STRADA ENERGY INTERNATIONAL LIMITED INVESTOR PRESENTATION

Transcription

1 STRADA ENERGY INTERNATIONAL LIMITED INVESTOR PRESENTATION JANUARY 2016

2 THE COMPANY Privately owned Geothermal Energy Company Headquartered in Jersey, Channel Islands, with global operations Highly experienced team of geothermal and drilling industry experts Use worldwide patented technology innovations to significantly improve efficiency, speed of drilling and safety Convert previously non-economically viable geothermal projects into viable attractive projects Disrupt the global energy and renewables markets by unlocking the geothermal market 2

3 OPERATIONS Specialists in contract drilling of both volcanic (high enthalpy) and deep hard-rock (low enthalpy) geothermal markets Deliver geothermal wells much faster, cheaper and deeper than competing drilling contractors in this market Enable energy independence through renewable energy to net energy importing countries, islands and remote communities Reduce / eliminate the carbon footprint associated with power generation by rapid development of geothermal sources 3

4 MEETING ENERGY DEMAND Global population expected to grow from 7 billion today to ~ billion by 2050 Majority of growth will be in cities in currently emerging markets Urbanisation requires a rise out of energy poverty Total global energy demand could rise by % by 2050 from its level today 4

5 ENVIRONMENTAL IMPACT OF ENERGY GENERATION 82% of energy production to date involves the burning of fossil fuels This is a factor causing global warming the human expansion of the greenhouse effect Governments and NGO s globally are pushing to reduce dependency on fossil fuels to curb the CO 2 emissions trajectory, to control: temperature rises, warming oceans, shrinking ice sheets, sea level rises, ocean acidification and extreme weather events Global targets to reduce the use of fossil fuels but meet increasing energy demands Up to 30% of the world s energy mix could come from renewables by

6 HURDLES FOR RENEWABLES To date truly renewable energy generation solutions share the restriction of being peak-load (not always available if not sunny/windy for example) Additional idiosyncratic disadvantages include: Solar very large land areas required for significant power generation Wind noise disturbances, threat to wildlife and visual impact The solution MUST include geothermal, BUT Capital cost of developing geothermal sources globally is prohibitive due to high drilling costs (50-70% capex. of projects) due to use of oil & gas technology (costs) for utility-style returns 6

7 THE SOLUTION Strada disrupt the energy market by unlocking the geothermal market, with huge implications Strada lowers the cost of geothermal energy development significantly by using patented proprietary drilling technology Cost and time savings are great enough to switch economically non-viable geothermal opportunities into viable opportunities Countries globally, ranging from small island nations to large developed economies recognise the benefits of geothermal energy for energy security and environmental sustainability 7

8 GREEN TECHNOLOGY The only base-load (available 24/7) renewable energy source. Not dependent on wind or sun conditions, termed peak-load Heat from the earth provides a stable, consistent, reliable, zero emission, very low cost energy source Energy can be used for direct applications - steam generation, electricity, direct heating and desalination Provides clean cost effective power, heat and water. No fuel used to create the power Historically capital cost prohibitive due to high drilling costs, but Strada s low cost drilling makes geothermal projects viable 8

9 CLEAN, RENEWABLE ENERGY 9

10 CURRENT FORECAST GEOTHERMAL INDUSTRY GROWTH Assuming pre-strada Fluid Hammer Operating System, there was up to 7,000MW new geothermal energy planned over 10 years Average 4MW/well = 1,750 wells Average Depth 2,500m = 4.4 million metres of drilling US$12 Billion industry in geothermal drilling growth alone Majority of growth in the volcanic market. Requires new mobile and cost effective rigs and methods to lower capital costs 10

11 GEOGRAPHIC BREAKDOWN OF GEOTHERMAL RAMP UP Source: International Energy Agency

12 THE BEGINNING OF THE END Clean energy power generation capacity additions (GW) set to heavily outweigh fossil fuel additions Geothermal has the potential to take clean-energy market share from wind and solar, as capacity becomes available economically using Strada technology Source: Bloomberg New Energy Finance 12

13 VERY EXPERIENCED TEAM Warren Strange Executive Chairman and major shareholder 3 rd generation driller. Owned, managed, led and sold Strange Drilling & Manufacturing and Globe Drill Manufacturing Has globally patented the fluid hammer operating system and has an exclusive agreement with Numa for the supply of fluid hammers Glenn Baldwin Chief Executive Officer Global mining executive with CEO, COO, director, general manager, strategic technical and operational roles including Consolidated Minerals, Gold Fields and Anglo American Rick Ironside Chief Operating Officer North American Energy Executive with public company Director, CEO, COO roles the recent 15 years and a strong technical operations & engineering background for the preceding 20 years Rod Williams Senior VP: Asia 30 years experience across Asia, at President/Managing/Regional Director level, in the energy, geothermal development and drilling markets including 26 years with Rolls Royce 13

14 VERY EXPERIENCED TEAM Brad Hill Director Corporate advisory professional. Previously ran industry related management consulting firm Jim Randle Senior Project Consultant Mechanical engineer with over 30 years experience in geothermal. Trusted geothermal advisor to the World Bank, Asia Development Bank and multiple Governments Ian Speer Compressor and drilling expert Over 40 years experience. Industry expert consultant, including writing training courses for Australian Drilling Industry Association 14

15 >120 YEARS OF DRILLING EXPERTISE Key management experience includes a 10-year period of: Safety ~500,000 manhours and over 3.5 million metres drilled with nil Lost Time Injuries. Australian record, likely unofficial global record. Significant redesign of drilling technology and methods; much of which is now industry standard 2005 Western Australia Mining business person of the year and business of the year Developed extensive drilling related patent portfolio 15

16 COMPETITORS Heavily invested in mud rotary technology which is not fit-for-purpose in hard rock Rigs are, generally, slow and expensive to move, set up, operate and pull down Developed for traditional oil & gas wells in soft ground where high investment returns mitigate high drilling costs Mud rotary drilling has very slow penetration rates in hard ground Not focused on the total geothermal drilling market Historic drilling typically 50-70% of total capital cost of geothermal projects 16

17 STRADA The only drilling company positioned to take advantage of geothermal growth using cost-effective patented technology and operational efficiencies Developed drill rigs and drilling methods specifically for this market Rigs designed for percussion drilling and to accommodate patented water hammer operating system Small highly mobile GT3000 drill rig: unmatched power and control from patented hydraulic traverse systems quick and cheap to move and set up approx. 20 truck loads vs. approx. 70 truck loads smaller footprint reduces site preparation costs significantly less labour 17

18 PERCUSSION DRILLING - HOW IT WORKS Working pressure opens the check valve, and drives the piston cycle. The cycled return exhausts through the blow tube (foot valve) The exhaust is vented via porting through the drill bit, and continues across the face of the bit. This flow then continues up the hole annulus carrying the drill cuttings with it The DTH hammer is valveless, and the piston is the only moving part (other than the check valve) The amount of pressure and flow applied determine both the impact energy, and the hole flushing capability Source: NUMA market presentation WORKING PRESSURE EXHAUST AND CUTTINGS REMOVAL PISTON BIT CUTTING FACE 18

19 PROVEN SPEED, EFFICIENCY AND SAFETY Tried and tested method of drilling Fast, efficient and very cost effective A proven technology to a depth of >5,300m Strange Drilling successfully drilled >3.5 million metres using percussion methods with nil lost time injuries Exclusive agreement for fluid hammers in place between Numa (global leading manufacturer) and Strada Strada s latest innovations and patented IP delivers overbalanced (pressure delivered into the well is higher than geological pressure) drilling with percussion. This fundamentally transforms the viability of the hard-rock global geothermal energy Globally patented IP protects the competitive advantage 19

20 WHAT WE DO Strada s Services Project Operator 3. Completion to production 2. Drilling operations 1. Pre-drilling issues Strada reduces the Operator s Risk 20

21 SUMMARY Highly experienced team of geothermal and drilling industry experts Innovative rig and equipment design with worldwide patents, protecting operating systems Existing proven hybrid oil/gas and mining technology. Drill wells faster and more costeffectively than the competition Strong project pipeline 21