Carnarvon Energy Limited · ASX:CVN
Carnarvon Energy — Carnarvon Petroleum — Investor Presentation (October 2010)
53 slides from Carnarvon Energy's investor presentation, Oct 13, 2010
Slide 1: Investor Update
Investor Update For personal use only October 2010
Slide 2: Disclaimer
For personal use only Disclaimer The information in this document, that relates to oil exploration results and reserves, is based on information compiled by the Company’s General Manager (Operations), Mr Philip Huizenga, who is a full-time employee of the Company. Mr Huizenga consents to the inclusi
Slide 3: Introduction / Latest News
Introduction / Latest News For personal use only Page No. Content 2 Projects - International 3 Projects - Australia 4 Strategic Position 5 Current Asset Position 6 People 7 Key Metrics 8 2010 CY Highlights 9 Upcoming Activities 1
Slide 4: Projects - International
Projects - International For personal use only New Zealand Thailand Tuatara 10% L20/50 50% L33/43 & L44/43 40% Indonesia L52/50 & L53/50 50% Rangkas 25% CVN’s focus is SE Asia & Australasia 2
Slide 5: Projects - Australia
Projects - Australia For personal use only Carnarvon Basin WA-399-P 13% Phoenix Gas Bedout Sub Basin Permits 50% WA 399-P farmed out WA-443-P 100% CVN retains 13% for free carry through 3D Seismic Karatha hub Port Hedland 5 CVN is building our presence in Australia 3
Slide 6: Strategic Position
Strategic Position Means to grow Experienced team
Slide 7: Current Asset Position
Current Asset Position For personal use only New Thailand Australia Indonesia Zealand 6 6 1 1 Exploration onshore offshore onshore offshore Carnarvon’s permits permits permit permit growth plans are focused 3 on adding Appraisal onshore assets that permits create a quality portfolio 6 Production ons
Slide 8: People
People For personal use only Peter Leonhardt – Chairman FCA, FAICD (Life) Independent non-executive director Finance, accounting, business management, governance Edward (Ted) Jacobson – Chief Executive Officer B.Sc (Hons) Geology Executive director Company founder, geologist, corporate strategy Neil
Slide 9: Key Metrics (as at September 2010)
Key Metrics (as at September 2010) For personal use only Production (net) 4,500 bopd Market capitalisation A$275 million 2P reserves (net) 24.5 mmbbls 3P reserves (net) 57.0 mmbbls Reserve life 25 years EV / 2P reserves A$11.25 / bbl EBIT / bbl produced A$43.25 / bbl NPAT / bbl produced A$16.60 / bb
Slide 10: 2010 CY Highlights
2010 CY Highlights For personal use only • 48% reserves upgrade in L44/43 permit (Thailand) • New discoveries in volcanics at Wichian Buri produces >3,500 bopd from first well and >5,000 bopd from second well (Thailand) • New discovery in L33/43 Concession to be appraised & developed under new produ
Slide 11: Upcoming Activities
Upcoming Activities For personal use only • L44/43 (Thailand) and L33/43 (Thailand) drilling appraisal and development wells in Q4, 2010 & Q1, 2011 • Phoenix (Australia) seismic acquisition program Q3/Q4, 2010 with farmout program commencing Q2, 2011 • Rangkas PSC (Indonesia) seismic acquisition Q3/
Slide 12: Operations - Thailand
For personal use only Operations - Thailand
Slide 13: Operations - Thailand
Operations - Thailand For personal use only Page No. Content 11 L44 & SW1A Overview 13 L44 & SW1A Field Overview 14 L44 & SW1A Production Overview 15 Fractured Reservoirs 16 WBEXT Area 21 L20/50 – Permit Overview 23 L20/50 – Tapao Kaew Prospect 24 L52 & L53 – Permit Overview 10
Slide 14: L44 & SW1A Overview
L44 & SW1A Overview For personal use only Active field operations 11
Slide 15: L44 & SW1A Overview
L44 & SW1A Overview For personal use only High margin production with exploration upside • Onshore close to quality infrastructure • Opex & trucking ~US$10.80/bbl • Depreciation / amortisation ~US$7.20/bbl (*) (*) Based on current accounting policy and estimates • Production ~1.0 mmbbls p.a. net • 2
Slide 16: L44 & SW1A Field Overview
L44 & SW1A Field Overview For personal use only L33-1 2P Reserves by Field (mmbbls) L33-2 L44-W 2.2 NSE Central 1.4 NSE F1 7.2 1.5 WBEXT Bo Rang Volc B Bo Rang B Bo Rang Volc A Wichian Buri 3.4 Bo Rang A NSE South Wichian Buri 4.8 NSE North 4.0 Other NSE-E NSE-F NSE Central Na Sanun NSE South • Sign
Slide 17: L44 & SW1A Production Overview
L44 & SW1A Production Overview For personal use only Daily Production • Production predominantly from Oil Rate Water Rate fractured reservoirs 16000 • Recent success at WBExt has significantly increased production 14000 levels 12000 • Production levels driven by: 10000 • number of wells on flush Flu
Slide 18: Fractured Reservoirs
Fractured Reservoirs For personal use only Example well production from • L33, L44 & SW1A contain multi L44 fractured reservoir layered oil filled fractured Flush reservoirs production • Massive lost circulation – no returns over reservoirs • Heterogeneous nature of DEPTHS fracturing means individua
Slide 19: WBEXT Area
WBEXT Area For personal use only • Multiple, stacked pay zones in volcanic and sandstone reservoirs • Multiple fault compartments that require a large number of wells to define reserves • Recent successes resulting in excellent flow rates • Highest flow from sandstone of 550 bopd from WBExt-1 • High
Slide 20: WBExt Sandstone F sand reservoir
WBExt Sandstone “F sand” reservoir For personal use only • F sand discovered 1988 (Wichian Buri) • Total Wichian Buri field 999,000 bbls • WB-1 well cumulative production of 475,000 bbls initially producing at 350 bopd II IV • WBExt-1B extends good quality reservoir III F sands to the north and west
Slide 21: WBExt Volcanic WBV1 reservoir
WBExt Volcanic “WBV1” reservoir For personal use only • Excellent recent results • L33-1 1,100 bopd • L33-2: 2,370 bopd • WBExt-1: 3,500 bopd PROSPECTIVE RESOURCE ESTIMATES (Unrisked, Operator) Low Mid High Prospect Name MMbbls MMbbls MMbbl I (WBExt-1) 2.1 3.6 5.8 II 1.0 1.6 2.3 III 0.4 1.0 1.8 IV 3
Slide 22: WBExt Volcanic WBV2 reservoir
WBExt Volcanic “WBV2” reservoir For personal use only • Excellent recent results • WBExt-1A: 5,300 bopd • WBExt-2: 1.6 MM scf/day PROSPECTIVE RESOURCE ESTIMATES (Unrisked, Operator) Low Mid Prospect Name MMbbls MMbbls High MMbbl I (WBExt-1A) 2.8 4.3 6.2 II (WBExt-2) 5.4 8.6 12.7 III 3.6 5.6 8.1 IV 6
Slide 23: WBExt Volcanic WBV3 reservoir
WBExt Volcanic “WBV3” reservoir For personal use only • Untested by any wells drilled to L33 PL Application date • WBExt-2A currently drilling • Further well at L44-E proposed before end of year • Large potential upside extends into L33, largely covered by WBExt-2A L33 production license L33/43 appl
Slide 24: L20/50
L20/50 For personal use only • On trend with 200 million barrel Sirikit Oil Field located ~50 km to NW (now producing ~20,000 bopd; over 150 mmbbls produced) Phitsanulok Basin Outline • Basin modelling and oil shows in previous well indicate oil potential in L20/50 • Three drillable prospects identi
Slide 25: L20/50
L20/50 For personal use only Tapao Kaew Prospect Chalawan Prospect • Interpretation reveals a deep basin and multiple plays, prospects & leads • Three (3) independent prospects ready to drill Stacked 4-Way and 3-Way 3-Way Tilted Hanging Wall Anticlines Fault Closures Dip Line Dip Line 4-Way Dip Clos
Slide 26: L20/50 Tapao Kaew Prospect
L20/50 Tapao Kaew Prospect For personal use only • Stacked, hanging-wall anticline closures Intra Yom • 4-way dip at Intra Yom Fm level Horizon 1 • Faulted 3-way buttress at Hor.1 and Unc. A levels Unc. A • Potential 21 MMbbls Pmean recoverable oil W E • Immediately adjacent to kitchen; TD 1,715 met
Slide 27: L52/50 & L53/50
L52/50 & L53/50 For personal use only • Exploration concession formally granted Feb 2010 • The combined area of the two blocks is large, comprising approximately 6,950 km2 • Both permits are lightly explored, with only two deep wells and limited seismic data available • On trend, and in a similar ba
Slide 28: Operations – Other Regions
For personal use only Operations – Other Regions
Slide 29: Operations – Other Regions
Operations – Other Regions For personal use only Page No. Content 26 Phoenix Blocks (Australia) 30 Rangkas PSC (Indonesia) 32 WA-399-P (Australia) 33 Tuatara (New Zealand) 25
Slide 30: Phoenix Blocks
Phoenix Blocks (*) For personal use only (*) Blocks comprise WA-435-P, WA-436-P, WA-437-P, WA-438P & WA-443-P • Permits acquired when Permits secured most of the industry was through gazettal process distracted with GFC issues • 28,300 km2 area in relatively shallow water close to WA shoreline • Par
Slide 31: Phoenix Blocks
Phoenix Blocks For personal use only Phoenix-2 • WA-435-P contains the Phoenix 678 m gross gas gas discoveries column • Phoenix-1: ~110 metre net gas-bearing section Phoenix-1 767 m gross gas • Key targets in ~100 m water 110 m net depth with multi-Tcf recoverable Phoenix resource potential South Pr
Slide 32: Phoenix Blocks
Phoenix Blocks For personal use only Year one data acquisition underway • Acquisition of 1,100 km2 of 3D data scheduled for November 2010 • Acquisition of 407 km of 2D data scheduled for November 2010 • Acquisition of 15,847 km2 of aeromagnetic data completed May 2010 • 2010 budget of A$3 Accelerate
Slide 33: Phoenix Blocks
Phoenix Blocks For personal use only • Gas discoveries in shallow water (~100 m) • Field is within ~250 km of current and proposed onshore LNG plants • The Joint Venture has a window of several years in FIXED SHELF PLATFORM WITH which to realise value from DEHYDRATION the asset Production line 333 k
Slide 34: Rangkas PSC
Rangkas PSC For personal use only • Carnarvon farmed into the permit in September 2009 • Large permit located onshore West Java, close to Jakarta • Previous wells (last in 1991) targeted shallow Neogene carbonates; deeper Paleogene clastic play is untested • Direct evidence of live oil from seeps an
Slide 35: Rangkas PSC
Rangkas PSC For personal use only • Acquisition of 474 km of 2D seismic data scheduled for September 2010 • Data will refine geophysical mapping which reveals over 12 significant leads • Environmental baseline study complete • Reprocessing of 1000 km of existing 2D data complete • Core/reservoir stu
Slide 36: WA-399-P
WA-399-P For personal use only • Apache farmed into the permit in July 2010 • 3D acquisition in planning stage, will be funded by Apache • Multiple play types expected to be better assessed with the 3D seismic data • Nearby and on trend with large oil and gas fields • Acreage located in the Exmouth
Slide 37: Tuatara (New Zealand)
Tuatara (New Zealand) For personal use only • Well drilled August 2010 • Exploration well commitment was ~US$3.2m (net to CVN) • Target prospect 80-100 mmbbl • Result: Intermittent gas and oil shows • Next Phase: Joint venture to undertake technical assessment of well results before assessing AWE (o
Slide 38: Corporate / Finance
For personal use only Corporate / Finance
Slide 39: Corporate / Finance
Corporate / Finance For personal use only Page No. Content 35 Capital Structure 36 Peer Comparison 37 Earnings Analysis 38 Reserves 39 Broker Valuations 41 Taxes Explained 34
Slide 40: Capital Structure
Capital Structure For personal use only • Issued shares 687m Significant Shareholdings (12 Aug 2010) • Options nil Currently there are no significant shareholders • Share price (as at 4 Aug 2010) $0.40 • Market capitalisation $275m Directors & staff hold 9.0% ASX 200 listed company 35
Slide 41: Peer Comparison
Peer Comparison For personal use only $400,000,000.00 $350,000,000.00 $300,000,000.00 Mareket Capitalisation (A$) $250,000,000.00 $200,000,000.00 $150,000,000.00 $100,000,000.00 $50,000,000.00 $- Material mid-cap exploration and production company 36
Slide 42: Earnings Analysis
Earnings Analysis For personal use only 90 80 70 60 US$/bbl 50 40 30 20 10 0 WTI Sales Operating Trucking Corporate EBITDA Dep'n & Royalties Profits tax Income Income Net price costs costs costs per barrel amort'n (SRB) tax tax earnings discount (CVN) (current) (deferred) per barrel Strong financial
Slide 43: Reserves (net to CVN)
Reserves (net to CVN) For personal use only 30 25 20 15 10 5 0 Reserve Production 2P Reserve Production 2P Reserve Production 2P Reserve Production 2P Increase Reserve Increase Reserve Increase Reserve Increase Reserve CY 2006 CY 2007 CY 2008 CY 2009 Strong base for further reserve growth with 57mmb
Slide 44: Broker Reports
Broker Reports For personal use only Coverage by five key broking houses 39
Slide 45: Broker Valuations
Broker Valuations For personal use only CVN share price Company value range $0.46 to $0.80 currently in the range of $0.35 to $0.40 Consensus $0.63 Exploration and appraisal assets value range $0.11 to $0.23 Consensus $0.15 Production assets (reserves) value range $0.31 to $0.54 Gaffney, Cline & Ass
Slide 46: Thai SRB Explained
Thai SRB Explained For personal use only • Thailand III regime • Designed to tax ‘excessive profits’ • Applied to each concession area Source: Hartley's, Department of Mineral Fuels, Thailand • Paid annually SRB Rate 100% 90% SRb Calculated Rate • Sliding scale from 0% to 75% 80% 70% 60% 50% 40% • H
Slide 47: Thai Royalty Explained
Thai Royalty Explained For personal use only • Thailand III regime • Royalty is applied over each concession area • Sliding scale from Source: Hartleys, Department of Mineral Fuels, Thailand 5% to 15% based on production levels Local Sub Royalty Distribution District 20% • Paid on a monthly basis Mi
Slide 48: Upcoming Activities
For personal use only Upcoming Activities
Slide 49: Upcoming Activities
Upcoming Activities For personal use only Page No. Content 44 2010 & 2011 Work Programme 45 Growth Plan 43
Slide 50: 2010 CY Work Programme
2010 CY Work Programme For personal use only Indicative Q1 Q2 Q3 Q4 2011 Thailand L44 & 25 – 35 wells 20 to 25 wells throughout the year L33 production Thailand L44 & (possible 3D 3 to 8 wells throughout the year seismic) L33 exploration Studies Thailand L20/50 (possible 3D 1 to 3 wells exploration
Slide 51: Growth Plan
Growth Plan For personal use only New New Thailand Australia Indonesia Zealand Regions Significant short term and medium term upside within the Exploration existing exploration asset portfolio Significant Appraisal short term • Direct oil & gas asset holding upside • Onshore / shallow offshore • Con
Slide 52: Carnarvon Petroleum Ltd.
ee of CARNARVON PETROLEUM LTD.
Slide 53: For personal use only
For personal use only Ground Floor 1322 Hay Street West Perth WA 6005 Telephone: +61 (8) 9321 2665 Fax: +61 (8) 9321 8867 www.carnarvon.com.au
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