MOLOPO AUSTRALIA LIMITED MOLOPO AUSTRALIA LIMITED June 2008 An Australian Gas Company An Australian Gas Company For personal use only
MOLOPO AUSTRALIA LIMITEDMOLOPO AUSTRALIA LIMITED
June 2008
An Australian Gas CompanyAn Australian Gas Company
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CORPORATE PROFILECORPORATE PROFILE
Market Capitalisation: $320mCash Reserves: $28m (Mar 2008)Debt Free
Board & ManagementBoard & Management::
Donald Beard – Chairman
Stephen Mitchell – Managing Director
Ian Gorman - Executive Director & COO
Ric Sotelo - CFO & Company Secretary
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OPERATIONAL STRATEGY/KEY ASSETSOPERATIONAL STRATEGY/KEY ASSETS
Molopo’s CBM growth strategy has been to build a diversified portfolio of petroleum assets at the appraisal or advanced exploration stage. This has thus far led to a portfolio that now includes 7 areas of interest:
1. Bowen Basin – Queensland2. Gloucester Basin – NSW3. Quebec – Canada4. Evander and Virginia – South Africa5. Liulin CBM Project – China6. Clarence Moreton Basin – NSW7. Mason County – USA
Most of these projects are targeting gas resources of over 1000PJ
Molopo is now set to embark upon a strategy to develop this portfolio into assets that can generate long-term cash flow and shareholder value
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Project Portfolio OverviewProject Portfolio Overview
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MOLOPOMOLOPO’’S FOCUS AREAS S FOCUS AREAS
Quebec Shale/Conventional gas
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QUEENSLANDBowen Basin - Molopo has 50% of ATP564P, PL94 (part), PLA210 and ATP602P
NEW SOUTH WALESGloucester Basin – Molopo has a 30% interest in PEL285
Clarence Moreton Basin - Molopo has a 100% interest in PEL 426 and a 49% interest in PEL 13.
Metgasco earning a 50% interest in PEL426
Metgasco is also earning 75% of the CBM rights and 50% of the conventional rights in PEL13
AUSTRALIAN PETROLEUM INTERESTSAUSTRALIAN PETROLEUM INTERESTSMOLOPO’S AUSTRALIAN PETROLEUM PERMITS
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CBM IN QLD - Bowen Basin Permits
Molopo’s share of 2P Reserves at Mungi and Harcourt is 43PJ, 3P reserves are 108PJ
Gas-in-place in QLD permits is estimated at over 1.5TCF
2P Reserves defined to date in 3 prospects.
Interest holders are Molopo (50%), Anglo (25.5%) and Mitsui (24.5%) .
QUEENSLAND PERMITS & PROSPECTS
Molopo’s Queensland Interests
>30050310ATP602P
>500501,650ATP564P
>50050178PLA210A
3505050PL94 (north)
GIIP(Bscf)
Interest(%)
Area(km2)
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CBM IN QLD - The Mungi Field
Total 2P reserves 61PJ – 3P 151PJ
Gas-in-place over 300PJ
10 wells in production with scope for over 100 laterals
Closest production to Gladstone
Three sole risk development wells underway
Performance of new lateral wells is critical
WELL LOCATIONS AT THE MUNGI GAS FIELD
• Mungi 27
• Mungi 1• Mungi 10
• Mungi 28
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CBM IN QLD - The Harcourt/Bindaree Field
Molopo has a 50% interest in the Harcourt/Bindaree Field in PLA210
Combined area is 178km2 – many times larger than Mungi
Current 2P reserves are 26PJ – 3P reserves are 66PJ – under review
4 Production wells tested to date
Fifth well to be completed
PL Application made. Possible tie in to Mungi processing facilities.
HARCOURT & BINDAREE PROJECT AREA
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CBM IN QLD CBM IN QLD -- The Timmy ProspectThe Timmy Prospect
Molopo has a 50% interest in ATP602P, which adjoins ATP564P
The Timmy Prospect is 71 km2 and is estimated to contain over 300PJ of recoverable gas
An old Conoco well using an outdated stimulation technique flowed gas at 150,000cf/day
Molopo and partners are currently testing a horizontal production well.
Exciting project – likely to have higher permeability than Mungi/Harcourt.
TIMMY PROSPECT
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CBM IN QLD - Lilyvale And Oak Park Prospect
The Lilyvale and Oak Park Prospects in ATP564P cover a combined area of 173 km2
Current reserves of 247PJ – under review
Three cored wells drilled by Origin and Molopo demonstrated favorable characteristics for CBM
Represents secondary target at present due to location
ATP564P NORTH WESTERN PROSPECT
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Very thick coal sequence (30 to 60 metres) with high permeability generally greater than 20md at Stratford Prospect
Measured gas contents at greater than 12m3/t up to 25m3/t.
15 chip and core exploration holes define part of basin
In total approximately 200km2 of coal bearing strata. JV GIIP estimates of ~ 2.5TCF.
CBM IN NSW - Gloucester Basin Summary PEL 285 – STRATFORD PROSPECT
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Very encouraging initial production results from first 3 wells producing in excess of 1,000,000cf/d each
3 new production wells and up to 13 CBM coreholes are planned to further delineate reserves - drilling underway
Initial Reserve Certification by NSAI:1P : 15 BCF2P : 170 BCF3P : 359 BCFContingent Resource : 167 BCFTotal Recoverable Potential : 525 BCF (RF33%)GIIP : 1.6 TCF
CBM IN NSW - Gloucester Basin Summary
Figure 5: Fraccing Operations
Figure 6: Seismic Operations
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CBM IN NSW PEL 13 & 426
Combined area of ~4,650km2
Prospective for CBM and conventional gas
Metgasco is earning 50% of PEL426 by financing new 2D seismic and 1 CBM well
Metgasco also earning an interest in PEL 13 (50% of conventional and 75% of CBM). First cored hole had thick gassy coal
21 Petroleum wells drilled to date. Best results have been:
• Hogarth 2 & Pickabooba – Both produced over 450mcf/d
CLARENCE MORETON BASIN
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International ProjectsInternational Projects
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GAS IN CANADA GAS IN CANADA -- QuebecQuebecCANADA – SHALE GAS PROJECT
Molopo has 100% (80% NRI) in 1,857,000 acres in Quebec
Shale gas and conventional targets
Primary objective is the Lorraine/Utica shales
Evidence of gas in shale from old wells with unstimulated flows recorded
Well positioned with respect to infrastructure and high priced east coast gas markets
Large companies in the region (Forest Oil, Talisman)
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QUEBECQUEBEC
Major attributes of the play:
The presence of regionally extensive, thick gassy shales with multi TCF gas in place potential
Impressive unstimulated gas production from shales in old wells
Pipeline access to one of the highest price gas markets in the world (NE USA)
Early success by Forest Oil in shales
Multiple playtypes (other than shale gas) also presentFor
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QUEBEC SHALE GAS QUEBEC SHALE GAS –– UNSTIMULATED DST RESULTSUNSTIMULATED DST RESULTS
Utica & Lorraine Shales
-12000
-10000
-8000
-6000
-4000
-2000
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1 10 100 1000 10000
Flow-rate (Mscf/d)
Dep
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LorraineUticaF
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Becancour-8Junex partner
Drilled 2006-07Frac stim 2007
St Francois du Lac-1Gastem partner
Drilled summer 2007Frac stim Dec 2007
Forest April 2008 announcement
4.1 TCF net resource potential in Junex & Gastem farmin acreage
2 vertical wells fracstimulated with test rates up to 1,000 Msf/d
Forest next stepTwin the vertical well locations in 2008 with 3 horizontal wells
2000’ laterals, 4 stage fracper lateral
FOREST OIL FOREST OIL -- Announced ResultsAnnounced Results
Molopo Canada
Forest Oil
St Louis de RichelieuGastem partner
Drilled summer 2007
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MOLOPO QUEBEC 1.857M ACRESMOLOPO QUEBEC 1.857M ACRES
Junex
Gastem
Talisman
Questerre
Squatex
Altai
Mundiregina
Intragaz
Petrolympia
Southern Blocks 975,000 acres
Gas pipeline to USA
Junex
Talisman
Squatex
Mundiregina
Intragaz
Northern Blocks 882,000 acres
30km
Molopo Canada
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PLAY TYPESPLAY TYPES
UnconventionalUnconventionalBiogenic Utica/Lorraine fractured Shale (Analogue - Michigan Basin Antrim Shale, over 900 gas wells)
Thermogenic Utica/Lorraine Fractured Shale (Analogue – Barnett Shale)
ConventionalConventionalTrenton/Black River hydrothermal dolomite, (Analogue - Indiana, Ohio and Michigan oil, New York gas)
Beekmantown carbonate (Analogue -Quebec’s Saint-Flavien gas field)
Potsdam Sandstone (Analogue – JunexBruyeres gas field)
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NWNW--SE SEISMIC SECTIONSE SEISMIC SECTION
Saint-FlavienGas Field
Logan’s Line
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Utica Shalezero edge
Foulon Fault
Yamaska Fault
Logan’s Line
A163 Shell Wickham6000’ of Melbourne Slate
resting on Trenton fm, TOC<0.1, Ro>6
A201 SEE Milton7m of surficial deposits on
334m of arkose interbeddedwith red & green slate TD
342m
Ophiolite(metamorphosed ultrabasic lavas)
A185 Soquip DomeDST 7,570-7,790’ Lorraine
flowed 50Mscf/d unstimulated
A166TOC 1.73;
Ro 4
A152Ro 3.7-4.2
Depth (ft)
DEPTH TO BASE UTICA SHALE (TOP TRENTON) & MAJOR FAULTSDEPTH TO BASE UTICA SHALE (TOP TRENTON) & MAJOR FAULTS
A187 SoquipLorraine/Utica
good gas shows
A194 ShellLorraine
good gas shows
Structural complexity
increasing to the SE toward Appalachians
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LorraineMax 8300’
UticaMax 2500’
Thickness (ft)
Thickness(ft)
SHALE THICKNESS FROM WELL CONTROL USING BOUNDING FAULTSSHALE THICKNESS FROM WELL CONTROL USING BOUNDING FAULTS
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Richelieu East2006PG835; 14,000ac
Bedford2006PG836, 2006PG838;
23,000ac
pipeline
Richelieu West2006PG832, 833, 834; 21,000ac
Thermogenic Shale Fairway East of Logan’s Line with good well control
Lyster2006PG910-916; 2006PG818
163,000ac
Drummondville1 large structural Lead
Bedford2 structural Leads
50kmCanada
USA
Richelieu West2006PG832, 833, 834; 90,000ac
Thermogenic* Shale Fairway West of Logan’s Line
Fractured Biogenic Shale Fairway (700-2400’)
SeawaySeveral structural
Leads
Quebec 2006PG831; 46,000ac
Richelieu West2 structural Leads
FOCUS AREASFOCUS AREAS
Logan’s Line
Thermogenic Shale Fairway East of Logan’s Line with poor well control
TBR/Beekmantown/Potsdam conventional plays
* All thermogenic fairways depth to base Utica >2400’
Quebec2 structural Leads
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SHALE GAS IN CANADA SHALE GAS IN CANADA –– Comparison of Shale Rock PropertiesComparison of Shale Rock Properties
Some analysts are comparing the Quebec shale play to the Barnett shales
Barnett shales have generated major reserves in the US (~ 30 TCF) via thousands of wells
Source: Forest Oil April 2008 Presentation
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PIPELINESPIPELINES
Montreal
Quebec City
TranscanadaPipeline
GazMetro Pipeline
TQM Pipeline
Vermont USANew York USA
New Hampshire
USA
Major gas pipeline is owned jointly by Trans Canada Pipeline Co.
The pipeline currently has about 350mmcf/day extra capacity
Great flexibility regarding access to the transmission and distribution system
Gas can be sold to GazMetro or they will transport the gas to a purchaser
Québec gas price likely to be NYMEX plus ~$1.00/mcf. F
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2008 WORK PROGRAMME2008 WORK PROGRAMME
Five areas with conventional leads identified which upon drilling will test all the currently recognised play types and also allow assessment of overlying shales
Currently purchasing available seismic, assessing reprocessing/acquisition needs and commencing interpretation of Leads
Currently interpreting aeromagnetic survey recorded by Amque
Continuing gas sampling/isotope and conventional core studies
Preparing to shoot new seismic and commence drilling early 2009
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GAS IN SOUTH AFRICAGAS IN SOUTH AFRICA
MPO has a 100% interest in two South African projects
Free State Exploration Right is ~ 500,000 acres
Mpumalanga Province Exploration Right is ~ 150,000 acres
Both areas have a history of gas emissions from mineral exploration
Over 70 gas emitting boreholes recently identified
Over 2000 soil gas samples taken
Nine wells producing a combined total of 1,000,000cf/d
Possible that significant carbon credits will be available.
SOUTH AFRICAN APPLICATIONS
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GAS IN SOUTH AFRICAGAS IN SOUTH AFRICA
Figure 7: Soilgas Sampling
Figure 9: New “blowers”
Figure 8: Oil & Gas Infrastructure
Figure 10: Old “blowers”
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GAS IN SOUTH AFRICA – Pilot Performance
Production stable
Wells produced since 1980’s
9 Wells in pilot group
Dataset aimed to support reserves certification
Total South Africa Production
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
2-N
ov7-
Nov
12-N
ov17
-Nov
22-N
ov27
-Nov
2-D
ec7-
Dec
12-D
ec17
-Dec
22-D
ec27
-Dec
1-Ja
n6-
Jan
11-J
an16
-Jan
21-J
an26
-Jan
31-J
an5-
Feb
10-F
eb15
-Feb
20-F
eb25
-Feb
1-M
ar6-
Mar
11-M
ar16
-Mar
21-M
ar26
-Mar
31-M
ar5-
Apr
10-A
pr15
-Apr
20-A
pr25
-Apr
30-A
pr5-
May
10-M
ay15
-May
20-M
ay25
-May
Scf
/day
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CBM IN CHINA CBM IN CHINA -- LiulinLiulin Contract AreaContract AreaThick coals (13m), high gas contents (14m3/t) and high permeability (up to 30 md) make Liulin an attractive project Resource estimate lifted from 800bcf to 1.2TCF
Molopo has 40% (net 20%). Partner is Fortune Oil – LSE company specialising in energy in China Two new production test wells recently completed and on testAdditional production and cored wells plannedMolopo is encouraging partner to drill laterals
P.R. CHINA – LIULIN PROSPECT
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SHALE GAS IN THE USA SHALE GAS IN THE USA –– West Virginia West Virginia
Molopo has 50% of ~5,700 acres in a gas project in the US
Gassy acreage – already 37 wells producing gas from shale by others in Mason County
Close to infrastructure
Strong partner.
Significant shale activity by majors in the region (Cabot)
US endeavours under review
MASON COUNTY WEST VIRGINIA
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2008 PROGRAMME 2008 PROGRAMME & OBJECTIVES & OBJECTIVES
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Data assessment, prioritise targetsCANADA – Quebec
Production test existing wells, 3 new cored holes, lateral appraisal well(s), extend Production Sharing Contract
CHINA
PROJECTS:MUNGI (QLD) 3+ new production wells, increased production, sales and reserves
New sales contract
GLOUCESTER (NSW) 5 well production pilot, 2 cored holes, established reserves
HARCOURT (QLD) 1 new production test well, confirm and expand reserves
TIMMY (QLD) Complete production test, establish initial reserves
SOUTH AFRICA Feasibility study on developing “blowers”, soilgas testing, mapping, development decision, sales contract
USA (WV) 1 production test well (shale)
CLARENCE MORETON (NSW) Seismic reprocessing, new seismic, 1 cored CBM well
2008 INDICATIVE PROJECT TARGETS2008 INDICATIVE PROJECT TARGETS
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MOLOPO AUSTRALIA LIMITED
The information in this presentation has been compiled by persons meeting the criteria in ASX Listing Rule 5.11. The identity of the relevant persons is dealt with in the releases to ASX.
References to “possible hydrocarbon reserves”, “probable hydrocarbon reserves” and “proved hydrocarbon reserves” have the same meaning as the ASX Listing Rules. The assessment of reserves involves matters of judgement. All amounts involve varying degrees of probability and uncertainty.
This presentation contains forward looking statements, i.e. statements that are not of historical fact. Such forward looking statements include statements regarding Molopo’s future production, profitability, financial position and cash-flow, Molopo’s business strategy, the plans and objectives of Molopo’s management for future operations, Molopo’s development plans, and Molopo’s reserve and resource positions.
Actual results, performance, achievements, outcomes or occurrences may be materially different from any forecast, prediction, estimate or other forward looking statement in this presentation, including those implied by any such forward looking statements.
Forward looking statements are based on numerous assumptions regarding Molopo’s present and future business strategies and the environment in which Molopo will operate in the future. Among the important factors that could cause Molopo’s actual results, performance or achievements to differ materially from any prediction, estimate, forecast or other forward looking statement in this presentation are – changes in levels of demand and market prices, increases in relevant input costs, drilling and production results, producible reserves being lower than anticipated, technical and other problems in the production and transportation of products, loss of market, delays in implementing projects, the impact of foreign currency exchange rates on market prices and operating costs, operational problems, political uncertainty, economic conditions in relevant areas of the world, actions of competitors, and the activities of governmental authorities (including changes in taxation, business regulation, environmental laws and fiscal policy).
The uncertainties and risks affecting forward looking statements should be taken into account when considering them and the extent to which it is prudent make decisions based on them.
All forward looking statements are applicable only as of the date of this presentation. Molopo disclaims any obligation or undertaking (except as required by applicable laws) to up-date or revise any forward looking statement to reflect any change in Molopo’s expectations or assessment regarding any such forward looking statement.
Nothing in this presentation is to be regarded as constituting advice or a recommendation regarding the making of any investment in Molopo or any dealing in securities of Molopo.
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