unlocking the hydrocarbon promise of morocco

5/24/2018 Unlocking the hydrocarbon promise of Morocco

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UNLOCKING THE

HYDROCARBON

PROMISE OF MOROCCO.

PetroMaroc

Investor Presentation June 2014


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PETROMAROCS VISION

TO BE THE LEADING

HYDROCARBON PRODUCER

IN MOROCCO.


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PETROMAROCS MISSION

PETROMAROC APPLIES DISCIPLINED,

WELL PROVEN TECHNOLOGIES AND RISK

MANAGEMENT PRACTICES TO CREATE

LONG-TERM VALUE FROM NATURAL GAS

AND OIL FOR ITS SHAREHOLDERS AND

THE PEOPLE OF MOROCCO.


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PetroMaroc leadership team

Dennis A. Sharp, Executive Chairman

D. Campbell Deacon, Non-ExecutiveDirector

Yogeshwar Sharma, Non-ExecutiveDirector

Thomas R. Vukovich, Non-ExecutiveDirector

Gregory Boland, Non-Executive Director

Benjamin Yi, Non-Executive Director

Nicholas Brigstocke, Non-ExecutiveDirector

Dennis Sharp, InterimExecutive Officer

Martin Arch, Chief Fi

Tom Feuchtwanger, V

Neil Hamzaoui, VP Co

Development

DIRECTORS MANAGEMEN


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PetroMaroc Corporate Snapshot

Market Information

Stock Exchange TSX-V Trading Symbol (Longreach) LOI

PetroMaroc symbol (pending) PMA

Share Price (at June 6, 2014) C$0.31

Basic Shares Outstanding 81.1MM

Market Capitalization (Basic) C$25.1MM

Cash balance:

31 March 2014 US$ 2.8M (unaudited)

Major Shareholders1

Dundee Corporation:

Blakeney LLP:

West Face Capital:

(1) As per Management Information Circular, at May 15,


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PetroMaroc Organization


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PetroMaroc operational update; Summary and Conclusions

The Kechoula drilling campaign has discovered a significant natur

opportunity in the lower Liassic formation. The Lower Liassic formation has the geological characteristics of a

(conventional and unconventional) natural gas reservoir.

North America is on the leading edge of using both conventional unconventional technologies to economically extract hydrocarbosimilar looking reservoirs.

PetroMaroc has access to the experience and expertise required thydrocarbons from such reservoirs at very economic rates.

Development of this asset into a producing gas field will benefit nshareholders but also introduce the Moroccan hydrocarbon sectothe innovative technologies currently being used in North Americ


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PetroMarocsresource value-creation process

Identify the potential

Where do we choose to operate? Capture the opportunity

Acquire exploration licenses.

Explore for drillable prospects Obtain seismic, drill and test etc.

Appraise the discoveries Understand the size and productive capacity of the

reservoir.

Develop the natural gas/oil Achieve cost-effective production.

Optimize Production Generate maximum returns for our shareholders and

Moroccans.

Concept

Play/Lead

Prospect/s

Field

Pool/s


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The Kingdom of Morocco


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Identifying the potential Morocco

FAVOURABLE

ECONOMICS

PROVEN

PETROLEUM

SYSTEM

HUGE DEMAND

Price of gas

Royalty and taxation

Price of entry

H

M

R

S

Energy deficit

Political stability

Development an


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Gas Monetisation Opportunities

Moroccan Economic Landscape

Undersupplied Morocco imports 99% of oil, 91% of gas Africas 2ndlargest importer

Energy bill of US$10.7 billion in 2011, half of the trade deficit

Strong domestic market Energy demand +54% over last decade, on steady riseFiscal incentives 25% state participation

Gas royalty 5%, Oil 10%

10 year corporate tax holiday on discovery

Local Gas Market: opportunities and upside potential

Phosphate

Industry / OCP

Morocco is home to 85% (51 billion tons) of the worlds known phosphate reserve

African Development Bank loaned $250 million to OCP for industrial platform at Jorf Lasfar Moroccan exports as share of world trade: 32% phosphate rock, 11% fertilizers

OCP plans to double production of rock and triple production of MAP / DAP / AP by 2020

Electricity Potential gas conversion into electricity

Tahaddart: gas intake capacity 49 mmcf/day

Ain Beni Mathar: gas intake capacity 34 mmcf/day Gas

80% of electricity primary energy source is thermic

Fundamental

economics

Competitive gas price

Spot condensate price

Trade D

Source: ONHYM, OCP, ONE


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Producing basins in Morocco and neighboring countries


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The Kingdom of Morocco

Capital: Rabat. Official language: Arabic

Area: 172,414 sq mi (446,550 sq km) Population: About 32 million

Chief products: Agriculture, Manufacturing, Miningphosphate rock, phosph

Political system: Morocco is a constitutional monarchy under a hereditary kinlegislature has two housesthe Chamber of Representatives, members electConsultative Chamber, members chosen by electoral college. The king appoinminister and cabinet.

Oil and natural gas: 5,057 bbl/day (2012 est.), world ranking: 99

Crude oilimports: 122,900 bbl/day (2010 est.)

Crude oilproved reserves:680,000 bbl (1 January 2013 est.)

Moroccos world ranking: 98


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Capturing the Opportunity; Acquiring exploration licenses

Sidi Moktar: Drilled two wells

(100% gross interest 50% nSidi Moussa: Farmed out to Gene

Well planned for 4Q

(2% gross interest 1.5% ne

FoumDraa: Farmed out to Cairn

Dry hole

(3.3% gross interest 2.5% n

Zag License: Expires May2015

(30% gross interest 22.5%

Tarfaya: Transferring interest


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Explore for drillable prospects; seismic, drilling etc


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The Kechoula prospect in the Sidi Moktar Exploration License

KOBA

KECHOU

STRUCT

MESKALA

POOL

HYDROCARBONSOURCE/KITCHEN


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KOBA-1; Drilling results

INCREASE IN GAS CONTENT

(in ppm)_

45M OF GROSS

LOWER LIASSICRESERVOIR

SAND.

WITH A

VERYSTRONG

INFLUX O

GAS.

LITHOLOG GAS CHROMATOGRAP

SIGNIFICANT INFLOW OF

WATER AT 1873m

HIGH FORMATION

PRESSURE (6000psi)

REQUIRED THAT THE

MUD WEIGHT BE

INCREASED TO 2.3SG TO

CONTROL INFLOW

DUE TO THE DAMA

RESERVOIR AND W

HEAVY DRILLING M

EFFECTIVENESS OF

AND THE COLLECT

AND FLUID SAMPL

LIMITED.


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Koba-1; a Discovery or an Occurrence?

Occurrence: Gas inflow from chromatograph

Visual description of reservoir quality

Lithology from well cuttings

Clean sand from Gamma ray log

Mineralogy and petrography from core

Visual porosity estimation

Formation pressures from drilling data.

Discovery: Quantitative data from wireline logs:

Effective porosity from neutron/density logs

Water/gas saturations from resistivity logs

Net and gross pay from logs

Quantitative data from cores: Porosity and permeability

Wettability and electrical properties

Area from Geology/geophysics.

Quantitative data from tests: Formation pressures

Gas composition

Size and deliverability.


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Results of core analyses; rock descriptions from thin sections

Conventional reservoir:

High porosity and

permeability.

Unconventional reservoir:

Low porosity and

permeability

Non-Reserv

No porosity


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Core Analyses; Permeability vs Porosity

CURRENT

PRODUCTION

FROM

MESKALA.

High Quality

Medium Quality

Tight Gas


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Classification of the Lower Liassic reservoir quality for Koba-1

K b 1 d t t d th t th K h l t t h L Li i


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Koba-1 demonstrated that the Kechoula structure has Lower Liassic

reservoir which is gas charged

KOBA-1 KAMAR

Th K h l St t i 3 D h i th K b d


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The Kechoula Structure in 3-D, showing the Koba and

Kamar drilling locations

KOBA KAMAR

KECHOU

STRUCTU

MESKALA

POOL


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KAMAR-1; Geological prognosis and drilling design

Kamar 1:


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Kamar-1:

Drilling Curve

Contract de

Pressure in

Planned Fina

LOWER

LIASSIC

TRIASSIC

?

?

Actual Fina


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Kamar-1: Slow drilling

Hard and abrasive rocksin the shallower section

damaged the PDC bits

which dramatically

reduced the rate of

penetration


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Kamar-1: New gas bearing zone encountered

LITHOLOG

Kamar-1: Lower Liassic reservoir section & logs showing gas


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Kamar 1: Lower Liassic reservoir section & logs showing gas

pay

LITHOLOG


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Log analysis: Lower Liassic zone Kamar-1

GAS SAND

b l d l k f h h l


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How Koba & Kamar lowered exploration risk of the Kechoula structur

KOBA-1 KAMAR

K b & K d t t th t th ti K h l t t i fi


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Koba & Kamar demonstrate that the entire Kechoula structure is gas fi

KECHOULA

STRUCTRE

MESKALA

KOBAKAMAR

Cl ifi ti f th L Li i i lit f K b 1


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Classification of the Lower Liassic reservoir quality for Koba-1

CONVENTIONAL

UNCONVENTIONAL

K h l t t i f th i


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Kechoula structure: size of the prize

350-

500BCF

CONVENTIONAL

UNCONVENTIONAL

Multiple

TCFs

K b d K h b d d


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Koba and Kamar have been suspended

KAMARKOBA-1

Our resource value creation process Where we are now?


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Our resource value-creation process. Where we are now?

Identify the potential Where do we want to operate?

Capture the opportunity Acquire exploration licenses.


Appraise the discoveries Understand the size and productive capacity of

the reservoir.


Optimize Production Generate maximum returns for our

shareholders and Moroccans.

Concept

Play/Lead

Prospect/s

Field

Pool/s

Understand the size and productive capacity of the reservoir


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Understand the size and productive capacity of the reservoir

Appraise these natural gas finds with the most cost-effective

technologies, including advanced completion techniques, to highest potential value

Testing program elementsboth wells in Q4 2014

Procure and deploy rig and completion equipment to complete pros

Conduct drill-stem or production tests to determine flow, volume, p

recovery, rock properties etc.

Evaluate test results and determine reserves potential and po

deliverability with internationally recognized independent qu

reserves evaluator.

Immediate funding required for the appraisal phase is $45 million


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Immediate funding required for the appraisal phase is $45 million

Proposed operations, timing and budget:

Testing and evaluating the existing wells and data (~$5 millio2014).

Acquire 3D seismic over the Kechoula structure (~$10 million

Drill 2-3 additional delineation and appraisal wells on the Ke

structure. (~$30 million, Q3/Q 42015).

Our resource value-creation process Where we are now?


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Our resource value-creation process. Where we are now?

Identify the potential Where do we want to operate?

Capture the opportunity Acquire exploration licenses.


Appraise the discoveries Understand the size and productive capacity of

the reservoir.


Optimize Production Generate maximum returns for our

shareholders and Moroccans.

Concept

Play/Lead

Prospect/s

Field

Pool/s

Kechoula development will probably use conventional and


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unconventional technologies

Existing Infrastructure and Opportunities


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Existing Infrastructure and Opportunities

Existing infrastructure

Gas moved via 8 pipeline with spare

capacity to OCP phosphate minesparecapacity, subject to technical feasibility

ONHYM moving condensate toMohammedia refinery on truck mountedtanks

Condensate separation plants Toukimt: capacity 2.8 mmcf/d

Meskala: capacity 6 mmcf/d

Nearby industrial ports

KO-1KA-1

Source: ONHYM, Ministry of Energy



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The Kechoula drilling campaign has discovered a significant naturopportunity in the lower Liassic formation.

The Lower Liassic formation has the geological characteristics of a(conventional and unconventional) natural gas reservoir.

North America is on the leading edge of using both conventional unconventional technologies to economically extract hydrocarbosimilar looking reservoirs.

PetroMaroc has access to the experience and expertise required t

hydrocarbons from such reservoirs at very economic rates. Development of this asset into a producing gas field will benefit n

shareholders but also introduce the Moroccan hydrocarbon sectothe innovative technologies currently being used in North Americ

Join PetroMaroc in its promising pursuit of unlocking Moroccos prom


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Join PetroMaroc in its promising pursuit of unlocking Morocco s prom

May 16 (Reuters) - Moroccan authorities said on Friday gas drilling by L(PetroMaroc) had found encouraging signs in the Kamar-1 well, located

Moktar, near the city of Essaouira.

The announcement by the Office of Hydrocarbonsand Mining (ONHYM) [that the Kamar well] was themost positive result so far since Morocco started to award dozen of pforeign oil companies in the past few years to develop its energy reso

"The drilling has encountered signs of gas in two levels inside a JurassicONHYM said in a statement carried by the state news agency MAP.


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UNLOCKING THE

HYDROCARBON

PROMISE OF MOROCCO.

PetroMaroc

Investor Presentation June 2014

unlocking the hydrocarbon promise of morocco

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