24 June 2020 | Investor Presentation
GROWTH IN THE PIPELINE
24 June 2020 | Investor Presentation
DISCLAIMERThe information contained in this confidential document (“Presentation”) has been prepared by President Energy Plc (the “Company”). While the information contained herein has been prepared in good faith, neither the Company nor any of its shareholders, directors, officers, agents, employees or advisers give, have given or have authority to give, any representations or warranties (express or implied) as to, or in relation to, the accuracy, reliability or completeness of the information in this Presentation, or any revision thereof, or of any other written or oral information made or to be made available to any interested party or its advisers (all such information being referred to as “Information”) 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, tortious, statutory or otherwise, in respect of, the accuracy or completeness of the Information 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 Presentation.
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24 June 2020 | Investor Presentation
WHY INVEST IN PRESIDENT?
• We are demonstrably undervalued versus our peer set of Latin American focused producers(1)
‒ EV/2P boe 1.5 versus peer average 4.9 (and max 10.7)‒ EV/boepd US$13,000 versus peer average US$22,000 (and max US$74,000)
• This is notwithstanding:‒ Clear focus on cost control delivering low operating costs ($13.8 / boe in Rio Negro) and low G&A ($4.8 / boe,
25% down year on year) enabling unaudited net cash profit in Argentina in H1 2020 approximately $4.5m USD, showing great strength in face of lowest oil prices in decades.
‒ Third party debt(2) to 2019 Adjusted EBITDA 0.3x‒ Unrivalled management equity alignment with shareholders (ca. 30% equity acquired)‒ Recent entry of Trafigura, leading oil and gas trader, as material (ca. 16%) shareholder‒ Clear focus on Environmental, Social and Governance standards (World Bank shareholder, robust Board, quality
advisors)
• President has:‒ Demonstrably robust existing portfolio of assets‒ Significant organic growth potential‒ The appetite and means to pursue material inorganic growth opportunities
REAL PROFITABLE ASSETS – NO DEBT BURDENS – SERIOUS MANAGEMENT –STRONG SHAREHOLDERS
IN A NUTSHELL
Slide 3
(1) See Slide 10 – based on broker estimates, Company information(2) $3.7mln in third party debt, in addition we have debt of $10.9mln with an affiliate of Peter Levine, our Chairman and largest shareholder
24 June 2020 | Investor Presentation
WHERE WE OPERATE
America
Paraguay
Hernandarias (Earn In)Exploration (Operator) 40% & 80%
PirityExploration (Operator) 100%
1
2
Argentina
East Lake VerretProduction (Operator)
1
Lake PeigneurProduction (Operator)
2
12
1
2
AMERICA
ARGENTINA
PARAGUAY
Argentina
Puesto Guardian(Five Oil Fields)Production(Operator) 100%
MatorrasExploration(Operator) 100%
Puesto Flores/Estancia Vieja (Two Fields) Production(Operator) 90%
OcultarExploration (Operator) 100%
1
2
3
4/5
6/7Puesto Prado/Los Bases(Two Fields) Production(Operator) 90%
1
2 3
4/5
6/7
AngosturaExploration & Production(Operator) 100%
8
8
Slide 4
24 June 2020 | Investor Presentation
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WHO WE AREPRESIDENT BOARD OF DIRECTORS
Peter Levine
Executive Chairman
Ex Imperial Energy30 years industry
Rob Shepherd
Finance Director Ex Shell, ABN
AMRO28 years industry
Jorge Bongiovanni
Non-Executive Director
Ex IFC40+ years industry
Alex Moody-Stuart
Non-Executive Director
Ex Schlumberger30 years industry
OPERATIONAL MANAGEMENT
AMERICA
MartinGee
Chief Geologist
35+ years industry
Claudia Perez
FinanceDirector
25+ years industry
Lucia D’Agostino
Legal and Administrative
Director
10 years industry
Jordan Coleman
HeadOperations
12 years industry5 years LatAm
Scott Daspit
HeadOperations
35+ years industry
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LATIN AMERICA(as 15 June 2020)
29.5%
16%8.9%
7.9%
23.3%
Peter Levine (PLLG Investments)
Trafigura (via Urion Holdings)
Schroders Investment Management
IFC (World Bank Group)
Michinoko Ltd
Other
FIRST CLASSSHAREHOLDER STRUCTURE
14.1%
Martin Urdapilleta
Trafigura Board Representative
Slide 5
24 June 2020 | Investor Presentation
RESERVES AND RESOURCES
(1) Source: Argentina numbers based on Independent Reserves Report, Louisiana based on Management estimates (2) Prospective median risked
15.6 MMBOE1P
NET EXPLORATION RESOURCES(2)
ARGENTINAover150MMBBLS
GROUP NET RESERVES(1)As at 31 December 2019
26.4 MMBOE2P
43.5 MMBOE3P
PARAGUAY
LOUISIANA
OVER
500MMBOE
OVER
20BCF
Slide 6
24 June 2020 | Investor Presentation
YEAR AHEAD TO DELIVER ORGANIC GROWTH
FIELD INDICATIVE ACTIVITY H2 2020 FY 2021
PUESTO FLORES
Drilling - Development
Drilling - Exploration
Workover
ESTANCIA VIEJA
Drilling
Drilling - Exploration
New gas compressor
LAS BASES Drilling – Development
ANGOSTURA Workover &
PUESTO GUARDIAN
Drilling - Development
PARAGUAY Drilling - Exploration
Slide 7
24 June 2020 | Investor Presentation
SOLID FOUNDATIONS OF 2019 HAVE SET US UP WELL TO FACE THE CHALLENGES OF 2020
US$12MILLION
ADJUSTED (1)
EBITDA
2,400BOEPD
AVERAGEPRODUCTION
US$41MILLION
GROUP TURNOVER
(1) Earnings before interest, tax, depreciation, amortisation and impairment and adjusted to exclude non-recurring items(2) Unaudited - after all G&A, foreign exchange, and finance charges but before depreciation
FY audited 2019 financials
Slide 8
US$ 3.5MILLION
Q1
Unaudited 2020 net cash profit in Argentina(2)
US$ 1MILLION
Q2
US$ 4.5MILLION
H1
Making cash in the darkest of times
-
10
20
30
40
50
60
70
80
02/01/2020 02/02/2020 02/03/2020 02/04/2020 02/05/2020 02/06/2020
Dated Brent US$/bblsource: FactSet
24 June 2020 | Investor Presentation
UNDERLYING VALUE CREATION IN RECENT YEARS NOT RECOGNISED
Slide 9
533
1,121
2,279 2,414
- 500
1,000 1,500 2,000 2,500
3,000 3,500 4,000 4,500
2016 2017 2018 2019
Average production boepd
20.3
27.1 25.4 26.4
-
5.0
10.0
15.0
20.0
25.0
30.0
2016 2017 2018 2019
2P reserves
(4,880) (4,257)
15,961
9,670
(10,000)
(5,000)
0
5,000
10,000
15,000
20,000
2016 2017 2018 2019
Operating profit / (loss) before depreciation
117,118
144,250
69,068
27,389
-
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
2016 2017 2018 2019
EV (US$)/boepd
3.1
6.0 6.2
2.5
-
1.0
2.0
3.0
4.0
5.0
6.0
7.0
2016 2017 2018 2019
EV (US$)/2P reserves
Source: Company published information
24 June 2020 | Investor Presentation
LEAVING THE COMPANY SIGNIFICANTLY UNDERVALUED VERSUS PEERS
Slide 10
-
2.0
4.0
6.0
8.0
10.0
12.0
PGR CNE
PARXF TXP
GBX GPR
K CTA FE
C PTA
L TR
IN PPC CER
P
AVERAGE
EV/2P $/boe
-
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
TXP
PGR CNE
GBX GPR
K GPR
K PARXF CTA PPC
TRIN FE
C PTA
L
AVERAGE
EV/boepd
(1) Based on broker estimates, Company information
24 June 2020 | Investor Presentation
ARGENTINA
Slide 11
24 June 2020 | Investor Presentation
ARGENTINA MACRO ENVIRONMENT
SIGNIFICANT MAJOR OIL AND GAS INDUSTRY PLAYERS IN ARGENTINA
• Continued energy deficit notwithstanding domestic reserves(1)
• Expected gas deficit of some 20-40 mm m3 / day in 2020 carrying on to 2021
• New plan to encourage development of conventional gas being discussed by government with a base of US$ 3.5 per MMBtu
• Consequently, the domestic energy sector is a key focus for investment given the continued energy imbalance
• The Government is ‘preparing proposals’ to stimulate investment, particularly in conventional production
• In the meantime, domestic oil price set at US$45
(1) According to BP, oil production of 27 mln tonnes in 2018 amounted to 75% of consumption and gas production of 39.4 bcm 80% of consumptionSlide 12
24 June 2020 | Investor Presentation
Currently69
31 Dec ‘1837.7
1 Jan ‘1818.6
Source: xe.com
PPC LARGELY UNAFFECTED BY FX VOLATILITY
• Dollar based business
• Sales revenues are denominated in US$ (but paid in AR$) with true up / down mechanism to account for volatility between date of billing and payment
• Consequently in 2018 and 2019, combined with proactive treasury management, we suffered minimal cash FX losses ca. 1% of revenues
• We do experience material non-cash ‘distortions’ in Financial Statements as a result of tax accounting in AR$ and reporting in US$ although cash flow is unaffected
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24 June 2020 | Investor Presentation
• PARTNERED WITH PROVINCIAL OIL COMPANY EDHIPSA (10%)
• FOUR FIELDS WITH SIGNIFICANT DEVELOPMENT AND EXPLORATION UPSIDE
• OIL SALES VIA PIPELINE TO REGIONAL HUB
• OWNERSHIP OF 60Km STRATEGIC GAS PIPELINE AND INFRASTRUCTURE
Rio Negro Province, Argentina
NEUQUEN BASIN ASSETS
Puesto Guardian(Five Oil Fields)Production(Operator) 100%
MatorrasExploration(Operator) 100%
Puesto Flores/Estancia Vieja (Two Fields) Production(Operator) 90%
OcultarExploration (Operator) 100%
Puesto Prado/Los Bases(Two Fields) Production(Operator) 90%
1
2
3
4/5
6/7
1P: 7.6
2P: 13.8
Reserves(MMboe)
Slide 14
24 June 2020 | Investor Presentation
Neuquen Basin – Concession Licence to 2027 (with extension rights of further 10 years now applied for). Operator, WI 90%
PUESTO FLORES FIELD
HIGH QUALITY FIELD, CASH GENERATIVE, SIGNIFICANT REACTIVATIONS, DRILLING AND EXPLORATION POTENTIAL
• Targeting material increase in both production and reserves• Drilling new wells in H1 2020 with more later in the year
CURRENT STATUS
• Oil and gas production from 14 wells
PLANS FOR 2020
• Commencing to drill new wells in H2 2020/H1 2021• Exploration licence to 2037
Slide 15
24 June 2020 | Investor Presentation
Neuquen Basin – Concession Licence to 2027 (with extension rights of further 10 years applied for). Operator, WI 90%
ESTANCIA VIEJA FIELD
• Targeting material increase in both production and reserves• Drilling new wells in H1 2020 with more later in the year
CURRENT STATUS• Oil production from 5 re-worked existing wells• Producing gas from 3 wells for sale and internal power requirements• Built and commissioned a new 16Km pipeline section
PLANS FOR 2020• Targeting material increase in both production and reserves• Drilling new oil & gas wells, including exploration wells in 2020/2021• Extension of licence to 2037
HISTORICALLY LARGE OIL PRODUCING FIELD. PREVIOUSLY SHUT-IN. NOW PRODUCING OIL AND GAS WITH SIGNIFICANT UPSIDE POTENTIAL
Slide 16
24 June 2020 | Investor Presentation
Neuquen Basin – Concession Licence to 2028 (with extension rights). Operator, WI 90%
PUESTO PRADO FIELD
• Targeting material increase in both production and reserves• Drilling new wells in H1 2020 with more later in the year
CURRENT STATUS
• 5 wells re-activated• Field being powered by Estancia Vieja gas through the newly acquired
pipeline
MATURE FIELD REACTIVATION – SYNERGIES WITH ESTANCIA VIEJA AND PUESTO FLORES UPSIDE ATTRACTION
Slide 17
24 June 2020 | Investor Presentation
Neuquen Basin – Concession Licence to 2028 (with extension rights). Operator, WI 90%
LAS BASES FIELD
• Targeting material increase in both production and reserves• Drilling new wells in H1 2020 with more later in the year
CURRENT STATUS
• Gas plant reactivated
PLANS FOR 2020
• Drilling a development well
MAJOR GAS PRODUCTION POTENTIAL WITH PROCESSING PLANT OWNERSHIP OF MAJOR PAN-REGIONAL GAS PIPELINE
Slide 18
24 June 2020 | Investor Presentation
Neuquen Basin – Initial contract to 2023 (with extension rights). Operator, WI 100%
ANGOSTURA CONCESSION
• Targeting material increase in both production and reserves• Drilling new wells in H1 2020 with more later in the year
CURRENT STATUS
• Gas currently being produced from four wells and oil from two wells • Gas treated within the concession and transported via pipeline to Las
Bases where it joins President’s regional pipeline direct to off takers• Oil production shipped via truck to President’s own Puesto Prado
treatment plant for processing
PLANS FOR 2020/2021
• Workovers and possible drilling
OPERATIONAL SYNERGIES WITH RIO NEGRO OPERATIONS UTILIZING CRITICAL MASS TO OPTIMISE COSTS AND SIGNIFICATLY REDUCE FIELD OPEX
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24 June 2020 | Investor Presentation
ArgentinaPuesto Guardian(Five Oil Fields)Production(Operator) 100%
MatorrasExploration(Operator) 100%OcultarExploration (Operator) 100%
1
2
3
1
2 3
4/5
6/7
8
• Targeting material increase in both production and reserves• Drilling new wells in H1 2020 with more later in the year
CURRENT STATUS
• Current production approaching 300-400 boepd• Identification of drilling locations for next programme taking place
FUTURE PLANS• Drilling 2/3 development wells in late 2021/2022
PUESTO GUARDIAN CONCESSION Noroeste Basin, Salta Province – Concession License to 2050 (with extension rights). Operator, WI 100%
30 YEAR OLD FIELD THAT WAS POORLY RUN, NOW STABILIZED AND PRIMED FOR FUTURE DEVELOPMENT
OPERATIONALLY PROFITABLE GENERATING POSITIVE FREE CASH FLOW
Slide 20
24 June 2020 | Investor Presentation
LOUISIANAStable cash flow from reliable operation
Slide 21
24 June 2020 | Investor Presentation
LOUISIANA ASSETS
USA
East Lake VerretProduction (Operated) 50%
1 East Lake Verret - Two producing wellsTriche (69.5% WI / 43.5% NRI) and Simmons (43.9% WI / 33.3% NRI)
Currently producing, generating some US$100k per month in free cash flow after all opex, G&A and taxes
All fields in Louisiana generated positive operating profits in 2019 despite operational challenges
Benefit from accrued tax losses which are being utilised giving potential for further accretive acquisitions of operated assets
1
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24 June 2020 | Investor Presentation
PARAGUAYA compelling opportunity to change a country’s history
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24 June 2020 | Investor Presentation
FUTURE
PRESENTPAST
Exploration assets with the potential to transform the Company
PARAGUAY EXPLORATION
EXTENSIVE KNOWLEDGE OF AREA WITH LESSONS LEARNED FROM 2014 DRILLING CAMPAIGN WHEN PRESIDENT SUCESSFULLY IDENTIFIED A PETROLEUM SYSTEM
• Extensive 2D and 3D seismic surveys together with sub-surface work acquired and analysed by President
• Ongoing farm-out process with active parties with signed NDA’s working in data room
• Terms of concession extends to Q1 2022
• Delray Cretaceous prospect targeted for drilling• The first prospect to be drilled is on trend with prolific oil
fields on Argentine side of border
• Over 500 Mmboe of mid-case prospective median risked resources in first two drillable prospects with many more leads identified
• Stable democratic country with no current oil production and 10% corporate tax rate
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24 June 2020 | Investor Presentation
PARAGUAY EXPLORATIONDrilling to target proven cretaceous fairway
Imperial complex(Mean 193 MMboe Cret.
Resources)
Delray Complex (Mean 394 MMboe Cret. Resources)Palmar Largo
Complex
Spectral Geochemical Anomalies
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24 June 2020 | Investor Presentation
SUMMARY
Slide 26
24 June 2020 | Investor Presentation
SUMMARY
Clear strategy to deliver sustainable value growth
Strong and supportive shareholder base
Strong Environmental, Social and Governance principles
Alignment to stratagy between Executive Chairman, Trafigura, a major strategic shareholder, and all shareholders
Significant organic and inorganic growth opportunities
Relative immunity to Argentinian macro environment misunderstood by market
Demonstrably undervalued compared to peers
Slide 27
24 June 2020 | Investor Presentation
Office HeadquartersCarrwood Park, Selby Road, LeedsLS15 4LG. United Kingdom
Argentine OfficeJuana Manso 1750, Complejo ZencityEdificio Esmarelda, 3er Piso Norte, C1107CHJ. Buenos Aires, Argentina
Tel: +54 (11) 4317 0400
Paraguay OfficeAsuncion, Paraguay
USA Office2020 W Pinhook, Ste 201LafayetteLA70508USA
Thank you
© 2020 President Energy PLC
Company Registered OfficeCarrwood Park, Selby RoadLeeds, LS15 4LG, United Kingdom
Tel: +44 (0) 20 7016 7950
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