Magnum Gas & Power Ltd · Magnum is the Operator of a farm in agreement with Apex Energy NL, that...

Magnum Gas & Power LtdASX:MPE

THIS NOT REALLY FIT WITHCORPORATE COLOUR SCHEME

Gas & Power Ltd

ASX:MPE

June 2013

BotswanaResource

Conference

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Projects Overview

Magnum Gas & Power LtdACN: 107 708 305 ©2013

Significant Gas Resource : Estimated 12.6 Tcf Gas In Place

Large conventional Petroleum Exploration Licence

CBM Exploration drilling underway

Neighbours drilling include Origin/Sasol, Exxaro & Tlou Energy

Domestic Market, Export Potential, Supportive Government

AUSTRALIABOTSWANA Estimated Gas Reserve (Gross) 2P 58PJ, 3P 210PJ

Estimated Gas Resource (Gross) GIP 2.6 Tcf

Local peers including Dart Energy, AGL & Santos

Existing reserve, demanding market

Effective standstill due to political environment

MPE

MPE

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Corporate and Board

Ted Ellyard – Chairman

Tom Fontaine – Non Executive Director

Trent Wheeler – Managing Director

Raalin Wheeler – Non Executive Director

Brett Montgomery – Non – Executive Director

A professional engineer who has over 25 years experience in the Oil and GasIndustry including Coal Seam Gas.He was one of the original founders of Pure Energy Resources Limited which wasa CSG focussed company which listed on the ASX and was subsequently acquiredby BG Group for approximately $1.0 billion in 2009.

A professional engineer, manager and director with over sixteen yearsexperience in the energy and resources sector, on significant upstream anddownstream oil, gas, mineral, metal, chemical and power projects throughoutAustralia, Canada, America, South East Asia and Botswana.Trent is a member of the Australian Institute of Company Directors.

A geologist with over 35 years experience in mineral and petroleum exploration,development and production. Mr Ellyard was Managing Director and CEO ofHardman Resources Ltd from 1996 to late 2004. During that time Hardman’smarket capitalisation grew from less than $5 million to over $1.5 billion.

Over 30 years of private and public company experience and a Fellow of theAustralian Institute of Company Directors. Raalin has a broad range of experience inengineering and manufacturing for the resources industry, including oil and gasdirectional drilling technology, downstream process plants, remote area greenfieldsproject establishment and services.

Over 27 years of experience in the gold mining industry and management ofpublic companies. Brett has been both joint Managing Director and Chairman ofEurogold and has experience in both debt and equity raising.


Capital Structure (as at 31st Mar 2013)

ASX Code MPE

Share Price (as at 31st Dec 2012) $0.018

Market Capitalisation (million) ≈$14.1

Shares on Issue (million) 778.6

Options on Issue (million) 67.2

Cash (millions, as at 31st Mar 2013) $2.9

Debt Nil

Major Shareholders (as at 31st Mar 2013)

T Fontaine ≈ 12 %

R Wheeler ≈ 11 %

T Wheeler ≈ 9 %

ie. Directors & Management ≈ 37%

Current Number of Share Holders ≈ 540

Experienced Board with Proven Success

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Botswana CBM Projects

Notes:Assumes 1 Tcf = 1,000,000,000,000 (ie. 1x1012) cubic feet,PJ = 1x1015 Joules=1,000,000 GJ, 1 Tcf = 1,050 PJ, 1 boe(barrels oil equivalent) = 6000 cubic feet of CBM

The Pre-Feasibility Studies (PFS) were completed by anindependent CBM consulting group, Advanced ResourcesInternational.

Independent ExpertPre-Feasibility Study (PFS) Results

Project LicenceArea

2,340 Km2

578,000 Acre

EstimatedGas In Place

12.6 Tcf

13,100 PJ

EstimatedEconomicalRecoverable

6.7 Tcf

7,000 PJ

1.1Billion

boe

Pre-Feasibility studies completedbased on local core samples, gas

measurement and down hole testing

Significant Coal Bed Methane (“CBM”) prospecting

licences over two prospective basins in Botswana, Africa

Strong Market Demand in close proximity


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Petroleum Exploration Projects

Magnum holds 100% of a

Petroleum Exploration Licence

(Conventional Oil and Gas) which

covers ≈24,300 Km2 (≈6 million Acres)


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Illawarra Burragorang Total

444 29 - 32

442 169 - 172

454 - 168 168

Total 372

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Sydney Coal Basin – CSG Project

Gross Acreage (km2)

Gross Resource

Illawarra Burragorang Total

2P1 58 PJ 58 PJ

3P1 210 PJ 210 PJ

2C1 495 PJ 865 PJ 1,360 PJ

GIP2 1.3 Tcf 1.3 Tcf 2.6 Tcf

MPE also holds an ≈13% share holding in APEX Energy NL.

NOTE:1) Review by MHA Petroleum Consultants2) Review by Ian Macculloch for APEX Energy NL

Magnum is the Operator of a farm in agreement withApex Energy NL, that enables Magnum to earn up to50% of the acreage (in phases).


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Botswana Focused

•Supportive Investment Environment

• Low Sovereign Risk, Low Corruption

• No Exchange Controls

• Favorable tax regime

•Political Stability and Multi-party Democracy

•British based legal systems & corporate practices

•Growing Hub to the Southern Africa Region

• One of the wealthiest non-oil producing countries in Africa

• Educated and highly literate workforce, Population ≈ 2 Million

• Approximately the size of France


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Botswana CBM


Coal Bed Methane (“CBM”) play as there are coal seams and carbonaceous shales

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Botswana CBM Exploration


• Two exploration wells pre-collared

• Mobilising coring, testing and analysis

Two Explorationwells underway

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Basin exploration is building momentum

Initial Basin ContingentResources have recentlybeen booked;

• Tlou Energy2C 152 Bcf3C 2.3 Tcf

• Kalahari Energy1C 5.35 Tcf2C 6.17 Tcf3C 7.00 Tcf

- Major exploration programmes are underway by significant peers

- Contingent Resources booked, Reserves are the next step to development


The Magnum CentralProject area is approx.1200km2 (Blueshaded areas) of CBMexploration licencesacross the main CBMbasin

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Neighbour’s CBM Pilot Wells

Gas Production (Red) increasing as Water (Blue) is pumped down,Data shown is extracted from Exxaro presentation materialMagnum Gas & Power Ltd

ACN: 107 708 305 ©2013

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Simple CBM


AnnularStream

PumpedStream

GasStream

WaterStream

Wat

erSe

par

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asSe

par

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Wellhead

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Reserves - Chicken or Egg?


Production

DownstreamMarket &Infrastructure

BFS

Resource

Reserves

Financing

Offtake

InternationalFinancial Markets

CBM is all about the

Economics

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CBM Evaluation


Reserves:“1P” = Proved“2P” = Proved+Probable“3P” = Proved+Probable+Possible

Contingent Resources:“1C”, “2C” & “3C”

OOOOO

2P

3P1C

1P

2C

3C

Eg. Another way to think of it

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Roadmap to Reserves


Exploration

Exploration Appraisal Reserve Certification Production Reserve Upgrade

Res

ou

rce

or

Res

erve

PJo

rTc

fEstimatedEconomic

Recoverable

3P Reserves

2P Reserves

Contingent Resource

Drilling Core Samples Gas Measurement Appraisal Well Pilot “5 spot” and step out wells

Appraisal Certification

Down-hole Tests

Immediate Phases

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Gas Off-takes

• Electrical Utilities

• Mining and Industrial Users

• Compressed Natural Gas (CNG)

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Potential Markets

Electrical Power Generation

• 1 - 5 MW Skid Mounted units

• 10 - 50 MW Gas Turbine units

• 200-2,000 MW Power Station

Gas To Liquids (GTL)

•Diesel (Synthetic)

•Liquefied Natural Gas (LNG)

2 x 165 MW

Carbon Markets

•Enhanced CBM by CO2 Sequestration

(Coal prefers CO2 rather than Methane)

•Carbon Credits

Downstream Products

• Fertilisers

• Explosives

• Methanol

Water

•Irrigation (Agriculture, Aquaculture and Stock)

•Potable (Industry and Community)

•Steam (Electrical Power Generation Plants)


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Botswana Power Market

90 MW Dual Fuel:

Existing 120 MW

70 MW Diesel Fired

• Coal Fired

• Past design life

• Currently out of service

• Pending refurbishment by 2015

• Currently Diesel (≈32,000L/hr)

ie. Expensive

• Awaiting CBM gas

Expansion 528 MW• Coal Fired

• Commissioning issues

• Insufficient to meet forecastdemand

• Domestic market initially, but potential to export

• Heavily impacted by South Africa power crisis

• Botswana imports a significant portion of it’s Power

• The imported supply availability is decreasing

• Supply gap of >≈ 300MW within 5 years (if no intervention)

• Demand Increasing, particularly with recovery of mining sector

• Rural electrification programme underway

• Tariffs are increasing, but need to better reflect costs

• Independent Power Provider (IPP) now possible

• Co-operative Government desiring a solution


Operating PowerGeneration Facilities are

awaiting CBM gas supply,currently running on Diesel

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Commercialisation

3-5 MW SkidPower Generation

Eg. Downstream projects as Reserves are booked

Ammonium Nitrateie. Fertiliser & Explosives

4x 50MW Gas TurbinePower Generation

Gas to Liquidseg. Diesel


- Power Generation (Dual Fuel) infrastructure in place awaiting CBM gas supply

- The first Contingent Resources in the basin have been booked

- Neighbouring majors are also working to certify Reserves

- Vertical integration, via partnering and relationships, to enable gas offtakes

- Develop critical mass of Reserves required for large downstream projects

- Downstream projects are likely to require multiple gas suppliers

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Roadmap to Production


• Exploration Drilling• Core Samples• Down hole testing• Gas Measurement & Analysis

• Geophysical Surveys• Desktop Studies and Modelling

• Appraisal & Monitoring wells (Flow rates)• Pilot Production wells (Completions testing?)

•Single/Multiple Certification wells•Pilot Production Facility

•Bankable Feasibility Study•Off take•Financing•Mining (Production) Licence

Projects:- Central CBM- Northern CBM- Petroleum

TIME

CO

MM

ERC

IALI

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LUE

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Strategy

Strategy Action

Add value by convertingresources to reserves

Exploration drilling is underway

Leverage off neighbour’sexploration operations

Certification by peers is in progress

Vertical integration through partneringto facilitate market opportunities

Access market(s) through partnering

Leverage people and knowledgeby early entry and significant positions

in high potential plays

Significant acreage in an early stage offield life, with supportive government

and demanding market

Regional Diversification and PortfolioBotswana is the immediate focus,until NSW is appropriate too, also

look for international opportunities


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Disclaimer

Nature of this document: This document has been prepared by Magnum Gas & Power Limited (“Magnum” or the “Company”) and contains summary information about the Companyand its subsidiaries as at 12 June 2013, unless otherwise stated. The information in this document does not summarise all information that an investor should consider when making aninvestment decision. It should be read in conjunction with the Company’s other periodic and continuous disclosure announcements lodged with the Australian Securities Exchange(“ASX”), which are available at www.asx.com.au or www.magnumgpl.com.au. In viewing this document you agree to be bound by the following terms and conditions.Not an offer: This document is for information purposes only and does not constitute or form part of any offer for sale or issue for any securities or an offer or invitation to purchase orsubscribe for any such securities. This document and its contents must not be distributed, transmitted or viewed by any person in any jurisdiction where the distribution, transmission orviewing of this document would be unlawful under the securities or other laws of that or any other jurisdiction.Not financial product advice: The information contained in this document is not intended to be relied upon as financial product advice or investment advice nor is it a recommendationto acquire Magnum securities and has been prepared without taking into account the objectives, financial situation or needs of individuals. Before making an investment decisionprospective investors should consider the appropriateness of the information having regard to their own objectives, financial situation and needs and seek legal, taxation and financialadvice appropriate to their jurisdiction and circumstances. Neither Magnum nor any of its related bodies corporate is licensed to provide financial product advice in respect of Magnumsecurities or any other financial products.Technical information: The information in this document that relates to Magnum’s exploration results is based on information compiled by Thomas Fontaine, a Director of Magnum anda member of the Society of Petroleum Engineers. Mr Fontaine has a degree in a discipline related to petroleum engineering and has in excess of 5 years’ experience in the relevantactivity. Mr Fontaine consents to the inclusion in this document of the matters based on his information in the form and context in which it appears.Exploration and production targets: Any information in this document that relates to exploration and production targets refers to targets that are conceptual in nature, where in partthere has been insufficient exploration to define reserves and it is uncertain if further exploration will result in the determination of any reserves. Production targets are currentlyconceptual in nature and relate to future production goals. There remains at present insufficient certainty with respect to whether economically viable reserves of hydrocarbons exist toreliably estimate future production rates. These production targets are also subject to the completion of all necessary feasibility studies, environmental approvals, financingarrangements, execution of relevant agreements and timely project construction.Forward-looking statements: This document contains certain “forward-looking statements”. The words “anticipate”, “believe”, “expect”, “project”, “forecast”, “estimate”, “likely”,“intend”, “should”, “could”, “may”, “target”, “plan”, “consider”, “foresee”, “aim”, “will” and other similar expressions are intended to identify forward-looking statements. Indicationsof, and guidance on, future production, production targets, resources, reserves, capital expenditure and financial position and performance are also forward-looking statements. Suchforward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors, many of which are outside the control ofMagnum.Risks of investment: An investment in Magnum securities is subject to investment and other known and unknown risks, some of which are beyond the control of Magnum, includingpossible loss of income and principal invested. Magnum does not guarantee any particular rate of return or the performance of the Company, nor does it guarantee the repayment ofcapital from Magnum or any particular tax treatment. In considering an investment in Magnum securities, investors should have regard to (amongst other things) the risk and disclaimersoutlined in the bidder’s statement released by Magnum to the ASX on 16 July 2012 in respect of its off-market takeover bid for Energy Botswana Limited.Unverified information: This document may contain information (including information derived from publicly available sources) that has not been independently verified by theCompany.Disclaimer: Neither the Company nor its directors, officers, employees or advisors make any representation or warranty and accordingly no reliance should be placed on the fairness,accuracy, completeness or reliability of the information contained in this document. To the maximum extent permitted by law, the Company, its directors, officers, employees oradvisors do not accept any liability for any errors, omissions or loss (including because of negligence or otherwise) arising, directly or indirectly, from any use of this document or itscontent.Financial data: All dollar values are in Australian dollars (A$) and financial data is presented within the financial year ended 30 June unless otherwise stated.Effect of rounding: A number of figures, amounts, percentages, estimates, calculations of value and fractions in this document are subject to the effect of rounding. Accordingly, theactual calculation of these figures may differ from the figures set out in this document.


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On with the Journey


www.magnumgpl.com

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Magnum Gas & Power Ltd · Magnum is the Operator of a farm in agreement with Apex Energy NL, that...

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