Carnarvon Energy Limited · ASX:CVN
Carnarvon Energy — Investor Presentation (September 2023)
42 slides from Carnarvon Energy's investor presentation, Sep 26, 2023
Slide 1: Progressing from Explorer to Producer: Strategy Update Investor Briefing
P ROGRESSI NG FRO M STR ATEG Y U P DAT E E X PLORER TO PRO D U C ER I N V ESTO R B R IE F IN G ASX:CVN S E P T E M B E R 2023
Slide 2: Overview
Overview.
Slide 3: From Explorer to Producer
FROM EXPLORER TO PRODUCER OUR HISTORY OUR FOCUS OUR FUTURE • Proven oil and gas explorer • Delivering existing • World class Dorado • Delivered highly successful development projects production and integration discoveries and farmouts • Exploration in the highly of discovered tie-backs prospective B
Slide 4: Carnarvon Energy: Company at a Glance
CARNARVON ENERGY COMPANY AT A GLANCE • ASX listed and based in Australia • A unique offering in the energy sector with interests in the highly prospective Bedout basin • Strong management team with extensive industry experience in Australia and South East Asia • Significant deal making experience: C
Slide 5: Asset Overview
ASSET OVERVIEW BEDOUT BASIN EXPLORATION • Bedout basin offshore Western Australia is one of DISCOVERED GAS the most exciting exploration plays in the country • 2C gas resource of • Focused exploration has the potential to deliver ~ 1 Tcf (Pmean, Gross*) 9 Tcf of gas and 1.6 billion bbls (Pmean, Gros
Slide 6: Building Value
BUILDING VALUE CARNARVON HAS STRONG DRIVERS CORE FOCUS ON DEVELOPMENT FOR NEAR-TERM SHAREHOLDER VALUE AND EXPLORATION PRODUCTION ASSET • Continual evaluation of EXPOSURE IN A • Carnarvon actively screening initiatives to drive market WORLD CLASS BASIN for growth opportunities recognition of value an
Slide 7: Funding the Growth
FUNDING THE GROWTH DEBT CAPACITY • Currently no debt and STRONG, CLEAN minimal commitments FINANCIAL POSITION • Senior debt process for PARTIAL DIVESTMENT • A$319 million in liquidity Dorado commenced in 2022 OF BEDOUT BASIN before adding debt capacity – interest was strong ASSETS UNDERPINS ‒ Carnar
Slide 8: Context
Context.
Slide 9: Oil and gas will continue to play a crucial role in the energy system
― Oil and gas WILL continue to play a crucial role in the energy system for a long time to come...with demand reducing only gradually over time. Continued investment in oil and gas is critical to ensure a balanced energy transition... SHELL CAPITAL MARKETS DAY 2023 ―
Slide 10: Sectorial Context
SECTORIAL CONTEXT • Crude oil demand is required to 2050 and beyond, particularly for petrochemical use and growth in developing economies • Without new fields, supply is projected to fall short of current demand forecasts due to continuous underinvestment in new supply CARNARVON ENERGY • Geopolitic
Slide 11: Dorado Crude
DORADO CRUDE • Dorado is an extra light sweet crude with a high yield of light products suitable for maximising gasoline and naphtha production • Dorado development expected to have a low emissions profile, due to re-injection of gas and crude having a lower carbon intensity CARNARVON ENERGY than he
Slide 12: Uses for Dorado Oil
USES FOR DORADO OIL MANUFACTURED GOODS AGRICULTURE TRANSPORTATION TRAVEL CARNARVON ENERGY 12
Slide 13: Unlocking the Bedout Basin
UNLOCKING THE BEDOUT BASIN
Slide 14: Bedout Basin Investment Case
BEDOUT BASIN INVESTMENT CASE 01. 02. 03. 04. 05. 06. WORLD EXPERIENCED STRONG CASH LOW RISK TIER 1 SIGNIFICANT CLASS ASSET OPERATOR GENERATION DEVELOPMENT JURISDICTION UPSIDE • Dorado is a high-quality • Santos is a highly • Strong cash generation • Compact structure in • Bedout basin is strategical
Slide 15: Dorado Phase 1 Liquids Development
DORADO PHASE 1 LIQUIDS DEVELOPMENT THE FIELD OIL PRODUCTION FLOWLINE IS EXPECTED TO PRODUCE GAS INJECTION AT AN INITIAL CARNARVON ENERGY FLOWLINE RATE OF UP UMBILICAL LINE TO 100,000 BOPD (GROSS) 15
Slide 16: Dorado Approvals - Phase 1 Liquids Development
DORADO APPROVALS -PHASE 1 LIQUIDS DEVELOPMENT ALL OF THE APPROVAL REQUIRED AGENCY STATUS PRIMARY PROJECT Location Declaration National Offshore Petroleum APPROVED APPROVALS Titles 10 September 2020 Administrator (NOPTA) HAVE BEEN SECURED Production License NOPTA APPROVED 7 April 2022 CARNARVON ENERG
Slide 17: Pavo Development Plan
PAVO DEVELOPMENT THE PROPOSED PLAN IS TO • Discovered in March 2022 PRODUCE • Pavo-1 light sweet oil PART OF PHASE 1 LIQUIDS DEVELOPMENT PAVO LIQUIDS discovery is ~46km THROUGH east of Dorado within THE DORADO industry standard tie- FACILITIES back range to proposed Dorado facilities • Low ~300 scf
Slide 18: Pavo Production Timing Ideal
PAVO PRODUCTION BENEFITS IN BEING ABLE TO TIME PAVO PRODUCTION TO OFFSET TIMING IDEAL DORADO NATURAL FIELD DECLINES • Fluid production rates from Dorado are naturally expected to decline after a plateau period of 1-2 years. • Once this begins to occur, there will be spare capacity in the crude oil h
Slide 19: Significant Exploration Upside
WALLACE ARA WENDOLENE STARBUCK PAVO SOUTH EXPLORATION UPSIDE* • 238 BSCF gas and • 549 BSCF gas and • 549 BSCF gas and • 113 MMBBLS liquids • 66 MMBBLS liquids 11 MMBBLS liquids 91 MMBBLS liquids 83 MMBBLS liquids and 195 BSCF gas and 10 BSCF gas • Potential to unlock • Potential to unlock • Potenti
Slide 20: Prudent Financial Growth
PRUDENT FINANCIAL GROWTH CARNARVON ENERGY 20
Slide 21: Robust Financial Position
ROBUST FINANCIAL POSITION ROBUST AND UNCOMPLICATED BALANCE SHEET CARNARVON ENERGY As of 30 June 2023 Changes as of 16 August 2023 • A$95m cash • A$181m cash • A$169m capitalised • Plus A$138m held in exploration asset, primarily off balance liquidity in in the Bedout basin the form of Dorado • No de
Slide 22: Underlying Portfolio Value
UNDERLYING PORTFOLIO VALUE ATTRACTIVE LOOK-THROUGH COMPONENTS ACROSS THE PORTFOLIO BEDOUT 700 05 EXPLORATION ADDITIONAL 10% HELD 600 04 BY CVN IN PAVO ETC 500 03 CPC PAYMENT & CARRY LOOK- THROUGH ON RETAINED ASSETS $A Million 400 CPC CARRY BENEFIT 02 OF A$138M 300 200 CASH OF 01 A$181 MILLION 100 22
Slide 23: Capital Allocation Priorities
CAPITAL ALLOCATION PRIORITIES 01 02 03 FUNDING FUNDING THE UNLOCKING THE GREATER INORGANIC GROWTH DORADO DEVELOPMENT BEDOUT - EXPLORATION OPPORTUNITIES FOCUSED ON AND APPRAISAL RETURNS ON • Delivering the Dorado Phase 1 liquids development to FID and RFSU is • Future exploration has the potential •
Slide 24: Funding Dorado
FUNDING DORADO DORADO’S FINANCING SENIOR DEBT MEZZANINE FINANCE DIVESTMENT ATTRACTION • Debt process initiated • Finance in addition to senior • Completed in August • Strong debt servicing capacity in 2022 debt - in discussion with 2023 – reduces project equity CARNARVON ENERGY • Low operating cost
Slide 25: Future Value Generation
FUTURE VALUE GENERATION NEAR-FIELD EXPLORATION • Focus on opportunitites near Dorado for future tie-backs • Tie-backs provide low additional CAPEX per barrel and minimal additional OPEX CARNARVON ENERGY • Higher returns on investment with shorter timeframe to earnings for shareholders GREATER BEDOUT
Slide 26: Inorganic Growth Strategy
INORGANIC GROWTH STRATEGY APPLYING CARNARVON’S TECHNICAL DISCIPLINED TRANSITION & COMMERCIAL SKILLS INVESTMENT • Actively screening near term growth opportunities • Identify carbon credit generating opportunities • Carnarvon is well positioned to take advantage of increasing M&A activity to manage e
Slide 27: Energy Transition
ENERGY TRANSITION CARNARVON ENERGY 27
Slide 28: A Disciplined Approach to the Energy Transition
A DISCIPLINED APPROACH Source: Wood Macken zie CARNARVON’S APPROACH TO THE ENERGY TRANSTION CARNARVON ENERGY Maintaining a financially Strong demand for Management of Technology focused Biofuels retain the disciplined approach to biofuels as businesses exposure to carbon approach to biofuel Company’
Slide 29: Carbon Credit Generation
CARBON CREDIT GENERATION MANAGING EXPOSURE TO CARBON OFFSET COST RISK • Monitoring changes to the Safeguard Mechanism • Active management of exposure to escalating carbon offset costs • Disciplined investment into acquiring CARNARVON ENERGY carbon credits and/or carbon credit generating opportunitie
Slide 30: Summary: Carnarvon Energy Ltd
SUMMARY CARNARVON ENERGY LTD
Slide 31: From Explorer to Producer
FROM EXPLORER TO PRODUCER CARNARVON’S FOCUS ON VALUE GENERATION Robust financial position – investment decisions driven Conservative by value generation investment in the and returns on energy transition investment Actively screening through biofuels for quality near-term and carbon production asset
Slide 32: Contingent & Prospective Resource Estimates — Appendix
CONTINGENT & PROSPECTIVE RESOURCE ESTIMATES — APPENDIX 1 — CARNARVON ENERGY 32
Slide 33: Bedout Basin Contingent Resources
BEDOUT BASIN CONTINGENT RESOURCES GROSS BASI S LIGHT OIL & CONDENSATE FREE & ASSOCIATED GAS BARRELS OF OIL EQUIVALENT MMSTB MMSTB MMSTB BSCF BSCF BSCF MMBOE MMBOE MMBOE Resource Permit 1C 2C 3C 1C 2C 3C 1C 2C 3C Dorado WA-437-P 86 162 285 367 748 1,358 176 344 614 Pavo WA-438-P 26 43 62 6 11 17 27 4
Slide 34: Bedout Basin Prospective Resources: Ara Cluster
BEDOUT BASIN PROSPECTIVE RESOURCES* ARA CLUSTER GR OS S VOLU ME S Gas (Bscf) Liquids (mmbbls) Barrels of Oil Equivalent (mmboe) Risked Prospect Permit CVN Equity Pg (%) Mean P90 P50 Pmean P10 P90 P50 Pmean P10 P90 P50 Pmean P10 mmboe Bandy WA-435-P 10% 31% 45 286 399 911 6 41 66 160 15 96 137 316 42
Slide 35: Bedout Basin Prospective Resources: Wallace Cluster Gross
BEDOUT BASIN PROSPECTIVE RESOURCES* WALL ACE CLUSTER G ROS S VOLU ME S Gas (Bscf) Liquids (mmbbls) Barrels of Oil Equivalent (mmboe) Risked Prospect Permit CVN Equity Pg (%) Mean P90 P50 Pmean P10 P90 P50 Pmean P10 P90 P50 Pmean P10 mmboe Gromit WA-435-P 10% 15% 3 123 205 524 0 5 10 26 1 28 46 118 7
Slide 36: Bedout Basin Prospective Resources: Wallace Cluster Net
BEDOUT BASIN PROSPECTIVE RESOURCES* WALL ACE CLUSTER NE T VOLU ME S Gas (Bscf) Liquids (mmbbls) Barrels of Oil Equivalent (mmboe) Risked Prospect Permit CVN Equity Pg (%) Mean P90 P50 Pmean P10 P90 P50 Pmean P10 P90 P50 Pmean P10 mmboe Gromit WA-435-P 10% 15% 0 12 21 52 0 1 1 3 0 3 5 12 1 Wallace Ea
Slide 37: Bedout Basin Prospective Resources: Wendolene Cluster
BEDOUT BASIN PROSPECTIVE RESOURCES* WEND OLEN E CLUSTER G ROS S VOLU ME S Gas (Bscf) Liquids (mmbbls) Barrels of Oil Equivalent (mmboe) Risked Prospect Permit CVN Equity Pg (%) Mean P90 P50 Pmean P10 P90 P50 Pmean P10 P90 P50 Pmean P10 mmboe Mensa B WA-435-P 10% 58% 3 21 44 105 2 12 25 55 3 16 30 73
Slide 38: Bedout Basin Prospective Resources: Starbuck Cluster Gross
BEDOUT BASIN PROSPECTIVE RESOURCES* STARBUCK CLUSTER G ROS S VOLU ME S Gas (Bscf) Liquids (mmbbls) Barrels of Oil Equivalent (mmboe) Risked Prospect Permit CVN Equity Pg (%) Mean P90 P50 Pmean P10 P90 P50 Pmean P10 P90 P50 Pmean P10 mmboe Fall Line WA-436-P 20% 48% 7 55 136 363 4 33 80 214 6 44 104
Slide 39: Bedout Basin Prospective Resources: Starbuck Cluster Net
BEDOUT BASIN PROSPECTIVE RESOURCES* STARBUCK CLUSTER NE T VOLU ME S Gas (Bscf) Liquids (mmbbls) Barrels of Oil Equivalent (mmboe) Risked Prospect Permit CVN Equity Pg (%) Mean P90 P50 Pmean P10 P90 P50 Pmean P10 P90 P50 Pmean P10 mmboe Fall Line WA-436-P 20% 48% 1 11 27 73 1 7 16 43 1 9 21 56 10 Coh
Slide 40: Bedout Basin Prospective Resources: Pavo South Cluster
BEDOUT BASIN PROSPECTIVE RESOURCES* PAVO SOUTH CLUSTER G ROS S VOLU ME S Gas (Bscf) Liquids (mmbbls) Barrels of Oil Equivalent (mmboe) Risked Prospect Permit CVN Equity Pg (%) Mean P90 P50 Pmean P10 P90 P50 Pmean P10 P90 P50 Pmean P10 mmboe Taurus WA-437-P 10% 38% 15 84 102 215 1 4 5 11 3 19 23 49 9
Slide 41: Disclaimer
DISCLAIMER CONTINGENT AND PROSPECTIVE RESOURCES very optimistic estimate, due to the portfolio effects of control of, change without notice, and may be unknown to Carnarvon and its related bodies corporate and their The resource estimates outlined in this presentation are arithmetic summation. Prosp
Slide 42: Carnarvon Energy contact details
CARNARVON ENERGY L EVEL 2 76 K IN GS PARK ROAD AD M I N@CVN .COM. AU WE ST PE RTH WA 60 0 5 + 61 8 9321 2665 WWW.CARNA RVON.COM. AU 42
Carnarvon Energy — Investor Presentation (September 2023) on 6ix