Challenger Gold Limited · ASX:CEL
Challenger Gold — Challenger Energy — Investec Oil & Gas Conference 2014
19 slides from Challenger Gold's conference presentation, Nov 6, 2014
Slide 1: Shale Gas: South Africa's Energy Game-Changer
For personal use only SHALE GAS: SOUTH AFRICA’S ENERGY GAME-CHANGER Robert Willes, Managing Director Investec Oil & Gas Conference Cape Town 3-4 November 2014
Slide 2: Disclaimer
Disclaimer For personal use only This presentation contains “forward-looking statements”. Such forward-looking statements include, without limitation: estimates of future earnings, the sensitivity of earnings to oil & gas prices and foreign exchange rate movements; estimates of future oil & gas prod
Slide 3: Introduction
Introduction For personal use only Late 1960s: national oil company (Soekor) exploration in SA’s Karoo region Late 2000s: renewed interest in Karoo gas potential • recoverable resource estimate: 390 trillion cubic feet (tcf) (EIA, June 2013) • ranked eighth-largest globally “… shale gas is • Cha
Slide 4: Regulatory process moves ahead
Regulatory process moves ahead For personal use only Exploration right application processing gets under way • 27 February 2015 deadline for applicants to submit reports on: • EMP review • public participation Continuing government support • ANC Manifesto • legislation recalled for review, pre-e
Slide 5: Challenger Energy: overview
Challenger Energy: overview For personal use only Australian listed shale gas exploration junior (ASX: CEL) South African subsidiary: Bundu Gas and Oil Exploration (Pty) Limited (Bundu) • 95% Challenger, 5% BEE (Don Ncube) Bundu first company to apply for shale gas exploration right Applicat
Slide 6: Challenger Energy: overview, cont'd
Challenger Energy: overview, cont’d For personal use only Permit application area centred around Board and management 1968 discovery well Michael Fry, Chairman Industry experience: 7 years E&P (30 yrs Capital markets) Chair Red Fork Energy (RFE), Norwest (NEW), past member ASX • flowed gas to surf
Slide 7: Financial overview
Financial overview For personal use only Share price performance (ASX: CEL) Capital structure Fully paid ordinary shares 329 482 541 Listed options 65 896 502 Unlisted options and rights1 41 500 000 Share price2 A$0.085 Market capitalisation2 A$28.0m Cash3 A$0.485m Shareholders 1 151 Top 20 41.73% S
Slide 8: Bundu permit application: Cranemere
Bundu permit application: Cranemere For personal use only Three wells drilled in late 1960s with uniform shale sections Application area surrounds discovery well (CR 1/68) • strong gas ‘kick’ and flow to surface, extensive core collected Shales are thick • upper, middle Ecca shales 1,500-1,800
Slide 9: Bundu permit application: Cranemere, cont'd
Bundu permit application: Cranemere, cont’d For personal use only Term: • three years, up to three renewals not exceeding two years each Expected work programme: • studies • seismic reprocessing • 1-2 core holes • drill, complete, fracture-stimulate one well • production test Investor presentati
Slide 10: Shale gas in South Africa
Shale gas in South Africa For personal use only Econometrix (SA’s largest independent Modelled value-added and employment scenarios macro-economic consultancy) (March 2012 report): Scenario A Scenario B • 50tcf shale resource Gas resource tcf 20 50 • could add R200bn to GDP pa Production years 25
Slide 11: Competitive position of gas in power generation
Competitive position of gas in power generation For personal use only Eskom electricity pricing (MYPD3) regulated by National Energy Regulator of South Africa (NERSA) 12.3% rise in SA delivered electricity prices in 2012-13, following three years of >20% increases (NUS Consulting) 101.7% rise
Slide 12: Commercialisation
Commercialisation For personal use only Shale likely to play significant role in future: • drive to early gas-fired power generation • potential to spark a “Dash for Gas” as in UK (gas-fired power generation 5% of installed capacity in 1990, 30% by 2002) Existing synthetic fuels industry: • coal
Slide 13: Why invest
Why invest For personal use only Recent transactions demonstrate increasing $18,489/acre market value of acreage as it progresses towards commercialisation Previous discovery area $4,009/acre World class neighbours $40/acre $844/acre Strong SA government support, development imperatives Sour
Slide 14: Appendices
Appendices For personal use only Investor presentation | November 2014 14
Slide 15: Growing international interest
Growing international interest For personal use only LEGEND Investor presentation | November 2014 15
Slide 16: Some background: the Karoo
Some background: the Karoo For personal use only About the Karoo: • semi-desert, ±400 000km2 in extent • sparsely populated – ±300 000 people • primary economic activity – farming, eco-tourism Robust debate on shale gas exploration pros, cons Investor presentation | November 2014 16
Slide 17: SA: economy, employment imperatives (NDP)
SA: economy, employment imperatives (NDP) For personal use only National Development Plan 2030 ‘to eliminate poverty and reduce inequality by 2030’ • economy • increase GDP by 2.7 times, requiring annual GDP growth rate of 5.4% • GDP per capita to increase from ±R50 000 to R110 000 • exports to gr
Slide 18: SA: emerging energy crisis
SA: emerging energy crisis For personal use only Electricity shortfall Power grid has severe supply constraints • increased demand since 1994, ageing fleet • coal base-load • diesel-peaking plants make up shortfall • utility Eskom implementing load-shedding • significant government support • ~16.9
Slide 19: Contacts
For personal use only Contacts Robert Willes, Managing Director, Challenger Energy Limited Mob: +61 410 479 032 Email: robert.willes@challengerenergy.com.au Annette Ellis, Cannings Purple Tel: + 61 (0) 8 6314 6300 Mob: + 61 (0) 458 200 039 Email: aellis@canningspurple.com.au James Duncan, Russell an
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