Ithaca Energy PLC · LSE:ITH
Ithaca Energy — Investor Presentation (June 2019)
22 slides from Ithaca Energy's investor presentation, June 2019
Slide 1: Corporate Presentation
Corporate Presentation June 2019
Slide 2: Cautionary Statement
Cautionary Statement This proprietary presentation (including any accompanying oral presentation, question and answer session and any other document or materials distributed at or in connection with this presentation) (collectively, the “Presentation”) has been prepared by Ithaca Energy Limited (“It
Slide 3: Ithaca at a glance… an established UK North Sea operator
Ithaca at a glance… an established UK North Sea operator Captain Britannia & Sats. Alba Elgin / Franklin Erskine Greater Stella Area Jade Focused Strategy Attractive Outlook Solid Financial Profile Highly Supportive Shareholder Experienced operator – $2Bn Chevron North Sea Ltd Simple, low cost
Slide 4: Portfolio overview… established fields with well understood performance characteristics
Portfolio overview… established fields with well understood performance characteristics Britannia Dons CNSL (32.38%) Ithaca (40%, Don Southwest), (21.4%, ConocoPhillips (58.65%)* and Mitsui E&P UK West Don) (8.97%) EnQuest* (60%,Don Southwest), (78.6% West Don) Alder CNSL (73.68%)* Broom ConocoPhill
Slide 5: CNSL acquisition… providing operational and financial scale and strength
CNSL acquisition… providing operational and financial scale and strength Production Operating Production Reserves Opex Capex Portfolio Cash Flow1 410% 145% 20% 25% 560% 125% Pro-forma 18 Fields 82 222 Ithaca 2019E $15/boe $8/boe $1,025M (7 Operated) kboe/d MMboe Stand-alone 8 fields (3 Op.) 16 kboe/
Slide 6: Material and balanced portfolio
Material and balanced portfolio Experienced oil and gas operator – proven drilling, production, development and decommissioning capabilities Business built through organic growth and acquisitions – including start-up of Greater Stella Area production hub in 2017 Material step-up in operational
Slide 7: Portfolio overview… weighted towards operated assets
Portfolio overview… weighted towards operated assets 2019E Working 2P Reserves % Liquids1 Field Operator production Interest (MMboe) Reserves Start-Up (kboe/d) Captain Heavy oil field with multiple wells over several reservoirs – 1.1Bn barrels of oil initially in place, 30% recovery to date 85% 25
Slide 8: Attractive growth outlook… well defined investment programmes
Attractive growth outlook… well defined investment programmes 2019 2020 2021 2022 2023 2024 Short Cycle, Infill Drilling Alba* Elgin / Franklin Britannia Satellites Captain EOR Expansion Stage 1 – Platform Wells* Stage 2 – Subsea Wells* Satellite Field Dev. GSA* Captain Area* Near-Field Explo. Alba
Slide 9: Strong track record… proven operational expertise
Strong track record… proven operational expertise Ithaca established the GSA as a new operated production hub to GSA “Hub and spoke” strategy – leveraging proven infrastructure capture the value of multiple undeveloped discoveries development, operational and commercial expertise Acquired field in
Slide 10: Strategy… focus on operational excellence, financial strength and value creation
Strategy… focus on operational excellence, financial strength and value creation Operational Strength Superior Cashflow Generation Establishing a leading independent North Sea operator Focus on production performance and cost efficiency Focus on lower risk production and development led Maximise
Slide 11: Financial policy
Financial policy Target leverage ratio below 2.0x through the cycle Low Near term focus on deleveraging with free cash flow proceeds Leverage Enhanced debt structure with significantly lower pro-forma leverage $1.65Bn Reserve Based Lending senior debt facility, $700M acquisition facility and s
Slide 12: Delek Group… highly supportive shareholder
Delek Group… highly supportive shareholder Delek Group E&P Operations North Sea Assets North American Assets East Mediterranean Assets Tamar Gas Field Leviathan Gas Field Long-term strategic shareholder focused on international building a high quality… >$1.3Bn invested in Ithaca since 2015 Delek G
Slide 13: Key credit highlights
Key credit highlights 1 Material UK North Sea operator – fifth largest producer 2 High quality asset portfolio with strong production track record 3 Low unit opex ensures resilience to lower commodity prices 4 Well invested asset base with control and flexibility over future capex 5 Strong free cash
Slide 14: Material UK North Sea operator… fifth largest UK producer
1 Material UK North Sea operator… fifth largest UK producer CNSL acquisition delivers a material increase in the operational and financial scale of the business Balanced mix of high quality, established producing assets contribute to a robust production record and outlook Enlarged portfolio pr
Slide 15: High quality asset portfolio with strong production track record
2 High quality asset portfolio with strong production track record Broad asset portfolio, with strong production track record and weighted towards operated assets – minimising concentration risk GSA: “hub and spoke” development of satellite fields via central infrastructure, with new field start
Slide 16: Low unit opex ensures resilience to lower commodity prices
3 Low unit opex ensures resilience to lower commodity prices Competitive unit operating expenditure track record – ~70% of costs controlled via operated asset positions Unit opex broadly constant – increase in total opex attributable to variable costs associated with additional production volume
Slide 17: Well invested asset base with control and flexibility over future capex
4 Well invested asset base with control and flexibility over future capex High quality asset portfolio with a strong safety and production efficiency track record – maintenance programmes focused on managing the life of the offshore facilities to ensure maximum economic reserves recovery Capital
Slide 18: Strong free cash flow generation
5 Strong free cash flow generation Operating Expenditure ($M) Production (kboepd) Ithaca CNSL Ithaca CNSL 86 $15 $14 $16 $15 82 76 69 432 441 439 373 2016 2017 2018 2019E 2016 2017 2018 2019E Capital Expenditures ($M) Operating Cash Flow1 ($M) Ithaca CNSL $18 $8 $7 $8 1,006 1,025 452 818 249 226 193
Slide 19: Cashflows supported by tax allowances and limited near term decomm.
6 Cashflows supported by tax allowances and limited near term decomm. Near term cash flows materially enhanced by accelerated Limited decommissioning expenditure over next 10 years utilisation of Ithaca’s existing $2.2Bn UK tax allowances Letter of credit facilities means no decommissioning securi
Slide 20: Highly experienced management and organisation
7 Highly experienced management and organisation Executive team with extensive North Sea oil and gas industry experience – led by CEO who previously ran Marathon Oil’s European upstream business and Wood Group’s production facilities business Full transfer of CNSL personnel to Ithaca facilitates
Slide 21: Independent Reserves Evaluation… highlights a strong outlook
Independent Reserves Evaluation… highlights a strong outlook Production (kboepd) Operating Expenditure ($M) 2P 2C 2P 2C 82 $15 $14 $15 $16 $19 78 70 73 67 439 442 472 412 390 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 Capital Expenditures ($M) Operating Cash Flow1 ($M) 2P 2C 2P + 2C $8 $10 $1
Slide 22: Key credit highlights
Key credit highlights Highly experienced Material UK North Sea management and operator organisation 7 1 High quality asset Cashflows supported by tax allowances and limited 2 portfolio with strong near term decomm. 6 production track record 3 5 Low unit opex ensures resilience to lower Strong free c