20% of the government s revenues, and supported 280,000 jobs Declining oil production and increased consumption has resulted in Indonesia being a net oil importer The Government is introducing incentives to encourage investment: New improved production sharing splits in recent bid rounds with after-tax returns for oil increasing from 15% to 25% and for gas from 30%-35% to 40% In early 2017, the Government introduced the Gross Split PSC 28

29 Waterflood expanding on the proven concept 70% of Range s reserves are in waterflood Trinidad onshore oilfields are mature, with some having produced for over 100 years Most of the fields have been traditionally produced by primary recovery only recovers about 18% of the oil-in-place Waterflooding is estimated to increase the total recovery factor to approximately 30% Common and proven secondary recovery practice Texaco used waterflooding successfully in parts of the Beach Marcelle field in the1950s/60s Pilot project competed by Range and successfully producing since 2010 Two further waterflood projects successfully competed by Range and are in production Approximately 35% of Range s current production is from waterflood 29

30 Glossary 1P 2P 3P 1C 2C 3C bscf bopd bwpd CPR MMstb Proven reserves with 90% probability of being recovered Proven plus probable reserves with 50% probability of being recovered Proven plus probable plus possible reserves with 10% probability of being recovered A low estimate category of Contingent Resources A best estimate category of Contingent Resources A high estimate category of Contingent Resources Billions of standard cubic feet of gas Barrels of oil per day Barrels of water per day Competent Persons Report Million stock-tank barrels of oil 30