23rd Africa Oil Week October 2016

Transcription

1 23rd Africa Oil Week October 2016

2 DISCLAIMER and IMPORTANT NOTICE THIS PRESENTATION IS NOT, AND DOES NOT CONSTITUTE, AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, COMPANY SECURITIES BY ANY PERSON. NO SECURITIES OF THE COMPANY HAVE BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, NOR HAS THE U.S. SECURITIES AND EXCHANGE COMMISSION OR ANY STATE REGULATORY AUTHORITY PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PRESENTATION OR ENDORSED THE MERITS OF AN INVESTMENT IN THE COMPANY. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL. READERS OF THIS PRESENTATION SHOULD NOT CONSTRUE THE CONTENTS OF THIS PRESENTATION AS LEGAL, TAX, INVESTMENT OR OTHER ADVICE. READERS OF THIS PRESENTATION SHOULD CONSULT THEIR OWN ATTORNEY, BUSINESS ADVISOR AND TAX ADVISOR AS TO LEGAL, BUSINESS, TAX AND RELATED MATTERS CONCERNING AN INVESTMENT IN THE COMPANY. EXCEPT AS OTHERWISE INDICATED, THIS PRESENTATION SPEAKS AS OF THE DATE HEREOF. THE PRESENCE OF THIS PRESENTATION ON THE COMPANY S WEBISTE SHALL NOT, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE INFORMATION CONTAINED HEREIN AFTER THE DATE HEREOF. THIS PRESENTATION INCLUDES CERTAIN STATEMENTS BY THE COMPANY WITH RESPECT TO THE COMPANY'S FUTURE PERFORMANCE. ESTIMATES OF FUTURE PERFORMANCE REFLECT VARIOUS ASSUMPTIONS MADE BY THE COMPANY WHICH MAY OR MAY NOT PROVE ACCURATE, AS WELL AS THE EXERCISE OF A SUBSTANTIAL DEGREE OF JUDGMENT BY MANAGEMENT AS TO THE SCOPE AND PRESENTATION OF SUCH INFORMATION. NO REPRESENTATIONS OR WARRANTIES ARE MADE AS TO THE ACCURACY OF SUCH STATEMENTS OR ESTIMATES OF FUTURE PERFORMANCE. ACTUAL RESULTS ACHIEVED DURING PROJECTION PERIODS MAY DIFFER SUBSTANTIALLY FROM THOSE PROJECTED. FORWARD-LOOKING STATEMENTS This Presentation includes forward-looking statements. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "projects", "forecasts -, "estimates", "expects", "anticipates", "believes", "plans", "intends", "may", "might", "will", "would", "can", "could", "should" or, in each case, their negative, or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this Presentation and include statements regarding the Company's intentions, beliefs or current expectations concerning, among other things, its financial position, operating results, liquidity, prospects, growth, strategies and the industry in which it 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. Prospective investors are cautioned that forward-looking statements are not guarantees of future performance and that the Company's actual financial position, operating results and liquidity, and the development of the industry in which it operates, may differ materially from those made in or suggested by the forward-looking statements contained in this Presentation. The Company cannot assure you that the intentions, beliefs or current expectations upon which its forward-looking statements are based will occur. These forward-looking statements are subject to risks, uncertainties and assumptions, including those discussed in this Presentation. The Company undertakes no obligation to publicly update or publicly revise any forward-looking statement, whether as a result of new information, future events or otherwise. 02

3 OML 18 A WORLD-CLASS PRODUCING ASSET San Leon ( SLE ) has acquired an initial 9.72% economic interest in the world-class OML 18 oil and gas block in Southern Niger Delta, onshore Nigeria SLE is listed on London s Alternative Investment Market, and has been established as an E&P operator for 8 years in Europe and North Africa. Market cap approximately $250 million OML 18 stake acquired through $173 million loan instrument, repaid to SLE with 17% p.a. interest SLE committing to a 5-Year Capital Return Policy: 50% of Nigerian free cash flow to be returned to shareholders via dividend and/or share buyback Effective local operator - Eroton Exploration and Production Company Limited OML 18 is producing ~50,000 bopd (June 2016), plan to reach ~115,000 bopd in 2020 Hedge at $95 per barrel with Shell for ~35% of expected 2P production to the end of 2017** Mr Mutiu Sunmonu, former Head of Shell Nigeria has joined SLE Board as Non-Exec Chairman San Leon is the only publicly-traded investment route into OML 18 **$91.50 after hedging fee 03

4 THE ASSET OML 18 Geography Southern Niger Delta near Port Harcourt 1,035km 2 mangrove swamp licence (larger than the country of Bahrain) 9 discovered fields with 4 producing Notore Chemicals GAS OFFTAKE Production Producing ~50,000 bopd*, ~50 mmscfd Opex costs ~$10 per barrel (5-year average from July 2016) Infrastructure and distribution Production transported via multiphase Nembe Creek Trunkline ( NCTL ) to Bonny Terminal Gas to Notore Chemicals plant Pipeline to Bonny Oil Terminal (Shell) OIL EXPORT *June Includes Awoba Field, operated by Newcross Petroleum (~11% of production) 04

5 OML 18 FACILITIES 5

6 OML 18 REDEVELOPMENT PLAN Production already increased substantially March 2015: June 2016: ~10,000 bopd ~ 50,000 bopd Actuals CPR 2P Sales Predictions Three-stage field redevelopment plan to reach > 100,000 bopd 1. Surface fixes and light workovers (79 wells, in progress) 2. Workovers on 4 existing wells 3. Infill well drilling (50 oil, 26 gas) Upside: Contingent Resources 203 mmbbls of oil & 1,648 Bcf of gas Upside: Exploration 471 mmbbls of oil & 1,572 Bcf of gas (Risked) OML 18 Gross reserves (01/01/2016) 1P 2P 3P Oil + condensate (mmbbls) Gas (Bcf) 3,119 4,213 5,080 Source: Competent Persons Report by PetroVision Energy Services, June

7 CPR INDICATIVE CASH FLOW TO SLE OML18 2P - Base Price TOTAL Gross Production (OML %) Average Daily Oil/Condensate Production kbopd Unhedged Oil Price $/bbl Oil/Condensate Sales Volumes mmbbl Gas Sales Volumes bscf ,565 Potential Cash Flow Attributable to SLE $mm SLE NPV10 $mm 429 Source: Petrovision CPR Figures exclude potential services income SLE has secured the right to provide drilling and workover rig services to operator (on expected 5-year capex of $1.5 billion funded from cash flow) 9.72% initial economic interest reduces to 5.4% (shareholder interest) in future years dependent on certain payout and production thresholds being exceeded. Included in CPR calculations SLE Net Attributable OML 18 Reserves 2P Reserves Contingent Resources Prospective Resources* Oil + condensate (mmbbls) Gas (Bcf) *Based on twenty risked exploration prospects 3 separate cash flow streams to SLE 07

8 EROTON EXPLORATION & PRODUCTION COMPANY (Operator of OML 18) Incorporated to make 2014 US $1.1 billion bid for 45% interest in OML 18 from Shell, Total & Agip Full-cycle E&P company, took over operatorship when deal completed deal in March 2015 More than 200 employees, including over 180 technical staff RBL & hedging structure was awarded Deal of the Year by Trade & Forfaiting Review 2015 Revenue US $184.4 million*, 2015 Profit after tax US $65.7 million* Highly-experienced management with senior roles across Africa and worldwide Onajite Okoloko, Chairman Ebiaho Emafo, CEO Theo Okeke, CTO *Revenue and profit generated includes income from $95 per barrel hedge *Eroton Audited Financial Statements 31 December

9 SUMMARY SAN LEON AND OML 18 San Leon is the only public route into OML 18 investment OML 18 is a great success story, with excellent operatorship under Eroton: Dramatic increase in oil production, start-up of gas exports Low leverage, plus significant hedging position at nearly double current oil price Large 2P development programme being executed now All capex expected to be funded through cash flow Huge contingent and exploration resource potential San Leon expects cash flow from three sources: Repayment of principal and interest on its investment loan Equity stake in OML 18 Provision of drilling, workover and production facility services 09

10 THANK YOU Contact: Oisin Fanning CEO, San Leon Energy Plc