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© Coastal Energy Company 2013 | All Rights Reserved
Corporate Presentation September 2013
2 Corporate Presentation September 2013
This presentation contains ‘forward-looking statements’ as defined by the applicable securities legislation. Statements relating to current and future drilling results, existence and recoverability of potential hydrocarbon reserves, production amounts or revenues, forward capital expenditures, operation costs, oil and gas price forecasts and similar matters are based on current data and information and should be viewed as forward-looking statements. Such statements are NOT guarantees of future results and are subject to risks and uncertainties beyond Coastal Energy’s control. Actual results may differ substantially from the forward-looking statements. This presentation does not contain all of the information contained in the preliminary prospectus of Coastal Energy Company, which should reviewed for complete information.
Forward Looking Statements
3 Corporate Presentation September 2013
Note: 2012 reserve figures per RPS Energy Ltd. report as of December 31, 2012; prospective resource volumes are undiscovered and represent internal estimates *1H 2013 post-tax figures include accrual for taxes to be paid in 2H 2013 & 1H 2014
Investment Highlights
Solid Reserve Base with Substantial Exploration Upside
2P Reserves of 144.3 mmboe; 3P Reserves of 196.1 mmboe
Additional 10.0 mmboe of Contingent Resources
>30 identified prospects comprising 477 Mmbbls offshore prospective resources
Substantial 2013 Drilling Program Two rigs running for entire year
First oil expected in Malaysia in 2H2013
Strong Offshore Netbacks
1H 2013 Offshore pre-tax cash flow per bbl of $63.89
1H 2013 Offshore post-cash tax netback of $41.36 / bbl offshore*
Growing Production & Cash Flow YTD Production (through August 31) ~23,300 boepd, 5-Year CAGR of 56%
2012 Cash Flow from Operations of $382MM, 102% YoY growth
Strong Financial Position with Low Net Debt
$85MM cash balance at August 31st
$100MM drawn on revolving credit facility
4 Corporate Presentation September 2013
Company Overview
Operational Overview Asset Overview
Financial Overview ($US in millions, except shares / share price)
Share Price (at 9/12/13) C$17.75
Shares Outstanding 113.3
Shares Outstanding, Fully Diluted 117.1
Equity Value / Market Cap. $2,156.2
Debt (at 8/31/13) $100.0
Cash (at 8/31/13) $85.0
Enterprise Value $2,201.2
Production
Current Production (boepd) 23,000
Offshore Production (oil) 20,500
12/31/2012 RPS Reserves1
2P (Mmboe) 144.3
% Oil 84%
Increase vs. YE 2011 2P 40%
After-Tax 2P PV-10 ($MM) $2,713.1
Prospective Resources (Recoverable - Mmboe)2 477.0
(1) Per RPS Energy, Ltd. Reserve evaluation as of 12/31/2012 (2) Internal estimate - offshore only
5 Corporate Presentation September 2013
Thailand Asset Overview Offshore Thailand
Bua Ban North
Booked 68 Mmbbl 2P in 2011; added 40 Mmbbl 2P at 3/31/2012
Bua Ban South
Pilot fracking program was successful and two frac wells are onstream
56 mmbbl of prospective resources at Bua Ban South
34 mmbbl Miocene and 22 mmbbl Eocene tight sands
Bua Ban Main
5 well Eocene frac program underway
Songkhla A
New fault block to the northeast of Songkhla A discovered in 2013
Will require new facilities to develop
Onshore
Sinphuhorm gas field current production ~2,500 boepd
8 years remaining on Gas Sales Agreement with Nam Phong power plant; 10 year extension option
Dong Mun discovery being evaluated for development
10 Mmboe contingent resources
6 Corporate Presentation September 2013
Malaysia RSC Contract
Coastal is developing the Kapal, Banang and Meranti fields (KBM) offshore Malaysia for Petronas
Coastal is a 70% partner and a local Malaysian contractor (Petra) is a 30% partner
First oil from Kapal is expected in Q313, while first oil at Benang and Meranti is expected in Q114 and Q219, respectively
There are existing discoveries at each field. Coastal estimates recoverable oil could be anywhere from 15 to 35 Mmbbl
The Capital Expenditure of KBM Cluster is estimated to be USD320 million over the life of the project
Contractors are subjected to the Corporate Income Tax Act (CITA) and not the Petroleum Income Tax Act (PITA). Corporate tax payable by the Contractor Group under CITA is at the prevailing rate of 25%
7 Corporate Presentation September 2013
Substantial Organic Reserve Growth
51.0
102.8 27.3 6.7 7.4
144.2 51.9
10.0
484.8
0
100
200
300
400
500
600
700
800
2P YE 2010 2P YE 2011 2P Bua BanNorth Addition
2P Bua BanSouth Addition
Other 2PYE2012
3PYE2012
Contingent Prospective
(Mm
boe)
144 Mmboe 2P reserves at 12/31/2012 (84% oil/offshore, 53% 1P)*
Near-term drilling program could result in significant additional uplift
Opportunity to de-risk ~660 Mmbbls of unrisked oil-in-place through year-end 2013
*Per RPS Energy, Ltd. Reserve evaluation as of December 31, 2012 Note: Offshore prospective resources reflect internal estimates
8 Corporate Presentation September 2013
0
100
200
300
400
500
600
700
2008 2009 2010 2011 2012 2013Est.
($U
S M
M)
0
5,000
10,000
15,000
20,000
25,000
30,000
2008 2009 2010 2011 2012 2013Est.
(Boe
pd)
Onshore Offshore Malaysia
Production Growth EBITDA Growth
Growth Remains on Upward Trajectory
3,666
7,362
9,670
11,540
21,838
25,800
$5.9 $37.9
$114.3
$201.7
$575.0 $600.0
9 Corporate Presentation September 2013
$21.81
$17.75
$2.10
$0.00
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
Net Asset Value per RPS Share Price at Sep 12
Offshore 2P Onshore 2P
Shares at Discount to 2P NAV as per RPS
10 Corporate Presentation September 2013
2013 EBITDAX Sensitivity
Note: Assumes 2013 guidance of 33,000 boepd, $19/boe OpEx and $315 MM capital program
11 Corporate Presentation September 2013
Mar 2013 Apr 2013 May 2013 Jun 2013 Jul 2013 Sep 2013 Oct 2013 Nov 2013 Dec 2013
Drilling Sequence Thailand & Malaysia
Aug 2013
Exploration Appraisal Development
SKL A side
track
G5/43 Expl
Bua Ban Main Side tracks and fracs
SKL C side
tracks SKL A
G5/50 KK02 Expl
G5/43 KW01 Expl
Vicksburg
Manta Bua Ban North Development Kapal Appraisal Wells
12 Corporate Presentation September 2013
Industry Leading F&D Costs
F&D Cost ($/boe) (Including Facilities CapEx) F&D Cost ($/boe) (Excluding Facilities CapEx)
<$600 MM total CapEx (excluding facilities) between Jan’08 - Dec’12
~104 Mmboe added between Jan’08 - Dec’12, net of production
Note: F&D cost calculated as cumulative period CapEx divided by period ending 2P reserves less period beginning 2P reserves plus cumulative period production Ending period for all calculations reflects 3/31/2012
$4.34
$4.66
$4.00
$4.10
$4.20
$4.30
$4.40
$4.50
$4.60
$4.70
$4.80
$4.90
$5.00
3 Yr. F&D 5 Yr. F&D
F&D
Cost
($/b
oe)
$6.33
$6.81
$5.80
$6.00
$6.20
$6.40
$6.60
$6.80
$7.00
3 Yr. F&D 5 Yr. F&D
F&D
Cost
($/b
oe)
13 Corporate Presentation September 2013
Robust 2013 Drilling Program
2013 FCF of $150 MM post CapEx and taxes at $100 realized oil price
2013 CapEx budget of $356 MM
Revised upward for 5 additional frac wells at $7MM each and ~$15MM for facilities damaged in transit
Two MOPUs
1 for Thailand and 1 for Malaysia
Onshore CapEx focused on early development stages of Dong Mun discovery
($US MM) 2013
Drilling & Completions
Offshore Thailand 208
Onshore Thailand 8
Malaysia 42
Facilities 80
Seismic 7
Other 10
Total 356
14 Corporate Presentation September 2013
Exploration Overview
Offshore Exploration Prospective resource inventory of 477.0 mmbbl Additional exploration upside at producing fields
Bua Ban North - 79.5 mmbbl of prospective resources (recoverable) Bua Ban South – 55.9 mmbbl of prospective resources (recoverable)
Songkhla Basin has significant upside Acquired $50MM 3D seismic program in 2012 Survey covers entire Songkhla basin as well as the G5/50 exploration block
Data quality is excellent Final processed volumes delivered in September Fast track volumes have already produced new leads
Onshore Exploration
Dong Mun gas discovery (10 mmboe net to Coastal) Commerciality study has been approved Expected to begin production in 2015
15 Corporate Presentation September 2013
Prospects
Lower Miocene/ Up Oligocene
Eocene
Pre-Tertiary Buried Hill
Lower Oligocene
Highly Prospective Songkhla Basin
Bua Ban North
Songkhla A Extensions
Bua Ban South
Bua Ban Terrace
Songkhla H
Benjarong South (Songkhla N)
Songkhla J (Buried Hill II)
Eocene
Lower Oligocene
Lower Miocene
Fields
Note: Prospective resource volumes are undiscovered resources and represent internal estimates
Songkhla L
Songkhla M
16 Corporate Presentation September 2013
Bua Ban Pilot Fracturing Program
Bua Ban South A-01 and A-03 were successfully fracked in Q113
A five well drilling program is underway in Bua Ban Main
The primary objective of the wells is the Eocene
Two wells have been drilled which encountered thick sections of oil filled Eocene sands
Multi-stage fracs have been successfully carried out on both wells and they will be on production in the next few weeks
With further optimization in a multi-well program, results can improve while bringing fracturing costs down
Substantial resources to be exploited in tight sands in Songkhla basin
Recoverable Oil Assuming 10% Recovery Factor
Songkhla 3.3 MMBO Bua Ban North 3.5 MMBO Bua Ban Main & South 23.2+ MMBO Total: 30.0+ MMBO
17 Corporate Presentation September 2013
Songkhla Basin Miocene Trend
A A’
18 Corporate Presentation September 2013
Songkhla N (Benjarong) Prospects
Lower Miocene M200 Time Structure 20 ms contour interval
Multiple stacked structural targets in: Lower Miocene Upper Oligocene Lower Oligocene Eocene
M200 A
M200 B
M200 C
19 Corporate Presentation September 2013
Songkhla N (Benjarong) Prospects – Dip Line
M050 M075
M200
U Olig marker
M200 A
colored inversion
Tim
e (s
ec)
1000 m
west east
Bua Ban North Field
20 Corporate Presentation September 2013
Future Exploration Well Locations
EIA applications have been submitted for 10 exploration wells
All well locations are covered by new 3D seismic
Application for Bua Ban Production area underway
Bua Ban North Production Area
21 Corporate Presentation September 2013
SPHE-A Indo I Resource
Volumetrics
Min 3.1 BCF
Mid 24.1 BCF
Max 1069 BCF
Sinphuhorm East
Sinphuhorm East
22 Corporate Presentation September 2013
SW NE L15/43 Border
SPHE-1
Sinphuhorm East – New 3D Seismic
23 Corporate Presentation September 2013
L15/43 Border
Pseu
do P
oros
ity %
15
11
8
1
5
3
SW NE Recommended West Well Track
SPHE-1
Sinphuhorm East – Psuedo Porosity Display
Potential Reservoir Rock
24 Corporate Presentation September 2013
Well count : 4 producers/2 injectors
Wells spaced roughly equidistant to maximize reservoir coverage
Well location to balance water coning/gas coning (upon breakout)
Wells completed (perforated across entire sand interval)
Water injectors located close to OWC to maximize pressure support/sweep (1 injector per 2 producers)
Malaysia Development plan
25 Corporate Presentation September 2013
Bua Ban North Style Structure
Central Basin Horst
Terrace Play
West East
LO LST
New 3D Seismic
Potential Strat Play
Three Way Upthrown Traps
26 Corporate Presentation September 2013
Fault Block Lead Miocene Ramp Play
Miocene Graben Play
LO LST
UO LST
North South
New 3D Seismic
Three Way Upthrown Traps
Three Way Upthrown Traps
Four Way Closure Traps
Upper Oligocene Strat Play