Northern Petroleum Plc. Oil Capital September 2016

Transcription

1 Plc Oil Capital

2 Disclaimer These presentation materials (the "Presentation Materials") are being solely issued to and directed at persons having professional experience in matters relating to investments and who are investment professionals as specified in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Financial Promotions Order") or to persons who are high net worth companies, unincorporated associations or high value trusts as specified in Article 49(2) of the Financial Promotions Order ( Exempt Persons ). The Presentation Materials are exempt from the general restriction on the communication of invitations or inducements to enter into investment activity on the basis that they are only being made to Exempt Persons and have therefore not been approved by an authorised person as would otherwise be required by section 21 of the Financial Services and Markets Act 2000 ( FSMA ). Any investment to which this document relates is available to (and any investment activity to which it relates will be engaged with) Exempt Persons. In consideration of receipt of the Presentation Materials each recipient warrants and represents that he or it is an Exempt Person. The Presentation Materials do not constitute or form any part of any offer or invitation to sell or issue or purchase or subscribe for any shares in PLC ( ) nor shall they or any part of them, or the fact of their distribution, form the basis of, or be relied on in connection with, any contract with relating to any securities. Any decision regarding any proposed purchase of shares in must be made solely on the basis of the information issued by at the relevant time. Past performance cannot be relied upon as a guide to future performance. The Presentation Materials are being provided to recipients on the basis that they keep confidential any information contained within them or otherwise made available, whether orally or in writing in connection with or otherwise. The Presentation Materials are not intended to be distributed or passed on, directly or indirectly, whether to Exempt Persons or to any other class of persons. They are being supplied to you solely for your information and may not be reproduced, forwarded to any other person or published, in whole or in part, for any other purpose. In particular they, directly or indirectly, must not be distributed to persons in the United States of America, its territories or possessions or Australia or Canada or Japan or the Republic of Ireland or South Africa. Any such distribution could result in a violation of law in those territories. The Presentation Materials do not constitute or form part of a prospectus prepared in accordance with the Prospectus Rules (being the rules produced and implemented by the Financial Conduct Authority ( FCA ) by virtue of the Prospectus Rules Instrument 2005) and have not been approved as a prospectus by the FCA (as the competent authority in the UK). The Presentation Materials do not contain any offer of transferable securities to the public as such expression is defined in section 102(b) FSMA or otherwise and do not constitute or form part of any offer or invitation to subscribe for, underwrite or purchase securities nor shall they, or any part of them, form the basis of, or be relied upon in connection with, any contract with relating to any securities. 2

3 Production led growth AIM quoted Exploration and Production company Growth through production and cashflow Opportunity of significant upside potential through unique exploration and appraisal portfolio Small board and management team with necessary skills and experience to achieve growth Low corporate running costs Existing asset base can create a material business 3

4 The Board Keith Bush Chief Executive Officer led E.ON s E&P operations in Norway 25 years in the E&P industry Reservoir Engineer by profession Nick Morgan Finance Director 13 years corporate finance experience focused on the E&P sector broad collection of M&A and ECM transactions in oil and gas Chartered Accountant by profession Jon Murphy Non-executive Chairman over 30 years E&P industry experience COO of Venture Production from inception to sale Geologist by profession Iain Lanaghan Independent Non-executive Director over 30 years financing and transaction experience previously Group Finance Director of Faroe Chartered Accountant by profession 4

5 The assets - Canada Material production project redevelopment of existing wells established operating facilities Simple production growth well workover and sidetracks limited capital investment Good netback economics low incremental per barrel breakeven hurdle Six miles Virgo leases Rainbow leases 5

6 Canadian operations Two production facilities More than 50 wells available for production Direct tie in to national infrastructure Multiple opportunities to acquire accretive assets in area 6

7 The assets Italy Company changing exploration and appraisal portfolio Large onshore exploration project carried by Shell Offshore discovery requiring flow test to proceed to development Strategic exploration position in the southern Adriatic with large prospect to be drilled Cygnus & Giove Cascina Alberto Cascina Alberto 300 mmbbls onshore exploration prospect Analogous to Villafortuna- Trecate 25km southeast Farmed out to Shell for cash, seismic acquisition and exploration well carry Key projects Giove discovery Offshore discovery, contingent resource of 26 mmbbls Requires appraisal well with flow test Well being planned for 2017 Cygnus prospect 446 mmbbls offshore exploration prospective 12 km from producing Aquila oil field If connected to Aquila, volumes are much larger 7

8 The assets - Italy NOP has 20% carried interest in Cascina Alberto including first exploration well Farm in discussion started one month after award of permit Villafortuna Trecate has produced more than 220 mmbbls Previously identified prospects Villafortuna Trecate field Giove-2 intersected a 90m oil column Discovery is 12km from producing Aquila oil field No apparent closure between Cygnus and Aquila High case prospective resources greater than a billion barrels 8

9 Our focus Increase production provides cashflow to grow the business creates core value for investors Netback focus on netback per barrel to maximise profitability, whatever the oil price capital investment based on payback period and economic return Scale scale through production growth will attract further investment must be material to the industry to attract partners or eventually acquirers Upside progress a portfolio of exploration and appraisal upside opportunities minimal investment as funded through farm out capital 9

10 Production economics Illustrative economics at $45 WTI 400 bopd 800 bopd $7 $5 Discount /tariff Royalty $7 $5 $38 sales price $14 Netback $20 $5 Variable opex $5 $14 Fixed opex $8 Annualised 400 bopd 800 bopd Revenue $5.5m $11.1m Operating cashflow $2.0m $5.8m 10

11 Objectives Canadian production H double production to 800 bopd plus - generate free cashflow for further growth - increase production to 1,500 bopd - increase production to 2,500 to 3,000 bopd Italian exploration and appraisal / / shoot southern Adriatic seismic - drill and flow test Giove discovery - farm out Cygnus and Giove - exploration well on Cascina Alberto - exploration well on Cygnus 11

12 Financials Current Current cash balance approx. $1.0 million Remaining $0.2 million to be returned from AER in October Total Group G&A less than $3.0 million Medium term $3 million winter programme to double production Finance through: asset farm out or joint venture (Italy or Canada) contractor finance and cashflow equity and / or debt Keep total Group G&A low Grow production organically and through acquisition Advance Italian assets to execute further farm outs Consider a second production base to leverage off the established Group platform 12

13 Production led growth Growth of the business through low risk production creates core value and funds growth Opportunistic time to grow production through acquisition Focus on building a sustainable business with lowest breakeven costs Doubling production to at least 800 bopd is achievable by Q Existing asset base will support further growth to 4,000 to 5,000 bopd Industry interest returning to Italy with improving business environment Development opportunities within Italian portfolio Company changing exploration prospects Successful execution will be transformational for the Company and its share price 13