Tomer Energy Royalties (2012) Ltd. · TASE:TOEN
Tomer Energy Royalties (2012) — Delek Royalties — Investor Presentation (March 2020)
33 slides from Tomer Energy Royalties (2012)'s investor presentation, March 2020
Slide 1: The High Margin Energy Royalties & Streaming Company
THE HIGH MARGIN ENERGY ROYALTIES & STREAMING COMPANY March, 31
Slide 2: Cautionary Statements
CAUTIONARY STATEMENTS CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This presentation was prepared by Delek Royalties and is given to you only for the provision of concise information for the sake of convenience, and may not be copied or distributed to any other person. The Data and informati
Slide 3: About Delek Royalties
About Delek Royalties TASE: DLRL 3
Slide 4: A Model Designed to Benefit All Stakeholders
A MODEL DESIGNED TO BENEFIT ALL Our Vision STAKEHOLDERS To be a premier energy investment vehicle (*) Our Mandate To deliver value though royalties & streaming to all of our stakeholders: To our Shareholders, To our Partners, by delivering low risk, by crystallizing high quality, diversified value f
Slide 5: Delek's Royalties & Streaming Advantage
DELEK’S ROYALTIES & STREAMING ADVANTAGE PREDICTABLE DCF ENERGY PRICE LEVERAGE Contractually defined royalties Investors get leverage to energy as % of revenues typically prices (*) protects streamers from inflationary co pressure (opex & capex) UPSIDE HIGH WIT LOWER Receives the benefit from oil & U
Slide 6: Unique and Sustainable Dividend
UNIQE AND SUSTAINABLE DIVIDEND HIGH DIVIDEND YIELD Unique Dividend Policy: • Distribute net earnings every year. • 90% of net earnings (1) Benefits: • Limited commodity price exposure • Participation in robust organic production grow • Exploration and expansion upside • Sustainable and flexible • Di
Slide 7: How Royalties & Streaming Works
HOW ROYALTIES & STRAMING WORKS A NEW ALTERNATIVE IN PROTFOLIO OPTIMIZATION Delek makes an UPFRONT PAYMANT Upfront Payment and (CASH AND/OR DLRL SHARES) in return, we receive DELEK PARTNER ENERGY ROYALTI COMPAN a fixed percentage of ES Y the future production % OF PRODUCTION (CASH) from energy projec
Slide 8: Delek Royalties & Streaming Model
DELEK ROYALTIES & STREAMING MODEL ANALYZE THE IMPACT POTENTIAL 6 1 ON DELEK’S PORTFOLIO OPPERTUNITY Using the After identifying a Appropriate potential FUTURE discount rate, opportunity, future cash flows we use the 5 CASH FLOWS 2 are discounted to production profile determine the PRODUCTION and val
Slide 9: High Quality Asset Base
HIGH QUALITY ASSET BASE 9
Slide 10: Tamar – World Class Deepwater Project
TAMAR – WORLD CLASS DEEPWATER POJECT ISRAEL ECONOMIC WATER Our Royalties 1.52% from 100% Tamar Revenues 2P Reserves* 10.8 tcf (305 bcm) First Gas 31.03.2013 Production Capacity Up to 1.1 bcf/d (11 bcm/y) Long Life Production 30 years (2050) Global Scale Development & Operation: Very high operational
Slide 11: Ownership – Working Interest
OWNERSHIP – WORKING INTEREST 4% 25% (Operator) 28.75% 3.5% Everest 22% 16.75% Tamar Petroleum 11
Slide 12: Our Partners
OUR PARTNERS Delek Drilling (TASE: Tamar Petroleum (TASE: DEDR.L) with Market TMRP) with Market Cap Cap of of 205 MM$ (**) and 3.0 B$ (**) and Global Global Credit Rating BB (*) Credit Rating BB (*) (*) Both have Credit rating of A1il by Midroog (Moody’s subsidiary) practically equivalent to global
Slide 13: Robust Steady CF Generating Project
ROBUST STEADY CF GENERATING POJECT GROSS REVENUES ($mm) Revenue increase resulting from supply and price protective GSPAs Long term contractual structure with limited commodity 2500 price risk 2,020 2067 1,860 2000 1,749 1,577 1.5+ 1,601 9.2+ 6.3+ 8.6+ 2.3+ 1500 % % % % % 10.4 9.7 10.3 $MM 9.3 1
Slide 14: Benefits to Partner Energy Companies
BENEFITS TO PARTNER ENERGY COMPANIES 14
Slide 15: Energy Royalties & Streaming
ENERGY ROYALTIES & STREAMING Royalty Debt THE BENEFITS Equity & TO PARTNER COMPANY Stream Non-dilutive form of funding Initial value creation for both parties Improvs project IRR and partner’s ROE Crystalize future production of energy partner Share sales risk Expedited due diligence & closing proce
Slide 16: It Is Not Mezzanine or Debt!!
IT IS NOT MEZZANINE or DEBT !! Mezzanine or Royalty & Debt THE BENEFITS Stream TO PARTNER COMPANY - Capacity constrained Credit rating and on going disclosure - requirements - Minimum deal size - Early redemption costs - Financial covenants required Bespoke disclosure and documentation - requirement
Slide 17: Why Invest in Delek Royalties?
קבוצת דלק בע"מ ?WHY INVEST IN DELEK ROYALTIES 17
Slide 18: A Premier Energy Investment
A PREMIER ENERGY INVESTMENT DELEK HAS HIGH QUALITY ROYALTIES Energy Delek Project / Assets Royalties Energy 100% No capital cost exposure & No abandonment liabilities No operating cost exposure & No environmental costs Exploration & expansion upside Highly diverse asset base Sustainable dividend Lev
Slide 19: Delek's Track Record
DELEK’S TRACK RECORD AS OF DECEMBER 31 , 2019 mm$ invested in royalties 174 mm$ of operational cash flows generated from IPO to Dec 2019 38 mm$ paid in dividends to Dec 2019 (~ 10% annualized yield) (TASE Avg. 2.6%) 4 ~ mm$ cash flows expected (1) 900 ~ years of reserve life remaining (1) 30 average
Slide 20: Delek Is Both the Present and the Future of Royalties & Streaming
DELEK IS BOTH THE PRESENT AND THE FUTURE OF ROYALTIES & STREAMING Delek Royalties provide strong balance sheet with low risk business/profile: DCF predictability High quality asset base Sustainable operations Leverage to energy prices Attractive valuation Tax confidence Competitive div
Slide 21: Financial Snapshot
FINANCIAL SNAPSHOT FINANCIAL RESULTS AND BALANCE SHEET (IFRS GAAP) YTD Q4 19 Q3 19 Q2 19 Q1 19 )2019( 28.9 7.9 7.5 6.4 7.1 Revenues (mm$) 3.6% 3.3% 3.2% 4.3% 3.9% )%( G&A 28.0 7.7 7.3 6.1 6.8 EBITDA (mm$) 97% 97% 97% 95% 96% )%( EBITDA Net earnings 14.5 4.0 3.9 3.0 3.6 (mm$) 50% 51% 52% 47% 51% )%(
Slide 22: Delek Versus Other Energy Companies
DELEK VERSUS OTHER ENERGY COMPANIES (*) STRONG CASH FLOW GENERATING As of 31 December 2019 EBITDA Margin Operating CF/Revenues Delek Royalties 97% Cohen Development Gas 92% & Oil Cohen Development 94% Delek Royalties 85% Gas & Oil Tamar Petroleum 74% Alon Natural Gas 67% Exploration Solegreen 67% Ta
Slide 23: Corporate Costs
CORPORATE COSTS LOW G&A COSTS ENABLE SCALABILITY OF BUSINESS As of 31 December 2019 G&A as % of Revenues 30% 29% 25% 20% 15% 14% 12% 10% 8% 5% 4% 4% 1% Sector 0% Avr. Series1 -5% 10% Tamar Delek RoyaltiesAlon Natural Cohen Sunflower Solegreen Modiin Energy Petroleum Gas Exploration Development Gas &
Slide 24: Delek Overview
DELEK OVERVIEW (December 31, 2019) Capitalization Table 20,001,000 Common Shares Outstanding 2.5 Share Price ($) (1) 50 Market Capitalization (mm$) 75 Net Debt (mm$) 9 Adj (mm$) 134 Enterprise Value (mm$) 10% Yield (2) 21% ROE (3) (1) Closing price as of December 31, 2019. Share price is traded in N
Slide 25: Leadership Team
LEADERSHIP TEAM Senior leadership team offers unique expertise managing royalty assets and broad, long-standing industry relationships Board of Directors Executive Team Assi Bartfeld, Chair of the Board Meir Menachem, President & CEO / Former CEO of DELEK GROUP (TASE: DLEKG) Director Market Cap 1.7B
Slide 26: Contact
CONTACT www.delekroyalties.co.il TASE: DLRL 26
Slide 27: Thank you
קבוצת דלק בע"מ Thank you 27
Slide 28: Types of Royalties
TYPES OF ROYALTIES The following figure outlines the royalty hierarchy. As you move down the royalty hierarchy, costs increase and duration decreases Crown Royalties Fee Simple Petroleum Title Low Risk Delek Gross Overriding Royalties Royalties Streams Core Business Net Profit Interest High Volumetr
Slide 29: Royalty Interests Generally Senior to All Claims in Capital Structure
ROYALTY INTERESTS (oil & gas) GENERALLY SENIOR TO ALL CLAIMS IN CAPITAL STRUCTURE In many countries royalty interests (oil & gas) are considered by law to be real property interests and are thus afforded additional protection under bankruptcy law Royalty Interest owner entitled to ~ 15%- 25% of prod
Slide 30: Why Delek Is a Premier Royalties & Streaming Company
WHY DELEK IS A PREMIER ROYALTIES & STREAMING COMPANY An established track record of treating our partners Focused on sustainable .fairly relationships Maintaining a focus on high-quality, long-life assets Quality is of utmost .that are accretive to our portfolio importance Our knowledge of the royal
Slide 31: Highest Dividend Yield Amongst Streamers
HIGHEST DIVIDEND YIELD AMONGST STREAMERS “ Flowstream targets 7% yield from oil and gas royalties 26 July 2019, London FlowStream Royalties looks to raise $250 million (£200 million) for trust investing in mature oil exploration and production companies. FlowStream Royalties (FSR), a new investment
Slide 32: Delek Royalties Is Independent from Delek Group
DELEK ROYALTIES IS INDEPENDENT FROM DELEK GROUP • Delek Royalties is traded in TASE:DLRL owned 39.9% by Delek Group (non- controlling interest) and 60.1% by the public • The 39.9% stake of Delek Group, must be sold until December 2021 and until then those shares doesn’t have any voting rights nor ma
Slide 33: Delek Royalties Has High Level of Corporate Governance
DELEK ROYALTIES HAS HIGH LEVEL OF CORPORATE • GOVERNANCE Delek Royalties is traded in TASE:DLRL owned 39.9% by Delek Group (non-controlling interest) and 60.1% by the public • The 39.9% stake of Delek Group doesn’t have any voting rights nor management rights • Delek Royalties has an independent tea