march 20, 2018 neptune energy a new...
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Neptune Energy – A New BeginningMarch 20, 2018
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Disclaimer
2
• This confidential presentation (the “Presentation”) has been prepared and is issued by, and is the sole responsibility of, Neptune Energy Group Holdings Limited
(“Neptune”).
• The information contained in this Presentation which is not already in the public domain must be kept strictly confidential and may not be reproduced (in whole or in
part) or redistributed in any format without the express written approval of Neptune.
• Certain information contained in this Presentation has been obtained from published and non-published sources prepared by other parties, which in certain cases
have not been updated through the date hereof. While such information is believed to be reliable for the purpose used in this Presentation, Neptune does not
assume any responsibility for the accuracy or completeness of such information and such information has not been independently verified by Neptune. Except
where otherwise indicated herein, the information provided in this Presentation is based on matters as they exist as of the date of preparation and not as of any
future date, and might not be updated or otherwise revised to reflect information that subsequently becomes available, or circumstances existing or changes
occurring after the date hereof.
• Certain information, including but not limited to, the strategy and intentions of Neptune contained in this presentation are based on current expectations, estimates
and projects about global economic conditions, the economic conditions of the regions and industries that are major markets for Neptune's line of business. These
expectations, estimates and projects are generally identifiable by statements containing words such as, but not limited to, “expects”, “believes”, “estimates”,
“forecasts” or similar expressions. Important factors that could cause actual results to differ materially from those expectations include, among others, economic and
market conditions in the geographic areas and industries that are or will be major markets for Neptune’s businesses, oil prices, market acceptance of new products
and services, changes in governmental regulations, interest rates, fluctuations in currency exchange rates and such other factors as may be discussed from time to
time in the Presentation. Although Neptune believes that its expectations and the Presentation are based on reasonable assumptions, it can give no assurance that
those expectations will be achieved or that the actual results will be as set out in the Presentation.
• Carlyle, CIC, CVC and Neptune and their respective directors, officers, employees, partners, shareholders, advisers and agents expressly disclaim, to the maximum
extent permitted by law, any and all liability and shall have no liability whatsoever for any direct, indirect or consequential loss or damage suffered or incurred by any
person or entity however caused (including but not limited to negligence) in any way in connection with this Presentation or any other written or oral information
made available to such other person or entity regarding this Presentation, any errors or omissions however caused, any person or entity placing any reliance on this
Presentation or such other information, or the reasonableness, authenticity, validity, adequacy, accuracy, completeness or reliability of this Presentation or such
other information.
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E&P Market
3
From then to now
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20
40
60
80
100
120
140
2010 2011 2012 2013 2014 2015 2016 2017 2018
Bre
nt
Oil
Pri
ce (
$/b
bl)
O&G UK BB Talk
$116/bbl
O&G UK
BB Talk
$65/bblJim
leaves
Aberdeen
Source: Bloomberg, Youtube
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UKCS Performance
4
2018 Business Outlook
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20
40
60
80
100
120
140
2010 2011 2012 2013 2014 2015 2016 2017 2018
Bre
nt
Oil
Pri
ce (
$/b
bl)
HSE
Production
Costs
Growth
2014 2015 2016 2017 2018
Production Capex/boe Opex/boe E&A Count
Fiscal Support
Source: Bloomberg, Oil and Gas UK 2018 Business Outlook
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Neptune Energy
5
A New Beginning
Leading International Independent E&P companyin
safety
production
cost control
returns
One Team
across geographies
across cultures
collaborating
standalone
accountable to ourselves
flat, agile organisation
innovative E&P
upstream focus
maximise returns
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Neptune at a glance
6
Leading International Independent E&P Company
2017 production split2
Norway51%
Netherlands21%
UK12%
Germany8%
Indonesia5%
Egypt3%
Highlights
Completed acquisition of ENGIE E&P International S.A. (“EPI”), the E&P
subsidiary of ENGIE SA, on February 15th 2018
One of the largest independent E&Ps in Europe(1) with production of 154,000
boepd, 56% operated, 92% OECD
Gross operated production of ~225kboepd
Mix of oil and gas exposure into European, North Africa and Asian markets
Industry proven management team
Over 1800 employees
Source: Company information1 By production and reserves; 2 2017A net entitlement production
Geographic Footprint
Focused Investors
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Neptune’s Strategy
7
Performance culture focused on clear accountabilities with incentives to tie reward to asset efficiency and value creation
Encourage an agile, entrepreneurial way of working
Sustainable development of business via highest standards in health, safety, security, environmental performance
Performance-driven
business with highest
HSE standards
Optimize well productivity, production reliability and reservoir management of operated producing assets
Focus on maximizing the recovery of in-place hydrocarbons and extending production profiles
Non-operated assets: work together with the operator to continually assess opportunities for targeted intervention
Achieve efficiency gains and cost savings from standardization of systems, investment in new technology as well as organization
design, process simplifications, rigorous cost management and disciplined capital allocation
Asset performance and
superior return through
production and cost
efficiency
Maintain a strong balance sheet
Sustain liquidity to allow the necessary flexibility required by operational needs and investment activity
Hedge oil and gas price exposures and protect significant portion of post-tax production revenues on a rolling two to three year basis
Strong balance sheet,
robust level of liquidity
and active risk
management
Focus on near-field opportunities that require relatively short development periods and are located close to existing hubs
Strategic “bolt-on” and other tactical acquisition opportunities as and when value accretive opportunities arise
M&A focus on reinforcing profile to add longer term growth portfolio
Balanced inorganic and
organic growth with
focus on short-cycle
projects
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Neptune Differentiators
8
Low risk, operated, productive international independent E&P company
Significant cash flow generation, strong balance sheet and conservative risk
management
Conventional, diversified OECD-focused portfolio
Large-scale, robust and low-cost production profile with favourable gas price
environment providing additional stability
Experienced management and leadership team with supportive
shareholders
Well invested asset base with future capital expenditures flexibility and low
decommissioning commitments
Proven operational capability
1
2
6
5
3
4
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Leading E&P
9
One of the largest European independent E&P companies by production and reserves
Source: Company information1 Pro forma Hess Norge acquisition2 Working interest production3 Based on Wood Mackenzie 2017 production4 Based on Wood Mackenzie 2017 commercial reserves5 Based on Neptune price deck
-
20
40
60
80
100
120
140
160
180
200
kb
oe
pd
Net entitlement production 2017A
322 31 3
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Proven Operator
10
Extensive experience across the E&P life cycle
)
)
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Neptune in the UKCS
11
SNS is a core hub for Neptune
Highlights
Presence in the UK since early 1990s
2 operated fields, Cygnus (38.75% WI) and Juliet (81% WI)
and 11 late-life non-operated fields
Accounts for 8% of our 2P reserves and 12% of our 2017
production
Offices in Aberdeen (Drilling Centre of Excellence for
Neptune) and London (Corporate Head Office)
Management experience in the UKCS
▪ Jim House – Apache
▪ Sam Laidlaw – Centrica, Chevron, Hess, Enterprise
▪ Peter Thomas – TAQA, Enterprise
Location Maps
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Cygnus
12
Largest dry gas producer in the UKCS
Source: UK Government
--
50
100
150
200
250
Avg
Go
rss
Pro
du
ctio
n (
mm
scf/
d)
Dec
'16
-N
ov'
17
Dry gas Associated Gas
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Cygnus Complex
13
SNS is a core hub for Neptune
Highlights
Ownership: Neptune E&P UK (38.75%, operator), Spirit Energy (61.25%)
Project Milestones
▪ Project sanctioned August 2012
▪ Alpha First Gas 2016
▪ Bravo First Gas 2017
Production
▪ 10 wells (7 drilled to date)
▪ Original design capacity 250 mmscf/d
▪ Debottlenecking project in 2017, production increased to 300 MMscf/d
▪ Export via ETS to Perenco-operated Bacton terminal
▪ 96% uptime, 90% production efficiency, 20% above nameplate capacity
Future Activity
▪ Remaining development wells – B1z spud March 2018, A1 in Q4 2018,
AD deferred depending on A1 results
▪ Potential infill wells – Blocks 2b East, 4, 5, 8 (Cepheus)
▪ Near field exploration – FB9 spud in August 2018
▪ Third-party tie-back – HoT under negotiation
SNS non-operated fields
FDP Undrilled Wells
Well Key
Ketch
Leman
Producer
Target
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Cygnus Performance
14
Blending constraints limiting indigenous gas supplies
0
50
100
150
200
250
300
350
Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18
Gro
ss P
rod
uct
ion
(m
msc
f/d
)
Alpha
first gas Sept. shut-
down
Start of blending
issues
Bravo first gas
Reaches 300 mmscf/d
FPS shutdown
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2018 Business Outlook
15
Recovery mode
Source: Bloomberg, Oil and Gas UK 2018 Business Outlook
Market
Supply Chain
E&P
Oil market
Gas market
M&A
Performance
Outlook
Employment
Production
Expenditure
Profitability
Drilling Activity
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UKCS 2018 – Business Outlook Messages
16
Recovering
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