august 2013 investor presentation - queiroz galvão ... · investor presentation . p. 4 1980...

August 2013

Investor Presentation

Agenda

Experienced Leadership Team

Balanced Portfolio

Major Producing Asset

Strong Financial Position

Strategic Growth Plans

QGEP Overview

STRONG FOOTPRINT IN THE OIL&GAS

SEGMENT OF THE QUEIROZ GALVÃO GROUP

P. 3

The QG Group

► 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

Largest Brazilian oil &

gas services company

with top notch efficiency

performance

Largest shipyard

of the Americas

Largest private sector E&P company based on annualized daily production of boe.

One of the first companies to acquire blocks in the exclusive pre salt areas

One of the leading EPC

providers in Brazil

SBM partnership,

leader in FPSO’s

One of the largest

engineering companies in

Brazil with a

historical track record

DRILLING SHIPPING E&P EPC FPSO ENGINEERING

INVESTOR PRESENTATION

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P. 4

1980 Queiroz Galvão Perfurações S.A. founded in April 1980

1996 Initiated E&P business

2000 Discovery of Manati field

2011 QGEP IPO

Two farm ins: BM-S-8 and BS-4

2012 Farm in BM-C-27 Concession

Carcará Discovery (BM-S-8)

2010 Start of QGEP

2007 First gas in the Manati Field

1999 Awarded the first E&P concession blocks

2003 First Oil in Coral Field

LONGEST OIL & GAS

TRACK RECORD IN BRAZIL


2013 8 blocks acquired at the 11th ANP Bidding Round

Agenda


Balanced Portfolio




QGEP Overview

P. 6

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


Agenda


Balanced Portfolio




QGEP Overview

BALANCED & DIVERSIFIED PORTFOLIO OF ASSETS

INVESTOR PRESENTATION P. 8

-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 7 Concessions, 6 in the exploratory

phase and 1 in the development phase

BLOCKS AWARDED IN THE 11th ANP BIDDING ROUND

8 blocks acquired at the 11th ANP Bidding

Round, distributed across 5 different basins

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

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%

Pará-Maranhão

PAMA-M-265 Pacific Brasil QGEP 30%

Pará-Maranhão

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%


P. 10

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


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

▶ 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

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

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%

ATLANTA AND OLIVA FIELDS

P. 13

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. 14

FLOW RATE: EXPECTED OIL PRODUCTION

(2 WELLS)

0

5

10

15

20

25

30

35

0

5

10

15

20

25

30

35

0 1 2 3

Accu

mu

late

d O

il P

ro

du

cti

on

(M

bb

l)

Flo

w R

ate

fo

r O

il P

ro

du

cti

on

(kb

bl/

d)

Time (Years)

Flow Rate for Oil Production (Upper Limit)

Flow Rate for Oil Production (Lower Limit)

Accumulated Oil Production (Upper Limit)

Accumulated Oil Production (Lower Limit)

P. 15

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)


P. 16

BM-J-2: RESULTS EXPECTED BY 3Q13

Drilling

interrupted

at 2,540 m


▶ 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

Agenda


Balanced Portfolio




QGEP Overview

SALVADOR

KM

N

EW

S

0 5 10 20

QGEP’s Gas Fields

Statoil Blocks

Petrobras Blocks

Valdemir Ferreira Gas Treatment Plant

Gas

ene

Manat i

Cam arão

Norte

P. 18

STRONG AND SOLID PRODUCTION AT MANATI FIELD

▶ Largest shareholders of the Manati Field

= 45% working interest

▶ Partners:

• Petrobras : 35% (Operator)

• Panoro: 10%

• Brasoil: 10%

▶ 3P Reserves : 57.7 million boe*


*Dated 2Q13

Average 2012:

6.1 MM m3 per day

5,9 5,6

6,6 6,7

4,1 3,5

4,2 4,7

5,2

6,6 6,7 6,1

6,6

5,0

1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13

Daily Gas Production (MM m3 per day)

Average 2010:

6.2 MM m3 per day

Average 2011:

4.1 MM m3 per day

P. 19

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.

Average 6M13:

5.8 MM m3 per day

Agenda


Balanced Portfolio




QGEP Overview

P. 21

QGEP’S FINANCIAL PERFORMANCE

387,5

289,0

462,3

219,1 232,1

2010 2011 2012 6M12 6M13

Net Revenue (R$ million)

CAGR:+9.2%

+5.9%

EBITDAX (R$ million) Net Income (R$ million)

1.017,5

675,1

1.010,6

482,2 471,0

2010 2011 2012 6M12 6M13

CAGR: -0.3%

-2.3%

Gas Production (Millions of m3)


301,2

103,6

285,1

140,5 119,6

78%

36%

62% 64%

52%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0,0

50,0

100,0

150,0

200,0

250,0

300,0

350,0

2010 2011 2012 6M12 6M13

EBITDAX Margin

65,9

148,0

92,1

-26,8

95,9

38% 32%

18% -12%

41%

-20%

-10%

0%

10%

20%

30%

40%

50%

-40,0

-20,0

0,0

20,0

40,0

60,0

80,0

100,0

120,0

140,0

160,0

2010 2011 2012 6M12 6M13

Net Margin

8 7

95

225 45

78

42

2013 2014

Signature Bonus Round 11 Development

Exploration Other

190(2)

EXPECTED CAPEX

CAPEX net to QGEP(1) (US$ million)

CAPEX net to QGEP(1) (US$ million)

(1) Does not include the compression plant at the Manati Field (2) US$ 30 million was already spent up to June 30, 2012

45

78

42

20

70 40

15

70 10

70

25

8

7

2013 2014

BS -4 Development Blocks Round 11

BM-J-2 BM-CAL-12

BM-S-8 BS-4 Piapara

BM-S-12 Other

310

190(2)

310


STRONG NET CASH POSITION

▶ At the end of 2Q13, cash balance was

over R$1 billion

▶ 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

▶ Cash is invested in dedicated funds and

fixed income assets, mostly in reais


Government Securities

30%

Banco do Brasil 13%

BNB 15%

Caixa Econômica

13%

Bradesco 9%

Itaú 10%

Votorantim 6%

Santander 3%

Other 1%

Investment Distribution

AAA 94%

AA 6%

Ratings *

*Does not include Government Securities

Agenda


Balanced Portfolio




QGEP Overview

LOOKING AHEAD: MAJOR MILESTONES

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

2014 ► 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

► Drilling at the Ilha Bela well and CAM#01 (Além-Tejo) prospects

2015-2017 ► 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

2018-2020 ► First oil expected

from Carcará

P. 25 INVESTOR PRESENTATION

P. 26

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 non- operated assets

▶ Ambitions to be amongst the top 3 largest producing Brazilian oil & gas companies by 2020


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

CONTACT US


http://www.qgep.com.br/ri

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

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"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.

DISCLAMER
