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transcript
Company Presenta.on
October 2011
Disclaimer
The informa,on contained in this presenta,on (“Presenta.on”) has been prepared by Orca Energy Limited (“the Company”) and is being delivered for informa,onal purposes only to a limited number of persons to assist them in deciding whether or not they have an interest in inves,ng in the Company. The Presenta,on has not been independently verified and the informa,on contained within is subject to upda,ng, comple,on, revision, verifica,on and further amendment. The Presenta,on does not purport to contain all informa,on that a prospec,ve investor may require. While the informa,on contained herein has been prepared in good faith, neither the Company nor its shareholders, directors, officers, agents, employees, or advisors give, has given or has authority to give, any representa,ons or warran,es (express or implied) as to, or in rela,on to, the accuracy, reliability or completeness of the informa,on in this Presenta,on, or any revision thereof, or of any other wriJen or oral informa,on made or to be made available to any interested party or its advisers (all such informa,on being referred to as “Informa.on”) and liability therefore is expressly disclaimed. Accordingly, neither the Company nor any of its shareholders, directors, officers, agents, employees or advisers take any responsibility for, or will accept any liability whether direct or indirect, express or implied, contractual, tor,ous, statutory or otherwise, in respect of the accuracy or completeness of the Informa,on or for any of the opinions contained herein or for any errors, omissions or misstatements or for any loss, howsoever arising from the use of this Presenta,on. In furnishing this Presenta,on, the Company does not undertake or agree to any obliga,on to provide the recipient with access to any addi,onal informa,on or to update this Presenta,on or to correct any inaccuracies in, or omissions from, this Presenta,on which may become apparent. Informa,on contained in this Presenta,on is confiden,al informa,on and the property of the Company. It is made available strictly for the purposes referred to above. The Presenta,on and any further confiden,al informa,on made available to any recipient must be held in complete confidence and documents containing such informa,on may not be reproduced, used or disclosed without the prior wriJen consent of the Company. This Presenta,on shall not be copied, published, reproduced or distributed in whole or in part at any ,me without the prior wriJen consent of the Company. By accep,ng delivery of this Presenta,on, the recipient agrees to return it to the Company at the request of the Company. This Presenta,on should not be considered as the giving of investment advice by the Company or any of its shareholders, directors, officers, agents, employees or advisors. Each party to whom this Presenta,on is made available must make its own independent assessment of the Company aOer making such inves,ga,ons and taking such advice as may be deemed necessary. In par,cular, any es,mates or projec,ons or opinions contained herein necessarily involve significant elements of subjec,ve judgment, analysis and assump,on and each recipient should sa,sfy itself in rela,on to such maJers. Neither the issue of this Presenta,on nor any part of its contents is to be taken as any form of commitment on the part of the Company to proceed with any transac,on and the right is reserved to terminate any discussions or nego,a,ons with any prospec,ve investors. In no circumstances will the Company be responsible for any costs, losses or expenses incurred in connec,on with any appraisal or inves,ga,on of the Company. The informa,on included in this Presenta,on that relates to resources was prepared by Mr. Mark A. PaJerson. Mr. PaJerson has over 30 years of oil and gas experience and is a member of the American Associa,on of Petroleum Geologists, the Society of Explora,on Geophysicists, and the Council of Energy Advisors. Es,mates as to recoverable hydrocarbon volumes contained in this Presenta,on are based upon certain assump,ons. Accordingly, actual results will differ, and may differ significantly and materially, from those presented. Forward Looking Statements Certain statements contained in this presenta,on, including informa,on as to the future financial or opera,ng performance of Orca Energy Limited and its projects, are forward looking statements. Such forward looking statements: § are necessarily based upon a number of es,mates and assump,ons that, while considered reasonable by Orca Energy Limited, are inherently subject to significant technical, business, economic, compe,,ve,
poli,cal and social uncertain,es and con,ngencies; § involve known and unknown risks and uncertain,es that could cause actual events or results to differ materially from es,mated or an,cipated events or results reflected in such forward looking statements; and § may include, among other things, statements regarding targets, es,mates and assump,ons in respect of produc,on and prices opera,ng costs produc,on prices, and results, capital expenditures, reserves and
resources and an,cipated flow rates, and are or may be based on assump,ons and es,mates related to future technical, economic, market, poli,cal, social and other condi,ons. Orca Energy Limited disclaims any intent or obliga,on to update publicly any forward looking statements, whether as a result of new informa,on, future events or results or otherwise. The words “believe”, “expect”, “an,cipate”, “indicate”, “contemplate”, “target”, “plan”, “intends”, “con,nue”, “budget”, “es,mate”, “may”, “will”, “schedule” and similar expressions iden,fy forward looking statements. All forward looking statements made in this presenta,on are qualified by the foregoing cau,onary statements. Investors are cau,oned that forward looking statements are not guarantees of future performance and accordingly investors are cau,oned not to put undue reliance on forward looking statements due to the inherent uncertainty therein.
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Capital Structure
ASX Listed – ASX: OGY § Previously Monitor Energy
– ASX: MHL
§ Current Shares on Issue – 9,100,671,434
§ Current Share Price
– 0.2c
§ Market Capitalisa,on – $18m
§ Cash – Circa A$1m
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Management
Senior Management § Greg Bandy – Execu.ve Director
Over 12 years broking & corporate experience in Australia. Senior Advisor with Patersons Securi,es. Execu,ve Director of dual listed Red Emperor Resources (ASX/AIM: RMP) and responsible for managing and facilita,ng the acquisi,on of the Seabiscuit asset in the US
§ Jason Bontempo – Non-‐Execu.ve Director
Highly experienced ASX director with over 10 years experience at senior board level in Australia and the UK. Current Execu,ve Director of Interna,onal Goldfields Limited (ASX: IGS), Glory Resources (ASX: GLY) and Chameleon Mining NL (ASX: CHM)
§ Tony King – Execu.ve Consultant
Managing Director of Max Capital Pty Ltd. Tony has in excess of 15 years of corporate experience, specifically with publically listed Australian companies and capital markets and responsible for advising Monitor/Orca on the Seabiscuit acquisi,on in the US
§ Mark A. PaRerson – Technical Advisor
Mr. PaJerson has over 30 years of oil and gas experience and is a member of the American Associa,on of Petroleum Geologists, the Society of Explora,on Geophysicists, and the Council of Energy Advisors. He currently advises Range Resources Limited (ASX: RRS ; AIM: RRL) and helped introduce and facilitate the acquisi,on of the Seabiscuit asset in the US. Mark resides in Dallas, Texas
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Overview
§ Orca Energy have a 20% interest in the highly prospec,ve “Seabiscuit Project”, acquired in August 2011 and announced to the market on 12 July, 2011
§ The Seabiscuit Project covers an area of approx. 1,750 acres and has the poten,al to contain up to 1Tcf and 10MMbo
§ Drilling expected to commence in Q1, 2012 § Orca also holds key interests in two highly prospec,ve Cooper Basin blocks, one of which has
already had an oil discovery (PEL 115)
§ PEL 115 (OGY – 42%) -‐ Oil discovery in Dec 2009. 13m gross oil column. Range of volumes of oil in place (7.99MMbo -‐ 17.44MMbo)*
§ PEL 115 also presents significant unconven,onal shale gas poten,al and is adjacent to PEL
516 [100% owned by JV partner Senex Energy (ASX: SXY) which es,mates over 100Tcf poten,al Gas-‐in-‐Place] – ASX Presenta,on, October 2011
§ PEL 110 (OGY – 20%) -‐ seismic work to begin in 2012 *Independent report by MBA Petroleum Consultants, Brisbane based petroleum consultancy company
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Seabiscuit Acquisi.on & Partners
§ Orca Energy acquired its 20% interest in the Seabiscuit Project through the acquisi,on of 100% of the issued capital of Sugarbay Investments Pty Ltd, the current assignee and JV par,cipant in the project
§ Sugarbay was assigned their interest by Crest Resources, a prominent oil & gas operator in the Gulf Coast and responsible for introducing, drilling and discovering Range Resources’ (ASX: RRS) current producing field in East Texas, North Chapman Ranch
§ Orca’s major partner and operator of the Seabiscuit Project will be Dan A. Hughes Co., a prominent, independent petroleum explora,on and produc,on company with a 43-‐year record of success in drilling, discovering and producing hydrocarbons in the Gulf Coast
§ With over $400m in annual revenue, Dan A. Hughes has been credited with discoveries in excess 530MMbo & 1.6Tcf
§ Hughes holds a 50% working interest in the Seabiscuit Project.
§ Other US oil & gas companies and their management hold the remaining 30% working interest.
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Seabiscuit Loca.on
Texas Gulf Coast
Geological Map of Texas
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Seabiscuit Loca.on (cont.)
§ The Seabiscuit Project is located along the Texas Gulf Coast in Matagorda County, within the expanded Frio producing trend
§ The prospect is on trend with several recent discoveries and world class oil and gas fields
Regional Produc,on Map
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Seabiscuit Structure
§ The Seabiscuit Project is a large structural closure with an area of approximately 1,750 acres on the Gulf Coast
§ It is located in an ideal geological sewng on trend with recently drilled wells flowing at sustained rates of 20 million cubic feet of natural gas and 200 barrels of oil per day, without any fracture s,mula,on
§ A 17,500 O. well has been proposed to test the Seabiscuit trap that is es,mated to contain prospec,ve resources of more than 300 billion cubic feet of natural gas (Bcf) and 3 million barrels of oil (MMbo) or condensate (mid case scenario)
§ Depending on reservoir thickness and column, Seabiscuit could contain prospec,ve resources more than 1 trillion cubic feet of natural gas (Tcf) and 10 million barrels of oil (MMbo) or condensate (high case scenario)
§ The Seabiscuit project was delineated from high quality 3D seismic data, the oil and gas
industry's best tool for imaging hydrocarbon traps
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Seabiscuit Structure (cont.)
§ 3D seismic data clearly indicate the presence of a large, 3-‐way dip closure at the Upper Tex Miss objec,ve
§ Up-‐thrown fault traps such as Seabiscuit are well known to be produc,ve along the prolific Texas Gulf Coast
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Seabiscuit Geological Summary
§ Nearby wells have confirmed hundreds of feet of high quality reservoir sandstones, and the proposed well is expected to penetrate the objec,ve forma,on approximately 500 feet higher than the closest well which is 4 km’s away and produced gas and condensate from the very top of the objec,ve sec,on
§ All of the nearby wells have encountered thick, high quality porous sandstones, indica,ng that the
risk of poor reservoir rock is low
§ Seismic interpreta,on indicates that the reservoir rocks were in a trapping posi,on in ,me to receive hydrocarbon charge, and this is supported by other discoveries along trend
§ Once formed, the Seabiscuit trap was buried beneath an es,mated 8500 O. of impermeable shale, which formed an ideal seal to keep the oil and gas in place
§ The targeted objec,ves at Seabiscuit are the same age as those found produc,ve in Old Ocean Field (4.9 Tcf) approximately 53 km northeast of the prospect, and East Bay City Field (500 Bcf) approximately 43 km to the northeast. The latest discovery along trend at the Silverspoon Field, located approximately 24 km northeast of Seabiscuit, came on line at over 18 MMcfd and has produced 9.9 Bcf and 100,000 barrels of oil in just over 2 years
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Seabiscuit Seismic
§ Seabiscuit was mapped on high quality 3D seismic data, processed with state-‐of-‐the-‐art Pres-‐stack ,me migra,on
§ NW-‐SE dip lines show the main trapping fault and posi,on of Seabiscuit updip to produc,ve wells
3D Seismic Dip Line
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Seabiscuit Seismic (cont.)
§ NE-‐SW strike lines show the cri,cal dip reversal on strike necessary for a large, up-‐thrown fault trap.
§ 3D seismic supports the interpreta,on that the Seabiscuit trap was in place well before hydrocarbon migra,on occurred.
3D Seismic Strike Line
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Tex Miss Target: World Class Reservoir
§ As evidenced by the Devon Harrington #1 well in the nearby Silverspoon Field (type well), the Tex Miss has the poten,al for massive sand development with excellent porosity and permeability
§ The Devon well produced
approximately 9.9 Billion Cubic Feet of natural gas and 100,000 barrels of oil in its first 25 months of produc,on
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Drilling Timetable & Fiscal Terms
§ The first well is expected to be drilled in Q1, 2012
§ Orca’s share of drilling costs (OGY -‐ 20%) will be circa $US1.8m
§ NRI – 72% (Standard for US oil & gas plays of this nature) § Mid case success scenario would call for 6-‐10 development wells to be drilled
§ NPV on “mid case scenario” is circa $US360MM (gross) – refer appendix on page 20
§ NPV on “high case scenario” is circa $US1.8B (gross) – refer appendix on page 20
§ Operator es,mates the geological chance of success (CoS) at between 50% -‐ 75%
§ Independently reviewed by RISC Pty Ltd whose geological CoS was between 50% -‐ 60%
§ Both es,mates represent a very low risk for such an explora,on prospect
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Cooper Basin
§ PEL 115 (OGY 42%) – Oil discovery in December 2009 (Fury-‐1) – 13m gross oil column with an interpreted range of volumes of oil in place from a
mean 7.99MMbo to a highside 17.44MMbo* – Tes,ng and comple,on delayed due to heavy rain & flooding in the Cooper Basin – JV review of economics currently underway – Significant unconven,onal shale gas resource poten,al – Adjacent to JV partner and operator’s 100% owned block, PEL 516 – Senex Energy Limited (ASX: SXY) is drilling up to 3 wells on PEL 516 in the next 9
months and es,mates over 100Tcf Gas-‐in-‐Place resource poten,al (ASX presenta,on – October 2011)
§ PEL 110 (OGY 20%) – Highly prospec,ve explora,on block – Seismic work planned for 2012
*Independent report by MBA Petroleum Consultants, Brisbane based petroleum consultancy company
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PEL 115 Loca.on
PEL 115 – Orca Energy 42%
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PEL 115 – Large Shale Poten.al
Coal Seam Methane & Shale Gas Potential § Extensive gas zones have been identified in deep coal/shale units throughout the
Cooper Basin. § Endorsed and promoted by major Cooper basin players: Santos, Drillsearch, Beach § Senex have estimated over 100 Tcf Gas-in-Place resource potential § PEL 115 contains previous drilling with intersections of coal seams. § PEL 115 located in the heart of prospective CSM/Shale Gas acreage. Paleochannel “stranded” oil prospects § Recent discoveries nearby – analogous to Growler, Snatcher. § Previously ignored in Cooper Basin § Large scale potential identified on PEL 115.
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Summary
§ Orca Energy has managed to secure a world class oil & gas explora,on project with “company making” upside
§ The Seabiscuit JV partners and operator are significant players in the Gulf Coast, USA and provide the exper,se and funding required to achieve success
§ Drilling is imminent with work having already begun to prepare for Q1, 2012 ac,vity
§ The Cooper Basin assets and specifically PEL 115 provides Orca with a strategically valuable block in the current shale gas environment
§ Strong corporate management team with history of success and focused on delivering results
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Assump.ons for Seabiscuit NPV’s
§ Most likely Case – Assumes a 10-‐well development averaging 20 Bcf & 200 Mbo per well – Average well cost of $9MM – Oil price of $85 per barrel and gas price of $4.50 per Mcf – Current state severance tax assump,ons used – Opera,ng expenditure of $5,000 per month – Discount rate of 10% – NRI of 72% – Gross NPV of the project = $360m
§ Upside Case – Assumes a 30-‐well development averaging 30Bcf & 300 Mbo per well – Average well cost of $9MM – Oil price of $85 per barrel and gas price of $4.50 per Mcf – Current state severance tax assump,ons used – Opera,ng expenditure of $5,000 per month – Discount rate of 10% – NRI of 72% – Gross NPV of the project = $1.8b It should be noted that these assump,ons are based on prospec,ve resources that OGY has not yet delineated and are subject to drilling confirma,on
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Orca Energy Limited
ASX: OGY
35 Richardson Street | West Perth WA 6005
www.orcaenergy.com.au info@orcaenergy.com.au
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