investor presentation q2 2017 - soundenergyplc.com · or sbk-1 appraisal under consideration...
TRANSCRIPT
INVESTORPRESENTATION
Q2 2017
I T ALY
MO R O C C O
1Slide
Investor PresentationQ2 2017
Acquisition of Italian onshore gas portfolio
Securing cost covering production
Introduction of Cornerstone Investors
Tendrara, Sidi Moktar, Meridja
Schlumberger (Tendrara, Badile)
TE6, TE7 & TE8Continental Investment Partners, Oil and Gas Investment Fund (OGIF)
Rapagnano
Acquisition of Moroccan onshore gas portfolio
Introduction of Strategic Partner
Successful drilling of 3 wells and extended well test in Eastern Morocco
JOURNEY SO FAR...
A MID-CAP AFRICAN & EUROPEAN GAS COMPANY
REGIONAL GAS STRATEGY UNDERPINNED BY � Strong European gas demand and local pricing � Pan European / African Strategic Partnership
with Schlumberger � Supportive Cornerstone Investors
STRONG THEMATIC POSITIONING � Carbon consciousness and global
warming driving transition to gas
LOW COST MULTI TCF DEVELOPMENT IN EASTERN MOROCCO
METRICS
TWO REMAINING STRATEGIC PLAYS � Badile (Italy) and Sidi Moktar
(Morocco) BOLD GROWTH AGENDA �
�
Key Shareholders:Stock Ticker:Market Cap:Volumes:
CIP, OGIFSOU.LN£0.6 bn6m shares/day
Italian Cornerstone Investor (Continental Investment Partners)Moroccan Cornerstone Investor (OGIF) Retail Other
54.6%
9.5%
7.1%
28.8%
KEY SHAREHOLDERS
James Parsons
Over 20 years in Oil & Gas strategy, general management,
Europe, South America and Central America 12 years with Royal Dutch Shell Specialist in restructuring, funding and growing small listed upstream companies;
Joined Sound Energy in 2011
Leonardo SpicciEVP, Production & Development Over 25 years experience in Oil & Gas management and operations across Kazakhstan, north Africa and Italy. Reservoir geologist background with 23 years with ENI E&P
Brian Mitchener EVP, Exploration Over 36 years experience in Oil & Gas exploration including as Regional General Manager Exploration at BG, Vice President International Exploration for Africa at Statoil and 22 years with BP Exploration. Chartered Geologist, and a past President of the Geological Society’s Petroleum Group
Leonardo SalvadoriManaging Director, Italy Over 30 years upstream experience with ENI and Dana Gas in exploration, business development and general management
Luca MadedduManaging Director, Morocco Over 25 years managerial experience across Europe, Asia and South America. Reservoir geologist background with 22 years with ENI E&P
Will HollandEVP, Business Development Over 20 years upstream experience across a
roles. 10 years as an engineer with Halliburton. Subsequently Director in Macquarie’s Oil & Gas team
2Slide
Investor PresentationQ2 2017
THE TEAM
I T ALY
MO R O C C O
Dalla
Rapagnano
Casa Tiberi
SMG
ZibidoBadile
Tendrara I
Tendrara
MeridjaTendrara II
ExplorationSidi Moktar
Laura
Costa Del Sole
Solfara Mare
Posta Del Giudice
COMPELLING REGIONALCASE FOR GAS
3Slide
Investor PresentationQ2 2017
Growing gas penetration
Low risk emerging market Gas increasingly replacing other fuels
Stable demand with high gas dependency Strong domestic gas network
Circa 90% hydrocarbons imported from Algeria GME pipeline ownership transitions to Morocco in 2021New Gas Agency under discussion
Circa 90% hydrocarbons imported from Algeria and Russia Recently introduced energy policy to encourage commercialisation of domestic hydrocarbons
10 year tax holidayThereafter 35% net government take (30% Corporation tax and 5% royalty after 10.6 Bcf)
37.9% government net take (24% corporation tax ((FY2017 onwards)), 3.9% regional income tax plus 10% royalty above 0.9 Bcf annually)
Disadvantaged supply position
Top quartile fiscal terms
Morocco Italy
4Slide
FLAGSHIP EASTERN MOROCCO DEVELOPMENT: EXTENSION OF PROVEN NORTH AFRICAN BASINS
M O R O C C O
T U N I S I A
A L G E R I A
Atlas Mountains
BenoudGhadames
Illizi
Oued Mya
Timimoun
Ahnet
Atlas Mountains
High Plateau
0 300 Nkm
� Strategic Partnership where Schlumberger own 27.5% and co-fund and technically de-risk the asset (Geophysical Survey (including seismic) with gross cost of $27.2m fully carried by Schlumberger)
� Continuity of the Algerian Triassic Province and Saharan Hercynian platform
� Play type: gas discovery with condensate- light oil shows in the Lower Triassic sequence;
� TAGI and Paleozoic sand objectives � Tendrara, eight exploration permits
14,500 km2 acreage, seven wells drilled; Meridja: reconnaissance licence 9,000km2
TENDRARA* (47.5% interest; Operated)MERIDJA* (47.5% interest; Operated)
*Subject to completion of OGIF and Schlumberger transactions
Investor PresentationQ2 2017
Slide
EXISTING AND FUTURE WELLS
TE-6 TE-8
5
28m net pay, 17 mmscf/d achieved post-stimulation
Paleozoic Play Opener and Extension of TAGI Reservoir.
TE-7 TE-1/2/432 mmscf/d after clean up: Successful Extended Well Test
Re-entryOR SBK-1 APPRAISALUnder consideration
EASTERN MOROCCO TAGI AND PALEOZOIC:DRILLING RESULTS AND POTENTIAL
Investor PresentationQ2 2017
MER I D J A N
DRARARTENDRADRDRA
RR-1
TE-3
TE-2TE-2TE-8
SBK-1
JK-1
TE-5
K 1
TE-1TE-1
TE-4
TE-6
TETTE
TE-6TE-7Triassic TAGI
discovery and leads 21.2 Tcf
potential2500-3500 mMD
Paleozoic concepts
addit ional ca. 10 Tcf potential
3000-4000 mMD
5 0 KM
All volumetric estimates are 100% - Gross unrisked GOIP
Based on current seismic data
Slide
6Investor PresentationQ2 2017 Discovered TAGI Extension TAGI leads
GAS
VO
LUM
E (T
CF) 21.2 TCF
Discovered0.3-0.5
(Under evaluation)
North Eastern TAGI Extension(TE8/1) (Under
evaluation)
Meridja Identified
TAGI leads5.5
Tendrara Identified
TAGI leads8.8
Paleozoic
LOW
MID
HIG
H
17
9
0
31
EASTERN MOROCCO: PROSPECTS, LEADS AND RESOURCES
All volumetric estimates are 100% - Gross unrisked GOIP
Gas Maghreb-Europe PipelineGas Pipeline Project
OuedEl Makhazine2 x 400 MW
Al Wahda4 x 400 MW
Dhar Doum4 x 400 MW
Oujda
Casablanca
Marrakech
MO R O C C O
M E D I T E R R A N E A N
A L G E R I A
A TL A
N T I CRabat
Tahaddart Power2 x 400 MW
Tendrara
Meridja120km
Slide
�pipeline near Ain Beni Mathar village, a few km from the Morocco-Algeria border via a new Pipeline
�plants for gas-to-power generation (transit via GME line) or export to Southern Europe
� The GME can accommodate c.200 mmscfd of Moroccan-source gas immediately, additional capacity opening in the short-term with contracted exports from Algeria declining
7Investor PresentationQ2 2017
EASTERN MOROCCO: COMMERCIALISATION
TALY
MO R O C C O
III TTTAAALLLYYY
Dalla
Rapagnano
Casa Tiberi
SMG
ZibidoBadile
Laura
Costa Del Sole
Solfara Mare
Posta Del Giudice
Pavia
Lacchiarella
SNAM GasPipeline
BadilePermit
3DSeismicCoverage
Badile
Zibido
M I L A N O
Badile 3DSeismic
Pipeline
� Po Valley (Northern Italy); 45 km SW of
�
�
� �
�
�
of the licence
NORTHERN ITALYSTRATEGIC PLAY: BADILE
80%; operated, Schlumberger 20%
Slide
8
Net to Sound
Investor PresentationQ2 2017
Resource potential
0
100
200
300
400
500
HIGH
MEANLOW
Bcfe
37 cum.
142 cum.
538 cum.
Slide
9Investor PresentationQ2 2017
SOUTHERN MOROCCOSTRATEGIC PLAY: SIDI MOKTAR
Jorf LasfarPower Plant
Safi Chemicals Plant
Chichaoua
State owned Phosphate Plant (OCP)
Planned New PhosphatePlant
MeskalaPlant
Kamar-1
Koba-1
Gas Maghreb-Europe PipelineTriassic (TAGI) leads
� Play type: gas discovery (Kechoula) in the Lower Liassic sequence, (219 Bscf net to Sound, initial estimate, single accumulation most likely)
� Two wells drilled with positive gas indications from log and gas shows in the Liassic; Rig mobilised to site April 2017 for two workovers and possible sidetrack / extended well test
� Triassic across multiple blocks considered analogous to the adjacent
� Unrisked up to 9 Tcf exploration potential targeting the Triassic (TAGI)
� Asset is located 10km from the Meskala gas processing plant
All volumetric estimates are 100% - Gross unrisked GOIP
Slide
10Investor PresentationQ2 2017
UPCOMINGNEWSFLOW
H12017
H12017
Q42017
Q22017
H2 2017–H1 2018
H2 2017–H1 2018
Exploration well in Italy
Workover of Koba-1 and Kamar-1(Sidi Moktar wells) with option to sidetrack
Re-entry and test; feasibility currently being determined
Concession application
2D seismic over the remainder of the block - to determine prospects and give better indication on volumes
Commencement of development works (facilities)
BADILE
SIDI MOKTAR
TENDRARA
TENDRARA
TENDRARA
TENDRARA
- Moirago-1
- Koba-1 & Kamar-1
- TE-1
- Concession
- 2D Seismic
- FDP
Slide
11Investor PresentationQ2 2017
SUMMARY
ACCESS TO LOW COST ONSHORE GAS PLAY IN TOP TIER EMERGING MARKET (MOROCCO) � Recent potential multi Tcf onshore
gas discovery in Morocco � Strong domestic demand and infrastructure
connecting Morocco to strong European gas markets
�
SCALE, LIQUIDITY AND NEWSFLOW � Multiple near term catalysts (Badile, TE8) � High liquidity
TEAM TRACK RECORD � Demonstrated deal making pre-discovery
(with potential to apply same skills to gas commercialisation and exit)
�and deliver wells
� Strong retail shareholder base
STRONG CORPORATE GOVERNANCE � Industry experienced Board with balance of
UNDERPINNED BY INDUSTRY PARTNERSHIPS � Schlumberger as strategic partner:
enabling scale, technically de-risking assets and providing funding
� Cornerstone Investors with Board representation � Strong Moroccan relationships
Slide
12
Investor PresentationQ2 2017
APPENDIX
Slide
13Investor PresentationQ2 2017
Current shares in issueShares to be issued
Total fully diluted shares 1.117 billion
10.4p warrants o/s
24.0p warrants o/s
30.0p warrants o/s
Options o/s
715.1 million
OGIF
8.3 million
31.5 million
53.0 million
37.2 million
272.0 million
CAPITAL STRUCTURE AS AT 13 APRIL 2017
CORNERSTONE INVESTOR POSITION
0 25 50 75 100 125
Cash and cash equivalents
€28.8 million corporate bonds5% couponDue 21 June 2021Secured on Sound Energy Italy Holdings share capital
150 175 200 225 250 275 300
OGIF
No. direct shares (millions)
Continental Investment Partners
£47.4 million
£24.6 million
14Slide
TENDRARA – CROSS SECTION
After Craig et al 2008
Investor PresentationQ2 2017
Slide
* Vakartchouk et al 1984, Structure Geologique et Interet Petrolier du Bassin Interatlasique
0
1
2
3
4
5
7
6
8
SENW
DEP
TH IN
KIL
OM
ETR
ES
0 50Kilometres
PetroleumGeneration
HercynianUnconformity
KEYJurassic
Triassic (Basalt)
Triassic (TAGI)
Upper Carboniferous
Devonian
Silurian
Lower Carboniferous
Paleozoic Petroleum Source Rocks
Early Paleozoic and Basement
Gas migration
Gas accumulations
Granite
Triassic (Salt)
15
� Multiple source rocks in Silurian, Devonian, Carboniferous well documented in surrounding
Algerian plays �
generated post the Hercynian Unconformity
� Basin modelling implies a range of 9-17-31 Tcf accumulated
� Thermogenic hydrocarbons present in all wells drilled to date
� Basin wide salt seal of over 1000m in thickness
�underlying petroleum system
� Pre-salt reservoirs in the Triassic and Paleozoic
� Triassic ‘TAGI’ reservoir present in all wells
� Commercial production rates now proven by TE-7
� Paleozoic yet to be unlocked but proven in Algeria
Investor PresentationQ2 2017
EASTERN MOROCCO BASIN & PETROLEUM SYSTEM
Slide
16Investor PresentationQ2 2017
BROADER PORTFOLIO
COST COVERING PRODUCTION* (2 LICENCES)
APPRAISAL (6 LICENCES, EXCLUDING STRATEGIC PLAYS)
– LAURA
– DORA / DALLA
EXPLORATION (4 LICENCES EXCLUDING STRATEGIC PLAYS) – ZIBIDO
I T ALY
MO R O C C O
Dalla
Rapagnano
Casa Tiberi
SMG
ZibidoBadile
Tendrara I
Tendrara
MeridjaTendrara II
ExplorationSidi Moktar
Laura
Costa Del Sole
Solfara Mare
Posta Del Giudice
* Excludes two concessions awaiting abandonment
Slide
17Investor PresentationQ2 2017
STRONG REGIONAL INFRASTRUCTURE
Ven iceMi lan
Rome
ZibidoBadile
Dalla
Rapagnano
Casa Triberi
SMG
Laura
High pressure gaspipeline network
Costa Del Sole
Solfara Mare
Posta Del Giudice
Gas Maghreb-Europe PipelineGas Pipeline Project
OuedEl Makhazine2 x 400 MW
Al Wahda4 x 400 MW
Dhar Doum4 x 400 MW
Oujda
Casablanca
Marrakech
MO R O C C O
M E D I T E R R A N E A N
A L G E R I A
A TL A
N T I CRabat
Tahaddart Power2 x 400 MW
Tendrara
Meridja120km
Sidi Moktar
ITALIAN HIGH PRESSURE GAS PIPELINE NETWORK
MOROCCAN GAS PIPELINE NETWORK
For more information please contact:
Detailed information on our investor website:
Slide
www.soundenergyplc.com
James Parsons
Brian MitchenerEVP Exploration [email protected]
18Investor PresentationQ2 2017
Disclaimer: The investment mentioned in this document may not be suitable for all recipients or be appropriate for their personal circumstances. The information in this document is believed to be correct but cannot be guaranteed. Opinions constitute our judgment as of this date and are subject to
not recover the amount invested. Some securities carry a higher degree of risk than others. The levels and basis of taxation can change. The contents of this document have been prepared by, are the sole responsibility of, and have been issued by the Company.
Slide
19Investor PresentationQ2 2017
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20Investor PresentationQ2 2017
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