asx spotlight presentation spotlight presentation hong kong & singapore may 2014 david casey,...
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ASX Spotlight Presentation Hong Kong & Singapore
May 2014
David Casey, Managing Director
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Disclaimer
Important Notice
• This presentation does not constitute investment advice. Neither this presentation nor the information contained in it constitutes an offer, invitation,
solicitation or recommendation in relation to the purchase or sale of shares in any jurisdiction.
• Shareholders should not rely on this presentation. This presentation does not take into account any person's particular investment objectives, financial
resources or other relevant circumstances and the opinions and recommendations in this presentation are not intended to represent recommendations
of particular investments to particular persons. All securities transactions involve risks, which include (among others) the risk of adverse or
unanticipated market, financial or political developments.
• The information set out in this presentation does not purport to be all inclusive or to contain all the information which its recipients may require in order
to make an informed assessment of Petrel. You should conduct your own investigations and perform your own analysis in order to satisfy yourself as
to the accuracy and completeness of the information, statements and opinions contained in this presentation.
• To the fullest extent permitted by law, the Company does not make any representation or warranty, express or implied, as to the accuracy or
completeness of any information, statements, opinions, estimates, forecasts or other representations contained in this presentation. No responsibility
for any errors or omissions from this presentation arising out of negligence or otherwise is accepted.
• This presentation may include forward looking statements. Forward looking statements are only predictions and are subject to risks, uncertainties and
assumptions which are outside the control of Petrel. These risks, uncertainties and assumptions include commodity prices, currency fluctuations,
economic and financial market conditions in various countries and regions, environmental risks and legislative, fiscal or regulatory developments,
political risks, project delay or advancement, approvals and cost estimates. Actual values, results or events may be materially different to those
expressed or implied in this presentation. Given these uncertainties, readers are cautioned not to place reliance on forward looking statements.
• Any forward looking statements in this presentation speak only at the date of issue of this presentation. Subject to any continuing obligations under
applicable law and the ASX Listing Rules, Petrel does not undertake any obligation to update or revise any information or any of the forward looking
statements in this presentation or any changes in events, conditions or circumstances on which any such forward looking statement is based.
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Petrel Energy’s Diversified Global Portfolio
Norte Basin Uruguay Cordobes Shale and Cerrezeulo and
La Paloma SS
Targeting unconventional and
conventional oil targets in Piedra Sola &
Salto Concessions (3.5M acres)
Betic Alps Spain – Aljibe
Formation Targeting conventional sandstone gas
reservoirs in 94,000 acres in Southern
Spain.
Lochend Cardium Alberta,
Canada Targeting “tight oil” in lower siltstone and
sandstone in 6,400 acres. (sales process
commenced)
Petrel Energy’s objective is to create shareholder wealth through the acquisition, exploration,
appraisal and development of a diversified portfolio of substantial oil and gas projects
Conventional and unconventional oil and gas project diversity
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Corporate Profile
Capital Structure
Cash: $8.6m (March 2014)
Issued Cap: 443.2m Shares
Market Cap: $80m (at $0.18)
Debt: $0
ASX Code: PRL
Uruguay & Spain Acquired
Coring Programme commenced
Shareholders
David Casey* 8.7%
Stephen Mitchell* 7.3%
Alexander Sundich* 5.0%
Cameron Richard Pty Ltd 6.6%
Smithley Super Pty Ltd 4.8%
Linwierik Super 3.9%
Top 20 55.0%
Board & Management
Stephen Mitchell* Chairman
David Casey* Managing Director & CEO
Alexander Sundich* Non-Executive Director
Ian Kirkham Company Secretary
Share price has increased up to 5 fold at times since Uruguay and Spain assets acquired
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Share Performance
$0.18
ResourceInvest - AOGR Report - 22 May 2014
Petrel best performing ASX oil & gas company by share price for 2013
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URUGUAY
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Uruguay Background
Stable democracy, population 3 million and ranked among the least corrupt countries in the world
Increasing international attention turning to Uruguay after recent successful offshore licencing round
with companies such as BP, BG and Total acquiring extensive offshore and more recently onshore permits
“…Total joins independents Schuepbach Energy and Petrel Energy.”
TOTAL & ANCAP acquired concessions after Petrel’s entry in late 2012
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Uruguay Ideal Operating Environment
Ready local market for oil and gas at international prices – Uruguay currently imports 40,000 bopd into La Teja Refinery in Montevideo
Attractive PSC terms. ANCAP (Energy Ministry) involved in upstream and downstream activities
Ideal operating conditions with ready access to equipment in neighbouring Brazil and Argentina – 2 Coreholes drilled by local contractors, seismic about to commence
Politically stable democracy with excellent fiscal terms and proactive business environment
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Uruguay Concessions
Extensive acreage position in Piedra
Sola and Salto concessions totaling
14,000 km2 (~3.5 million acres)
Magnetotelluric (MT) programme
confirmed existence of rift basin
extending across both permits with
Devonian and Permian sediments
Successful corehole programme has
confirmed the existence of oil
producing source and reservoir rocks
Both unconventional and
conventional reservoir targets.
Uruguay represents a rare company transforming “first mover” opportunity for Petrel
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Uruguay Corehole Success
Corehole results confirm existence of an active petroleum system
Multiple mature source rocks identified
Free oil identified across majority of Piedra Sola block
Uruguay Corehole Achar E-1; Oil leaching from Devonian sandstones just below Cordobes Shales (306-315m)
Permian and Devonian source rocks and very high quality sandstone reservoirs represent
significant conventional and unconventional reservoir targets
Cardozo Chico E1 Permeability = 20.5 darcies
Cardozo Chico E1 Permeability = 30.9 darcies
Excellent porosity and permeability measured from sandstone core samples. Porosities commonly greater than 20% with measured permeability in the Darcy (1000md) range in some samples
Significant conventional reservoir potential
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Uruguay Corehole Success
Corehole results confirm active petroleum system across most of Piedra Sola and very likely
deeper Salto block.
75kms
Piedra Sola
Corehole Results
Parameter SEI Cerro
Padilla E-1 SEI Cardozo
Chico E-1 SEI
Achar E-1
ANCAP Cañada
Charrua E-2
TOC Max. 4.5% * 11.60% 2.5% 9%
TOC average TBC 3.30% 1.5% 2.8%
Amorphous kerogen 70% 40%-70% 95% 50% - 90%
Vitrinite reflectance 0.74 0.76 to 0.78 0.65 0.75
Reservoir permeability (max)
TBC 1,000 -
3,000md (30,000md)
1,000 - 2,000md
(7,600md) n/a
Reservoir porosity TBC ~20% ~20% n/a
Streaming UV Yes Yes Yes Yes
Free oil Yes Yes Yes Yes
* Preliminary results
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Uruguay 2014 Seismic Program
580km 2D seismic program on track to commence in June.
Seismic (red lines) will be conducted on public roads where possible.
Piedra Sola Salto
Proposed seismic programme (red) Roads (yellow)
Concessions (pink)
Seismic will assist with reservoir and resource extent and delineation
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Uruguay How does the Norte Basin Compare?
Bakken Analogue
Currently producing more than 800,000 bopd and anticipated to increase to more than 1-2 MM bopd by 2020
USGS estimates 7.4 billion bbls recoverable oil potential
Current areal extent of US producing play area 28,000km2
Vaca Muerta Analogue
First shale oil discovered Nov 2010 by YPF, partnered with Exxon / EOG / Total / Shell, current production 16,000 bopd
US EIA estimates total recoverable hydrocarbons to be 16.2 billion bbls and 308 TCF
Current areal extent of play area 30,000km2
Comparable Bakken analogue is largest US oil development in decades
Similarities Same Devonian-age shales
Similar geological environments
Both have condensed organic rich sections
Kerogens are mainly amorphous and hydrogen rich – more oil and liquids prone
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Uruguay How does the Norte Basin Compare?
“Energy gurus Wood Mackenzie recently called Argentina’s shales the best in the world”
www.oilandgas-investments.com February 2014
“U.S. oil company Chevron Corp signed an agreement with Argentina’s YPF to invest $1.24 billion in the Vaca Muerta shale oil and gas formation, thought to be one of the biggest reserves in the Western Hemisphere”
Reuters, 16 July 2013
* Preliminary results from limited sampling
The Vaca Muerta is proof that very large shale plays are being found and developed outside
the USA
Uruguay Argentina USA (ND) USA (PA - NY)
Cordobes San Gregorio Mangrullo Vaca Muerta Bakken Marcellus
Hydrocarbon Type Oil Oil Oil Oil Oil Gas
Depth, feet 1000' - 10,000' 1500' - 8000' 2500' - 7000' 5500' - 10,000' 4000' - 11,000' 4800' - 8500'
Net Pay 300' 70' 270' 325' 10 - 60' 50-250'
TOC 1% - 4%* 1% - 11.5% 1% - 4.5%* 3% - 14% 10% - 15% 3% - 11%
Ro% 0.67 - 0.85 0.75 - 0.8 0.73 - 0.8 0.45 - 0.6 0.8 - 3.0
Recoverable Oil bbbls Unknown Unknown Unknown 16 7 1
Recoverable Gas TCF 308 6 84
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SPAIN
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Spain Background
Two contiguous license areas total 38,000ha (94,000 acres), Cadiz province, southern Spain
License contains 1956 Almarchal-1, which flowed gas from stacked porous & permeable
conventional sandstones at shallow depths
Thinly populated rural area, good relationship with local authorities & land owners
Access to 40” gas pipeline with excess
capacity 3km from well
USD10+ spot gas price
Known gas accumulation with ready access to high priced European gas markets
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Spain Highlights
Detailed formation evaluation suggests
upwards of 500m of net pay with gas
columns in excess of 400m.
Exhaustive data compilation and analysis
of the Almarchal-1 well confirms
excessive formation damage likely due
to heavy fresh water drilling fluids
The Joint Venture continues to appraise
farmout opportunities for the Tesorillo
prospect.
Joint Venture is attempting to gain
access to core from original well.
Prospective Resource of up to 3TCF certified by Netherland, Sewell & Associates, Inc. (NSAI)
Prospective Resource may be conservative if drilling confirms more extensive oil water
contact than assumed in certification
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Spain Almarchal -1 Well
Drilled by Valdebro in 1956/57
Almarchal-1 Well location selected on basis of field geology and gravimetry, not seismic
Took 12 months to drill
Many problems due to swelling shales, four sidetracks, gas flared from leaky surface casing
39 DST’s, most recovered small amounts of gas (max 93% CH4), little to no water
Good reservoir quality indicated
61 cores drilled
41 good quality porosity and permeability measurements by IFP (Paris)
Gas flowed to the surface on multiple occasions
Despite reservoir damage from poor drilling methods i.e. the use of fresh water drilling fluids
Twin of Almarchal-1 to be drilled & tested
Using inhibited mud system to protect reservoirs & ensure optimal gas rates
DST13: flowed 7Mscf/d Gas
DST36: flowed 5Mscf/d Gas
DST5: rec 793m gas & mud
DST6: rec 1055m gas & mud DST7: rec gas cut mud
DST8: rec gas cut mud & fm water
DST14, 19: swabbed mud & fm water
DST21: rec 114m slightly gas cut mud DST12: rec 366m gas cut mud
DST23: rec 274m gas cut mud
DST27: rec 76m gas cut mud
Miocene Aljibe SS
Gross interval 1180m
(1030-2210m)
Net reservoir >500m
Almarchal-1
Recent petrographic studies support notion of excessive reservoir damage from swelling clays
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CANADA
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Canada Background
In March 2013 Petrel acquired a 40% interest in 5,120 gross acres and a producing well in the Lochend Cardium immediately west of Calgary
Unconventional “tight oil” play targeting siltstone and sandstone reservoir
Renewed focus in the area came with the development of horizontal wells and multi-stage fraccing
IP’s range from 100-1,000 boe/d - 38°API (Lochend 100-350 boe/d)
Macquarie Capital Markets is currently seeking proposals for the sale of Petrel’s Cardium assets allowing Petrel to focus capital on its core projects in Uruguay and Spain
Ground floor, no promote, entry to low risk light oil play
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Canada Cardium Production Potential
Well 16-19-25-3W5M at Lochend yielded a 30 day initial production (IP 30) rate of 150 boed.
Joint venture has licenced 2 new well locations including associated infrastructure
On trend development drilling immediately to the north averages 132,000bbl EUR (recoverable)
Drilling trending toward two-mile horizontal wells and use of multi-well pads to minimize surface constraints
Experience and Technology readily applicable to other projects in Petrel’s portfolio
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Canada Joint Venture Expressions of Interest
Potential Cardium sale enables Petrel to consider active participation in
upcoming well in Spain
Extract from full Overview Memorandum released to ASX on 13 May 2014
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Looking forward…the year ahead
Continue to underpin value by realising large upside in Spain and Uruguay projects with tailored appraisal programmes
Monetise recently consolidated Cardium acreage through sales process with JV partners
Str
ate
gic
URUGUAY
Continue detailed core analysis & geological modelling
Increased interest to 51% (Spain 43.3%)
Commence seismic mid 2014 to enable resource delineation with possible follow up corehole programme
CANADA
Seek expressions of interest for Cardium assets with JV partner Bernum Petroleum
Focus capital on our core projects with likely better returns
SPAIN
Progress well permitting & approvals
Continue farmout process seeking well and possible seismic commitment
Permit MT programme to assist with pre-drilling appraisal
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THANK YOU
www.petrelenergy.com