SHALE GAS: SOUTH AFRICAS ENERGY GAME-CHANGER Robert Willes, Managing Director Investec Oil & Gas Conference Cape Town 3-4 November 2014
Introduction Late 1960s: national oil company (Soekor) exploration in SAs Karoo region Late 2000s: renewed interest in Karoo gas potential recoverable resource estimate: 390 trillion cubic feet (tcf) (EIA, June 2013) ranked…
Regulatory process moves ahead Exploration right application processing gets under way 27 February 2015 deadline for applicants to submit reports on: EMP review public participation Continuing government support ANC Manifesto…
Challenger Energy: overview Australian listed shale gas exploration junior (ASX: CEL) South African subsidiary: Bundu Gas and Oil Exploration (Pty) Limited (Bundu) 95% Challenger, 5% BEE (Don Ncube) Bundu first company to apply…
Challenger Energy: overview, contd Permit application area centred around Board and management 1968 discovery well Michael Fry, Chairman Industry experience: 7 years E&P (30 yrs Capital markets) Chair Red Fork Energy (RFE), Norwest…
Bundu permit application: Cranemere Three wells drilled in late 1960s with uniform shale sections Application area surrounds discovery well (CR 1/68) strong gas kick and flow to surface, extensive core collected Shales are thick…
Bundu permit application: Cranemere, contd Term: three years, up to three renewals not exceeding two years each Expected work programme: studies seismic reprocessing 1-2 core holes drill, complete, fracture-stimulate one well…
Shale gas in South Africa Econometrix (SAs largest independent Modelled value-added and employment scenarios macro-economic consultancy) (March 2012 report): Scenario A Scenario B 50tcf shale resource Gas resource tcf 20 50 could…
Competitive position of gas in power generation Eskom electricity pricing (MYPD3) regulated by National Energy Regulator of South Africa (NERSA) 12.3% rise in SA delivered electricity prices in 2012-13, following three years of…
Commercialisation Shale likely to play significant role in future: drive to early gas-fired power generation potential to spark a Dash for Gas as in UK (gas-fired power generation 5% of installed capacity in 1990, 30% by 2002)…
Why invest Recent transactions demonstrate increasing 18,489/acre market value of acreage as it progresses towards commercialisation Previous discovery area 4,009/acre World class neighbours 40/acre 844/acre Strong SA…
Appendices Investor presentation November 2014 14
Growing international interest LEGEND Investor presentation November 2014 15
Some background: the Karoo About the Karoo: semi-desert, 400 000km2 in extent sparsely populated 300 000 people primary economic activity farming, eco-tourism Robust debate on shale gas exploration pros, cons Investor…
SA: economy, employment imperatives (NDP) National Development Plan 2030 to eliminate poverty and reduce inequality by 2030 economy increase GDP by 2.7 times, requiring annual GDP growth rate of 5.4% GDP per capita to increase…
SA: emerging energy crisis Electricity shortfall Power grid has severe supply constraints increased demand since 1994, ageing fleet coal base-load diesel-peaking plants make up shortfall utility Eskom implementing load-shedding…
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