Date post: | 18-Dec-2014 |
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A New Story for PA Resources
Mark McAllister, CEO
Pareto Bond Conference
Stockholm, 23 January 2014
DecNovOctSepAugJulJunMay
The Renewal is underway.....
We have made very significant progress in 2013 in our regeneration plan
A highly experienced management team is now in place
A series of strategic farm-outs has shaped the portfolio for development
Equity raised has lowered leverage
Two new large owners with outstanding industry experience
2
Tunisian
Farm-Out
Congo
Farm-Out
Azurite
Field
Closure
Denmark
Farm-Out
SEK 891m
Equity
SEK 750m
Bond
…and further drilling success in Equatorial Guinea!
Mark McAllister
Chief Executive Officer Monument Exploration
» Director of Operations
LASMO plc
» Managing Director (Europe and N Africa)
Acorn Oil & Gas
» Founder and Managing Director
Fairfield Energy
» Founder and CEO
Board Member of Oil & Gas UK
Founding Chairman of OSPRAG
» North Sea response to Macondo blow-out
Decommissioning Security and Relief Steering Committee
» Oil industry engagement with HMG on tax relief status
Honorary Doctorate from Robert Gordons University
» Services to the Oil Industry3
Tomas Hedstrom
Chief Financial Officer
PWC
» Auditor
SCA
» Senior Vice President, Stockholm, Large cap
» CFO, (North America) Philadelphia
» Vice President Business Control, Stockholm
» Managing Director SCA Recycling, London
» Head of M&A, Packaging division, Brussels
» Managing Director, Packaging sub, Stockholm
Rottneros
» CFO, Stockholm, small cap
4
Kevin McGrory
General Counsel
Unocal
» Regional Counsel, MEA
Chevron
» Senior Legal Adviser, Upstream Operations
Anadarko
» Vice President, Legal & Negotiations EMEA
Delta Group
» Group General Counsel
Fairfield Energy
» General Manager, Legal & Commercial
Shepherd and Wedderburn LLP
» Partner, Head of Oil & Gas Law
Seven Energy International Ltd
» General Counsel5
Graham Goffey
SVP Exploration, MD N Sea and W Africa
Conoco
» Geologist
LASMO plc
» VP Exploration, Indonesia
Sterling Energy plc
» Exploration Manager
Paladin Resources plc
» Business Unit Manager, International
Director of Oil and Gas Independent Association
Member of Advisory Board, Petroleum Geoscience MSc, Royal Holloway University
Previous Chairman, Petroleum Group of Geological Society of London
BSc (Birmingham), MSc (Imperial College), MBA (Warwick)
6
Paul Elstone
Managing Director PA Tunisia
Aramco – Saudi Arabia
» Field Engineer
NIOC - Iran
» Engineering Superintendent
Mesa Petroleum - UKCS
» Commissioning Manager
BP – UKCS & International
» Offshore Installation Manager (OIM)
» Mature Assets Business Manager, UKCS
» Field Manager, New Project Start-up, Venezuela
» Business Transformation and Start-up Manager, Azerbaijan
» Area General Manager , GUPCO Egypt
» HSE Business Transformation Advisor, Trinidad & Tobago and US Refining post Texas City
7
Slimane Bouabbane
VP Business Development Technip/Coflexip Stena (Aberdeen)
» Engineering
» Support to worldwide offshore project
IntecSea (Houston)
» Project and Engineering
» Support to E&P companies and contractors
Subsea 7 (London/Stavanger/Paris)
» Management roles, commercial and strategy
» Turn-around team of Acergy/Stolt Offshore
PA Resources (Stockholm)
» VP Projects & Investments
» Farm-out, Financing, Investment management
Board Member of The MacArtney Underwater Group (Denmark)
MBA (INSEAD) and Engineering Deg. (Ecole Centrale Marseille)
8
The Portfolio
9
Take out Greenland
Production
Exploration and development
Production
Appraisal
&
Development
Priority
Upside
Potential
• Tunisia Offshore: Didon
• Tunisia Onshore: DST
• Equatorial Guinea: Aseng & Alen
• Tunisia: Onshore exploration
• North Sea: Danish/German exploration
• Equatorial Guinea: Gas, exploration
• Congo: MPS exploration
• Tunisia: Zarat & Elyssa
• Equatorial Guinea: Diega
• Denmark: Broder Tuck & Lille John
• UK: Birgitta (22/19-1)
10
A hat trick of successful farm-outs
MPS
Congo
Farmed out 40% to SOCO
PA retains significant upside
with a 25% interest
SOCO will carry PA share of
exploration costs
An exploration well in the
remaining license period
SOCO is an established
operator in Congo
SOCO and PA AMI for
further activity
Zarat
Tunisia
Farmed out 70% to EnQuest
PAR retains 30% interest in
production & development
$249m consideration including
carry and contingent
payments
EnQuest expert in mature field
extension and new
developments
EnQuest and PA AMI for
further acquisitions
Farmed out 40% to Dana
PA retains significant upside
with a 24% interest
$44m consideration including
appraisal and development
carry
Financial strength of KNOC
behind Dana
Dana operates nearby
licenses
Also includes German
exploration acreage
Dana joining PA Danish 7th
Round bidding group
12/06
Denmark
PA has undertaken a highly focused farm-out campaign.
Each operator is a technical and strategic fit for the respective licence.
Exploration Appraisal Production
Didon Field2017
First production 2013-2017
Development1976
Discovery
1998First Oil
1997 Concession
2006Platform + 2 Wells
2008-20094 New Wells
2013+LEX program: ESP, Infill,
2005PA Acquisition
2011Enhancement Study
» Produced 32 million barrels since 1998
» Platform and tanker in place
» 70 km offshore in 70m water depth
» Tanker was repaired and recertified in 2013
» EnQuest has been highly successful in
mature field rehabilitation at Thistle & Heather
» Plan to install an Electrical Submersible
Pump on one of three wells in 2014
» Will follow up with new production well
» Further ESP installation and new wells likely
in following years
11
Zarat Field1992
Discovery
2010-2011ZRT-N1 Appraisal
1995 Appraisal Well
2011-2012POD Update, Unitisation
2017First production
2015-2017Development
2014 UPOD, UUOA
2005PA Acquisition
1990 Permit Award
» Largest undeveloped discovery in Tunisia
with 120mmboe of oil and gas
» Active participation of ETAP to secure
early production and offset decline in
Tunisian gas production
» Development may need CO2 sequestration
and gas recycling
» Local infrastructure can handle sour gas
» Commercially complex since unitisation
required with Joint Oil block
12
Elyssa Field
» Another significant gas accumulation
» Four well penetrations drilled to date
with one further appraisal well planned
» Straightforward development if appraisal
is successful
» Commercially simple with whole field in
PA licence
» Local infrastructure with ullage for gas
» Tunisian need for gas will ensure active
ETAP support once appraisal complete
1974 Discovery
2006/2007Appraisal Well + ST
1992 Appraisal
Well
2010New 3D Seismic
2016First Production
2014POD
2014-2016Development
2013ELY-4 Appraisal Well
2005PA Acquisition
13
2006 6th license round
Awarded to Scotsdale
2011Exploration well
+ ST
2008 PA acquired
Scotsdale
2012Declaration of
commerciality
2017First production
2014BT POD
2015Development
start
Broder Tuck
» Gas field discovered by PA in 2011
» Estimated recovery 15-45mmboe
» Development Plan will be completed in 2014
» In shallow water and adjacent to existing
infrastructure
» Preferred development concept to be
determined in 2014
» Good progress in discussions with nearby
host platform and an alternative host is
under active review
14
2006 6th license round
Awarded to Scotsdale
2011Exploration well
+ ST
2008 PA acquired
Scotsdale
2012Declaration of
commerciality
2017First production
2014LJ appraisal well
2015Development
start
Lille John
» Oil field discovered by PA in 2011
» Estimated recovery ranges from
uneconomic up to 60mmstb if appraisal well
confirms reservoir model
» Appraisal well required to confirm size of
structure
» Currently looking at 2014 slot in Dana rig
programme
» Straightforward tieback to existing
infrastructure for oil export to Danish
mainland
» Appraisal well required to establish better
reservoir development
» Will pursue this trend together with Dana
15
Mer Profonde Sud
» Azurite Field now abandoned and vessel
shortly to depart
» Murphy exited after Azurite failure but
remain in the Azurite Exploration Permit
» MPS: prospective exploration block
adjacent to and along trend from several
large fields
» Encouraging reprocessed 3D seismic
was basis for PA re-evaluation and farm-out
to SOCO
» Once transaction complete, plan to drill
RR prospect in 2014/2015
2014DL-23
2010-20113D Seismic
2002-2004WO & Infill Drilling
17
Since 2000 Gunvor has grown into one of the world’s leading energy commodity traders
In 2012 Gunvor traded 130 million tonnes of oil and ended the year with:
» a turnover > $93 billion,
» book equity > $2.2 billion
» available liquidity of $5.6 billion
As part of its growth strategy, Gunvor has invested in a number of business related to its trading
activities, including PA Resources
Apart from being our largest equity holder, Gunvor is a key stakeholder in PA through its reserve
base lending facility
The second largest PA shareholder is Lorito, a trust owned by the Lundin family, founders of
Sweden’s most successful oil company
Strong Supportive Shareholders
17
Current debt in the market
18
Q3 2013 Q2 2013 Q1 2013 Covenants
Book Equity (SEK
million)2,144 1,973 2,201 >1,000
Book Equity to
Capital Employed49% 46% 48% >40%
Net debt (SEK million) 1,422 2,197 2,111 N/A
Covenants and Net Debt development
NOK Bond
ISIN NO0010605728
Amount outstanding NOK 810,000,000
Maturity date 2016-04-05
Amortisations2014-04-05: NOK 135m 2015-04-05: NOK 135m
Coupon 12,25%
Interest paymentsSemi-annually April/October
Following repayment of convertible bond on 15th January 2014, PA Resources currently have 2
outstanding bonds:
SEK Bond
ISIN SE0005392834
Amount outstanding SEK 750,000,000
Maturity date 2016-03-03
Amortisations --
Coupon 13,50%
Interest payments Annually
Earnings – Q1 to Q3
19
SEK million Jan – Sept 2013
Profit for the period -817
One-off costs
Decommissioning costs 469
9/06 (Gita) 89
2008/17 (Block 8) 97
Tunisian farm-out 117
Remaining costs Azurite field 21
Net exchange gains/losses -88
Didon 70% net result impact 3
Profit for the period
(Adjusted)-109
Cash flow – Q1 to Q3
20
SEK million Jan - Sept 2013
Cash flow from operations -110
Capex -171
Rights issues 1,413
Loans raised 38
Amortisation of debt -392
Cash flow from financing 1,059
Net cash flow 778
KEY COMMENTS
• Rights issues of SEK 810 million and
SEK 604 million respectively, net after
transaction costs
• Full year capex forecast of SEK 250-
380 million, expected outcome in the
lower part of the range
• Cash and cash equivalents at the end
of the period, SEK 835 million
.....progress will continue in 2014.......
Field rehabilitation in Didon
ESP on a current producer
A new production well
Development Plans approved:
Zarat
Diega
Development concepts worked:
Broder Tuck
Birgitta
Rigs secured and drilling plans in place:
Lille John
Elyssa
MPS21