June 11, 2014 SEA DRAGON ENERGY INC. EPAC Conference Calgary

Transcription

1 June 11, 2014 SEA DRAGON ENERGY INC. EPAC Conference Calgary

2 Disclaimer Caution to Reader This presentation is for information purposes only and does not and is not intended to constitute an offer to sell or a solicitation to buy the securities referred to herein. No securities commission or similar authority in Canada or elsewhere has in any way passed upon the merits of this presentation or the business and affairs addressed herein. Forward-Looking Information Certain statements and graphs regarding operational information, future exploration and development plans and anticipated future production and resources (collectively statements ) contained in this presentation constitute forward-looking statements or forward-looking information within the meaning of applicable securities legislation. The use of any of the words could, expect, believe, will, projected, estimated, and similar expressions and statements relating to matters that are not historical facts are intended to identify forward-looking statements or information. These statements are based upon the Corporation s current expectations and are based upon information currently available to the Corporation. Forward-looking statements or information in this presentation include, but are not limited to, statements with respect to: estimates of oil resources, the nature and extent of oil prospects, recoverable oil, future production, anticipated future production rates, finding costs, future production sale prices, future net revenues and cash flows, anticipated crude oil delivery methods and refinery operations, future exploratory drilling and seismic operations and future economic performance. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Corporation to be materially different from any future results, performance and achievements expressed or implied by such forward-looking statements Readers are cautioned not to place undue reliance on forward-looking information, as there can be no assurance that the plans, intentions or expectations upon which such statements are based will be realized. Although the Corporation has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forwardlooking statements, there may be other factors that cause actions, events or results not to be anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate as actual results and future events could vary or differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements contained in this presentation. Forward-looking statements are made based on management s beliefs, estimates and opinions on the date the statements are made and the Corporation undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable law. 1

3 Objectives Leverage Regional Expertise: To increase stakeholder value Window of Opportunity: To capture assets and develop their potential Double Production & Reserves: within months A unique investment opportunity focused on exploring, developing & operating oil and gas properties in Egypt 2

4 Management Said ARRATA, Executive Chairman Chairman and CEO of Centurion Energy Intl. Inc. until sold to DanaGas in 2007 Danagas board member Management positions with Majors Bachelor of Science, Cairo University 40+ years Experience in oil and gas industry 40,000 boepd Mr. Arrata built Centurion Energy to a peak production of 40,000 boepd with operations in Egypt and internationally. $1.2 billion Centurion was sold to Dana Gas in early 2007 at a 36% premium to the traded price Paul WELCH, CEO, COO, President CEO of Chariot Oil and Gas Management positions with Shell Oil Company, Hunt Oil Company and Pioneer Natural Resources B.Sc. and M.Sc., Petroleum Engineering, Colorado School of Mines MBA, Finance, SMU University 26 years Experience in oil and gas industry 25,000 boepd Mr. Welch grew Pioneer s Tunisian portfolio from 500 boepd to a peak of over 25,000 boepd $800 million Pioneer s Tunisia portfolio successfully sold to OMV in 2011 Olivier SERRA, CFO, Director Group Head Middle East and Africa (EMEA) Oil & Gas at BNP Paribas MBA, Finance, Columbia University 18 years Experience in banking industry $5 billion Deployed capital as Group Head for Europe, Middle East and Africa (EMEA) Oil & Gas at BNP Paribas $50 million Set up the first line of credit for a junior E&P post Arab Spring with BNPP and HSBC Ahmed MOAAZ, Country Manager, Director Chairman of El Wastani company, a JV between EGAS and Centurion Energy Management positions with Trident Petroleum, Suez Esso Petroleum B.Sc. in Petroleum Engineering, Cairo University 30+ years Experience in oil and gas industry EGPC Former Deputy Chairman for Production, responsible for drilling production and petroleum engineering of all JV companies in Egypt El Wastani Managed the development of the largest gas/cond. discovery in the Nile Delta to date 3

5 Focus on Egypt Egypt Turnaround: Political and Economic Progress Governance: Supporting sector investment, deals and payments Reforms: $8.5bn. stimulus package, fiscal reform, GDP growth Investment: $20bn GCC support, EGX market run, Rating upgrade Payments: US$1.5bn payments in Dec. 2013, US$1bn planned in 2014 Stability: New Constitution, Presidential Election, Parliament in fall Investment Environment: Window of Opportunity Operational: No interruption in production in last 24 months Financial: Reduced receivables <90 days; increased cash flow Opportunities: Assets undervalued but strong on fundamentals EGX30 Index 12-m Management Expertise: Regional Knowledge and Track Record Relationships: Long standing relationships Expertise: Discovered Built and Sold companies for >US$2 BN Presence: Unique access to opportunities Source: Bloomberg Data Stream

6 Assets in Egypt PRESENT IN GULF OF SUEZ AND NILE DELTA Gulf of Suez Building a Fairway: 3 concessions with Proven Reserves NW Gemsa : solid production base Shukheir Marine : production + upside potential South Ramadan: 2 development locations PROLIFIC BASINS WITH STRONG IOC PRESENCE Nile Delta Transformational Potential: prolific exploration basin South Disouq: Multi-Tcf exploration potential Large acreage within the Abu Madi Baltim trend Management expertise: Discovered, developed and operated several fields in the Nile delta basin Sold to Danagas in 2007 for USD $1.2bn 5

7 Recent Developments 1Q2014 Results HIGHLIGHTS Current Production at 1,686 Mboepd Completed Development of NW Gemsa Completed mapping of Shukheir Marine Agreed work plan on South Ramadan Concession ratification of South Disouq Portfolio Opportunities SHUKHER MARINE (100% WI, GULF OF SUEZ) Significant prospect mapped Resource evaluation completed Economic evaluation completed Concession extension application filed SOUTH RAMADAN (12.75% WI, GULF OF SUEZ) Offset of BP Saqqara field Largest disc. in Gulf of Suez in 20yr $23 MM (gross) Work Commitment incl. 1 well and facilities upgrade 2 development opportunities identified SOUTH DISOUQ (100% WI, NILE DELTA) Transformational potential 1.5 TCF of Resource Potential $9 MM (gross) Work Commitment Farm-Out process on-going Signed Concession Agreement 6

8 Gulf of Suez Fairway North West Gemsa 10% Working Interest Asset Map EGYPT 12,992 boepd Avg. production (gross), April MMboe 2P Reserves (gross) as of 31 Dec SHEHAB GEYAD CAIRO GULF OF SUEZ 15.3 MMboe Cumulative production to April 2014 AL AMIR AL OLA RED SEA 5x Production 2x Reserves Performance since acquisition in Fields Al Amir SE, Geyad, Al Ola North West Gemsa Oil Production History (net) 83km 2 onshore concession 300km from Cairo Partners: North Petroleum Int. (50%, Operator), Circle Oil (40%) 2014 WORK PLAN 3 development wells & 1 work-over Maintain plateau production at facility capacity (13 Mboepd) 7

9 North West Gemsa Solid Production Base Phase 1 Development complete. Concession producing at a plateau rate of 12,500 Bopd & 12MMscfd. Continuous development activity since field start up in Drilling rig departed the field in late May after 2 continuous years of activity. All facilities and associated construction activity also complete. Asset will be significantly cash generative going forward. G&G team now focusing on: Updating the subsurface model with recent G&G data and calibrating it to field performance Exploration opportunities in deeper horizons. Nubia potential Development options for heavy oil discovery (AA1-ST) within block. 8

10 Gulf of Suez Fairway - Shukheir Marine Fields 100% Working Interest Asset Map 379 bopd Current production (gross), April MMboe 2P Reserves (gross) as of 31 Dec MMbbl Cumulative production to April 2014 Prospectivity Nubia & Lwr Rudeis potential mapped, April Fields Shukheir Bay, Gamma Shukheir Bay & Gamma Production 29km 2 shallow offshore concession in the Gulf of Suez Concession expires in Aug. 2015, renewal application submitted 2014 WORK PLAN Confirm Prospects with Well Proposal Get 10 year extension approved Drill 1-2 appraisal wells, dependent upon timing of extension 9

11 Shukheir Marine Appraisal Potential Two Horizons Top Nubia Structure - Gamma Complete technical review completed in April 2014 Lower Rudeis Structure - SHB All productive horizons in two producing fields reinterpreted and remapped Gulf of Suez geology complex due to the presence of salt and abundant faulting Significant potential identified in both fields Nubia in Gamma & Lwr Rudeis in SHB Recoverable volumes 7-26 MMbo Low cost opportunities All locations accessible from shore. 10

12 Gulf of Suez Fairway South Ramadan 12.75% Working Interest Asset Map MEDITERRANEAN Petroleum System 2 wells produced and depleted EGYPT CAIRO 3.75 MMbbl Cumulative production Prospectivity 2 development locations under evaluation On-trend with adjacent producing fields GULF OF SUEZ SOUTH RAMADAN RED SEA 1 Field South Ramadan, several fault blocks 26 km 2 shallow offshore concession in the Gulf of Suez Concession extended for 10 years to 2024 Adjacent to and on-trend with BP s Saqqara discovery South Ramadan Production 2014 WORK PLAN Work with partners on field redevelopment plan Form JV operating company Drill 1 development well (contingent) 11

13 South Ramadan Development and Upside Potential Block located within prolific section of the Gulf of Suez Block contains by-passed oil potential up-dip of the SR-1 and SR-2 wells Identified an undrilled fault block on trend with the Edfu field 12

14 South Ramadan Matulla & Senonian Upside Project Economics Dcf: 10.2 $MM ROR: 35% *Profit / 10% Dcf: 3.54 Payout from production start: 1.1 yrs Max yearly cashflow: Max WI Share Production: Gross Company Reserves: Company Share CAPEX (incl Carry): F&D Cost: 4.0 $MM 306 BOE/d 0.70 MMBOE 2.9 $MM 4.11 $/BOE 13

15 South Disouq Exploration Prospectivity 100% Working Interest Asset Map 1,275 km 2 Concession area 1.5 TCF Resource potential 6.3 TCF 100 MMboe 2P Reserves in Abu Madi Baltim Trend (IHS) Acquired in the latest EGAS bid round 65 km north of Cairo within prolific Abu Madi Baltim trend : Location of previous success under Centurion (El Wastani) Minimal work commitment: 300km 2 seismic and 1 well Approached to Farm-Out Abu-Madi Baltim Trend 2014 WORK PLAN Complete Farm-out Process Complete Technical work to identify Area of 3D acquisition Prepare 3D Seismic Tender 14

16 South Disouq Incised Valley Fill (IVF) Play IVF Potential The IVF trend contain the largest gascondensate fields in the Nile Delta basin. Existing onshore fields (18) in the IVF account for 4.6 TCF gas and 72 MMB condensate (IHS data) The up-dip extension of the IVF trend remains unexplored. 2D seismic data depicts the presence of a sediment package below the Pliocene Kafr el Sheikh formation as part of an IVF system Little previous exploration activity in this section of the original Disouq block due to previous operator s focus on delineating earlier discoveries Block contains existing infrastructure which allows for rapid development of any future discoveries 15

17 South Disouq Incised Valley Fill (IVF) Play S. Disouq Potential 5 leads identified from existing 2D data Un-risked Recoverable Volume Potential: P90: 152 BCF & 4 MMbo P50: 598 BCF & 20 MMbo P10: 2,299 BCF & 91 MMbo Project Economics - P50 Case Unrisked Risked $MM Expected 10% 43.9 $MM ROR: 48.0 % ROR: 27.4 % Company Gross Reserves: MMBOE Company Gross Reserves: 22.7 MMBOE Company Share CAPEX: $MM Company Share CAPEX: 48.9 $MM F&D Cost: 1.69 $/BOE F&D Cost: 2.15 $/BOE Dcf / Investment 1.41 Dcf / Investment* 0.90 Project Payout: 6.19 yrs Project Payout from Production Start 3.19 yrs Max yearly cashflow: $MM Max WI Share Production: 33,630 BOE/d 16

18 2014 Work Program Work Plan: Complete NW Gemsa Development Map Shukheir Marine Prospects South Ramadan redevelopment plan South Disouq pre-seismic studies 2014 Capex Budget $ 6.5 MM Bonus (4 SD) $ 4.0 MM NWG (3 wells & 1 W/O) $ 2.0 MM SHM (1 W/O + maps) $ 0.5 MM 2014 Activity 1Q 2Q 3Q 4Q AASE-19 AASE-21 AASE-20 NWG Workover Shukheir S. Ramadan S. Disouq Comments Shagar Producer Shagar Producer Rahmi - Injector Rahmi - Injector Tech Review / Extension Form Opco / Tech Review Farmout/ 3D Planning 17

19 SDX NAV Overview Net Asset Value (Management Estimate as at 1/1/2014) Core NAV : $39 MM 10.4 cts/sh NW Gemsa 2P NPV10 (Ryder Scott) $42 MM 11.2 cts/sh Net Working Capital ($ 3 MM) 0.8 cts/sh Risked Upside: $104 MM 27.7 cts/sh SHM and SR redevelopment $54 MM 14.4 cts/sh South Disouq exploration $50 MM 13.3 cts/sh Unrisked Upside: $430 MM cts/sh $130 MM 35.0 cts/sh. $300 MM 80.0 cts/sh Trading : $26 MM 7.0 cts/sh Trading at significant discount to Core NAV Trading at significant EV discount to Peers Trading Metrics Company Market Cap Net Debt EV Prod 2P EV / Prod EV / 1P EV / 2P ($MM) ($MM) ($MM) (boe/d) (Mmboe) ($/boepd) ($/boe) ($/boe) TransGlobe , , Petroceltic , , Circle Oil , , Sea Dragon 26 (3.0) 23 1, , Management Estimates and Public Information 18

20 Our Goal Building Value in Egypt EGYPT REMAINS OUR FOCUS Sea Dragon Team knows the region Operating history and strong in-country relationships Political situation creates opportunities in a buyer s market SEA DRAGON POSITIONED FOR GROWTH Strong operatorship and acquisition expertise Portfolio with proven producing reserves plus upside Financial flexibility with Borrowing Base facility and low receivables EXECUTING ON STRATEGY Doubled Production by acquiring assets at attractive prices Focus on fairway areas in prolific basins, plus frontier areas Active deal pipeline with attractive valuations 19

21 Thank You! Sea Dragon Energy Inc. SDX.V Website: London Cairo Sea Dragon Energy 38 Welbeck Street London, W1G 8DP UK Tel: +44 (0) Sea Dragon Energy 12, Al Nahda Street El-Maadi, Kornish El Nile Cairo, Egypt Tel: +(20)