Challenger Gold Limited · ASX:CEL
Challenger Gold — Challenger Energy — Investec Oil & Gas Conference 2015
23 slides from Challenger Gold's conference presentation, Oct 28, 2015
Slide 1: Shale Gas: new energy imperative for South Africa
For personal use only Pierre Joubert October 2015
Slide 2: Disclaimer
DISCLAIMER For personal use only This presentation contains “forward-looking statements”. Such forward-looking statements include, without limitation: estimates of future earnings, the sensitivity of earnings to oil & gas prices and foreign exchange rate movements; estimates of future oil & gas prod
Slide 3: Introduction
INTRODUCTION For personal use only Unique opportunity to invest in emerging world-class shale gas province in South Africa • proven gas from 1968 Soekor drilling Renewed interest in Karoo gas potential • recoverable resource estimate: 390 trillion cubic feet (tcf) (EIA, June 2013) “We will soon
Slide 4: Overview
OVERVIEW For personal use only 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 for shale gas exploration right Application made over ~3,50
Slide 5: Board and Management
BOARD AND MANAGEMENT 200 years’ collective experience For personal use only Highly experienced technical team CHALLENGER ENERGY BUNDU Michael Fry, Chairman Robert Willes, Director Industry experience: seven years E&P; 30 years capital markets Industry experience: 27 years Chair Red Fork Energy,
Slide 6: Bundu Permit Application: Cranemere
BUNDU PERMIT APPLICATION: CRANEMERE For personal use only Late 1960s: three wells drilled; uniform shale sections Application area surrounds discovery well (CR 1/68) • strong gas ‘kick’ and flow to surface, extensive core collected Thick shales • upper, middle Ecca shales 1 500-1 800m • Basal
Slide 7: Where We Are Now
WHERE WE ARE NOW For personal use only Multi-year process Exploration right – three years, extendable to nine years We are here Encouraging Encouraging Encouraging Approval Soekor Exploration Proto multi sought for wells and right Stage 1 Exploration Stage 2 Appraisal Stage 3 commercial borehole
Slide 8: Exploration Work Programme
EXPLORATION WORK PROGRAMME For personal use only PHASE 1 DESKTOP STUDIES AND DATA GATHERING Six to nine months Water sampling (results shared with landowners) Geological data gathering Data from Soekor borehole (eg core, borehole logs) PHASE 2 DEVELOP GEOLOGICAL MODEL Six to nine months Unde
Slide 9: Seismic
SEISMIC For personal use only Soekor seismic lines • re-processing original data using modern software can yield additional information • if existing data insufficient, Bundu may seek to gather new seismic data • not anticipated at this stage Shale Gas: new energy imperative for South Africa | Oct
Slide 10: About the Cranemere Well
ABOUT THE CRANEMERE WELL For personal use only Drilled by Soekor in 1968 • to 15 282ft (4 658m) • gas flowed to surface from circa 8 150ft (2 484m) for ~24 hours • core, other samples collected Shale Gas: new energy imperative for South Africa | October 2015 10
Slide 11: Rising Electricity Costs in South Africa
RISING ELECTRICITY COSTS IN SOUTH AFRICA For personal use only International Electricity and Natural Gas Report and Price Survey in 2013/2014: • South Africa ranked 15 out of 18 countries for highest average electricity prices • had the biggest rise in tariffs with 7.5%, to rate of 8.97 US cents (
Slide 12: September 2015: McKinsey Report – South Africa's 'Big Five'
SEPTEMBER 2015: MCKINSEY REPORT – SOUTH AFRICA’S ‘BIG FIVE’ For personal use only Natural gas one of five priorities for SA economic growth • growth constrained by electricity shortage BIG FIVE: • continued shortfall predicted to 2025-2035, advanced manufacturing in spite of increased capacity
Slide 13: SA: Emerging Energy Investment
SA: EMERGING ENERGY INVESTMENT For personal use only In 2014, Bloomberg New Energy Finance: Joemat-Pettersson re-affirms plan to expand role of gas • global interest in investing in renewable energy increased • South Africa ranked ninth, in top 10 clean energy investment countries • fast, importan
Slide 14: Countdown to Licence Award
COUNTDOWN TO LICENCE AWARD 2009 Oct 2009 Dec 2010 For personal use only Shell technical Falcon technical Shell application Apr 2011 Sep 2012 Oct 2013 co-operation co-operation for exploration Moratorium Moratorium Technical regulations permit granted permit granted right submitted introduced lifted
Slide 15: Risks and Mitigation
RISKS AND MITIGATION For personal use only KEY RISKS MITIGATION Geological Encouraging gas flow from earlier drilling Next stage exploration work Strong interest from oil majors Political Energy crisis in South Africa Emerging policy and licensing regime Exploration licence expected immi
Slide 16: Energy Infrastructure and Poseidon Substation
ENERGY INFRASTRUCTURE AND POSEIDON SUBSTATION For personal use only Shale Gas: new energy imperative for South africa | July 2015 16
Slide 17: Financial Overview
FINANCIAL OVERVIEW For personal use only Share price performance (ASX: CEL) Capital structure Fully paid ordinary shares 352 025 933 Listed options 65 896 502 Unlisted options and rights1 26 000 000 Share price2 A$0.028 Market capitalisation2 A$9.85m Cash3 A$0.715m Shareholders 1 127 Top 20 40.3% Si
Slide 18: The Opportunity
single digits) that would be applied to very large potential undiscovered resources would render results almost meaningless. Going up the valuation S-curve A more useful approach is to look at top-down metrics such as $/acre for unconventional plays. The THE OPPORTUNITY S-curve below is a stylised i
Slide 19: Appendices
ro '-o" personel Use On P| > : a APPENDICES www.challengerenergy.com.au
Slide 20: Commercialisation
COMMERCIALISATION For personal use only 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) Existing synthetic fuels industry: • coa
Slide 21: Bundu's Application Area
BUNDU’S APPLICATION AREA For personal use only Insert map of area showing Chris Hani Municipality marked in orange, Modi had to hide some stuff on the map so it’s a new version – he may or may not have been asked to do this map – its at the left and bottom, and the logo on the side panel Shale Gas:
Slide 22: Growing International Interest
GROWING INTERNATIONAL INTEREST For personal use only LEGEND Shale Gas: new energy imperative for South Africa | October 2015 22
Slide 23: Contacts
For personal use only CONTACTS Robert Willes, Challenger Energy Limited Mobile: +61 410 479 032 Email: robert.willes@challengerenergy.com.au Pierre Joubert, Challenger Energy Limited Mobile: +27 83 578 8054 61 Email: pierre.joubert@challengerenergy.com.au James Duncan, Russell and Associates Mob: +2
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