2017.08.30 snv corporate presentation - squarespace · seeking to acquire producing/development...
TRANSCRIPT
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Forward-LookingStatementsCertainstatementsinthispresenta-onmaycons-tute“forward-lookinginforma-on”(“forward-lookingstatements”)withinthemeaningofapplicableCanadiansecuri-eslaws.Forward-lookingstatementsareo@en,butnotalways,iden-fiedbytheuseofwordssuchas“an-cipate”,“es-mate”,“poten-al”,“could”,“ongoing”,“prospec-ve”,“expected”andsimilarwordssugges-ngfutureoutcomes.Readersarecau-onedthat,bytheirnature,forward-lookingstatementsarebasedoncurrentexpecta-onsregardingfutureeventsthatinvolveanumberofassump-ons,knownandunknownrisks,anduncertain-es.Actualresults,performanceorachievementsoftheCompany,ortheindustry,mayvarymateriallyfromwhatisexpressedorimpliedbysuchforward-lookingstatements.Therefore,readersshouldnotplaceunduerelianceonforward-lookingstatements.Readersarealsocau-onedthatpoten-alproduc-onratesmaynotbeindica-veoflong-termperformanceoroful-materecovery.TheCompanywillupdateitsassump-onstoreflectneweventsorcircumstanceswhenitisrequired,bylaw,todoso.Theforward-lookingstatementsinthispresenta-onarebasedonmanagement’scurrentexpecta-onsandassump-onsthatinvolveanumberofrisksanduncertain-es.Theserisksanduncertain-esinclude,butarenotlimitedto:(1)risksassociatedwithobtaining,maintainingandthe-mingofreceiptofregulatoryapprovals,permits,andlicenses;(2)uncertain-esrelatedtofinancingoftheCompany’sexplora-onac-vi-esandcon-nuedopera-onsthroughaccesstocapitalmarkets;(3)theriskofvola-leglobaleconomiccondi-ons;(4)con-nuedpoli-calstability;(5)con-nuedsupportfromthelocalcommuni-es,(6)opera-onalrisksindevelopment,explora-onandproduc-ondelaysorchangesinplanswithrespecttoexplora-onordevelopmentprojectsorcapitalexpenditures;(7)theuncertaintyofresourcees-mates,geologicalinterpreta-ons,es-matesandprojec-onsinrela-ontoproduc-on,costsandexpenses,andhealth,safetyandenvironmentalrisks;(8)thecon-nuedabilitytoobtainqualifiedstaffandequipmentina-melyandcostefficientmanner;(9)theriskofcommoditypriceandforeignexchangeratefluctua-ons;and(10)risksassociatedwiththeimplementa-onofnewtechnology.
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Summary:SNVonTSX-V§ Sharesissued:~177million
§ LastShareClosingPriceC$0.04(Aug30,2017)§ MarketCapitaliza-onof~C$7.08mm
IndonesianBudongBudongLicense§ Sonoro,throughitssubsidiaryStockbridge
BudongBudongBV,hasaworkinginterestof71.5%
§ ExtensionoflicensetoJan.15,2018
§ PlannedspudofwellSeptember2017§ Appraisalwellwith16MMbblsofprospec-verecoverableresources
§ Successopensupanen-renewbasinonW.Sulawesiwithseveralotherlargerstructuresiden-fied.
Seekingtoacquireproducing/developmentopportuni-esinIndonesia
54,866,061
42,610,523
74,267,567
5,570,326
Mgmt & Board
Friends and Family
Shareholders NBPP 2017
Shareholders Prior
24.0%
30.9%
41.9%
3.1%
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§ Oneoftheworld’sfastest-developingeconomies§ Demandforenergyisoutstrippingsupply§ Oilandgasfiscalregimeisverywellestablished§ Provenandmatureoilandgasbasins§ Indonesiangovernmentisseekingtoamractmore
investmentintoenergyinthefaceofdecliningoilandgasproduc-on
§ Largepoolofprofessionalsandskillstodrawuponinouroilandgasindustry
§ SonorohasanexperiencedteamwithatrackrecordinIndonesiaandtheregion
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ChrisAtkinson(Chairman)• Geologist,30yearsinterna-onal:Shell,ARCO,V.P.ARCOEurope/N.Africa• MajorsuccessesinChina,NewZealand,IndonesiaandtheUnitedKingdom• Trackrecordofbuildingandfinancingstart-upexplora-onandproduc-onventures• SEAsia,theUK,CanadaandtheCaribbean.
DavidWinter(Director)• Geologist,over27yearsInterna-onalOil:HorizonPetroleum,CalValley,AEC,CdnOxy,SunOil,BP• Europe,SEAsia,N.America,S.America,Africa• CurrentlyCEOandPresidentofHorizonPetroleumLtd.;Founder&DirectorofCanacolEnergy• FormerlywithCdnOccidentalinIndonesia
DavidRobinson(Director)• Geologist,25yearsInterna-onal:RadCan,ArakisEnergy,ForumEnergy,andBenchmark• Colombia,Philippines,Tunisia,Egypt,Indonesia,Turkmenistan,Sudan,PNG,Oman• CurrentlyVPBusinessDevelopmentofHorizonPetroleumPlc;• Hasbeeninvolvedinraisingover$300mmacrossvariousventures
RyszardKurr(Director)• Over30yearsinterna-onalcommercialandfinacialexperienceinOilandGas• MostrecentlywithNobleandGlencoreandformerlywithBPandVitol• MajorityofexperiencelivingandworkinginSEAsia,EuropeandAfrica• Currentlyestablishingandinves-nginstartupandgrowthenergycompanies
RichardWadsworth BillMarpe
DirectorandChiefExecu-veOfficer DirectorandGMIndonesia (seemanagement) (seemanagement)
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ExperiencedInternaFonal&SEAsiaTeamwithsuccessfultrackrecord
Richard WadsworthChief Executive Officer
: Engineer,25+yearsinterna-onal:Premier,AngloAlbanian,Koch,Syncrude&EssoCo-FounderBankersPetroleum,President&COO;Increasedproduc-onto7,000bopd;2Preservesof100+mmbblWhileatAngloAlbanianPetroleum(PremierOil),drilledthefirsttwentywellinAlbaniainover20yearsDevelopednumerousoilandgasfieldsforKochexplora-oninW.Canadaduringhisearlycareer
Bill Marpe General Manager Jakarta, Indonesia
: Lawyer(TX),35yearsinterna-onal:UnionTexasPetroleum,TransworldOilLtd.PresidentofthreeProduc-onSharingCompaniesinIndonesia.GeneralManagerofP.T.PetconBorneo:PalangkarayaBlocksoldtoConoco-PhillipsFounderandPresidentofStockbridgeOil&GasLtd
Dean Callaway Chief Financial Officer
: Formerexecu-vewithBukitEnergy,GallicEnergy,TGWorld,Enbridge,TransAlta,andMerrylLynchCharteredProfessionalAccount,BachelorCommercefromDalhousewithMBAfromNijenrodeUniversityExperienceinIndonesia,Philippines,France,NigerandN.America
Hening Sugiatno Geoscience
: Geologist,ColoradoSchoolofMines,MSc;20yearsOilE&PexperienceinIndonesia.ManagedseveralPSCblocks:W.Kampar,PandalianField,Sumatera.DevelopedplayconceptsleadingtoawardofPalangkarayaPSC,Kalimantan
Alan Rachman Government Liaison)
: Engineer,>30yearsupstreamanddownstreamopera-onsinIndonesia.PTPetcon,HarvestNaturalResourcesandOrmatInterna-onal.StartedhiscareerwithSchlumberger.Regularpar-cipantinIndonesiaGovernmentandandregulatoryconsulta-vepanelsfocusingonrenewableenergy.
L to R:
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TheSonoroteamhasaproventrackrecordofincuba-ngstartups.
Company Initial
Investment Exit/IPO Value
Extracted
PDA/Serica 2000 2004 c15x initial $*
Mitra Energy 2006 2008 c10x initial $
TopOil 2006 2007 c25x initial $
MPX 2006 2010-11 c5x initial $ ZinMac 2007 2010 c8x initial $ GFP 2008 2010 c10x initial $
Transition/Vela 2011 2013 c20x initial $
Bankers Petroleum 2004 2016 c$500mm+
Lookinareas…withCHARGE!§ Wheresource“isagiven”§ Liveseepsexist,havebeendescribedoroilhasflowed
previously“petroleumsystemapproach”
Veni,Vidi,VerF…whereotherscame,lookedandleQ!§ Appliedconven-onalwisdom
§ Le@significantsunkcostpoolsWherethereisdocumented“historic”success§ Lowersrisk§ NewtechnologiescanbeappliedWherewellsareREPEATABLE(likearesourceplay)§ Becomesmanufacturingeffort,bringingdowncosts§ Poten-alforlargeregional,low-dippinch-outs
Whereweapplyouronshoreexperiencetoapproachdifferently§ Lowercostofexplora-onandappraisal§ Applytherighttechnology§ Fieldswithhighcostrecoveryasothershavefailed
(commercially),andareleavingorhavele@
…RevisitSuccess!
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TopographyDoda&surroundingareas
Shallowwellsdrilledwithsteam-poweredcabletoolrigtomaximumdepthof250m(1898to1901):Allwellsreportedsignificantoilandgasshowswithseveralblow-outs
DutchGeologicalMap(ca.1901)Seeps,Saradu&Timontewells
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DodaExplora-eMaatschappij(DEM),LariangBasin:1898-1927§ DodaArea,abundantseeps:4shallowwellsto~250m§ Oilandgascon-nuestoleakfromwellheadstoday§ Nogeologicallinktodrilling§ Reportedsuccessfulflowsinshallowwellsadjacenttoseeps
BataafschePetroleumMaatschappij,BPM(Shell):1927-1938§ Geologicalfieldreconnaissanceandprospectmappingiden-fied
mul-plesurfacean-clines
Chevron&Gulf;BP:1970-1980§ Fieldworkandlimited2D(314km)jungleseismic§ Stra-graphictests:Karama-1S(2,000m)&Lariang-1S(1,089m)§ BPfarmed-inasoperator(1974),drilledTike-1(1979)to2,895m
Tately/Harvest:2007-2015,EocenePlayConcept§ 2Dseismicmisinterpreted;2deepwells(LG-1,KD-1ST)totestEocene§ EocenesandsnotpenetratedinLG-1,KD-1ST
Sonoro:2016-2017–Torevisitsuccessanddrillshallowan-clines!
§ Anac-veshallowhydrocarbonsystem§ Simple,lower-riskexplora-onandappraisal§ Shallowdrillingtargets(400mto600m)
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DODAAREA
KARAMA
LARIANG
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Lariang:RevisitSuccess,1900sDodaArea§ 100yearslate!§ “Stepout”totheLG-1well
§ LG-2isanup-dip“appraisal”§ Favourablethickeningseismiccharacter§ Willfacilitateafast-trackPOD
§ Simple,verylowriskexplora-on§ Shallowdrillingtargets(~500m)
ShallowSurfaceAn-clinesandOilSeeps§ An-clinalTheory…Revisited!§ “Oilseeps”successfullytesteddespite
primi-ve1900’stechnology§ RecentLG-1well
§ Plio-MioceneLisuFm.Sandspenetratedw/goodshows
§ Loca-onssub-op-malforPlio-MiocenegivendeeperEocenetargets
§ Newop-mizedMioceneloca-ons§ LG-2,MJN-1
DodaArea
LG-2LG-1Well
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T.D.500m
LG-1(discovery)LG-2(appraisal)
Seismicsec-onthroughLG-1,LG-2proposed§ LG-2topenetrateanuntestedreservoirsec-on§ Significantthickeningup-dipfromLG-1§ SeveralunitsshowthickeningtowardsLG-2§ Uppermostunit(yellow)maybeanewreservoir§ Thickening:notincludedinresourcees-mate
SeismicLine1990BP-09
DodaSand
Fairway(specula-ve)
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Exploration License Term
§ 71.5% Stockbridge § 10 years; received extension to Jan. 15, 2018 § Will convert to a Production License on successful drill of LG-2 and submission of POD
Production License Term
§ Additional 20 years following relinquishments; expires January 15, 2038
Relinquishments § Now down to 20% of original area, 1,099 sq. km remaining
FTP § 10% to the government
Cost Recovery § Cost recovery (100% to the contractor, unless the government has participated) Not limited until all approved costs have been recouped; CR >US$80 million (unaudited)
Production Split § Oil: 37.5% to Government and 62.5% to Contractor (35% after tax) § Gas: 28.57% to Government and ~71.43% to Contractor (40% after tax)
DMO § 25% of contractor share sold at 25% of benchmark price (holiday for first 5 years)
Income & Distribution Tax
§ 44%
Production Bonuses § $250,000 @ 25 MMBoe; $375,000 @ 50 MMBoe; and $500,000 @ 75 MMBoe
Run Rate Production Takeaway
§ Once all cost recovery is expended, contractor after tax and FTP yield is 31.50%
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Leverageteamtrackrecord,experienceandtechnologytobuildasignificantbalancedporyolioofhigh-qualityoilandgasassetsinonshoresoutheastAsiaDeveloplow-costonshoredevelopmentrepe--vemodel
• BudongBudong(BB)Sulawesi,shallow16MMbblpoten-aldevelopment• Addi-onallargerstructuresinbasiniden-fiedtopursuefollowingBBsuccess• Repeatthisprocess,alongwithtechnicalonshoreexper-se,tootherPSC’s
Focusedacquisi-onsofsoutheastAsianporyolioofoilandgasassets
• Exis-ngonshoreoilandgasproduc-onwithupsideopportuni-es• Near-termcommercialdevelopmentprojects
• NumerouscompaniesinSEAsiainfinancialdifficultyandunabletomovediscoveriesforward,duetocapitalrestraints• Lowriskasdiscovered,neartermproduc-onandcashflow• PrivatelocalcompaniesandIOC’slookingtogainliquidityorexitrespec-vely
Addi-onalexplora-onopportuni-esoncecompany’sproduc-onandcashflowareestablished.Theseexplora-onopportuni-esbringingsignificantmoreupside,butmoreinherentearlyriskGainoffshoreexperienceinmaterialprojectsthroughsmallernon-operatedinterestsU-lizeacquiredproducingcashflowassetstoleverageandsustainvalueaddingexplora-onanddiscoveriesassecondphase
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LG-1Up-dipLeaseSite§ Leaseacquiredandconstructed
§ Storagelogis-cyardatoriginalwellestablished
§ Teamandsecurityinplace
DrillRig§ OriginalcontractorunabletosecureSKPIcer-fica-on
§ Companyterminatescontract
§ NewcontractwithPTAdvancedServicesIndonesiaestablished(“ASI”)
§ Fit-for-purpose400HPhydrauliccorerigwithASI
§ Allcer-fica-onsinplace
§ ExpectedtobemobilisedandspuddingmidSeptember
OtherServices§ Allotherdrillingservicesofferscontractedanddeliveredon-me
§ Equipmentandotherservices(logging,cemen-ng,casing,etc…)mobilisedtosite
RigMobiliza-onandSpud§ Expectedmid-September2017
§ AboveassumesnoweatherdelaysandapprovalfromSKKMGAStospud
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1000m
MJN-1(Prospect)
Dodaregionalcontext:Recentwells,seismicandselectedtopographiclinears MadjeneStructure,BP:BasedonBPMmappingfrom1933
DodaSAR
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KARAMABASIN
§ Severalshallowprospects(MJN)areknownintheLariangBasin§ However,alargeshallowlead(1,000m)hasrecentlybeeniden-fiedintheKaramaarea§ Approximately15kmx3km;oilandgasseepinacrestalposi-on§ Reconnaissancemappingonly(tobefurtherevaluated)
PanenBetulLead