th oilbarrel conference london, englandpresent.knowledgevision.com/account/brr/assets/... ·...

55th Oilbarrel Conference London, England 13 November 2012 1

Corporate Overview

55th Oilbarrel Conference Slide 2

Eland Oil & Gas PLC (AIM:ELA)

Share Price ( 6th November 2012) 123 p

Market Cap £166 Million

Shares Outstanding 134,871,982

Debt Facility(undrawn)) $22 Million

Major Shareholders

Helios Investment Partners 29.4%

Henderson's Global Investors 14.3%

Solstice International 10.1%

Richard Griffiths 10.1%

Artemis 3.9%

Management

Leslie Blair* Chief Executive

George Maxwell* Chief Financial Officer

Giel Krijger* Technical Director

Pieter van der Groen General Manager Operations

Jay Christison General Manager Facilities

Micol Hetherington General Manager Finance

Board of Directors

Harry Wilson Chairman

Bob Lambert Non Executive

Russell Harvey Non Executive

Louis Castro Non Executive

* Director

Eland at a Glance


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2012 2013 2014 2015 2016 2017 2018 2019

Year

Notional exploration

Ugbo

Abiala

Gbetiokun

Opuama Infill

Opuama Existing wells

Oil

prod

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opd)

EXPORT PIPELINE: 36km, 8”-12” to Otumara

OPUAMA: 30 kblpd capacity

PLANNED FACILITIES: • Gbetiokun Flow Station – 30,000 BLPD • Abiala Flow Station – 30,000 BLPD • 65km, 16” Pipeline – 100,000 BLPD • Spur 10” Pipelines – 50,000 BLPD ea Flowstation

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Aug_12 Mar_13 2014 2015 2016

Reserves and Resources Position

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Appr

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• AIM listed on September 3 2012 with £134 Million Market Cap - Twice the size of any previous AIM IPO in the oil and gas sector - Largest AIM IPO since 2009

• Purely Nigeria Upstream • Focus on production and cash flow but with world class

exploration prospects • Management team based in Nigeria and capable of delivery

- CEO and operational management team based in Nigeria - Excellent track record with Addax Petroleum (investor return > 100 x)

• Initial acquisition of a world class asset, OML 40, from Shell • Growth focused on acquiring undeveloped discovered oil

- Over 800 undeveloped oil discoveries in the Niger Delta

• Exceptionally well positioned in the Nigeria upstream market

• The early development of OML 40 reserves as the cornerstone asset for the company – OML 40 has a portfolio of assets in one licence area

• First production and cash flow expected within 6 months

• Gross production target of over 50,000 bopd within four years and 356 MMbbls of gross oil additional exploration upside

OML 40 Development • Development of an experienced and focused organisation based

upon the core team who demonstrated their capability with Addax Petroleum in Nigeria

Effective Organisation

• Accelerated reserve and production growth through the drill bit, increasing asset, and shareholder value

• Focused technical work including reprocessing of 3D seismic and geo-steering, to optimise exploitation of existing fields and de-risk further appraisal and exploration drilling

Leveraging Technical Expertise

• Growth through low cost, high impact acquisitions focused on West Africa and Nigeria in particular

• Particular focus on acquisitions of proven oil reserves in developed hydrocarbon basins with existing export facilities in place for early production and cash flow

Acquisitions

• Create effective community programmes and establish an interdependency with our host communities through the provision of employment and social amenities

Community Interdependence

Eland at home in Africa

Strategy


• Remaining reserves in Nigeria are over 37 Billion barrels of oil and 187 Tcf of gas

• Large number of licence areas with multiple prospects that have not been drilled

• Huge swathes of low risk acreage

Reserves and resources

• Nigeria is under invested due to the perceived high barriers to entry……..but a growing focus of many

• Small number of competitors…….at this time

Barriers to entry

• Management experience and knowledge of how to work in Nigeria gained over many years

Country Expertise

• Super Majors are divesting

onshore assets

• Opportunities for well funded independents

• High Risk / Low Cost / High Reward

Acquisition Cost

Opportunity

Why Nigeria


Our Corporate Responsibility - just good business


Water Electricity Education Employment Development

* Wood Mackenzie Source: BP Statistical Review of World Energy

Proved Reserves (billion bbls)

Nigeria Angola Sudan Equatorial Guinea

Gabon Chad

37.2

13.5

6.7 3.7

1.9 1.8 1.7

Total Africa: 132.1 billion bbls

Ghana *

1.5

Production Click for: Proved Reserves

Production (kbopd)

Nigeria Angola Sudan Congo (Brazzaville

Equatorial Guinea

Gabon Chad

2,402 1,851

486 292 274 245

122

Total Africa: 10,098 kbpod


Congo (Brazzaville

Nigeria - A Giant in Sub-Saharan Africa

Nigeria - Underexplored and Underexploited


Nigeria Fact Book 1

• Africa’s largest oil producer –onshore, shallow offshore and deep offshore • Number of upstream concessions: 288 - Operational 145 ; Open 143 • Operating companies 49, producing companies 17 • Total number of fields discovered: 1183 fields yet only circa 20% on production • Daily production: currently exceeds 2.7 Million bbls per day • Total reserves: Oil 37.2 Billion bbls, Gas 181 TCF with very significant exploration upside

Market factors • Nigeria has moved to repatriate control of their petroleum assets and legislated that preference

be given to indigenous companies of which many currently lack the technical and financial capability to operate and are therefore looking to trusted partners to provide such capabilities

• Technically, Nigeria is geologically low risk with world class exploration potential • 3D seismic, stacked reservoirs and deviated wells offer a very high chance of success (typically

75-90%) • Thousands of prospects identified in the onshore Niger Delta by 2D and 3D seismic that have

never been drilled due to the richness of the portfolio • Reservoir properties and recovery rates are amongst the best in the world

1 Ministry of Petroleum , Nigeria

OML 40 A World Class Asset


• Early production (and cash flow) with significant upside appraisal and exploration opportunities

• Existing production facility and export pipeline with a 30,000 blpd capacity

• Light oil, low GOR and high recovery factors with a strong aquifer drive

• Primary Reservoirs are not deep, are stacked, and can be exploited more effectively with modern well-steering techniques

• The upside comes in the form of monetizing the near field potential and prospects of the block – an ability that the Eland Management team demonstrated with Addax Petroleum

• Reprocessing of the 90’s 3D seismic may well prove to be a "game changer“

• No known militant activity in OML 40

• Eland fully funded for the initial work programme and self funding after the first two new wells brought onto production

OML 40 Field Development Programme 2012-2015


Planned Facilities: •Gbetiokun Flow Station - 30,000 BLPD •Abiala Flow Station - 30,000 BLPD •65km, 16” Pipeline - 100,000 BLPD •Spur 10 “ Pipelines - 50,000 BLPD ea

Start-Up Gross Production ≈ 2,500 bopd

Year-End Gross Production >10,000 bopd



Export Pipeline: 36km, 8”-12” to Otumara

Opuama: 30 kblpd capacity

YEAR 2012: • Re-commission FS,

2 Opuama wells • First oil Q1 2013 • Dredge a slot for

Opuama infill wells

YEAR 2014: • Drill 3 Opuama wells • Drill 6 producers in Gbetiokun,

(Rig 2) • Start 2 more exploration wells

end of year

YEAR 2015: • Complete Abiala and

Ugbo project work • Development drilling

Abiala and Ugbo

YEAR 2013: • Drill 3 Opuama wells • Drill 2 Abiala exploration

wells, targeting 113 MMbbls • Mobilize a floating EPF and

build an export pipeline for Gbetiokun

• Discovered 1972 and in production from 1975 • Structure fault bounded to the North and South • Light oil (0.3-0.8 cP), 45 API • Seven wells drilled and five producers • Dual completions and wells flow naturally • Main reservoirs with remaining reserves

D1.0, D2.0, D5.0 and E2.0 • Flow station with nominal capacity of 30,000 blpd • Field closed in since March 2006

Opuama Field – Drilling 2013


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Opuama-5 Opuama-2 Opuama-3 Opuama-4 Opuama-1

Depth in ft ss Original OWC at 8805 ft ss

Original GOC varies across the field: 8690 to 8715 ft ss

E2000

Fault

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SW NE

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Opuama-2 Opuama-7 Opuama-6

E2000 D5000

D1000 D2000

D4000 D3500

Depth in ft ss

Oil Gas

Canyon Canyon

• 43 MMbbls produced from 4 reservoirs • Certified 2P reserves of 42 MMbbls

remaining • Vertical wells drilled on the 2D seismic

data set were not optimally positioned • Opuama 1 landed in near optimal position

in the D5 reservoir recovered 17 MMbbls oil and is still producing after >30 years

• Re-development infill wells will be: - Scooper wells targeting under-saturated

reservoirs at the top of the structure - Horizontal wells in the E2 reservoir under

the gas cap

• Strong aquifer drive • High RF > 50% (CPR)

Opuama Re-Development


• Discovered 1987 • Simple east west trending roll over anticline against a

large growth fault • Two wells drilled in Gbetiokun Field extending in

OML 49 (Chevron) and called Bime field • Light under-saturated oil 39 to 43 API and 0.3 to 9.1 cP • 3D seismic, RFT pressures, cores, sidewall samples

and PVT analysis available • Strong aquifer expected • Field Development Plan prepared by Shell but the field

was never produced

Gbetiokun Field – Drilling 2014


2009 re-processed seismic showing western extension

Abiala-Blk2 Abiala-NE

Abiala-E

Tongarafa

Gbetiokun

1994 3D seismic data

OML 40 Prospects


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Oil Gas

Prospect Inventory Probability of Success (POS) • Nigeria enjoys some of the highest exploration drilling success rates in

the world

• There have been 3,584 exploratory wells drilled in Nigeria but few drilled since the twin advances of 3D seismic technology and deviated (scooper wells), horizontal drilling in the late 1990s, where both technologies have had a material impact on discovery success rates and subsequent production rates

• In the period 1950-1999 the exploration success rate was 65% but this increased to 72% from 2000-2009 and is still increasing today

• State of the art reprocessing of 3D seismic will further increase POS

Gross Prospective Resource of 356 MMbbls

All of the Ingredients


OML 40 • Opuama re-start production • 30,000 bopd Flow station • 498 km2 license with production,

development & exploration • Dedicated export route

Forecasted Production Profile (with Exploration Upside)


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2012 2013 2014 2015 2016 2017 2018 2019 Year

Notional exploration

Ugbo

Abiala

Gbetiokun

Opuama Infill

Opuama Existing wells

Oil

prod

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opd)

Forecasted Reserves and Resources 2012-2016


Year –end 2016: Approx 420 MMbbls

Year-end 2014:

Approx 270 MMbbls

Sep 2012: 143 MMbbls

H2 2012 : • 3D Seismic reprocessing • Start 3D Seismic

interpretation

YEAR 2013: • Abiala N and NE

Exploration drilling • Opuama Field Review • Revised CPR

YEAR 2014: • Abiala and Ugbo

appraisal drilling • Development Plan Abiala

N and NE discoveries • Drilling 2 exploration

wells (GBW D5000 and Ebrohimi)

YEAR 2015: • Development Plan

GBW D5000 (satellite of Gbetiokun)

• Development drilling Abiala and Ugbo

Appr

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Investment Summary


OML 40

Early Production/ Cashflow

Significant Growth

Potential

• Proven management team based in Nigeria and the UK leveraging deep technical expertise • Highly experienced in oil & gas sector particularly in Nigeria – with Addax Petroleum • Working with Addax’s former Nigerian Partner - Starcrest

• Gross 2P reserves of 71.5 MMbbls estimated by McDaniel • Existing wells, facilities and export pipeline allow early production • Significant on-block exploration upside • Reserves increase expected following 3D seismic processing

• Initial production from existing wells of c.2,500 bopd (gross) expected within six months • Infield development drilling allowing rapid production growth • Targeting gross production of over 50,000 bopd through appraisal and exploration

drilling within four years

• Operating expertise together with indigenous partnerships to deliver value in Nigeria • Significant and attractive growth opportunities for focussed West African independent

OML 40 World Class

Cornerstone Asset

High-Impact Exploration

• Additional gross prospective oil resource of 356 mmbbls – drilling success rate on block historically 83%

• 3D Seismic over 75% of the Licence Area, 15 Prospects identified

Eland Oil & Gas plc

With thanks

19

Disclaimer


The content of this presentation has not been approved by an authorised person within the meaning of the Financial Services and Markets Act 2000 (“FSMA”). Reliance on

the information contained in this presentation for the purposes of engaging in any investment activity may expose the investor to a significant risk of losing all of the property or assets invested. Any person who is in any doubt about the investment to which this presentation relates should consult a person duly authorised for the purposes of FSMA who specialises in the acquisition of shares and other securities.

The information in this presentation is subject to updating, revision and amendment. The information in this presentation, which includes certain information drawn from public sources does not purport to be comprehensive and has not been independently verified. This presentation does not constitute or form part of any offer or invitation to sell, or any solicitation of any offer to purchase or subscribe for or otherwise acquire, any securities in Eland Oil & Gas PLC (the "Company") in any jurisdiction or any other body corporation or an invitation or an inducement to engage in investment activity under section 21 of the Financial Services and Markets Act 2000, nor shall it or any part of it form the basis of or be relied on in connection with any contract therefore. This presentation does not constitute an invitation to effect any transaction with the Company or to make use of any services provided by the Company. No reliance may be placed for any purpose whatsoever on the information contained in this presentation or any assumptions made as to its completeness. No representation or warranty, express or implied, is given by the Company, any of its subsidiaries or any of its advisers, officers, employees or agents, as to the accuracy, reliability or completeness of the information or opinions contained in this presentation or in any revision of the presentation or of any other written or oral information made or to be made available to any interested party or its advisers and, save in the case of fraud, no responsibility or liability is accepted (and all such liability is hereby excluded for any such information or opinions). No liability is accepted by any of them for any such information or opinions (which should not be relied upon) and no responsibility is accepted for any errors, misstatements in or omissions from this presentation or for any loss howsoever arising, directly or indirectly, from any use of this presentation or its contents.

The information and opinions contained in this presentation are provided as at the date of this presentation and are subject to change without notice. In the United Kingdom, this presentation is only being distributed to persons who are reasonably believed to be persons who fall within Articles 19 (1) and 19 (5) (investment

professionals) or 49 (2) (High net worth Companies etc.) of The Financial Services and Markets Act 2000 (Financial Promotions) Order 2005 (“Financial Promotion Order”) or to other persons to whom this presentation may otherwise be lawfully distributed. Persons who do not fall within any of these definitions should return this presentation immediately to the Company and in any event, must not act or rely upon the information contained in this presentation. By listening to this presentation, each person is deemed to confirm, warrant and represent that they fall under one of the Articles set out above. The contents of this presentation must not be copied or distributed by recipients and its contents are confidential.

No recipient of the information in this presentation should deal in or arrange any dealing in or otherwise base any behaviour (including any action or inaction) in relation to any securities to which this document relates (including behaviour referred to in section 118(6) of the Financial Services and Markets Act 2000) which would or might constitute market abuse (as defined in section 118 of the Financial Services and Markets Act 2000).

Any financial projection and other statements of anticipated future performance that are included in this presentation or otherwise furnished are for illustrative purposes only and are based on assumptions by the Company's management that are subject to significant risks and uncertainties and may prove to be incomplete or inaccurate. Actual results achieved may vary from the projections and the variations may be material. Variations in the assumptions underlying the projections may also significantly affect projected results. This presentation has not been examined, reviewed or compiled by the Company's independent certified accountants. No representation or warranty of any kind is made with respect to the accuracy or completeness of the financial projections or other forward-looking statements, any assumptions underling them, the future operations or the amount of any future income or loss..

Disclaimer


This presentation does not constitute or form part of any offer or solicitation to purchase or subscribe for securities in the United States. Securities may not be offered or

sold in the United States absent registration under the US Securities Act of 1933, as amended (the "Securities Act"), or an exemption from, or in a transaction not subject to, registration. The Company has not and does not intend to register any securities under the Securities Act and does not intend to offer any securities to the public in the United States. Subject to certain exceptions, the securities referred to herein may not be offered or sold, directly or indirectly, into, within or in the United States, Australia, Canada, the Republic of South Africa, Switzerland or Japan or to, or for the account or benefit of, any national, resident or citizen of the United States, Australia, Canada, the Republic of South Africa, Switzerland or Japan. The offer and sale of the securities referred to herein has not been and will not be registered nor will a prospectus be filed under the applicable securities laws of the United States, Australia, Canada, Ireland, the Republic of South Africa, Switzerland or Japan.

Information in this presentation has not been prepared with regard to matters that may be of particular concern to Canadian readers and, accordingly, should be read with this in mind. The Company intends to rely on an exemption from the prospectus requirement of applicable Canadian securities laws in distributing the securities. The re-sale of any securities issued pursuant to such exemptions are restricted except in limited circumstances. The Company is not, and does not intend to become, a reporting issuer in any jurisdiction of Canada. If the Company does not become a reporting issuer in a jurisdiction of Canada, any securities issued pursuant to an exemption from the prospectus requirement of applicable Canadian securities laws may be subject to re-sale restrictions in Canada for an indefinite period.

By attending / reading the presentation you agree to be bound by these provisions.

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