PA Resources AGM 2012

Transcription

1 PA Resources AGM 2012 Annual General Meeting Bo Askvik, President & CEO Stockholm, 22 May 2012

2 PA Resources where we are today 2010 Today» No value in the North Sea asset portfolio» New play discoveries in Denmark as operator» Marginal value recognised in Block I, Equatorial Guinea» Aseng investments recovered after 9 months - strong future cashflow» High investment level, capex/produced barrel equal to 80 USD» Significantly lower investment level, capex/produced barrel equal to 6 USD in Q

3 Focusing on Africa and North Sea KEY FACTS: Oil and gas company with operations and assets in nine countries Exploration, development and production portfolio - key infrastructure assets in Africa 25 oil and gas licences 6 producing fields 9 potential commercial discoveries Operator of 12 licences Oil production in Equatorial Guinea, Republic of Congo (Brazzaville) and Tunisia Average production of 8,700 bopd in Q million mmboe in 2P reserves and 145 mmboe in contingent resources* 130 employees in Tunisia, the UK and Sweden Production Development Exploration * Million barrels of oil equivalents, Working Interest figures per 31 Dec Infrastructure hub 3

4 Shareholder structure per March 2012 Number of shares Capital/votes AVANZA PENSION 53,990, % NORDNET PENSIONSFÖRSÄKRING 21,657, % LÄNSFÖRSÄKRINGAR FONDER AB 17,270, % CBNY-DFA-INT SML CAP V 15,454, % ROBUR FÖRSÄKRING 10,883, % AB TRACTION 10,778, % VOB & T HOLDING AB 10,000, % SEB S.A., W8IMY 9,378, % JP MORGAN BANK 7,765, % JPM CHASE NA 7,724, % Total - 10 largest shareholders 164,901, % Total - other shareholders 472,575, % Total number of shares 637,476, % The share listed on NASDAQ OMX Stockholm (Mid Cap) Market capitalization of approx. SEK 920 million Enterprise value of approx. SEK 4.3 billion and Nomination committee in 2011: Länsförsäkringar AB Traction Folksam 4

5 Financial Review Q1

6 Macro perspective Brent price trend (USD per barrel) Geopolitical uncertainty continues European debt crisis and outlook of global economy coming year uncertain Lack of extra production capacity Demand still driven by growth economies such as China and India Transport sector increasing in pace with population and GDP It is getting more difficult to find oil Existing producing fields have a natural decline rate of 4% a year +40 million barrels per day needed from new producing fields by

7 Production trend and update Average production per country/bopd Congo: Azurite EG: Aseng Tunisia: Didon & Onshore Q Q Q Q Q CONGO: Azurite Marked decline in one well since February 2012, well flowing at minimal rate Technical and economic analysis of remedial options ongoing One week shutdown for annual field maintenance planned for in late May 2012 EG: Aseng Higher target level of around 60,000 boepd reached in early March 2012 Fifth production well on stream - all wells contributing fully, gas re-injection fully commissioned Frequent liftings EG: Alen Delopment project on plan for production start 2013, significant cost synergies reducing opex 7

8 Production and sales Average quarterly production/bopd bopd Full Year 2011 Q APRIL 2012 West Africa 5,300 6,200 5, North Africa 3,300 2,500 2,700 Group Total 8,600 8,700 8,400 0 Q Q Q Q Q Q Q Q Q Average sales price USD/bbl LIFTINGS IN 2012: Q1 - EARLY APRIL PA Resources Brent ,000 bbls from Aseng and Tunisia in Q1 520,000 bbls from Azurite on 4 April (Q2 2012) Q Q Q Q Q Q Q Q Q

9 Earnings and key ratios Q Q FY 2011 FY 2010 Production (bopd) 8,700 8,400 8,600 10,700 Oil price (USD/barrel) Revenue (SEK million) ,154 2,227 EBITDA (SEK million) ,295 1,276 EBITDA margin 60.8% 57.2% 60.1% 57.3% Profit before tax (SEK million)* Profit for the period (SEK million)* Earnings per share (SEK) * Figures for 2011 exclude non-cash, one-off costs of SEK 2,035 million before tax and SEK 1,758 million after tax. 9

10 SEK million Significantly lower capex in Capex Actual Forecasted 1, KEY COMMENTS 2012 forecast of SEK million Capex of SEK 32 million in Q1 Continued low investment activity in 2012 Drilling program/planned wells Tunisia: Zarat Elyssa Q4 2012/2013 Appraisal/1 Tunisia: Makthar 2013 Exploration/1 EG: Block H Aleta Q4 2012/2013 Exploration/1 DK: 12/06 Lille John 2013 Appraisal/1 10

11 Improved cash flow SEK million Q Q FY 2011 FY 2010 Operating cash flow of which income taxes paid CAPEX ,613 1,585 AZURITE LIFTING Q Azurite lifting on 4 April adds SEK 400 million cash flow, and reduces net debt PA Resources next planned lifting from Azurite in early 2013 Financing activities ,321 Net cash flow ,209 1,152 11

12 Refinancing activities May - Dec Maturity structure Bonds and convertibels (SEK million) Bond (NOK 900 million) Convertible Bond Bond (SEK 850 million) 5 year senior unsecured NOK 900 million bond loan issued in March 2011 to refinance maturing loans in 2011 and 2012 Total amortizations of net SEK 408 million in 2011 As per 25 April net debt reduced by SEK 580 million since year end amounting to SEK 3.4 billion Next maturity in October

13 Reduced debt Balance Sheet (SEK million) Non-current assets Current assets Total assets Equity attributable to owners of the parent Non-current liabilities Current liabilities KEY COMMENTS Q Substantial reduction in 2P reserves on Azurite field resulted in impairment of SEK 1,436 million Write-down of SEK 599 million related to Didon North and divestment of El Bibane and Ezzaouia fields in Tunisia Total equity and liabilities April* Q Q Covenant Book Equity (SEK million) 2,994 2,994 3,270 >2,000 Book Equity to Capital Employed Covenants and net debt 46% 43% 45% >40% Net debt (SEK million) 3,400 3,803 3,982 N/A * Assuming fixed closing rate per 31 March 13

14 Operational update Q1

15 Highlights 2011: West Africa West Africa Reserves and resources (mmboe) P Reserves 20 Contingent Resources SEK 780 million in investments 62 Risked Prospective Resources SEK 3,304 million in non-current assets 5,300 barrels/day in average production IMPORTANT EVENTS Equatorial Guinea: Early production start at the Aseng field in November 2011, adding frequent cash flow from Q Alen development in progress adding significant cost synergies to PAR, production start in 2013 New operator for Block H Congo: Azurite development completed with lower production than expected, booked 2P reserves written down by 6 mmboe Exploration well on Marine XIV found non-commercial hydrocarbons 15

16 Highlights 2011: North Africa North Africa: Reserves and resources (mmboe) 48 2P Reserves SEK 486 million in investments SEK 3,848 million in non-current assets 91 Contingent Resources 48 Risked Prospective Resources IMPORTANT EVENTS Allocation of reserves and development planning of Zarat field in progress Production well on the satellite field Didon North failed No commercial discoveries found on Jelma Disposal of two small producing fields - El Bibane and Ezzaouia Political situation resulting in social instability affecting activities in the country 3,300 barrels/day in average production 16

17 Highlights 2011: North Sea and Greenland North Sea and Greenland: Reserves and resources (mmboe) 2P Reserves 34 Contingent Resources 299 Risked Prospective Resources IMPORTANT EVENTS Discovery of gas and condensate on Broder Tuck in Danish licence 12/06 Oil discovery in the Miocene structure on Lille John in Danish licence 12/06 Seismic analysis completed in Greenland resulting in a number of sizable prospects and leads Awarded new licence in Germany, adjacent to Danish 12/06 SEK 347 million in investments SEK 758 million in non-current assets 17

18 Successful drilling campaign on 12/06 in Denmark PA Resources 64% (Operator) Background 12/06 licence located in the Danish part of North Sea Adjacent to existing oil and gas infrastructure Exploration well drilled in 1975 (Broder Tuck field today), encountered a gas column Awarded adjacent German licence in January 2011, before successful drilling 18

19 Denmark 12/06: Thorough geoscience analysis PA Resources 64% (Operator) Pre-drill perceptions 1975 well with small gas column in Middle Jurassic Industry perception of Chalk as only target in area, with high risk on oil charge Our perceptions Structures drilled historically on 2D data 3D acquired in past but no subsequent exploration drilling Lies in Danish Central Graben large fields nearby What we did Use of 3D to define Lille John as multi-target prospect (Miocene, Chalk, Middle Jurassic) Evaluated historic well and recognised upside 19

20 Denmark 12/06: Discoveries and way forward PA Resources 64% (Operator) Broder Tuck 360m+ gas and condensate column proved by wells High quality Middle Jurassic reservoir Mid to high case assessment of c mmboe gross of contingent resources including liquids 2012 work programme to progress development planning towards commercialisation 12/06 Broder Tuck - 2 Lille John Wells established 35 API oil in Miocene sandstone at c. 900m exceptionally light oil for shallow depth Obvious seismic anomaly at Miocene Recognition of shallow light oil re-focussed work on developing a Miocene prospect inventory Likely to be remaining deeper potential Chalk remains and well result upgrades Middle Jurassic 2012 work programme to reprocess 3D to determine prospect inventory and appraisal well location, drilling project management tendered B Lille John-1 Licence Group: Operator PA Resources (64%), Danish North Sea Fund (20%), Spyker Energy (8%), Danoil (8%) 20

21 PA Resources operator with focus on HSE Objective - safe drilling campaign with minimal impact Total working hours; 184,149 or 7,673 man days with an average of 72 personnel on board during operation Reportable incidents; 0 environmental incidents, 3 reportable incidents, 0 lost time incidents, 1 first aid case HSE audits; > 100 audits by PA Resources rig-based HSE supervisor Transportations; 6,698 tonnes of equipment moved to/from rig in 68 supply boat sailings Use of chemicals; tonnes of chemicals discharged being 96.3% designated Green substances which pose little or no risk to environment Use of environmentally harmful substances; usage of only 15.6 tonnes of 221 tonnes in total that PA Resources was permitted to use, of which, zero tonnes discharged to the environment Disposal; 76.9 tonnes of waste shipped from the rig for safe disposal 21

22 Success factors and the 12/06 team Key success factors Careful, diligent work and formed own evidence-based views on prospectivity Conducted a safe drilling campaign with minimal impact to highest standards High degree transparency to joint venture partners and DEA Professional team and good communication PA Resources UK the 12/06 team Graham Goffey Regional Director Fiona Goodfellow Geoscience Project Leader Dave Mackertich Senior Geoscientist Jon Lucas Geotechn. & HSE Manager Mark Attree Exploration Manager William Tyrell Geologist 22

23 Reserves and valuation Q1

24 2011 Reserves and resources P Reserves Contingent Resources Risked Prospective Resources 2P Reserves Aseng derisked 6 months in production Alen production start in 2013 Contingent Resources Danish discoveries on 12/06 added 32 mmboe Risked Prospective Resources Seismic analys of Greenland licence added significant volumes Danish 12/06 exploration potential 24

25 Overview: Assets per classification 409 mmboe 60.2 mmboe 2P Reserves 145 mmboe Contingent Resources Risked Prospective Resources Azurite Didon Tunisia onshore Zarat liquids Block I: Aseng Alen Didon Zarat gas Elyssa Zarat permit Didon North Denmark 12/06 Block I (other) Mer Profonde Sud Marine XIV Netherlands Tunisia: Jelma, Makthar, Jenein Centre, Zarat permit UK Mer Profonde Sud (Miocene & Sendji) Marine XIV Block I and Block H Netherlands: Schagen, Q7 Denmark: 12/06, Gita/Maja Greenland, Block 8 Producing assets Under development Priority development 25

26 Current valuation of 2P reserves Peer group 2012* PAR AGM 2012 PAR AGM 2011 Market capitalisation 920 2,665 Net debt 3,400 3,280 Enterprise value SEK million 4,320 5,945 Enterprise value USD million 1, P boe million Value/2P boe (USD) PAR oil price (USD) * Peer group includes 15 E&P companies per April

27 Indicative valuation of selected assets 145 mmboe 60.2 mmboe 2P Reserves Contingent Resources Value range (USD/boe) Indicative value (MUSD) Producing: North Africa: Tunisia West Africa: Congo (Azurite) EG (Aseng) To be developed: Tunisia: Zarat field EG: Block I Denmark: Broder Tuck Total 674 1,168 Net debt -500 (Market) value SEK/share *equivalent * USD/SEK

28 Strategic focus update Development of prioritised assets in Africa Azurite and Aseng completed Alen production start in 2013 Increase reserves and resources Develop prioritised assets Strengthen capital structure Increase value from existing assets Selective exploration activities Discoveries on 12/06 in Denmark Strengthen captital structure Refinancing activities in 2011 Net debt reduced by SEK 600 million in Jan. April 2012 Low capex positive cash flow in

29 Outlook and focus 2012 Technical and economic analysis of remedial options for Azurite well Appraisal drilling and development planning of Danish discoveries towards commercialisation Selective appraisal and exploration activity in EG: Block I and Block H Progressing the Zarat field and Block I development projects Positive cash flow and reduction of debt 29

30 Thank you! Q1