Enquest Plc · LSE:ENQ

Enquest — H1 2013 Earnings Presentation

49 slides from Enquest's earnings presentation, Aug 13, 2013

  1. Slide 1: EnQuest 2013 Half Year Results

    EnQuest 2013 Half Year Results Substantial production growth in 2014 Kraken on track, gross reserves 137 MMboe, second £800m allowance H1 2013 production up 6%, strong cash flow generation continues Alma/Galia first oil in Q1 2014

  2. Slide 2: Agenda

    Agenda  Overview. Amjad Bseisu, CEO Business development & major projects  Financials Jonathan Swinney, CFO  Operations Nigel Hares, Co-founder & Strategy Adviser  Summary Amjad Bseisu

  3. Slide 3: Repeatable strategy delivering success

    Repeatable strategy delivering success  H1 2013 production up 6%, good operations progress, good development drilling results and good reservoir performance  Strong cash flow of $235m  Thistle well better than expected, stronger Thistle H2  First oil from Alma/Galia currently expected in Q1 2014

  4. Slide 4: Cash flow

    Cash flow Six months to 30 June 2013 US$m Strong financial position, $900m credit facility and £145m retail bond 235 (415) 90 (102) (12) Financing & other Cash & equivalents less Cash & equivalents less Cash flow Capex (excludes borrowings) borrowings at borrowings at from operations 30 June 2013 1

  5. Slide 5: Growth through the realisation of untapped potential

    Growth through the realisation of untapped potential Technical leadership in integrated development Creating development value via: Heather/Broom  Upgrading existing facilities Thistle/Deveron  Newer technology, new seismic Field life extensions  Simplifying processes Maturing fields  Infill dri

  6. Slide 6: H1 2013 Results: Building blocks for sustainable future growth in place

    H1 2013 Results Building blocks for sustainable future growth in place  Production of 21,455 Boepd in H1 2013 Production  6 wells successfully drilled, $141m capital investment in producing fields & Reserves  Successful development drilling at Thistle and the Dons  Business development & new pro

  7. Slide 7: Business development & major projects

    Business development & major projects

  8. Slide 8: Further expanding our UK asset base in 2013

    Further expanding our UK asset base in 2013 With a rich discovery ‘hopper’ Kraken (60%) Cairngorm Appraisal well 2013 Farmed out 55% on promoted basis Cairngorm (45% ) Appraisal well 2013 Alba Acquired 8% Avalon Crathes / Scolty (40%) Farmed in to 50% FDP planned for 2014 7

  9. Slide 9: Alma/Galia

    Alma/Galia First oil in Q1 2014, net initial production of c.13,000 Boepd H1 2013  Announced increase in scope and specification  Extending vessel and field life, optimising operating costs  Enabling a second phase of development  Gross reserves increased from 29 MMboe to 34 Mmboe H2 2013  New

  10. Slide 10: Kraken on track for sanction in H2 2013

    Kraken on track for sanction in H2 2013 Kraken North confirmed  H1 2013 appraisal well confirmed Kraken North field  Second £800m heavy oil allowance  FDP submitted in Q2 2012 as planned  Contains plan for both fields  Gross reserves at 137 MMboe, with Kraken North  Expecting to book at least

  11. Slide 11: Entry into North Africa - Tunisia

    Entry into North Africa - Tunisia 70% operating interest in the producing Didon Oil Field and the Zarat Permit  Good fit with strategy to create value from maturing assets and new developments  First international production acquisition, providing an operating platform in Tunisia  With over 100 M

  12. Slide 12: Three years of strong cash flow generation

    Three years of strong cash flow generation 300% reserve replacement ratio Reserves 2010 - 2012 Cash flow 2010 - 2012 72.0 128.5 $1.5bn MMboe MMboe $(0.1)bn 80.5 (24.0) MMboe MMboe Additions to Tax, $90m Production reserves $8m Finance, 2010 to 2012 2010 to 2012 Other $(1.3)bn Dec 09 Cash flow Capex

  13. Slide 13: Financials

    Financials @nQuest

  14. Slide 14: Results summary

    Results summary Half year to 30 June Unless otherwise stated all figures are before exceptional items and depletion of fair value uplift and are in US dollars US dollars 2013 2012 Change % Export production (Boepd) 21,455 20,253 5.9 Average realised price per barrel ($) 108.7 111.6 (2.6) Revenue ($

  15. Slide 15: Summary income statement

    Summary income statement Half year to 30 June 2013 2013 2013 2012 US dollars Business Exceptional Reported Reported performance items $m’s $m’s $m’s $m’s Revenue 455.9 - 455.9 440.1 Cost of sales (280.9) (6.4) (287.2) (240.1) Gross profit 175.0 (6.4) 168.6 200.0 Exploration and evaluation expenses (

  16. Slide 16: Group taxation position

    Group taxation position No material cash tax liability on operational activities expected before 2018 ETR % $m’s UK Tax Allowances $m’s PBT 141 Recognised at 31 December 604 2012 UK CT Rate 62.0 87 1H 2013 net additions 174 PRT 4.8 7 RFES 40 RFES (17.8) (25) Leasing arrangement 32 Leasing arrangemen

  17. Slide 17: Oil & gas capital additions $412m

    Oil & gas capital additions $412m Six months to 30 June 2013 US$m 220 63 57 56 16 Alma/Galia Thistle/Deveron Kraken Dons/Conrie Heather/Broom 16

  18. Slide 18: Cash flow

    Cash flow Six months to 30 June 2013 US$m Strong financial position, $900m credit facility and £145m retail bond 235 (415) 90 (102) (12) Financing & other Cash & equivalents less Cash & equivalents less Cash flow Capex (excludes borrowings) borrowings at borrowings at from operations 30 June 2013 1

  19. Slide 19: Finance outlook

    Finance outlook Full Year 2013  Current capex expectations of approximately $750m, with additional $300m post Kraken sanction  Production and transportation costs expected to be in the range $310m to $320m  Depletion anticipated to be similar to the first half on a per bbl basis  G&A approximate

  20. Slide 20: Operations

    Operations Continuing investment: - Strong reservoir performance - Improving uptimes - Improving production

  21. Slide 21: 2013 Production results by hub

    2013 Production results by hub Up 6% H1 2013 Vs H1 2012 Net production (Boepd) 2012 2013 21,455 20,253 11,349 8,895 7,655 5,046 3,703 4,246 - 814 Thistle/Deveron The Dons Heather/Broom Alba Total 20

  22. Slide 22: EnQuest 2013 production

    EnQuest 2013 production Good drilling results, strong reservoir performance, improving uptimes All figures EnQuest net production (bopd) aggregated and expressed as a weekly average

  23. Slide 23: Thistle / Deveron

    Thistle / Deveron New producer better than expected, D turbine fully commissioned in H2 2013 Area6 – I1 2013 A59 w/o  Drilled A60(WFB-P1), 80ft high to prognosis, started A59 production this August  Workover of A53/60 injector well completed and A56 A22 w/o increased injection rate A56 w/o NFB – I

  24. Slide 24: Thistle Late Life Extension projects

    Thistle Late Life Extension projects Power & Electricity Upgrade Project New D turbine commissioned Jacket Integrity Project Modifications required to ensure jacket protection for another 15 years Topsides Structural Integrity Projects Required to upgrade access ways, accommodation and secondary ste

  25. Slide 25: West Dons and Don Southwest

    West Dons and Don Southwest Successful well at W6, S12Z and OB 2013  28% production increase  West Don • W6 injector tied in and brought online in W1 Q1, providing strong support to W4 Conrie – S7 producer W2  Don South West W5 W3Z • Successful producer/injector pair drilled at S6 S12Z and OB OB

  26. Slide 26: Heather/Broom

    Heather/Broom 2013 • 15% production increase • Good operational uptimes 2/0 Else 5- • Broom continues to outperform production 15 H42 H33 expectations Erica 2/05-21 H61Z 2/0 2/0 • Improvement in Heather operating uptimes H46 (BW3) 5-5 5-6 Rosea 2/05-23 2/0 after extensive work on the gas lift H41 5-

  27. Slide 27: Heather field life extension

    Heather field life extension Drilling rig upgrade 26

  28. Slide 28: 2013 EnQuest outline programme

    2013 EnQuest outline programme 15 wells being delivered Q1 Q2 Q3 Q4 Thistle Workover Drilling (1 well), workover Heather Producer workover Dons Drilling (3 wells) Alba Drilling (4 wells) Alma/Galia Drilling 3 production well completions Kraken FDP submission Development sanction Exploration/ Kraken

  29. Slide 29: Summary

    Summary @nQuest

  30. Slide 30: Outlook: Demonstrating the sustainability of EnQuest's growth

    Outlook Demonstrating the sustainability of EnQuest’s growth  2013 guidance in the lower half of the range of between 22,000 Boepd to 27,000 Boepd  Material increase to come in 2014 Production  15 wells being delivered in 2013  including seven production wells on existing fields and three on Alm

  31. Slide 31: Delivering sustainable growth

    Delivering sustainable growth Successfully implementing our strategy Exploiting our existing reserves Dons, Thistle/Deveron, Heather/Broom, Alba Making selective acquisitions Commercialising & developing discoveries Didon/Zarat Alma/Galia Converting contingent resources into reserves 30

  32. Slide 32: Q&A

    Q&A Thistle/Deveron Dons Northern Producer Heather/Broom Alma/Galia EnQuest Producer 31

  33. Slide 33: EnQuest's North Sea assets

    EnQuest’s North Sea assets At 30 June 2013, including Avalon farm in 32

  34. Slide 34: Balance Sheet

    Balance Sheet 30 June 2013 31 December 2012 US dollars $000’s $000’s ASSETS Property, plant and equipment 2,270.1 1,816.6 Non-current assets Goodwill 107.8 107.8 Intangible oil and gas assets 110.0 97.5 Investments 2.0 2.3 Deferred tax asset 3.9 23.1 Other financial assets 16.2 19.4 2,509.9 2,066.8

  35. Slide 35: Track Record of Sustainable Delivery and Growth

    Track Record of Sustainable Delivery and Growth Reserve replacement ratio of 300% over three years MMboe Full year 2010 Full year 2011 Full year 2012 21.5 128.51 115.2 35.1 88.5 (8.2) 15.4 80.5 (8.4) (7.4) Net 2P Production Reserve Net 2P Production Reserve Net 2P Production Reserve Net 2P reserves

  36. Slide 36: Largest UK Independent Producer in the UK North Sea

    Largest UK Independent Producer in the UK North Sea Government data (DECC) for UK North sea independent producers Total Production for the year ending April 2013 1,000,000 900,000 Total Production in Mass units (tonnes) 800,000 700,000 600,000 500,000 400,000 300,000 200,000 100,000 - EnQuest Ithaca

  37. Slide 37: Malaysia: Larger map

    Malaysia: Larger map ©nQuest | < “A ‘cannes 66 { sw | Ng ia}. [/ coums SE 36

  38. Slide 38: Alba

    Alba Field Summary A37W 26 + ALBA FIELD MAP • A48W A11Y A33Y A44Y 14 5 Located in Block 16/26. Operated by A4X A4Z A13 A13Y A13Z A29Y Top Main Field Reservoir Map A2Z (SI04 Interpretation) 15 11 A59Y A36Y A55Z A62Y A14 A34Y Chevron A42 A3Z A7Z A46W 6 A56Y A58Y (Updated July 2010) • A9X Heavy Oil (20

  39. Slide 39: Thistle, Conrie and The Dons Infrastructure

    Thistle, Conrie and The Dons Infrastructure 38

  40. Slide 40: Heather / Broom Infrastructure

    Heather / Broom Infrastructure 39

  41. Slide 41: Kraken Infrastructure

    Kraken Infrastructure ©nQuest COREL 12" PRODUCTION FLOWLINE HSP POWER FLUID + ALL FLOWLINES TRENCHED AND ROCK DUMPED + ALL STRUCTURES FISHING FRIENDLY DESIGN cercecere| pc4 PRODUCTION/INJECTION COMBINED MANIFOLD) _— PIPELINE END TERMINATION 12” WATER INJECTION — b ‘STRUCTURES NINE _= SP POWER FLUID

  42. Slide 42: Cairngorm Well Block 16/3d

    Cairngorm Well Block 16/3d Flank Well 1 2 16/3d 16/2b NW SE 41

  43. Slide 43: Alma/Galia

    Alma/Galia ‘c} Quest LECT CONTROL UMBILICAL (8° ID WATER INJECTION FLEXIBLE FLOWLINE.

  44. Slide 44: Alma: Subsurface

    Alma Subsurface -10 -105 52 00 5 -1047 -104 5 -1 50 04 25 -1 -10400 -100375 -1 3 -10032550 300 -10 -10-1 -10 2202275 5 50 500205 17 -102 5 -9878-59-999 00 -101 50 -9 5 0 12 0 -1 00 5 80 -10 1 -982 -9 484000 484400 484800 485200 485600 486000 486400 486800 505 487200 -977 -97 -9725 -9700 575487600 48

  45. Slide 45: Alma: Seismic

    Alma Seismic SW 30/24-2 30/24-1 3 0/24-5 30/24-3 30/25a-2 NE 44

  46. Slide 46: Alma: Extensive In-House Subsurface Work

    Alma Extensive In-House Subsurface Work Reinterpretation of  Seismic  Petrophysics  Layering Re Build of models  Static  Simulation Integrated Team  ESP design  Well Trajectories 45

  47. Slide 47: Alma Development

    0 0 0 -9 -985 45 -94 -9 -9300 -9 6229200 0 00 -925 -98 0 Alma Development -980 0 -9 -9 75 70 0 Wells Trajectory Schematic -8 50 6228800 60 7 -8 0 30/25a-02 -94 50 00 -940 0 -94 -9 65 0 0 -8 60 65 -9 50 0 00 0 -955 -94 -9 5 6228400 -9350 0 90 Development wells optimised to 0 -9 -8 -895 3 00 0 60 00 -

  48. Slide 48: Galia: STOIIP & Reserves

    Galia STOIIP & Reserves Only 50% Water Cut Galia Main 2 Well Sampled 30/24-15 Galia 1 Bubble Point Pressure 1900 psia Main 1 Differential Gas-Oil Ratio 631 scf/stb outline 9 29 Galia East 3 30Z outline Formation Volume Factor 1.33 b/stb 0 04 Oil Viscosity 0.49 Degrees 30Y 15 API Gravity 38 Degrees F

  49. Slide 49: Forward Looking Statements

    Forward Looking Statements This presentation may contain certain forward looking statements with respect to EnQuest’s expectation and plans, strategy, management’s objectives, future performance, production, costs, revenues and other trend information. These statements and forecasts involve risk and

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