Progress and Potential

Progress and Potential
Annual General Meeting
30 May 2013
Brian O’Cathain
0
Disclaimer
• This presentation contains certain forward-looking statements that are subject to the usual risk
factors and uncertainties associated with the oil and gas exploration and production business.
• Whilst Petroceltic believes the expectations reflected herein to be reasonable in light of the
information available to them at this time, the actual outcome may be materially different owing to
factors beyond the Group’s control or within the Group’s control where, for example, the Group
decides on a change of plan or strategy.
• The Group undertakes no obligation to revise any such forward-looking statements to reflect any
changes in the Group’s expectations or any change in circumstances, events or the Group’s
plans and strategy. Accordingly no reliance may be placed on the figures contained in such
forward looking statements.
1
In the last 12 months,
Petroceltic delivered…
Merger
with
Melrose to
create full
cycle E&P
company
New
acreage in
Egypt and
Italy
Booking of
304MMboe
of 2P
reserves
for Algeria
$300m
bridge
financing
facility
Refinanced
with a 7
year $500m
syndicated
facility
Seismic in
Bulgaria,
Romania
and
Kurdistan
2
Average
production
of
27Mboepd
Exploration
and
production
drilling in
Egypt
What to expect in the next 12
months…
Completion of
second
Algeria
farmout
Kaliakra 1
tieback to
increase
production
in Bulgaria
Spudding
of two wells
in Romania
Listing on
main London
and Irish
Stock
Exchanges
Two high
impact wells
in Kurdistan
Share
Consolidation
of 25:1
Exploration
and
production
drilling in
Egypt
FEED
studies in
preparation
for Algerian
development
Balanced portfolio with a regional focus
•
Balanced portfolio of exploration, development and production assets
–
–
High impact exploration initiatives in Kurdistan Region of Iraq,
Romania, Egypt and Italy
Core development and production assets in Algeria, Egypt and
Bulgaria
•
Production of 25 to 27 Mboepd(1) underpinning strong operational
cashflows to fund future development and exploration
•
Field Development Plan and Gas Sales terms for Ain Tsila approved by
Algerian Authorities
•
High impact exploration program over coming 24 months – 8 firm wells
and 4 contingent wells, including high impact wells in Kurdistan and
offshore Romania
•
Experienced management team with complementary skill sets – full
cycle operational capability onshore and offshore
Production
Appraisal/Development
Full cycle independent oil and gas company focused on North Africa, Mediterranean and Black Sea
(1) 2013 guidance, working interest basis
3
Exploration
Experienced Board and management team
Experienced Non- Executive Directors
•
•
•
•
•
Hugh McCutcheon, Deputy Chairman – Formerly Head of Corporate Finance at J&E Davy
Robert Adair, Non-Executive Chairman
• Geologist and Chartered Accountant
• Founder of Melrose
• 23.5% shareholder in enlarged business
Robert Arnott, Previous Chairman of Petroceltic – Non-Executive Director of Spring Energy
James Agnew – Chairman of UK Corporate Broking at Deutsche Bank
Alan Parsley – Former Head of Shell International Exploration and New Ventures
Con Casey – Chartered Certified Accountant, 25 years of experience as an advisor in the natural resources sector
Brian O’Cathain, CEO
Tom Hickey, CFO
•
•
•
Chartered Accountant
CFO of Tullow Oil plc- 2000 to 2008
Non-Executive Director of PetroNeft
Resources
Peter Dunne
•
•
•
Geologist and Petroleum Engineer
Founding CEO of Afren
25+ years with Shell, Enterprise,
Tullow
Geoff Probert
David Archer, OBE
•
Managing Director,
Group Finance
•
Managing Director,
North Africa
•
Managing Director,
Black Sea
•
Chartered Accountant
with 15+ years
experience
•
Petroleum engineer
with 29 years
experience
•
•
Prior to joining
Petroceltic in 2009
was Group Financial
Controller of Regal
Petroleum plc.
•
Managing Algeria
Development process
within PCI
30 years' oil industry
experience, principally
with BP and Texaco,
prior to joining Melrose
in 1999
4
•
Formerly ran BHP
Billiton’s Ohanet
development in Algeria
David Thomas, COO
•
Responsible for all
Bulgaria and Romania
production and
commercial activities
•
•
•
Petroleum Engineer
CEO Melrose, ex President and COO
Centurion
30+ years experience with Conoco,
Lasmo and ENI
John Naismith
•
•
Head of Technical
•
Responsible for Group
reserves and
petroleum engineering
With Melrose since
2007, prior experience
with Enterprise
Dermot Corcoran
•
•
Head of Exploration
•
Responsible for Group
exploration, geology &
geophysics
With Petroceltic since
2006, previously
worked with
ExxonMobil, Fina &
Statoil
High quality assets with material scale
Full cycle E&P portfolio
Combined reserves and resources
Algeria, Egypt and Bulgaria
Production and
Development
Reserves and
Resources
•
•
•
2P reserves of 378 MMboe
2P
Production of 28.4 Mboepd (2012 average)
378
MMboe
Ain Tsila resources converted to reserves
Italy
• Elsa contingent resources of 52 MMboe
2P + 2C
430
MMboe
Kurdistan, Romania, Bulgaria, Italy and Egypt
Appraisal and
Exploration
•
•
Unrisked
High impact exploration portfolio
Prospective
Net mean unrisked prospective resources of
Resources
1,570 MMboe
Note: all figures quoted year end 2012 on working interest basis
5
Onshore
Egypt
Bulgaria
Algeria
Italy
Egypt
1,570
MMboe
Bulgaria
Italy
Romania
Kurdistan Region of Iraq
Active two year work programme
Development projects and 16 Wells (8 firm exploration)
2013
WD HZ 14
SD 2
Egypt
2014*
WK3
ST
WORKOVERS
WK4
ST
WD HZ 15
SEEM CRET (CONT)
WORKOVERS
WK 10
WK 9
DIKIRNIS REFRIGERATION & KHILALA COMPRESSION
TAMAD COMPRESSION
QA’A PLAIN
(CONT)
Bulgaria
KAMCHIA
KALIAKRA 1 TIEBACK
KAV E COMP
EST COBALCESCU
Romania
MURIDAVA
MURIDAVA
Algeria
KAVARNA EAST
EST COBALCESCU
MURIDAVA
EST
COBALCESCU
AIN TSILA DEVELOPMENT
CARPIGNANO SESIA (CONT)
Italy
ELSA (CONT)
OFFSHORE ADRIATIC
(CONT)
SHAKROK
Kurdistan
DINARTA
Exploration seismic
*Preliminary indicative plan
6
Exploration well
DINARTA
Development well
Field development
Sustainable long term production profile
Assumes second Ain Tsila farm out and no exploration success
Mboepd, Working Interest Basis
2013 Production guidance 25 Mboepd to 27 Mboepd
Note: net entitlement numbers on the basis of a oil price of $90/bbl constant.
7
Clear Long Term Financial Strategy
•
Short and Medium term production profile supports
funding strategy
•
Strong cashflow generation from producing assets
•
two core producing areas – Pro Forma 2012
Revenue >$250 million
•
•
•
low operating costs
stable mix of liquids and gas
predictable gas prices on long-term contracts
•
Second phase Algerian asset farm-out substantially
commercially agreed.
•
Proven access to financing markets
•
•
8
$500 million 7 year facility led by HSBC/IFC
Clear and specific availability for Algeria project
subject to milestones
Country
2013 Forecast ($m)
Exploration
Development
Total
Algeria
-
11
11
Bulgaria
9
27
36
Egypt
10
48
58
Italy
3
-
3
Kurdistan
22
-
22
Romania
20
-
20
Total
64
86
150
Integrated and focused growth strategy
Overall Group Strategy for Growth
Portfolio Balance
and Diversity
9
Quality Leadership
and Management
Financial
Flexibility
Countries, assets,
commodities and
contracts
Operational Excellence
Financial Control and
Governance
Technical Focus
Health and Safety, CSR
Access to Capital
Markets
Bus Dev /
New Ventures
Stakeholder
Management
Capital Allocation
Project Analysis
Producing assets
Egypt and Bulgaria
Stable cash flow and return on investment
10
Egypt production
• Operated assets onshore Nile Delta (100% working interest)
–
–
–
15 development leases, 12 fields currently on production
Two material assets with long term production
SE Mansoura exploration concession
• Low cost operating environment with established infrastructure
• Competitive Production Sharing Contract terms
–
W Khilala
35% cost oil and 80/20 profit share
NE Abu Zahra
W Abu Khadra
E Abu Khadra
• Average combined field 2012 production rate
–
S Zarqa
S Khilala
E Dikirnis
106 MMcfpd and 3,600 blpd
S Batra
W Dikirnis
Qantara
Salaka
• International liquids and domestic gas prices (1)
–
–
$106.56/bbl (oil, condensate and LPG)
$2.76/Mcf (gas)
S Mansoura
El Tamad
Damas
Al Rawda
SE El Mansoura
S Damas
Legend
• Assets managed through Joint OpCo with Govt
Exploration
30Km
(1) Commodity prices are 2012 averages
11
Production
Main Egyptian producing fields
West Dikirnis (oil and rich gas)
• Technically advanced development with horizontal wells,
gas re-injection and LPG plant
• Current production rate 2,900 blpd
• Ultimate reserves 20 MMbbls and 93 Bcf (~36% depleted)
• LPG plant expansion in progress and new wells planned
West and South Khilala (dry gas)
•
•
•
•
9 gas producers, simple production facilities
Current production rate 64 MMcfpd
Ultimate reserves 335 Bcfe (~63% depleted)
Compression project in progress and new wells planned
12
Bulgaria production
•
Galata Block (100% WI) located in shallow water (<100m) in the
Western Black Sea - suitable for jack-ups
•
Three fields currently on production
–
–
–
•
Galata (field development hub - platform pipeline and onshore
plant)
Kavarna and Kaliakra (single well subsea tie-backs)
Combined production of 30 MMcfpd
Future investment plans include
–
–
completion of suspended Kaliakra-1 discovery well
Kavarna East development in 2014
•
Majority of gas sold to Bulgargaz (state-owned gas utility company).
Average 2012 price $8.27/Mcf, 2013 forecast circa $8.50/Mcf
•
Competitive fiscal terms; 10% average Royalty and 10% CT
13
Building On our Bulgarian Infrastructure – Kaliakra, Kavarna
14
Development assets
Algeria and Italy
Material reserves and production growth
15
Algeria gas infrastructure
Major pipeline routes and the Isarene permit location
16
Key development asset: Ain Tsila field, Algeria
•
56.625% operated working interest
– partners Sonatrach (25.0%), Enel (18.375%)
– 2nd farm-out of 18.375% commercially agreed
•
Field appraised with 3D seismic and 9 wells
•
Development Plan and Gas Sales Terms
approved by Algerian Authorities December 2012
– 124 vertical wells (18 pre-first production)
– new gas treatment facilities
– 100km tie-back to the TFT field
– $1.5 billion pre-production capex (gross)
– capital phasing concentrated in 2015/16/17
•
Contingent resources 2.1 Tcf gas and 175 MMbbls
condensate and LPG
– first gas Q3 2017
– 355 MMcfpd production plateau (14 years)
•
Reserves booked 2013
•
Joint Operating Organisation steadily building
17
Ain Tsila Development Team Field Trip May 2013
18
Development Team Field Trip May 2013
19
Key appraisal / development asset: Elsa field, Italy
• Petroceltic operated asset (55% WI)
• Discovered in 1992
• Gross 2C contingent resource 95 MMbbls
• 65 metre oil pay zone identified in Cretaceous
dolomites, but not tested
• Key technical issues: fluid viscosity and
reservoir deliverability
• Planned Elsa-2 well to establish productivity
and fluid type
• Repeal of Decree 128 and launch of new Italian
National Energy Strategy may expedite drilling
• Expect to resubmit environmental application
to drill appraisal well shortly
20
Elsa
34-95-187
MMboe CR
Exploration portfolio
Egypt, Romania, Kurdistan and Italy
Transformational opportunities
21
Egypt exploration concessions
N Thekah
• Actively strengthening long term exploration acreage position
during period of low industry competition
– Three recent block awards in EGAS/EGPC licencing rounds,
pending ratification in 2013
S Idku
SE El Mansoura
Cairo
• Onshore Nile Delta
– South East Mansoura (1,860 km², 100% WI, Operator)
– South Idku (1575 km2, 75% WI, Operator)
– Core area with Tertiary and Cretaceous potential
– 3 year initial term, 2D/3D seismic and two wells
•
El Qa’a Plain
0
Km
120
W&E
Abu Khadra
Offshore Nile Delta
– North Thekah (3750 km2, 50% WI)
– Potential Levantine Basin extension
– 3 year initial term, 3D seismic
W Khilala
NE Abu Zahra
S Khilala
S Idku
S Batra
Salaka
S Mansoura
W Zahayra
S Zarqa
E Dikirnis
W Dikirnis
Qantara
El Tamad
Al Rawda
SE El Mansoura
Damas
S Damas
•
Onshore Gulf of Suez
– El Qa’a Plain (1824 km², 37,5% WI)
– Underexplored potentially oil prone sub-basin
– 4 year initial term, 3D seismic and one well
22
Legend
Exploration
Gas
Development
Gas & Condensate
Oil
0
Km
40
North Thekah - Proven Levantine Basin Play Fairway
•
Located 100km offshore,
between large Nile Delta and
Levantine Basin gas discoveries
Legend
Aphrodite (7 TCF)
Leviathan (16 TCF)
Petroceltic Acreage
Tanin (.5 TCF)
Licensed Acreage
•
Area: 3750km2
•
Edison 50% (Operator),
Petroceltic 50%
Open Acreage
Gas/ Condensate Field
Oil Field
Lead
1500km2
Commitment
•
Israel has recognised the
Egyptian block boundaries
•
Water depths: 400m-1400m
•
Underexplored with limited onblock data:
–
1580km 2D seismic
–
1080km2 3D (southern third
of block only)
23
Oligo-Miocene Sub-Salt Play
Dalit (.5 TCF)
3D
•
–
Tamar (8 TCF)
Gas Field
no previous drilling on block
Shimshon (2.3 TCF)
Mari
NOA
Gaza Marine
Pliocene Play
0
Km
80
Romania exploration: Muridava and Est Cobalcescu
• Muridava (Ex27): Petroceltic 40%,
Sterling 40% and Petromar 20%
Legend
Licensed
Petroceltic
• Est Cobalcescu (Ex28): Petroceltic 40%
Beach 30% and Petromar 30%
Romania
Eugenia-1
Sterling
• Mainly shallow water (jack-up) with
multiple proven exploration plays
• Under-explored due to old maritime
boundary dispute
Lebada
Petrom OMV
Est Cobalescu
Lukoil
Cobalescu
Lukoil
Sterling
Petroventures
Ana
Domino-1
• Increasing industry interest post
Domino-1 and Eugenia-1 discoveries
• Competitive fiscal terms: maximum
13.5% Royalty and 16% CT
• Romanian gas market liberalising
24
Petrom OMV
Exxon
60Km
Oil Field
Muridava
Olinpiskiyi
Doina
Constanta
Gas Field
Black Sea
Romania exploration: Muridava and Est Cobalcescu
•
•
•
•
Limited 1980s 2D seismic data and one well drilled on the Muridava block (Olympiskaya oil and gas
discovery)
New block wide 3D seismic survey (1,930 km2) acquired in 2012
Two wells scheduled for drilling in 2H 2013 – on trend with existing discoveries
– Cobalcescu South – 1 – Two miocene targets
– P50 prospective resources 404 bcf, 23.36% COS
– Muridava – 1 – Eocene, paleocene and cretaceous targets
– P50 prospective resources 169 bcf, 29-43% COS
Four firm exploration wells planned for 2014
25
Romania 3D Seismic Acquisition 2012
The Vyacheslav Tikhonov
26
Kurdistan Region of Iraq: Shakrok and Dinarta
• Shakrok and Dinarta PSCs signed with
KRG in July 2011
• Hess Operator, 64%, Petroceltic 16%,
KRG 20% (carried).
• Contain 5 large undrilled surface
structures
• Situated adjacent to existing oil discoveries
in the northern Kurdistan Region
– Taq Taq, Bina Bawi, Shaikan, Atrush,
Swara Tika
• First exploration well in each block to spud
in 2013
Dinarta and Shakrok Blocks
Dinarta and Shakrok both undrilled and on trend with major discoveries
27
Kurdistan exploration: Shakrok and Dinarta
•
•
•
•
•
Significant progress in Shakrok and Dinarta in 2012
–
2D seismic acquisition, field work, G&G Studies
Presence of 5 large undrilled anticlines in a prolific
petroleum province
100’s MMbbls potential in each structure with 30-40%
chance of success
First exploration well in each block planned for 2013
–
Shakrok-1 to spud in Q3 2013 – rig contract signed
–
Dinarta well to spud in Q4 2013 – rig contract
signed
Follow-up potential in 2014/15 in remaining structures
28
Regional Oil And Gas Infrastructure developing in Kurdistan
• Pipeline from Genel’s TaqTaq
field to Khurmala expected to be
operational by end Q2 2013
Turkey
Fishkabur
Zakho
Tawke
Dinarta
Swara Tika
Dahuk
Atrush
Shaikan
• Khurmala to Dohuk 300,000
bopd pipeline under construction
Iran
Bakrman
Heavy Crude Oil:
500,000 bopd
Bekhme
Bijeel
MOSUL
Salahaddin
IRBIL
• Khurmala to Fishkabur 1 million
bopd pipeline expansion
planned for 2014
Shakrok
Harir
Bina Bawi
TaqTaq
Legend
Licensed Acreage
Khurmala
Kirkuk
Open Acreage
Metering Station
• 2nd Heavy Crudes pipeline of
500,000 bopd planned from
Shaikan
Power Plant
Planned Power Plant
Sulaymaniya
Iraq
Kirkuk
Chamchamal
Oil Refinery
Planned Oil Refinery
Tawuk
City
Gas Pipeline
Tuz
Khurmatu
Planned Gas Pipeline
• 250 mmscf/d gas currently being
exported from Chemchemal to
power station near Irbil
29
Oil Pipeline
Planned Oil Pipeline
Kifri
Tikrit
Oil and Gas Pipeline
Oil Field/ Discovery
0
Km
80
Shakrok: On Track for July Spud
•
Ensign Rig 941 mobilising from Poland
•
Rig mobilization order issued March 2013
•
Shipment is by sea to Turkey and by
road to Kurdistan (Two border crossings)
•
Rig is currently on transport ship in Mediterranean en
route to Turkey, expected to reach port today
•
Rig expected in Erbil Kurdistan by late June
•
Rig move is on track with no delays reported
30
Ensign Rig-941 Move Route
31
Shakrok civil works advancing (April 2013)
32
Dinarta Seismic acquisition
33
Italy exploration: Po Valley, Carpignano Sesia prospect
•
Thrusted structure identified to west of producing 250MMbbls
Trecate / Villafortuna field and of similar scale
•
Triassic fractured carbonate targets - P50 prospective resources
230 MMbbls
•
Stakeholder consultation, permitting and well planning underway
•
Environmental approval process underway
•
Petroceltic 47.5%, Eni (Operator) 47.5%, Condotte 5%
Carpignano Sesia
prospect
Villafortuna
250 MMboe
34
Summary: a year of solid progress, exciting times ahead
• Diverse portfolio, balanced between production, development and exploration
• Existing stable production generating strong operating cash flow
• High impact development and exploration portfolio – continuing and material activity over next
24 months
• Successful refinancing exercise creates solid financial foundation supporting multiple options to
fund future development
• Experienced teams with complementary exploration and operating capabilities
• Combined organisation working effectively and well positioned to pursue further growth
opportunities
• Second Algerian farm-out planned Q3 2013
• Planned step up to Official Listing in Dublin and London
35