Slide 1: Green Canyon 21 Farmin and Capital Raising
Green Canyon 21 Farmin and Capital Raising 29 March 2019 ASX: OEL Not for release to US wire services or distribution in the United States 1
Slide 2: Disclaimer (refer also to slide 45)
Disclaimer (refer also to slide 45) 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 fully underwritten pro-rata accelerated non-renounceable entitlement offer of new
Slide 3: Company Overview
Company Overview Building a 5,000 boepd production base by end of 2020 – currently at ~1,750 boepd • Diversified production base from two production • Highly experienced Houston based management assets. Both are the result of discoveries from team with extensive Gulf Coast and Gulf of Mexico partici
Slide 4: 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 5: 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 50% WI 50% WI 37.5% WI Structure (50% of Cost1) (22.22% of Cost1) (66.7% of Cost1) NRI 40.625% 28.50% 28.50% 13.336% 43.75% Status Production Development Exploration
Slide 6: 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 7: Capital Raising Summary
Capital Raising Summary Otto is undertaking a ~A$31 million equity raising via a A$11 million placement and an underwritten 1 for 5 entitlement offer • Equity raise of approximately A$31 million via: Capital Raising • Placement of A$11 million to new institutional shareholders; and Structure • A 1 f
Slide 8: Timetable for Capital Raising
Timetable for Capital Raising Timetable for Non-Renounceable Entitlement Offer Announcement of the Equity Raising 29 March 2019 Institutional Entitlement Offer and Bookbuild opens 29 March 2019 Institutional Entitlement Offer and Bookbuild closes 1 April 2019 Results of Institutional offer announced
Slide 9: South Marsh Island 71
South Marsh Island 71 Production commenced March 2018 OTTO ENERGY | INVESTOR PRESENTATION - MARCH 2019 | ASX : OEL 9
Slide 10: South Marsh Island 71 - Overview
South Marsh Island 71 - Overview Strong free cashflow base to fund growth ~US$2m in net operating cashflow each month • 12 months of stable production with in excess of 1 million bbls produced • Currently producing approximately 3,100 bopd plus 7 MMscf/d of gas (gross) • Long dated 2P reserves life
Slide 11: 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 12: 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 13: 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 1,400,000 1,200,000 5,000 1,000,000 4,000 Bbls - Cumulative 800,000 Bbls - Daily 3,000 600,000 2,000 400,000 Profile flatt
Slide 14: South Marsh Island 71 – Cash Generating Oil Field
South Marsh Island 71 – Cash Generating Oil Field SM 71 provides excellent returns illustrating a typical cash flow profile for a conventional oil field Future cash flows many multiples Future cashof flows the manyinvestment multiples in of the initialin initial investment exploration exploration we
Slide 15: 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 - MARCH 2019 | ASX : OEL 15
Slide 16: 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 17: 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 18: 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 19: 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 20: Chambers County – Mustang Prospect
Chambers County – Mustang Prospect 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 has seen limited expl
Slide 21: Green Canyon farm-in with Talos Energy
Green Canyon 21 farm-in with Talos Energy Low risk, high production rate oil development with deeper amplitude supported exploration potential OTTO ENERGY | INVESTOR PRESENTATION - MARCH 2019 | ASX : OEL 21
Slide 22: Gulf of Mexico Green Canyon Farm-in - Overview
Gulf of Mexico Green Canyon 21 Farm-in - Overview Opportunity to participate in appraisal drilling in May 2019 with respected offshore operator, Talos Energy, testing the “Bulleit” prospect • Drilling of existing discovery in May 2019 with further Joint Venture Parties upside through deepening to te
Slide 23: Gulf of Mexico Green Canyon 21 Farm-in - Overview
Gulf of Mexico Green Canyon 21 Farm-in - Overview Otto to participate 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 • Workin
Slide 24: Green Canyon Farm-in – Overview of Bulleit
Green Canyon 21 Farm-in – Overview of Bulleit Key targets already discovered and tested – appraisal/development well to be drilled in Q2 2019 • 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
Slide 25: 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 26: Summary
Summary Otto Energy Limited (ASX:OEL) OTTO ENERGY | INVESTOR PRESENTATION - MARCH 2019 | ASX : OEL 26
Slide 27: 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 VR232 Gulf Ongoing studies prior to initial test well of Beluga Oil Lake Mexico H
Slide 28: 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 29: Peer Analysis
Peer Analysis High margin producer with compelling valuation metrics ASX Mid Cap Oil & Gas Companies 15 March 2019 16,000 Production and Market Cap Distribution Sundance Energy 14,000 12,000 10,000 BOEPD1 Elk Petroleum 8,000 6,000 Horizon Oil 4,000 Cooper Energy Central Otto Energy Petroleum Byron E
Slide 30: Additional Information
Additional Information OTTO ENERGY | INVESTOR PRESENTATION - MARCH 2019 | ASX : OEL 30
Slide 31: Corporate Snapshot (ASX:OEL) – Pre-Capital Raising
Corporate Snapshot (ASX:OEL) – Pre-Capital Raising CAPITAL STRUCTURE FUNDING POSITION SHAREHOLDERS Fully paid ordinary shares 1.875b Cash (28 February 2019) US$7.8m Molton Holdings 16.3% Performance Rights 46.8m Convertible Note Liability US$8.8m Perennial Value Management 8.2% Convertible Notes (US
Slide 32: 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 33: 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 34: 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 35: 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 36: 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 37: 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 38: 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 39: 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 40: 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 41: 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 42: Pro Forma Consolidated Statement of Financial Position
Pro Forma Consolidated Statement of Financial Position Placement and Notes Entitlement Convertible Pro Forma 1. Derived from the 31 December 2018 financial statements of Otto Energy 31-Dec-18 Issue Note 31-Dec-18 Limited which were reviewed by the Company’s independent auditor, BDO. US$’000 US$’000
Slide 43: 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 44: 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 45: Disclaimer
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 46: Disclaimer (cont.)
Disclaimer (cont.) Future performance and forward-looking statements This Presentation may contain certain 'forward‐looking statements' with respect to the financial condition, results of operations and business of the Company and certain plans and objectives of the management of the Company. Forwar
Slide 47: 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 48: 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 49: 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 50: Glossary
Glossary Terms Definitions A$ Australian dollars or cents. ASIC Australian Securities and Investments Commission. ASX Australian Securities Exchange. ASX Listing Rules Rules governing the admission of entities to the official list, quotation of securities, suspension of securities from quotation and
Slide 51: Glossary (cont.)
Glossary (cont.) Terms Definitions LLS Louisiana Light Sweet crude. MBBL One thousand barrels. MBOE One thousand BOE MMBOE One million BOE MMBTU One million British Thermal Units. MCF One thousand cubic feet. New Shares Shares to be allocated and issued under the Entitlement Offer. NGLs Natural Gas
Slide 52: 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 52