Egdon Resources — FY2018 Earnings Presentation
29 slides from Egdon Resources's earnings presentation, Oct 30, 2018
Slide 1: Preliminary Results and Business Review
Egdon Resources plc Preliminary Results For the financial year ending 31 July 2018 and Business Review Slide 1 Preliminary Results Investor Presentation 30 October 2018
Slide 2: Egdon at a Glance – Summary
Egdon at a Glance – Summary Operated Best Estimate 2P Reserves Production ** UK Licences Licences Resources 44 28 699 0.54 84 mmboe mmboe boepd Unconventional Prospective Net Cash* Shares in Issue GIIP Unconventional 51 189,000 2.8 c. 260 TCF acres £ million million mmboe = millions of barrels of oi
Slide 3: Strategy Progress
Strategy Progress • Well placed to benefit from the increased operational activity across the UK unconventional resources sector • A period in which Egdon has achieved strategic objectives of: • Balancing portfolio • Mitigating risk exposure • Maintaining cost discipline • Set to deliver a significa
Slide 4: Strategy Progress
Strategy Progress Three key near-term strategic objectives to Status/Progress deliver shareholder value UK growing the Company’s • One of few listed UK investment opportunities with Unconventional exposure to unconventional exposure to shale gas Resources resource exploration • Achieved significan
Slide 5: Operational and Corporate Highlights
Operational and Corporate Highlights • Completion of site construction at Springs Road (PEDL140) IGas (operator) expects to commence drilling in H1 2019 (following Tinker Lane) • Acquisition of additional 5% interest in PEDL180 and PEDL182 for a deferred cash payment • Acquisition of 100% interest i
Slide 6: Financial Statements
Financial Statements • Oil and gas revenues during the period of £1.00 million (2017: £1.04 million) • Loss for the period of £1.98 million after write-downs, pre-licence costs and impairment reversals of £0.40 million (2017: loss of £1.70 million after write-downs, pre-licence costs and impairments
Slide 7: Subsequent Events
Subsequent Events • Appeal submitted during September against the refusal by North Lincolnshire Council to extend the existing consent at Wressle • Holmwood site lease not renewed by Forestry Commission • Installation of new flow meter and restoration of production from the Ceres well • Restart of s
Slide 8: Unconventional Resources – Strategy, Assets & Performance
Unconventional Resources – Strategy, Assets & Performance Strategy: grow the Company’s exposure to unconventional resource exploration opportunities in Northern England • Delivered significant growth in acreage and GIIP since 2014 (acreage 188,531 acres, 51 TCF GIIP) • 2019 = drilling of Springs Roa
Slide 9: Unconventional Resources – East Midlands
Unconventional Resources – East Midlands • Egdon holds 142,796 net acres under licence in the East Midlands with shale/tight gas potential • Gainsborough Trough = Egdon core area - Springs Road drilling H1 2019 (EDR 14.5% Carried) • Widmerpool Basin - 2 licences in basin • Humber Basin - Exploration
Slide 10: Unconventional Resources – Gainsborough Trough – Who’s Who
Unconventional Resources – Gainsborough Trough – Who’s Who *** PL161-2,PEDL043, PEDL169, PEDL037, PEDL011, PEDL139/PEDL140, PEDL209, PL161/162 Option, PEDL273, PEDL305, PEDL316, PEDl278, PEDl276, EXL288, PEDL12, PEDL200, PEDL207, PEDL210, PEDL272, ML004, PEDL006, PL178, ML007 Slide 10 Preliminary Re
Slide 11: Unconventional Resources – Gainsborough Trough - Geology
Unconventional Resources – Gainsborough Trough - Geology Geological Cross-Section across the Gainsborough Trough Source: IGas Investor Presentation September 2018 Slide 11 Preliminary Results Investor Presentation 30 October 2018
Slide 12: Unconventional Resources – Springs Road – Play-Opening Well
Unconventional Resources – Springs Road – Play-Opening Well Springs Road-1 • Site construction essentially completed (Egdon 14.5%) • Vertical exploration well (approx. 3,500m) expected drilling H1 2019 • Egdon’s costs carried by INEOS Shale Springs Road well site Springs Road well site (Courtesy IGa
Slide 13: Unconventional Resources – Industry Activity
Unconventional Resources – Industry Activity Cuadrilla • Hydraulic fracturing and testing of two horizontal wells has commenced with results to be reported in Q1 2019 • Reported “excellent rock quality” and “high natural gas quantities” in two vertical wells with horizontal laterals completed at Pre
Slide 14: Conventional Exploration/Appraisal
Conventional Exploration/Appraisal Strategy: adding additional reserves/revenues through an active drilling programme whilst managing risk and financial exposure through farm-out • Significant UK conventional prospect portfolio • Successful farm-outs at Biscathorpe • More active operational phase =
Slide 15: Conventional Resources - Biscathorpe Prospect
Conventional Resources - Biscathorpe Prospect Biscathorpe Prospect • Planning and EA permit in place Appraisal • Oil shows from 1.2m sand in 1987 BP crestal well, reservoir expected to (5.0 mmbo*) thicken down-dip on structure • High (P10) Estimate Gross Prospective Resources of 41 mmbo • Site const
Slide 16: Conventional Resources - North Kelsey Prospect
Conventional Resources - North Kelsey Prospect North Kelsey Prospect • Prospect with multiple reservoir targets – Wressle analogue (5.2 mmbo*) • Mean Gross Prospective Resources of 6.5 mmbo • Drilling expected 2019 – subject to further farm-out Hibaldstow-1 Reservoir Analogue for North Kelsey Top Di
Slide 17: Conventional Resources – Resolution & Endeavour
Conventional Resources – Resolution & Endeavour Resolution Gas Discovery • Early North Sea discovery (Total: 1966) (P1929*) • Capable of 25-50 mmcfg/d using modern completion techniques (337 bcf**) Endeavour Gas Discovery • Acquired interest at minimal firm consideration (c. £15K) (P2304*) • Endeavo
Slide 18: Conventional Resources – Resolution & Endeavour
Conventional Resources – Resolution & Endeavour • Marine 3D seismic acquisition to optimise appraisal drilling programme • 438km² 3D seismic planned in H1 2019* to detail both Resolution and Endeavour gas discoveries • Finalising an updated reservoir model and Competent Persons Report (CPR) • Seekin
Slide 19: Production
Production Strategy: Continue to focus on maximising production rates, revenues and profitability from existing producing assets through targeted investment 2017-18 production: 84 boepd Production Guidance 2018-19: 150-180 boepd* Ceres • New Flow meter installed in and Ceres production re-commenced
Slide 20: Production – Ceres Gas Field
Production – Ceres Gas Field Ceres gas field • Ceres flowmeter successfully replaced allowing production from Ceres well (Egdon 10% (shut-in since September 2016) non-operated) • Additional back-out production from the Mercury/Neptune gas fields • Forecast combined average net production of 125-150
Slide 21: Production - Fiskerton Airfield Oil Field
Production - Fiskerton Airfield Oil Field Fiskerton Airfield • Acquired for $750,000 in cash (Egdon 80% operated) • Sale of 20% to Union Jack Oil plc • Workovers completed during period January to March 2018 • Production increased to c. 30 bopd • Further optimisation planned • Evaluation of reproces
Slide 22: Production - Wressle Development
Production - Wressle Development Wressle Development • Gross 2P Reserves 0.62 mmbo and 2C Resources 1.53 mmbo (Egdon 30% • Production rate of c. 500 bopd (150 bopd Net Egdon) operated) • Planning Appeals dismissed January 2018 • Application to extend existing planning consent refused (August) and ap
Slide 23: Outlook & Planned Activity
Outlook & Planned Activity Production • Guidance of c.150-180 boepd H1 2019 • Significant increase in Ceres production • New Wressle planning application Unconventional • Drilling of play-opening Springs Road-1 well Resources • Increased activity by Cuadrilla, IGas and INEOS Shale Conventional • Bis
Slide 24: Summary
Summary “A leading UK “shale” “Active conventional “Financial Discipline” portfolio with near-term exploration programme” catalysts” One of two listed UK Drilling programme targeting Onshore project = robust companies with material shale 10.2mmbo* net to Egdon economics acreage Biscathorpe-2 planned
Slide 25: Disclaimer
Disclaimer This document comprises the written materials/slides for a presentation (together with any accompanying information communicated verbally (including any questions and answers session and any material distributed with it), the Presentation) by Egdon Resources plc (the Company). This Presen
Slide 26: Appendices
Appendices Slide 26 Preliminary Results Investor Presentation 30 October 2018
Slide 27: Egdon at a Glance – UK Licences & Activity
Egdon at a Glance – UK Licences & Activity Slide 27 Preliminary Results Investor Presentation 30 October 2018
Slide 28: Financial Statements
Financial Statements Summary Statement of Comprehensive Income Audited year Audited year Summary Statement of Financial Position Audited year Audited year ended 31-Jul-18 ended 31-July-17 ended 31-Jul-18 ended 31-July-17 £'000 £'000 £'000 £'000 Revenue 1,001 1,039 Non Current Assets Accrued revenue
Slide 29: Value Drivers – UK Unconventional Resources
Value Drivers – UK Unconventional Resources- Deal Value $/acre (non N. America) / Argentina Example US Gas / Deal $423/acre Neuquen Deal High Sasol/Talisman $648/acre $38,000/acre / $938/acre Australia Cooper / Deal $2,977/acre Note LOG SCALE $/acre Gainsborough farm-in/optin Deals $2,067/acre IMPLI