ADELPHI ENERGYADELPHI ENERGYExcellence in Oil & GasExcellence in Oil & Gas
May 2008 May 2008
Adelphi Energy LimitedGround Floor, 88 Colin StreetWEST PERTH, WA 6005Ph: (08) 9480 1300Fax: (08) 9263 4688email: [email protected]
Chris Hodge – Managing Director
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Presentation OutlinePresentation Outline
•• IntroductionIntroduction•• Corporate StructureCorporate Structure•• Share Price PerformanceShare Price Performance
•• AssetsAssets•• USAUSA•• YemenYemen•• AustraliaAustralia
•• New VenturesNew Ventures•• ConclusionConclusion
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Overview of Adelphi
• International oil and gas participant, focusing on high impact exploration and production opportunities
• Close association with ARC Energy which owns 32% of Adelphi
• High leverage exploration portfolio in USA, Yemen and Australia. New venture in Indonesia
• a very exciting few months ahead…….For
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Capital Structure:Fully paid Shares 105,958,662Unlisted Options
- 2008/10 ($0.36-$0.95) - Employees 8,600,000
Market Cap ~A$40-50mmCash ~A$5mm
Shareholder Structure:
63%
5%
32%
PublicARC Board/Associates
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Share Price Performance (1 year)Share Price Performance (1 year)F
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Share Price Performance (3 months)
Disbelief
Pessimism
Optimism
Opportunity
Elliot wave theory
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Sugarloaf ChalkSugarloaf ChalkSugarloaf AMI (20%)Sugarloaf AMI (20%)
Austin Chalk ProspectAustin Chalk Prospect
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4TCF & 500mmbbls
1TCF & 150mmbbls
Austin Chalk Trend
360BCF & 35mmbbls
Sugarkane area >3TCF + 500mmbbls potential
The Austin ChalkThe Austin ChalkF
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Sugarkane Field
• The Sugarkane discovery well is Kunde -1 vertical well which produces from the Austin Chalk.
• EUR is 1BCF gas and 260,000bbls oil. This could be 10x with a horizontal well
• The Sugarkane is a stratigraphic play, and has opened up a new trend and a grab to sign leases
• Sugarloaf is the name of our 22,000 acre AMI close to Kunde and the new Sugarkane fieldF
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Location Map
Courtesy of Aurora Oil and GasThis map shows illustrative boundaries only and does not accurately reflect land position.
(Sugarloaf A)
(Sugarloaf B)
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Meridian Resource Corporation farmout opportunities on trend…..
50 - 100km away!
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Sugarloaf Reservoir
• Austin Chalk in our area is not typical• It is pressured and has a very high condensate yield• East Texas analogue provides clues on how to drill and
complete Sugarloaf wells• Fracture permeability can provide major upside….
Typical Chalk Sugarloaf East Texas Analogue
Depth(feet)
5,500 – 15,000 12,500 13,000
Porosity 2-5% 6-9% >6%
Condensate(bbls / mmcfg)
various 250 250
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Sugarloaf Fracture Prediction
• Chalk can flow at modest rates with matrix porosity alone……
• But fractures in horizontal wells adds major upside
• The trick is to find them…
(From Ferrill & Morris, AAPG 2008) Dip Change on 3DFracture development
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Sugarkane or Sugarloaf “A” area
•Located 6km SW of Sugarloaf Area
0.65mmcfgpd + 130bcpd
2.2mmcfgpd + 560bcpd
1 BCF + 260kbbls
Both horizontal wells flared while drilling, both tested unstimulated, both tested over limited zones
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Gas + 257 bblscondensate
Kennedy test still in progress….
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Kennedy-1H Results
• Wire-line logs indicated several extended zones of hydrocarbon saturated rocks
• Hydrocarbon saturation has now been confirmed by the frac and test results so far….
HOWEVER……..from East Texas analogue area we now know that the well was not drilled and completed optimally.
• drilled too low in the lower to mid chalk instead of the Sugarkane productive top zone
• cemented liner is in place instead of uncemented slotted liner
IN ADDITION• There were no flares encountered while drilling (i.e. no fractures)• A light water frac was used• Test was over the bottom quarter of the hole only • The remainder of hole with different rock types remains to be tested
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Forward Operations Plan
• Conclude the Kennedy test- Accelerate recovery of remaining frac fluid- ??Refrac same zone with greater frac height and/or more perfs- ??Move up hole to test another zone
• Commence a new horizontal well starting in July 2008- Drill in known productive upper chalk zone, complete with
slotted liner, flow back and/or frac in one seamless operation
• Further horizontal wells thereafter- To appraise the acreage under leaseF
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Sugarloaf ConclusionsSugarloaf Conclusions•• The Sugarkane (Block A) production and test results The Sugarkane (Block A) production and test results ““next doornext door””
confirm the presence of a new Austin Chalk play areaconfirm the presence of a new Austin Chalk play area
•• The play is highly likely to extend into our Sugarloaf areaThe play is highly likely to extend into our Sugarloaf area
•• Kennedy results confirm the presence of condensate and gas Kennedy results confirm the presence of condensate and gas saturated rock in the mid to lower chalksaturated rock in the mid to lower chalk
•• The known upper chalk productive zone has yet to be tested in thThe known upper chalk productive zone has yet to be tested in the e Sugarloaf areaSugarloaf area
•• Increased drilling and 3D seismic acquisition + opportunist landIncreased drilling and 3D seismic acquisition + opportunist landacquisition on trendacquisition on trend
•• Sugarloaf JV expected to commence a 3+ well horizontal drilling Sugarloaf JV expected to commence a 3+ well horizontal drilling campaign using optimal drilling and completion techniquescampaign using optimal drilling and completion techniques
•• No change to the estimated 600BCFe gross mean potentialNo change to the estimated 600BCFe gross mean potential
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YemenYemenBlocks 7 & 74Blocks 7 & 74(8.5%)(8.5%)
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Expected Block 7 & 74 TimingExpected Block 7 & 74 Timing
Q1 2008 started (B7)
Q3 2009(B7)
Ratified March 2008!!
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Petroleum Geology
• Primary play is fractured basement
• A myriad of secondary targets
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Block 7 Block 7 ProspectivityProspectivity
• Several basement leads 20 - >100 mmbbls
• Other sub-salt leads up to ~100mmbbls
• 3D seismic about to commence
• Drilling mid-2009For
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Block 74 Block 74 –– ProspectivityProspectivity• Live oil shows in existing
wells• Thicker and more extensive
source rock than previously thought
• Exciting prospects mapped –multi-target including basement
• 2D seismic planned 2009, drilling 2010
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Australia Australia –– Bonaparte Gulf BasinBonaparte Gulf Basin
AC/P32
West Atlas Jack-up © Seadrill
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AC/P32 Timor Sea (10%)AC/P32 Timor Sea (10%)F
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Wisteria ProspectWisteria Prospect•• Three targetsThree targets•• Amplitude and HRDZ Amplitude and HRDZ
supported Puffin supported Puffin stratstrattrap geometrytrap geometry
•• Simple Montara & Plover Simple Montara & Plover structural trapstructural trap
•• 200mmbbls potential200mmbbls potential•• JulyJuly or Oct 2008 drillingor Oct 2008 drilling•• Near infrastructure Near infrastructure ––
<5mmbbls economic<5mmbbls economic•• Adelphi near fully carried Adelphi near fully carried
through drillingthrough drillingFor
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Dip Line over Azalea
HRDZNote red over blackCorresp. To top of
Cemented zone
Base Pliocene
Top Paleocene
Top Cretaceous
Shallow gas anomalies
Wisteria (Cretaceous)
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New Ventures New Ventures –– Southeast AsiaSoutheast Asia
•• IndonesiaIndonesiaOily, underexplored, potential for large Oily, underexplored, potential for large discoveriesdiscoveriesOur Joint Study with Government is completed Our Joint Study with Government is completed Have first right of refusal on a block to be Have first right of refusal on a block to be gazetted gazetted –– possibly very soon.possibly very soon.In advanced stage of negotiating a farm out in In advanced stage of negotiating a farm out in return for a carry on a significant work return for a carry on a significant work programprogram
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Risked Value….
Permit MeanPotential
Chance of
Success
ADI Equity
NPV in Ground
NPV to
ADI
Leverage Risked NPV to
ADI
(mmbbls) % % US$ $A $/share $/share
Sugarloaf 600BCF 50 20 $2/mcfe 268 2.55 1.28
Yemen 100 20 8.5 $10/bbl 94 0.90 0.18
Wisteria Jurassic
25 20 10 $14.70 / bbl
41 0.39 0.08
Wisteria Puffin
175 4 10 $12/bbl 233 2.22 0.09
Indonesia 25 20 25 $5/bbl 35 0.33 0.07
Cash 5 0.05 0.05
Total $1.74
ADI currently trading at ~$0.45 – 25% of risked NPV
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Leverage – mean success value $/share
• Sugarloaf lease area and Wisteria prospect provide highest success case leverage
• Sugarloaf has higher chance of success than Wisteria Puffin
Sugarloaf, $2.55
Yemen, $0.90
Wisteria Jurassic,
$0.29
Wisteria Puffin, $2.22
Indonesia, $0.22
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Activity Timetable
Next 3 years……. 2008 2009 2010
Sugarloaf Kennedy Test + up to 3 new wells
Program dependent on 2008 results
3
2 wells
2 wells
drilling
AC/P32 Wisteria-1 1
New Block Block award? seismic ?
Total
Block 7 3D seismic 2D seismic + 2 wells
4
Block 74 2D seismic+ 1 well
3
Award??
?Horizontal well #3
S
Gazettal?Indonesia
3D seismicYemen
Wisteria-1AC/P32
??Horizontal well #4Horizontal well #2Kennedy Test
Sugarloaf
DNOAJJ2008
At least 12 wells in next 3 years…..
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ConclusionsConclusions
A high quality portfolio of material assetsA high quality portfolio of material assets…………
SugarloafSugarloaf –– on threshold of being proved, very high risk and on threshold of being proved, very high risk and success case value, aggressive appraisal program planned in success case value, aggressive appraisal program planned in 20082008
WisteriaWisteria -- multimulti--target high leverage near fully carried well to target high leverage near fully carried well to spud July 2008spud July 2008
YemenYemen -- ratified finally, 3D underway. Block 7 is world classratified finally, 3D underway. Block 7 is world class
IndonesiaIndonesia –– hard work completed, well positioned for the hard work completed, well positioned for the upcoming bid roundupcoming bid round
………………a very exciting few months ahead.a very exciting few months ahead.
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DisclaimerDisclaimer
This presentation contains some references to forward looking This presentation contains some references to forward looking assumptions, representations, estimates and outcomes. These are assumptions, representations, estimates and outcomes. These are uncertain by the nature of the oil and gas industry and no assuruncertain by the nature of the oil and gas industry and no assurance ance can be given by Adelphi Energy Limited that its expectations, escan be given by Adelphi Energy Limited that its expectations, estimates timates and forecast outcomes will be achieved.and forecast outcomes will be achieved.
This overview of Adelphi does not purport to be all inclusive orThis overview of Adelphi does not purport to be all inclusive or to to contain all information which its recipients may require in ordecontain all information which its recipients may require in order to r to make an assessment of Adelphimake an assessment of Adelphi’’s prospects. Investors should s prospects. Investors should undertake their own investigation and perform their own analysisundertake their own investigation and perform their own analysis in in order to satisfy themselves as to the accuracy and completeness order to satisfy themselves as to the accuracy and completeness of the of the information, statements and opinions contained in this presentatinformation, statements and opinions contained in this presentation, ion, and obtain independent advice before investing in Adelphi sharesand obtain independent advice before investing in Adelphi shares..F
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