Cabre Maroc Purchase Onshore Morocco

Transcription

1 Cabre Maroc Purchase Onshore Morocco AIM: GPX 19 December 2012

2 Purchase of Cabre Maroc Acquisition of Cabre Maroc, the Moroccan subsidiary of privately held Caithness Petroleum Operatorship of large contiguous and highly prospective onshore assets totalling 13,352 km² in northern Morocco with a proven working petroleum system for both oil and gas Acquisition provides near term cash flow from Rharb Central permit through: Low risk gas exploration assets Inexpensive to develop Local market demand for purchasing gas production Extensive network of gas pipelines 2P reserves of 0.6 Bscf, 2C contingent resources of 1.4 Bscf and P50 of 24.4 Bscf Significant upside potential from moderate to high risk oil exploration of thrust and folded structural features identified in the Rharb Sud, Fes and Taounate Permits Gulfsands has successfully reduced its exposure to Syria, with operatorship of assets in Tunisia and now Morocco 2

3 The Deal $19 million cash Provision of bank guarantees up to $11.5 million Carry totalling $11 million for Caithness through: Fes activity of 3 wells and 1,000 km 2D seismic acquisition up to a gross pool of $30 million ($10 million carry) Taounate activity of FTG survey & seismic acquisition up to a cap of $2.5 million ($1.0 million carry) ONHYM agreed in principle to issue 5 new permits to Cabre Maroc, subject to Ministerial approval Following completion, Cabre Maroc will transfer 25% interest in Fes Permit and 30% interest in Taounate Permits to Caithness PERMIT EQUITY INTEREST EXPLORATION FUNDING COMPANY GPX CP ONHYM GPX CP ONHYM RHARB 75% 0% 25% 100% 0% 0% FÉS 50% 25% 25% 66.66% 33.33% 0% TAUONATE 45% 30% 25% 60% 40% 0% 3

4 Morocco Purchase of Cabre Maroc Why Morocco? Stable political environment Attractive fiscal terms Tax/ royalty system - gas royalty 5%, oil royalty 10% 10 year corporate tax (30%) holiday on production State participation 25% carried interest through exploration phase Strong demand for oil and gas Vast majority of Morocco s energy is imported (97% in 2011) World s largest supplier of phosphates requires significant gas volumes Projected gas requirement of 275 bcf/yr by 2020 Leverage current expertise/ skill sets Why Cabre Maroc? Interested in the company for some time Meets all internal criteria set: Near term production potential = near term cashflow Significant exploration upside potential for oil Operatorship onshore with a large contiguous permit holding Proven working petroleum system with infrastructure already in place 4

5 Location and Infrastructure Maghreb-Europe 48 gas pipeline with capacity of 1.2 Bscf/d Small depleted oil fields light oil production Rharb Centre has an existing network of 4 and 8 pipelines that supply gas to industrial markets at Kenitra with a capacity of 26.5MMscfpd Fes and Taounate Permits have been lightly explored located adjacent and east of 3 depleted oil fields that produced light oil Rail networks could be used for transport of oil to the Mohommedia oil refinery 4 Gas Pipeline & 8 Gas Pipeline with capacity of 26.5 MMscf/d Railroad link Magreb Europe gas pipeline could be used for gas export if a large resource was discovered A network of 225kV power lines crosses the Fes and Rharb blocks associated gas can be used to generate electricity into the grid via power purchase agreements 5

6 Cabre Maroc Permits - Part of a Regional Petroleum System Regional Petroleum System Map Onshore Areas: Basement Massifs Mountain Ranges Foreland Basins Cabre Prerif prospects Active exploration programmes Large oil accumulations Offshore Areas: Continental Crust Oceanic Crust Cabre Foreland basin prospects Gulfsands Sicily Channel prospects The fold and thrust belt is part of a regional petroleum system extending from Spain to Italy Large prospective structures with petroleum potential Complex geology but application of modern technology such as 3D seismic and Full Tensor Gravity can significantly increase the chance of success (in the Fes and Taounate permits) The foreland area prospects of the Rharb Centre Permit in Morocco and the Offshore Kerkouane Permit in Tunisia are less complex with more simply defined structural traps 6

7 Fès Permit Play Cross section AZH1 Fès block Zalagh Lead The Boudraa and Tselfat Oil Fields were discovered and produced in 1950s & now depleted Haricha sandstone and Domerian limestone produced oil (35 degree API) in Tselfat Field - expected to be present in the adjacent Fès Permit The Zalagh lead shown to the right, and other leads like it in the Fès block, has the potential to trap significant quantities of oil. 7

8 Fès Permit Gravity Data Interpretation Modelled at Top Domerian Horizon Fès-1Z Well drilled offstructure Zalagh Lead Gravity data provides detailed structural configuration of the Fès permit Gravity data shows that FES-1Z was drilled off structure New 2D to be acquired to image structural highs 8

9 Rharb Centre Gas Entrapment Circle Oil Schematic Gas charged Miocene aged turbidite channel and fan sands within structural and stratigraphic traps Use of 3D seismic can decrease the risk of accurately identifying gas accumulations by seismic amplitude analyses ( bright spots ) as well as more advanced techniques All drilling to date by Caithness has been based only on 2D data 9

10 Rharb Centre Gas Play RHARB CENTRE New 3D acquired New 300 km 2 3D seismic programme acquired Q3 2012, data delivery Q SIDI AMER ZHANA Circle Oil activity New data should significantly improve exploration success rates Up to 9 exploration wells planned to be drilled in 2013 KENITRA RHARB SUD 10

11 Rharb Concessions and Reserves Name of Concession Fields Period of Validity Participating Interests Comments Zhana 1 Zhana to 2005 Zhana 2 Zhana 2 Zhana to 2018 Sidi Amer to 2019 The Company 65% ONHYM 35% The Company 75% ONHYM 25% The Company 75% ONHYM 25% ZH-1 Depleted ZH-2 & ZH-3 Depleted SAR-1 Shut in AHF-1 Depleted Cabre Maroc Gas Reserves & Resources to 1 Apr 2012* Reserves and Contingent Resources are carried for BFD-1 and DNO-1 accumulations, drilled in 2006 and 2009 respectively. Prospective Resources are carried for the general Rharb Permit Area. Rharb Permit Area Net Reserves Net Contingent Net Prospective 2P 3P 2C P50 P10 P50 Leads Gas (BSCF) Oil Equivalent (MMBOE) Since 1997, Cabre Maroc has drilled 13 wells based on 2D seismic data making 9 discoveries of which 5 have been put on production. * Audited by Senergy Group, Report Dated July Assumes 6 Bscf = 1 Mmboe BFD-1 has continued to produce intermittently during

12 Rharb Programme Provides Near-Term Cash Flow Modest sized prospects, but inexpensive drilling & development programmes Gas almost pure methane - minimal processing Gas network already in place Preferential gas pricing compared to other regions Sales of newly developed gas anticipated Q3, 2013 Conservative Case: 7 mmscfpd in 2014 & maintained for 5 years Assumptions Rharb 5 Well Daily Production Gross Exploration Well Cost/ well Gross Completion Cost/ well Gas Price $1.5m $1.5m Recoverable Gas Bscf wells drilled and 5 successful producers $8.50/mscf Commence production 3Q 2013 with 2 pro ducers Note: Circle Oil report producing MMscfpd from 3 wells & anticipate producing 8 MMscfpd by winter 2012 mscfpd 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1, Year Based on assumptions above, cash flow after tax exceeds G&A costs of the Group on an annualised basis and payback on the acquisition would be approximately 3 years 12

13 Way Forward Corporate Caithness Shareholders Meeting early January 2013 Completion anticipated mid-january 2013 Award of Taounate Permits possibly February Work Programme Rharb Permit Interpretation of 3D seismic survey Q and selection of drilling locations In Q2, start drilling of up to 9 wells on gas accumulations identified on 3D seismic Fes Permit Start 1,000 km 2D seismic acquisition March/ April 2013 followed by processing and interpretation Taounate Permit FTG survey of 10,000 line km FTG & 350 line km 2D seismic acquisition 2013 heralds the start of a new phase of activity for the Group 13