Shamaran Petroleum Ltd. · OSL:SNM
Shamaran Petroleum — Investor Presentation (June 2018)
23 slides from Shamaran Petroleum's investor presentation, June 2018
Slide 1: ShaMaran Petroleum Corp. Corporate Presentation
ShaMaran Petroleum Corp. Corporate Presentation June 2018 – A Lundin –Group ShaMaranShaMaran A Lundin Group Company Company
Slide 2: ShaMaran to acquire additional 15% in Atrush
ShaMaran to acquire additional 15% in Atrush ▪ ShaMaran has agreed to acquire, with effect from Jan 1, 2018, 15% interest in Atrush from Marathon for USD 60m, subject to final closing adjustments • Includes 15.4 MMbbl of 2P reserves valued at an NPV10 of USD 164m based on latest McDaniel reserves re
Slide 3: Highlights – Shamaran after acquisition
Highlights – Shamaran after acquisition Net 10,500 Large production asset in the Atrush oil field in Kurdistan production bopd capacity* Highly accretive acquisition of Marathon’s working interest in Atrush 36 Net 2P oil MMbbl reserves* Significant cash flow from production 104 Net 2C oil MMbbl reso
Slide 4: Highly accretive Marathon transaction
Highly accretive Marathon transaction EV/production capacity EV/2P 1,000 USD USD/boe / bopd ▪ The Company views the -35% -35% acquisition as highly 47.1 13.8 accretive 30.9 9.0 ▪ Multiples are significantly improved on production, cash flow and reserves ▪ Multiples do not account for the USD 12.3m (
Slide 5: ShaMaran is a Kurdistan focused oil company
ShaMaran is a Kurdistan focused oil company Atrush partnership post acquisition ▪ ShaMaran is an E&P company active in the Kurdistan region with a 20.1% direct KRG TAQA interest in the Atrush oil field 25.0% (Operator) • CAD 194m market capitalization 39.9% • Listed on TSX.V and NASDAQ First North i
Slide 6: Kurdistan – a world class oil province
Kurdistan – a world class oil province Overview of Kurdistan oil operations ▪ Kurdistan’s oil industry is at a relatively early stage of development • First exploration PSCs were awarded in 2004 ▪ Significant reserves and resources ▪ Strong interest in the region ▪ Several international oil companie
Slide 7: ShaMaran is a Lundin Group company
ShaMaran is a Lundin Group company Combined value ~ USD 21 billion ShaMaran – A Lundin Group Company 7
Slide 8: Management and Board of Directors
Management and Board of Directors Keith C. Hill – Chairman and Director C. Ashley Heppenstall – Director Over 30 years experience in the oil industry including Over 25 years experience working with public international new venture management and senior companies associated with the Lundin family exp
Slide 9: Atrush is a large, world class oil field
Atrush is a large, world class oil field ▪ Atrush block was awarded in 2007 and Atrush oil field facts (gross)1 ShaMaran acquired interest in 2010 • Atrush field discovered in 2011 MMbbl 1P/C 2P/C 3P/C • FDP approved October 2013 Oil reserves 37.4 102.7 165.9 • First production July 2017 Oil conting
Slide 10: The Atrush field – Facilities and well locations
The Atrush field – Facilities and well locations CK-6, AT-3 well location Extended Phase 1 facilities heavy oil test AT-2 well location CK-7 and CK-10 well location AT-4, CK-5, CK- 8 well location Future CK-9 well location ShaMaran – A Lundin Group Company 10
Slide 11: Kurdistan export facilities in place
Kurdistan export facilities in place ▪ Atrush crude exported via existing Kurdistan Export Pipeline to Fishkabur and on to Ceyhan in Turkey ▪ Pipeline capacity sufficient to accommodate increased production both from Atrush and other fields in Kurdistan ShaMaran – A Lundin Group Company 11
Slide 12: Production
Production Production facilities completed… ...with 11 months of production ▪ First production in July 2017 Bopd Back- CK-7, produced CK-10 • Phase I facilities and pipeline project completed 30,000 Facility shut down to address production salt plugs facilities constraints 25,000 ▪ Five production w
Slide 13: 25% increase in Atrush reserves in 2017
25% increase in Atrush reserves in 2017 Atrush gross reserves development ▪ 21 MMbbl (25%) upward revision in MMbbl reserves in 2017 due to: 120 • CK-7 well results found the top of the reservoir 114 meters higher to prognosis 100 • Planned drilling of four additional wells 21.0 (3.4) 80 ▪ Positive
Slide 14: Attractive lifting costs and near term cash flow
Attractive lifting costs and near term cash flow Low lifting costs KRG loans and cost oil as of May 2018 USD/bbl USDm Large cost oil pool 9 500 underpins cash flow going forward 8 450 7 400 350 6 300 5 323 8.5 250 4 8.1 441 6.8 200 3 6.1 150 2 100 60 1 50 58 - Q3 2017 Q4 2017 Q1 2018 2018 guidance -
Slide 15: 2018 work program
2018 work program ▪ Objective • Keep the facilities at full capacity 2018 • Debottleneck facilities to increase Complete and test CK-7 capacity well and bring it to • Gather information for next phases of production development Wells Drill CK-10 ▪ 2018 capex guidance producer well • USD 19.6m for 20
Slide 16: Ample room for production growth
Ample room for production growth Current capacity Debottlenecking Further phases ~100,000 30,000 bopd to be defined ~100,000 bopd ▪ Identifying low cost ▪ Second production ▪ State of the art and fully facility modifications to facility potential for automated facilities address bottlenecks heavy oi
Slide 17: Financial strategy
Financial strategy ▪ Focus on cash flow and building a robust cash balance • 2018 cash flow is expected to be strong due to: • Strong cash flow at current oil prices • Repayment of preferential historical costs in 2018 • Significant KRG loan repayments within the next two years ▪ Maximize value of t
Slide 18: Established track record of regular payments
Established track record of regular payments Payments1 by KRG per production month ▪ Following a period of USDm lumpy payments for 120 exports, KRG has made regular payments to the operators since Sept 2015 100 ▪ The four listed E&P Atrush companies1 have reported 80 payments of USD ~2bn for product
Slide 19: Demonstrated access to funding
Demonstrated access to funding USDm 300 Equity ▪ ShaMaran has strong support Issue Super from shareholders and Voluntary senior bondholders debt to Bond 27 250 equity Rights Issue 17 ▪ During the development of 18 Atrush, the company has Bond raised USD 106m in equity 200 for following the issuance
Slide 20: Financial summary
Financial summary ▪ Oil production started July 2017 and has Revenues and EBITDA been steadily ramped up since then USDm 120 106 • Q4’17 average production of 21,700 bopd 80 • Q1’18 average production of 20,300 bopd 54 somewhat lower due to recent production issues 40 18 • 2018 guidance of 23-28,000
Slide 21: Corporate profile
Corporate profile ▪ Share capital ▪ Major shareholders • Shares issued and outstanding 2,158,631,534 • Lundin family trusts 16.8% ▪ Market capitalization • Lundin Petroleum 5.6% • CAD 194 million (@ 4 June 2018) • Directors/Management 0.3% ▪ Net debt*) ▪ Trading information • USD 134 million (@ 31 M
Slide 22: Highlights – Shamaran after acquisition
Highlights – Shamaran after acquisition Net 10,500 Large production asset in the Atrush oil field in Kurdistan production bopd capacity* Highly accretive acquisition of Marathon’s working interest in Atrush 36 Net 2P oil MMbbl reserves* Significant cash flow from production 104 Net 2C oil MMbbl reso
Slide 23: Cautionary statements
Cautionary statements This document contains statements about expected or anticipated future events and financial results that are forward-looking in nature and, as a result, are subject to certain risks and uncertainties, such as legal and political risk, civil unrest, general economic, market and
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