Otto Energy Limited · ASX:OEL
Otto Energy — Investor Presentation (February 2019)
38 slides from Otto Energy's investor presentation, February 2019
Slide 1: Investor Presentation February 2019
Investor Presentation February 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 secu
Slide 3: Disclaimer: Reserves and Resources Governance
Disclaimer Reserves and Resources Governance Otto’s reserves estimates are compiled annually. Otto engages Collarini and Associates, a qualified external petroleum engineering consultant, to conduct an independent assessment of the Company’s reserves. Collarini and Associates is an independent petro
Slide 4: Corporate Snapshot (ASX:OEL)
Corporate Snapshot (ASX:OEL) CAPITAL STRUCTURE FUNDING POSITION SHAREHOLDERS Fully paid ordinary shares 1.875b Cash (31 December 2018) US$10.3m Molton Holdings 16.3% Performance Rights 46.8m Convertible Note Liability US$8.8m Perennial Value Management 7.5% Convertible Notes (US$1 per note)2 8.2m (r
Slide 5: 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 6: Company Overview
Company Overview Building a 5,000 boepd production base by end of 2020 – currently at ~1,580 boepd • First Gulf of Mexico production commenced in • Highly experienced US Gulf Coast operator, March 2018 delivering long-life production, cash Hilcorp Energy, to manage Gulf Coast drilling and flow and r
Slide 7: Location and Formation
Location and Formation 3 Headquarters 1 SM 71 Operations 2 Gulf Coast Package 3 Alaska North Slope 2 1 Oil Lake Don Julio 2 37.5% WI 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 Operating Partner H
Slide 8: Project Ownership Structure
Project Ownership Structure Metric SM 71 VR 232 Gulf Coast Alaska (WB) Alaska (CB) Type JV JV JV JV JV 50/50 37.5% WI 22.5% Ownership Structure 50/50 8% - 10.8% (66.7% of Cost*) (50% of Cost*) (25% of Cost*) NRI 40.625% 43.75% 28.50% 18.75% 6.67 – 9.45% Status Production Exploration Exploration Expl
Slide 9: South Marsh Island 71
South Marsh Island 71 Production commenced March 2018 OTTO ENERGY | INVESTOR PRESENTATION - FEBRUARY 2019 | ASX : OEL 9
Slide 10: South Marsh Island 71 - Overview
South Marsh Island 71 - Overview SM 71 is Otto’s cornerstone production asset currently expected to generate ~US$2m in net free operating cashflow each month • Production commenced in March 2018 • Production sells at LLS (Louisiana Light Sweet) • 50:50 JV (40.625% NRI) with operator Byron Energy • O
Slide 11: 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 JV Partners Byron Energy (operator) 50.0% WI / 40.625% NRI F1 and F3 wells currently completed in D5 sand No prior production from the D5 sand in SM 71 Pleistocene to Pliocene ag
Slide 12: 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 13: South Marsh Island 71 – Reserve Statement
South Marsh Island 71 – Reserve 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 14: South Marsh Island – Production History
South Marsh Island 71 – Production History Field reached 1 million bbls production milestone in January 2019 – less than one year after production commenced Oil Production 6,000 1,200,000 5,000 1,000,000 4,000 800,000 Bbls - Cumulative Bbls - Daily 3,000 600,000 2,000 400,000 1,000 200,000 - - Mar-1
Slide 15: South Marsh Island 71 – Production Forecast
South Marsh Island 71 – Production Forecast Strong future production and cashflows expected to be delivered from SM 71 South Marsh Island 71 Actual & Projected 1P Production 3,000 2,500 Actual 1P Projections Generated from 1P 2,000 Production profile by Collarini & Associates 1,500 1,000 500 0 Actua
Slide 16: 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 - FEBRUARY 2019 | ASX : OEL 17
Slide 17: Gulf Coast Package - Exploration with Hilcorp
Gulf Coast Package - Exploration with Hilcorp Commitment to multi-well exploration drilling program with Hilcorp Energy • Otto secured participation in a multi • Highly experienced and privately owned US exploration well program in July 2018 with Gulf Coast operator Hilcorp Energy to Hilcorp Energy.
Slide 18: Gulf Coast Package – Overview
Gulf Coast Package – Overview Commitment to eight well drilling program with Hilcorp Energy • In July 2018, Otto agreed to participate in a firm • Program Cap – Should Otto has incur a total eight-well program with a right of first offer amount relating to the initial eight wells of (ROFO) to a subs
Slide 19: Gulf Coast Package – Economics
Gulf Coast Package – Economics Risked Portfolio Potential to materially increase Otto’s US business RISKED* SUMMARY DATA - 8 WELL PORTFOLIO, GROSS (8/8THS) Metric P90 P50 P10 Volumes, MMBOE 4.63 19.86 64.59 Peak Production Rate, BOE/d 3,270 9,990 31,300 % Hydrocarbon Liquids per BOE 13% 28% 56% Find
Slide 20: Gulf Coast Package – Lightning Discovery
Gulf Coast Package – Lightning Discovery Production to commence by end of March 2019; net pay significantly ahead of pre-drill estimate Lightning Key Details JV Partners Hilcorp (operator) 62.5% / Otto Energy 37.5% Well Depth 15,218 ft MD/15216 ft TVD targeting Lower Oligocene Frio/Tex Miss sands Si
Slide 21: Gulf Coast Package – Prospects
Gulf Coast Package – Prospects Independent prospects committed to be drilled based on proprietary 3D seismic results Net Planned Target Working Prospect Revenue Stratigraphic County/ Spud Depth Rig Type Interest Location Name Interest Interval Parish Date (TVD), ft (WI) (NRI) Don Julio 2 Feb-19 11,5
Slide 22: Gulf Coast Package – Prospective Resources
Gulf Coast Package – Prospective Resources Potential for material growth in prospective resource identified through new geophysical data capture Prospective Resources1 Probability of MMboe Prospect Name Working Net Revenue Success Interest Interest Otto Net Revenue Interest P90 P50 Mean P10 Don Juli
Slide 23: 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 P10 P50 P90 SM 71 100 80 Probability of Success % Pre-drill estimate; logged net pay Mallard Mustang considerably gr
Slide 24: Gulf Coast Package – Hilcorp Energy Company
Gulf Coast Package – Hilcorp Energy Company Operator with proven capability to take discoveries into production • Founded in 1989, Hilcorp is one of the largest • Hilcorp is consistently recognised for its strong privately held oil and natural gas companies in culture, values, and ethics both within
Slide 25: Alaska North Slope
Alaska North Slope High impact exploration well drilling February 2019 OTTO ENERGY | INVESTOR PRESENTATION - FEBRUARY 2019 | ASX : OEL 26
Slide 26: Alaska North Slope - Overview
Alaska North Slope - Overview Otto to Drill Large Nanushuk Oil Prospect on the Alaska North Slope in February 400 MMbbl2 gross, best estimate prospective resource target on the Alaska North Slope. Otto’s 18.75% net revenue interest (before Great Bear 10% back in – refer table) would be 75 MMbbls2.
Slide 27: Alaska North Slope – Winx-1 Well
Alaska North Slope – Winx-1 Well Ice road, drill pad construction completed and rig mobilisation underway MDKB (ft) vs Time (days) SPUD 0 5 10 15 20 25 30 35 40 45 50 55 60 - 1,000 Drill Surface Hole 2,000 Run Surface Casing / Leak Off Test 3,000 4,000 Drill 8.5" Hole Seabee Turbidites Run 3.5" Tubi
Slide 28: Summary
Summary Otto Energy Limited (ASX:OEL) OTTO ENERGY | INVESTOR PRESENTATION - FEBRUARY 2019 | ASX : OEL 29
Slide 29: Pipeline of Opportunities
Pipeline of Opportunities Otto has assembled an exciting pipeline of upcoming activities 2019 2020 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 SM 71 Low-cost production Lightning Low-cost production Gulf of Mexico VR232 Ongoing studies prior to initial test well Beluga Tarpon Mus
Slide 30: Peer Analysis
Peer Analysis High margin producer with compelling valuation metrics ASX Mid Cap Oil & Gas Companies 5 Feb 2019 Production and Market Cap Distribution 16,000 14,000 Sundance Energy 12,000 10,000 Elk Petroleum BOEPD 8,000 6,000 Horizon Oil 4,000 Central Petroleum Cooper Energy Freedom Oil & Gas Otto
Slide 31: 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 32: Additional Information
Additional Information OTTO ENERGY | INVESTOR PRESENTATION - FEBRUARY 2019 | ASX : OEL 33
Slide 33: Board of Directors
Board of Directors John Jetter Ian Macliver Ian Boserio Kevin Small Non-Executive Chairman Non-Executive Director Non-Executive Director Senior Exploration Consultant LLB, BEc INSEAD BComm, FCA, SF Fin, FAICD BSc (Hons) BSc (Geophysical Engineering) Former MD/CEO J.P. Morgan Managing Director Grange
Slide 34: Matagorda County – Lightning Discovery
Matagorda County – Lightning Discovery Old Ocean field 1 Discovered in 1934, Frio Tex Miss shelf edge production In-Place Liquids 474.6 MMbbls In-Place Gas 4,466 Bcf Baer Franklin 2017 Discovery.2 Cum Prod. Condensate 40.5 Mbbls Gas 3.6 Bcf ©2018 Geomap Company 1. Data source AAPG Lightning Well 2.
Slide 35: Chambers County – Don Julio 2 Prospect
Chambers County – Don Julio 2 Prospect Don Julio Key Details Hilcorp (operator) 59.375% JV Partners Otto Energy 35.625% Private party 5.000% Objective 11,800 ft MD/11,600 ft TVD targeting Oligocene Vicksburg formation Significant historical production exists from the Frio/Tex Miss in Chambers County
Slide 36: Chambers County – Vicksburg Prospects
Chambers County – Vicksburg Prospects Don Julio 2 Well Location 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
Slide 37: Alaska North Slope - Permit Map
Alaska North Slope - Permit Map OTTO ENERGY | INVESTOR PRESENTATION - FEBRUARY 2019 | ASX : OEL 38
Slide 38: 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 39