Capital Markets Day 28 January 2015 Lincoln Centre London
Agenda 9.30 Introduction and business review Brian OCathain Algeria 9.45 Introduction to Ain Tsila Geoff Probert 10.05 Project status Geoff Stevenson 10.30 Subsurface and Drilling Tony Cave 10.50 Security considerations Stuart Harrower…
Introduction and Business Review Brian OCathain
Introduction and Key Objectives Review progress made by the business since the merger with Melrose in late 2012 Provide an insight into the Companys strategy in light of the current low oil price Review the core asset base in North…
Substantial Progress on Key Projects in 2013/14 Algeria, significant progress on major Ain Tsila development project - second farm-out completed - high quality development team and operating company - key contracts completed or…
Financial Performance 2013/4 Corporate finance initiatives have enhanced financial flexibility - successfully refinanced the Company with 5 year facility - 160 million carry on Sonatrach farm-out covers Algeria to Q1/Q2 2016 - 100…
Strategic Considerations - Production and Development The Companys core value and reserves are dominated by the Algerian Ain Tsila development and Egyptian producing fields (98% of year end 2013 2P reserves) The pace of the Ain Tsila…
Strategic Considerations - Exploration and Appraisal Limited exploration success since 2012 Remaining high volume prospects are skewed towards high risk and/or are immature - Dinarta block (Shireen-1 well), Kurdistan - Carisio…
Proved plus Probable Reserves and Upside Potential Resources Combined Total 654 MMboe Algeria, Egypt and Bulgaria 2P Reserves 144 Algeria 255 Indicative Upside 52 Italy (Elsa) 2C Resources 203 Italy, Egypt and Kurdistan P50…
Strategy Overview Production, Development and Exploration Assets Focus the organisation on the execution and financing of the Ain Tsila development project, to achieve a first gas date in 2018 - actively promote and progress…
Country Plan Implications Production and Development Algeria Focus on project execution, accelerated delivery and securing financing Egypt Focus on maintaining production and cost reduction Bulgaria Focus on maintaining production and…
Strategy Overview Financial and Corporate Optimise the pace of spend on AinTsila commensurate with the plan to deliver first gas in 2018 Increase revenues and reduce operating cost in Egypt and Bulgaria Restructure the…
Algeria Introduction to Ain Tsila Development Geoff Probert
Delivering a World Class Project in Algeria Introduction Geoff Probert, MD North Africa Project Status Geoff Stevenson, MD Joint Operating Company (JOC) Subsurface & Drilling Tony Cave, Subsurface Manager JOC Security…
Delivering a World Class Project in Algeria Introduction Some basic facts Achievements in 2014 Snapshot on schedule and costs Algerian operating environment The production prize Project Status Geoff Stevenson, MD JOC…
Algeria Basic Facts - Ain Tsila Development World class development with many regional analogues 1,700 km from port 550 km from regional support base in Hassi Messaoud 16
Algeria Basic Facts - Ain Tsila Development Summary Major gas/ condensate field in Southern Algeria (Illizi Basin) GIIP 10 tcf Will utilise proven processing technology (more than 10 similar plants in Algeria) Development consists…
Algeria Achievements Active Development 2013 2014 2015 2016 2018 Groupement Award FEED Award EPC Infrastructure Commissioning established Gas Sales Drilling and on- Liquids marketing First gas FEED Tender Agreement going…
Algeria Achievements 2014 Highlights and Lowlights Major progress in important areas + Second farm-out agreement (to Sonatrach) ratified by Government 18 June + Secondment Agreement - signed with Sonatrach 26 June + Gas Sales Agreement…
Algeria Achievements Gas Sales Agreement (GSA) Contract Materiality Dry gas accounts for 55% of all project revenues (the rest from liquids) Petroceltics total share of revenues from the dry gas under the GSA is - 2 billion over…
Algeria Snapshot - Project Schedule AIN TSILA Field Development - Phase 1 . December 2014 - rev. 2 December 2014 2014 2015 2016 2017 2018 Activity description Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 . . . 1 Early…
Algeria Snapshot Petroceltic Cumulative Cashflow (MM USD) 600 500 400 300 200 100 Carried - 2014 2015 2016 2017 2018 2019 2020 2021 Major Commitments Max Exposure Cash Payback Late 2015 Mid 2018 within 4 years…
Algeria Operating Environment - Characteristics Political Context: post-independence political forces remain in place, however, This is not the location for the next Arab Spring Population suffered greatly during 1990s civil war, and…
Algerian Operating Environment Decision Making Framework Sonatrach - not Petroceltic - hold the licence to exploit discovered hydrocarbons Petroceltic are the Contractor to Sonatrach to (partly) fund and deliver an agreed…
Algerian Operating Environment Decision Making Framework JOC prepares all work plans and budgets and is governed by a management council which takes unanimous decisions Sonatrach mandate equipment specification and control…
Algerian Operating Environment Development Planning Considerations Development plan must Be compliant with Algerian regulatory requirements Be delivered jointly with Sonatrach and compliant with local laws on tendering Recognise…
Algerian Operating Environment Overall Joint Venture Structure and Locations Management Council CONTRACTOR SONATRACH ISARNE JOC Petroceltic (op) JOA Enel Co-Administrators IT HR HSE Finance Contracts Project Technical and…
Significant Algeria Operating Experience Algeria Name Role Experience Petroceltic BHP ROD/Ohanet, Geoff Probert MD North Africa Petroceltic Toyoki Petroceltic Algeria Itochu, BHP, Nishibayashi Country Manager Petroceltic JOC Geoff…
The Prize Base and Upside Production Profile 800 Enhanced Plateau 700 mmscfd wet gas 700 600 Wet Gas Rate (MMcfpd) 500 Upside Production Profile Plateau rate 710mmscfd Nominal plant capacity 420 mmscfd 400 300 200…
Ain Tsila Gas Project focus on delivery in 2015 Deliver deep FEED by summer, and award EPC before year end Contract main rig and mobilise to site Procure first batch of drilling and well equipment Effectively manage remote…
Ain Tsila Development Project Status Geoff Stevenson
Ain Tsila development project status The development project is well under way We have a strong, experienced team who are motivated to succeed We are aligned with our Partners and Algerian stakeholders Our Joint Operating Company…
What is the Ain Tsila gas development project Ain Tsila is by industry standards a large scale project: It will process 420 MMcfpd wet gas, recovering condensate and liquefied petroleum gas (LPG) and delivering sales quality gas It…
How does that translate into numbers 15 million construction manhours, employing at peak over 3000 workers Over 200 pieces of major equipment, 25% of which are over 50 tonnes Heaviest piece is around 400 tonnes Largest piece 48 metres…
Similar plant to Ain Tsila proposed design 35
Large projects some simple rules for success The (PSC) Contract drives the project requirements History shows that fast track projects are invariably neither fast nor on track Fail to spend money up front and you will pay for it in…
What are the key challenges Project execution and maintaining cost and schedule Location and natural constraints Logistics and Customs Security of personnel Working within restrictive tendering and procurement procedures…
Geographical Area of Activity 1,700 km from port 550 km from regional support base in Hassi Messaoud 38
Design and Execution Constraints - Location and Infrastructure Distance from ports - 1,700 km involving crossing the Atlas mountains at 2,200 m Requires detailed planning as many bridges and roads are inadequate Logistics support…
Ain Tsila Export Routings Mederba TFT Station Base/Airstrip Repsol Base/Airstrip Condensate pipeline Gas and LPG To In Amenas pipelines (175 km) Ain Tsila Central Processing Facilty 40
Environment Ain Tsila is located in the Sahara desert, an ecologically fragile environment Operator has a duty to maintain it in its pristine condition As such we are obliged to perform Environmental Impact Assessments for all our…
Project execution - maintaining cost and schedule We have assembled an experienced team of engineers with in excess of 300 years of relevant Algerian experience of drilling, subsurface and EPC execution Engineers from Sonatrach to…
Project Status - Deep FEED Lump sum contract awarded in October 2014 to Chicago Bridge & Iron BV (CB&I) after restricted tender Completion scheduled for August 2015. Execution in Den Haag, London and New Delhi Phase 1 completed on…
Simplified Facilities Block Flow Scheme 30 MW Export Gas Compression Wellheads 83 km Export and manifolds Pipeline Gas Dehydration Expander and Mercury Plant and NGL Gathering Separation Sales Gas to Removal Pipelines Tie-In…
Project Status Main EPC Contract Scope covers gas processing facility, power generation, export pipelines, gas gathering system, and industrial and accommodation bases Prequalification is about to begin to shortlist potential…
Alternate development options which have been considered Could we purchase a standard gas plant and ship to Algeria Given location, infrastructure needs, requirement for high availability/ efficiency and contracted product…
Other Infrastructure (not in main EPC contract scope) As shown on the maps Ain Tsila is remote, has no nearby support infrastructure and transportation facilities. Therefore we need to build it This involves Over 150 km of roads…
Project Status - Drilling The main rig contractor selected and Partner approval process advanced Contract signature in February 2015 Rig mobilization in Q3 2015 A light rig for workover and completions under tender for a Q4 2015…
Strong alignment on earliest possible production from Ain Tsila Opportunities In seeking ideas of how to get to earliest reliable production consistent with stakeholder requirements, we must consider which activities lie on the…
Algeria Snapshot - Project Schedule AIN TSILA Field Development - Phase 1 . December 2014 - rev. 2 December 2014 2014 2015 2016 2017 2018 Activity description Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 . . . 1 Early…
Similar plant to Ain Tsila proposed design 51
Ain Tsila Subsurface and Drilling Tony Cave
Ain Tsila Gas and Reservoir Rocks Large field area (80km by 35km) and Top Ordovician Depth Structure Map GIIP 10 Tcf (m below ground level) Tight gas field but key bonus character in Algerian Ordovician fields High matrix…
Ain Tsila Multi Tcf Ordovician Development Analogues Tiguentourine (BP, Statoil) 3 trains 1000 MMscf/d wet gas plateau 30 wells Tin Fouye-Tabenkort (Total, Repsol) 2 trains 700 MMscf/d wet gas plateau 40 wells Ohanet (BHP…
Isarene Permit Area Exploration History 13 wells drilled on permit since 2005 34 MMscf/d AT-1 AT-8 39 MMscf/d AT-5 &5z 2006 exploration AT-9 68 MMscf/d drilling AT-2 2008 3D AT-4 seismic acquisition Isarene 3D AT-3 2009-10…
Project Status Preparing for Drilling 24 new wells and 6 re-completions prior to First Gas Drilling rig and long lead time equipment contracts awards imminent Rig operations to commence in 2015. Key preparation activities include:…
Subsurface Well Target Selection Strategy Objectives of the early wells are to provide: productive wells for hook-up to the gathering system and plant additional data to optimise the efficient location, drilling and completion of…
Subsurface Selection of First 12 New Well Targets Locations ranked on key geological and reservoir engineering criteria Structural Elevation and Gross Pay Thickness Top Ordovician Depth Structure /Field Gas water contact 1570m below…
Subsurface First Batch of 12 Target Locations Agreed In expected higher matrix With faults permeability area between AT-8, AT-1 & AT-9 Largely on pop-up structures for higher elevation and possible natural fracturing Approximate…
Subsurface Forward Plans Key focus on preparing for operations Regulatory approvals Data acquisition plans Frac optimisation Well testing plans Select further well locations 3D Seismic planning for 2016 60
An integrated approach for a future producing asset Subsurface development is not just about the drilling Close co-operation with the Deep FEED team Efficient construction planning Matching models to the real world Process plant…
Drilling An optimised delivery plan to meet the objectives and addresses the challenges and uncertainties Objective: to deliver at least 420 MMscf/d at First Gas 24 new vertical producers 6 recompletions All producers hydraulically…
Drilling an innovative approach Objective: Optimise drilling performance across initial 30 well programme What does that mean Shorten well delivery timelines Reduce drilling and completion costs Generate early data to optimise…
Opportunities for long term value creation Productivity / recovery upsides Hydraulic frac optimisation/well spacing Distribution of good reservoir facies (higher permeability) Sonatrach approach to development planning…
Opportunities for longer term value creation 800 700 600 Wet Gas Rate (MMcfpd) 500 400 300 200 Initial Production Profile Plateau rate 355mmscfd 100 2.2 Tcf Base (21% RF) 0 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16…
Indicative upside production profile 800 Enhanced Plateau 700 mmscfd wet gas 700 600 Wet Gas Rate (MMcfpd) 500 Upside Production Profile Plateau rate 710mmscfd Nominal plant capacity 420 mmscfd 400 300 200 Initial…
In summary Getting on with the business of development Deliver the base bank the plateau production An experienced and integrated team Experienced in working with this reservoir Experienced in working in the country Experienced…
Security Considerations Country and Project Level Planning Stuart Harrower
Petroceltic Security Philosophy Overall security philosophy to be adopted for all Petroceltics major developments provides guidance on security measures (physical, procedural and organisational) that should be incorporated during the…
Country Situation Crime and social unrest pose main risk to personnel Recent protests relating to shale gas Terrorist threat continues to pose risk to personnel and assets Al-Qaeda in the Islamic Maghreb (AQIM) Unity Movement for…
FEED Activities 1 Asset Characterisation 0 Pre-SVA Information review Information request Agree risk parameters 0 Asset register Criticality Analysis Mobilisation, Site survey Identify existing countermeasures 6 Estimate severity…
Security Measures Principle is deter / detect / delay / respond Sum of delay factors should exceed response time Layers of protection Security requirements developed with expert advice and integrated into FEED studies Physical…
Summary Security plans established Appropriate controls established in-country for current activities Close cooperation with partners, industry and authorities Security integrated into the design process Phased ramp up as…
Algeria Summary Geoff Probert
Summary of Algerian Fiscal Terms for Isarene PSC General The blocks awarded to Petroceltic in the 5th Algerian Licensing Round of 2004 Standard Algerian PSC under the 2001 licencing model with a bid k factor Participation (Investors)…
The Production Prize Base and Upside Production Profile 800 Enhanced Plateau 700 mmscfd wet gas 700 600 Wet Gas Rate (MMcfpd) 500 Upside Production Profile Plateau rate 710mmscfd Nominal plant capacity 420 mmscfd 400…
Ain Tsila Gas Project in 2015 Focused on project delivery On track for EPC award this year, along with main rig mobilisation Challenging project, but well managed by experienced, professional regional experts We understand how…
Current Access Road to Isarene Area Ain Tsila Gas Project in 2015 79
Egypt Production and Development John Naismith
Egypt Country Overview Petroceltic Egypt Long term presence in country since 1998 (and operatorship since 2006) Well established Joint Operating Company (Mansoura Petroleum Company) Strong national staff base, including senior…
Egyptian Production and Developments Onshore Nile Delta Petroceltic operated assets (100% WI) - 13 development leases, 12 fields currently on production - 3 material assets with long term W Khilala W & E NEAbu Zahra Abu Khadra…
Petroceltics Nile Delta Concessions - Operating Environment Agriculture based economy with high population density Good local infrastructure availability (roads, pipelines and power) Corporate Social Responsibility programs well…
3 Key Fields account for almost 75% of reserves West Khilala Field Remaining 2P % Reserves* West Dikirnis 16.2 34 West Khilala 13.4 28 South Damas 5.7 12 Others 12.2 26 Total 47.5 100 West Dikirnis *2013 year end reserves…
West Dikirnis Oil and Gas Field Oil rim/gas cap reservoir with remaining reserves of 16.2 MMboe (7.8 MMbbl and 49 Bcf) Highly volatile oil Variable permeability Strong and non-uniform aquifer Localised faulting (some act as baffles,…
West Khilala Gas Field Miocene channel sand reservoir with high to WKh-5 moderate permeability and a moderate aquifer Dry gas with remaining reserves 77 Bcf WKh-10 WKh-3st WKh-2 5 gas producers WKh-8 compression added 2013…
West Khilala Future Development Planned 2015 wells WK-10: infill well in good quality area of reservoir (currently drilling ahead) WKh-5 - Reserves 9.9 Bcf, production 6 MMscf/d WKh-10 WK-6st: near field undeveloped WKh-3st…
South Damas Gas Field South Damas is clean, high net-to-gross, Sidi Salim formation Field has outperformed with ultimate reserves estimate increasing from 30 to 57 Bcf South Damas-2 drilled 2013 and completed with gravel pack for…
Field Development 2015 Capital Budget Summary Infill Drilling Activity Four wells (2 West Khilala, 2 West Dikirnis) Incremental 2P reserves of 0.9 MMbbl and 14.3 Bcf Production contribution of 1,900 boepd (2015) Opex Reduction and…
Production Optimisation Opportunities West Dikirnis Gas Cap Blowdown Philosophy Maximising liquids recovery means cycling gas through the reservoir until most liquids have been recovered (liquids attract international prices)…
Production Optimisation Opportunities Fields are mostly channel sand reservoirs with relatively weak sands and active aquifers Wells generally have high flow potential and the 12 fields have been developed with few wells (23 current…
Egypt - Exploration Ciaran Nolan
Egypt Exploration Introduction Recent portfolio renewal Undertaken when competition was low Guided by expected gas price trends Four new licenses acquired in 2013/14 N Thekah and N Port Fouad (gas) High impact, material…
Egypt is becoming a net gas importer.. LNG production and consumption Domestic gas price is set at around 2.75/mcf Over 30% of gas production achieves enhanced prices to permit development (up to 5.80/mcf) Price incentives…
New Licences Concession terms and commitments El Qaa Plain (PCI 37.5%, Dana 37.5%, Beach 25%) PSC signed January 2014 Minimum 1st period commitment of 450km2 of 3D seismic & 1 well South Idku (PCI 75% and operator, Edison 25%) PSC…
Egypt Nile Delta Onshore Greater El Mansoura 3D seismic was key to identifying amplitude supported prospects 3D Mansoura 3D SE Mansoura Petroceltic 100% 3D key to defining structurally conformable DHIs 52 exploration wells…
Egypt Nile Delta Onshore South Idku Replicating the success story in Greater El Mansoura Petroceltic 75%(op), Edison 25% 3D tendering underway, drilling in 2016/2017 Low cost, attribute driven exploration via 3D seismic looking…
South Idku - Messinian Play SE NW Bright amplitude Numerous Messinian Abu Madi Messinian anomaly Pliocene Shales amplitude anomalies identified on Lead 3 sparse 2D seismic Amplitude supported play with potential for significant…
Egypt Offshore Nile Delta - North Thekah & North Port Fouad High Impact Blocks on trend with Leviathan and Tamar Edison 50% (op), Petroceltic 75% Levantine Basin 3D tendering underway (blue outlines) 40 TCF discovered in Israel and…
Eastern Mediterranean Bid Rounds Signature Bonuses Cyprus 2012 and EGAS 2013 and 2014 ENI Shorouk 5mm signature bonus ENI & KOGAS TOTAL 210mm 34m signature bonus ENI North Leil signature N.Port Fouad - PCI bonus 5.1m…
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