Serica Energy Plc · LSE:SQZ
Serica Energy — Shareholder Meeting (June 2015)
21 slides from Serica Energy's shareholder meeting presentation, Jun 30, 2015
Slide 1: Serica Energy AGM
SERICA ENERGY AGM TUESDAY 30 JUNE 2015 LONDON
Slide 2: Disclaimer
DISCLAIMER The information presented herein is subject to amendment and has not been independently verified. Serica Energy plc (“Serica”) does not represent that the information and opinions contained herein are necessarily adequate or accurate and no liability is accepted for any errors or omission
Slide 3: Cash and Risk Management Is Key
CASH AND RISK MANAGEMENT IS KEY SERICA IS WELL PLACED FOR GROWTH • Lean and focussed – During current industry downturn focus is on near term projects and production – Low headcount and overheads – no debt – Smaller board – Key consultants used for technical/project support • No Material Commitments
Slide 4: Financial Highlights – Well Balanced
FINANCIAL HIGHLIGHTS – WELL BALANCED SERICA IS PROTECTING ITS CASH BASE • End year cash balances US$9.9 million, increasing to over US$14.0 million upon Erskine completion in June with no borrowings • Existing cash resources plus Erskine projected revenues cover 2015/16 work programmes • Loss for 20
Slide 5: Serica Asset Base – Production, Development, Exploration
SERICA ASSET BASE – PRODUCTION, DEVELOPMENT, EXPLORATION CURRENT FOCUS IS ON CENTRAL NORTH SEA UK/NORWAY ATLANTIC MARGIN Production, development and High impact exploration exploration assets portfolio focussed on underexplored Atlantic Margin UK Central North Sea basins • Production • Development •
Slide 6: Core Area for Near-Term Growth
CORE AREA FOR NEAR-TERM GROWTH SERICA IS BUILDING A CENTRAL NORTH SEA POSITION UK CENTRAL NORTH SEA • Erskine - robust producing field Opportunities to: – Improve efficiency and uptime – Extend field life – Utilise tax position • Columbus – set for development – Progress in discussions with BG – Dev
Slide 7: Erskine Deal Transformational
ERSKINE ERSKINE DEAL TRANSFORMATIONAL BRINGS MATERIAL BENEFITS TO SERICA AT LOW COST: • 3.6 million barrels of oil equivalent as at 1 January 2014 acquired at US$4 per barrel • Serica’s share of decommissioning liability up to £31.32 million adjusted for inflation remains with BP, further reducing p
Slide 8: Erskine Deal – Terms
ERSKINE DEAL – TERMS ERSKINE TERMS VERY LOW COST/BOE TRANSACTION TERMS MATERIALLY IMPROVE SERICA’S CASH POSITION: • Base consideration set at US$11.1 million plus 27 million Serica shares – transaction effective 1 January 2014 Adjustments at completion: • Consideration adjusted for field revenues an
Slide 9: Erskine – Sub Surface
ERSKINE - SUB SURFACE ERSKINE SUBSUFACE IS WELL UNDERSTOOD RESERVOIR MODEL • Five wells drain the four reservoir regions • Field has produced for 16 years • Produced Reserves: ~120mmboe (gross)* • Remaining Reserves acquired (gross): 20mmboe** • Remaining reserves at 30 June 2015 (net): 3.3mmboe** *
Slide 10: Erskine – Offtake Route and Infrastructure
ERSKINE - OFFTAKE ROUTE AND INFRASTRUCTURE ERSKINE ACCESSES KEY DOWNSTREAM ERSKINE OFFTAKE ROUTE INFRASTRUCTURE • Erskine Platform – Unmanned wellhead platform for 5 production wells – Entry point for production – flow from wells commingled – Access to wells for wireline intervention – Monitored rem
Slide 11: Erskine – Current Operations
ERSKINE - CURRENT OPERATIONS ERSKINE PRODUCTION IS STEADILY RAMPING UP • Production capability W5 W2 – Erskine capable of producing at 27,000 boepd gross (4,860 boepd net to Serica) from 5 wells at full capacity W1 – Relies upon Lomond platform and other operators for export – Lomond platform has ex
Slide 12: Erskine Boepd History – Net to Serica
ERSKINE BOEPD HISTORY - NET TO SERICA IMPROVED UP-TIME EXPECTED Lomond restricted Erskine in 2014 Lomond shutdown for investment 4500 4000 3500 3000 2500 2000 Transaction 1500 Completed. Erskine restart 1000 500 0 12
Slide 13: Field Performance Since Restart
ERSKINE – FIELD PERFORMANCE SINCE RESTART EARLY SIGNS OF IMPROVEMENT IMPROVED FACILITY EVIDENT PERFORMANCE • Investment over 2014/15 expected to Serica Net Erskine Production boe/d – From May ‘15 improve up-time significantly • Lomond 100% available since restart in early May 2015 3500 • Erskine res
Slide 14: Erskine – Well Potential
ERSKINE - WELL POTENTIAL ERSKINE WELLS CAN DELIVER WELL AVAILABILITY Net boepd – Serica share • 3 out of 5 wells currently producing • 4 out of 5 wells will produce after commissioning work (>4,000 boe/d) net • Well intervention work will return 5th well to production Graph above shows potential of
Slide 15: Columbus Development
COLUMBUS DEVELOPMENT COLUMBUS CAN UNLOCK FURTHER VALUE IN ERSKINE DEVELOPMENT OPTIONS • Columbus is fully appraised • Serica interest in Erskine can help unlock Columbus • Various development options are possible via Lomond, single well or dual well subsea • Other routes possible but using Lomond re
Slide 16: Columbus – Operated by Serica
COLUMBUS – OPERATED BY SERICA COLUMBUS POTENTIAL COLUMBUS POTENTIAL: • 5.2 mmboe currently classified as contingent resources pending agreement on export route • Located very close to Lomond platform • Discussions with BG continue on tariffing and cost sharing proposals which could provide a basis f
Slide 17: Central North Sea: 22/19c
CENTRAL NORTH SEA: 22/19c LOW RISK - LOW COST HIGH REWARD EXPLORATION BLOCK 22/19c • Located in proven play area – Analogous discoveries in the area – Close to Columbus field and infrastructure in which Serica has an interest • Prospects – Three high impact prospects on block – Rowallan, Sundrum and
Slide 18: Central North Sea: 22/19c Main Prospect Rowallan
CENTRAL NORTH SEA: 22/19c LOW COST HIGH REWARD EXPLORATION MAIN PROSPECT • Rowallan subsea Metres Rowallan – Two reservoir targets – Triassic and Middle West East Jurassic Eocene – Structural prospect on 3D seismic 3000 Palaeocene – Analogue to Culzean discovery in Block 22/25a Upper Cretaceous (Cha
Slide 19: Exploration Portfolio – NW Europe
EXPLORATION PORTFOLIO – NW EUROPE WORK CONTINUES TO MATURE OTHER PROSPECTS UK • Southern North Sea – Greater York Area – Ranking prospects to identify drilling target. Close to infrastructure (York) • East Irish Sea – Doyle Prospect, – Carry on well (up to £11million gross cap). – Well deferred awai
Slide 20: Exploration Portfolio – Africa
EXPLORATION PORTFOLIO - AFRICA MAINTAIN POSITION FOR HIGH IMPACT EXPLORATION MOROCCO • Tarfaya-Ifni Basin, Sidi Moussa – SM-1 well encountered oil. Evaluating drilling and fluid analysis results – Further work under review including possible drilling – Requesting licence extension • Tarfaya-Ifni Bas
Slide 21: Conclusions
CONCLUSIONS SERICA IS SET FAIR FOR GROWTH THE ERSKINE TRANSACTION TRANSFORMS SERICA’S ABILITY TO GROW • Serica’s tax position, zero debt, limited commitments and established position puts Serica in an enviable position amongst its peers • The Erskine transaction has transformed Serica’s prospects an