growth in the pipeline - president energy plc€¦ · 25 february 2020 | investor presentation...
TRANSCRIPT
25 February 2020 | Investor Presentation
DISCLAIMER
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The information contained in this confidential document (“Presentation”) has been prepared by President Energy Plc (the “Company”). While the information contained herein has been prepared in good faith, neither the Company nor any of its shareholders, directors, officers, agents, employees or advisers give, have given or have authority to give, any representations or warranties (express or implied) as to, or in relation to, the accuracy, reliability or completeness of the information in this Presentation, or any revision thereof, or of any other written or oral information made or to be made available to any interested party or its advisers (all such information being referred to as “Information”) and liability therefore is expressly disclaimed. Accordingly, neither the Company nor any of its shareholders, directors, officers, agents, employees or advisers take any responsibility for, or will accept any liability whether direct or indirect, express or implied, contractual, tortious, statutory or otherwise, in respect of, the accuracy or completeness of the Information or for any of the opinions contained herein or for any errors, omissions or misstatements or for any loss, howsoever arising, from the use of this Presentation.
This Presentation may contain forward-looking statements that involve substantial risks and uncertainties, and actual results and developments may differ materially from those expressed or implied by these statements. These forward-looking statements are 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 because they relate to events and depend on circumstances that may or may not occur in the future. These forward-looking statements speak only as of the date of this Presentation and the Company does not undertake any obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of this Presentation.
Neither the issue of this Presentation nor any part of its contents is to be taken as any form of commitment on the part of the Company to proceed with any transaction and the right is reserved to terminate any discussions or negotiations with any prospective investors. In no circumstances will the Company be responsible for any costs, losses or expenses incurred in connection with any appraisal or investigation of the Company. In furnishing this Presentation, the Company does not undertake or agree to any obligation to provide the recipient with access to any additional information or to update this Presentation or to correct any inaccuracies in, or omissions from, this Presentation which may become apparent.
This Presentation should not be considered as the giving of investment advice by the Company or any of its shareholders, directors, officers, agents, employees or advisers. In particular, this Presentation does not constitute an offer or invitation to subscribe for or purchase any securities and neither this Presentation nor anything contained herein shall form the basis of any contract or commitment whatsoever. Each party to whom this Presentation is made available must make its own independent assessment of the Company after making such investigations and taking such advice as may be deemed necessary. In particular, any estimates or projections or opinions contained herein necessarily involve significant elements of subjective judgment, analysis and assumptions and each recipient should satisfy itself in relation to such matters.
Neither this Presentation nor any copy of it may be (a) taken or transmitted into Australia, Canada, Japan, the Republic of Ireland, the Republic of South Africa or the United States of America (each a “Restricted Territory”), their territories or possessions; (b) distributed to any U.S. person (as defined in Regulation S under the United States Securities Act of 1933 (as amended)) or (c) distributed to any individual outside a Restricted Territory who is a resident thereof in any such case for the purpose of offer for sale or solicitation or invitation to buy or subscribe any securities or in the context where its distribution may be construed as such offer, solicitation or invitation, in any such case except in compliance with any applicable exemption. The distribution of this document in or to persons subject to other jurisdictions may be restricted by law and persons into whose possession this document comes should inform themselves about, and observe, any such restrictions. Any failure to comply with these restrictions may constitute a violation of the laws of the relevant jurisdiction.
25 February 2020 | Investor Presentation
WHERE WE OPERATE
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America
Paraguay
Hernandarias (Earn In)
Exploration (Operator) 40% & 80%
Pirity
Exploration (Operator) 100%
1
2
Argentina
East Lake Verret
Production (Operator)
1
Lake Peigneur
Production (Operator)
2
1
2
1
2
AMERICA
ARGENTINA
PARAGUAY
Argentina
Puesto Guardian
(Five Oil Fields)Production(Operator) 100%
Matorras
Exploration(Operator) 100%
Puesto Flores/Estancia Vieja (Two Fields)
Production(Operator) 90%
Ocultar
Exploration (Operator) 100%
1
2
3
4/5
6/7Puesto Prado/Los Bases(Two Fields)
Production(Operator) 90%
1
2 3
4/5
6/7
AngosturaExploration & Production(Operator) 80%
8
8
25 February 2020 | Investor Presentation
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WHO WE ARE
PRESIDENT BOARD OF DIRECTORS
Peter Levine
Executive ChairmanEx Imperial Energy30 years industry
Rob Shepherd
Finance Director Ex Shell, ABN AMRO
28 years industry
Jorge Bongiovanni
Non-Executive DirectorEx IFC
40+ years industry
Alex Moody-Stuart
Non-Executive DirectorEx Schlumberger30 years industry
OPERATIONAL MANAGEMENT
AMERICA
MartinGee
Chief Geologist
35+ years industry
Claudia Perez
FinanceDirector
25+ years industry
Lucia D’Agostino
LegalDirector
10 years industry
Jordan Coleman
HeadOperations
12 years industry5 years LatAm
Scott Daspit
HeadOperations
35+ years industry
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LATIN AMERICA(as at 23 January 2020)
29.7%
17.5%8.8%
6.2%
27.9%
Peter Levine (PLLG Investments)
Schroders Investment Management
IFC (World Bank Group)
Michinoko Ltd
Trafigura (via Urion Holdings)
Other
FIRST CLASS
SHAREHOLDER STRUCTURE
9.9%
25 February 2020 | Investor Presentation
KEY FACTS
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Multiple producing wells across 8 operated fields in Argentina and Louisiana
2020 average production target of over 4,000 boepd (up 60% yoy)
Robust operating netbacks demonstrate focus on cost management(eg 30% lower unit opex than well regarded peer in country)
Independently certified 2P reserves of over 26 million barrels of oilequivalent with significant exploration upside potential
Multi well 2020 drilling and development program in Rio Negro and Louisiana
Over 100km of owned and operated pipelines
Active acquisition strategy
25 February 2020 | Investor Presentation
KEY INVESTMENT CONSIDERATIONS
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Clear strategy to deliver sustainable value growth
By ’laser-like’ focus on maximizing operating margins
Through owning and operating assets and
infrastructure
And strong, experienced management in country
Unparalleled alignment between Executive Chairman and shareholders
Recognised by key shareholders including Schroders, Trafigura and the World Bank
Significant organic and inorganic growth potential
As well as material exploration opportunities
Strong Environmental, Social and Governance Principles
Adherence to World Bank standards
Compliance with QCA Code
25 February 2020 | Investor Presentation
RESERVES AND RESOURCES
(1) Source: Argentina numbers based on Independent Reserves Report, Louisiana based on Management estimates (2) Prospective median riskedSlide 7
15.6 MMBOE1P
NET EXPLORATION RESOURCES(2)
ARGENTINAover
150MMBBLS
GROUP NET RESERVES(1)
As at 31 December 2019
26.4 MMBOE2P
43.5 MMBOE3P
PARAGUAY
LOUISIANA
OVER
500MMBOE
OVER
20BCF
25 February 2020 | Investor Presentation
EXCITING YEAR AHEAD TO DELIVER ORGANIC GROWTH
FIELD INDICATIVE ACTIVITY H1 2020 H2 2020 FY 2021
PUESTO FLORES
Drilling - Development
Drilling - Exploration
Workover
ESTANCIA VIEJA
Drilling - Development
Drilling - Exploration
New gas pipeline commissioning
LAS BASES Drilling – Exploration
PUESTO GUARDIAN
Drilling - Development
PARAGUAY Drilling - Exploration
USA – JEFFERSON ISLAND Drilling - Exploration
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25 February 2020 | Investor Presentation
2020 WILL BUILD ON THE SOLID FOUNDATIONS OF 2019
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ca. US$12MILLION
UNAUDITEDADJUSTED (1)
EBITDA
2,400BOEPD
AVERAGEPRODUCTION
ca. US$41MILLION
UNAUDITEDGROUP
TURNOVER
(1) Earnings before interest, tax, depreciation, amortisation and impairment and adjusted to exclude non-recurring items(2) 2020 numbers are preliminary estimates – see disclaimer
FY unaudited 2019 financials
>US$25MILLION
UNAUDITEDOPERATING
PROFIT (PRE DD&A)
>4,000BOEPD
AVERAGEPRODUCTION
>US$60MILLION
UNAUDITEDGROUP
TURNOVER
Management estimates For 2020
>60%
>40%
>150%
25 February 2020 | Investor Presentation
UNDERLYING VALUE CREATION IN RECENT YEARS NOT RECOGNISED
(1) Note that (a) a Peel Hunt note issued on 18 Feb ‘2020 suggests that PPC peers are trading at an average EV/2P boe of $6.9 and (b) Amerisur’s recent acquisition by GeoPark was at an implied EV/2P boe valuation of $12.3
(2) 2020 numbers are preliminary estimates – see disclaimer(3) 2020 projected EV includes forecast debt reduction plus current market cap.
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25 February 2020 | Investor Presentation
ARGENTINA MACRO ENVIRONMENT
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SIGNIFICANT MAJOR OIL AND GAS INDUSTRY PLAYERS IN ARGENTINA
• President Fernandez inaugurated on 10 Dec
• Continued energy deficit notwithstanding domestic reserves(1)
• Expected gas deficit of some 20-40 mm m3 / day in 2020
• Consequently, the domestic energy sector is a key focus for investment given the continued energy imbalance
• The Government is ‘preparing proposals’ to stimulate investment, particularly in conventional production
(1) According to BP, oil production of 27 mln tonnes in 2018 amounted to 75% of consumption and gas production of 39.4 bcm 80% of consumption
25 February 2020 | Investor Presentation
Currently61.7
31 Dec ‘1837.7
1 Jan ‘1818.6
PPC LARGELY UNAFFECTED BY FX VOLATILITY
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• Sales revenues are denominated in US$ (but paid in AR$) with true up / down mechanism to account for volatility between date of billing and payment
• Consequently in 2018 and 2019, combined with proactive treasury management, we suffered minimal cash FX losses ca. 1% of revenues
• We do experience material non-cash ‘distortions’ in Financial Statements as a result of tax accounting in AR$ and reporting in US$ although cash flow is unaffected
25 February 2020 | Investor Presentation
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• PARTNERED WITH PROVINCIAL OIL COMPANY EDHIPSA (10%)
• FOUR FIELDS WITH SIGNIFICANT DEVELOPMENT AND EXPLORATION UPSIDE
• OIL SALES VIA PIPELINE TO REGIONAL HUB
• OWNERSHIP OF 60Km STRATEGIC GAS PIPELINE AND INFRASTRUCTURE
Rio Negro Province, Argentina
NEUQUEN BASIN ASSETS
Puesto Guardian
(Five Oil Fields)Production(Operator) 100%
Matorras
Exploration(Operator) 100%
Puesto Flores/Estancia Vieja (Two Fields)
Production(Operator) 90%
Ocultar
Exploration (Operator) 100%
Puesto Prado/Los Bases(Two Fields)
Production(Operator) 90%
1
2
3
4/5
6/7
1P: 7.6
2P: 13.8
Reserves(MMboe)
MMBbls
25 February 2020 | Investor Presentation
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Neuquen Basin – Concession Licence to 2027 (with extension rights). Operator, WI 90%
PUESTO FLORES FIELD
HIGH QUALITY FIELD, SIGNIFICANT REACTIVATIONS, DRILLING AND EXPLORATION POTENTIAL
• Targeting material increase in both production and reserves• Drilling new wells in H1 2020 with more later in the year
CURRENT STATUS
• Oil and gas production from 14 wells
PLANS FOR 2020
• Targeting material increase in both production and reserves• Commencing to drill new wells in H1 2020 with more later in the year
25 February 2020 | Investor Presentation
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Neuquen Basin – Concession Licence to 2027 (with extension rights). Operator, WI 90%
ESTANCIA VIEJA FIELD
• Targeting material increase in both production and reserves• Drilling new wells in H1 2020 with more later in the year
CURRENT STATUS
• Oil production from 5 re-worked existing wells• Producing gas from 3 wells for sale and internal power requirements• Built and commissioned a new 16Km pipeline section
PLANS FOR 2020
• Targeting material increase in both production and reserves• Drilling new wells in 2020
HISTORICALLY LARGE OIL PRODUCING FIELD. PREVIOUSLY SHUT-IN. NOW PRODUCING OIL AND GAS WITH SIGNIFICANT UPSIDE POTENTIAL
25 February 2020 | Investor Presentation
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Neuquen Basin – Concession Licence to 2028 (with extension rights). Operator, WI 90%
PUESTO PRADO FIELD
• Targeting material increase in both production and reserves• Drilling new wells in H1 2020 with more later in the year
CURRENT STATUS
• 5 wells re-activated, producing 130 bopd• Field being powered by Estancia Vieja gas through the newly acquired
pipeline
PLANS FOR 2020
• Workovers
MATURE FIELD REACTIVATION – SYNERGIES WITH ESTANCIA VIEJA AND PUESTO FLORES UPSIDE ATTRACTION
25 February 2020 | Investor Presentation
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Neuquen Basin – Concession Licence to 2028 (with extension rights). Operator, WI 90%
LAS BASES FIELD
• Targeting material increase in both production and reserves• Drilling new wells in H1 2020 with more later in the year
CURRENT STATUS
• Gas plant reactivated
PLANS FOR 2020
• Drilling
MAJOR GAS PRODUCTION POTENTIAL WITH PROCESSING PLANT OWNERSHIP OF MAJOR PAN-REGIONAL GAS PIPELINE
25 February 2020 | Investor Presentation
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Neuquen Basin – Initial contract to 2023 (with extension rights). Operator, WI 100%
ANGOSTURA CONCESSION
• Targeting material increase in both production and reserves• Drilling new wells in H1 2020 with more later in the year
CURRENT STATUS
• Gas currently being produced from four wells and oil from a further one well
• Gas treated within the concession and transported via pipeline to Las Bases where it joins President’s regional pipeline direct to off takers
• Oil production shipped via truck to President’s own Puesto Prado treatment plant for processing
OPERATIONAL SYNERGIES WITH RIO NEGRO OPERATIONS UTILIZING CRITICAL MASS TO OPTIMISE COSTS AND SIGNIFICATLY REDUCE FIELD OPEX
25 February 2020 | Investor Presentation
Argentina
Puesto Guardian
(Five Oil Fields)Production(Operator) 100%
Matorras
Exploration(Operator) 100%
Ocultar
Exploration (Operator) 100%
1
2
3
1
2 3
4/
5
6/
78
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• Targeting material increase in both production and reserves• Drilling new wells in H1 2020 with more later in the year
CURRENT STATUS
• Current production approaching 400 boepd• Work to improve margins• Identification of drilling locations for next programme taking place
FUTURE PLANS• Drilling 2/3 development wells in late 2020 / early 2021
PUESTO GUARDIAN CONCESSION Noroeste Basin, Salta Province – Concession License to 2050 (with extension rights). Operator, WI 100%
30 YEAR OLD FIELD THAT WAS POORLY RUN, NOW STABILIZED AND PRIMED FOR FUTURE DEVELOPMENT
OPERATIONALLY PROFITABLE GENERATING POSITIVE FREE CASH FLOW
25 February 2020 | Investor Presentation
Located near President’s existing field at East Lake Verret
LOUISIANA ASSETS
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USA
East Lake Verret
Production (Operated) 50%
1
Lake Peigneur
(Operated) 20%
2
East Lake Verret - Two producing wellsTriche (69.5% WI / 43.5% NRI) and Simmons (43.9% WI / 33.3% NRI)
Currently producing, generating some US$150k per month in free cash flow after all opex, G&A and taxes
Benefit from accrued tax losses which are being utilised giving potential for further accretive acquisitions of operated assets
Lake Peigneur - ExplorationJefferson Island License (20% Operated interest)
1-2 Wells to be drilled starting H1 2020 at a total estimated cost net to President of US$250k per well
Historic salt dome field with significant potential for undrained production
1
2
Low risk high reward opportunity benefitting from President’s continued use of accrued past tax losses
Lease acquisition cost net to President US$35,000 for 20% operated interest
25 February 2020 | Investor Presentation
PARAGUAYA compelling opportunity to change a country’s history
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25 February 2020 | Investor Presentation
PARAGUAY EXPLORATION
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2020 drilling targeting proven cretaceous fairway
Imperial complex(Mean 193 MMboe Cret.
Resources)
Delray Complex (Mean 394
MMboe Cret. Resources)Palmar Largo
Complex
Spectral Geochemical Anomalies
25 February 2020 | Investor Presentation
FUTURE
PRESENTPAST
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Exploration assets with the potential to transform the Company
PARAGUAY EXPLORATION
EXTENSIVE KNOWLEDGE OF AREA WITH LESSONS LEARNED FROM 2014 DRILLING CAMPAIGN WHEN PREISDENT SUCESSFULLY IDENTIFIED A PETROLEUM SYSTEM
• Extensive 2D and 3D seismic surveys together with sub-surface work acquired and analysed by President
• Ongoing farm-out process with active parties with signed NDA’s working in data room
• Delray Cretaceous prospect targeted for drilling• The first prospect to be drilled is on trend with prolific oil
fields on Argentine side of border
• Over 500 Mmboe of mid-case prospective median risked resources in first two drillable prospects with many more leads identified
• Stable democratic country with no current oil production and 10% corporate tax rate
25 February 2020 | Investor Presentation
SUMMARY
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Clear strategy to deliver sustainable value growth in 2020 and beyond
Strong and supportive shareholder base
Strong Environmental, Social and Governance principles
Unparalleled alignment between Executive Chairman and shareholders
Significant organic and inorganic growth opportunities
Relative immunity to Argentinian macro environment misunderstood by market
Demonstrably undervalued compared to peers
25 February 2020 | Investor Presentation
Office Headquarters
Carrwood Park, Selby Road, Leeds
LS15 4LG. United Kingdom
Argentine OfficeJuana Manso 1750, Complejo ZencityEdificio Esmarelda, 3er Piso Norte, C1107CHJ. Buenos Aires, Argentina
Tel: +54 (11) 4317 0400
Paraguay Office
Asuncion, Paraguay
USA Office2020 W Pinhook, Ste 201LafayetteLA70508USA
Thank you
© 2020 President Energy PLC
Company Registered OfficeCarrwood Park, Selby Road
Leeds, LS15 4LG, United Kingdom
Tel: +44 (0) 20 7016 7950
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