March 2018 PRESIDENT ENERGY. Growing cash and profits

Transcription

1 PRESIDENT ENERGY Growing cash and profits 1

2 Disclaimer The information contained in this confidential document ("Presentation") has been prepared by President Energy plc (the "Company"). This Presentation has not been approved by an authorised person in accordance with Section 21 of the Financial Services and Markets Act 2000 ("FSMA") and therefore it is being delivered for information purposes only to a very limited number of persons and companies being: (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO"); (ii) high net-worth companies, unincorporated associations and other bodies within the meaning of Article 49 of the FPO; and (iii) persons to whom it is otherwise lawful to make the Presentation. Any other person who receives this Presentation should not rely or act upon it. By accepting this Presentation and not immediately returning it, the recipient represents and warrants that they are a person who falls within the above description of persons entitled to receive the Presentation. This Presentation is not to be disclosed to any other person or used for any other purpose. Please note that the information in this Presentation has yet to be announced or otherwise made public and as such constitutes non-public price sensitive information for the purposes of the Criminal Justice Act 1993 and inside information for the purposes of the Market Abuse Regulation 596/2014. You should keep confidential the information contained in this Presentation and not deal in any way in the securities of the Company until after the formal release of an announcement by the Company as to do so may result in civil and/or criminal liability. While the information contained herein has been prepared in good faith, none of the Company, finncap Limited ("finnccap") or any of their respective shareholders, directors, officers, agents, employees or advisers give, have given or have authority to give, any representations or warranties (express or implied) as to, or in relation to, the accuracy, reliability or completeness of the information in this Presentation, or any revision thereof, or of any other written or oral information made or to be made available to any interested party or its advisers (all such information being referred to as "Information") and liability therefore is expressly disclaimed. Accordingly, none of the Company, FinnCap or any of their respective shareholders, directors, officers, agents, employees or advisers take any responsibility for, or will accept any liability, whether direct or indirect, express or implied, contractual, tortious, statutory or otherwise, in respect of, the accuracy or completeness of the Information or for any of the opinions contained herein or for any errors, omissions or misstatements or for any loss, howsoever arising, from the use of this Presentation. This Presentation may contain forward-looking statements that involve substantial risks and uncertainties, and actual results and developments may differ materially from those expressed or implied by these statements. These forward-looking statements are 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 because they relate to events and depend on circumstances that may or may not occur in the future. These forward-looking statements speak only as of the date of this Presentation and the Company does not undertake any obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of this Presentation. Neither the issue of this Presentation nor any part of its contents is to be taken as any form of commitment on the part of the Company to proceed with any transaction and the right is reserved to terminate any discussions or negotiations with any prospective investors. In no circumstances will the Company be responsible for any costs, losses or expenses incurred in connection with any appraisal or investigation of the Company. In furnishing this Presentation, none of the Company or FinnCap undertakes or agrees to any obligation to provide the recipient with access to any additional information or to update this Presentation or to correct any inaccuracies in, or omissions from, this Presentation which may become apparent. This Presentation should not be considered as the giving of investment advice by the Company or FinnCap or any of their respective shareholders, directors, officers, agents, employees or advisers. In particular, this Presentation does not constitute an offer or invitation to subscribe for or purchase any securities and neither this Presentation nor anything contained herein shall form the basis of any contract or commitment whatsoever. Each party to whom this Presentation is made available must make its own independent assessment of the Company after making such investigations and taking such advice as may be deemed necessary. In particular, any estimates or projections or opinions contained herein necessarily involve significant elements of subjective judgment, analysis and assumptions and each recipient should satisfy itself in relation to such matters. FinnCap which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting only for the Company in the provision of corporate finance business, within the meaning of the Financial Conduct Authority s ("FCA") Conduct of Business Sourcebook ("COBS"), and no-one else in connection with the matters contained in the Presentation. Accordingly, FinnCap is not acting for or advising any other person, or treating any other person (whether or not a recipient of this Presentation) as its clients, in relation thereto and will not be responsible for providing regulatory protection afforded to its clients or advice to any other person in relation to the matters contained in the Presentation. Apart from the responsibilities and liabilities, if any, which may be imposed on it by the FSMA, FinnCap accordingly disclaims to the fullest extent permitted by law all and any responsibility and liability whether arising in tort, contract or otherwise which it might otherwise have in respect of this Presentation. Neither this Presentation nor any copy of it may be (a) taken or transmitted into Australia, Canada, Japan, the Republic of Ireland, the Republic of South Africa or the United States of America (each a "Restricted Territory"), their territories or possessions; (b) distributed to any U.S. person (as defined in Regulation S under the United States Securities Act of 1933 (as amended)) or (c) distributed to any individual outside a Restricted Territory who is a resident thereof in any such case for the purpose of offer for sale or solicitation or invitation to buy or subscribe any securities or in the context where its distribution may be construed as such offer, solicitation or invitation, in any such case except in compliance with any applicable exemption. The distribution of this document in or to persons subject to other jurisdictions may be restricted by law and persons into whose possession this Presentation comes should inform themselves about, and observe, any such restrictions. Any failure to comply with these restrictions may constitute a violation of the laws of the relevant jurisdiction. 2

3 Corporate Summary CURRENT ESTIMATED ANNUALISED TURNOVER* +/- US$55-60 MILLION CURRENT GROUP PRODUCTION +/- 2,500 BOEPD SIGNIFICANT SHAREHOLDERS as at 1 March 2018 President Energy Plc London AIM: PPC Peter Levine (PLLG Investments) 30% RESERVES INDEPENDENTLY CERTIFIED RESERVES 1P > 15 MMBOE 2P > 27 MMBOE RESOURCES Other 26% JP Morgan Asset Management 9% IFC (World Bank Group) 12% ARGENTINA PROSPECTIVE RESOURCES 7.68TCF 194 MMBBLS PARAGUAY OVER 500 MMBOE CRETACEOUS FORMATION AND SIGNIFICANT PALEOZOIC RESOURCES Michinoko Ltd 9% Schroders Investment Management 14% *Estimated annualised for whole 2018 on basis of first two months

4 President s Management Team Strong Management Team CHAIRMAN Peter Levine Chairman & Chief Executive Ex Imperial Energy Plc PRESIDENT BOARD DIRECTORS Rob Shepherd Miles Biggins Jorge Bongiovanni Alex Moody-Stuart Finance Director Ex Shell Technical Director Ex Shell Non-Executive Director Ex Chief Petroleum Engineer, IFC Non-Executive Director Ex Schlumberger PRESIDENT ARGENTINE OPERATIONAL MANAGEMENT Horacio Rossignoli Country Manager Argentina Ex Sinopec and Occidental Warren Levy Chief Operating Officer - Argentina Ex Schlumberger Pablo Garcia Drilling, Completions & Workover Ex Wintershall and Chevron Jordan Coleman Operations Manager Ex Schlumberger Martin de Innocentis Operations Manager / HSES Manager Ex Chevron and Occidental Victor Linari Chief Geologist Ex YPF Ignacio Zanelli Senior Production Engineer Ex Chevron and Apache Osvaldo Hinojosa Stimulations Advisor Ex Halliburton Martin de Paola Senior Production Engineer Ex Chevron and YPF Eduardo Moreno Senior Company Man Ex Chevron 4

5 President Energy Share Liquidity MARKET CAPITALISATION US$175 MILLION * *As at close of business 12 March

6 INTRODUCTION A rapidly expanding, profitable Group centred in Argentina with major exploration upside Argentina An investment hot spot in South America : right place, right time as a proved operator in the country 4,000 Argentina 2P Case Management Estimates* Argentina Consolidated Oil Production (bbl/day) Emphasis on developing and growing profitable barrels, margins and positive free cash in the prolific Neuquen Basin whilst benefitting from its Salta and Louisiana assets cash flows 3,000 2,000 1,000 Current estimated Group annualized turnover of approximately US$55-60 million with February 2018 production approximately 2,500 boepd with potential to double within 3 years from existing assets - 50,000 40, Argentina Consolidated EBITDA (MUS$) Significant free positive cash being generated with all capex programs fully funded and focus on margins with January 2018 earnings of US$1.3 million after all opex, G&A and finance costs with February estimated similar 30,000 20,000 10,000 Each Production Concession is profitable at field level with increasing free cash flow and EBITDA Louisiana throws off US$200k per month of free cash - 100,000 80, Argentina Consolidated Revenues (MUS$) Current Debt level equivalent to less than estimated 1x P case EBITDA calculated after all opex, taxes and Group G&A Fully funded for all 2018 capex 60,000 40,000 20,

7 President Energy Assets East Lake Verret East White Lake USA Producing Producing (Non-Operator) 50% 22% Argentina Puesto Guardian (Five Oil Fields) Producing 100% Matorras Puesto Flores/ Estancia Vieja (Two Fields) Ocultar Exploration Producing Exploration 100% 90% 100% Pirity Hernandarias (Earn In) Paraguay Exploration Exploration 100% 40% 80%

8 Puesto Flores and Estancia Vieja Overview Significant free cash flow with potential to double production within 3 years Overview Acquired September 2017 Puesto Flores Oeste / Estancia Vieja Fields (175 km 2, formerly 100% Chevron Argentina S.R.L.) 10 year Concession President 90% and Operator, Provincial Oil Company 10% 1P Certified Reserves of 4.5 MMboe and 2P Reserves 8 MMboe Concession producing approximately 1,700 BOPD gross from 20 producing wells $33/bbl netback with $65/bbl current realised price at February 2018 Estancia Vieja Gas Field successful tests Field to be reactivated Strategy - significant potential to grow at the fields Target to double production within 3 years Fully funded Multi-well in-field drilling, re-completions and workover programme to be spread through to 2021 Additional exploration potential 8

9 Estancia Vieja Reactivation March 2018 Multiple Gas Drill Targets February wells tested successfully targeting first gas production late

10 Existing Puesto Guardian Concession, Salta Province, Argentina Production, Significant Reserves and Long Term Benefits o Long term Production Licence to 2050 with President having already satisfied the required financial commitment level of work programme giving ample time to develop the fields at President s discretion o Operationally profitable generating positive free cash flow at field level and paying for Argentina BA head office G&A o Five separate mature fields of 10.2 MMboe of Proven and 18.6 MMboe of Proven plus Probable oil reserves o Significant undrilled proven undeveloped reserves and significant exploration upside with drilling planned for

11 Louisiana USA Cash Generative Operated Producing Assets Producing assets, currently some 300 boepd, generating approx US$200k per month in free cash flow after all opex, G&A and taxes Benefit from accrued tax losses which are being utilised giving potential for further accretive acquisitions of operated assets 11

12 Contact Details President Energy Plc 1200 Century Way Thorpe Park Business Park Leeds, LS15 8ZA United Kingdom Tel: +44 (0) President Petroleum S. A. Complejo Zencity Edificio Esmeralda Juana Manso Piso Norte (C1107CHJ) Puerto Madero Ciudad Autónoma de Bs. As República Argentina Tel:

13 Glossary Boe Bopd Boepd Bofpd MMbbls MMboe MMbtu Tcf Barrels of oil equivalent Barrels of oil per day Barrels of oil equivalent per day Barrels of fluid per day Million barrels of oil Million barrels of oil equivalent One Million British Thermal Units Trillion Cubic Feet NPV10 Net present value discounted by 10% The full text of the SPE PRMS Definitions and Guidelines as to Proven, Probable Reserves, Prospective Resources and Prospect can be viewed at NOTE (i) In the unlikely event that ratification of extension to licence not granted then after a period of grace, Concession licence reverts to Province with President retaining all benefit and liabilities to that point but released from obligation to pay the US$15 million for the extension and all deferred payments. All movable assets purchased from Chevron are President s in any event. (ii) In such event President, whilst continuing to operate the Concession, would enter negotiations with the Province for a new long term licence. 13