Qualified Petroleum Reserves and Resources Evaluator Requirements Qualified Petroleum Reserves and Resource Evaluator Requirements - The information in this report that relates to Reserves and Contingent and Prospective Resources is…
Corporate Briefing August 2014 Welcome and Agenda Dudley White, GM Corporate Communications
Housekeeping Please switch off or turn to silent In the unlikely event of an emergency: Act on the instructions of the fire wardens Exits to the left and right of the theatre Assembly area in front of Governor Phillip Tower…
Agenda Corporate Briefing Introduction Dudley White, GM Corporate Communications Corporate Strategy Overview Brad Lingo, Managing Director and CEO Performance & Guidance Ian Bucknell, Chief Financial Officer Drillsearch as an Operator…
Corporate Briefing August 2014 Corporate Overview Brad Lingo, Managing Director
Investment Highlights Focused on growing reserves, production and cash flow Profitable with a strong balance sheet including 152.4 million of cash Experienced management team with track record of delivery Active work programs…
Vision and Approach Our goal is to build Australias leading independent oil and gas company through: Delivering sustained growth in shareholder value; Being a partner and employer of choice, well regarded by our communities and…
People, Projects, Plan People Projects Plan Leveraging all of our human and resource capital to deliver shareholder value 9 DRILLSEARCH CORPORATE BRIEFING AUGUST 2014
People Committed to prudent growth Growth in Team 100 Technically-led organisation Building our operational capability Committed to diversity Cohesive, experienced management team Team composition as of July 2014…
Projects Only ASX 200 Company Offering Pure Cooper Basin Exposure 11 DRILLSEARCH CORPORATE BRIEFING AUGUST 2014
Drillsearch: Three Key Business Streams OIL NEAR-TERM ENGINE AND WET GAS MEDIUM-TERM UNCONVENTIONAL UPSIDE CASH FLOW GENERATOR DRIVER OPPORTUNITY Australias third-largest Wet gas producer with Joint Venture with QGC onshore oil…
Risk Projects ATP 940P Yarrow, Flax, Juniper PEL 182 Northern Wet Gas PEL 91 Exploration Inland Cook Western Wet Gas Oil PEL 91 Development Tintaburra Wet Gas Unconventional Bauer Note: size indicative of…
Plan: Gas Demand East Australian gas demand seen almost tripling by 2025, driven by new LNG export projects East Coast Demand Opportunity expected to be available to new Cooper Basin Supply (PJ)* LNG plants add significant demand…
Plan: Gas Prices Seen Higher for Longer Minimum required Sustainable pricing point Price spikes seen already in line with long-term LNG pricing Westside agreement to sell to GLNG at A9.28/GJ Short-term spikes as high as A14/GJ…
Plan: Self-sustaining business model UNC Business Optimise spend to deliver value drivers Wet Gas Business Grow reserves and production commercialise new and existing discoveries Oil Business Maintain and grow…
Five-Year Roadmap FY2009 FY2014 FY2019 Production 0.2 mmboe 3.4 mmboe Targeted to double 85% oil and 95% oil and Highly leveraged to oil, gas and Revenue / product mix 15% gas 5% Gas and NGLs NGLs Capital Spend 5 million 98.4…
Corporate Briefing August 2014 FY2014 Performance and FY2015 Guidance Ian Bucknell, Chief Financial Officer
FY2014 Performance: Production FY2014 Actual Production Record production of 3.4 mmboe Oil 2.9 mmboe Wet Gas 0.5 mmboe Exceeded guidance of 3.0 to 3.3 mmboe FY2014 Revenue 387 million of annual revenue (unaudited), more…
FY2014 Performance: Capital Spend FY2014 Capital Spend Delivers Record production delivered on only 98 million of capital expenditure PEL 91 joint venture continues to deliver while working well within budgets Several…
FY2015 Guidance: Production FY2015 Forecast Production Guidance 3.0 to 3.4 mmboe PEL 91 production to remain strong as new wells and facilities come online Maintain Eastern Margin oil output and Western Wet Gas (BPT) production…
FY2015 Guidance: Capital Spend FY2015 Capex Guidance Investing for Future Growth Oil Business Western Flank and Eastern Margin: reserves replacement and production delivery (facilities etc.) Inland-Cook: active exploration…
FY2015 Guidance: Capital Spend Activities FY2015 Capital Spend Activities Approximately 75% of capital spend directed to conventional business Greater share of investment in the Oil Business Carried by Santos in PELs 513 and…
Performance & Guidance: Other Financial Matters Funding Strong closing cash position of 152.4 million (unaudited) at 30 June 2014 50 million working capital facility remains undrawn as at 30 June 2014 Fully funded for FY2015 and…
Corporate Briefing August 2014 Drillsearch as an Operator David Evans, Chief Operating Officer
Defined by Our Values Focus Execution Innovation Collaboration Integrity On operating In line with To reduce our With our key In our interaction safely and industry best environmental stakeholders with local responsibly practice…
Operating Capability Building our Operating Capability to deliver our Five-Year Plan 27 DRILLSEARCH CORPORATE BRIEFING AUGUST 2014
Operating Capability: 2012-13 Resource People Drilling 0 Superintendents Petroleum 0 Engineering Supers Engineering 2 HSEC 2 Supply 1 Chain/Contracts 3D Seismic Field 5 (B2B) People in Field (Sub Contractors)…
Operating Capability: 2014-15 Conventional Drilling (PEL 101) Resource People 3D Seismic (ATP 924P) Drilling Sup 2 (B2B) Pet Eng Sup 2 (B2B) Conventional Engineering 6 Drilling (PEL 103) HSEC 6 Drilling and Supply…
Operations: Our Teams Capabilities Major achievements so far: Western Cooper Wet Gas drilling campaign late FY2013: 3 wells drilled, 2 discoveries Northern Cooper Wet Gas appraisal drilling HPHT drilling in ATP 940P 2 wells…
Operations: Drill Rigs Contracted Ensign 918 Weatherford 826 Ensign 932 Weatherford 826 Upgraded by Drillsearch; only HPHT Capable Rig in Cooper Basin 31 DRILLSEARCH CORPORATE BRIEFING AUGUST 2014
Health & Safety Improved TRIFR (Total Recordable Injury Frequency Rate) of 9.72% in FY2014, even as operated activity increases New HSEC strategy to drive performance over next three years Corporate social responsibility is a…
Operations: Our Teams Capabilities Supply Chain capability developed to provide Centralised logistics hub in Adelaide Centralised procurement, reducing operational and commercial risks Spend category strategies to deliver targeted…
FY2015 Activity: Matched to Five-Year Plan FY2015 DLS Permit Operator Total % Sept Dec Mar Jun Sept Q Q Q Q Q OIL Western Flank - PELs 91 & 182 60-43 BPT/SXY 21 Seismic acquisition and processing 500km2 Solidus 3D acquisition and…
Summary Proven experience and growing as a Cooper Basin Operator One of the most experienced and lean Operations Teams onshore Australia Forward program aligned to execute and deliver the Drillsearch Five-Year Plan Dynamic HSEC…
Corporate Briefing August 2014 Cooper Basin Overview Duncan Lockhart, Chief Technical Officer
Cooper Basin: Australias Premier Onshore Petroleum Address What can our rocks do How do we get the most out of our rocks Are there better rocks elsewhere Play-driven approach having a great position in great plays Source:…
Regional Evaluation Process: Project Uber 1. Fields - Review oil and gas accumulations 2. Plays - Define extent of proven oil and gas plays and calculate remaining potential (conventional and unconventional) 3. Technology Review…
Regional Evaluation Process: Project Uber Bail-out Ideas Opportunities Bail-out Studies Bid/Trade/Divest 1. WHITE SPACE SCREENING STUDY (1-3 months) Data gathering & search 2. BASIN FRAMEWORK STUDY Base maps (3-6 months) 3.…
Cooper Basin: Australias Premier Onshore Petroleum Address Permian is main source Triassic Zero Edge rock Oil and gas migrate from low to high Ridges act as focal points for migration Oil and gas migrates until a trap causes it…
Oil Fairways Potential for oil to be generated from several intervals including the Permian and Jurassic Most Cooper oil typed to the Permian rocks Most oil reservoired in the Jurassic Eromanga Basin sediments Main oil fields…
Oil Fairways Western Flank Oil Fairway Optimally Located 42 DRILLSEARCH CORPORATE BRIEFING AUGUST 2014
Gas Fairways For gas, source rocks need to be hotter and more deeply buried Source rock types associated with Permian produce more gas than oil Gas generated later than oil tends to be found in more central parts of the…
Gas Fairways Unconventional Gas Plenty of gas but the rocks too tight to allow migration Patchawarra Formation is self-sourcing. Mature coals and shales producing oil & gas and charging surrounding sandstones Roseneath Epsilon and…
Gas Fairways: Nappamerri Trough versus Patchawarra Trough Only party with interest in both plays Patchawarra Trough is more liquids-rich, with less CO2 and at lower pressure and temperature, however the size of the prize is bigger…
Summary: Bringing New Ideas to an Established Region Only pure Cooper Basin-focused company in the ASX 200 Senior technical team with decades of experience in Australia and overseas Project Uber helps us to be proactive in…
Corporate Briefing August 2014 Questions
Corporate Briefing August 2014 Oil Business David Evans, Chief Operating Officer
Oil: Introduction Production Bauer (PEL 91) Chiton (PEL 91) Development Hanson (PEL 91) Stunsail (PEL 91) Eastern Margin Pennington (PEL 91) Exploration Kalladeina, Congony and ATP 924P Sceale (KCS) (PEL 91) PEL 182 Arno (PEL 91)…
Oil: FY2014 Production Performance New production coming online in FY2015 PEL 91 and Eastern Margin provide robust production base 50 DRILLSEARCH CORPORATE BRIEFING AUGUST 2014
Oil: Profitability Margins greater than 75 a barrel * A Among the most profitable barrels of oil production in the world 51 * The data presented above is unaudited DRILLSEARCH CORPORATE BRIEFING AUGUST 2014
Oil: PEL 91 Current Status Production 12,485 bpd in June Quarter (7,491 DLS Share) 14 wells in production Bauer-1 to -11, Hanson-1, Chiton-1 and -2 Export 10,000 bpd pipeline, with remainder trucked to Moomba Bauer fluid handling…
Oil: Major Work Program in PEL 91 in FY2015 Drilling: 18 wells planned in FY2015: 6 Exploration wells (5 oil and 1 gas) 4 Oil appraisal wells 8 Development wells Seismic: 500km 3D Solidus seismic survey in north west…
Oil: PEL 91 - Stunsail and Pennington Three wells cased and suspended at Pennington, one at Stunsail Additional appraisal drilling needed before facilities are sized Reserves of both under review in 30 June 2014 audit Stunsail…
Oil: PEL 91 Exploration Potential Burners-1 and Balgowan-1 Simple anticline oil prospects; follow-ups to Stunsail-1, 2km and 3.5km to the South West Multi-zone targets - McKinlay/Namur, Mid- Namur and Birkhead Upside in the…
Oil: Potential in the Birkhead PELs 91 and 182 More than 35 Birkhead oil discoveries in South Australia (average size 0.6 mmbbls). PEL 91 located between Growler (3.4 Considerable oil 2.2 mmbbls mmbbls) and Snatcher (2.2…
Oil: PEL 91 - Export Capacity Longer-term export capacity options, if Bauer required, include: Additional capacity with extra trucks Increase capacity on Bauer-Lycium pipeline Bauer to Lycium (additional pumps) Running at 10,000…
Oil: PEL 182 a New Opportunity on the Western Flank 3D seismic processing completed in June quarter Several new leads identified with oil targets in the Poolowanna, Hutton and the Birkhead Three exploration wells to be drilled…
Oil: Eastern Margin/Tintaburra ATP 299P (Santos Operated) 84 producing wells 8 wells in FY14 all successful Remaining two deepenings to be completed in FY2015 Production of 1,200-1,400bbls/d gross Production Optimisation and…
Oil: Inland Cook ATP 924P Work Program and Beach Farmout 2,300km in SW Queensland Cooper Basin Between Inland Oil field to the north and Cook/Cuisinier to the south Two 3D seismic surveys recently completed with seismic…
Oil: Inland Cook ATP 924P Prospectivity Current program is de-risking and high-grading multiple prospects and leads identified on vintage 2D 2D seismic identified Hurron as largest undrilled oil prospect in the portfolio (Based on…
Oil: Banyan Banyan-1 3D-controlled exploration well - August 2014 One of three culminations in the area, close to Acrasia and Reg Sprigg testing Hutton and Birkhead up-dip of Sprigg South-1 TWT Seismic section through the…
Oil: Juniper Juniper-3 Appraisal well to spud September 2014 5.7km north east and up-dip of Juniper-1 Testing Juniper structure - three-way Spectral decompostion and amplitude extraction at Top Patchawarra on Juniper Structure…
Oil: Flax Solving the Puzzle Lauded as one of Australias largest onshore oil fields when originally discovered by Innamincka Petroleum ACQUIRED BY DRILLSEARCH IN EARLY 2013 DISCOVERY START-UP EVALUATION RESTART 2004 2007 2013…
Oil: Flax Applying New Thinking Horizontal well trajectories across Flax Opportunity Summary (100% Ownership) Significant technical work conducted internally and by RISC Northern Cooper Tight Oil Commercialisation Study completed…
Oil: Flax The Way Forward Next steps towards delivering a field development: 1. Additional technical work internally 2. Stage 1 Proof of Concept 1-2 proof of concept multi-stage frac horizontal wells late FY2015/early FY2016 3. Stage…
Oil: Summary Balanced portfolio highly profitable production and high impact exploration Increased investment seen in FY2015 Bauer continues to surprise to upside; potential remains on Western Flank PELs 91 and 182 Targeting…
Corporate Briefing August 2014 Wet Gas Business Duncan Lockhart, Chief Technical Officer
Wet Gas: Introduction Production Brownlow, Middleton, Canunda - PEL 106 Development Coolawang, Udacha - PEL 106 Cadenza - PEL 632 Exploration Yarrow PRL 17 PEL 101 PEL 106 PEL 107 PEL 513 PEL 632 PEL 91 (eastern area)…
Wet Gas: Project Area Overview 70 DRILLSEARCH CORPORATE BRIEFING AUGUST 2014
Wet Gas: FY2014 Production Sales Gas (boe) gross LPG (boe) gross Condensate (boe) gross 120,000 Production impacted by Canunda 100,000 Moomba plant shut-ins and production Canunda offline increased 80,000 boe 60,000…
Wet Gas: Clear Strategy to Become a Material Producer Targeting net raw gas production of 50-70 mmscfs/d from 4-5 production satellites 18 existing discoveries with 16 close to pipeline networks Middleton as template for…
Wet Gas: Brownlow-Middleton as a Template Total CAPEX 40m (full cycle, gross) Seismic, exploration & development drilling, gas plant DLS CAPEX 11.4m 1.05 mmboe production Gross Jan 2012 June 2014 Remaining (full cycle, net)…
Wet Gas: Liquids Drive Profitability Wet Gas projects are substantially linked to global oil prices through natural gas liquids * Brownlow-Middleton % gross profit by product Condensate Sales gas - - gross profit gross…
Western Wet Gas: Santos JV Acreage PELs 513 and 632 Seismic: 329km2 Jacenza 3D survey acquisition commenced Forward strategy Drilling: waiting on results of Nulla Flowline ILI Eight wells planned: 6 in PEL 513 2 in PEL 632…
Western Wet Gas: Beach JV Acreage PELs 91, 106 and 107 Drilling: Five wells planned: 4 exploration 1 appraisal well Karrata-1 gas well proposed in PEL 91 Development: Central compression facility planned, commissioning late…
Northern Wet Gas: PEL 101 Three untested discoveries: Crocus, Crocus South and Ginko Five wells planned in FY2015 Excellent low risk wet Top Toolachee Depth Structural Map gas potential Proximate to pipeline networks…
Northern Wet Gas: PEL 101 3D Unlocking Stratigraphic Potential Ginko North Ginko Central Ginko South Ginko SW Isochron and RMS amplitude 78 DRILLSEARCH CORPORATE BRIEFING AUGUST 2014
Northern Wet Gas: PEL 182 Vanessa Discovered in 2007 not covered by 3D Estimated gas flows 8.4mmscf/d Associated condensate production 20 barrels per mmscf/d (170 barrels per day) Toolachee and Epsilon structure with stratigraphic…
Northern Wet Gas: Proposed Acquisition of Ambassador Compelling bolt-on acquisition that consolidates position in Northern Cooper Wet Gas PEL 101 and 570 structural stratigraphic play potential seen as analogous to SACBJVs Greater…
Wet Gas: Clear Strategy to Become a Material Producer 81 DRILLSEARCH CORPORATE BRIEFING AUGUST 2014
Wet Gas Summary: Clear Strategy to Become a Material Producer Long life assets, with liquids content improving the economics Targeting self-funding by FY2017 through development of 4-5 production satellites FY2015 drilling…
Corporate Briefing August 2014 Unconventional Business Peter Fox, Chief Commercial Officer
Context What: Oil and/or gas - pervasive in extent Multiple plays shale, tight gas, deep CSG Where: Well understood fairways in mature oil and gas region Often associated with conventional resources Immediate focus is ATP 940P…
Cooper Unconventional: A Major Role in the East Coast Market The Cooper Basin has supplied East Coast for more than 40 years LNG growth beyond current developments benefits from economies of scale LNG pricing unlocking untapped…
Unconventional: Value Milestones Four key steps to establishing a viable Unconventional project: Profitability Do selling price, Producability project costs and What volume production Prevalence and rate can the combine to…
Unconventional: How to Build a Commercial Project Key variables determining profitability of an Unconventional project Observable Gas Price Changes over time Early indications Production Rate More wells, refined completion…
ATP 940P Joint Venture With QGC: Landmark Agreement Who: Central Unconventional Fairway ATP 940P First alliance to introduce global major DLS 40% (Operator), 60% QGC into Cooper Basin unconventional project Relationship responsive…
Winnie 3D Seismic: Providing the Roadmap More than 1,050km 3D seismic survey conducted by WesternGeco, a unit of Schlumberger. Latest technology used to meet the Interpret and understand structural elements resolution required…
Operations outcomes: Difficult conditions, excellent delivery Weatherford 826 Rig 1,500-HP top-drive drilling rig, built in Houston, Texas Advanced rig suited to conventional and unconventional drilling Delivers certainty and…
Technical Outcomes: Charal-1 and Anakin-1 3D seismic provided excellent resolution Program tests lateral extent of seismic area Two distinct plays reached by each well Elevated gas levels experienced in both wells Hydraulic…
Technical outcomes: Other Cooper Basin Wells OPEN FILE CONFIDENTIAL 92 DRILLSEARCH CORPORATE BRIEFING AUGUST 2014
Next Steps: Rollout of Hydraulic Stimulation Program Halliburton high horsepower hydraulic stimulation spread 94 DRILLSEARCH CORPORATE BRIEFING AUGUST 2014
Work Program Date Milestone March 2014 QGC farm-in renegotiated April 2014 Charal-1 completed to target depth July 2014 Anakin-1 completed to target depth August 2014 Padme-1 to be re-entered and drilled to target depth…
ATP940: Changes to Queensland Legislation Longer permit term More considered evaluation Better resource outcomes Framework changes provide opportunity 96 DRILLSEARCH CORPORATE BRIEFING AUGUST 2014
Unconventional: Long-Term Value Driver Deliberate, science-led approach using the best technology measure twice, cut once Maintaining disciplined use of funds in order to pursue the opportunity Gas market dynamics and a…
Corporate Briefing August 2014 Questions
Corporate Briefing August 2014 Concluding Comments Brad Lingo, Managing Director
Track Record of Outperformance Drillsearch TSR Ranking Table TSR % for the Performance Period of 20 June 2011 to 20 June 2014 300 250 200 150 100 50 0 PRL DLS SXY BPT COE ROC AWE STO…
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