Providence Resources P.l.c — Shareholder Meeting (July 2016)
87 slides from Providence Resources P.l.c's shareholder meeting presentation, Jul 27, 2016
Slide 1: AGM Presentation July 27, 2016
AGM Presentation July 27, 2016 Courtesy Ocean Rig
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: James McCarthy, Chairman
0 PROVIDENCE James McCarthy Chairman
Slide 4: Agenda
Agenda Resolutions Chairman’s Remarks Operational Update • Tony O’Reilly, Chief Executive • John O’Sullivan, Technical Director Q&A 4
Slide 5: Resolutions
Resolutions Ordinary Business 1. To receive and consider the Directors’ Report and Financial Statements for the year ended 31 December 2015 2. (a) To re-elect Mr. James McCarthy as a Director (b) To re-elect Dr. Phil Nolan as a Director 3. To authorise the Directors to fix the remuneration of the Au
Slide 6: Focused on Offshore Ireland
Focused on Offshore Ireland Irish Focused Oil & Gas Portfolio Providence is Central to the Irish E&P Space Focus on early stage exploration & appraisal opportunities • Diversified portfolio of licences offshore Ireland • Mixture of exploration prospects & appraisal projects with material equity stak
Slide 7: Providence Assets – July 2016
Providence Assets – July 2016 Irish Focused Oil & Gas Portfolio Estimated Resource Volumes: 1. Barryroe Oil Project (PVR - 80%) Field Size (2C): c. 346 MMBOE REC Net to PVR: c. 277 MMBOE REC 2. Hook Head Oil Project (PVR - 72.5%) Field Size (2C): c. 35 MMBOE REC Net to PVR: c. 25 MMBOE REC 3. Spanis
Slide 8: Industry Overview - Oil Price
Industry Overview - Oil Price US$’s 8
Slide 9: Industry Overview - North Sea Developments
Industry Overview - North Sea Developments • The number of jobs that the industry supports will have fallen 33% from its peak of 450,000 in 2014 to around 300,000 by the end of 2016 • Net investment has fallen £1 billion – 1/8th of the average over the last 5 years and insufficient to sustain curren
Slide 10: Industry Overview - Global Developments
Industry Overview - Global Developments 10
Slide 11: Industry Overview - E&P Sectoral Implications
Industry Overview - E&P Sectoral Implications Future Global Supply & Demand Imbalance • IHS Energy reports that investment planned for the years from 2014 to 2020 has already been reduced by US$1.8 trillion • Further reductions expected from Venezuela, Nigeria, Libya and US unconventional players to
Slide 12: Tony O’Reilly, Chief Executive
Tony O’Reilly Chief Executive
Slide 13: 2015 Highlights
2015 Highlights 1. Barryroe Oil Project, North Celtic Sea Basin (SEL 1/11) – 2 year extension to 1st phase of SEL 1/11 to July 2017 and an extension to 2nd phase to July 2019 – Area of SEL 1/11 increased by c.118 km2 to accommodate mapped potential extensions – Assessed separate development options
Slide 14: 2015 Highlights
2015 Highlights 1. Dunquin Oil Prospect, Southern Porcupine Basin (FEL 3/04) – Agreed to acquire* Atlantic Petroleum (Ireland) Limited’s 4% interest in FEL 3/04 increasing the Company’s working interest to 20% 2. Druid/Drombeg Oil Prospects, Southern Porcupine Basin (FEL2/14) – Major post 3D seismic
Slide 15: Post Year-End Events
Post Year-End Events 1. Barryroe Oil Project, North Celtic Sea Basin (SEL 1/11) – Farm out campaign continues – Upper C-Sand GIIP within SEL 1/11 & OPL1 Option area now estimated at c. 400 BSCF – Well cost estimate of c. US$25 million – Court of Appeal ruling 2. Druid/ Drombeg Oil Prospects, Souther
Slide 16: Post Year-End Events
Post Year-End Events 1. Newgrange Prospect, Goban Spur Basin (FEL 6/14) – Pre-Cretaceous structural closure far larger than previously mapped – Prospective resource potential of 13.6 TSCF or c. 9.2 BBO STOIIP – Top seal capacity analysis indicates potential for a hydrocarbon column of up to 350 metr
Slide 17: Background to the Placing & Open Offers
Background to the Placing & Open Offers Working Capital • Overview of working capital situation • Background to the share suspension Transocean Litigation • Reasons for Transocean litigation • Background to the Court of Appeal ruling Financing Structure • Reasons for Placing and Open Offers • Placin
Slide 18: Background to the Placing & Open Offers: Working Capital
Background to the Placing & Open Offers Working Capital • Without Barryroe farm out concluded - Melody debt repayment impossible as per facility schedule • Contingency plan - basis of extension agreed with Melody (late 2015) • Oil price collapse further compounded difficulties in progressing farm ou
Slide 19: Background to the Placing & Open Offers: Transocean Litigation
Background to the Placing & Open Offers Transocean Litigation • Post the Barryroe drilling operations, Transocean made a financial claim for c.$19 million • Transocean initiated legal proceedings in the Commercial Court in 2012 • Our position was vindicated in Dec. 2014 when Transocean were found in
Slide 20: Background to the Placing & Open Offers: Financing, Farm Outs
Background to the Placing & Open Offers Financing Structure • Financing need was acute • Placing and Open Offer considered most appropriate and efficient for our needs – validated by institutional take-up and existing shareholder support Farm Outs • We are currently involved in 3 major farm out prog
Slide 21: Results of the Placing & Open Offers
Results of the Placing & Open Offers EGM • Held on July 14th, 2016 • All resolutions were passed with +98% acceptances Placing Offer • Raised proceeds of £47.961 million through the issuance of 399.671 million shares • Placed with over 30 institutions • Providence has significantly increased the dep
Slide 22: Results of the Placing Offer & Open Offer
Results of the Placing Offer & Open Offer Planned Use of Proceeds • Retire Melody debt (paid July 15th) • Payment to Transocean (paid July 18th) • Fund medium term working capital • Fund Druid drilling costs (2017) Issued Share Capital • The new ordinary shares were admitted for trading on July 15th
Slide 23: Providence Today
Providence Today • Capital raise fundamentally changes BALANCE SHEET and restores financial flexibility • Target farm-out/appraisal drilling of BARRYROE in 2017 • Operate & drill an exploration well on DRUID in 2017 • Target farm-out/appraisal drilling of SPANISH POINT in 2018 PROVIDENCE NOW HAS THE
Slide 24: John O’Sullivan, Technical Director
John O’Sullivan Technical Director
Slide 25: Exploration & Appraisal Strategy
Exploration & Appraisal Strategy Appraise Known & Material Oil & Gas Discoveries • Barryroe – Commercial – plan to continue farm-out discussions & drill in 2017 – Technical – explore application of new state of the art technologies • 3D seismic data mining as in Druid/Drombeg • Spanish Point – Comme
Slide 26: Technical Update Barryroe
0 PROVIDENCE Technical Update Barryroe
Slide 27: Barryroe Oil Field, North Celtic Sea Basin
Barryroe Oil Field, North Celtic Sea Basin Audited Gross Resources • 6 wells drilled (4 tested) & 3D seismic coverage • 4 stacked reservoir systems • Resource audits carried out by RPS (2011) & NSAI (2013) • Audited resources – 346 MMBOE • Field size covers area of c. 300 km2 Upside Potential • Test
Slide 28: 48/24-10Z Well Results
0 PROVIDENCE 48/24-10Z Well Results
Slide 29: Barryroe Oil Field – 48/24-10z Petrophysical Log
Barryroe Oil Field – 48/24-10z Petrophysical Log TVD Measured Depth 7300ft C Sand (gas) Basal Wealden Sands 7350ft A Sand (oil) 7400ft
Slide 30: Barryroe Oil Field – Excellent Reservoir Quality
Barryroe Oil Field – Excellent Reservoir Quality Vclay • Comprises 3 intervals- A-Sand (oil), B-Silt, C-Sand (gas) • Sit directly on the Purbeck Shale Fm (source) • Arenitic well developed, clean, laterally continuous – A-Sand rotary sidewall core porosity up to 17.8%, core permeability up to 3D – A
Slide 31: Barryroe Oil Field – Laterally Extensive Basal Wealden Reservoir System
Barryroe Oil Field – Laterally Extensive Basal Wealden Reservoir System BARRYROE FIELD WELLS
Slide 32: Barryroe Oil Field – Waxy Crude
Barryroe Oil Field – Waxy Crude • Barryroe is a light, sweet, high value, waxy crude oil: • 43 API oil (lighter than Brent which is c. 38 API) • 17% wax content • Excellent low in-situ oil viscosity: 0.8 cP in-situ • In-situ Reservoir temperature well above the WAT and PP: • 66°C Reservoir Temp • 46
Slide 33: Appraisal Planning
0 PROVIDENCE Appraisal Planning
Slide 34: Barryroe Oil Field – Compartmentalisation
Barryroe Oil Field – Compartmentalisation Risk Mitigation • In 2012 the planned side-track of the 48/24-10z well to further appraise the field and address compartmentalisation, was not drilled due to programme delays associated with 3rd party equipment problems – well suspended. • However, subsequen
Slide 35: Barryroe Oil Field – Compartmentalisation Low Fault Density
Barryroe Oil Field – Compartmentalisation Low Fault Density
Slide 36: Development Planning
0 PROVIDENCE Development Planning
Slide 37: Barryroe – Ideal Oil & Gas Development Location
Barryroe – Ideal Oil & Gas Development Location
Slide 38: Current Preferred Oil Development Analogue - Maari Oil Field
Current Preferred Oil Development Analogue - Maari Oil Field, New Zealand • Maari (OMV operated) discovered 1983 in 100 metres water. Production start up in Feb. 2009. • Maari crude is 37 API with 18% Wax Content and a PP of 20 C and WAT of 48 C • Developed with a Well Head Platform tied back to an
Slide 39: Technical Update Spanish Point
Technical Update Spanish Point
Slide 40: Spanish Point Gas Condensate Field, Northern Porcupine
Spanish Point Gas Condensate Field, Northern Porcupine Audited Gross Resources • Tested well and 3D PSDM seismic coverage • Senergy CPR Resource Audit (2011) - 2C c. 97 MMBOE REC • Updated Operator estimates (2015) - HIIP of c. 730 MMBOE and combined contingent plus prospective recoverable resources
Slide 41: Spanish Point – 35/8-2 Discovery Well
Spanish Point – 35/8-2 Discovery Well
Slide 42: Spanish Point – Potential Appraisal Drilling Programme
Spanish Point – Potential Appraisal Drilling Programme
Slide 43: Spanish Point – Potential Appraisal Drilling Programme
Spanish Point – Potential Appraisal Drilling Programme URCA LEAD SPANISH POINT
Slide 44: Spanish Point – Potential Gas Development Tie-Back Distances
Spanish Point – Potential Gas Development Tie-Back Distances
Slide 45: Technical Update Kish
0 PROVIDENCE Technical Update Kish
Slide 46: Kish Oil Prospect, Kish Bank Basin
Kish Oil Prospect, Kish Bank Basin Kish - Prospect Details • Significant Lower Triassic structural closure mapped on • 2D seismic data • P50 REC – 210 MMBO (PVR) • Provisional exploration well location agreed • UK East Irish Sea Basin oil field analogues – Douglas and Lennox Forward Plans • Advance
Slide 47: Kish Oil Prospect – 2D Seismic Reflection Profile
Kish Oil Prospect – 2D Seismic Reflection Profile SW NE Kish Oil Prospect Base Quaternary Near Top Salt Sherwood Sst Base Jurassic Top Lower salt St Bees Collyhurst Westphalian Faults terminate in salt – structure significantly predates HC migration Courtesy PAD
Slide 48: Kish Oil Prospect – Sub-Salt Petroleum System
Kish Oil Prospect – Sub-Salt Petroleum System 33/21-1 Salt& Shale Seal Seal Primary Reservoir Sherwood Sandstone Source (Gas) Source (Oil)
Slide 49: Kish Bank – Modern Day Surface Oil Seeps
Kish Bank – Modern Day Surface Oil Seeps – Mature Oil Source Rocks 7-metre dead oil column reported in top of Sherwood Sst KISH PROSPECT Residual oil logged in Carboniferous sands After Dunford et al. 2001
Slide 50: Kish Oil Prospect – East Irish Sea Exploration Analogue
Kish Oil Prospect – East Irish Sea Exploration Analogue
Slide 51: Technical Update The Irish Atlantic Margin
Technical Update The Irish Atlantic Margin
Slide 52: Providence’s Leadership Role in the Porcupine Basin
Providence’s Leadership Role in the Porcupine Basin 2004 • Licensed Dunquin & Spanish Point December 2004 2006 • ExxonMobil farm in to Dunquin • Licence Option secured for Newgrange with ExxonMobil • 2D seismic acquired over Dunquin, Newgrange & Druid/Drombeg 2008 • Chrysaor farms into Spanish Point
Slide 53: North Atlantic Source Rock Superhighway
North Atlantic Source Rock Superhighway 53
Slide 54: Porcupine Basin Licence Activity – 2004 vs 2016
Porcupine Basin Licence Activity – 2004 vs 2016 December 2004 June 2016 54
Slide 55: Technical Update Schlumberger Exploration Collaboration Project
Technical Update Schlumberger Exploration Collaboration Project
Slide 56: Schlumberger Exploration Collaboration Project
Schlumberger Exploration Collaboration Project September 2015 • Providence and Schlumberger sign Strategic Exploration Collaboration Agreement • Project commenced primarily designed to focus on the Druid, Drombeg, Newgrange and Dunquin South exploration prospects • 30 technical professionals worked
Slide 57: Druid/Drombeg Oil Prospects, Southern Porcupine Basin
Druid/Drombeg Oil Prospects, Southern Porcupine Basin Druid Drombeg Diablo
Slide 58: Schlumberger Exploration Collaboration Project
Schlumberger Exploration Collaboration Project • Multi-domain analysis confirms that the 3D seismic responses from the Druid and Drombeg prospects are consistent with the presence of two large vertically stacked stratigraphically trapped oil accumulations • Total cumulative in-place un-risked prospe
Slide 59: Technical Update Druid
0 PROVIDENCE Technical Update Druid
Slide 60: Druid Oil Prospect, Southern Porcupine Basin
Druid Oil Prospect, Southern Porcupine Basin • Two fans c. 1,750 m BML and structurally up-dip from a potential significant fluid escape feature from the underlying pre-Cretaceous Diablo Ridge NEAR STACK • Cumulative in-place un-risked prospective resources of 3.180 BBO (PMean) • Fan 1 – 984 MMBO (P
Slide 61: Druid Oil Prospect, Southern Porcupine Basin
Druid Oil Prospect, Southern Porcupine Basin Erosive channel cuts Fan1 & Fan 2 AVO and Spectral Decomposition suggests channel backfilled with mudstone thus providing effective trap
Slide 62: Druid Oil Prospect – Depth Conformant AVO Anomaly
Druid Oil Prospect – Depth Conformant AVO Anomaly SPECTRAL DECOMPOSITION DEPTH CONFORMANT AVO MINOR FOUR WAY CLOSURES ALSO ‘LIGHT UP’ SUPPORTING AVO TO BE FLUID EFFECT AVO product (Far – Near)*Far
Slide 63: Forties Formation, UK North Sea – AVO Success
Forties Formation, UK North Sea – AVO Success… Montrose Field Arbroath Field
Slide 64: Technical Update Drombeg
0 PROVIDENCE Technical Update Drombeg
Slide 65: Drombeg Oil Prospect, Southern Porcupine Basin
Drombeg Oil Prospect, Southern Porcupine Basin • Located c. 2,750 m BML and structurally up-dip from a potential significant fluid escape feature from the underlying pre-Cretaceous Diablo Ridge • In-place un-risked prospective resource of 1.915 BBO (PMean) • Pre-stack seismic inversion and regional
Slide 66: Drombeg Oil Prospect, Southern Porcupine Basin
Drombeg Oil Prospect, Southern Porcupine Basin
Slide 67: Druid/Drombeg – Vp/Vs Supports Two Stacked Sandstone Rich Fan Systems
Druid/Drombeg – Vp/Vs Supports Two Stacked Sandstone Rich Fan Systems Well 53/6-A 67
Slide 68: Technical Update Druid/Drombeg Drilling
Technical Update Druid/Drombeg Drilling
Slide 69: Druid/Drombeg – Provisional Well Location Schematic
Druid/Drombeg – Provisional Well Location Schematic 69
Slide 70: Druid/Drombeg – Provisional Well Location Schematic
Druid/Drombeg – Provisional Well Location Schematic 70
Slide 71: Druid/Drombeg – Global Analogues
Druid/Drombeg – Global Analogues 71
Slide 72: Technical Update Dunquin South
Technical Update Dunquin South
Slide 73: Dunquin South Oil Prospect, Southern Porcupine Basin
Dunquin South Oil Prospect, Southern Porcupine Basin Prospect Details • 2nd of two isolated carbonate platforms – Dunquin North & South • Dunquin North exploration well drilled in 2013 • Dunquin South – Prospective Resources • Hydrocarbons in place – c. 3.475 BBOE (Pmean, ExxonMobil) • Recoverable –
Slide 74: Dunquin South – Location Map
Dunquin South – Location Map Top Carbonate Depth Map Dunquin North 44/23-1 Dunquin South 74
Slide 75: Dunquin North – Well Results
Dunquin North – Well Results Drilled in 2013 • Thick, high porosity carbonate reservoir • c. 44m residual oil column encountered in massive over-pressured high porosity carbonate reservoir system • DQN Pre-breach oil STOIIP – c. 1.2 BBOE (ExxonMobil) • DQN Current residual oil STOIIP – c. 600 MMBOE
Slide 76: Dunquin North vs Dunquin South – 2D Seismic Data
Dunquin North vs Dunquin South – 2D Seismic Data Dunquin Dunquin North South FAULT CONTROL NOT FAULT CONTROLLED Courtesy PAD Line 0299-03-39 Line 0299-07-51 76
Slide 77: Dunquin North vs Dunquin South – 2D Velocity Data
Dunquin North vs Dunquin South – 2D Velocity Data Low seismic interval velocities at Dunquin South which are comparable with Dunquin North implies porosity preservation possibly related to hydrocarbon charging…the risk then becomes, has the charge been retained….? Dunquin Dunquin North South 77
Slide 78: Technical Update Avalon
0 PROVIDENCE Technical Update Avalon
Slide 79: Avalon Oil Prospect, Porcupine Basin
Avalon Oil Prospect, Porcupine Basin Avalon - Prospect Details • Mapped on 2D vintage seismic data as part of recent 2015 Irish AMLR • Significant Paleocene basin floor stratigraphic trap identified in basin axis • Target is c. 2,500 m BML in c. 1,300 m water depth • Located close to the Dunquin Nor
Slide 80: Avalon Oil Prospect, Porcupine Basin
Avalon Oil Prospect, Porcupine Basin Courtesy PAD
Slide 81: Technical Update Newgrange
0 PROVIDENCE Technical Update Newgrange
Slide 82: Newgrange Gas Prospect, Goban Spur Basin
Newgrange Gas Prospect, Goban Spur Basin Newgrange - Prospect Details • 500 line km 2D seismic survey carried out in 2006 • Significant structure identified in basin • Cretaceous target c. 400 metres BML in c. 1,000m water depth • BCU structural closure covers c. 1800 km2 (1,000 km2 within Providenc
Slide 83: Newgrange Gas Prospect, Goban Spur Basin
Newgrange Gas Prospect, Goban Spur Basin 83 83
Slide 84: Newgrange Gas Prospect, Goban Spur Basin
Newgrange Gas Prospect, Goban Spur Basin 84 84
Slide 85: Tony O’Reilly, Chief Executive
Tony O’Reilly Chief Executive
Slide 86: The Providence Opportunity
The Providence Opportunity Ireland • Proven hydrocarbon systems • 2015 Atlantic Margin Licensing Round and Providence’s Schlumberger collaboration - major catalysts • Attractive fiscal regime • Established ports/infrastructure and connected to the European gas supply network Providence • Uniquely po
Slide 87: Providence Resources P.l.c.
Providence Resources P.l.c. www.providenceresources.com
Providence Resources P.l.c. — Shareholder Meeting (July 2016) on 6ix