North Energy Asa · OSL:NORTH

North Energy Asa — Q1 2014 Earnings Presentation

32 slides from North Energy Asa's earnings presentation, May 14, 2014

  1. Slide 1: North Energy Q1 2014

    North Energy Q1 2014 14 May 2014

  2. Slide 2: Important information

    Important information This presentation and its appendices (together the “Presentation”) have been prepared and delivered by North Energy ASA (“North Energy” or the “Company”). The Presentation is prepared for information purposes only, and is not to be used for any other purpose. The Presentation d

  3. Slide 3: Agenda

    Agenda  Highlights Q1  Financial update  Exploration update  Outlook North Energy ASA · post@northenergy.no · (+47) 78 60 79 50 · www.northenergy.no

  4. Slide 4: Highlights Q1 and later events

    Highlights Q1 and later events  Capital raise of NOK 360 million approved in EGM  New share issue of NOK 285 million in a private placement and convertible drawing facility of NOK 75 million  Enables financing of new drilling campaign of 8 - 12 wells selected by new technology  Acquisition of EM

  5. Slide 5: Agenda

    Agenda  Highlights Q1  Financial update  Exploration update  Outlook North Energy ASA · post@northenergy.no · (+47) 78 60 79 50 · www.northenergy.no

  6. Slide 6: NOK 285 million raised in a private placement

    NOK 285 million raised in a private placement  Directed towards large North Energy shareholders, close affiliates and other large investors  Approved in EGM 13 February  Share issue price of NOK 4 per share  Premium of 7% compared to last trade prior to announcement  71.25 million new shares is

  7. Slide 7: Acquisition of EMGS Barents Sea library of EM data

    Acquisition of EMGS Barents Sea library of EM data  Convertible loan of NOK 75 million  Six months duration  Convertible between four to six months post issue  Conversion price of NOK 4.15 per share  Interest of 6.0 % p.a.  Other commitments  EMGS to provide North with services of NOK 15 mill

  8. Slide 8: Share issue of 285 MNOK and convertible loan of 75 MNOK

    Share issue of 285 MNOK and convertible loan of 75 MNOK New financial / industrial EMGS friends Current shareholders shareholders Contribution Contribution Contribution Contribution  EM data/competence  Cash – NOK 4 /  Cash – NOK 4 /  Cash – NOK 4 /  Cash – NOK 4 / share share share share  NOK

  9. Slide 9: Strong shareholder base post transaction

    Strong shareholder base post transaction Top 10 shareholders  Strong support from existing Investor shareholders 1 THS Partners 2 Elliott International  New technology based 3 Rex Technology Mgmt New shareholders 4 Odin New 5 Isfjorden  Large investment funds 6 Rex International Holding New 7 EMG

  10. Slide 10: Profit & Loss Q1 2014

    Profit & Loss Q1 2014 NOK Million Q1 2014 Q4 2013 Q1 2013 2013 Profit 0,7 0,5 - 98,6 Farm-out PL498 Exploration expenses (98,9) (468,5) (27,7) (696,6) EM data & other exploration expences Payroll (9,8) (10,8) (16,2) (51,0) Same level - higher charge out Other operating expenses (10,2) (8,0) (8,7) (3

  11. Slide 11: Balance sheet 31 March 2014

    Balance sheet 31 March 2014 NOK Million 31.03.2014 31.12.2013 31.12.2012 Assets Fixed Assets 152,1 145,7 304,2 Deferred tax asset and cap. drilling cost Long term receivables 94,4 - - Tax receivable refund - Dec 2015 Short term receivables 403,5 368,5 540,6 Tax receivable refund - Dec 2014 Cash 13,8

  12. Slide 12: Fully funded drilling campaign

    Fully funded drilling campaign Net cash* position Q1 2014  Q1 2014 net cash position of NOK 390 million  Net cash position of NOK 465 million 56 prior to EMGS convertion  Unused convertible 285 loan facility of NOK 277 million  Unused exploration loan facility NOK 950 million * Excluding convert

  13. Slide 13: Agenda

    Agenda  Highlights Q1  Financial update  Exploration update  Outlook North Energy ASA · post@northenergy.no · (+47) 78 60 79 50 · www.northenergy.no

  14. Slide 14: Maximize use of G&G data and techniques pre-drill to minimize risk and exploration costs

    Maximize use of G&G data and techniques pre- drill to minimize risk and exploration costs  Focus on commercial oil  Close to infrastructure  Follow the migration routes and known oil prone trends  Focus on areas where new technology tools are most effective  Shallow targets holds more informati

  15. Slide 15: APA 2013

    APA 2013 Barents Sea North Sea 2  North Energy applied in six new areas 6 5 1  North Energy awarded six APA 2013 licences: 1. PL 503C North Sea 2. PL 509CS North Sea Norwegian Sea 3. PL 590B Norw. Sea 4. PL 762 Norw. Sea 4 Barents Sea 3 5. PL 769 Barents Sea 6. PL 770 Barents Sea Norwegian Sea * T

  16. Slide 16: Portfolio makeover based on new exploration strategy

    Portfolio makeover based on new exploration strategy  More geophysical studies (DHI’s) before acquiring licences  New EM acquisition with new source if not too deep target  Always low frequency analysis (RVD), preferably on new broadband seismic data, and internal QA of possible sources of error

  17. Slide 17: 32 of 36 months spent on getting out of dry wells and building a new drilling portfolio

    32 of 36 months spent on getting out of dry wells and building a new drilling portfolio 14.05.14 47 42 Old licences 37 No. of wells New licences 32 and licenses 27 Wells (acc.) 22 17 12 7 2 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 201

  18. Slide 18: Possible drilling program

    Possible drilling program 2014 2015 2016 Prospect WI Operator Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Farm-in PL713 20 % Statoil PL510 20 % Maersk Firm wells PL 591 15 % Tullow Farm-in PL590 30 % North Energy PL 616 15 % Edison PL509S 35 % North Energy PL708 10 % Lundin Farm-in Farm-in PL 722 20 % GDF Nort

  19. Slide 19: PL 713 Pingvin - a prospect with DHI's on a slope

    PL 713 Pingvin - a prospect with DHI’s on a slope  Located within the Bjørnøya Basin  Young and unknown reservoir  Strong amplitude anomaly defines stratigraphically trapped sand body  All geophysical methods show hydrocarbons  EM, RVD, AVO, Seismic amplitude and flatspots, all within the same

  20. Slide 20: A striking resemblance with questionmarks. High probability for oil and/or gas

    A striking resemblance with questionmarks. High probability for oil and/or gas Seismis surface (RVD) Rex EM modelling Sample, taken from 8-9hz Modelling by Det Norske North Energy ASA · post@northenergy.no · (+47) 78 60 79 50 · www.northenergy.no

  21. Slide 21: PL 713 Pingvin – Well likely in 2014

    PL 713 Pingvin – Well likely in 2014 PL 713 in the Barents Sea Awarded 22. round Main prospect Halddi/Pingvin Operator Statoil (40%) Hydrocarbons Oil and or gas Partners North Energy (20%) Expected drilling Q4 2014 RN Nordic Oil (20%) Reservoir Paleocene Edison (20%) Prob. of oil 47% Gross mean unri

  22. Slide 22: PL 510 - from the "old portfolio" with gas

    PL 510 - from the “old portfolio” with gas PL 510 in the Norwegian Sea Awarded APA 2008 Main prospect Tvillingen South Operator Maersk (50%) Hydrocarbons Gas Condensate Partners North Energy (20%) Expected drilling Q1 2015 Edison (30%) Reservoir Lower to Middle Jurassic Prob. of success 40% Reservoi

  23. Slide 23: PL 591 - Well from recent Business Development

    PL 591 - Well from recent Business Development PL 591 in the Norwegian Sea Awarded APA 2011 Main prospect Zumba Operator Tullow (90%) Hydrocarbons Oil Partners North Energy (20%) Expected drilling Q1 2015 Reservoir Rogn Prob. of success 43% Gross mean unrisked 184 mmboe Net mean risked 16 mmboe Prob

  24. Slide 24: PL 708 - RVD response and seismic data

    PL 708 - RVD response and seismic data TIME MAP MSEC North Energy ASA, Markveien 38b, Postboks 1243,9504 Alta, Norway. Phone: (+47) 78 60 79 50 · Fax: (+47) 78 60 83 50 · E-Mail: post@northenergy.no · www.northenergy.no

  25. Slide 25: PL 708 - RVD response and porosity prediction from seismic amplitude

    PL 708 - RVD response and porosity prediction from seismic amplitude North Energy ASA, Markveien 38b, Postboks 1243,9504 Alta, Norway. Phone: (+47) 78 60 79 50 · Fax: (+47) 78 60 83 50 · E-Mail: post@northenergy.no · www.northenergy.no

  26. Slide 26: PL 708 Ørnen

    PL 708 Ørnen PL 708 in the Barents Sea Awarded 22. round Main prospect Seiland East/Ørnen North Operator Lundin (40%) Hydrocarbons Oil Partners North Energy (10%) Expected drilling Q3 2015 Edison (20%) Reservoir Upper Permian Lukoil (20%) Prob. of success 46% Lime (10%) Gross mean 301 mmboe unrisked

  27. Slide 27: Result from DFI risk (GeoX). Pingvin example.

    Result from DFI risk (GeoX). Pingvin example. Monitored by the founder of GeoX  Quality of following geophysical paramaters fed into GeoX  EM  RVD  AVO  Seismic amplitudes  Flatspots  The DFI’s may highgrade the prospect, or take it out of portfolio North Energy ASA · post@northenergy.no · (+

  28. Slide 28: Risk - The first - reward

    Risk The first - reward DFI results from GeoX risk meetings shows that the firm wells have been approved PL 708 Ørnen Pingvin PL 713 Pingvin PL 591 Zumba Ørnen Approved for drilling Zumba Being Sell or relinquish evaluated North Energy ASA · post@northenergy.no · (+47) 78 60 79 50 · www.northenergy.

  29. Slide 29: PL 722 - Structural closure with resonance frequency similar to structure

    PL 722 - Structural closure with resonance frequency similar to structure PL 722 in the Barents Sea .Resonnance (RVD) ..anomaly with very Awarded 22. round Main prospect Skaidi/Inca ..similar shape to Operator GDF (30 %) Hydrocarbons Oil ..structural closure Partners North Energy (20%) Expected dril

  30. Slide 30: New broadband seismic acquisition for low frequency evaluation around recent discoveries

    New broadband seismic acquisition for low frequency evaluation around recent discoveries New 2D seismic in the Hoop area New 3D seismic on the Loppa High Make new draping shapes of the seismic outlines North Energy ASA · post@northenergy.no · (+47) 78 60 79 50 · www.northenergy.no

  31. Slide 31: Outlook

    Outlook  3 months  Define new Barents Sea blocks for EM acquisition  DoD on PL 708 in the Barents Sea  DoD on PL 590/590B in the Norwegian Sea  DoD on PL 509S/509BS/509CS and PL 616 in the North Sea  12 new RVD evaluations  12 months  Exploration well on PL 510  Exploration well on PL 713 

  32. Slide 32: Q&A

    Q&A North Energy ASA · post@northenergy.no · (+47) 78 60 79 50 · www.northenergy.no

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