Ithaca Energy PLC · LSE:ITH
Ithaca Energy — Investor Presentation (May 2009)
26 slides from Ithaca Energy's investor presentation, May 2009
Slide 1: May 2009 Update
May 2009 Update (Please could investors note this is updated for recent events post the April Roadshow)
Slide 2: Forward Looking Statement
Forward Looking Statement In the Interest of providing potential investors with information regarding the Company, including management’s assessment of the Company’s future plans and operations, certain statements and graphs throughout this presentation are “forward-looking statements” and represent
Slide 3: Key Points
Key Points The Ithaca team has delivered on production, exploration and deal execution Ithaca has a fully funded, no debt, profile rising to over 10,000 boepd in 2011 Ithaca has no immediate requirement to raise equity funds With some access to additional capital Ithaca can grow organically
Slide 4: Attractiveness of the UK North Sea
Attractiveness of the UK North Sea Significant remaining reserves Prolific production rates Good historic well success ratio of 35%* Established infrastructure Availability of prospects } Majors are moving out } Regular Licensing Rounds Attractive fiscal terms } No royalty – accelerated
Slide 5: Company Background
Company Background 4 years of solid growth in reserves and opportunities (Net 2P reserves 19.2 mmboe (2007), 39.7 mmboe (May 2008), 28.7 mmboe (Dec 2008)) c. $300 MM of equity funds invested to date Listed on TSX Venture and LSE AIM – IAE Share price C$0.53 (May 7, 2009) C$83 MM Market Cap
Slide 6: Recent Achievements and Events
Recent Achievements and Events Strategic asset deal with Dyas Jacky First oil Bravo Production reinstatement Carna exploration success 5 Year oil sales agreement with BP 25th Licensing Round additions Beatrice operational enhancements Optimisation across the portfolio has minimised for
Slide 7: Dyas Transaction
Dyas Transaction Ithaca has sold 25.25% of all its assets as at November 1, 2008 (“Effective Date”) for £40 MM (US$ 65.5) 9.2 mmboe 2P reserves sold (US$ 6.69/boe) Option to purchase additional 15.15% of original interest for US$ 61.2 MM as adjusted for working capital movements from the Effec
Slide 8: Healthy Funded Ithaca
Healthy Funded Ithaca Carna Develop Beatrice Jacky Stella 2nd Jacky Exploration Stella & Lease First Oil Appraisal Well Success Carna Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2008 2009 2010 Proven success in low oil price and challenging funding environment: } Rigorously managed finances } Transferred RBS loan
Slide 9: Production Profile Scenarios
Production Profile Scenarios Base Profile - fully funded } Dyas exercises option } No new debt } No new equity Potential Profile - from existing portfolio } Dyas exercises option } Incremental projects Target Profile - with access to capital and external opportunities } Dyas exercises option }
Slide 10: Base Production Profile (Fully Funded)
Base Production Profile (Fully Funded) 35 Assumptions Post Dyas Option } Dyas exercise option Equities 30 } No new debt } No new equity Carna Carna 23.8 % 25 boepd (‘000) Stella 20 Stella 39.74 % 15 Jacky Jacky 53.64 % 10 Beatrice Beatrice 59.6 % 5 0 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 2009 2010 2011 20
Slide 11: Potential Growth Opportunities
Potential Growth Opportunities Net Additional Peak daily net Price required Net Cost Reserves production to deliver NPV10 ($MM) (MMboe) (boepd) returns Beatrice Enhancements 1.6 3,350 34 35 $/bbl Near Term (6 Workovers, 1 Attic Infill Well) (2009 - 2010) Beatrice field area 1.8 1,500 46 40 $/bbl (2
Slide 12: Potential Production Profile Post Dyas Option
Potential Production Profile 35 Post Dyas Option Equities Assumptions } Dyas exercise option Athena 30 } Includes Athena Athena 37.2 % } Opportunities within existing portfolio Additional funding for incremental projects Current 25 Portfolio sourced from better than anticipated production, Portf
Slide 13: Focused Portfolio – Underpinning Value
Focused Portfolio – Underpinning Value Beatrice & Beatrice & Jacky Jacky Production Hub Production Hub Athena Hub Athena Hub ‘Stable cash ‘Stable cash base’ base’ ‘Oil Price ‘Oil Price Play Play -- ready to ready to go’ go’ Nigg Storage Nigg Storage Facility Facility ‘Sales & ‘Sales & 3rd 3rd Party
Slide 14: Jacky/Beatrice Production
Jacky/Beatrice Production Legend Jacky Beatrice Field (74.75 %*) Well 6 Jacky Field (67.28 %*) Platform Jacky Pipeline Since Beatrice handover Bravo Tie-in } Asset integrity improvement } Export pipeline internal corrosion survey complete BRAVO } Storage ($3.9 million in 2009) and Ship-to-Ship
Slide 15: Carna Exploration
Carna Exploration Gas Discovery (29.9 %*) Garrow Trent } Carboniferous Sandstone Kilmar } Structure filled to spill ~1,500 ft gas column 123 ft net pay m Gross GIIP 171 - 328 Bcf 1K Carna ~1 (Source: Operator - Venture Production: VPC) Well Tested at 9 mmscfpd } In line with pre drill expe
Slide 16: Stella Appraisal
Stella Appraisal Elgin 29/4b Shearwater Stella Discovery (49.8%*) } Gas condensate Explo Franklin } Appraisal drilling H2 2009 29/5e Kessog Define hydrocarbon composition Explo Courageous Define hydrocarbon contact Puffin Shallow (commonly filled to spill) } Net 2P Reserves 5.4 mmboe* (Source:
Slide 17: Athena Development
Athena Development Athena Development (52.3 %*) Review of Capex in progress to capture falling costs in low oil price environment } Drilling Rig rates down 43% } ~$19 MM net saving } Facilities Subsea equipment/steel down 15% } ~$8 MM net saving } FPSO (subject to conversion cost reduction)
Slide 18: Potential Growth Opportunities
Potential Growth Opportunities Net Additional Peak daily net Price required Net Cost Reserves production to deliver NPV10 ($MM) (MMboe) (boepd) returns Beatrice Enhancements 1.6 3,350 34 35 $/bbl Near Term (6 Workovers, 1 Attic Infill Well) (2009 - 2010) Beatrice field area 1.8 1,500 46 40 $/bbl (2
Slide 19: Target Production Profile
Target Production Profile Longer Term 35 More access to funding brings } Beatrice enhancements External Opportunities 30 } Small production additions External Opportunities } Exploration drilling } Asset acquisition(s) Growth Athena 25 boepd (‘000) Current Athena 20 Portfolio Opportunities Near Te
Slide 20: Strategic Direction
Strategic Direction Base Profile 30 Successful portfolio management and 25 optimisation boepd (‘000) 20 } Selective deals struck in a difficult climate 15 } Key projects delivered despite worsening economic climate 10 } Balanced portfolio with real upside 5 } Ithaca is fully funded through 2011 0
Slide 21: Appendices
21 Appendices E N E R GY
Slide 22: Forex Hedging
Forex Hedging 100% of 2009 income is US$ denominated with 60-80% of expenditures in GBP. } Key GBP expenditures cover Wood Group Engineering (North Sea) Limited duty holder contract (c. £30m per annum) } G&A costs of approximately $6m per annum. Ithaca entered in to “Forward Window Plus” contrac
Slide 23: Recent Asset Deal Metrics
Recent Asset Deal Metrics 160 40 Oil Price 140 35 Producing 120 30 Undeveloped 100 25 Oil Price ($) TEV/Boe ($) 80 20 60 15 40 10 20 5 0 0 Jan-2008 Mar-2008 Apr-2008 Jun-2008 Jul-2008 Sep-2008 Nov-2008 Dec-2008 Feb-2009 Apr-2009 May-2009 Nature of Transaction 2P TEV/ Date Buyer Seller Key Assets Ass
Slide 24: $62 MM 2009 Budgeted Capital Plan (Fully funded)
$62 MM 2009 Budgeted Capital Plan (Fully funded) 2009 } Jacky capex now fully expensed and on stream. 8% } Carna well drilled and tested 26% 20% } Beatrice Bravo now flowing. Alpha well work over budgeted for Q4 10% } Stella appraisal well budgeted Q4 36% } Other relates to internal charges on Ath
Slide 25: Management Team
Management Team Iain McKendrick Lawrie Payne Chief Executive Officer Executive Chairman 18 yrs oil industry exp, North 40 yrs of oil industry Sea & Gulf Coast experience Exploration, production & Geologist commercial President/CEO of several Previously VP Business Dev international priva
Slide 26: Board of Directors
Board of Directors CEO and Director Chairman of the Board Iain McKendrick Lawrie Payne Management Management Director Director Director Frank Jay Zammit Alexander Berger Lawyer Managing Director Dyas BV Wormsbecker Reservoir Engineer Director Director Director Jack Lee John Summers Brad Hurtubise Oi