Serica Energy Plc · LSE:SQZ
Serica Energy — Shareholder Meeting (June 2016)
19 slides from Serica Energy's shareholder meeting presentation, Jun 23, 2016
Slide 1: AGM 23 June 2016
AGM 23 JUNE 2016
Slide 2: Disclaimer
DISCLAIMER The information presented herein is subject to amendment and has not been independently verified. Serica Energy plc (“Serica”) does not represent that the information and opinions contained herein are necessarily adequate or accurate and no liability is accepted for any errors or omission
Slide 3: Highlights
HIGHLIGHTS Cash of Production of Profitable producer US$24M 3,000 at end March ‘16 boepd over H2 2015 High impact 2015 profit after tax Zero debt, no exploration material portfolio US$6.5M commitments 3
Slide 4: Covering the Full Cycle
COVERING THE FULL CYCLE PRODUCTION: Erskine Field • Can deliver up to *4,500boepd net to Serica • Average rate for January and February 2016 over 3,300boepd (net) • 4.2mmboe P+P reserves booked at 1 January 2016 DEVELOPMENT: Columbus • Progressing plans to develop 6.2mmboe contingent resource net to
Slide 5: 2015 Financials
2015 FINANCIALS Profit and Loss 2015 ($Millions) Revenue 24.0 7 months’ production Operating costs (6.6) $10.90/boe after exceptional Q3 credits DD&A (1.3) $2.20/boe reflects low Erskine acquisition cost GROSS PROFIT 16.1 Serica share price vs Brent Crude price Pre-licence costs and (8.5) Exploratio
Slide 6: 2015 Financials
2015 FINANCIALS Balance sheet 2015 2014 ($Millions) ($Millions) Exploration and evaluation 51.9 58.1 Columbus investment to date assets plus retained exploration PP&E 8.9 - Erskine acquisition Deferred tax 2.4 - Total non-current assets 63.2 58.1 Inventories and receivables 4.6 2.3 Mainly December 2
Slide 7: Erskine: Impact on Company Performance
ERSKINE: IMPACT ON COMPANY PERFORMANCE Share price performance since June 2015 Gross profit of 2015 Erskine acquisition INCREASED $16.1M from 18% PRODUCTION interest in Erskine Net production H2 ’15 3,000 boepd 2015 gross profit $16 million End March ‘16 cash $24 million Current market cap $40 milli
Slide 8: Erskine Material Benefits
ERSKINE MATERIAL BENEFITS • Low cost/boe acquisition • Reduced operating costs • Strong cash flow • Efficient utilization of tax position • Strategic position in hub infrastructure • 50% upgrade in reserves since acquisition 8 Erskine has exceeded expectations
Slide 9: Erskine Reserves Increase
ERSKINE RESERVES INCREASE 5 wells • Wells produced at higher rates than predicted producing • No increase in water production from Erskine reservoir • Good pressure recovery and increased Erskine (W2, W3, W5) production rates after shut-ins • 2016 audit increased reserves accordingly • 4.2mmboe net
Slide 10: Erskine Temporary Shutdown
ERSKINE TEMPORARY SHUTDOWN • Lomond condensate export line blocked on 29 th Feb ‘16 • Blockage due to foam ‘pig’ and wax in line • Blockage cleared by reversing direction of flow and pumping wax dissolving chemical Wax build-up • Start-up deferred until CATS and Lomond maintenance completed • Erskin
Slide 11: Columbus Field Development
COLUMBUS FIELD DEVELOPMENT Undeveloped gas condensate field in UK Central North Sea, 5km north of Lomond Platform Serica’s interest increased from 33.2% to 50% through acquisition of the SSE and BG interests in Columbus Increase in contingent resources from 5.2 mmboe to 6.2 mmboe net to Serica (sing
Slide 12: Operations Strategy
OPERATIONS STRATEGY Deliver value from our portfolio of production, development and exploration assets Lower costs and increase production Increase reserves and extend field life Pursue synergies through collaboration with partners in Central North Sea infrastructure hub Operate with lean but strong
Slide 13: UK Exploration: Block 22/19c Rowallan
UK EXPLORATION: Block 22/19c Rowallan Initial exploration well and all associated costs covered by JX Nippon Rowallan Prospect (220mmboe P50 gross resources) analogue to the large *Culzean field development. Serica net P50 Rowallan resource 20mmboe, P10 resource estimate 60mmboe Drilling now planned
Slide 14: UK Exploration: 113/27c + 113/22a Doyle
UK EXPLORATION: 113/27c + 113/22a Doyle Exploration well costs to be covered by Centrica (up to £11 million gross cap) Zennor Petroleum - new operator. Site survey acquired, prospect drill-ready Gas prospect in shallow water: Zennor estimate c.265bcf P50 gross resource potential (source Zennor websi
Slide 15: Serica Exploration: Namibia
SERICA EXPLORATION: NAMIBIA Large acreage position (17,000km2) in frontier area. Extension being sought to further explore High impact carbonate prospect 600 million – 2 billion barrel potential and numerous clastic prospects, all well defined on 3D seismic data Industry environment for exploration
Slide 16: Serica Exploration: Namibia
SERICA EXPLORATION: NAMIBIA Detailed investigation into source, reservoir, migration and charge Geological model built using 3D seismic and well data Seismic anomalies point towards hydrocarbon potential in clastic prospects Prospect B 16 Selection of carbonate and clastic prospects
Slide 17: Ireland: Rockall and Slyne Basins
IRELAND: ROCKALL AND SLYNE BASINS Large acreage position in proven hydrocarbon play, government open to licence extensions Well-defined prospects on excellent 3D data, all commitments fulfilled 4 high impact prospects : Muckish, Aghla More, Derryveagh and Boyne Rockall Basin Lower drilling costs and
Slide 18: Growth Strategy
GROWTH STRATEGY Build asset base through acquisitions: increase production base and spread risk Strengthen company through corporate activity Explore in UK through carried exploration wells Retain strong exploration position in Namibia and Ireland to benefit from market upturn Serica share price aga
Slide 19: Serica: 2016 and Beyond
SERICA: 2016 AND BEYOND Serica is considerably stronger than it was a year ago – notwithstanding wider industry headwinds Cash resources, zero debt position and low commitments means we are strongly placed to create further value Erskine production expected to resume in July Sustaining low operating