Otto Energy Limited · ASX:OEL
Otto Energy — 121 Oil and Gas Investment Conference Hong Kong 2019
40 slides from Otto Energy's conference presentation, May 15, 2019
Slide 1: 121 Oil and Gas Investment Hong Kong
121 Oil and Gas Investment Hong Kong 15 May 2019 ASX: OEL 1
Slide 2: Disclaimer
Disclaimer This presentation is provided for information purposes only and is not a disclosure document as defined under the Corporations Act 2001 (Cth) This presentation does not constitute an offer, invitation, solicitation or recommendation with respect to the purchase, sale or issue of any secur
Slide 3: High Impact Catalysts for Q2 2019
High Impact Catalysts for Q2 2019 Otto has an active drilling program underway – two wells expected to reach target in coming quarter • SM71 continued strong production and cashflow • Lightning field production to commence this quarter • Green Canyon 21 “Bulleit” oil appraisal well to reach target b
Slide 4: Corporate Snapshot
Corporate Snapshot (ASX:OEL) CAPITAL STRUCTURE FUNDING POSITION SHAREHOLDERS Fully paid ordinary shares 2.460b Cash (6 May 2019) US$16.8m Molton Holdings 12.4% Performance Rights 46.8m Debt Nil Perennial Value Management 10.5% Market capitalisation1 A$133m Colonial First State 5.5% Directors & Manag
Slide 5: Otto Energy's Strategy
Otto Energy’s Strategy Strategic Goal - Build a 5,000 boepd production base by end of 2020 – currently at ~1,750 boepd • Exploration focused, conventional oil and gas • Material cashflow generation supports funding projects with non-operator business model growth initiatives • Pure play focus on pro
Slide 6: Location and Formation
Location and Formation Houston Headquarters 1 SM 71 Operations & GC21 Appraisal/Development 2 Gulf Coast Package 2 1 Oil Lake 37.5% WI Mustang Mallard Beluga 37.5% WI 37.5% WI 37.5% WI Tarpon 37.5% WI Miocene Trend Lightning Pliocene Trend 37.5% WI VR232 SM71 50% WI 50% WI GC21 Operating Partner 16.
Slide 7: Production - South Marsh Island 71, offshore Gulf of Mexico
Production - South Marsh Island 71, offshore Gulf of Mexico Strong free cashflow base to fund growth ~US$2m in net operating cashflow each month South Marsh Island 71 Joint Venture Otto Energy 50.0% Byron Energy (operator) 50.0% Fiscal Terms Federal Royalty 18.75% Held by production licence Location
Slide 8: Development – Lightning, onshore Texas Gulf Coast
Development – Lightning, onshore Texas Gulf Coast First production scheduled for Q2 2019 – first discovery under Gulf Coast Drilling program Lightning Discovery Joint Venture Otto Energy 37.5% Hilcorp Energy (operator) 62.5% Fiscal Terms Landowner Royalty 24.9% Held by production licence Lightning L
Slide 9: Appraisal – Green Canyon 21 “Bulleit”, offshore Gulf of Mexico
Appraisal – Green Canyon 21 “Bulleit”, offshore Gulf of Mexico Appraisal well currently drilling – results expected before end of Q2 2019 Green Canyon 21 “Bulleit” Prospect ~16 km tie-back Joint Venture Otto Energy 16.67% (paying interest of 22.22%) GC21 - Bulleit Prospect Talos Energy (operator) 50
Slide 10: Exploration – Mustang, onshore Texas Gulf Coast
Exploration – Mustang, onshore Texas Gulf Coast Exploration well spud in May 2019 – results expected in early Q3 2019 Mustang Prospect Joint Venture Otto Energy 37.5% Hilcorp Energy (operator) 62.5% Fiscal Terms Landowner Royalty 25.0% Held by production licence Location Onshore Chambers County, Tex
Slide 11: Pipeline of Opportunities
Pipeline of Opportunities Otto has assembled an exciting pipeline of upcoming activities 2019 2020 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 SM 71 Low-cost production Lightning Low-cost production VR232 Ongoing studies prior to initial test well Gulf of Beluga Oil Lake Mexico Hilcorp G
Slide 12: Otto Energy Limited (ASX:OEL)
Otto Energy Limited (ASX:OEL) An emerging mid-tier oil and gas producer underpinned by cashflow to fund growth • Low cost oil producer - expected to generate net • Strong financial and production growth discipline free cashflow of ~US$2m per month from SM 71 - capitalise on additional opportunities
Slide 13: Additional Information
Additional Information OTTO ENERGY | INVESTOR PRESENTATION - MAY 2019 | ASX : OEL 13
Slide 14: Project Ownership Structure
Project Ownership Structure Metric SM 71 Lightning Gulf Coast Green Canyon 21 VR 232 Type JV JV JV JV JV Ownership 37.5% WI 16.67% WI 100% WI 50% WI 37.5% WI Structure (50% of Cost1) (22.22% of Cost1) NRI 40.625% 28.50% 28.50% 13.336% 81.25% Status Production Development Exploration Appraisal Explor
Slide 15: Management Team
Management Team Matthew Allen David Rich Philip Trajanovich Managing Director & CEO Chief Financial Officer & Company Secretary Senior Commercial Manager BBus, FCA, FFin, GAICD BCom. FCA, GAICD, Grad.Dip.CSP AGIA B.Com (First Class Honours) Global exposure to the upstream oil and gas Experienced lis
Slide 16: Board of Directors
Board of Directors John Jetter Ian Macliver Ian Boserio Kevin Small Non-Executive Chairman Non-Executive Director Non-Executive Director Non-Executive Director & LLB, BEc INSEAD BComm, FCA, SF Fin, FAICD BSc (Hons) Senior Exploration Consultant Former MD/CEO J.P. Morgan Managing Director Grange Exec
Slide 17: South Marsh Island 71
South Marsh Island 71 Production commenced March 2018 OTTO ENERGY | INVESTOR PRESENTATION - MAY 2019 | ASX : OEL 17
Slide 18: Production - South Marsh Island 71
Production - South Marsh Island 71 Strong free cashflow base to fund growth ~US$2m in net operating cashflow each month • Production commenced in March 2018. • Currently producing approximately 3,100 bopd plus 7 MMscf/d of gas (gross) • Low opex, high margin oil production. SM 71 receives premium pr
Slide 19: South Marsh Island 71 – Key Facts
South Marsh Island 71 – Key Facts Discovered in 2016 – production commenced March 2018 Otto Energy 50.0% WI / 40.625% NRI Held by production, entry secured via farm-in during JV Partners Lease terms Byron Energy (operator) 50.0% WI / 40.625% NRI December 2015, Royalty rate 18.75% Pleistocene to Plio
Slide 20: South Marsh Island 71 – Production History
Bbls - Daily - 1,000 2,000 3,000 5,000 6,000 4,000 23/03/2018 30/03/2018 6/04/2018 13/04/2018 20/04/2018 27/04/2018 4/05/2018 11/05/2018 18/05/2018 25/05/2018 production commenced 1/06/2018 8/06/2018 15/06/2018 22/06/2018 29/06/2018 6/07/2018 13/07/2018 20/07/2018 27/07/2018 3/08/2018 10/08/2018 17/
Slide 21: South Marsh Island 71 - D5 Sand Completions
South Marsh Island 71 - D5 Sand Completions Salt dome flank play unlocked with further infill opportunity Notice: This data is owned by and is a trade secret of Fairfield Geotechnologies and is protected by US and international copyrights. The use of this data is restricted to companies holding a va
Slide 22: South Marsh Island 71 – Reserves Statement
South Marsh Island 71 – Reserves Statement SM 71 Gross 100% Otto Net (40.625%) 30 June 2018 Collarini & Associates Independent Estimate Oil (Mbbl) Gas (MMscf) MBoe Oil (Mbbl) Gas (MMscf) MBoe Proved Developed Producing (PDP) 3,466 2,130 3,821 1,408 865 1,552 Proved Behind Pipe (PDNP) 609 380 672 248
Slide 23: Gulf Coast Package with Hilcorp Energy
Gulf Coast Package with Hilcorp Energy Multi-well exploration package with first discovery made February 2019 OTTO ENERGY | INVESTOR PRESENTATION - MAY 2019 | ASX : OEL 23
Slide 24: Gulf Coast Package - Exploration with Hilcorp
Gulf Coast Package - Exploration with Hilcorp Value of Lightning discovery expected to exceed capital costs of the full 8 well program • Lightning exploration well delivers first discovery in • Near/Onshore locations with identified access to program with production expected to commence in Q2 infras
Slide 25: Gulf Coast Package – Lightning Discovery
Gulf Coast Package – Lightning Discovery Flow test indicates high liquids yield and strong production expected - commencing in Q2 2019 • Discovery made Feb 2019 with 180 feet of net pay • Flow test results, high well pressures and nearby Freo logged compared to pre-drill P50 and P10 estimates of Tex
Slide 26: Chambers County – Vicksburg Prospects
Chambers County – Vicksburg Prospects Mustang, Corsair, Hellcat Complex Turtle Beach Field (Vicksburg) (LLOX discovery made in 2018 – on production in Sept 2018) Tarpon & Damsel Beluga Well Well Location Location Algoa Field (Vicksburg) 6.0 BCF and 0.2 Mbbl (1993 to current) LLOX made new discoverie
Slide 27: Chambers County – Mustang Prospect (Currently Drilling)
Chambers County – Mustang Prospect (Currently Drilling) Mustang Key Details Hilcorp (operator) 62.5% JV Partners Otto Energy 37.5% Objective 17,500 ft MD targeting Oligocene Vicksburg formation Significant historical production exists from the Frio/Tex Miss in Chambers County, however the Vicksburg
Slide 28: Gulf Coast Package – Prospective Resources
Gulf Coast Package – Prospective Resources Independent prospects committed to be drilled based on proprietary 3D seismic results Prospective Resources1 Prospect Net Target Probability MMboe Name Working Planned Stratigraphic Revenue Depth of Success (State) Interest Spud Date Interval Otto Net Reven
Slide 29: Gulf Coast Package - Timing
Gulf Coast Package - Timing Risk-weighted potential of the Hilcorp Gulf Coast portfolio versus SM 71 Comparison of SM 71 reserve base with Gulf Coast Package prospective resources 120 This is the pre-drill estimate. Logged net SM 71 Lightning pay and liquids yield are P10 P50 P90 multiples of the P5
Slide 30: Green Canyon 21 “Bulleit” Appraisal Well
Green Canyon 21 “Bulleit” Appraisal Well Low risk, high production rate oil development with deeper amplitude supported exploration potential OTTO ENERGY | INVESTOR PRESENTATION - MAY 2019 | ASX : OEL 30
Slide 31: Green Canyon – “Bulleit” Well Currently Drilling
Green Canyon 21 – “Bulleit” Well Currently Drilling Participating in appraisal well testing “Bulleit” prospect with respected offshore operator Talos Energy. • Drilling of existing discovery now underway with Joint Venture Parties further upside through deepening to test a second Party Working Net R
Slide 32: Gulf of Mexico Green Canyon 21 Farm-in - Overview
Gulf of Mexico Green Canyon 21 Farm-in - Overview Otto participating in appraisal/development drilling at Green Canyon 21 operated by Talos Energy Low risk, high production rate oil development with deeper amplitude supported exploration potential • Farm-in terms: 1/3 for 1/4 on first well • Working
Slide 33: Green Canyon – Overview of Bulleit
Green Canyon 21 – Overview of Bulleit Key targets already discovered and tested – appraisal/development well currently drilling • Originally discovered in 1984 • Three oil sands discovered within the DTR-10 Sand Package; DSTs from first and third sands yielded test rates of 2,100 bopd and 1,675 bopd
Slide 34: Green Canyon Farm-in – Overview of Development
Green Canyon 21 Farm-in – Overview of Development Subsea development planned to start production in 2020 • Talos will complete the well as a subsea tieback with a smart completion; tying back to Talos operated GC 18A-Platform. • Adequate capacity for a second well if warranted for acceleration. • Da
Slide 35: Summary
Summary Otto Energy Limited (ASX:OEL) OTTO ENERGY | INVESTOR PRESENTATION - MAY 2019 | ASX : OEL 35
Slide 36: Peer Analysis
Peer Analysis High margin producer with compelling valuation metrics ASX Mid Cap Oil & Gas Companies 9 May 2019 16,000 Production & Market Cap Distribution 14,000 Sundance Energy 12,000 10,000 BOEPD1 8,000 Elk Petroleum 6,000 Central Petroleum Horizon Oil Senex Cooper Energy 4,000 Freedom Oil & Gas
Slide 37: Reserves & Prospective Resources
Reserves & Prospective Resources RESERVES AND PROSPECTIVE RESOURCES RESERVES AND PROSPECTIVE RESOURCES OTTO ENERGY WORKING INTEREST (WI) % OTTO ENERGY NET REVENUE INTEREST (NRI) % Reserves - 30 June 2018 Oil (Mbbls) Gas (MMscf) Mboe (6:1) Reserves - 30 June 2018 Oil (Mbbls) Gas (MMscf) Mboe (6:1) SM
Slide 38: Competent Persons and Cautionary Statements
Competent Persons and Cautionary Statements Competent Persons Statement The information in this report that relates to oil and gas resources in relation to the Gulf Coast Package (Lightning, Mustang, Beluga, Oil Lake, Tarpon and Mallard) in the Gulf of Mexico was compiled by technical employees of H
Slide 39: Competent Persons and Cautionary Statements
Competent Persons and Cautionary Statements Prospective Resources Prospective resource estimates in this report for SM 71 are prepared as at 30 June 2018. Refer to the ASX release of 6 August 2018. The Gulf Coast Package and Alaska Central Blocks prospective resource estimates in this report are eff
Slide 40: Address Contact Info Telephone
Address 32 Delhi Street West Perth WA 6005 Australia 1200 Smith Street Suite 1080 Houston TX 77002 United States of America Contact Info Email: info@ottoenergy.com Web: www.ottoenergy.com Telephone + 61 8 6467 8800 +1 713 893 8894 40
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