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Corporate Presentation |www.panoroenergy.com
CORPORATE PRESENTATION
OSE Ticker PEN
March 2017
Corporate Presentation |
DISCLAIMER
This presentation does not constitute an offer to buy or sell shares or other financial instruments of Panoro Energy ASA (“Company”).
This presentation contains certain statements that are, or may be deemed to be, “forward-looking statements”, which include all
statements other than statements of historical fact. Forward-looking statements involve making certain assumptions based on the
Company’s experience and perception of historical trends, current conditions, expected future developments and other factors that
we believe are appropriate under the circumstances. Although we believe that the expectations reflected in these forward-looking
statements are reasonable, actual events or results may differ materially from those projected or implied in such forward-looking
statements due to known or unknown risks, uncertainties and other factors. These risks and uncertainties include, among others,
uncertainties in the exploration for and development and production of oil and gas, uncertainties inherent in estimating oil and gas
reserves and projecting future rates of production, uncertainties as to the amount and timing of future capital expenditures,
unpredictable changes in general economic conditions, volatility of oil and gas prices, competitive risks, counterparty risks including
partner funding, regulatory changes and other risks and uncertainties discussed in the Company’s periodic reports. Forward-looking
statements are often identified by the words “believe”, “budget”, “potential”, “expect”, “anticipate”, “intend”, “plan” and other
similar terms and phrases. We caution you not to place undue reliance on these forward-looking statements, which speak only as of
the date of this presentation, and we undertake no obligation to update or revise any of this information.
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Corporate Presentation |
PANORO ASSETS IN WEST AFRICA
TWO CORE ASSETS IN WEST AFRICA WITH PRODUCTION, DISCOVERED RESOURCES & SIGNIFICANT EXPLORATION UPSIDE
Aje (Nigeria) Dussafu (Gabon)
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Corporate Presentation |
COMPANY SNAPSHOT
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US$29mmMarket Cap (March 13, 2017)
ticker: PEN
US$4.8mmCash
(as at December 31, 2016)
US$0mmDebt
3.2mmbbl2P Reserves
35.4mmbbl2C Resources
Focused E&P Company High-quality Asset Portfolio Solid Foundation
▪ Entire team
located in
London
▪ Full cycle portfolio
▪ Additional proven resources in
OML 113 Nigeria
▪ Substantial pre-salt discoveries
in Gabon
▪ Progress of Gabon development
▪ Material Exploration upside
▪ Oil Production
▪ Proven reserves and production
provide foundation to valuation
▪ Debt free
▪ Pending transaction on Dussafu-
$12 million in cash
▪ Strong shareholder register
Corporate Presentation |
PANORO TEAM
EXECUTIVE MANAGEMENT TEAM
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BOARD OF DIRECTORS
Mr. Julien Balkany
ChairmanMrs. Hilde ÅdlandMs. Alexandra Herger Mr. Torstein Sanness Mr. Garrett Soden
John HamiltonChief Executive Officer
Experience
Qazi QadeerChief Financial Officer
Richard Morton Technical Director
Experience Experience
Experience ExperienceExperience Experience Experience
Corporate Presentation |
WEST AFRICA STRATEGY
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NIGERIA
GABON
▪ Unlock value at Aje
▪ Close transaction with BWO
▪ Build business through M&A
▪ Use existing regional knowledge
base and strong local network
▪ Prioritise pre-salt, transform margin plays
▪ Target mature established basins
▪ Evaluate both oil and gas opportunities
▪ Focus primarily on production and development
assets, operated or non operated
▪ Maintain strong financial discipline
Corporate Presentation |
CORPORATE SUMMARYPANORO IS FULLY COMMITTED TO CREATING SHAREHOLDER VALUE
Project execution
Efficient and low cost
operations
Growth opportunities
assessment
FOCUSED TEAM AJE
Provides Foundation for
Company
Ability to leverage cash
flow from Aje once
stabilised
Further value in
OML 113
DUSSAFU UPSIDE
BWO Transaction
Existing discovered
resource base
Material exploration
upside
PANORO IS A FULL CYCLE E&P COMPANY
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Corporate Presentation |
Corporate Presentation
AJENigeria
Corporate Presentation |
OML 113 AJE LICENSE OVERVIEW
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Operator YFP
Revenue Interest Initially 12.19%
Paying Interest 16.255%
Working Interest 6.502%
Other Partners NewAge, EER, MX Oil
HISTORY AND STATUS
MAY 2016 AJE FIELD COMMENCED COMMERCIAL PRODUCTION
PROJECT INFORMATION
Within the OML 113 License area, a Secure Anchorage Area is in operation, off the coast
of Lagos, for vessels that require dedicated maritime security. The area is protected by
multiple armed Patrol Boats, which enforce a Maritime Exclusion Zone around the
anchored vessels.
1991: Awarded to Yinka Folawiyo Petroleum (“YFP”)
1996: Aje field discovered in 1996
- Located offshore Lagos, near Benin border
- Approximately 800km from Niger Delta
- Water depths ranging from 100-1,500m
- Discoveries lies 24km from the coast
- Close to West Africa Gas pipeline (12km) and Lagos (64km)
2014: Aje Field Development Plan (FDP) approved
2014: Final Investment Decision (FID) made (October)
2015: Aje 5 and Aje 4 wells completed (Q3/4)
2015: YFP purchases Afren/FHN stake (22.5% paying
interest) in October 2015 for US$ 35 million (October)
2016: First Oil production (May)
First lifting (September)
Corporate Presentation |
AJE UPDATE
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Operational
• Gas lift compressor issue fully resolved in January. Net 4Q16 production at 355 bopd.
• Intervention operations at Aje 5 underway, with a view to re-establishing targeted production levels
Arbitration
• Panoro has commenced arbitration proceedings against its joint venture partners in OML 113 claiming that they have
not abided by the terms of the Joint Operating Agreement (JOA) in purporting to pass certain resolutions in respect of
a new well and issuing related cash call notices
• Panoro’s position that the resolutions are invalid, and as such the cash call notices are invalid
• In addition to commencing arbitration proceedings, in order to protect its rights prior to commencement of the
proceedings, the Company applied to the High Court in London, UK for interim relief in order to protect its rights
under the JOA. The application was successful and a Court order was received granting Panoro an interim injunction,
and awarded its legal costs in seeking the injunction. The other joint venture partners are now temporarily restricted
from taking any action related to new well cash calls that would prevent Panoro’s continued participation in the JOA
and OML 113
• Arbitration hearing is likely to take place in late 2nd quarter 2017, and a decision in late 3rd quarter
• Panoro has been required by the High Court to post a security in the sum of US$1.5 million
• Panoro is still proactively trying to resolve the issue out-of-court in order to preserve shareholder value
• Panoro is in discussion with a number of potential buyers for the sale of all or a portion of its interest in OML 113.
However there can be no assurances that any transaction contemplated under these discussions will be consummated.
In the meantime, Panoro is resolved to bring the case to arbitration should no commercial solution be forthcoming
OPERATIONAL
ARBITRATION
Corporate Presentation |
OML 113 AJE FIELD
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Aje-3 Aje-1 Aje-2 Aje 4
CENOMANIAN OIL JUST THE START
TURONIANMATERIAL DISCOVERED GAS AND
LIQUIDS RESOURCE - PHASE 3
CENOMANIAN
TWO WELLS (PHASE 1), AJE 4 & 5
TWO FURTHER WELLS POSSIBLE
(PHASE 2)
ALBIANFURTHER GAS AND CONDENSATE
UPSIDE
Aje 5
Corporate Presentation |
AJE RESERVES AND CONTINGENT RESOURCES1
GROSS RESERVES AND RESOURCES (MMBOE)PANORO ECONOMIC ENTITLEMENT
NET RESERVES AND RESOURCES (MMBOE)
ORIGINAL PRODUCTION PROFILE (KBOEPD)
▪ Net entitlement barrels vary between
12.1913% and 16.255% due to carry
arrangement embedded within Joint
Venture Agreement
0
5
10
15
20
25
30
35
40
45
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
(Gross, kboepd)
Aje Cenomanian 1P Aje Cenomanian 2PTuronian 2C Oil RimAje Cenomanian 2CTuronian 2C Con Turonian 2C LPGTuronian 2C Gas
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Phase 1Aje 4 & 5 wells
23.4mmbo
15.7mmbo
Phase 2Aje 6 & 7 wells
11.7 11.7
163.2mmboe
Phase 3Assumes 4 Turonian gas
cond. wells with onshore gas plant
4.0
22.0
40.0
97.2
Phase 1Aje 4 & 5 wells
3.2mmbo
2.0mmbo
Phase 2Aje 6 & 7 wells
1.8 1.4
26.6mmboe
Phase 3Assumes 4 Turonian gas
cond. wells with onshore gas plant
0.7
3.6
6.5
15.8
1C: 18.2 mmboe
2C: 26.6 mmboe
1) TRACS CPR Report, 25th July 2014 (at 80 US$/bbl)
Corporate Presentation |
TURONIAN & CENOMANIAN DEVELOPMENT
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OML 113 3D SEISMIC & PROSPECTIVITY
▪ In late 2013, 1,000km2 of 3D acquired in conjunction with OPL
310 license holders
▪ Prospect inventory being updated
▪ New seismic being used to plan phase 2 and phase 3 drilling
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NEW 3D SEISMIC DATA STATUS
▪ Ogo-1 and Ogo-1ST were drilled on OPL 310 in 2013, discovery
reported to have P50 resources of 774 mmboe in Turonian –
Cenomanian and syn-rift
▪ With Aje, discoveries confirms potential of Dahomey Basin
DAHOMAY BASIN EMERGING
▪ 7 leads in post-rift middle cretaceous section identified from
existing seismic data; at least further 2 leads have been
identified in syn-rift
▪ Improved seismic increased confidence in distribution of
Cenomanian oil reserves; supports reported reserves and
resources
▪ Prospective Resource Study commissioned
OML 113 PROSPECTIVITY
Corporate Presentation |
NIGERIAN GAS IN CONTEXT
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▪ 7th largest population in world (180 million
people)
▪ Largest economy in Africa
▪ 9th largest gas reserves in world
▪ Domestic gas prices rising (>$3.50/mscf)
▪ Nigerian gas production for domestic
power: 600 mmscf per day, while demand
is estimated at 2700 mmscf per day
▪ Large infrastructure investment required in
order to meet local demand
▪ Due to irregular supply of electricity,
Nigerian businesses and families estimated
to spend $22 billion per annum to buy
diesel for power generation
Corporate Presentation |
OML 113 GAS RESOURCES IN CONTEXT
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▪ Nigerian installed gas fired power
generation capacity estimated at
10,000 MW
▪ Only 3600 MW actually generated
largely due to gas constraints
▪ Generation generally in the
West (70%) while consumption is
weighted to the West
▪ Infrastructure constrained
▪ OML 113 strategically located near
large gas markets near Lagos and
the West Africa pipeline
~60% total load
~70% total generation
OML 113
Corporate Presentation |
WEST AFRICAN GAS PIPELINE
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WAGP is owned by
Chevron, Nigerian
National Petroleum
Corporation (NNPC),
Shell, Ghana, Togo,
Benin
NNPC Contractual
obligation to send via
WAGP
120 MMscf per day
Capacity of
800 MMscfpd
Net backs $4/mcf
Corporate Presentation |
Corporate Presentation
DUSSAFUGabon
Corporate Presentation |
BW OFFSHORE DEAL WITH PANORO: ULTIMATE GROUP
Panoro
Subsidiary
8.33% 81.66%
Assuming Gabon Oil
Company (National Oil
Company) carried interest 10%
BW Energy
Gabon
Dussafu
PSC
SALE OF A 25% STAKE IN DUSSAFU
• $12 million in cash
• Non-recourse loan for up to $12.5
million for all costs until first oil
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• SPA signed
• Pending Gabonese approvals
Corporate Presentation |
DUSSAFU MARIN (GABON)LARGE DEVELOPMENT BLOCK WITH MULTIPLE DISCOVERIES AND EXPLORATION PROSPECTS
Operator BW Energy Gabon 81.66%
Panoro Working
Interest8.33%
Other PartnersBack-in right for 10% working interest
held by Affiliate of Tullow Oil
Gabon Oil Company 10.00% assumed
PROJECT OWNERSHIP POST BWE TRANSACTIONS
▪ Four pre-salt oil discoveries with upside/appraisal potential
▪ Panoro’s oil discoveries in Ruche (2011) and Tortue (2013) have demonstrated
a step change in the success rate of identifying oil-bearing structures
▪ Gaffney Cline reports demonstrate commerciality of the discoveries with
Gross 2C Resources of 36.3 mmbbl, 3C 70.6 mmbbl
▪ PSC area outside Ruche EEA expired May 2016
▪ Important milestones achieved in 2014 with Declaration of Commerciality and
award of Exclusive Exploitation Authorisation
▪ Field Development Plan has been approved by the Government of Gabon, first
oil required by mid 2018
▪ Following the 2013 outboard 3D seismic the block is now fully covered by 3D
seismic data
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LICENSE
ACTIVITY
RUCHE
EEA AREA
Etame
M’Bya
GMC-1X
Walt Whitman
Moubenga
Tortue
Ruche
DUSSAFU BLOCK
Oil Fields Gas Discovery Gamba Prospects Gamba Leads Dentale Prospects
N. Tchibala
S. Tchibala
Avouma
M’Wengui
Yombo
Etame located a few
kilometres away is Dussafu
analogue with ca 100
mmbo recovered to date,
initial estimate 30 mmbo
Corporate Presentation |
DUSSAFU DEVELOPMENT PROJECT
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• Full new upstream technical team has been assembled
by BWO with many years of experience in Gabon
• New team fully focussed on achieving first oil by second
half 2018
• Potential has been identified beyond Contingent
Resources estimate from historical Gaffney Cline
Associates (“GCA”) 2014 report
• Initial likely development plan ca.15,000 bopd
• Team have experience on Etame PSC analogue which
has produced ca. 100 mmbo since 2002, with original
estimates of only 30 mmbo
• Full field development can yield up to 150 mmbo
recoverable not including all exploration prospects
• Further exploration potential inside EEA area includes
the large A and B prospects with the potential for an
estimated mid-case additional ~500 million barrels
Potential Ruche Area development
Corporate Presentation |
▪ 13 robust prospects have been identified and over 14 leads
within Ruche EEA
▪ The most attractive prospects are within Ruche EEA area and
have potential for inclusion in FDP once drilled
▪ Within EEA area, Prospects A and B have combined P50 of 482
million barrels of gross un-risked prospective resources
EXPLORATION INVENTORY
Base of salt map from 3D seismic with prospect outlines
RUCHE AREA EEA
Gamba
Dentale
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Tortue
Corporate Presentation |
PANORO ENERGY78 Brook Street
London W1K 5EF
United Kingdom
Tel: +44 (0) 203 405 1060
Fax: +44 (0) 203 004 1130
Contact Details:
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