Providence Resources P.l.c — H1 2015 Earnings Presentation
31 slides from Providence Resources P.l.c's earnings presentation, 2015
Slide 1: Leadership in the Irish Offshore - Interim Results 2015
Leadership in the Irish Offshore Interim Results 2015
Slide 2: Disclaimer
Disclaimer Important: You must read the following before continuing. By attending any oral presentation made in conjunction with this presentation or by accepting this presentation you will be taken to have represented, warranted and undertaken that you have read and agree to comply with the content
Slide 3: Providence – The Opportunity
Providence – The Opportunity • Providence’s extensive asset base and its management team are the same as when the Company was valued at 20x its current valuation just 3 years ago • Providence, like many junior E&P companies, has been impacted by the fall in oil prices which has caused a disconnect i
Slide 4: Ireland's Expanding E&P Sector – Influencing Factors
Ireland’s Expanding E&P Sector – Influencing Factors Technology • Modern Seismic & Drilling Infrastructure • Pipelines, Refineries & Ports Norway - 78% Netherlands– 75% Pricing & Fiscal Regime United Kingdom – 62% • Lowest base taxation rate France – 36.1% Portugal – 31.5% in NW European Sector Moro
Slide 5: Providence – International Experience - Ireland Focused
Providence – International Experience - Ireland Focused Irish Focused Oil & Gas Portfolio Management Team • Over 30 years exploring offshore Ireland Tony O’Reilly Fergal Murphy • Irish headquartered and managed Chief Executive Geophysical Consultant 25 years experience 18 years experience ARCON, C&L
Slide 6: Providence - Strategy
Providence - Strategy • Focus on Oil & Gas exploration offshore the ‘Island of Ireland’ • Core focus on early stage exploration & appraisal opportunities • Active in 8 basins • Create diversified material exploration & appraisal portfolio • 358 MMBOE net audited 2C contingent resources (REC) • 3,020
Slide 7: Providence – Leading Operator Offshore Ireland
Providence – Leading Operator Offshore Ireland * Providence operated unless denoted Shallow Water Exploration Areas * 8 Wells Drilled since 2000 c. 0 > 100 metre water depth Helvick (plus side track)(2000) Blackrock (2004) 2D seismic coverage Hook Head (2007) Well control Hook Head (2008) Dunmore (2
Slide 8: Providence – Material Resource Base
Providence – Material Resource Base Appraisal Assets – 478 MMBOE REC (Net to PVR: 358 MMBOE) 1. Barryroe Oil Project, North Celtic Sea Basin (PVR-80%) 9 Field Size (2C): 346 MMBOE REC Net to PVR: 277 MMBOE REC 2. Spanish Point Gas Condensate Project, Porcupine Basin (PVR-58%) Field Size (2C): 97 MMB
Slide 9: H1 2015 - Highlights
H1 2015 - Highlights • Barryroe Oil Project, North Celtic Sea Basin • Continuation of farm out discussions with a number of counterparties • Successfully defended Transocean litigation case • Spanish Point Gas Condensate Project, Northern Porcupine Basin • Acquisition of CEPIL increased the Company’
Slide 10: H1 2015 – Highlights contd.
H1 2015 – Highlights contd. • Other Atlantic Margin Projects, Southern Porcupine & Goban Spur Basins • Following the acquisition and evaluation of 3D and 2D seismic in 2014, technical updates were provided on: • Druid Oil Prospect, Southern Porcupine Basin • Spanish Point South Gas Prospect, Norther
Slide 11: Post June 30 Events
Post June 30 Events • Barryroe Oil Project, North Celtic Sea Basin • Farm out discussions ongoing with a number of counterparties • Dunquin Oil Prospect, Southern Porcupine Basin • Acquisition of 4% stake in Dunquin from Atlantic Petroleum taking equity stake to 20% • Spanish Point Gas Condensate Pr
Slide 12: Objectives – 2015/2016
Objectives – 2015/2016 • Farm out of Barryroe* • Spanish Point appraisal well* • Participation in Irish Atlantic Margin Licensing Round • Complete processing of 3D & 2D seismic on: • Drombeg/Druid – in advance of intended farm out for future drilling • Newgrange – in advance of intended farm out for
Slide 13: Creating Value Through Drilling – Appraisal
Creating Value Through Drilling – Appraisal Programme 1. Barryroe Oil Project, North Celtic Sea Basin (PVR-80%) Field Size (2C): 346 MMBOE REC Well and side-track targeting 70 MMBOE REC (net to PVR:56 MMBOE) 2. Spanish Point Gas Condensate Project, Porcupine Basin (PVR-58%) Field Size (2C): 337 MMBO
Slide 14: Creating Value Through Drilling - Exploration
Creating Value Through Drilling - Exploration Programme 1. Barryroe Oil Project, North Celtic Sea Basin (PVR-80%) Field Size (2C): 346 MMBOE REC Well and side-track targeting 70 MMBOE REC (net to PVR:56 MMBOE) 2. Spanish Point Gas Condensate Project, Porcupine Basin (PVR-58%) Field Size (2C): 97 MMB
Slide 15: Creating Value Through Portfolio Management
Creating Value Through Portfolio Management Outline Programme 1. Barryroe Oil Project, North Celtic Sea Basin (PVR-80%) 9 Field Size (2C): 346 MMBOE REC Well and side-track targeting 70 MMBOE REC (net to PVR:56 MMBOE) 2. Spanish Point Gas Condensate Project, Porcupine Basin (PVR-58%) Field Size (2C)
Slide 16: Providence – Summary
Providence – Summary • Based on market valuation metrics1, Providence is significantly undervalued and recent bidding round demonstrates the international focus on Ireland, where Providence is the dominant player • Providence remains committed to its Irish-centric strategy and continues to invest pr
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Slide 18: Appendix – Portfolio
Appendix – Portfolio 18
Slide 19: Barryroe Oil Field, North Celtic Sea Basin
Barryroe Oil Field, North Celtic Sea Basin Audited Gross on Block Resources Barryroe – Audited Gross Resources • 6 wells drilled (4 tested) & modern 3D seismic coverage OIP REC • 4 stacked reservoir systems 2C/P50 2C/P50 • Resource audits carried out by RPS (2010) & NSAI (2012) Main Sands MMBO MMBO
Slide 20: Spanish Point Gas Condensate Field, Northern Porcupine Basin
Spanish Point Gas Condensate Field, Northern Porcupine Basin Spanish Point – Audited Gross Resources • Tested well and modern 3D PSDM seismic coverage • Senergy CPR Resource Audit (2011) • 2C Contingent Resources – c. 97 MMBOE REC • Updated Operator estimates (2015) • Revised HIIP of c. 730 MMBOE (2
Slide 21: North Atlantic Jurassic Oil Source Rock Super Highway
North Atlantic Jurassic Oil Source Rock Super Highway Flemish Pass Basin Jean D’Arc Basin Porcupine Basin After Enachescu et al. 2010 21
Slide 22: Dunquin South Oil Prospect, Southern Porcupine Basin
Dunquin South Oil Prospect, Southern Porcupine Basin Prospect Details • Two isolated carbonate platforms – Dunquin North & South • Dunquin North exploration well (2013) o c. 44m residual oil column encountered in massive over-pressured high porosity carbonate reservoir system o Pre-breach oil STOIIP
Slide 23: Drombeg Oil Prospect, Southern Porcupine Basin
Drombeg Oil Prospect, Southern Porcupine Basin Prospect Details • 1,000 km 2D survey carried out in 2008 • Interpreted significant Lower Cretaceous seismic anomaly linked to underlying fluid escape feature • Low impedance, Class II AVO, EEI fluid anomaly o Data consistent with modelled response of u
Slide 24: Druid Oil Prospect, Southern Porcupine Basin
Druid Oil Prospect, Southern Porcupine Basin Prospect Details • 1,000 km 2D survey carried out in 2008 • Interpreted significant Palaeocene seismic anomaly linked to underlying fluid escape feature • Low impedance, Class II AVO, o Data consistent with modelled response of thick high porosity deep-wa
Slide 25: Newgrange Gas Prospect, Goban Spur Basin
Newgrange Gas Prospect, Goban Spur Basin Prospect Details • 500 line km 2D seismic survey carried out in 2006 • Significant structure identified in basin • Cretaceous target c. 400 metres BML in 1,000m water depth • Structural closure covers c. 1200 km2 with up to c. 300 metres of vertical relief •
Slide 26: Appendix – Irish Fiscal Terms
Appendix – Irish Fiscal Terms 26
Slide 27: Irish Fiscal Terms
Irish Fiscal Terms Pro-investment Legislature • The current* base tax regime, which applies to upstream petroleum activities, is set out in the Taxes Consolidation Act, 1997 as amended by the Finance Act, 1999, with the Profit Resource Rent Tax (PRRT) included in the 2008 Finance Act. * Tax Rate • 2
Slide 28: Appendix – Resource Metrics
Appendix – Resource Metrics 28
Slide 29: Precedent (pre-) Development Asset Transactions
Precedent (pre-) Development Asset Transactions • Precedent pre-development / development field transaction multiples (US$ / 2P)1 Brent price (US$/bbl) 59 61 68 67 75 85 83 118 112 119 97 108 105 110 107 98 53 25 21 21 20 Based on fairly limited universe 17 of comparable transactions in $ / 2P (US$/
Slide 30: Precedent 2P Transaction Details
Precedent 2P Transaction Details • Precedent pre-development / development fields1 Date Transaction Buyer(s) Seller(s) Transaction $/2P value (US$m) (US$/bbl) Jul-15 Iona Energy sells 25% WI in Orlando project for $36M Undisclosed Iona 36 11.59 Sep-14 Cairn Energy farms out 10% WI in UK licences to
Slide 31: Precedent 2C Transaction Details
Precedent 2C Transaction Details • Precedent pre-development field transactions with 2C resources1 Date Transaction Buyer(s) Seller(s) Transaction US$/2C Value (US$m) (US$/bbl) May-15 Atlantic Petroleum divests 10% WI in three UK North Sea licences for Third Energy Atlantic Petroleum 11.4 0.28 $11M
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