Investor Presentation - Queiroz Galvão Exploração e Produção

August 2013
Investor
Presentation
Agenda
QGEP Overview
Experienced Leadership Team
Balanced Portfolio
Major Producing Asset
Strong Financial Position
Strategic Growth Plans
STRONG FOOTPRINT IN THE OIL&GAS
SEGMENT OF THE QUEIROZ GALVÃO GROUP
The QG Group
DRILLING
SHIPPING
Largest Brazilian oil &
gas services company
with top notch efficiency
performance
Largest shipyard
of the Americas
►
E&P
Largest private sector E&P
company based on
annualized daily
production of boe.
EPC
One of the leading EPC
providers in Brazil
FPSO
SBM partnership,
leader in FPSO’s
One of the first
companies to acquire
blocks in the exclusive pre
salt areas
ENGINEERING
One of the largest
engineering companies in
Brazil with a
historical track record
Sponsorship of the Queiroz Galvão Group, one of the largest conglomerates in Brazil with
an extensive footprint of 30 years across the Oil & Gas industry
►
Consolidated Group Net Revenues of R$ 8.7 billion in 2012
►
Arms length transaction between the Group’s companies
INVESTOR PRESENTATION
P. 3
LONGEST OIL & GAS
TRACK RECORD IN BRAZIL
2010
1996
Initiated E&P
business
1980
Queiroz
Galvão
Perfurações
S.A. founded
in April 1980
1999
Start of
QGEP
QGEP IPO
2000
Discovery of
Manati field
Awarded the first
E&P concession
blocks
2011
2003
First Oil in
Coral Field
2007
First gas in the
Manati Field
2012
Farm in BM-C-27
Two farm ins: Concession
BM-S-8 and
Carcará
BS-4
Discovery
(BM-S-8)
2013
8 blocks
acquired at
the 11th ANP
Bidding
Round
INVESTOR PRESENTATION
P. 4
Agenda
QGEP Overview
Experienced Leadership Team
Balanced Portfolio
Major Producing Asset
Strong Financial Position
Strategic Growth Plans
EXPERIENCED LEADERSHIP TEAM
▶
Technical team includes
42 highly qualified professionals
▶
International experience in
Libya, Iraq, Angola, Nigeria,
USA, Colombia, Bolivia, among
others
▶
Vast experience in Brazil’s
most important basins
▶
Active involvement in important
discoveries in Brazil, GoM and
West Africa, such as Roncador,
Marlim Complex, Albacora,
Barracuda, Piranema, Tiber,
Akpo, Agbami, among others
▶
Development of challenging
fields: Cascade, Chinook,
Cottonwood, among others
INVESTOR PRESENTATION
P. 6
Agenda
QGEP Overview
Experienced Leadership Team
Balanced Portfolio
Major Producing Asset
Strong Financial Position
Strategic Growth Plans
BALANCED & DIVERSIFIED PORTFOLIO OF ASSETS
-1st independent Brazilian Oil & Gas company to
operate in pre-salt premium area
- 1 producing field: Manati
-
3 Fields Under Development – Atlanta, Oliva and
Camarão Norte
-
3 Discoveries and 1 Potential Discovery Extension –
Carcará, Bem-Te-Vi, Copaíba and Abaré Oeste
-
14 Concessions in 9 different Brazilian basins
- Operator of
phase and
INVESTOR PRESENTATION
7 Concessions, 6 in the exploratory
1 in the development phase
P. 8
BLOCKS AWARDED IN THE 11th ANP BIDDING ROUND
 8 blocks acquired at the 11th ANP Bidding
Round, distributed across 5 different basins
Basin
Block
Other
Consortium
Members
Operator
QGEP
Working
Interest
Foz do
Amazonas
FZA-M-90
Premier Oil
Pacific Brasil
QGEP
35%
Espírito
Santo
ES-M-598
Statoil Brasil
Petrobras
Statoil
20%
Espírito
Santo
ES-M-673
Statoil Brasil
Petrobras
Statoil
20%
ParáMaranhão
PAMA-M-265
Pacific Brasil
QGEP
30%
ParáMaranhão
PAMA-M-337
Pacific Brasil
QGEP
50%
Ceará
CE-M-661
Total
OGX
Total
25%
Pernambuco
-Paraíba
PEPB-M-894
Petra Energia
QGEP
30%
Pernambuco
-Paraíba
PEPB-M-896
Petra Energia
QGEP
30%
encompassing a total of 5,785 km2
 Operatorship in 5 of the 8 blocks
 5 new partnerships including: Statoil, Total,
Premier Oil, Pacific Rubiales and Petra Energia
 Total of R$94.9 million in signature bonuses
 Approximately US$30-40 million net to QGEP
is expected to be expensed for the acquisition
of 3D seismic data over the next two years
 Drilling of at least four exploratory wells,
which are expected to begin drilling in 2017,
estimated at US$200 million net to QGEP
INVESTOR PRESENTATION
P. 9
PROLIFIC SANTOS BASIN
▶
More than 15 billion barrels
already discovered here
▶
Concentrated area for a
majority of Petrobras’ future
investments
▶
Multi-Play Basin: Post-salt
(sandstones and carbonates),
Pre-salt (sandstones, biolitites
and fresh water carbonates)
▶
Presence of high quality oil
▶
Important discoveries include:
Lula, Iara, Carioca, Libra,
Franco, Jupiter, Sapinhoá,
Atlanta and Carcará
INVESTOR PRESENTATION
P. 10
BM-S-8: MAJOR COLUMN OF AT LEAST 471 METERS OF
OIL OF 31° API AT CARCARÁ PROSPECT
▶
Contingent and
Prospective Resources
▶
10% stake
▶
Data obtained at Carcará
prospect showed a major
column of at least 471
meters of 31° API oil
exclusive of any
contaminants such as CO2
and H2S
▶
At least 402 meters are
microbial carbonate
connected reservoirs
▶
Reservoirs with excellent
permeability and porosity
▶
High potential flow rate
estimated in Carcará
INVESTOR PRESENTATION
▶
Revised Evaluation Plan at the
Block, already approved by the
ANP includes:



▶
Drilling of an appraisal well
for Carcará in 4Q13 followed
by the performance of a Drill
Stem Test
One well at the Guanxuma
prospect, which is expected
to be drilled in 2014
An additional well is
contingent on the results of
ongoing studies in the Block
The Operator’s development
schedule for Block BM-S-8
calls for drilling of production
wells at Carcará in 2016-2017
with first oil by the end of
2018
P. 11
BS-4: OPERATORSHIP IN DEEP WATERS
▶
Atlanta and Oliva post-salt fields with heavy oil
ranging from 14º to 16º API
▶
QGEP: Operator and 30% stake
▶
Located within the Blue Picanha, a high pre salt
exploratory potential region, located close to the
discoveries of Libra, Franco, among others
▶
Since receiving ANP approval in December 2012 for
the Atlanta Field Development Plan, QGEP has moved
ahead with preparations for the EPS:
▶
•
Advanced negotiations to secure a rig to allow
drilling in the 2H13, with first oil to be
extracted by 2015 through two horizontal
wells
•
Services providers for the Field include world
class companies such as Baker, Cameron, GE,
Weatherford, among others
The Company is awaiting ANP approval for the
Development Plan of the Oliva Field
INVESTOR PRESENTATION
P. 12
ATLANTA AND OLIVA FIELDS
Field
Fluid
Volumes in place
(millions of barrels)
Recoverable
Volumes
(millions of barrels)
Recovery
Factor (%)
Atlanta
Oil
1,500
260
17%
Oliva
Oil
350
62
18%
FPSO
Specifications
 Contract Type: Leasing
 Expected contract signing: Early 2014
Characteristics

Minimum liquid capacity: 30,500 bbl/d

Minimum oil capacity: 25,000 bbl/d

Water treatment capacity: 8,000 bbl/d

Gas compression system: 180,000 m³/d

Slots for 3 production wells

Anchoring: Spread Mooring or Single Point Mooring (Turret)
P. 13
FLOW RATE: EXPECTED OIL PRODUCTION
(2 WELLS)
35
35
Flow Rate for Oil Production (Upper Limit)
Flow Rate for Oil Production (Lower Limit)
30
Accumulated Oil Production (Upper Limit)
Accumulated Oil Production (Lower Limit)
25
25
20
20
15
15
10
10
5
5
0
0
0
1
Time (Years)
2
Accumulated Oil Production (Mbbl)
Flow Rate for Oil Production (kbbl/d)
30
3
P. 14
EMERGING CAMAMU
AND JEQUITINHONHA BASINS
▶
Similar geological context
▶
Includes both post-salt and pre-salt
targets
▶
Sandstones and potentialy carbonate
reservoirs
▶
Previous discoveries in the Basins
include: Pinaúna (oil), Sardinha (oil
and gas),
Manati (gas), and Camarão/ Camarão
Norte (oil and gas)
INVESTOR PRESENTATION
P. 15
BM-J-2: RESULTS EXPECTED BY 3Q13
▶
100% stake and Operator
▶
2 Prospects:
•
Alto de Canavieiras: 29% of GCOS
•
Alto Externo: 24% of GCOS
▶
Risked Prospective Resources: 94.2 million boe
(Blended Case)
▶
In July 2013, the Company restarted drilling at
the Alto de Canavieiras (JEQ#1) prospect in
Block BM-J-2 with the jack-up rig, P-VI from
Petrobras
▶
Previously drilled to a depth of 2,540 meters,
the JEQ #1 prospect will be drilled to a final
depth of approximately 4,700 meters
▶
The Company expects to reach the final depth
by the end of the 2013 third quarter
INVESTOR PRESENTATION
Drilling
interrupted
at 2,540 m
P. 16
Agenda
QGEP Overview
Experienced Leadership Team
Balanced Portfolio
Major Producing Asset
Strong Financial Position
Strategic Growth Plans
STRONG AND SOLID PRODUCTION AT MANATI FIELD
▶
Partners:
▶
the
•
Petrobras : 35% (Operator)
•
Panoro: 10%
•
Brasoil: 10%
Manati
Field
se
ne
Largest shareholders of
= 45% working interest
SALVADOR
Ga
▶
3P Reserves : 57.7 million boe*
Manat i
Ca m arão
N ort e
N
W
E
S
0
5
10
20
KM
QGEP’s Gas Fields
Petrobras Blocks
Valdemir Ferreira Gas Treatment Plant
Statoil Blocks
*Dated 2Q13
INVESTOR PRESENTATION
P. 18
INCREASED PRODUCTION AT MANATI FIELD
▶
Based on our current visibility, we expect full year 2013 production capacity at the
Manati Field to average 5.5 - 6.0 MMm³ per day
▶
In order to maintain these levels, it will be necessary to construct a surface
compression plant to boost the reservoir energy and assist in the delivery of gas to
the treatment plant. Construction of the plant will begin in 2014 and will be
completed by that end of that year.
▶
As a result, QGEP is forecasting 2014 production of 5.0 to 5.5 MMm3 per day,
returning to approximately 6.0MMm3 per day in 2015.
Daily Gas Production
6,6
5,9
(MM m3 per day)
6,7
6,6
5,6
4,2
4,1
4,7
6,7
6,1
6,6
5,2
5,0
3,5
1Q10
2Q10
3Q10
4Q10
Average 2010:
6.2 MM m3 per day
INVESTOR PRESENTATION
1Q11
2Q11
3Q11
4Q11
Average 2011:
4.1 MM m3 per day
1Q12
2Q12
3Q12
4Q12
1Q13
2Q13
Average 2012:
Average 6M13:
6.1 MM m3 per day 5.8 MM m3 per day
P. 19
Agenda
QGEP Overview
Experienced Leadership Team
Balanced Portfolio
Major Producing Asset
Strong Financial Position
Strategic Growth Plans
QGEP’S FINANCIAL PERFORMANCE
Net Revenue (R$ million)
Gas Production (Millions of m3)
CAGR: -0.3%
1.017,5
CAGR:+9.2%
1.010,6
387,5
-2.3%
675,1
482,2
2010
2011
2012
471,0
6M12 6M13
100%
62%
250,0
78% 103,6
140,0
90%
70%
52%
119,6
60%
150,0
100,0
80%
64%
140,5
2011
2012
219,1
232,1
6M12
6M13
Net Income (R$ million)
285,1
300,0
200,0
2010
148,0
160,0
301,2
+5.9%
289,0
EBITDAX (R$ million)
350,0
462,3
50%
36%
38%
120,0
100,0
80,0
32%
40,0
30%
20,0
20%
0,0
10%
-20,0
0%
-40,0
95,9
92,1
40%
20%
18%
10%
-12%
0%
-10%
50,0
0,0
2010
2011
2012
6M12
EBITDAX Margin
INVESTOR PRESENTATION
50%
30%
65,9
60,0
40%
41%
6M13
2010
2011
2012
-26,8
6M12
-20%
6M13
Net Margin
P. 21
EXPECTED CAPEX
CAPEX net to QGEP(1)
(US$ million)
CAPEX net to QGEP(1)
(US$ million)
310
310
7
25
78
190(2)
70
190(2)
8
10
42
70
45
20
42
78
45
8
7
2013
(2)
40
225
95
(1)
70
15
2014
Signature Bonus Round 11
Development
Exploration
Other
2013
2014
BS -4 Development
Blocks Round 11
BM-J-2
BM-CAL-12
BM-S-8
BS-4 Piapara
BM-S-12
Other
Does not include the compression plant at the Manati Field
US$ 30 million was already spent up to June 30, 2012
INVESTOR PRESENTATION
P. 22
STRONG NET CASH POSITION
Investment Distribution
▶
▶
▶
At the end of 2Q13, cash balance was
over R$1 billion
BNB
15%
In 2Q12, the Company eliminated all of
its debt, following the total repayment of
the BNDES and BNB loans linked to the
Manati Field development
Caixa
Econômica
13%
Itaú
10%
Banco do
Brasil
13%
Cash is invested in dedicated funds and
fixed income assets, mostly in reais
Bradesco
9%
Governmen
t Securities
30%
Votorantim
6%
Santander
3%
Other
1%
Ratings*
AA
6%
AAA
94%
*Does not include Government Securities
INVESTOR PRESENTATION
P. 23
Agenda
QGEP Overview
Experienced Leadership Team
Balanced Portfolio
Major Producing Asset
Strong Financial Position
Strategic Growth Plans
LOOKING AHEAD: MAJOR MILESTONES
2018-2020
2015-2017
2014
2013
►
Drilling at JEQ#1 Prospect underway
►
Resources Certification Report
►
►
BS-4: Horizontal well to be drilled EPS for Atlanta Field
BM-S-8: Drilling of the Carcará
appraisal well
►
•
•
►
•
•
►
INVESTOR PRESENTATION
BS-4:
Development of the Atlanta Field
Drilling of the Piapara pre-salt
prospect
BM-S-8:
Appraisal well and test results
from Carcará
Drilling of Guanxuma prospect
►
►
►
►
►
First oil expected
from Carcará
First Oil from the Atlanta Field
Development of Carcará:
Extended Well Test in 2015
Exploratory wells at the
Blocks awarded at the 11th
ANP Bidding Round
Exploratory Drilling at Copaíba
and Guanabara Profundo
Drilling at the Ilha Bela well and
CAM#01 (Além-Tejo) prospects
P. 25
BUILDING A BALANCED PORTFOLIO
OF PRODUCING & EXPLORATORY ASSETS
▶
Exploration-focused growth strategy
▶
Building a portfolio looking to the mid
and long-term
▶
Technical team of highly-skilled
professionals with extensive experience
across a number of
basins, both in Brazil and abroad
▶
Presence in both producing and frontier
basins, with a focus in Brazil:
― Offshore deepwater
▶
Balance between operated and nonoperated assets
▶
Ambitions to be amongst the top 3
largest producing Brazilian oil & gas
companies by 2020
INVESTOR PRESENTATION
P. 26
CONTACT US
Investor Relations QGEP Participações S.A.
Av. Almirante Barroso, nº 52/sala 1301, Centro, Rio de Janeiro, RJ
CEP: 20031-918
Phone - IR: 55 21 3509-5959
Fax: 55 21 3509-5958
E-mail: [email protected]
www.qgep.com.br/ri
INVESTOR PRESENTATION
P. 27
DISCLAMER
This document contains some statements and information about the Company that reflect the current views and/or expectations of
the Company and its managers with regard to its activities. These include all statements containing forecasts and projections or
that indicate or imply future results, performance or achievements, which may include such words as "believe", "predict", "expect",
"contemplate", "will probably result", or any other words or expressions of similar meaning. Such statements are subject to a
series of expressive risks, uncertainties and assumptions. Readers are warned that several important factors may lead actual
results to significantly diverge from the plans, targets, expectations, estimates and intentions expressed herein, there can be no
assurance that the Company will achieve or is likely to achieve the future results or projections contained herein. Under no
circumstances shall the Company or its directors, officers, representatives or employees be liable to any third parties (including
investors) should they make decisions, investments or business acts based on information and statements presented herein, nor
shall the Company be liable for any indirect damages, loss of profit, or similar consequences thereof. The Company does not
intend to provide shareholders with any revised versions of the statements or analysis of differences between the statements and
actual results. This presentation does not contain all the necessary information for a complete investment assessment on the
Company. Investors must produce their own assessments, including the associated risks, before making an investment decision.
INVESTOR PRESENTATION
P. 28