2014 Capital Markets Day Agenda Time Topic Main presenter Q&A 12.30 Introduction Aidan Heavey 12.45 West Africa Business David Lawrie David Lawrie, Paul McDade and Angus McCoss 13.45 East Africa Business Gary Thompson Gary…
2014 Capital Markets Day Speaker biographies David Lawrie Gary Thompson Vice President, West & North Africa Vice President, South & East Africa David joined Tullow in 2011 and is the Regional Vice Gary joined Tullow in 2013 and is the…
2014 Capital Markets Day INTRODUCTION Aidan Heavey
2014 Capital Markets Day Our Strategy Additional cash flow from new production Monetisation High Margin Exploration Selective Options & Production and Development Portfolio Cash flow Appraisal Management Costs &…
2014 Capital Markets Day WEST AFRICA BUSINESS David Lawrie
2014 Capital Markets Day Our strategy Additional cash flow from new production Monetisation High Margin Exploration Selective Options & Production and Development Portfolio Cash flow Appraisal Management Costs &…
2014 Capital Markets Day Regional investment highlights West & North Africa 9 Countries 39 Licences 28 Years experience c.88,000 Sq km 65,000 boepd 665.6 mmboe Acreage 2013 production Reserves & Resources Material…
2014 Capital Markets Day 2014 CAPITAL MARKETS DAY West Africa Business NON-OPERATED PRODUCTION
2014 Capital Markets Day Non-operated - strengths and opportunities Material portfolio of high margin resources High margin oil fields give broad technical base with potential to drive future value growth Influencing non-operated…
2014 Capital Markets Day Non-operated sustaining high margin production Good technical work has delivered investment opportunities High value incremental High return investments compete strongly for capital within investments can…
2014 Capital Markets Day Non-operated case study: Gabon Gabon net production profile 16,000 14,000 High value infill drilling has offset decline 12,000 Tullow technical influence impacting Operator 10,000 decisions boepd…
2014 Capital Markets Day Non-operated case study: Equatorial Guinea Use of 4D seismic data to optimise infill drilling - First iteration in 2010 (learning ahead of use at Jubilee & TEN) - Next campaign planned for late 2014/15…
2014 Capital Markets Day 2014 CAPITAL MARKETS DAY West Africa Business GHANA OPERATED ACTIVITY
2014 Capital Markets Day Ghana long-term value generation World class fields Up to c.4 billion barrels of high quality oil in place, with additional gas in place of up to c.4 tcf Strong track record Experienced team with strong…
2014 Capital Markets Day World class fields JUBILEE OIL Jubilee TEN MTA GAS TEN OIL Material resource base will drive long-term value growth Slide 17
2014 Capital Markets Day Sustainable production and cash flow Ghana gross production profile 250 Gross production at around Jubilee to be developed TEN to be developed (80:20 oil:gas) Jubilee Upside MTA TEN Upside (45:55…
2014 Capital Markets Day Strong track record Opex management Jubilee opex vs production 14 120 Direct operating costs benchmark Opex Oil Production favourably with identified cost 12 100 reduction areas 10 Indirect operating…
2014 Capital Markets Day Strong track record potential to increase capacity FPSO capacity improvements Current oil capacity Work Work Work completed in progress outstanding - Constrained by gas export infrastructure - On track to…
2014 Capital Markets Day Visible future growth delivering Jubilee upside 2P recovery Additional wells identified to develop remaining resources Further sub-sea infrastructure to be installed to extend resource reach Investing in…
2014 Capital Markets Day Visible future growth TEN development overview Base development case 300 mmboe reserves being developed 24 well development Gross development capex of 4.9 billion Leased FPSO, capacity of 80,000 bopd…
2014 Capital Markets Day Visible future growth - TEN Project on track Execution schedule with strategic milestones 2013 2014 2015 2016 ACTIVITY Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Over 2 million man-hours General Milestones…
2014 Capital Markets Day Visible future growth monetising gas resources in Ghana Up to c.4 tcf gross potential gas resource to be monetised GNGC gas infrastructure project creates sufficient capacity to take Jubilee and TEN gas…
2014 Capital Markets Day Strong local relationships 2013 Employment: Socio-economic contribution - 266 Ghanaians employed, 87% of permanent staff Procurement: - 438 million spent with 740 local companies 2010-2013 - 50% of total…
2014 Capital Markets Day 2014 CAPITAL MARKETS DAY West Africa Business CONCLUSION
2014 Capital Markets Day Investment highlights Material business with potential to generate over 2.5bn per annum of pre-tax operating cash flow Rising production base to over 100,000 boepd by 2017; significant future value growth…
2014 Capital Markets Day EAST AFRICA BUSINESS Gary Thompson
2014 Capital Markets Day Our strategy Additional cash flow from new production Monetisation High Margin Exploration Selective Options & Production and Development Portfolio Cash flow Appraisal Management Costs &…
2014 Capital Markets Day Investment highlights Full life cycle regional scale E&P business Two basins discovered with over 300,000 bopd potential Large yet-to-find upside from basin opening exploration campaign Governments and…
2014 Capital Markets Day Creating a material value regional oil business Major resources A new oil province Two major oil basins already discovered with large upside potential to be tested across 12+ basins; Multi basin opening…
2014 Capital Markets Day 2014 CAPITAL MARKETS DAY East Africa Business A NEW OIL PROVINCE
2014 Capital Markets Day Major oil resources discovered Potential new oil province Prospective acreage covers 12+ basins Two established as major oil basins - Lake Albert - South Lokichar Significant resources discovered - Large…
2014 Capital Markets Day Exploring Kenya & Ethiopias significant resource potential The following basins will be tested in 2014/2015 Date Chew Bahir South Basin: Gardim In progress North Kerio Basin: Kodos 3Q 2014 Turkana Central…
2014 Capital Markets Day Case Study: Sudan analogue Sudan Production Milestones 600 1995: Block 6 relicenced to CNPC 500 1996: Early production scheme (c.5mbd) 1997: Greater Nile Blocks and Block 5A 400 relicenced path open to…
2014 Capital Markets Day 2014 CAPITAL MARKETS DAY East Africa Business LEADING REGIONAL POSITION
2014 Capital Markets Day Building scale, equity, opportunity and value First mover access to major frontier acreage in Uganda Perseverance and resilience - First discovery 2006 & major discoveries 2008+ Built on Tullows initial…
2014 Capital Markets Day Material full cycle E&P business established Access & Explore Regional exploration & appraisal success 87% at 1.95/bbl. Leveraged to multi basin opening exploration & upside value. Appraise Successful…
2014 Capital Markets Day 2014 CAPITAL MARKETS DAY East Africa Business DEVELOPING DISCOVERED RESOURCES
2014 Capital Markets Day Uganda development status Project definition being finalised 250 Appraisal programme completed Development costs reduced by 30% 200 200 Kingfisher PL awarded, all EA2 Field Development plans submitted to…
2014 Capital Markets Day Kenya development plans rapidly advancing Explore, appraise and develop simultaneously Exploration and appraisal drill out by end 2015 - 600 mmbo Pmean gross resources discovered to date Appraisal Area of…
2014 Capital Markets Day Regional crude oil export pipelines Regional pipeline agreed - Governments across region supportive 600 km Significant progress on technical design 860 km - Routing and environmental screening completed -…
2014 Capital Markets Day Marketing and transporting high quality crude oil Ultra low sulphur, intermediate API gravity - Comparable to Minas, Cabinda Very low level of impurities - TAN, nitrogen, metals etc High proportions of…
2014 Capital Markets Day 2014 CAPITAL MARKETS DAY East Africa Business EXECUTION CAPABILITY
2014 Capital Markets Day Exploration operations capability Kenya well costs Since 2004 50 104 exploration and appraisal wells & sidetracks - 77 as operator 40 40 wells tested both production & injection 57,700 sq km of FTG surveys…
2014 Capital Markets Day Effective appraisal capability Uganda Buliisa example 3D - Attributes Two 3D surveys (649 sq km); 30 appraisal wells & sidetracks; well tests on 25 wells Production and interference testing, water injection,…
2014 Capital Markets Day Executing developments in East Africa Ugandan and Kenyan discoveries Similar development have much in common concepts High angle/horizontal wells. Artificial lift to Good quality waxy, high maximise…
2014 Capital Markets Day Uganda development optimisation and Capex savings Development optimisation and Capex reduction 3bn Capex cost reduction 4% programme in 2013/14 Reduction in 9% Facilities Capex Reduction in Capex reduced…
2014 Capital Markets Day Management of surface risks Local Content Social Performance Integrated into core business Established SP functions land access & water capability Local Content Task Force Robust EHSIA strategy Strengthening…
2014 Capital Markets Day 2014 CAPITAL MARKETS DAY East Africa Business CONCLUSION
2014 Capital Markets Day East Africa Business key messages Full life cycle regional scale E&P business Two basins discovered with over 300,000 bopd potential Large yet-to-find upside from basin opening exploration campaign…
2014 Capital Markets Day EXPLORATION Ian Cloke
2014 Capital Markets Day Our strategy Additional cash flow from new production Monetisation High Margin Exploration Selective Options & Production and Development Portfolio Cash flow Appraisal Management Costs &…
2014 Capital Markets Day Structured to continue strong exploration performance 2007-2013 1.4 3.3 210 5 770% 330,000 Billion boe /boe Discovered resource Finding costs* E&A Team Basins opened Production Replacement Sq km gross…
2014 Capital Markets Day Where we explore: Africa & Atlantic for light oil North Atlantic North Atlantic Exploration Campaign & Business Development Central Atlantic Central Major Exploration Atlantic East African Campaign…
2014 Capital Markets Day How we explore: our process works 600M 1,000M Risked upside* Monte Carlo simulation of Prospect & Lead Inventory (P10 = 4.3 Bbo) within full potential of plays & basins (6.6 Bbo) Slide 57
2014 Capital Markets Day Balanced investment across the portfolio Frontier Core South Atlantic Margins East African Rift Basins Low cost options give exposure to upside 10 Bbo STOIIP found in 40 Bbo potential Older turbidites…
2014 Capital Markets Day Exploring for high value oil Higher profitability associated with higher oil reserve mix Oil finding principles 100% Focus on finding high value producible light oil 80% Oil is multiples more valuable than…
2014 Capital Markets Day Cost efficient exploration 3.3/boe (2007-2013) 900 Potential Kick in East African Rift Basins 3 core campaigns < 3.3/boe 800 Creaming Curve East African Rift Basins 1.95/boe Net Contingent Resources…
2014 Capital Markets Day Costs & well complexity impact global exploration industry Deepwater and Land cost analysis indexes Cost escalation 250 Costs doubled over 5 year boom (2005-9) 200 Cost Index (2000=100) Increased…
2014 Capital Markets Day Shifts of emphasis within exploration portfolio for value Uruguay Ghana Liberia, Sierra Leone Guyana Higher cost / Lower non-technical risk Lower cost / Higher non-technical risk Suriname Gabon…
2014 Capital Markets Day E&A people & portfolio Age Diversity People 50 Leading demographics despite Industry Crew Change 40 195 petroleum geoscientists with 15 years average oil 30 finding experience 20 15 Global…
2014 Capital Markets Day 2014 CAPITAL MARKETS DAY East Africa Development Business CORE CAMPAIGNS
2014 Capital Markets Day East African onshore Rift Basins Campaign Uganda Lake Albert Rift Basin (1st phase) East African Rift Basin Volumes New oil basin opened 2006 91% E&A success 2006-2014 (88 wells) Well cost reduction & smart…
2014 Capital Markets Day Kenya onshore Rift Basins transformational oil opportunity South Lokichar ultimate potential & beyond Eight oil discoveries (2012-2014) High value resource currently being drilled-out Rapidly appraise in…
2014 Capital Markets Day Opening phase of West African Margin Campaign Tano Basin opened offshore Ghana Jubilee giant oil discovery led industry shift Campaign hit the N/G sweetspots Tullow E&A wells drilled with 80% success 4.6…
2014 Capital Markets Day West African near field exploration in producing heartlands Oil field & production plateau extensions Numerous near field & near infrastructure exploration & appraisal prospects in Ghana, Gabon, Equatorial…
2014 Capital Markets Day North Atlantic Continental Shelf Campaign Barents Sea frontier exploration Wisting shallow giant oil discovery Bjaarland & Hansel to test 500mmbo upside CSEM & HiFi 3D seismic proprietary insights Exploring…
2014 Capital Markets Day 2014 CAPITAL MARKETS DAY East Africa Development Business EXPLORATION BUSINESS DEVELOPMENT & FRONTIER CAMPAIGNS
2014 Capital Markets Day Selecting our next New Frontiers for sustained value growth Directed by continental scale geology Fundamental geology locates possible oil basins Staying clear of expensive feeding frenzies Early business…
2014 Capital Markets Day Central Atlantic Margin Campaign Mauritania Outboard Plays Mauritania deepwater turbidites (1st phase) Fregate-1 discovers over 30m light oil & condensate Commercialisation options under review (high costs)…
2014 Capital Markets Day Next growth frontier exploration examples Namibia reachable turbidites Older turbidites beneath shelf (low cost) Oil system established by Wingat-1 (HRT) New 3D survey highlights 2015 prospect Albatross…
2014 Capital Markets Day Exploration investment highlights PEOPLE Industry recognised leading oil finders over last 5 years TRACK RECORD 200mmboe/yr (average 2007-2013 3.3/boe; 4.4/boe for 222mmboe in 2013) PORTFOLIO Industry…
2014 Capital Markets Day Tullow Oil June 2014 Capital Markets Day Brian Williams Vice President Corporate Finance FUNDING STRATEGY Brian Williams
2014 Capital Markets Day Our Strategy Additional cash flow from new production Monetisation High Margin Exploration Selective Options & Production and Development Portfolio Cash flow Appraisal Management Costs &…
2014 Capital Markets Day Funding strategy designed to support business strategy Business strategy Funding strategy Additional cash flow from new production Maintain To support the business model appropriate Target minimum…
2014 Capital Markets Day Funding initiatives leverage business strengths Business Strengths Funding Initiatives 1. Proven track record: E&A success Portfolio Development project execution Commercial Management Operating Strong…
2014 Capital Markets Day Corporate bonds enhance Tullows debt capital structure Commercial bank debt Corporate bonds New source of capital reduces dependency on banks Limited pool of banks Deep, liquid market Portfolio mix…
2014 Capital Markets Day Debt capital structure has evolved Debt maturity profile Key metrics mm Commitment size Maturity mm 31 May 2014 RBL 3,500 Dec 2019 Cash and cash equivalents 430 Corporate Facility 750 Apr 2017 Debt…
2014 Capital Markets Day Disciplined financial management policies Business Risk Profile Financial policies 1. Maintain a well funded balance sheet Exploration-led growth strategy Provide ample liquidity Access to flexible and…
2014 Capital Markets Day Historical performance key metrics Adj. EBITDAX (mm) 1,847 1,779 1,908 Strong growth in Adjusted EBITDAX driven by increasing 800 production 2010 2011 2012 2013 Capital investment (mm) Over 6.3bn of…
2014 Capital Markets Day High margin production and competitive cost base Realized oil price per bbl ()1 Operating costs per boe ()2 Brent avg. 79.5 111.3 111.7 108.7 WTI avg. 79.6 95.1 94.1 98.0 108.0 108.0 16.5 105.7 14.6 13.5…
2014 Capital Markets Day Tullow is a well-funded company Managed with a prudent financial approach Ample liquidity headroom to fund planned capital expenditures Quality and highly cash flow generative portfolio of producing…
2014 Capital Markets Day STRATEGY & PORTFOLIO MANAGEMENT Les Wood
2014 Capital Markets Day Strategy in action Business strategy Strategy execution Additional cash flow from new production Grow and develop our commercial reserves to provide strong, stable cash High Monetisation Margin…
2014 Capital Markets Day Portfolio management environment Recent market environment E&P sector has been out of favour Majors focusing on divestments & cash returns to shareholders rather than acquisitions Small E&Ps are funding…
2014 Capital Markets Day Monetising options and portfolio management Portfolio management motivation Capital allocation: ensuring right balance of Exploration, Developments and funding Optimising exposure: right equity at right stage…
2014 Capital Markets Day Tullow additional value potential being created Exploration Industry-leading acreage Development position, strong track record Value driven, flexible programme (0.6-1bn) Production Strong set of…
2014 Capital Markets Day CLOSING REMARKS Ian Springett
2014 Capital Markets Day Download the Tullow Investor Relations and Media App from the Apple and Android stores: Tullow Oil plc 9 Chiswick Park 566 Chiswick High Road London, W4 5XT United Kingdom Follow Tullow on: Tel: +44…
Loading...
