Horizon Petroleum Ltd. · TSXV:HPL
Horizon Petroleum — Investor Presentation (October 2019)
34 slides from Horizon Petroleum's investor presentation, Oct 8, 2019
Slide 1: Horizon Petroleum Ltd. - Building a European Conventional Natural Gas Development Company
Horizon Petroleum Ltd. October 2019 Building a European Conventional Natural Gas Development Company
Slide 2: Corporate Introduction
Corporate Introduction Please read important legal, risk and resource advisories in Appendix C to this presentation
Slide 3: Summary
Summary Early stage E&P company focusing on conventional natural gas assets in Europe Strategy • Acquire conventional natural gas development and production assets • Targeting growing, liberalised natural gas markets with high prices (US$8.00-9.00/Mcfe) • Low entry cost opportunities, high operating
Slide 4: Corporate Strategy
Corporate Strategy International experience in developing oil and conventional natural gas fields Proven technical and operating track record § Extensive, diverse international experience, including Europe (Poland, Holland, France, UK)1 § Production and reserves growth through the drill bit and merg
Slide 5: Corporate Overview
Corporate Overview Key corporate information TSX-V: HPL Listing FRA: HPM1 59.9 MM (basic) Common Shares 63.4 MM (fully diluted) Share price (October 8, 2019) C$0.04 Market cap C$3.0 MM Cash (as at September 30, 2019) ~C$200k Debt - Management & Board Ownership 12.8% (fully diluted) Key shareholders
Slide 6: The European Natural Gas Market
The European Natural Gas Market
Slide 7: European Natural Gas: Strong Fundamentals
European Natural Gas: Strong Fundamentals Domestic natural gas production continues to decline • Legacy UK and Dutch natural gas fields are mature • Unconventional natural gas development in past 10 years has been largely unsuccessful • 86% of supply from 3 countries: Russia (42%), Norway (34%), Alg
Slide 8: Polish Natural Gas Market
Polish Natural Gas Market Conventional natural gas fundamentals Polish Power Exchange (POLPX) and Accompanying Natural Gas Price • Rising demand with increasing imports and flat domestic production 280 14.00 260 Historical Strip 13.00 • Strong political push to reduce reliance on Russian natural gas
Slide 9: The Acquisition
Horizon The Acquisition
Slide 10: Asset Acquisition
Asset Acquisition Acquired a proven, but undeveloped field and a large acreage position Agreements executed to acquire 100% interests in four concessions from San Leon Energy plc • Closed August 21, 20191 • US$1 MM in cash, C$1 MM in Horizon common shares and a 6% Net Profit Interest (NPI) payable o
Slide 11: Bielsko-Biala & Cieszyn Concessions: Location
Bielsko-Biala & Cieszyn Concessions: Location Cieszyn Bielsko-Biala Lachowice Gas Development Legend Current SLE/Horizon concessions Other concessions Lachowice export pipeline ~22 km HP High methane system- Transmission HP High methane system- Distribution Exit points from the HP systems TSX-V: HPL
Slide 12: Bielsko-Biala Concession: Lachowice field
Bielsko-Biala Concession: Lachowice field Lachowice-7 3.0 - 8.9 MMcf/d - multiple tests Warsaw Stryszawa-1K drilled into fault zone, highly reduced formation Bielsko – Biala Lachowice field Stryszawa-2K 2.52 MMcf/d • Located in the Carpathian foothills 50 km south of the city of Krakow • 950 km of l
Slide 13: Lachowice Reserves and Resources
Lachowice Reserves and Resources1,2,3,4 • 2P reserves assigned to the Lachowice-1, Lachowice-7 and Stryszawa-2K wells o Initial development drilling converts a portion to Proven Developed Producing category • Contingent resources in the fractures and matrix tight natural gas reservoirs in Lachowice-
Slide 14: Horizon Lachowice Development Plan
Horizon Lachowice Development Plan1,2,3 C$20-26 MM (combined with free cash flow) required to increase production to 30+ MMscfe/d Appraisal and development beyond that is expected to be fully funded from cash flow Engineering/Geoscience/Planning Government Approval/Land Negotiations Op. Execution On
Slide 15: Horizon Lachowice Development Plan (cont.)
Horizon Lachowice Development Plan (cont.)1,2,3 3. Follow up development drilling to convert remaining 100 Bcfe of risked Contingent Resources and 123 Bcfe of risked Prospective Resources to proven and probable reserves intended to be fully funded from cash flow Lachowice Production Forecast Capital
Slide 16: Kotlarka, Prusice Concessions
Kotlarka, Prusice Concessions Radziadz 37 bcf Grabowka 20 bcf Kotlarka Wierzchowice Borzecin 442 bcf 188 bcf Prusice Brzostowo 117 bcf Czeszow 71 bcf Dorzhen Gas discovery 9-10 bcf estimated reserves, 16 MMscf/d well test rate Potential field re-development PGNIG flowlines • Incremental reserve addi
Slide 17: Growth Strategy
Horizon Growth Strategy
Slide 18: Growth Strategy
Growth Strategy1 • Established near-term operated natural gas reserve and production platform § Targeting first natural gas sales of up to 3.0 MMscfe/d in Q1-2021 from the Lachowice natural gas field at estimated capex of US$8 million § Initiate full-field development drilling program in Late 2021 •
Slide 19: Why Invest In Horizon?
Why Invest In Horizon? • Compelling entry valuation to access 36 Bcfe 2P reserves with US$98 MM NPV10 § US$1 MM, C$1 MM in Horizon shares, 6% Net Profit Interest • Near-term work program to initiate early production and cash flow • Executed a LOI with a private company to farmout 50% in the Lachowic
Slide 20: Corporate Information
Corporate Information Contact Details: Dr. David A. Winter, President & CEO david.winter@horizon-petroleum.com +1 (403) 619-2957 Matt Janisch, Interim CFO matt.janisch@horizon-petroleum.com +1 (403) 975-4941 Office: Suite 1500, 700 4th Ave. S.W. Calgary, AB, T2P 3J4 CANADA Corporate Website www.hori
Slide 21: Appendix A: Additional Information
Appendix A: Additional Information
Slide 22: Management and Board
Management and Board David Winter Yogeshwar Sharma President & Chief Executive Officer, Non-Executive Chairman Director Matt Janisch Dr. Charle Gamba Interim Chief Financial Officer, Director Non-Executive Director Martin Robert Harry Wilson Chief Operating Officer Non-Executive Director TSX-V: HPL
Slide 23: Reserve and Resource Summary
Reserve and Resource Summary1,2 1. Prepared by APEX Global Energy Inc. effective January 31, 2018 in accordance with NI51-101 and COGEH 2. See important risk advisory and resource advisory at the end of this presentation 3. PIIP: Petroleum-Initially-in-Place – for definitions see disclosure at end o
Slide 24: Lachowice-7 Cross Section
Lachowice-7 Cross Section Devonian Black Shale – 36 m (gross thickness) Lachowice Development: • Targeting naturally fractured carbonates of Devonian age D4 Devonian Unit (fracture and matrix porosity) – 84 m • Thick natural gas columns between 130 to >300 m • Porosity range 2 - 7% D3b Devonian Unit
Slide 25: Appendix B: Horizon Development Plan Assumptions
Appendix B: Horizon Development Plan Assumptions
Slide 26: Horizon Development Plan Assumptions
Horizon Development Plan Assumptions • HPL maintained the reserves and resources estimated by APEX in the Reserves Report • HPL updated the Reserves Report with the following: § CAPEX: Based on updated 3rd party cost estimates for drilling, completion and processing equipment § Production forecasts:
Slide 27: Appendix C: Legal Notices, Risk and Resources Advisories
Appendix C: Legal Notices, Risk and Resources Advisories
Slide 28: Disclaimer
Disclaimer Forward-Looking Information This information contained in this corporate presentation and the accompanying verbal presentation (the “Presentation”) contains forward-looking statements and forward-looking information (collectively, “forward-looking information”) within the meaning of appli
Slide 29: Disclaimer (cont.)
Disclaimer (cont.) FOFI and other Financial Matters This Presentation contains future-oriented financial information and financial outlook information (collectively, "FOFI") about the Company’s prospective results of operations, operating netbacks and components thereof, all of which are subject to
Slide 30: Disclaimer (cont.)
Disclaimer (cont.) Cautionary Statements (cont.) For the purpose of Section 21 of the Financial Services and Markets Act 2000 of the UK ("FSMA"), any invitation or inducement to engage in any investment activity included within the Presentation is directed only at (i) investment professionals (withi
Slide 31: Risk Advisory
Risk Advisory The reserve and resource estimates of natural gas and natural gas liquids reserves provided in this presentation are estimates only, and there is no guarantee that the estimated reserves and/or resources will be recovered. Actual reserves and resources may eventually prove to be greate
Slide 32: Risk Advisory (cont.)
Risk Advisory (cont.) Estimates of resources always involve uncertainty, and the degree of uncertainty can vary widely between accumulations/projects and over the life of a project. Consequently, estimates of resources should generally be quoted as a range according to the level of confidence associ
Slide 33: Resource Advisory
Resource Advisory Definitions Total Petroleum Initially in Place (“PIIP”) refers to the total quantity of petroleum that is estimated to exist originally in naturally occurring accumulations. It includes the petroleum that exists in known accumulations prior to production and the estimated quantitie
Slide 34: Resource Advisory (cont.)
Resource Advisory (cont.) Resources are defined in the Canadian Oil and Gas Evaluation Handbook (COGEH) Volume 1, section 5 as follows: Contingent Resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations, but the applied projec
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