Niger Delta shallow offshore December 2018
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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,
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 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)
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
Side track well
Working in partnership to unlock value in oil & gas assets 10
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
Unlocking value in underdeveloped proven assets
OML 95 OML 109
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
Leading Natural Resources Fund
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
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.