Fastnet Oil & Gas Plc Proactive Presentation Manchester 29.10.14
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Company Overview Irish Assets Company Overview Moroccan Assets Outlook Moroccan Assets Irish Assets Outlook
OVERVIEW Overview and Company Funding 25,053 sq. km. under licence onshore and offshore Morocco and offshore Ireland with 16 primary exploration and appraisal prospects matured for drilling Cash balance USD 20 mm at 31 July 14 Running costs general and administration USD 2.6 mm p.a Fully funded to meet all current licence phase commitments - monetisation through farm down and recovery of past costs Quality Partners Kosmos Energy, BP, SK Celtic Sea farm out process well underway. Internal technical work continues to enhance value with completion of 3D interpretation. Offers expected Q4. Tendrara Lakbir well planning on schedule. Farmout process ongoing. FA-1 well reached TD May 14, under budget. Numerous oil and gas shows encountered in well. FA-1 results have significantly de-risked the Foum Assaka license area. www.fastnetoilandgas.com 4
OVERVIEW Business Model Health Check ACQUIRE ACQUIRE 25,053 sq. km. under licence and exclusive options New niche opportunities being reviewed in onshore East Africa ANALYSE ANALYSE 1,910 sq. km. of 3D seismic acquired in Ireland 488 sq. km. of 3D seismic reprocessed onshore Morocco Up to 5,000 sq. km. of 3D seismic acquired/reprocessed offshore Morocco FARM DOWN FARM DOWN Foum Assaka farmed out to SK Innovation carry in up to 2 wells plus back costs Total cost to Fastnet from licence acquisition to completion of the FA-1 well was USD 2.75m Celtic Sea and Tendrara Farmouts well underway 9 front-runners EXPLORE EXPLORE FA-1 first well tested the high risk, deepwater, acreage in the portfolio De-risked petroleum system oil shows encountered, sand presence confirmed but thickness/quality remains issue Tendrara Lakbir well planning under way and on track Celtic Sea 3D Interpretation has defined and de-risked very large potential oil and gas prospects FA-1 encountered non-commercial hydrocarbons, derisked elements of petroleum system for future prospect evaluation. MONETISE MONETISE Tendrara Lakbir drilling programme offers next near-term opportunity for monetisation Deep Kinsale and Mizzen prospects offer medium term potential for monetisation following farmdown/drilling www.fastnetoilandgas.com 5
Net Asset Value (GBp) OVERVIEW Potential Near Term Catalysts to Unlock Shareholder Value Fastnet Risked Net Asset Value 41.5p 40 35 30 25 20 15 10 Celtic Sea Farmout Significant industry interest in Celtic Sea licences following results of 3D seismic interpretation Farmout will validate the quality of Fastnet s portfolio and crystallise value with back costs of up to USD 22 mm repayable Tendrara Farmout & 2015 Drilling Fastnet objective is to retain material Programme carried interest in multi-well drilling programme in 2016 Farmout process well underway Terms to include reimbursement of back costs and disproportionate share of the cost of two wells to be drilled in 2015 Multi well drilling programme will target High Estimate Case of 892 BCF which provides substantial upside to current NAV estimates 15p 21p Celtic Sea Tendrara* 5 0 3p 3.5p Cash Balance 3.5p Price: 6.5p as at 10/10/14 Implied value of Exploration and Appraisal Portfolio Source Shore Capital March 2014 www.fastnetoilandgas.com *Management estimates based on re-risking of CPR, volumes Nov 2013. 6 *Unrisked P50 value: 30p **Value of the carry in 2 nd exploration well 2p Foum Assaka** Cash
THE TEAM Experienced Board & Senior Management Paul Griffiths, Managing Director CEO of Island Oil & Gas Plc until its acquisition by San Leon Energy Plc in 2009 Built and sold 3 oil and gas companies between 1999-2012 Senior geophysicist for Gulf Oil Corporation for Europe and Mediterranean Region and Gulf R&D in Pittsburgh 38+ years Experience in oil and gas exploration and near term field appraisal Value Creation Sold IPDL to DNO ASA, after reverse takeover of Providence Resources Plc collapsed in 2002, for an exit price of $34 mm after investing approx. $1.5 mm 100% 100% exploration success rate offshore Ireland with Island Oil & Gas: 4 wells drilled, two commercial gas fields Carol Law, Executive Director Former Exploration Manager, Anadarko East Africa Responsible for the play finding Prosperidade gas complex in Rovuma Area 1, offshore Mozambique Also member of teams responsible for discoveries in Ghana (Jubilee), Brazil (multiple Campos Basin discoveries) 30 years Experience in oil and gas industry 100 TCF + Carol led the Anadarko team that discovered over 100 TCF of natural gas in the Area 1 Block, Offshore Mozambique $2.64 billion Sale price of a 10% stake in Anadarko s Area 1 Block, Offshore Mozambique Cathal Friel, Executive Chairman Managing Director and one of the founders of Raglan Capital in 2007 Former founding partner and Director of Merrion Capital MBA from University of Ulster 25+ years Managerial Corporate Finance experience 100 million One of the founding directors of Merrion Capital, where he was part of the small team that built the business and sold it for c. 100m in 2006 $2.5 billion Value of successful corporate transactions on which Cathal has advised Will Holland, Chief Financial Officer Former Associate Director at Macquarie bank where he originated, structured and managed equity and debt investments in small-cap E&P companies. Previously worked at Halliburton Energy Services in various technical & business development roles based in Africa & Europe MBA from Heriot-Watt University 20+ years Experience in oil and gas industry +$110 million Managed Macquarie interest in over $110 million of debt and equity investments Internal Control Lead teams of internal auditors at Halliburton assessing accounting & operation risks Michael Nolan, Non-Executive Director Former Founder and Group Finance Director of Cove Energy PLC Currently CFO of Discover Exploration and Non-executive director of Rathdowney Resources plc and Orogen Gold plc Fellow of the Chartered Accountants Ireland 18+ years Experience in resource exploration sector +1900% Share price increase between the Cove Energy IPO in June 2009 and its sale in Aug 2012 $1.9 billion Cove Energy was sold to PTTEP in Aug 2012 after a competitive auction process
Company Overview Irish Assets Company Overview Moroccan Assets Outlook Moroccan Assets Irish Assets Outlook
IRELAND Celtic Sea Offshore Highly prospective basin capable of delivering significant near-term production Attractive petroleum geology with major reserves potential: largest producing gas field at Kinsale Head, large prospects with wellunderstood large-field analogues and existing infrastructure Underexplored, applying new technologies to de-risk by analogy with surrounding oil and gas discoveries Shallow water prospects: easier to monetise than deepwater Irish Atlantic Margin Largest ever 3D seismic survey undertaken in Summer 2013 (1,910km 2 ) - Mizzen 1,400km 2 - Kinsale 510km 2 DEEP KINSALE MOLLY MALONE MIZZEN & Mizzen East SHANAGARRY BLOCK 49/13 AREA 285 km 2 648 km 2 1942 km 2 881 km 2 272 km 2 WATER DEPTH c. 100 m c. 100 m c. 100 m c. 100 m c. 100 m FASTNET INTEREST 60% 100% 100% 82.35% 85% www.fastnetoilandgas.com 9
IRELAND Deep Kinsale - Large Untested Closure Below Shallow Producing Gas Field North South East Northern Bounding Fault Base Chalk Kinsale Field 1.7 TCF Gas Southern Bounding Fault Approx. Licence Limit (4000ft) Deep Kinsale Primary Prospect A Middle Wealden Prospect E MFS Reservoir Prone Mounding in Upper Purbeck 48/25-1 Discovery Upper Purbeck Sands Source North Potential reservoir bearing packages thicken into active Late Jurassic to Early Cretaceous Faults Upper Jurassic SE Upper-Middle Jurassic 49/9-2 Helvick Oil & Gas Play Deep Liassic Source? www.fastnetoilandgas.com 10
IRELAND P50 Closure for Upper Purbeck Sands Primary Prospect A 46 sq. km. 273 (P50) to 630 (P10) MBO Recoverable P10 Case 192 sq. km. Primary Prospect A Upper Purbeck 46km² Logged Live Oil 48/25-1 262 feet net oil pay www.fastnetoilandgas.com 11
IRELAND NEW 3D Seismic Defines Potential Gas Chimneys and Escape in Chalk (Compare Danish North Sea) and Multiple Gas-related Amplitude Anomalies Gas Chimney? Bright Spots Primary Prospect A Chalk Stratigraphic Prospect B Higher amplitude events (Clastics?) TDW 40 Aptian TDW 50 Barremian www.fastnetoilandgas.com 12
Company Overview Irish Assets Company Overview Moroccan Assets Outlook Moroccan Assets Irish Assets Outlook
MOROCCO Energy Prices and Fiscal Regime The gas and oil prices in Morocco are indexed to international prices. The gas price at the Morocco - Algerian border is 10 to 11 USD per a million BTU. The selling price of the produced gas from Moroccan wells is between 2 and 3 MAD/m3. Fiscal Incentives 25% State participation Royalty: Oil 10%; Gas 5% 10 year corporate tax holiday on discovery Morocco Libya UK Argentina Canada Indonesia Norway Egypt Profit Value of 1bbl of Oil in Morocco Producing 1bbl of oil in Morocco is equivalent to 13bbl in Algeria 7bbl in Nigeria 0% 20% 40% 60% 80% 100% Gov t Take (%) www.fastnetoilandgas.com Source: EY Global and tax guide, 2013 14 Morocco Algeria Nigeria Egypt
MOROCCO Tendrara Lakbir Option Overview 14,548 sq. km. Over entire prospective Missour-Tendrara Basin Material, near-development gas project clear pathway to early monetisation 7 wells drilled on licence 6 encountered gas Equity & Partners Pathfinder (subsidiary of Fastnet): 50% net equity Oil and Gas Investments Funds (OGIF): 25% ONHYM: 25% www.fastnetoilandgas.com 15
MOROCCO Tendrara Lakbir Exploration History: 6 wells discovered gas of 7 wells drilled Legacy Prospectivity (2000-2008) TE-5 Gas Structure (red) 488 sq. km. 3D & 4,110 kms. 2D seismic 3 month EWT no pressure depletion in TAGI I Formation damage stabilised rate 1.5 mm cfgpd SBK-1 Gas Discovery (red) TAGI II tested at 5 mm cfgpd Declined to 2.5 mm cfgpd (fault barrier/no 3D) Condensate shows in Lias dolomites & Trias basalts 300 bcf GIIP Best Estimate TE-3 & TE-4 Structure (red hatched) TAGI tight gas reservoir Gas shows in Lias limestone and Carboniferous TE-2 Structure (red outline) TAGI tight gas reservoir TAGI Prospects (yellow) Structural & Stratigraphic Pinchout TE-1 (1966) logged gas Possible downdip extension TE-5 Structure NW-SE LINE OF SECTION Legacy 2D Seismic Additional Untested Upside Cambro-Ordovician NE area of the Block Carboniferous Basinwide Unconventional Shale Gas Carboniferous basin centre play 62 TCF (Source ONHYM) Silurian/Tannezuft NE area www.fastnetoilandgas.com 16
MOROCCO Fastnet TAGI I Depth Map (At Seismic Reference Datum) Legacy 2D seismic processing (depth mapping in progress on reprocessed seismic data) TE-6 to test deliverability and TE-7 to Test P50 GIIP Volumes P50 CLOSURE: 40 sq. km. GAS-DOWN-TO 2451 meters subsea 88 meters gross gas column in TE-5 No water leg encountered Meskala Field pressure data supports single column Provisional TE-7 Testing P50 40 sq. km. 1.4 TCF GIIP o FAULT A MAY EXTEND ENE AS SHOWN BELOW Provisional TE-6 Testing 10 sq. km. updip 350 BCF GIIP Fault A o TE-5 P90 35 BCF GIIP from EWT interpretation Radius of investigation < 1 sq. km. TE-1 New Petrophysical Analysis 43.8 meters of gas pay now recognised Upside to Extend TE-5 Gas Column 400 meters Downdip www.fastnetoilandgas.com 17
MOROCCO Fastnet Independent Reservoir Engineering Study TE-5 Well inflow Performance Rates TE-6 Well to test well deliverability case A 9mm cfgpd A (Case A 9.1 mm cfgpd with all zones in 22.5m perforated; S = 0) (EWT Well Test k Only top 11.5m contributing; S = 0) ( Original Well Test k Only top 11.5m contributing; S = 30) www.fastnetoilandgas.com 18
MOROCCO Offshore Morocco Play Fairway Analysis FA-1 well trade value is being used to give valuable insight into an ongoing analysis of the potential of the underexplored offshore Deep Secondary Target favoured by Fastnet and a target for Chevron and BP offshore Nova Scotia remains a key target in Foum Assaka following the FA- 1 well Exploration drilling offshore Morocco has historically focused on the Carbonate Shelf with no commercial discoveries as yet Analysis of 32 Wells drilled in Morocco FA-1 Well www.fastnetoilandgas.com 19
MOROCCO FA-1 Preliminary Well Post Mortem Shows Untested Potential Pre-Drill Fastnet Primary Wedge Target Post-Drill Fastnet Primary Wedge Target Tagged but not Penetrated FA-1 SALT Live Oil Shows Flat Spot?? High Amplitude Package Recalibrate with Well Results www.fastnetoilandgas.com 20
MOROCCO FA-1 Sidewall Cores Live Oil Under UV Light Source: CoreLab www.fastnetoilandgas.com 21
Company Overview Irish Assets Moroccan Assets Outlook www.fastnetoilandgas.com 22
OUTLOOK Forward Work Programme Prospect ONSHORE MOROCCO (Tendrara Lakbir) Activity Farmout Exercising Option Agreement (Dec 2014) Rig contract Drilling preparation EIS Study Complete seismic pre-stack depth migration 2014 2015 Q2 Q3 Q4 Q1 Q2 Q3 Q4 OFFSHORE MOROCCO (Foum Assaka) mature prospect portfolio Drill first appraisal well Drill second non obligatory appraisal well/pod submission Drill first well Evaluate FA-1 well results Drill second FA-1 carried well subject to partners approving location & timing Evaluate well results OFFSHORE IRELAND (Celtic Sea) Celtic Sea Farmout/workshop (Joint Initiative by Celtic Sea operators) 3D Seismic Interpretation/AVO Processing Stage 1 & Stage 2 Farmouts Multi-Well programme planning for 2016 www.fastnetoilandgas.com 23
THANK YOU Thank You www.fastnetoilandgas.com 24