fastnet oil & gas plc corporate presentation · fastnet oil & gas plc (the “company”)...
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Fastnet Oil & Gas Plc
Corporate Presentation March 2015
www.fastnetoilandgas.com 2
Disclaimer
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The information set out herein may be subject to updating, completion, revision, verification and amendment and such information may change materially. If you rely on this communication to make an investment you may be exposed to a significant risk of losing all of your investment. This communication does not constitute either advice or a recommendation regarding any securities. Any person who is in any doubt about the subject matter of this communication should consult a duly authorised person specialising in advising on such investments.
This communication includes forward-looking statements. These forward-looking statements include all matters that are not historical facts, statements regarding the Company's intentions, beliefs or current expectations concerning, among other things, the Company's results of operations, financial condition, prospects, growth, strategies, and the industry in which the Company operates. By their nature, forward-looking statements involve risks and uncertainties. You are cautioned that forward-looking statements are not guarantees of future performance and that the Company's actual results of operations, financial condition and the development of the industry in which the Company operates may differ materially from those made in or suggested by the forward-looking statements contained in this communication. Past performance is not a guide to future performance.
Company Overview
Moroccan Assets
Irish Assets
Outlook
Company Overview
Irish Assets
Moroccan Assets
Outlook
www.fastnetoilandgas.com 4
Overview and Company Funding
• Current Portfolio Focus: Offshore Ireland and Offshore Morocco
• Cash balance USD 18 mm at 30 November 2014
• Carol Law appointed as CEO in December 2014
• Running Costs
– General and Administration - ongoing review of spending and staff changes forecasting < USD 2.3mm p.a. in 2015
– All current licence phase commitments have all been met – fully funded for discretionary spending going forward
• 2014 Highlight - FA-1 well reached TD May 14, under budget. Numerous oil and gas shows encountered in well. Full
prognosed section not penetrated due to salt occurring shallower than predicted. Well proved evidence of active petroleum
system on the block
• Technical work continues to enhance value
– Foum Assaka - integration of FA-1 well data, trade for other operators well data, rework interpretation
– Celtic Sea – working regional linkage to Flemish Pass, detailed petroleum systems work to reduce risk and high-grade
portfolio
• Continually enhance shareholder value through
– Farm downs to recover past costs and fund future activity
– Evaluation of new opportunities for strategic fit
– Focused review of potential acquisition candidates
OVERVIEW
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Exploration Asset Overview
Licence Name Region Area Fastnet Interest
Gross Net Partner Operator
Foum Assaka Offshore Morocco 6,478 km2 12.5% 9.375% Kosmos, BP, SK Kosmos
Mizzen Basin Offshore Ireland 787 km2 100% 100% n/a Fastnet
Mizzen East Offshore Ireland 1,155 km2 100% 100% n/a Fastnet
Ventry Offshore Ireland 996 km2 100% 100% n/a Fastnet
Deep Kinsale Offshore Ireland 285 km2 60% 60% PETRONAS Fastnet
Shanagarry Offshore Ireland 881 km2 82.35% 82.35% Adriatic Oil, Carob, Petro Celtex Fastnet
Molly Malone Offshore Ireland 648km2 100% 100% n/a Fastnet
Block 49/13 Offshore Ireland 272 km2 85% 85% Carob ltd, Petro Celtex Fastnet
Total Area 11,502 km2
771
283
95
0 100 200 300 400 500 600 700 800
Frontier
Standard
Mature
Strategic focus on frontier acreage with excellent fiscal terms in proven petroleum systems
Average Commercial Discovery Size in MMBoe 2010-2012 by Type
of Hydrocarbon Province
Note: Information from September 2012 Bernstein Research Report
OVERVIEW
www.fastnetoilandgas.com 6
Business Model Health Check
ACQUIRE
• 11,502 sq. km. under licence and exclusive options
• Continually reviewing and seeking out new niche opportunities
• Opportunistic M&A to leverage a strong cash balance in a distressed environment
ANALYSE
• 1,910 sq. km. of 3D seismic acquired in Ireland
• Up to 5,000 sq. km. of 3D seismic acquired/reprocessed offshore Morocco
• Fully integrate FA-1 well data into ongoing prospect generation
FARM DOWN
• Foum Assaka farmed out to SK Innovation in 2014 resulted in a carry in up to 2 wells plus back costs
• Total cost to Fastnet from licence acquisition to completion of the FA-1 well was USD 2.75m
• Celtic Sea technical work continues to enhance value / reduce risk for potential farminees
EXPLORE
• FA-1 first well tested the high risk, deepwater, acreage in the portfolio
• De-risked petroleum system – oil shows encountered, sand presence confirmed but thickness/quality remains issue
• Celtic Sea 3D / Interpretation has identified and de-risked very large oil and gas prospects
MONETISE
• FA-1 significantly de-risked petroleum system on the block, well data being fully integrated
towards further exploration on the License.
• Farm down Celtic Sea portfolio; seek opportunity for synergy with other Celtic Sea Operators
OVERVIEW
ACQUIRE
ANALYSE
FARM DOWN
EXPLORE
MONETISE
Experienced Board & Senior Management
Carol Law, Chief Executive Officer Former Exploration Manager, Anadarko East Africa
Responsible for the play finding Prosperidade gas complex
in Rovuma Area 1, offshore Mozambique
Also member of teams responsible for discoveries in
Ghana (Jubilee), Brazil (multiple Campos Basin
discoveries)
Cathal Friel, Non-Executive Chairman Managing Director and one of the founders of Raglan
Capital in 2007
Former founding partner and Director of Merrion Capital
MBA from University of Ulster
Michael Edelson, Non-Executive Director Non-executive Chairman of Sterling Green Group plc since
he founded the Company.
He has been a member of the board of Manchester United
Football Club since 1982
Angel investor, venture capitalist and philanthropist
Michael Nolan, Non-Executive Director Former Founder and Group Finance Director of Cove
Energy PLC
Currently CFO of Discover Exploration and Non-executive
director of Rathdowney Resources plc and Orogen Gold
plc
Fellow of the Chartered Accountants Ireland
100 TCF +
Carol led the Anadarko team
that discovered over 100 TCF
of natural gas in the Area 1
Block, Offshore Mozambique
$2.64 billion
Sale price of a 10%
stake in Anadarko’s
Area 1 Block, Offshore
Mozambique
30 years
Experience in oil
and gas industry
40+ years
Experience as a
Director of several
AIM listed PLCs
5p to £22
Founder of ASOS, the global
online fashion and beauty
retailer
Value Creation
Originated 20-plus AIM
and PLUS listed
vehicles, delivering
significant returns to
shareholders
THE TEAM
18+ years
Experience in
resource
exploration sector
+1900%
Share price increase between
the Cove Energy IPO in June
2009 and its sale in Aug 2012
$1.9 billion
Cove Energy was sold
to PTTEP in Aug 2012
after a competitive
auction process
€100 million
One of the founding directors
of Merrion Capital, where he
was part of the small team
that built the business and
sold it for c. €100m in 2006
$2.5 billion
Value of successful
corporate transactions
on which Cathal has
advised
25+ years
Managerial
Corporate Finance
experience
Company plans to add new director in 2015
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Changing Times - New Ideas: “Potential Acquisition Strategy”
Opportunity
• AIM E&P Sector down over 55% since September 1, 2014*
• Many E&P Companies are under funded for commitments going forward
• Capital constrained Market place
• Low Oil Price = Low Valuations = Opportunity
Fastnet Strategy
• Seek assets with core value and upside potential
• Leverage Board’s experience / expertise
• Enhance Shareholder Value
*LSE Statistics to February 2015
OVERVIEW
Company Overview
Moroccan Assets
Irish Assets
Outlook
Company Overview
Irish Assets
Moroccan Assets
Outlook
www.fastnetoilandgas.com 10
Celtic Sea Offshore
• Large Structures = Major reserve
potential
• Access to Gas production facility
at largest Irish producing gas field
at Kinsale Head
• Proven oil and gas petroleum
systems
• Large prospects with well-
understood analogues
• Underexplored, Excellent Fiscal
Terms
• Politically Stable
• Shallow water prospects: easier to
monetise than deepwater
opportunities: especially attractive
in current commodity environment
• Modern 3D seismic surveys -2013
- Mizzen 1,400km2
- Kinsale 510km2
• Tectonics link to Flemish Pass
Statoil 2013 discovery - potentially
600 MBO recoverable and
growing
DEEP
KINSALE
MOLLY
MALONE
MIZZEN &
MIZZEN EAST
VENTRY SHANAGARRY BLOCK 49/13
AREA 285 km2 648 km2 1942 km2 996km2 881 km2 272 km2
WATER DEPTH c. 100 m c. 100 m c. 100 m c.100m c. 100 m c. 100 m
FASTNET
INTEREST
60% 100% 100% 100% 82.35% 85%
IRELAND Portfolio of Opportunities in highly prospective basin
capable of delivering significant near-term production
www.fastnetoilandgas.com 11
The Jeanne D’Arc (JDB) and Flemish Pass
(FPB) basins and their Lower Cretaceous to
Jurassic Petroleum Systems link with
the Celtic Sea and Mizzen Basins Offshore
Ireland.
The East Orphan Basin (EOB) is the
conjugate pair of the Porcupine Basin.
Eastern Canada Fields and Discoveries
- Flemish Pass Basin
Bay Du Nord (2013) Mizzen
300 – 600 mmbbls 100 – 200 mmbls
- Jeanne D’Arc Basin
• Hibernia 884 mmbbls
+ 1.375 TCF
+ 145 mmbbls NGL
• Terra Nova
406 mmbbls
+14 mmbbls NGL
+ 269 BCF
• Hebron
325 mmbbls
Eastern Canada Fields and
Discoveries
(Statoil Website Nov 2013)
Pre-Atlantic Opening Map (Lowe et al 2011))
Shows Canadian and Irish Conjugate Basins
Note: Jeanne D’Arc and Flemish Pass basins are paired
with the Celtic Sea.
IRELAND
Celtic Sea Offshore
Ireland - Canada
Geologically Linked Basins
www.fastnetoilandgas.com 12
• Celtic Sea Frontier Basin – Conjugate Margin Equivalent is Flemish Pass/Jeanne D’Arc
• Late Jurassic/Early Cretaceous Proven Petroleum System
• Good Thick Reservoir Development (Based on Proximity to Fastnet High)
• Potentially less compartmentalisation compared to Barryroe
• Potential for Mature Purbeck (56/12-1) and Lower Jurassic (47/29-1) Source Rocks
• Discovered Light Non-waxy Oil (Lias Source) Exists Immediately to South in Fastnet Basin
• 3D Seismic Indicates Potential Gas DHI’s conforming to structure – de-risks migration &
charge
• 3D Seismic Confirms Potential for Material Structural/Stratigraphic Traps
• Running Room & Diverse Geological Plays
• Attractive commercial terms for potential farminee for 2016 multi-well drilling programme
• Risked economics are attractive based on realistic farmout terms – widespread industry
interest
• 13 companies (mostly majors) carried out data review in 2014, number of interested parties
prior to commodity price collapse.
IRELAND IRELAND
Celtic Sea Offshore – Why Mizzen?
www.fastnetoilandgas.com 13
Basement/Trias/Lower Jurassic
Tertiary
Chalk
Fault
UC
UC
UC
UC
UC
UC
UC
Crestal Carbonate Play
Intra-Formational Seal
Intra-Formational Seal
BCU?
Purbeck Sst
Base Chalk
Top Chalk
SB
SB
East
Aptian
Hauterivian
Local Source?
West
E
W
SB
Fan Delta Progrades UC
Null Point
Bright amplitudes
Lower Cretaceous
Source?
UC
Stratigraphic Wedge Play
Deep Sand Play
Basement & Triassic Play
Jurassic & Triassic
Mizzen - Multiple Plays and Trapping Configurations
IRELAND
www.fastnetoilandgas.com 14
Mizzen: Structure / Sand / Proven Hydrocarbons
Depth Feet
Contours 100ft
56/12-1
Low
Top Basal Wealden Sands Depth Map
IRELAND
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Mizzen 3D Seismic Defines Large Amplitude Anomaly 91.9 km2 Over Prospect
“A” - 1.45 TCF (P50) to 2 TCF (P10) Recoverable Gas
RMS Amplitude Extraction, TDW 40 mins 100ms
IRELAND
Basis for Maximum closure
at Primary Prospect A
High amplitudes over crest
Inline 728
Inline 728
16
Top Basal Wealden Sands 6650 ft
Top Purbeck 7110 ft
Oil Shows Throughout
Gross 460 ft
Net 127 ft
N/G 28%
Average PHIE 16%
PHIE up to 20%.
Average Oil Saturations 20%
Shows
Net Reservoir Flag
Calculated Hydrocarbons
56/12-1 Composite Log and Conventional Petrophysical Results
Basal Wealden Section – 460 ft thick
Circa 2x gross (and net) thickness as equivalent main reservoir (interval at Barryroe)
Basal Wealden Sand
o
Upper Purbeck Sand
Gross 1,352 ft
Net 278 ft
N/G 21%
Average PHIE 15%
Average Oil Saturations 26%
IRELAND
Mizzen – Proven Reservoir and HC Charge on flanks of large Structure
www.fastnetoilandgas.com 17
884
MMBO
325
MMBO
406
MMBO
274
MMBO
Jeanne D’Arc Basin Oil
and Gas Fields showing
Rotated Overlay of
Fastnet’s Celtic Sea
Mizzen and Mizzen East
Licence Option Areas
(1,950 km2) for Scale
RESOURCES
Hibernia
884 MMBbls Oil
+ 1.375 TCF
+ 145 MMBBLS NGL
Terra Nova
406 MMBbls Oil
+ 269 BCF
+ 14 MMBBLS NGL
Hebron
325 MMBbls Oil
IRELAND
Mizzen – East Mizzen Blocks Offer Potential for World Class Field Sizes
www.fastnetoilandgas.com 18
Ventry Licensing Option: Extending Mizzen acreage westwards
IRELAND
• Contiguous with and extending
westwards from the
Company’s previously
awarded Mizzen Licensing
Option 12/3 and East Mizzen
Licensing Option 13/3.
• Fastnet is the designated
operator and has a 100%
working interest and is
required to reprocess existing
2D seismic data and carry out
various geological studies.
• The Ventry Licensing Option
provides extension acreage
with significant running room
for multiple play types which
have been clearly imaged on
Fastnet’s Mizzen 3D seismic
data, which was acquired in
2013.
www.fastnetoilandgas.com 19
Deep Kinsale - Large Untested Closure Below Shallow Producing Gas Field IRELAND
Prospect E
Deep Kinsale Primary
Prospect “A”
49/9-2 “Helvick” Oil & Gas Play
Base Chalk
Upper Purbeck Sands
Middle Wealden
Upper Jurassic
Upper-Middle Jurassic
Mounding in Upper Purbeck
Northern Bounding Fault Kinsale Field 1.7 TCF Gas
MFS
48/25-1 Discovery
Southern Bounding Fault
Source
Reservoir Prone
Deep Liassic Source?
Approx. Licence Limit (4000ft)
North
SE
North South East
Potential reservoir bearing packages thicken into active Late Jurassic to Early Cretaceous Faults
• Exclusive Farmin Option (the “Option”) restricted to below 4,000 feet subsea
• 500 sq. km. 3D seismic was acquired by 31
December 2013 • The Option must be exercised before 31
March 2015 • Farmin Well to be commenced before 31
December 2016 • Primary geological objectives are the
Purbecko-Wealden reservoirs present in “Barryroe”
• Farmin Well to be drilled to a Provisional
Depth of 8,000 feet subsea • Fastnet to earn 60% equity by paying 100%
of the costs of one well, including testing
www.fastnetoilandgas.com 20
Additional potential closures
High
Primary Prospect “A” Basal Wealden
46 sq. km.
Logged Live Oil 48/25-1
270 feet net oil pay
Prospect “B” Lower Wealden
46.7 sq. km.
Deep Kinsale P50 Closures Basal Wealden Sands – Nutech Petrophysics
Prospect “A” – P50 151mmbls / P10 339mmbls Recoverable
IRELAND
www.fastnetoilandgas.com 21
High
Primary Prospect “A” Upper Purbeck
46.2 sq. km.
Logged Live Oil 48/25-1
270 feet net oil pay
Deep Kinsale P50 Closures Upper Purbeck Sands – NuTech Petrophysics
Prospect “A” – P50 273mmbls / P10 630mmbls Recoverable
IRELAND
www.fastnetoilandgas.com 22
Shanagarry
• Gas Discovered on Block
• Close proximity to Kinsale facility
• Numerous discoveries surrounding Block
• Definite Interest in Farmout Process
49 /13
• Heavy Oil recovered in well 49/13-2
• Close proximity to Kinsale facility
• Potential activity on adjacent block, 49/9-2 Helvick Oil
Field (Middle/Basal Upper Jurassic)
• High API oil - tested at 10,000 bopd
Molly Malone
• Oil and gas shows in close proximity
• Potentially very large structure indicated on limited 2D
data
• Proven Sherwood sandstone reservoir
• Main structure has mid-case prospective oil resource
potential of 125 million barrels
IRELAND IRELAND
Celtic Sea Offshore – Running Room
Existing Seismic Coverage
Company Overview
Moroccan Assets
Irish Assets
Outlook
Company Overview
Irish Assets
Moroccan Assets
Outlook
www.fastnetoilandgas.com 24
Energy Prices and Fiscal Regime
MOROCCO
• The gas and oil prices in Morocco are indexed to international prices.
Fiscal Incentives
• 25% State participation
• Royalty: Oil 10%; Gas 5%
• 10 year corporate tax holiday on discovery
Profit Value of 1bbl of Oil in Morocco
• Producing 1bbl of oil in Morocco is equivalent to
• 13bbl in Algeria
• 7bbl in Nigeria
Morocco Canada
Argentina UK
Libya Egypt
Norway Indonesia
0% 20% 40% 60% 80% 100%
Gov’t Take (%)
Source: EY Global oil and gas tax guide, 2013
www.fastnetoilandgas.com 25
Offshore Morocco Play Fairway Analysis
MOROCCO
• FA-1 well data trade for recent
wells drilled by other Operators
provides valuable insight into an
ongoing analysis of the potential
of the under-explored offshore
• FA-1 well results highlight a new
play based on the oil shows in
reservoir quality sands which
were not a primary target pre well
• Wells to be drilled in 2015 /2016
in offshore blocks will continue to
expand the understanding of the
active petroleum systems
• Post well technical work will focus
on mapping new play potential as
well as high grading existing
prospect portfolio
FA-1 Well
www.fastnetoilandgas.com 26
Flat Spot??
Pre-Drill Fastnet
Primary “Wedge” Target
Post-Drill Fastnet Primary “Wedge”
Target Tagged but not Penetrated
FA-1
Live Oil Shows
High Amplitude Package
Recalibrate with Well Results
SALT
MOROCCO
FA-1 Preliminary Well Post Mortem
• Untested potential down
dip
• Non-prognosed Aptian
Barreminan Sands with oil
shows
• Potential Source
encountered in well
• Geochemistry data
providing excellent
calibration for basin
www.fastnetoilandgas.com 27
MOROCCO
FA-1 Sidewall Cores – Live Oil Under UV Light
Source: CoreLab
www.fastnetoilandgas.com 28
Company Overview
Irish Assets
Moroccan Assets
Outlook
www.fastnetoilandgas.com 29
Near Term Share Price Catalysts
• Strong uncommitted cash balance = protection during Industry downturn
• Reviewing G&A with sharp scissors – preserving balance sheet
• Carol Law appointed as CEO in December 2014
• Recent confirmation that a rig will be drilling in the Celtic Sea increases attraction of the area;
Continue with farm out process
• Identification of additional prospects / second well location for Foum Assaka
• Business development – major opportunity now exists for those with strong balance sheets
OUTLOOK
www.fastnetoilandgas.com 30
Appendices
Fastnet Oil & Gas
Appendices
www.fastnetoilandgas.com 31
Deep Kinsale – New 3D Seismic De-risk Potential Untested Thicker Sand
Intervals
IRELAND
Southern Bounding Fault
Prospect E
Deep Kinsale Prospect A
49/9-2 “Helvick” Oil & Gas Play
Base Chalk
Upper Purbeck Sands
Middle Wealden
Upper Jurassic
Upper-Middle Jurassic
Mounding in Upper Purbeck Prospect K
Northern Bounding Fault
North South East
North
SE
Purbeck Shale
www.fastnetoilandgas.com 32
Comparison 56/12-1 Purbeck to Egret Source Rock of Jeanne D’Arc. Proprietary Fastnet Oil and Gas study versus IGI Paper from Conjugate Margins Conference, St. Johns, Aug 2014.
IRELAND
www.fastnetoilandgas.com 33
Preliminary Top Middle Purbeck TWT
Sealing Fault?
Sealing Fault Required
IRELAND
www.fastnetoilandgas.com 34
Molly Malone 2D Seismic and Well Database
TRIST-91
MP-84CE
Marathon 69,71,72
MPCR-84
Surveys
MP-84-CD
UK Lines on Order
(March 2013)
49/29-1 Oil Shows in Rhaetic-Hettangian
102/29-1 Wet Gas Shows in Lower Jurassic
93/2 Oil Shows in Rhaetic-Hettangian
IRELAND
www.fastnetoilandgas.com 35
NW SE
Molly 2D Seismic Dip-Line MP84CE-01-1
Tilted fault blocks – pre-inversion trap with Triassic Sherwood Sandstone sealed by salt Fault throw large enough to effect juxtaposition with mature source rocks
CYAN PROSPECT
IRELAND
www.fastnetoilandgas.com 36
Gross 1184 ft
Net 796 ft
N:G 0.67
Average Porosity 18%
Sonic Porosity up to 25%
Top Sherwood Sstn. 7801 ft MD (-7729 ft)
Top Palaeozoic 8985 ft MD (-8913 ft)
TR
IAS
SIC
Sh
erw
oo
d S
an
ds
ton
e G
rou
p
GR Resistivity Sonic
93/2-2 Sherwood Sandstone
Petrophysical Summary
Molly Triassic Sherwood Sandstone is a “World Class” Reservoir
www.fastnetoilandgas.com 37
“49/13” 2D & 3D Seismic and Well Data
49/13
Shanagarry
Molly Malone
Legacy Gulf 3D seismic coverage
49/9-2 Helvick Oil Field (Middle/Basal Upper Jurassic)
Tested at 10,000 bopd
49/13-2 Heavy Oil Discovery (Upper Jurassic)
DST extrapolated flow rate 250 bopd
IRELAND
www.fastnetoilandgas.com 38
Fastnet farm-out agreement with SK Innovation
About SK
• SK Innovation is part of SK Group, the third largest
conglomerate in South Korea behind Samsung and
Hyundai with 56,000 employees
• USD $130 billion in Annual Revenue
(Energy/Chemicals Division comprises 56%)
• SK is Korea’s number one and Asia’s fourth largest
oil refining company with 1.1 million boepd capacity
• As of Q1 14, SK’s E&P portfolio consists of 19 blocks
in 13 countries
– 5 production blocks, 14 exploration blocks, 4 LNG
projects across countries such as Peru, Columbia,
Kazakhstan, Libya, Australia, Oman Yemen,
Vietnam, Cote d’Ivoire, Madagascar
– Daily production of 70,000 boepd
– 619mm BOE Proven Reserves
MOROCCO: FOUM ASSAKA
Deal Terms
• SK acquired a 12.5% Gross interest (9.375% Net) in Foum
Assaka licence in December 2013
• Up to two well carry comprised of a carry in the first
exploration well on the Eagle-1 Prospect and first appraisal
well (capped at USD $100 million per well) or at SK
Innovations’ discretion a carry in a second exploration well
(capped at gross USD $100 million)
• Reimbursement of past costs of USD $3.2 million and a
further payment of 25% of Fastnet’s back costs relating to
the period from 1 October to 1 January 2014
• Fastnet now retains a 12.5% gross interest (9.375% - net)
www.fastnetoilandgas.com 39
Analyst Coverage
APPENDIX
Name Company
Harry Stevenson Beaufort Securities
Sam Wahab Cantor Fitzgerald
Job Langbroek Davy
Ian McLelland Edison Research
Alessandro Pozzi, Ritesh Gaggar GMP Securities
Gerry Hennigan Goodbody
Richard Savage Mirabaud
Stuart Amor RFC Ambrian
Craig Howie Shore Capital