Caspian Sunrise Plc · LSE:CASP
Caspian Sunrise — FY2022 Earnings Presentation
16 slides from Caspian Sunrise's earnings presentation, July 2023
Slide 1: Results presentation for the year ended 31 December 2022
Caspian Sunrise PLC Results presentation for the year ended 31 December 2022 1
Slide 2: Important Information
Important Information THIS PRESENTATION IS NOT, AND DOES NOT CONSTITUTE, AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, COMPANY SECURITIES BY ANY PERSON. NO SECURITIES OF THE COMPANY HAVE BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS,
Slide 3: Contents
Contents The results • Profit & Loss • Balance sheet • Cashflows • Why the delay • Audit opinion Updates • BNG • Caspian Explorer • Block 8 • Dividends 3
Slide 4: Notable events in 2022
Notable events in 2022 Operational • Produced 792,284 barrels (48% more than in 2021) • Well A8 tested and abandoned • Well 802 flowed at 700-900 before completion Non-operational • Conversion of $6.2 million debt • Court approved capital reorganisation • First dividends • Option to acquire Block 8
Slide 5: Impact of sanctions
Impact of sanctions Oil prices • Despite no EU / UK sanctions and new oil designation oil shipped via Russia still = Urals oil • Urals oil suffered $30-35 per barrel discounts • Taxes still levied as if no Urals discount • Uneconomic to sell via Russia –since Q2 2022 all production sold on the domes
Slide 6: BNG Operations 2022 / to date in 2023
BNG Operations 2022 / to date in 2023 Deep wells Shallow wells • A5 No progress in 2022 / 2023 MJF producing wells: • A6 No progress in 2022 / 2023 • 143, 151, 153, 154 • A7 Drilled to 2,000 meters South Yelemes producing wells: • A8 Deepened / tested / abandoned • 54, 805, 806, 807 • 801 No progres
Slide 7: Results – profit & loss account
Units 2022 2021 Movement Revenue Oil Sales / other $’m 39.2 25.0 +56.8% CTS $’m 3.7 0 N/A Total Revenue $’m 42.9 25.0 71.6% Cost of Sales $’m (8.8) (7.9) +11.4% Results – profit Gross profit $’m 32.3 19.1 +69.1% & loss account Gross profit % 78.5 70.7 +7.8% Pre-tax profit / (loss) $’m 11.7 (4.3) Tax
Slide 8: Results – first half vs second half
Results – first half vs second half First half 1st 2nd • Oil produced is sold on both 2022 Units half half Total international and domestic markets • Higher transportation and tax costs & Revenue $’m 25.6 15.5 41.1 longer payment times Cost of Sales $’m (6.7) (2.1) (8.8) Second half • Oil produced s
Slide 9: 2022 Results – Balance sheet
Units 2022 2021 Movement Unproven oil & gas assets (Deep $’m 43.8 46.1 -2.3 structures) Plant property & equipment $’m 60.7 57.1 +3.6 (Shallow structures) Other assets $’m 3.3 5.0 -1.7 2022 Results – Total fixed assets $’m 107.8 108.2 -0.4 Balance sheet Current Assets Current Liabilities $’m $’m 9.4
Slide 10: 2022 Results – Cashflows
Units 2022 2021 Movement Receipts from customers $’m 45.9 24.3 +21.6 Payments to suppliers $’m (26.5) (15.5) -11.0 Payments to staff $’m (1.0) (1.1) +0.1 2022 Results – Purchase of equipment Additions to unproven oil & gas assets $’m $’m (0.5) (11.5) (7.1) (0.7) +6.6 (10.8) Cashflows (deep) BNG Loan
Slide 11: Why the delay
Why the delay • New auditing standards – audits are more detailed, cost more and take longer • Audit firms – Grant Thornton in Kazakhstan, BDO for the Group, Baker Tilly in the UAE • It took longer than expected in Kazakhstan • Audit issues at Group level • CTS LLP • BNG Historic costs – provision o
Slide 12: Audit opinion
Audit opinion CTS • In 2020, 2021 & 2022 CTS worked on both Group assets (BNG) and non-Group assets (Block 8) • CTS was paid for its work at Block 8 but the receipts should have been shown as revenue rather than an addition to unproven oil & gas assets and the expenditure should have been debited to
Slide 13: Update: BNG
Update: BNG Airshagyl • A5 Q3 2023 - side-track from a depth of 4,500 meters • A6 Q3 2023 – well workover • A7 depends on outcome at A5 Yelemes: Deep structure • Existing Well 802 continuing to work to clear the well • New Well 803 spud date Q4 2023 MJF: Shallow structure • Existing Well 141 redrill
Slide 14: Update: Block 8
Update: Block 8 Background • Owned by the Oraziman family, Previously owned by LG International (Korean) • Contract Area 160 km from BNG (significant operational synergies) • Total area 2,823 sq. km with deep & shallow structures • Seismic data over 456 sq. km acquired by LGI – the Korean multinatio
Slide 15: Update: Caspian Explorer
Update: Caspian Explorer First commercial charter • For a consortium led by ENI • Drilling 2,500 meters in Q3 2024 • Expect net profit $15 million • Potential second well on similar terms if successful 50% conditionally sold for $22.5 million • Purchase price $3.7 million • 50% sold for $22.5 millio
Slide 16: Update: Dividends
Update: Dividends Cashflow constraints • Production levels currently below expectations (2,000 bopd vs 4,000 bopd) • Sanctions costing $18 million each year • Waiting on receipt of $22.5 million Caspian Explorer proceeds • Until we get either • Increased production from 141 / 142 / 802 • Proceeds fo