NOVEMBER 2012 Preliminary Results Presentation 1
NOVEMBER 2012 Preliminary Results Presentation 2
Disclaimer
Important Notice
Nothing in this presentation or in any accompanying management discussion of this presentation (the "Presentation") constitutes, nor is it intended to
constitute: (i) an invitation or inducement to engage in any investment activity, whether in the United Kingdom or in any other jurisdiction; (ii) any
recommendation or advice in respect of the ordinary shares (the "Shares") in Bowleven plc (the "Company"); or (iii) any offer for the sale, purchase or
subscription of any Shares.
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applicable state securities laws.
The Presentation may include statements that are, or may be deemed to be "forward-looking statements". These forward-looking statements can be identified
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"should" or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or
intentions. These forward-looking statements include all matters that are not historical facts. They include statements regarding the Company's intentions,
beliefs or current expectations concerning, amongst other things, the results of operations, financial conditions, liquidity, prospects, growth and strategies of
the Company and its direct and indirect subsidiaries (the “Group”) and the industry in which the Group operates. By their nature, forward-looking statements
involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Forward-looking
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industry in which the Group operates, may differ materially from those suggested by the forward-looking statements contained in the Presentation. In addition,
even if the Group’s results of operations, financial conditions and liquidity, and the development of the industry in which the Group operates, are consistent
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referred to above and contained elsewhere in the Presentation.
NOVEMBER 2012 Preliminary Results Presentation 3
Presentation Agenda
• Overview
• Etinde Development – Stage I
• Etinde Development – Stage II
• Cameroon – Further Prospectivity
• Kenya
• Financial Overview
• Outlook & Conclusion
• Q&A
oil & gas
Overview
NOVEMBER 2012 Preliminary Results Presentation 5
Vision & Strategy
• Strategy focused on creating and realising value through
material exploration success and development.
• Seek value adding partnerships and niche acquisitions as
appropriate.
• Fostering strong external partnerships and in-country
relationships.
• Targeted approach to technical, commercial and political risk.
• Resources to Reserves.
Vision
Strategy – Focus on Africa
“It is our vision to build an African focused exploration
and production company which in time becomes
renowned for its ability to consistently create and realise
material shareholder value through exploration led
organic growth and niche acquisitions.”
NOVEMBER 2012 Preliminary Results Presentation 6
Company Asset Base
• 5 blocks in Cameroon covering 4,644km².
• 3 offshore shallow water, 2 onshore; all operated.
• Multiple hydrocarbon discoveries.
• P50 contingent resource base 203 mmboe* (net).
• Phased Hub & Spoke development planned.
• Continued exploration of the Douala Basin.
Cameroon
• Block 11B onshore Kenya covering ~14,000km².
• Early stage exploration; Airborne geophysical survey and 2D
seismic acquisition.
• Operated by Adamantine Energy, technical support provided by
Bowleven under a TSA.
* Source: Preliminary Results Announcement 6 Nov 2012. Operator’s volumetrics.
Kenya
Kenya
Ethiopia
State back-in rights: Etinde 20%, Bomono 10% (at grant of exploitation licence).
Acreage: 2,316km2
Shallow Offshore
Equity Interest:
75% (Vitol 25%)
Operator:
Bowleven Group
Etinde Permit
Acreage: 2,328km2
Onshore
Equity Interest:
100%
Operator:
Bowleven Group
Bomono Permit
Nigeria
Cameroon
Acreage: ~14,000km2
Onshore
Equity Interest: 50%
(Adamantine 50%)
Operator:
Adamantine
Block 11B
South Sudan
NOVEMBER 2012 Preliminary Results Presentation 7
Progress Report
†
Resources to Reserves: The Path to FID*
• Etinde: Ongoing evaluation of Douala Basin prospectivity.
• Bomono: Drilling to commence in 2013 (timing subject to rig
availability).
• Bomono: Farm-out discussions at advanced stage.
• Kenya: Work programme commencing.
Exploration Strategy
Resources to Reserves
Exploring the
Douala Basin
New Frontiers
(Kenya)
* FID: Final Investment Decision ‡MOU: Memorandum of Understanding
Submission of draft Etinde Exploitation Authorisation
Application (EEAA).
Agreement of Fertiliser MOU‡.
Gas sales term sheet nearing finalisation - pending pricing
mechanism.
Access potential development financing - Petrofac
announcement.
Drilling programme commenced with appraisal/development
drilling ongoing at IM-5.
FID targeted for H2 2013 subject to:
• EEAA approval.
• Gas Sales Agreement.
• Access to development capital secured.
NOVEMBER 2012 Preliminary Results Presentation 8
Petrofac Strategic Alliance
• Extensive development experience.
• Provides access to expertise, purchasing power and personnel
(including engineering, design, project management,
procurement and training).
• Provides up to $500 million for Stage I development; initial
capital investment at FID.
• Potential for up to $60 million of Bowleven’s IM-5 costs at FID.
• Petrofac entitled to share of Bowleven cost and profit oil.
• High level basis of development design agreed.
• Extensive technical and commercial due diligence completed.
• Conditional on Bowleven shareholder approval.
Highlights
Timetable
• Circular expected to be posted to Bowleven shareholders no
later than 23 November 2012.
• Initial capital investment at FID; currently anticipated H2 2013.
Purchasing Power
Project
Management
NOVEMBER 2012 Preliminary Results Presentation 9
Petrofac Commercial Structure
• 80% of Euroil’s entitlement to cost oil until 130% of amount
invested has been repaid.
• X% of Euroil’s entitlement to profit oil (set at FID) to provide a
money multiple of 2.125 of amount invested, subject to not less
than 20% IRR.
• On Petrofac achieving money multiple of 2.125 and IRR 20%:
X% set at 10% ($500 million case) or 6% ($300 million case).
• On Petrofac achieving money multiple of 2.3 and IRR 20%:
X% set at 5% ($500 million case) or 3% ($300 million case).
• Petrofac’s remuneration ultimately capped at maximum of 50% of
Euroil’s project NPV.
Basis of Petrofac’s Remuneration
Commercial Structure
• Structure provides potential for $300 million or $500 million of
capital.
• Petrofac to be remunerated from Euroil’s share of the Etinde
project cashflows.
Onshore Hub
Offshore
Infrastructure
$300 / $500
million
Share of cost
& profit oil
NOVEMBER 2012 Preliminary Results Presentation 10
Progression to Development
Development Overview
FID
EEAA
Fertiliser FID
(Ferrostaal, SNH,
Proman, Helm)
Finance
Gas Sales
• All processing onshore; unmanned offshore platforms.
• Stage I - fields on MLHP-7.
• Stage II - discoveries on MLHP-5 (Sapele).
• FID target H2 2013.
• First production anticipated 2016; integrated with fertiliser
timetable
• Significant flexibility for future expansion.
Phased Approach
oil & gas
Etinde Development – Stage I
NOVEMBER 2012 Preliminary Results Presentation 12
Etinde Existing Discoveries Overview of Gross Unrisked Mean Volumes In place*
Deep Omicron fairway
*Operator’s estimates.
IC
IF
IE
IM
Manyikebi
Sapele-3
Sapele-2
Sapele-1/ST
SNA-1X
D-Discovery
NOVEMBER 2012 Preliminary Results Presentation 13
Hub and Spoke Development Flexibility for future expansion
• All processing onshore; unmanned offshore platforms.
• Stage I - fields on MLHP-7.
• Stage II - discoveries on MLHP-5 (Sapele).
• Significant flexibility for future expansion.
• Hub location to be optimised to maximise synergies with
fertiliser plant.
• First production anticipated 2016; integrated with fertiliser
timetable
• Offshore (wells and other infrastructure): ~$600 million.
• Onshore (processing & NGLs plant): ~$300 million.
• Development costs subject to phasing and cost
optimisation. To be further refined during FEED.
Stage I Development Cost Target (Gross): ~$900 million
Phased Approach
• Oil, condensate and wet gas to hub.
• Liquids stripping and NGL extraction onshore.
• 70mmscfd dry gas to fertiliser plant.
• Initial liquids production ~ 15k-20k boepd* (including LPG’s).
• Initially IE/IM fields; level of IF contribution under evaluation.
Liquids Focussed
* Operator projections, currently excludes IF.
NOVEMBER 2012 Preliminary Results Presentation 14
Etinde Development – Key FID Requirements
• Petrofac provides up to $500 million for Stage I development;
initial capital investment at FID.
Funding
†
• Draft EEAA submitted to Cameroon authorities; 3 workshops
held.
• EEAA covers a substantial part of Etinde Permit.
• Final EEAA submission due prior to end of current exploration
period (21 December 2012).
Etinde Exploitation Authorisation Application
• Ferrostaal Fertiliser Plant:
− MOU: Supply 70mmscfd dry gas for min.10 years.
− Term sheet nearing finalisation - pending pricing
mechanism.
− All parties targeting approval end 2012.
• Additional gas off take solutions also being considered.
Gas Sales Agreements
NOVEMBER 2012 Preliminary Results Presentation 15
Drilling Update
• IM-5 drilling operations ongoing.
• Primary objective: determine reservoir, fluid properties and
gas composition of Middle Isongo.
• Secondary objective: explore potential of Intra Isongo.
• Upper Isongo expected to be water-bearing at this location.
• Designed to be suspended as a producer.
• Mechanical difficulties during drilling operations; re-drill of
hole section.
• Update expected mid January 2013.
Etinde Appraisal/Development Drilling
Forward Plan
IM-5
(Currently
drilling)
IM-3
Middle Isongo
Intra-Isongo
• Assess requirements for further drilling post IM-5.
• Rig to move to Glencore (Cameroon) on completion of IM-5
operations, enabling evaluation process.
• Discussions ongoing for rig return (if required).
Upper Isongo
IM-3 (Gas
Condensate
Discovery)
Middle Isongo
Net Pay 37m
NOVEMBER 2012 Preliminary Results Presentation 16
Integrated Development Gantt Chart – Stage I
oil & gas
Etinde Development – Stage II
NOVEMBER 2012 Preliminary Results Presentation 18
• Hydrocarbons discovered at multiple stratigraphic levels.
• Significant in-place volumes discovered across MLHP-5 by
the Sapele and D-1R wells.
• Extensive stratigraphically trapped accumulations.
• Sapele recoverable reserves ultimately determined by
number of wells, completion type and reservoir connectivity.
• Stage II development anticipates unmanned offshore
platforms integrated with onshore hub facility constructed in
Stage I.
• Utilisation of Stage I hub facilitates sanction of future tie-ins.
Sapele & D-1R
Hub and Spoke Development Stage II (MLHP-5)
NOVEMBER 2012 Preliminary Results Presentation 19
Stage II (MLHP-5) Sapele – Deep Omicron Oil Fairway
Independent Volume Assessment
• Third party assessment carried out by Sproule.
• Methodology:
• Bowleven - fairway slab model.
• Sproule - discrete geobodies.
• Advanced 3D interpretation carried out, high graded future
drilling targets identified.
• Results validate Bowleven’s in-place fairway volumes.
• Sproule report available on website - www.bowleven.com
Independent Volume Assessment
In-Place Volumes
Mean
Bowleven‡ Sproule*
Total mmboe 1197 1208 ‡ Operator’s volumetrics.
*Aggregated discovered and undiscovered volumes.
oil & gas
Cameroon – Further Prospectivity
NOVEMBER 2012 Preliminary Results Presentation 21
Cameroon Overview Further Prospectivity
Douala Basin
• MLHP-5 & 6, OLHP 1 & 2.
• Onshore and shallow
offshore areas.
• Highly prospective
acreage.
• Number of onshore oil
seeps.
• Tertiary and Cretaceous
leads.
• Onshore early exploration
phase on 2D dataset.
• Offshore mature
prospects portfolio on 3D
dataset.
Rio del Rey Basin
• MLHP-7.
• Shallow offshore area.
• Highly prospective
acreage within a proven
active hydrocarbon
system.
• Tertiary oil and gas-
condensate discoveries.
• Established portfolio of
additional Tertiary
prospects.
• Maturing exploration with
transition into an
appraisal/development
phase.
Cretaceous Turonian plays accessible in onshore area and
shallow waters.
NOVEMBER 2012 Preliminary Results Presentation 22
Etinde - Further Prospectivity
MLHP-6
MLHP-5
• EEAA envisages additional exploration in exploitation area.
• Extensive deeper prospectivity at Paleocene and Cretaceous
levels. Hydrocarbons encountered with Sapele-1 and Sapele-3.
• Palaeocene Alpha-Epsilon system Mean GIIP 1819bcf*.
• Cretaceous Mean Dry GIIP 1029bcf*.
• Evaluation of prospectivity ongoing.
• Highly prospective acreage given its position between proven
active hydrocarbon systems.
• Variety of play types to explore for, Bowleven has 3D seismic
dataset.
• Acreage will be considered under separate exploration
licence.
*Operator’s volumetrics.
20km
NOVEMBER 2012 Preliminary Results Presentation 23
• 6 deep wells and c.10 shallow wells drilled in the 1950’s.
• Wells and onshore oil seeps proved active hydrocarbon
system.
• Tertiary and Cretaceous structural and stratigraphic traps
defined in area.
• Total 500km 2D seismic acquired by Bowleven.
• New 2D data integrated into existing vintage dataset and now
defines a series of structural prospects.
Bomono Overview
Bowleven
2D
Acquisition
Vintage 2D
VOG: Gas and
condensate production
commenced Dec 2011.
Douala
10km
Seeps
Historical
Plio-Pleistocene
Miocene
Eocene
Cretaceous
2.5km
NOVEMBER 2012 Preliminary Results Presentation 24
Bomono Exploration
Well Operations
Future
• Exploration well location selected, planning for immediate
follow-up appraisal wells.
• Zingana-1 Prospect - site preparation/civils nearing
completion.
• Drilling (up to 2 wells) to commence in 2013 (timing subject to
rig availability).
• Etinde hub facilities provide additional flexibility in event of
further discoveries.
Prospect
Unrisked Mean
HIIP
Oil mmbbls Associated
Gas bcf Gas bcf
Condensate
mmbbls
Tertiary D & E
Sands. 302 224
Tertiary B & C
Sands. 197 4
Permit Status
• SNH support our proposal to enter next 2 year exploration
phase; Special OCM November 2012.
• Farm-out discussions at an advanced stage.
Zingana-1
(Proposed Well)
B & C Sands
D & E Sands
oil & gas
Kenya
NOVEMBER 2012 Preliminary Results Presentation 26
Kenya
Upcoming Work Programme
• Anticipated 2013 activity:
− Airborne geophysical survey - Q1/Q2.
− Acquisition of 500km 2D seismic - Q2-Q3.
Geology
• In region of Tertiary and Cretaceous rift basin intersection
(East African Rift and Cretaceous).
• 4 basins identified in block.
• Existing data suggests basins similar form to Lockichar Basin
(Ngamia-1).
• Significant acreage ~14,000km2.
• Bowleven farm-in Sept 2012 – 50% equity interest.
• Initial 2 year exploration period work programme.
• Operated by Adamantine Energy, technical support provided
by Bowleven under a TSA.
Block 11B
Block
11B
Ngamia-1 Twiga South-1
Paipai-1
■Cretaceous
■Tertiary
NOVEMBER 2012 Preliminary Results Presentation 27
Kenya Block 11B
• Existing vintage seismic and gravity data confirm presence of multiple basins
and structural features closely analogous to successful discoveries to the south.
oil & gas
Financial Overview
NOVEMBER 2012 Preliminary Results Presentation 29
2012 Year End Results Summary
• Loss of $13.1 million in year (2011: $76.8 million including
$41.7 million exploration costs).
• Loss includes:
• $96.4 million cash invested in oil and gas activities, primarily on
drilling activity on Etinde Permit.
• Net proceeds of $123 million from equity issue.
• Net proceeds of $38.6 million from disposal of GGPC Gabon
(EOV) Limited.
• Net assets of $579 million at 30 June 2012, cash $142 million.
• Administrative expenses of $9.5 million.
• Exploration costs of $3.6 million relating to
relinquishment of the Epaemeno acreage.
• Loss on disposal of GGPC Gabon (EOV) Ltd of $3.2
million.
NOVEMBER 2012 Preliminary Results Presentation 30
Funding Overview
• Cash $142 million and no debt at 30 June 2012.
• Cash balance at end October 2012 approximately $120 million.
• Petrofac provides up to $500 million for Stage I development;
initial capital investment at FID.
• High equity interest in Etinde & Bomono provides opportunity to
introduce additional farm-in partners if appropriate.
• Talks with preferred bidder on Bomono farm-out progressing,
expect to cover intended work programme.
Significant financing flexibility.
oil & gas
Outlook & Conclusion
NOVEMBER 2012 Preliminary Results Presentation 32
Outlook & Conclusion
• Ongoing evaluation of the Douala Basin prospectivity.
• Bomono drilling targeting both Tertiary and Cretaceous
prospectivity.
• Commencing exploration activities over new Kenya acreage.
Exploration
†
• Progressing development activities for hub and spoke
development, including pre FEED/FEED work.
• Etinde FID targeted for H2 2013 ensuring:
• EEAA approval.
• Gas Sales Agreement finalisation.
• Access to finance for the development.
• Appraisal/development drilling on MLHP-7.
Resources to Reserves: The Path to Development
oil & gas
Q & A
oil & gas
Principal Contact:
Kerry Crawford
Tel: +44 131 524 5678
Kevin Hart
Tel: +44 131 524 5678
www.bowleven.com
Bowleven Plc.
The Cube
45 Leith Street
Edinburgh
EH1 3AT
United Kingdom
oil & gas
Appendix
NOVEMBER 2012 Preliminary Results Presentation 36
Contents
• Petrofac’s Percentage Share (X%)
• Maximising Liquids Value
NOVEMBER 2012 Preliminary Results Presentation 37
Petrofac’s percentage share (X%) of Euroil’s profit oil/profit gas
Gate 1:
Question 1: Is PFC NPV < 50% of original BLVN NPV?
Answer 1: Yes No
Gate 2:
Question 2: Is IRR => 20%?
Answer 2: Yes No
Gate 3:
Question 3: Is PFC NPV < 50% of original BLVN NPV?
Answer 3: Yes No
Basis of 'X'%*
* - Following commencement of production, 'X'% adjusted at the following points:
- Immediately upon PFC achieving later of 2.125 money multiple and 20% IRR: X = 10% ($500m case), X = 6% ($300m case)
- Immediately upon PFC achieving later of 2.3 money multiple and 20% IRR: X = 5% ($500m case), X = 3% ($300m case)
^ - 50% NPV10 subject to PFC achieving a minimum IRR of 15% on FID Investment Case and not less than 0% IRR on P90 downside case.
All NPV's post tax.
2.125 Money Multiple* 20% IRR* 50% NPV10 ^
Calculate NPV to PFC based on money multiple of 2.125
No adjustment requiredAdjust 'X'% downwards
to obtain 50% NPV
No further adjustmentAdjust 'X'% upwards to obtain
20% IRR
NOVEMBER 2012 Preliminary Results Presentation 38
C5’s Cond.
ML
HP
-7
ML
HP
-5
Fu
rth
er
Dis
c.
Maximising Liquids Value
• All liquid offtake is marketable internationally i.e. free marketing rights for oil.
• Strong local and pan-African market for Propane & Butane (Cameroon
currently imports from Equatorial Guinea).
• Current concept is phased development.
• Flexibility in gas disposal options maintained.
IM
IE
IF
Omicron Deep &
Lower
Epsilon
D-Discovery
(D-1R)
Other existing &
Future
Discoveries
Oil, Condensate
& up to
90mmscfd of
wet gas
Liquids Stripping
(Primary
Processing)
NGL Plant Up to 80mmscfd
Dry Gas
Power (AES)
Up to 10mmscfd
Fertiliser
(Ferrostaal)
Up to 70mmscfd
LNG
Up to 80mmscfd
Delivery Point Gas Options
C4’s Butane
C3’s Propane Methanol
c.60-70mmscfd
Small Scale
LNG
c.60-70mmscfd
Reinjection
Total Liquids Production
10-15% Shrinkage
3rd
Party
Led
Alte
rnativ
e In
-House S
olu
tions