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OML 109 Niger Delta shallow offshore December 2018
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OML 109 Niger Delta shallow offshore - Sirius …...Overview of OML 109 • Northern boundary of OML 109 approx. 30km south of OML 95 containing the Ororo field. • 773 sq km shallow

Mar 12, 2020

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  • OML 109

    Niger Delta shallow offshore December 2018

  • Disclaimer

    This Presentation (Presentation) has not been approved by an authorised person within the meaning of the Financial Services and Markets Act 2000 (FSMA). If any person is in doubt as to the contents of this Presentation, they should seek independent advice from a person who is authorised for the purposes of FSMA and who specialises in advising in investments. The inf ormation contained in this

    Presentation does not purport to cover all matters that may be relevant for the purposes of considering whether or not to mak e any prospective investment and is not intended to provide, and should not be relied upon, f or accounting, legal or tax advice. This Presentation is supplied to you solely for information.

    This Presentation does not constitute an admission document, prospectus or listing particulars relating to the Company; it has not been approved by the Financial Conduct Authority, nor does it constitute

    or f orm part of any offer, invitation, inducement or commitment to, sell, issue, or any solicitation of any such offer or inv itation to subscribe for, underwrite or buy, any shares in the Company or any of its af f iliates to any person in any jurisdiction, nor shall it nor any part of it, nor the fact of its distribution form the basis of, or be relied on in connection with, or act as any inducement to enter into any contract

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    rev ision and amendment and completion without notice. This Presentation does not purport to be all-inclusive or to contain all the information that an investor may desire to have in evaluating whether or not to make an inv estment in the Company. You are encouraged to seek individual advice from your personal, financial, legal, tax and other advisers before making any investment or f inancial decisions

    subscribing for or purchasing any securities.

    Certain statements in the Presentation are forward-looking statements, and the Presentation itself has been based upon a number of assumptions, forecasts and projections of the Company and its subsidiaries (Group) which by their nature are forward looking. Forward-looking statements are typically identified by the use of forward-looking terminology such as believes, expects, may, will, could,

    should, intends, estimates, potential, anticipate, plansor assumes, or similar expressions, or by discussions of strategy that involve risk and uncertainties. By their nature, forward-looking statements, assumptions, forecasts and projections involve a number of risks and uncertainties, and in some cases are based on estimates and incomplete information, that could cause actual results or events to

    dif f er materially from those expressed or implied by the forward-looking statements or by the Presentation as a whole. These risks and uncertainties, and the impact they have on the assumptions, f orecasts and projections contained in the Presentation, could adversely affect the outcome and financial effects of the plans and events described in the Presentation.

    No representation or warranty, express or implied, is made or given by or on behalf of the Company or any of their respective agents, affiliates, representatives, advisers, employees or its directors or any

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    The distribution of this document in certain jurisdictions may be restricted by law and therefore persons into whose possession this document comes should inform themselves about and observe any such requirements or restrictions. Any such distribution could result in a violation of the law of such jurisdictions.

    Neither this Presentation nor any copy of it may be taken or transmitted into the United States of America or its territories or possessions (United States), or distributed, directly or indirectly, in the United States, or to any U.S. Person as defined in Regulation S under the Securities Act 1933 as amended, including U.S. resident corporations, or other entities organised under the laws of the United States or

    any state of the United States, or non-U.S. branches or agencies of such corporations or entities. Neither this Presentation nor any copy of it may be taken or transmitted into or distributed in Canada, Australia, Japan, South Africa or the Republic of Ireland, or any other jurisdiction which prohibits such taking in, transmission or distribution, or to any person resident in such jurisdictions (including

    corporations or other entities organised under the laws of such jurisdictions, or branches or agencies of such corporations or entities outside of those jurisdictions) except in compliance with applicable securities laws. Any failure to comply with this restriction may constitute a violation of United States or other national securities laws.

  • Acquisition of 75% Interest in Precision

    • Sirius conditionally agreed to acquire 75% shareholding in Precision Energy Tetra 109 (BVI) Ltd (“Precision Energy SPV” or “Sirius JV”).

    • Sirius JV has in turn conditionally agreed to acquire a 40% equity and up to 80% economic interest in Tetrarch Limited (“Tetrarch”).

    • Tetrarch owns an effective 50% of the economic rights of Tetra Petroleum Oil Services (“TPOS”), the service provider to the OML 109 licence and Sirius JV gets its economic rights exclusively through Tetrarch. The effective 50% economic rights in TPOS owned by Fomak Limited are unaffected by this transaction.

    • On completion of the transactions, Sirius will own an effective 30% economic interest in the cash flows of TPOS through its economic interest in Tetrarch.

    • OML109 is currently producing circa 250 barrels of oil per day (“bbl/d”).

    • Minimum work programme commitment (“MWPC”) agreed to develop Ejelube field to ramp daily production to 5,000 bbls.

    • MWPC Stages A+B budgeted at US$40 million.

    • Sirius sourcing US$40 million debt for Sirius JV and in advanced discussions with major natural resource focused fund.

    • Sirius indirect economic 30% interest in the cash flows of TPOS through its economic interest in Tetrarch.

    Working in partnership to unlock value in oil & gas assets 3

  • Overview of OML 109

    • Northern boundary of OML 109 approx. 30km south of OML 95 containing the Ororofield.

    • 773 sq km shallow waters c10-25m and 15km east of coast.

    • Producing zones on both right and left flanks of license.

    • Ejubele field first oil in 1998. Linked to Trinity Spirit FPSO via 6” flow line.

    • To date produced 14.8 mmbbls (by end of 2018).

    • 2P Reserves 4.7 mmbbls *

    • 2C Un-risked Resources 4.4 mmbbls *

    * Reserve Report completed by Panterra Geoconsultants,

    December 2017

    Ekura-Tuna-Sonamfairway

    Extensive regional 3D seismic across the license

    Working in partnership to unlock value in oil & gas assets 4

  • OML 109 Development Targets

    • Stage A: production ramp-up via oneworkover to an existing well and the

    drilling of one new development well:

    EJ-9. In addition, Sirius and Precision’soption for additional work-overs or

    side-tracks of 2 existing wells.

    • Stage B: one exploration well on the

    EJ-WSW prospect where CPR hasattributed gross unrisked P50

    resources of 32-38 mmboe.

    Stage A MWPC – taking production from 250

    bbls/d to 5,000 bbls/d and Stage B – exploration well.

    Working in partnership to unlock value in oil & gas assets 5

  • Ejulebe Field

    • Ejulebe Field and Fault Block EJ-7ST are hanging wall traps. The hydrocarbons are trapped by sealing faults with dip closure elsewhere.

    • Individual reservoirs in Ejulebe Field have different hydrocarbon column heights due to variable fault seal capacity across the eastern boundary faults.

    • The maximum column height in the main reservoir is 450 ft.

    • Work overs: EJ-6A, and new development well at EJ-9.

    Working in partnership to unlock value in oil & gas assets 6

  • OML 109 Exploration Potential

    • The EJ-SW & EJ-WSW structures are three way dip and fault closed traps.

    • Identical in morphology to the producing intervals in the Ejulebe Main Field and EjulebeWest down-thrown fault traps.

    • EJ-WSW exploration well –budget included in the MWPC -P50 of 32-38mmboe, unrisked.

    • EJ-SW P50 of 32-53mmboe, unrisked. Not included in MWPC.

    • Additional prospects ascribed gross unrisked P50 prospective resources with 266 Mmboe**

    • EJ-WSW exploration well (MWPC inclusive), 3 to 4 km fromEjulebe platform

    • EJ-SW, 3 km from Ejulebe platform.

    Working in partnership to unlock value in oil & gas assets 7

    * Reserve Report by Pantera Geoconsultants, Dec 2017

    ** Reserve Review by Pantera Geoconsultants, Feb 2018

  • Extensive regional 3D seismic

    Working in partnership to unlock value in oil & gas assets

    Approx. area of EjubeleGOK 3D reprocessed survey (2010)

    8

  • Precision Energy – deal structure

    • Sirius conditionally acquiring 75% of shares in Sirius JV, which has in turn conditionally agreed

    to acquire a 40% equity and up to 80% economic interest in Tetrarch. The arrangements are

    conditional, among other things, on Sirius sourcing US$40m of funding for Sirius JV to

    execute the MWPC. No acquisition consideration, farm-in fee or signature bonus.

    • US$40m debt funding – advanced discussions with a leading natural resources fund with

    AUM > US$1bn. The funding is to be arranged by Sirius and is intended to be secured directly

    against the cashflows generated by the Ejulebe MWPC.

    • Sirius to arrange additional funding for development of EJ-WSW, if a successful discovery.

    • Up to 80% of net revenues of Tetrarch in favour of Sirius/Precision during cost recovery,

    subject to performance of milestones set out in MWPC.

    • The obligations under the MWPC are industry standard, and the Sirius JV and will obtain

    industry standard insurance before commencing any operations or making any material

    expenditures. On this basis, Sirius has provided a conditional parent company guarantee.

    Working in partnership to unlock value in oil & gas assets 9

  • Outline Programmes OML 95 + OML 109

    Well Q4/18 Q1/19 Q2/19 Q3/20 Q4/19 H1/20 H2/20

    Ororo-2

    Ororo-3

    EJ-6A

    EJ-9

    EJ-WSW

    Key

    Development well

    Work overwell

    Side track well

    ExplorationWell

    Appraisal Production

    Working in partnership to unlock value in oil & gas assets 10

  • Summary

    Working in partnership to unlock value in oil & gas assets

    • Operating in a prolific hydrocarbon province with opportunities to acquire excellent, value accretive assets and add value by progressing development:• Near-to-production or producing assets

    • Appraisal assets• Exploration assets

    • OML 109 adds all three to the Sirius portfolio

    • Sirius portfolio is attractive to the international debt funding institutions:• International contractors reduces development execution risk• Work programmes to commence/boost production

    • Shallow offshore eliminates onshore infrastructure risk

    • Development strategy designed so that all stakeholders take risk and share in success

    • Ability to introduce Sirius’ operational and commercial partners is likely to be appealing to local asset owners

    • Intend to continue to build the portfolio of assets:• Applying strategic criteria for evaluating assets

    • Securing operatorship and marketing rights mitigates risk

    11

  • Unlocking value in underdeveloped proven assets

    OML 95 OML 109

    Future Asset

    Future Asset

    Asset Co-owners

    Capital and Technical Partners

    Sirius Co-Owner + Operator + Off-take marketing

    • Strong local partnerships and assets owners• Innovative funding - major institutions• World class technical and engineering development partners

    BP

    Leading Natural Resources Fund

    12

  • Sirius Commercial Fulcrums• Provision of development capital to unlock proven assets:

    • International debt funding institutions

    • Buy-in to shallow offshore, near production with development and appraisal upside

    • Accelerated recovery of cash – paying down debt capital to achieve earliest free cashflow per asset.

    • Risk-sharing across JV and operational partners.

    • Focused on discovered, underdeveloped shallow offshore assets.

    • Key Strategic Criteria:• Minimum/low upfront consideration

    • Control of operations e.g. Ororo

    • Control of marketing rights e.g. Ororo

    • Producing and/or near producing

    • Platform to work with operational partners across multiple projects, deploying world class expertise

    • NPV accretive

    Disciplined approach to evaluation

    Working in partnership to unlock value in oil & gas assets 13

  • Strategic Partnerships

    Technical partnership with Havoc. Havoc Partners is a key technical advisor to the Company

    Under this partnership, Jon Taylor and Alan Stein (originally founders and Executive Directors of Ophir Energy plc) will sit on our TechnicalAdvisory Committee (“TAC”) and bring significant industry experience andtechnical expertise.

    Strategic partnership with Schlumberger. Schlumberger has evaluated the technical data on the Ororo Field and contributed to the FDP.Schlumberger has agreed to provide technical services on our proposed development on a vendor finance basis.

    Integrated Service Management (“ISM”) contract with Sirius

    Schlumberger is the world’s leading supplier of technology, integrated project management and information solutions to the oil and gasindustry, employing approximately 120,000people inmore than 85 countries.

    Strategic partnership with ADD Energy. ADD will provide Sirius with the engineering and operational capability to drill , complete, andproduce wells.

    Add Energy will provide its well management solutions services to Sirius. Add Energy is an International Consultancy Provider for theenergy industry, with a focus on Drilling & Well Operations, Asset & Operations Management, and Risk & Safety Management. AddEnergy works with major international oil & gas companies, including BP, Shell, Woodside, and Statoil, and has provided wellmanagement solutions in Africa, Europe, and Australasia.

    Working in partnership to unlock value in oil & gas assets 14

    Strategic marketing partnership with BP. Sirius has formed a crude oil marketing partnership with BP, under which BP has committed toprovide pre-pay funding, provide a prepayment facility for a fixed volume of Escravos Blend crude deliveries by prepaying an amount ofup to US$10 million per cargo to Sirius. The availability of the prepayment facility is conditional upon, among other things, the Ororo Fieldachieving certain daily production levels. Following initial drawdown, Sirius can request for an additional pre-payment drawdown againstscheduled cargo 4 months prior to loading

    BP is one of the world's leading integrated oil and gas companies, producing over 3.6 mmboepd with over 18 bnboe proved reserves,almost 75,000employees andwith a market capitalisation of £119bn.

    Shelf Drilling Limited providing the high specification jack-up rig for our proposed multi-well development in the Ororo field OML 95.Shelf Drilling is a leading international shallow water offshore drilling contractor with rig operations across Middle East, SoutheastAsia, India, West Africa and the Mediterranean. Shelf Drilling was founded in 2012 and has established itself as a leader within itsindustry.