sound oil - Investor Village

SOUND OIL PLC
Company Update
March 2012
Qualifying Statement with Respect to Forward Looking Information
Forward looking statements, which are subject to various risks, uncertainties and other factors
that could cause actual events or results to differ materially from those anticipated in such
forward looking statements. Such risks, uncertainties and other factors include the uncertainties
inherent in oil and gas exploration and development activities, the effect of actions by third
parties, fluctuations in world oil prices and other risks. The company cannot give assurance that
the results anticipated herein will be attained. No responsibility or liability whatsoever is accepted
for any loss howsoever arising from any use of, or in connection with, this presentation. The
company further assumes no obligation to update forward looking statements should
circumstances or management’s estimates change.
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Outline of Presentation
• Company Profile and Strategy
• Asset Portfolio
• Financials / Funding
• Why Invest in Sound
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Sound Oil Profile
•
Independent Exploration / Development company listed on AIM
•
Current market capitalisation of circa $ 50M with $ 13M cash in bank
•
Independently assessed portfolio of discoveries : 17.5 Mmboe (P50) and $ 300M NPV10
•
10 well drilling programme: exploration, appraisal and development; Italy and Indonesia
•
Chasing acquisitions and assets: recently completed two Italian deals
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Sound Oil fully funded drilling – impact potential in the next 12 months
Firm Drilling in 2012/13
when
impact per share
Jatayu Exploration
March
0.9p
Cataka Exploration
May
1.38p
Geulis Exploration
July >>>
0.2p
Kerendan Gas Development
July >>>
revenue mid 2013
Nervesa Discovery
August
Rapagnano Gas Field
August >>>
revenue 2012 Q4
Strombone Discovery*
December
3.9p
Kerendan Deep Exploration
2013 Q1
1.36p
1.8p
9.54p per share
data from Fugro Robertson Competent Person Report, October 2011 and share register
* Funding underway
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Impact potential – other assets
•
Discoveries – 3p per share
• Application for new assets underway
•
Exploration – 19p per share
• Includes Badile – farmout underway
– Worth 6p per share on a 2 for 1 farmout
data from Fugro Robertson Competent Person Report, October 2011 and share register
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Cash Flows from existing discoveries
Net to Sound
100.0
Future cash flow from existing discoveries: onshore and offshore
80.0
60.0
20.0
2038
2036
2034
2032
2030
2028
2026
2024
2022
2020
2018
2016
-20.0
2014
-
2012
$ millions
40.0
-40.0
-60.0
-80.0
years
100.0
Future cash flow from existing discoveries: onshore only
80.0
60.0
20.0
2038
2036
2034
2032
2030
2028
2026
2024
2022
2020
2018
2016
-20.0
2014
-
2012
$ millions
40.0
-40.0
-60.0
-80.0
years
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a) data from Fugro Robertson Competent Person Report, October 2011
b) costs after first appraisal well is drilled
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Strategy – market cap of $ 500M+ within 5 years
Achieved through….
•
Continued high activity operations
• 7 exploration apparaisal wells in 12 months
• Two field developments
•
High upside wells in the near future - Nervesa, Strombone
•
Building up portfolio in South East Asia
•
Building on Italy through asset growth and acquisition
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Outline of Presentation
• Company Profile and Strategy
• Asset Portfolio - Italy
• Financials / Funding
• Why Invest in Sound
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Italy Background
• 3rd / 5th largest producer of oil / gas in
Western Europe
• Large gas market gas importing 90% of its
hydrocarbons: Hence good price ~$10/Mscf ++
• Good fiscal terms – net take after tax is 54%
• Licenses involve low initial outlay and exit
costs
• Low onshore operating costs
• Extensive gas pipeline network
Sound’s Italy Portfolio
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• Potential to pick up quality assets from other
players
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Italy: Key Development Projects – all Sound operated
Discoveries for Development
All Sound Operated
2012
2013
WI%
P50
billions of
standard cu ft
P50
millions barrels
oil
NPV10
$ millions
success case
Nervesa
100
20.7
-
62
Strombone
100
-
6.4
131
Rapagnano
100
1.1
-
4.2
Casa Tiberi
100
Musone
50
-
0.8
16
Montefano
95
3.8
-
13
Manfria
100
-
2.4
22
Dora (offshore)
100
17.6
-
50
Totals
43
10
$298
Under review
All measures of Best Estimate of Contingent Resources (P50)
data from Fugro Robertson Competent Person Report, October 2011
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Italy: Key Exploration Projects – all Operated by Sound
Exploration
Projects Onshore
WI%
P50
billions of standard
cubic feet
P50
millions barrels
of oil
Success Case NPV10
$ millions
Prospect
Badile*
Badile
100
185
-
410
Zibido
100
130
-
298
Costa Del Sole
Cielo
100
-
2.8
28
S Maria Goretti
Castorano
100
150
-
(TBD ~$300+)
Totals
465
3
$736
All measures of Best Estimate of Contingent Resources (P50)
data from Fugro Robertson Competent Person Report, October 2011
*Farmout underway
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Nervesa Onshore Gas Discovery - drilling August 2012
Sound 100%
Northern Italy, onshore
• 21 bscf -- contingent recoverable gas
• $62 million success case NPV10
• well cost $ 6.6 MM
• Previously flowed at 3.3 mmscfg/d
from single zone
• Multiple undrained gas sands remain
• Appraisal risk 50%
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All figures of are Best Estimate of Contingent Resources (P50) data from Fugro
13
Strombone Oil Discovery – drilling Q4 2012
Sound 100%
Southern Italy, onshore
• 6.4 million barrels oil contingent
recoverable resources
• $ 131 million success case NPV10
• Original maximum flow of 786 bopd
• 35 degree API oil
• well cost ~ $ 8 million
– single slant well development
• 1,800 metre total depth
• Appraisal risk 50%
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All figures of are Best Estimate of Contingent Resources (P50) data from Fugro
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Future net cash flows from Nervesa + Strombone discoveries
Sound 100%
Cash Flow - Nervesa + Strombone discoveries
50
30
20
10
2036
2034
2032
2030
2028
2026
2024
2022
2020
2018
2016
-10
2014
2012
$ millions
40
-20
years
a) data from Fugro Robertson Competent Person Report, October 2011
b) costs after first appraisal well is drilled
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Badile Gas Exploration Prospect – farmout underway
Onshore Po Valley
Sound 100%
• 185 Bscf prospective gas
resources
Target area
for BHL
Oil show in
Lacc-2 at this
level
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• ~$400 million success case
NPV10
•
Well cost $18 million
•
Close to 3 producing oil fields
•
Risk = 1:6 (CPR)
•
3D seismic interpreted by expert
•
No further technical work needed
All figures of are Best Estimate of Contingent Resources (P50) data from Fugro
16
Dora Offshore Gas Discovery – future farmout
Sound 100%
Adriatic Sea
• 17.6 Bscf contingent recoverable
gas resources
• 20 MMscfd discovery well flow rate
• $49.5 million success case NPV10
TOP GAS BEARING CARBONATE
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•
Well cost $16 million gross
•
Outside exclusion area and close to
facilities
•
Appraisal risk 50%
•
Additional potential in adjacent Dalla
Prospect ~ 30 Bscf (Sound est.)
All figures of are Best Estimate of Contingent Resources (P50) data from Fugro
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Outline of Presentation
• Company Profile and Strategy
• Asset Portfolio - Indonesia
• Financials / Funding
• Why Invest in Sound
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Indonesia: Portfolio Summary – non operated
Licence and Status
Bangkanai
PSC/POD
WI%
Discovery
or Prospect
5
Carried
Kerendan Field
West Kerendan
Jupoi
Citarum
PSC
20
Jatayu
Cataka
Geulis
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Citarum PSC: Current Drilling Campaign 3 Exploration Wells
Geulis
P50 26 Bscf*
Mojang
Pasundan-1
Cataka
P50 471 Bscf*
Lodaya
Jatayu
P50 288 Bscf*
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* Resource estimates from Fugro Robertson CPR, October 2011
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Indonesia: Development & Exploration Projects
Development
Projects
Discovery
Bangkanai
Kerendan Gas Field
WI%
P50 reserves
billions of standard cu ft
NPV10
$ millions
5
6.5
6.4
Totals
6.5
6.4
WI%
P50 potential resources
billions of standard cu ft
NPV10
(success case, $ millions)
Exploration
Projects
Prospect
Bangkanai
West Kerendan
5
96
49
Jupoi*
5
173
86
Jatayu
20
58
30
Cataka
20
94
46
Geulis
20
5.2
7
Totals
332
$218
Citarum
* To be confirmed
All figures of are Best Estimate of Contingent Resources (P50) data from Fugro
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Cataka – what happened?
Sound 20%
Onshore Java
The Prospect remains:
• 470 Bscf P50 prospective
recoverable gas resources gross
• $46 million success case NPV10, net
to Sound
? fault at ~1400 feet
3000 bbls mud losses
3rd
2nd
•
Junked well cost $1.1 million net to
Sound
•
New well will cost the same
•
Risk of success 1 in 6 Sound
1st
All figures of are Best Estimate of
Contingent Resources (P50) data
from Fugro
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Jatayu exploration – next well – drilling March
Onshore Java
Sound 20%
• 290 Bscf prospective
recoverable gas resources gross
• $30 million success case
NPV10, net to Sound
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well cost $1.1 million net to Sound
•
Risk of success 1 in 6
•
good address but a wildcat
•
Target depth 5000 feet dd
All figures of are Best Estimate of Contingent Resources (P50) data from Fugro
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Bangkanai PSC
Kerendan Gas Field plus Deep Prospect
KALIMANTAN
Sound 5% (carried)
• Field development
• starts mid 2012
• first gas mid 2013
• Deep prospect = 1.83 TCF
prospective gas resource
• Deep exploration well
– TD 4385 m
– gross $18 million
– No net cost to Sound
• Drill in Q1 2013
All figures of are Best Estimate of
Contingent Resources (P50) data from
Fugro
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Outline of Presentation
• Company Profile and Strategy
• Asset Portfolio
• Financials / Funding
• Why Invest in Sound
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Key Financials
•
2.1 Billion shares in issue (AIM listed)
•
218 million warrants outstanding (60M exercisable at 2p; 158M exercisable at 1.86p)
•
36.6 million share options awarded to Directors / Officers (as at 31/12/11)
•
Current share price 1.65p (52 week high / low of 6.35p / 1.25p)
•
Average daily volume c. 30 million (1.5% of company; has been >100 million)
•
Cash in bank £8M (funds drilling to October 2012)
•
£10M SEDA in place (of which £ 5.85M remaining)
•
Only further funding will be to fund Strombone appraisal well
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Outline of Presentation
• Company Profile and Strategy
• Financials / Funding
• Asset Portfolio
• Why Invest in Sound
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Why Invest in Sound Oil?
High impact drilling campaign
Flow of deals
Near term revenue
Good people
Low overhead
Ambition to add value
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Key Management
•
Gerald Orbell, Chairman and Chief Executive Officer
•
•
•
•
James Parsons, Chief Financial Officer
•
•
•
17 years experience in Oil / Gas across Europe, South America and Central America,
including 12 years with Royal Dutch Shell
Strong background in mergers and acquisitions
Mick Cope, Chief Operating Officer
•
•
•
Over 30 years of technical, managerial and director level experience in hydrocarbon sector
Ex executive director of Fina Exploration, Fina Development, Premier Oil plc and United Utilities plc
Currently the chairman of Antrim Energy Inc. and on boards of Moorland Energy and Valpak Limited
Petroleum geologist with Texaco, Petrofina and Schlumberger
Involved in exploration, appraisal and field development projects in West Africa, North Africa,
Central Asia, Southeast Asia and Northwest Europe.
Luca Madeddu, Italy Managing Director
•
22 years of experience as reservoir geologist with ENI, including extensive experience in
hydrocarbon production, field development, petroleum engineering, supply chain management and
reservoir engineering across Venezuela, Nigeria, Indonesia, UK, Congo and Italy
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Board of Directors
•
Gerald Orbell, Chairman and Chief Executive Officer
•
Michael Nobbs, Non Executive Director
• 35 year track record in Investment Banking
•
Tony Heath, Non Executive Director
•
Ex Sound Oil CFO and ex Group Finance Director of Premier Oil plc
•
Illham Habibie, Non Executive Director
• Strong relationships in South East Asia
• Founding Director of Mitra Energia Ltd
•
Andrew Hockey, Non Executive Director
•
General Manager and Co-founder of Fairfield Energy Limited
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For further information…
Gerald Orbell
Chief Executive Officer and Chairman
[email protected]
James Parsons
Chief Financial Officer
[email protected]
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Appendix: Hydrocarbon Units and Abbreviations
Mscf
Thousand standard cubic feet of recoverable gas
Bscf
Billion standard cubic feet of recoverable gas
Tscf
Trillion standard cubic feet of recoverable gas
MMscfd
Million standard cubic feet of gas per day
MMbo
Million barrels of recoverable oil
MMboe
Million barrels of recoverable oil equivalent (6000 scf = 1 barrel of oil)
bopd
Barrels of oil per day
1C / 2C / 3C
Contingent resource categories equivalent to low / best / high estimates (correspond to proved,
probable and possible categories of reserve estimates)
P90/P50/P10
Probabilistic estimate of resources equivalent to the most likely or best estimate.
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