COMPANY PRESENTATION MARCH 2010 ROAR TESSEM CEO LARS HUSBY CFO. 1 Copyright 2010 Spring Energy Norway AS

Transcription

2 DISCLAIMER This company presentation (the Presentation ) has been prepared by Spring Energy Norway AS (the Company ). The shares in the Company is not listed on any regulated market place, and this Presentation has not been reviewed or registered with, or approved by, any public authority, stock exchange or regulated market place. The information included in this Presentation may contain certain forward-looking, uncertain statements and assessments relating to the business, financial performance and results of the Company and the industry in which it operates. Such statements or assessments concern i.a. future or uncertain circumstances, assumptions and results, hereunder other statements that are not historical facts, sometimes identified by the words as estimates, aims, believes, assumes, expects, predicts, intends, projects, plans, foresees, anticipates, targets, and similar expressions. Such expressions or statements contained in this Presentation, including assumptions, opinions and views of the Company or cited from third party sources are solely opinions and forecasts which are subject to risks, uncertainties and other factors that may cause actual events to differ materially from any anticipated development. The Company or any of their parent or subsidiary undertakings, advisors, or any such person s affiliates, officers or employees do not provide any assurance whatsoever that the assumptions underlying such statements are free from errors or omissions. Accordingly, none of them accept any responsibility or liability whatsoever for the future accuracy of the opinions, assumptions or statements expressed in this Presentation. This Presentation is dated March 2010, and there may have been changes in matters which affect the Company subsequent to the date of this Presentation. Neither the issue nor delivery of this Presentation shall under any circumstance create any implication that the information contained herein is correct as of any time subsequent to March 2010, and the Company does not intend, and does not assume any obligation, to update or correct any information included in this Presentation. Investors are advised, however, to inform themselves about any further disclosures made by the Company on its website; This Presentation has been prepared for information purposes only to identified addressees exclusively, and does not constitute any solicitation for any offer to purchase or subscribe any securities and is not an offer or invitation to sell or issue securities for sale in any jurisdiction, including the United States. Distribution of the Presentation in or into any jurisdiction where such distribution may be unlawful, is prohibited. The Company makes no expressed or implied representation or warranty as to the correctness or completeness of any of the information contained. This presentation is not and does not even intend to be complete in any way. Accordingly, the Company, its subsidiary, their directors, employees or advisors assume no liability whatsoever in connection with the information given in this Presentation. This Presentation is subject to Norwegian law, and any dispute arising in respect of this Presentation is subject to the exclusive jurisdiction of Norwegian courts with Oslo City Court (Oslo Tingrett) as exclusive venue. By receiving this Presentation, you accept to be bound by the terms above. 2 Copyright 2010 Spring Energy Norway AS

3 INTRODUCTION A RAPIDLY GROWING EXPLORATION AND PRODUCTION COMPANY Independent full cycle E&P company on the Norwegian continental shelf with a diversified portfolio of attractive assets SPRING ENERGY LICENSE PORTFOLIO 2.5% of the Brage field with approx. 800 boe/d net Three discoveries with 38.5 MMboe of net contingent resources to be further appraised in firm exploration wells next three years targeting 100 MMboe of net risked resources Strong capital base Paid in and committed equity: USD 127 million Exploration loan facility: USD 167 million Commercially driven, exploration based growth strategy Stringent investment criteria Pre-planned value realisation/exit points 3 Copyright 2010 Spring Energy Norway AS

5 STRONG MANAGEMENT TEAM DRIVEN BY SOUND COMMERCIAL AND TECHNICAL EXPERTISE CHIEF EXECUTIVE OFFICER Roar Tessem Master of Science in Petroleum Engineering, Norw. University of Science and Technology Extensive industry experience from mgt positions in Deminex, PGS and DNO/NOIL Managing Director of DNO s North Sea business from 2004 to 2007 listed separately with a market cap of USD 380 million CHAIRMAN OF THE BOARD Thorleif Enger Ph.D. in Structural Engineering, University of Colorado in USA Extensive industry experience from management positions in Norsk Hydro CEO of Yara International from 1999 to 2007, the world s largest supplier of mineral fertilizers Other current board positions include E.ON Ruhrgas, Acergy and FMC Technologies MANAGEMENT TEAM Lars Husby, Chief Financial Officer MBA, Norwegian School of Economics and Business Adm. Former CFO of OPRA Tech. and Fin Mgr with DNO Per-Gustav Granholm, Director Exploration MSc in Applied Geophysics, University of Oslo, Norway Former Exploration Manager with NOIL Jørn Rokk, Director Production and Business Development MSc in Petroleum Engineering, NTNU, Norway Former Chief Reservoir Engineer and BD Mgr with DNO John Magne Birkeland, Director HSEQ MSc in Energy and Int. Mgt, Norwegian School of Mgt Former HSEQ Manager & Senior Partner with Acona CMG Jan Christian Ellefsen, Director Development and Facilities Bachelor of Eng. from Heriot Watt University, Scotland Former Vice President Floating Production with Aibel Bjarne Syrstad, Director Drilling MSc in Petroleum Eng, University of Trondheim, Norway Former Drilling Manager with NOIL 5 Copyright 2010 Spring Energy Norway AS

6 USD/boe BUSINESS MODEL PRE-PLANNED VALUE REALIZATION / EXIT POINTS Spring Energy s business model is to create value through selective investments in E&P projects based on: Stringent investment criteria VALUE REALIZATION AND CREATION Expanded focus Divest (or swap) producing reserves Pre-planned value realisation / exit points Initial focus on acquiring, de-risking and proving up the value of undiscovered and immature oil and gas resources Initial focus / growth engine Farm down prior to development Divest (or swap) appraised discovery Produce and sell petroleum products Divest (or swap) PDO approved project Increasingly also create value through investing in selected development and production opportunities Farm down prior to wild cat well Farm down prior to appraisal well Divest (or swap) new discovery Realise value created through sale of assets and/or production of oil and gas SOURCING/ DE-RISKING EXPLORATION/ APPRAISAL PLANNING/ DEVELOPMENT PRODUCTION Exit points / opportunities to realise value created 6 Copyright 2010 Spring Energy Norway AS

7 USD/boe ACTIVE PORTFOLIO MANAGEMENT BUILDING AN ATTRACTIVE AND BALANCED PORTFOLIO ASSET CATEGORIES PRE-PLANNED EXIT POINTS A B C D Category A assets Core assets to be developed and produced Category B assets Core assets to be farmed-down against CAPEX carry Category C assets Non-core assets to be sold after discovery/ at PDO stage to finance core assets Category D assets Non-core assets to be farmed-down prior to drilling, alternatively relinquished Expanded focus Initial focus / growth engine Farm down prior to wild cat well Divest (or swap) appraised discovery Farm down prior to appraisal well D Divest (or swap) PDO approved project C C Divest (or swap) new discovery Divest (or swap) producing reserves B A Farm down prior to development Produce and sell petroleum products General category considerations Asset quality and liquidity (size and working interest), value add potential (de-risking), economics and commercial (ROI, breakeven oil price, cash exposure, funding), technical risk profile and probability of success, timing, aligned operators and partners etc. SOURCING/ DE-RISKING x EXPLORATION/ APPRAISAL PLANNING/ DEVELOPMENT Exit points / opportunities to realise value created PRODUCTION 7 Copyright 2010 Spring Energy Norway AS

8 FAST AND SUCCESSFUL PORTFOLIO BUILD-UP 24 LICENSES AND 1 PRODUCING FIELD IN CURRENT PORTFOLIO LICENSE PORTFOLIO EXPLORATION AND APPRAISAL WELLS License source 08A 09A 10YTD License awards Farm-ins and acquisitions Sales and relinquishments Change License location 08A 09A 10YTD North Sea Norwegian Sea Barents Sea Total Well type 08A 09A 10E 11E 12E Wildcat wells Appraisal wells Number of wells Well type 08A 09A 10YTD Dry wells Technical discoveries Commercial discoveries Technical success rate N/A 100% - Commercial success rate N/A 100% - 8 Copyright 2010 Spring Energy Norway AS

9 mmboe mmboe mmboe RESERVES AND RESOURCE GROWTH IN ALL CATEGORIES A GROWING RESOURCE BASE WITH CONSIDERABLE NEAR-TERM EXPLORATION UPSIDE RISKED PROSPECTIVE CONTINGENT PROVEN AND PROBABLE , , , ,4 42,8 74,4 59,5 56,8 121, ,4 30,9 38,5 0,80 0,60 0,40 0,20 0,00 1,00 0, YTD YTD YTD Barents Sea Norwegian Sea North Sea Barents Sea Norwegian Sea North Sea Barents Sea Norwegian Sea North Sea Key events affecting risked prospective resources Increase in risked resources in 2009 from a combination of awards in licensing rounds and farm-ins Changes in prospective resources in 2010 contributed by APA 2009 award and revisions Key events affecting contingent resources Increase in contingent resources in 2009 from successful drilling campaign: PL 378 Grosbeak discovery PL 375 Beta discovery Discoveries revised in 2010 Key events affecting proven and probable reserves The reserves has been acquired by swapping 5% of the Grosbeak discovery for 2.5% in the Brage field 9 Copyright 2010 Spring Energy Norway AS

10 Producing reserves ATTRACTIVE PRODUCTION WITH UPSIDE POTENTIAL Spring Energy holds 2.5% of the Brage field in the northern North Sea Acquired through a swap against 5% interest in PL 378 (Grosbeak discovery) Assumed ownership 1 January 2010 and achieved a net production of 800 boe/d in February 2010 The partnership is planning to drill two to three wells per year between 2009 and 2013 KEY ASSET DATA Brage partners Brage Unit PL 055 Statoil Petroleum AS, operator % % Talisman Energy Norge AS % % Petoro AS % % Altinex Oil Norway AS (Noreco) % % VNG Norge AS % % Spring Energy Norway AS % % Reserves (gross) Recoverable Remaining Liquids 371 mill. boe 32 mill. boe Gas 023 mill. boe 05 mill. boe Total 394 mill. boe 37 mill. boe 2010 drilling program Reservoir Prod. start (est) A-34C (producer) Statfjord Feb 2010 A-32B (producer) Statfjord May 2010 A-19B (producer) Fensfjord Oct 2010 Bowmore + Knockando + Upper Ten (production and exploration) Brent Feb Copyright 2010 Spring Energy Norway AS

11 CONTINGENT RESOURCES SIGNIFICANT EXPLORATION SUCCESSES In 2009, Spring Energy participated in two wildcat wells and one appraisal well, all successful In July, a discovery was made in the Grosbeak wild cat well In August, an appraisal well firmed up the resource potential in the Bream discovery In December, another discovery was made in the Beta wildcat well All three are believed to be commercial and work is ongoing to mature the discoveries further KEY ASSET DATA Beta Grosbeak Bream 18/10-1 Discovery year Current license PL 375 PL 378 PL 407 PL 406 Current interest 15% 15% 20% 20% License entry Farm-in Farm-in Acquisition Acquisition Area North Sea North Sea North Sea North Sea Operator Petro-Can. Wintershall BG Norge Premier Well name 34/ / /12-4 N/A Wellbore purpose Wild cat Wild cat Appraisal N/A Water depth 375 m 359 m 110 m 96 m Hydrocarbons Oil Oil/gas Oil Oil Appraisal wells Net resources 14.5 mmboe 10.4 mmboe 10.2 mmboe 2.4 mmboe Development planning / PDO preparations Next step Appraisal well in 2010 Appraisal well in 2010 PDO year end 2010 PDO pending Bream 11 Copyright 2010 Spring Energy Norway AS

12 PROSPECTIVE RESOURCES (MMBOE) DRILL QUEUE OF 11 FIRM EXPLORATION WELLS NEXT THREE YEARS Firm wells 2010 Prospect WI % Gross unrisked Within license Net unrisked PoS Net risked PL 341 Stirby 10% % % 3.6 PL 378 Gnatcatcher 15% % % 4.4 PL 406 Gardrofa 20% % % 2.0 PL 475 Maria 15% % % 7.4 PL 545 Svaneøgle 30% % % 4.1 SUM Firm wells 2011 PL 344 Rådyr 30% % % 1.5 PL 377 Apollon 20% % % 5.1 PL 405 Butch 15% % % 3.3 PL 511 Mjøsa 10% % % 3.0 PL 519 Albert 20% % % 38.6 SUM Firm wells 2012 PL 537 Emma 20% % % 27.1 SUM SUM * Beta and Grosbeak appraisal wells not included in table above 12 Copyright 2010 Spring Energy Norway AS

13 mmboe TOTAL DRILL QUEUE RISKED RESOURCE ESTIMATES AHEAD OF PLAN DUE TO SUCCESSFUL DRILLING IN 2009 PRE AND POST DRILL RESOURCE ESTIMATES 140 Cumulative pre-drill risked resource estimate Cumulative post-drill resource estimate , , ,9 24,1 38,5 26,5 30,1 34,4 36,4 40,6 45,6 48,9 50,4 53,4 0 7,2 13,9 19,1 13 Copyright 2010 Spring Energy Norway AS

14 Consolidated FINANCIAL STATEMENTS 2009 ACHIEVEMENTS REFLECTED IN FINANCIAL PERFORMANCE CONSOLIDATED INCOME STATEMENTS CONSOLIDATED BALANCE SHEETS NOK Sales - - Cost of goods sold - - Gross profit - - Other income 89,967 1,162 Seismic and other exploration cost expensed -209, ,621 General, administrative and other -16,074-8,818 Profit/(loss) from operating activities -135, ,277 Net finance -11,180-3,252 Profit/(loss) before income tax -146, ,529 Income tax expense(-)/income 179, ,194 Net profit/(loss) 32,086-32,335 NOK Oil and gas properties 112,800 - Capitalised exploration and acquisition costs 222,548 32,109 Other non-current assets 52,140 10,692 Tax receivable, exploration refund 382, ,563 Other current assets 113,308 57,018 Total assets 883, ,382 NOK Paid in capital 298, ,934 Retained earnings -0,243-32,335 Total equity 297, ,599 Provisions 35,050 - Other non-current liabilities 143,157 0,221 Interest-bearing current liabilities 259,967 87,188 Other current liabilities 142,279 70,374 Total liabilities 585, ,783 Total equity and liabilities 883, , Copyright 2010 Spring Energy Norway AS

15 SUMMARY PROVEN TEAM AND BUSINESS MODEL Proven team and business model Strong track record of value creation on NCS Three successful wells to date 38.5 MMboe in contingent resources Strong financial platform Paid-in and committed equity of USD 127 million Exploration loan facility of USD 167 million Commercially driven, exploration based growth strategy Exchanged 5% of the Grosbeak discovery for 2.5% of the Brage field approx. 800 boe/d Systematic portfolio management approach Developing value creation and exit strategy for each license prior to acquisition/award Extensive and fully funded exploration program next three years 11 firm exploration wells targeting 100 million barrels of oil equivalents 2 appraisal wells scheduled in 2010 for Grosbeak and Beta discoveries 15 Copyright 2010 Spring Energy Norway AS

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