onshore oman, block 55 - gmp securities · marketing flyer petrogas e&p llc page 1 onshore...
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Marketing Flyer
Petrogas E&P LLC
Page 1
Onshore Oman, Block 55 Exploration Farm in Opportunity
• Large onshore acreage position (>7,500km2) in a proven hydrocarbon province with a long standing E&P history.
• Significant working interest available given the asset is currently held 100% by Petrogas Kahil.
• Low cost, high impact drill ready prospects drawn from a prospect inventory of over 700 MMbbl (unrisked STOIIP).
• Prospects on trend with the play opening GA South-1 discovery (the first discovery east of the Huqf High).
• Additional prospectivity on the Huqf High and to the west at the margin of the South Oman Salt Basin, close to the Petrogas operated Rima Small Fields.
• Established and proven operator with in-country position and excellent high-level relationships.
• Quality dataset with re-processed 2D seismic and recently acquired 3D data.
• Rapid monetisation options via existing regional infrastructure.
High impact exploration in both established and recently proven oil plays
Block 55
Marketing Flyer
Petrogas E&P LLC
Page 2
Introduction
Petrogas E&P LLC (“Petrogas” or the “Company”) has engaged FirstEnergy Capital LLP (“GMP FirstEnergy”) as exclusive advisor for the farm-out of Block 55, onshore Oman. Block 55 is held by Petrogas Kahil, a 100% owned subsidiary of Petrogas.
Petrogas is a private, Oman based, E&P company with net production in excess of ~40 mbopd and 2P reserves greater than 100 MMbbl. Formed in 1999, the Company has since developed an international portfolio of production and exploration assets across the Middle East, Africa and Europe.
The Petrogas position in Oman includes production in Block 5 and the Rima Satellites Small Fields cluster in addition to Block 55.
Key Investment Highlights
Proven Hydrocarbon Basin
• Mature hydrocarbon province with extensive production and exploration history, existing infrastructure and established routes to market.
• Analogous fields are present in adjacent acreage to the west (Rima Small Fields) and to the north-east (GA-South-1 offshore).
Strong Operating Partner
• Experienced operator with over 17 years of operational experience in Oman and excellent in-country relationships.
• Successful development of the Rima Small Fields cluster and proven track record both in Oman and in other international oil and gas ventures.
Prospectivity
• Prospects and leads have been mapped in multiple, independent, geological domains across the block.
• Petrogas has identified approximately 700 MMbbl of STOIIP (gross, unrisked), with several key prospects matured to the drill ready stage for upcoming 2017-2018 drilling campaign.
Low Cost Operating Environment
• Established in-country E&P service sector allows for a low cost exploration and development environment.
• Modest commercial threshold for field size with attractive economics in a low oil price environment.
Rapid Path to Commercialization
• Various development options and early monetisation of any discovered resources during extended welltest.
• Potential to truck oil for early development, or extend nearby infrastructure into the block for pipeline access to international markets.
Fiscal and Licence Terms
• Attractive EPSA terms, with the ability to extend the exploration period by two years following completion of Phase One activities.
Block 55 - Asset Location
Marketing Flyer
Petrogas E&P LLC
Page 3
Block 55 Overview EPSA Petrogas Kahil holds a 100% operated interest in the licence which was awarded in 2014. The Block is located in South Eastern Oman and covers an area of 7,564 km2. The licence is governed by an EPSA and is currently in the first 4 year Exploration Phase (commencing from 2014). A 2nd Phase, of 2 years, is available following completion of the first phase obligations. The remaining commitments consist of the drilling of 3 onshore exploration wells commencing early 2017. Dataset Prior to the award, Block 55 was only lightly covered with sparse seismic that left large sections of the block under-explored. Petrogas has undertaken a comprehensive work program including reprocessing of legacy 2D data and the acquisition of modern 3D seismic to evaluate prospective areas identified from gravity and magnetic surveys. The block is now covered with some 4,180 km of 2D and 130 km2 of 3D data. This new seismic coverage, along with well control provided by historic drilling has enabled new prospects and leads to be developed.
Gravity/Magnetics and Seismic Data Coverage
Prospects and leads identified in each of the Geological Provinces
Final Gravity Residual map
Tertiary Basin Mini Basin
New seismic data reprocessed or shot in 2014-2015. Vintage dataset from the 1990’s.
The ongoing exploration program is focussed on both the Eastern Flank and Tertiary Basin structural targets. The first well, which will spud in Q1 2017, will target a mapped fault bounded dip-closure in the Tertiary with stacked reservoir objectives and an aggregate unrisked STOIIP significantly in excess of 100 MMbbl.
Rima Fields
Eastern flank of S. Salt Basin
Huqf High
Tertiary Basin
GA South-1
Geological Provinces
Marketing Flyer
Petrogas E&P LLC
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Eastern Flank & Tertiary Basin Prospectivity
Structure
The block has undergone a complex tectonic history with the structural and sedimentological architecture shaped by the obduction of ophiolitic rocks in the Late Cretaceous and Early Tertiary. Mapped prospects are all structurally defined, with several displaying large 4-way dip closures.
Tertiary Basin
The play-opening offshore Masirah Block discovery (GA South-1) confirmed the presence of a working petroleum system in the Tertiary Basin east of the Huqf High. The main source of hydrocarbon is expected to be the organic rich shales of the Masirah Bay (TOC up to 5%) in the Nafun Group. Additional source rock potential exists within the Aruma and Tertiary shale.
Reservoirs are targeted in the Basal Aruma, Natih, Shuabiba, Khufai and Huqf formations comprising both clastic and carbonate horizons.
Eastern Flank
A working hydrocarbon system is known to extend beyond the nearby Rima Small Fields cluster. Prospects will target analogous targets to the existing producing fields at Rima.
Huqf High
Shallow uplifted central area with plays in the Kahmah and Huqf levels charged via migration from the South Oman Salt Basin and/or locally mature Huqf source rocks.
Prospective Area Aggregate STOIIP
(MMbbl, gross unrisked)
Tertiary Targets 520
Eastern Flank Targets 60
Huqf High 130
Regional Stratigraphy and Cross Section
Representative dip closed prospect (Tertiary)
Marketing Flyer
Petrogas E&P LLC
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In order to fulfil well commitments, Petrogas plans to drill three onshore low cost wells in 2017 primarily targeting the Tertiary Basin prospects. The drilling location has been identified and civil work initiated. Additional secondary targets have been identified in the Eastern flank.
In the case of discovery, several options exist for appraisal, development and monetisation of resources, including potential for early production by extended well test to provide near term cash flow. Petrogas have the ability to expand current crude offtake contract to cater for this early monetisation.
Nearby infrastructure provides ready access to export facilities : • 25-120km from the Petrogas operated Rima Small Fields facilities and PDO main pipeline • 80-90km from Mukhaizna field facilities • Ras Markaz Crude Storage Terminal located at Block 55 coastline • Planned Oman Rail route inside the block
Licence Commitments and Forward Work Program
Conceptual Development and Infrastructure
Item Licence Commitments Status ($MM)
Licence Expenditure to
Date
Signature Bonus and Lease Rental/Training Complete 5.8
Acquisition and Processing of 2D seismic (1,550 km) & air Grav-Mag Survey (8,500km)
Complete 11.7
Reprocessing of 3,000 km of existing 2D seismic Complete 0.7
Drill 4 exploration wells 1 Well Drilled 3.7
Other (EIA,G&A) Ongoing 2.9
Estimated Future Well
Costs
Tertiary Basin Well Cost Planned 2017 9.0*
Eastern Flank Well Cost Contingent 2017 3.0*
* Cost per well
Regional Infrastructure
Oil & Gas pipelines
Planned Oman Rail way route
Tarmac roads
Ras Markaz
Mukhaizna
Rima
Marketing Flyer
Petrogas E&P LLC
Page 6
Offering, Deal Structure & Process
Petrogas is seeking a partner to jointly participate in the forthcoming exploration of Block 55, due to commence in Q1 2017. Petrogas’s preference is for the interested party to structure a farm-in proposal to acquire an interest by equalising on past costs and funding a disproportional share of the forward work program.
After signing a Confidentially Agreement (“CA”), interested parties will be provided with access to a comprehensive online dataroom. A physical dataroom, with access to seismic workstation, will be hosted at Petrogas’s office in Muscat and available for prospective buyers through the month of November 2016.
Bids are expected to the due in early December (detailed bidding instructions including the firm bid date will be provided via the online dataroom).
Mark Llamas
Managing Director
A&D
+44 (0) 20 7448 0224
Paul Bannister
Director
A&D
+44 (0) 20 7448 0241
David van Erp
Vice President
Corporate Finance
+44 (0) 20 7448 0243
Elizabeth Bull
Associate
A&D
+44 (0) 20 7448 0246
Tom Whittington
Associate
A&D
+44 (0) 20 7448 0223
For additional information, please contact the GMP FirstEnergy Team:
The information in this marketing document, which does not purport to be comprehensive, has been provided to GMP FirstEnergy by the Company and/or has otherwise been obtained from publicly available or named sources. No representation or warranty, express or implied as to the accuracy of the information in this document is or will be given by the Company, GMP FirstEnergy or their respective directors, officers, employees or advisers or any other person and, so far as permitted by law, no responsibility or liability is accepted for the accuracy or sufficiency thereof, or for any errors, omissions or mis-statements, negligent or otherwise, relating thereto. Interested parties should conduct and rely solely on, their own independent evaluation and analysis of the proposed transaction prior to submitting an offer. In furnishing this marketing document, neither the Company nor GMP FirstEnergy undertake any obligation to provide any additional information or to update this marketing document or to correct any inaccuracies that may become apparent. The Company and GMP FirstEnergy reserve the right, without advance notice, to change any and all dates or procedures respecting the matters described herein, or to terminate negotiations at any time prior to the entry into of any binding contract. The Company and GMP FirstEnergy reserve the right to negotiate with one or more prospective purchasers at any time and to enter into an agreement for with respect to the proposed offer without prior notice to other prospective buyers and without liability to any prospective buyers. FirstEnergy Capital LLP is authorised and regulated by the Financial Conduct Authority. GMP FirstEnergy is a trade name of FirstEnergy Capital LLP.