growth in the pipeline in the pipeline growth€¦ · growth in the pipeline presentation - march...

25 February 2020 | Investor Presentation

GROWTH IN THE PIPELINE GROWTH IN THE PIPELINE

PRESENTATION - MARCH 2020

DISCLAIMER

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The information contained in this confidential document (“Presentation”) has been prepared by President Energy Plc (the “Company”). While the information contained herein has been prepared in good faith, neither the Company nor any of its shareholders, directors, officers, agents, employees or advisers give, have given or have authority to give, any representations or warranties (express or implied) as to, or in relation to, the accuracy, reliability or completeness of the information in this Presentation, or any revision thereof, or of any other written or oral information made or to be made available to any interested party or its advisers (all such information being referred to as “Information”) and liability therefore is expressly disclaimed. Accordingly, neither the Company nor any of its shareholders, directors, officers, agents, employees or advisers take any responsibility for, or will accept any liability whether direct or indirect, express or implied, contractual, tortious, statutory or otherwise, in respect of, the accuracy or completeness of the Information or for any of the opinions contained herein or for any errors, omissions or misstatements or for any loss, howsoever arising, from the use of this Presentation.

This Presentation may contain forward-looking statements that involve substantial risks and uncertainties, and actual results and developments may differ materially from those expressed or implied by these statements. These forward-looking statements are statements regarding the Company's intentions, beliefs or current expectations concerning, among other things, the Company's results of operations, financial condition, prospects, growth, strategies and the industry in which the Company 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. These forward-looking statements speak only as of the date of this Presentation and the Company does not undertake any obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of this Presentation.

Neither the issue of this Presentation nor any part of its contents is to be taken as any form of commitment on the part of the Company to proceed with any transaction and the right is reserved to terminate any discussions or negotiations with any prospective investors. In no circumstances will the Company be responsible for any costs, losses or expenses incurred in connection with any appraisal or investigation of the Company. In furnishing this Presentation, the Company does not undertake or agree to any obligation to provide the recipient with access to any additional information or to update this Presentation or to correct any inaccuracies in, or omissions from, this Presentation which may become apparent.

This Presentation should not be considered as the giving of investment advice by the Company or any of its shareholders, directors, officers, agents, employees or advisers. In particular, this Presentation does not constitute an offer or invitation to subscribe for or purchase any securities and neither this Presentation nor anything contained herein shall form the basis of any contract or commitment whatsoever. Each party to whom this Presentation is made available must make its own independent assessment of the Company after making such investigations and taking such advice as may be deemed necessary. In particular, any estimates or projections or opinions contained herein necessarily involve significant elements of subjective judgment, analysis and assumptions and each recipient should satisfy itself in relation to such matters.

Neither this Presentation nor any copy of it may be (a) taken or transmitted into Australia, Canada, Japan, the Republic of Ireland, the Republic of South Africa or the United States of America (each a “Restricted Territory”), their territories or possessions; (b) distributed to any U.S. person (as defined in Regulation S under the United States Securities Act of 1933 (as amended)) or (c) distributed to any individual outside a Restricted Territory who is a resident thereof in any such case for the purpose of offer for sale or solicitation or invitation to buy or subscribe any securities or in the context where its distribution may be construed as such offer, solicitation or invitation, in any such case except in compliance with any applicable exemption. The distribution of this document in or to persons subject to other jurisdictions may be restricted by law and persons into whose possession this document comes should inform themselves about, and observe, any such restrictions. Any failure to comply with these restrictions may constitute a violation of the laws of the relevant jurisdiction.

3 March 2020 | Investor Presentation

WHERE WE OPERATE

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America

Paraguay

Hernandarias (Earn In)

Exploration (Operator) 40% & 80%

Pirity

Exploration (Operator) 100%

1

2

Argentina

East Lake Verret

Production (Operator)

1

Lake Peigneur

Production (Operator)

2

1

2

1

2

AMERICA

ARGENTINA

PARAGUAY

Argentina

Puesto Guardian

(Five Oil Fields)Production(Operator) 100%

Matorras

Exploration(Operator) 100%

Puesto Flores/Estancia Vieja (Two Fields)

Production(Operator) 90%

Ocultar


1

2

3

4/5

6/7Puesto Prado/Los Bases(Two Fields)


1

2 3

4/5

6/7

AngosturaExploration & Production(Operator) 80%

8

8


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WHO WE ARE

PRESIDENT BOARD OF DIRECTORS

Peter Levine

Executive ChairmanEx Imperial Energy30 years industry

Rob Shepherd

Finance Director Ex Shell, ABN AMRO

28 years industry

Jorge Bongiovanni

Non-Executive DirectorEx IFC

40+ years industry

Alex Moody-Stuart

Non-Executive DirectorEx Schlumberger30 years industry

OPERATIONAL MANAGEMENT

AMERICA

MartinGee

Chief Geologist

Claudia Perez

FinanceDirector

25+ years industry

Lucia D’Agostino

LegalDirector

10 years industry

Jordan Coleman

HeadOperations

12 years industry5 years LatAm

Scott Daspit

HeadOperations

35+ years industry

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LATIN AMERICA(as at 23 January 2020)

29.7%

17.5%8.8%

6.2%

27.9%

Peter Levine (PLLG Investments)

Schroders Investment Management

IFC (World Bank Group)

Michinoko Ltd

Trafigura (via Urion Holdings)

Other

FIRST CLASS

SHAREHOLDER STRUCTURE

9.9%

21 years industry


KEY FACTS

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Multiple producing wells across 8 operated fields in Argentina and Louisiana

2020 average production target of over 4,000 boepd (up 60% yoy)

Robust operating netbacks demonstrate focus on cost management(eg 30% lower unit opex than well regarded peer in country)

Independently certified 2P reserves of over 26 million barrels of oilequivalent with significant exploration upside potential

Multi well 2020 drilling and development program in Rio Negro and Louisiana

Over 100km of owned and operated pipelines

Active acquisition strategy


KEY INVESTMENT CONSIDERATIONS

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Clear strategy to deliver sustainable value growth

By ’laser-like’ focus on maximizing operating margins

Through owning and operating assets and

infrastructure

And strong, experienced management in country

Unparalleled alignment between Executive Chairman and shareholders

Recognised by key shareholders including Schroders, Trafigura and the World Bank

Significant organic and inorganic growth potential

As well as material exploration opportunities

Strong Environmental, Social and Governance Principles

Adherence to World Bank standards

Compliance with QCA Code


RESERVES AND RESOURCES

(1) Source: Argentina numbers based on Independent Reserves Report, Louisiana based on Management estimates (2) Prospective median riskedSlide 7

15.6 MMBOE1P

NET EXPLORATION RESOURCES(2)

ARGENTINAover

150MMBBLS

GROUP NET RESERVES(1)

As at 31 December 2019

26.4 MMBOE2P

43.5 MMBOE3P

PARAGUAY

LOUISIANA

OVER

500MMBOE

OVER

20BCF


EXCITING YEAR AHEAD TO DELIVER ORGANIC GROWTH

FIELD INDICATIVE ACTIVITY H1 2020 H2 2020 FY 2021

PUESTO FLORES

Drilling - Development

Drilling - Exploration

Workover

ESTANCIA VIEJA


Drilling - Exploration

New gas pipeline commissioning

LAS BASES Drilling – Exploration

PUESTO GUARDIAN


PARAGUAY Drilling - Exploration

USA – JEFFERSON ISLAND Drilling - Exploration

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2020 WILL BUILD ON THE SOLID FOUNDATIONS OF 2019

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ca. US$12MILLION

UNAUDITEDADJUSTED (1)

EBITDA

2,400BOEPD

AVERAGEPRODUCTION

ca. US$41MILLION

UNAUDITEDGROUP

TURNOVER

(1) Earnings before interest, tax, depreciation, amortisation and impairment and adjusted to exclude non-recurring items(2) 2020 numbers are preliminary estimates – see disclaimer

FY unaudited 2019 financials

>US$25MILLION

UNAUDITEDOPERATING

PROFIT (PRE DD&A)

>4,000BOEPD

AVERAGEPRODUCTION

>US$60MILLION

UNAUDITEDGROUP

TURNOVER

Management estimates For 2020

>60%

>40%

>150%


UNDERLYING VALUE CREATION IN RECENT YEARS NOT RECOGNISED

(1) Note that (a) a Peel Hunt note issued on 18 Feb ‘2020 suggests that PPC peers are trading at an average EV/2P boe of $6.9 and (b) Amerisur’s recent acquisition by GeoPark was at an implied EV/2P boe valuation of $12.3

(2) 2020 numbers are preliminary estimates – see disclaimer(3) 2020 projected EV includes forecast debt reduction plus current market cap.

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ARGENTINA

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ARGENTINA MACRO ENVIRONMENT

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SIGNIFICANT MAJOR OIL AND GAS INDUSTRY PLAYERS IN ARGENTINA

• President Fernandez inaugurated on 10 Dec

• Continued energy deficit notwithstanding domestic reserves(1)

• Expected gas deficit of some 20-40 mm m3 / day in 2020

• Consequently, the domestic energy sector is a key focus for investment given the continued energy imbalance

• The Government is ‘preparing proposals’ to stimulate investment, particularly in conventional production

(1) According to BP, oil production of 27 mln tonnes in 2018 amounted to 75% of consumption and gas production of 39.4 bcm 80% of consumption


Currently61.7

31 Dec ‘1837.7

1 Jan ‘1818.6

PPC LARGELY UNAFFECTED BY FX VOLATILITY

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• Sales revenues are denominated in US$ (but paid in AR$) with true up / down mechanism to account for volatility between date of billing and payment

• Consequently in 2018 and 2019, combined with proactive treasury management, we suffered minimal cash FX losses ca. 1% of revenues

• We do experience material non-cash ‘distortions’ in Financial Statements as a result of tax accounting in AR$ and reporting in US$ although cash flow is unaffected


• PARTNERED WITH PROVINCIAL OIL COMPANY EDHIPSA (10%)

• FOUR FIELDS WITH SIGNIFICANT DEVELOPMENT AND EXPLORATION UPSIDE

• OIL SALES VIA PIPELINE TO REGIONAL HUB

• OWNERSHIP OF 60Km STRATEGIC GAS PIPELINE AND INFRASTRUCTURE

Rio Negro Province, Argentina

NEUQUEN BASIN ASSETS

Puesto Guardian


Matorras


Puesto Flores/Estancia Vieja (Two Fields)


Ocultar


Puesto Prado/Los Bases(Two Fields)


1

2

3

4/5

6/7

1P: 7.6

2P: 13.8

Reserves(MMboe)

MMBbls


Neuquen Basin – Concession Licence to 2027 (with extension rights). Operator, WI 90%

PUESTO FLORES FIELD

HIGH QUALITY FIELD, SIGNIFICANT REACTIVATIONS, DRILLING AND EXPLORATION POTENTIAL

• Targeting material increase in both production and reserves• Drilling new wells in H1 2020 with more later in the year

CURRENT STATUS

• Oil and gas production from 14 wells

PLANS FOR 2020

• Targeting material increase in both production and reserves• Commencing to drill new wells in H1 2020 with more later in the year



ESTANCIA VIEJA FIELD


CURRENT STATUS

• Oil production from 5 re-worked existing wells• Producing gas from 3 wells for sale and internal power requirements• Built and commissioned a new 16Km pipeline section

PLANS FOR 2020

• Targeting material increase in both production and reserves• Drilling new wells in 2020

HISTORICALLY LARGE OIL PRODUCING FIELD. PREVIOUSLY SHUT-IN. NOW PRODUCING OIL AND GAS WITH SIGNIFICANT UPSIDE POTENTIAL



PUESTO PRADO FIELD


CURRENT STATUS

• 5 wells re-activated, producing 130 bopd• Field being powered by Estancia Vieja gas through the newly acquired

pipeline

PLANS FOR 2020

• Workovers

MATURE FIELD REACTIVATION – SYNERGIES WITH ESTANCIA VIEJA AND PUESTO FLORES UPSIDE ATTRACTION



LAS BASES FIELD


CURRENT STATUS

• Gas plant reactivated

PLANS FOR 2020

• Drilling

MAJOR GAS PRODUCTION POTENTIAL WITH PROCESSING PLANT OWNERSHIP OF MAJOR PAN-REGIONAL GAS PIPELINE


Neuquen Basin – Initial contract to 2023 (with extension rights). Operator, WI 100%

ANGOSTURA CONCESSION


CURRENT STATUS

• Gas currently being produced from four wells and oil from a further one well

• Gas treated within the concession and transported via pipeline to Las Bases where it joins President’s regional pipeline direct to off takers

• Oil production shipped via truck to President’s own Puesto Prado treatment plant for processing

OPERATIONAL SYNERGIES WITH RIO NEGRO OPERATIONS UTILIZING CRITICAL MASS TO OPTIMISE COSTS AND SIGNIFICATLY REDUCE FIELD OPEX


Argentina

Puesto Guardian


Matorras


Ocultar


1

2

3

1

2 3

4/

5

6/

78

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CURRENT STATUS

• Current production approaching 400 boepd• Work to improve margins• Identification of drilling locations for next programme taking place

FUTURE PLANS• Drilling 2/3 development wells in late 2020 / early 2021

PUESTO GUARDIAN CONCESSION Noroeste Basin, Salta Province – Concession License to 2050 (with extension rights). Operator, WI 100%

30 YEAR OLD FIELD THAT WAS POORLY RUN, NOW STABILIZED AND PRIMED FOR FUTURE DEVELOPMENT

OPERATIONALLY PROFITABLE GENERATING POSITIVE FREE CASH FLOW



LOUISIANAStable cash flow from reliable operation

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Located near President’s existing field at East Lake Verret

LOUISIANA ASSETS

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USA

East Lake Verret

Production (Operated) 50%

1

Lake Peigneur

(Operated) 20%

2

East Lake Verret - Two producing wells

Currently producing, generating some US$150k per month in free cash flow after all opex, G&A and taxes

Benefit from accrued tax losses which are being utilised giving potential for further accretive acquisitions of operated assets

Lake Peigneur - ExplorationJefferson Island License (20% Operated interest)

1-2 Wells to be drilled starting H1 2020 at a total estimated cost net to President of US$250k per well

Historic salt dome field with significant potential for undrained production

1

2

Low risk high reward opportunity benefitting from President’s continued use of accrued past tax losses

Lease acquisition cost net to President US$35,000 for 20% operated interest


Triche (70% WI) and Simmons (43.9% WI)


PARAGUAYA compelling opportunity to change a country’s history

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PARAGUAY EXPLORATION

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2020 drilling targeting proven cretaceous fairway

Imperial complex(Mean 193 MMboe Cret.

Resources)

Delray Complex (Mean 394

MMboe Cret. Resources)Palmar Largo

Complex

Spectral Geochemical Anomalies


FUTURE

PRESENTPAST

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Exploration assets with the potential to transform the Company

PARAGUAY EXPLORATION

EXTENSIVE KNOWLEDGE OF AREA WITH LESSONS LEARNED FROM 2014 DRILLING CAMPAIGN WHEN PREISDENT SUCESSFULLY IDENTIFIED A PETROLEUM SYSTEM

• Extensive 2D and 3D seismic surveys together with sub-surface work acquired and analysed by President

• Ongoing farm-out process with active parties with signed NDA’s working in data room

• Delray Cretaceous prospect targeted for drilling• The first prospect to be drilled is on trend with prolific oil

fields on Argentine side of border

• Over 500 Mmboe of mid-case prospective median risked resources in first two drillable prospects with many more leads identified

• Stable democratic country with no current oil production and 10% corporate tax rate



SUMMARY

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SUMMARY

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Clear strategy to deliver sustainable value growth in 2020 and beyond

Strong and supportive shareholder base

Strong Environmental, Social and Governance principles

Unparalleled alignment between Executive Chairman and shareholders

Significant organic and inorganic growth opportunities

Relative immunity to Argentinian macro environment misunderstood by market

Demonstrably undervalued compared to peers



Office Headquarters

Carrwood Park, Selby Road, Leeds

LS15 4LG. United Kingdom

Argentine OfficeJuana Manso 1750, Complejo ZencityEdificio Esmarelda, 3er Piso Norte, C1107CHJ. Buenos Aires, Argentina

Tel: +54 (11) 4317 0400

Paraguay Office

Asuncion, Paraguay

USA Office2020 W Pinhook, Ste 201LafayetteLA70508USA

Thank you

© 2020 President Energy PLC

Company Registered OfficeCarrwood Park, Selby Road

Leeds, LS15 4LG, United Kingdom

Tel: +44 (0) 20 7016 7950

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growth in the pipeline in the pipeline growth€¦ · growth in the pipeline presentation - march...

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