Otto Energy Limited · ASX:OEL
Otto Energy — Investor Presentation (March 2020)
39 slides from Otto Energy's investor presentation, Mar 26, 2020
Slide 1: Investor Presentation
INVESTOR PRESENTATION March 2020 ASX: OEL Not for release to US wire services or distribution in the United States 1
Slide 2: Disclaimer
Disclaimer This investor presentation (Presentation) has been prepared by Otto Energy Limited (ACN 107 555 046) (Otto or the Company). This Presentation has been prepared in relation to Otto’s partially underwritten pro-rata accelerated non- renounceable entitlement offer of new ordinary fully paid
Slide 3: Capital Raising Overview
Capital Raising Overview Capital Raising to shore-up Balance Sheet for all future scenarios considering current market conditions Balance sheet positions Otto to ride through the current market conditions and emerge in a strong position • OEL has successfully delivered on its ambitious transition fr
Slide 4: Capital Raising Summary
Capital Raising Summary Otto is undertaking a ~A$17.5 million equity raising via a A$1.386 million placement and a partially underwritten 1 for 1 entitlement offer • Equity raise of approximately A$17.5 million via: Capital Raising • Placement of approximately 231.1m shares to raise A$1.387 million
Slide 5: Timetable for Capital Raising
Timetable for Capital Raising Timetable for Equity Raising Announcement of Transaction, release of Appendix 3B and Cleansing Statement 26 March 2020 Institutional Entitlement Offer Opens 27 March 2020 Settlement of Placement 30 March 2020 Institutional Entitlement Offer Closes 30 March 2020 Announce
Slide 6: FY20 Outlook
FY20 Outlook The impact of OPEC+ and COVID-19 on oil markets – the oil market has weathered systemic change before Recent Events Crude Oil (US/bbl) • Supply side disruption amongst OPEC + reverses over 160.00 2.1 mmbbl/day in cuts 140.00 • Supply side war emerges amongst key market participants 120.
Slide 7: FY20 Outlook
FY20 Outlook A disciplined approach to investing in oil and gas projects and successfully growing shareholder value Operating Partner Otto’s strategy • Hilcorp Energy Byron Energy Current portfolio of production assets to achieve Talos Energy strategic goal of 5,000 boepd by end 2020 Otto Energy • D
Slide 8: ASX Listed Peer Group
ASX Listed Peer Group Exposure to production and cashflows is limited in small cap oil and gas companies on ASX 1 Key Changes since 2018 • AWE Ltd Take-over by Mitsui • Sino Gas Take-over by Lone Star • Freedom Oil and Gas In administration • Sundance Delisted from the ASX and moved to NASDAQ • Elk
Slide 9: Otto Energy - Investment Exposure to the Gulf of Mexico
Otto Energy - Investment Exposure to the Gulf of Mexico ASX-listed, US focused, diversified conventional oil and gas production and exploration business Otto Production (2P Forecast) Otto’s activity 6 • Green #2 production commenced in February 2020 5 • SM71 F5 development well currently drilling –
Slide 10: Otto Energy – Reserves at SM 71, Lightning and GC 21
Otto Energy – Reserves at SM 71, Lightning and GC 21 in the Gulf of Mexico Otto reserves have NPV10 value of US$ 213 MM at the 2P level net to Otto delivered from the active drilling program 14,000 300,000 12,000 250,000 10,000 200,000 NPV-10 ('000) 8,000 MBoe 150,000 6,000 100,000 4,000 50,000 2,00
Slide 11: Production - South Marsh Island 71, offshore Gulf of Mexico
Production - South Marsh Island 71, offshore Gulf of Mexico Oil and gas revenue provides strong cashflow foundation for growth 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 Offshore Federal
Slide 12: South Marsh Island 71, offshore Gulf of Mexico
South Marsh Island 71, offshore Gulf of Mexico Drilling of the F5 well is underway OTTO ENERGY | INVESTOR PRESENTATION – MARCH 2020 | ASX : OEL 12
Slide 13: Production - Lightning, onshore Texas Gulf Coast
Production - Lightning, onshore Texas Gulf Coast First discovery under Gulf Coast Drilling program – 2nd development well in progress to increase production Lightning Discovery Joint Venture Otto Energy 37.5% Hilcorp Energy (operator) 62.5% Fiscal Terms Landowner Royalty 24.9% Held by production lic
Slide 14: Discovery – Green Canyon 21 “Bulleit”, offshore Gulf of Mexico
Discovery – Green Canyon 21 “Bulleit”, offshore Gulf of Mexico Two target discovery with Talos Energy – wellbore suspended for completion in mid CY20 Green Canyon 21 “Bulleit” Prospect Joint Venture Otto Energy 16.67% ~16 km tie-back Talos Energy (operator) 50.00% GC21 - Bulleit Prospect Enven Energ
Slide 15: Pipeline of Opportunities
Pipeline of Opportunities Otto has assembled an exciting pipeline of upcoming activities as a result of its non-operating partnership strategy CY 2020 Q1 2020 Q2 2020 Q3 2020 Q4 2020 SM 71 Low-cost production SM71 F-5 Lightning Low-cost production Green #2 Green Canyon 21 “Bulleit” Successfully appr
Slide 16: Appendix
Appendix 16
Slide 17: Otto Energy – Reserves at SM 71, Lightning and GC 21
Otto Energy – Reserves at SM 71, Lightning and GC 21 in the Gulf of Mexico Otto reserves have NPV10 value of US$ 213 m at the 2P level net to Otto delivered from the active drilling program Total Gross (100%) Otto Net NPV 10 US$ MM* Gas Gas Oil (Mbbl) (MMscf) MBoe Oil (Mbbl) (MMscf) MBoe Otto Share
Slide 18: Corporate Snapshot (ASX:OEL)
Corporate Snapshot (ASX:OEL) CAPITAL STRUCTURE FUNDING POSITION SHAREHOLDERS Fully paid ordinary shares 2.460b Cash (31 Dec 2019) US$25.7m Perennial Value Management 14.9% Performance Rights 36.6m Molton Holdings 12.4% Debt - Commitment $55m Unlisted Options 42.5m - Currently Drawn (31 Dec 2019) $22
Slide 19: Otto Energy Gulf of Mexico Area Key Projects
Otto Energy Gulf of Mexico Area Key Projects1 Strong cashflow base to fund growth from oil and gas sales at SM 71 and Lightning Metric SM 71 Lightning Gulf Coast Green Canyon 21 VR 232 Type JV JV JV JV JV 37.5% WI 100% WI Ownership Structure 50% WI 37.5% WI 16.67% WI (50% of Cost2) NRI 40.625% 28.50
Slide 20: Board of Directors
Board of Directors Ian Boserio John Jetter Paul Senycia Non-Executive Chairman Non-Executive Director Non-Executive Director BSc (Hons) LLB, BEc INSEAD BSc (Hons), MAppSc Executive Technical Director of Pathfinder Former MD/CEO J.P. Morgan International oil & gas experience gained over 35 Energy Pty
Slide 21: Management Team
Management Team Matthew Allen Sergio Castro Philip Trajanovich Managing Director & CEO Chief Financial Officer Senior Commercial Manager BBus, FCA, FFin, GAICD BBus, CPA, CFE B.Com (First Class Honours) Global exposure to the upstream oil and gas Global experience as a commercial manager working Ext
Slide 22: December Quarter FY20 Highlights
December Quarter FY20 Highlights Otto continues to build towards the strategic objective of 5,000 beopd by the end of CY 2020 • WI Share of hydrocarbon sales equate to 1912 boepd, a 27% decrease over prior Oil and Gas Sales quarter • WI share ~131,002 bbls oil, 238,092 Mscf gas, and 5,265 bbls NGLs
Slide 23: Glossary
Glossary Abbreviation Expanded Term Definition GoM Gulf of Mexico Million barrels of oil equivalent/ MMboe / mboe thousand Million standard cubic feet per day MMscfpd (gas) Bopd/boepd Barrels of oil (equivalent) per day TD Total Depth The depth of the bottom of the well MD Measured Depth The total l
Slide 24: Competent Persons and Cautionary Statements
Competent Persons and Cautionary Statements Competent Persons Statement The information in this report that relates to oil and gas reserves and resources at SM 71 was compiled by technical employees of independent consultants Collarini and Associates, under the supervision of Mr Mitch Reece BSc PE.
Slide 25: Competent Persons and Cautionary Statements
Competent Persons and Cautionary Statements Reserves cautionary statement Oil and gas reserves and resource estimates are expressions of judgment based on knowledge, experience and industry practice. Estimates that were valid when originally calculated may alter significantly when new information or
Slide 26: Reserves and Resources Reporting Notes
Reserves and Resources Reporting Notes Pricing Assumptions Oil price assumptions used in the independent report represent forward prices (CME Nymex) as at 28 June 2019. ASX Reserves and Resources Reporting Notes i. The reserves and prospective resources information in this document is effective as a
Slide 27: Key Risks
Key Risks Impairment of carrying value of properties Otto may be required to write‐down the carrying value of its oil and gas properties when oil and gas prices are low. Under International Financial Reporting Standards, which Otto is required to comply with, the net capitalised costs of its oil and
Slide 28: Key Risks
Key Risks Future issuances or sale of significant amounts of Shares The future issuance of a substantial number of Shares (including under the Capital Raising), or the perception that such issuance could occur, could adversely affect the prevailing Share price. Sales of a substantial number of Share
Slide 29: Key Risks
Key Risks Commodity price risk and volatility of oil and gas prices The Company’s main business activities are currently highly exposed to movements in global oil prices and to a lesser extent, changes in gas prices. The prices of oil, natural gas and other hydrocarbon products remain outside the co
Slide 30: Key Risks
Key Risks Environmental risks Potentially hazardous activities arise in connection with Otto's business. A significant safety or environmental incident or the failure of safety processes or of occupational health plans, as well as a breach of regulatory or contractual obligations, could materially a
Slide 31: Key Risks
Key Risks Industry competition and energy demand The availability of a market for oil and gas in the future will depend in part on cost and availability of alternate fuels, the level of consumer demand, the extent of domestic production of oil and gas, the extent of important foreign oil and gas, th
Slide 32: Key Risks
Key Risks Joint venture relationships The majority of Otto’s’ business is carried on through joint ventures. The use of joint ventures is common in the exploration and production industry and serves to mitigate the risk and associated cost of exploration, production and operational failure. However,
Slide 33: Pro Forma Consolidated Statement of Financial Position
Pro Forma Consolidated Statement 31-Dec-19 Placement and Entitlement Issue Pro Forma 31-Dec-19 of Financial Position US$'000 US$'000 US$'000 Notes Current assets Cash and Cash equivalents 25,719 10,329 36,048 1. Derived from the 31 December 2019 financial statements of Otto Energy Limited which were
Slide 34: Disclaimer (continued from slide 2)
Disclaimer (continued from slide 2) Summary information This Presentation contains summary information about Otto, its subsidiaries and their activities which is current as at the date of this Presentation. The information in this Presentation is of a general nature and does not purport to be comple
Slide 35: Disclaimer (cont.)
Disclaimer (cont.) Investment risk An investment in Otto shares is subject to known and unknown risks, some of which are beyond the control of Otto and its directors. Although there is financial information in this Presentation, that information (as noted in the ‘Financial data’ section of this impo
Slide 36: International Offer Restrictions
International Offer Restrictions This document does not constitute an offer of new ordinary shares ("New Shares") of the Company in any jurisdiction in which it would be unlawful. In particular, this document may not be distributed to any person, and the New Shares may not be offered or sold, in any
Slide 37: International Offer Restrictions (cont.)
International Offer Restrictions (cont.) Singapore This document and any other materials relating to the New Shares have not been, and will not be, lodged or registered as a prospectus in Singapore with the Monetary Authority of Singapore. Accordingly, this document and any other document or materia
Slide 38: International Offer Restrictions (cont.)
International Offer Restrictions (cont.) Cambodia This document has not been, and will not be, registered as a disclosure document under the Public Offering Rules and Listing Rules of the SECC. No action has been taken in Cambodia to authorise or register this document with the SECC or to permit the
Slide 39: 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 2 4017 1257 +1 713 893 8894 39