Carnarvon Energy Limited · ASX:CVN
Carnarvon Energy — Investor Presentation (March 2022)
50 slides from Carnarvon Energy's investor presentation, Mar 28, 2022
Slide 1: Capital Raise Presentation
Capital Raise $70m placement to professional and institutional investors 28 March 2022 Presentation ASX listed energy company (ASX:CVN) Developing high quality assets in Western Australia Not for release to US wire services or distribution in the United States GENERATING VALUE THROUGH THE ENERGY TRA
Slide 2: Disclaimer
Disclaimer Nature of presentation This presentation has been prepared by Carnarvon Energy Limited ACN 002 688 851 (Carnarvon) in connection with Carnarvon’s proposed equity raising of new ordinary shares in Carnarvon (New Shares) comprising of a fully underwritten placement of New Shares to institut
Slide 3: Disclaimer
Disclaimer Not financial advice Nothing contained in this presentation constitutes investment, legal, tax or other advice. This presentation, and the information contained within it, does not take into account the investment objectives, financial situation or particular needs of any recipient. Befor
Slide 4: Disclaimer
Disclaimer Future performance (continued) No representation, warranty or assurance, express or implied, is given or made in relation to any forward looking statement. In particular no representation, warranty or assumption, express or implied, is given in relation to any underlying assumption or tha
Slide 5: Disclaimer
Disclaimer Resource estimates (continued) There are numerous uncertainties inherent in estimating reserves and resources, and in projecting future production, development expenditures, operating expenses and cash flows. Oil and gas reserve engineering and resource assessment are subjective processes
Slide 6: Disclaimer
Disclaimer Disclaimer (continued) Each Joint Lead Manager and its other Limited Parties make no recommendations as to whether you or your related parties should participate in the Institutional Placement nor do they make any representations or warranties to you concerning the Institutional Placement
Slide 7: Investment highlights
Investment highlights High quality energy portfolio in Western Australia ▪ Dorado development engineering and design progressing with project FID-ready in mid-2022 ▪ Low cost development in shallow water with an experienced operator (Santos) World Class ▪ High quality liquids, many components of whi
Slide 8: Equity raising overview
Equity raising overview Carnarvon is undertaking a placement to raise $70 million ▪ Single tranche underwritten placement to professional and institutional investors under the Company’s available capacity Offer pursuant to ASX Listing Rule 7.1 to raise approximately $70 million (Institutional Placem
Slide 9: Sources and uses of funds
Sources and uses of funds Sources (A$ million) Uses (A$ million) Placement Proceeds 70 Dorado development costs 70 Cash as at 31 December 2021 77 Dorado FEED 11 Bedout Exploration 27 General corporate purposes and contingencies 39 Total sources 147 Total uses 147 ▪ The Institutional Placement, toget
Slide 10: Timetable
Timetable Event Date (2022) Trading halt and announcement of the Institutional Placement Monday, 28 March Institutional Placement executed Monday, 28 March Announcement of the outcome of the Institutional Placement Wednesday, 30 March Trading halt lifted and trading of Shares recommences on ASX Wedn
Slide 11: Carnarvon is advancing several non-equity Dorado funding options
Carnarvon is advancing several non-equity Dorado funding options ➢ Technical DD commenced Sept 2021 Dorado’s attraction ➢ Commercial engagement commencing Senior debt in Q2, 2022 for financiers ➢ In discussion with >10 quality lenders ➢ Finance in addition to senior debt ➢ Strong debt servicing capa
Slide 12: Carnarvon Energy – highly valuable energy projects in WA
Carnarvon Energy – highly valuable energy projects in WA Dorado oil development - One of the few ASX listed companies with quality oil exposure, via the Dorado field in the Bedout basin in Western Australia Bedout basin exploration – With ~100 prospects in this basin, Carnarvon holds an enviable sta
Slide 13: Dorado oil field development
Dorado oil field development
Slide 14: Dorado field overview (CVN 20%)
Dorado field overview (CVN 20%) Contingent resource of 162mmbbls (gross 2C basis) Phase 1 – oil production ➢ Targeting an initial 75,000 to 100,000 bopd flow rate (gross) in early 2026 Phase 2 – gas and LPG production ➢ In concept phase, with timing objectives to align with oil production decline Do
Slide 15: Dorado development phase 1 – FID ready by mid-2022
Dorado development phase 1 – FID ready by mid-2022 ➢ Conceptual design complete on subsurface, WHP and FPSO ➢ FEED work advancing to finalise capital cost and execution plan, along with required contracts ➢ Production License and Offshore Project Plan prepared for regulatory approval, Field Developm
Slide 16: Increasing opportunity to sequence oil & gas production
Increasing opportunity to sequence oil & gas production ➢ Pavo oil discovery confirmed 23 March 2022 ➢ Apus-1 well is drilling in April 2022 ➢ Dorado gas is to be reinjected for future production, timing is flexible ➢ Roc gas (discovered and appraised in 2016) has the potential to tie-into Dorado ➢
Slide 17: Compelling value in producing additional oil in Dorado facilities
Compelling value in producing additional oil in Dorado facilities Illustration of the merits of tying back production from new fields into Dorado facilities with predominantly fixed operating costs ➢ Spreading operating costs over a larger resource pool maintains low operating costs per barrel Barre
Slide 18: Dorado field contains a sought after light sweet crude
Dorado field contains a sought after light sweet crude Examples of Dorado crude uses ➢ Petrochemicals ➢ Jet & other transport fuels Dorado crude is categorized as o ➢ Light / extra light (51 API) ➢ Sweet (defined by its low 189 ppm Sulphur content) (%’s by volume) GENERATING VALUE THROUGH THE ENERGY
Slide 19: Strong projected demand for light crude products like Dorado's
Strong projected demand for light crude products like Dorado’s ➢ Naphtha demand growth (petrochemical feedstock) ➢ Jet/kerosene demand growth ➢ Dorado crude refined products suited to growth areas Majority of Dorado oil ➢ Dorado production well timed into projected to forecast growth profile be prod
Slide 20: Dorado positioned to support Asian demand growth
Dorado positioned to support Asian demand growth GENERATING VALUE THROUGH THE ENERGY TRANSITION 20
Slide 21: Asian demand projections strong for light crudes like Dorado's
Asian demand projections strong for light crudes like Dorado’s ➢ Strong demand growth ➢ Driven from Asia Pacific ➢ Dorado production timing and Majority of location is ideal Dorado oil projected to be produced GENERATING VALUE THROUGH THE ENERGY TRANSITION 21
Slide 22: Dorado refined products and demand forecasts are attractive
Dorado refined products and demand forecasts are attractive Dorado refined products ➢ Naphtha for petrochemicals ➢ Jet and other transport fuels Dorado timing ➢ Demand growth projected in Dorado’s main production window Dorado location ➢ Well located to supply growth projections in the Asian markets
Slide 23: Focused growth in the Bedout basin
Focused growth in the Bedout basin
Slide 24: Around 100 targets identified in the Bedout basin (CVN 20%-30%)
Around 100 targets identified in the Bedout basin (CVN 20%-30%) Carnarvon’s objectives across the basin*: 2022 – Exploration drilling at Pavo and Apus 2024 2023 – Pavo appraisal drilling 2024 – Dorado development drilling 2025 Baxter appraisal drilling Northern basin exploration drilling 2023 2024 2
Slide 25: Pavo-1 exploration well (CVN 30%) Material oil discovery
Pavo-1 exploration well (CVN 30%) Material oil discovery Location 46 km east of Dorado development Highlights ✓ 46 metres net pay ✓ Quality reservoir ✓ Light oil (52o API) ✓ Tie back to the proposed Dorado production facility attractive ✓ Unlocks suite of nearby prospects Map showing Dorado, Pavo an
Slide 26: Apus-1 exploration well (CVN 20%-30%)
Apus-1 exploration well (CVN 20%-30%) To follow Pavo-1 Location 31 km southeast of Dorado Targets Caley & Milne Member sands Key Risks Charge & Top-seal A A’ Volumes* ✓ Liquids: 235 mmbbl; and ✓ Gas: 408 Bcf (gross, mean) Risk ✓ 23% Pg ✓ Pavo-1 result positive for key risks ✓ HRDZ’s possible mitigat
Slide 27: Quality 3D seismic data are contributing to Bedout results
Quality 3D seismic data are contributing to Bedout results 2D (1987) 3D (2019) 3D (2021) C D C D C D Dorado Dorado canyon canyon C Dorado D GENERATING VALUE THROUGH THE ENERGY TRANSITION 27
Slide 28: An exciting possibility for seismic data to de-risk future prospects
An exciting possibility for seismic data to de-risk future prospects Dorado Pavo N S N Cossigny S Fluid Escape Features (FEF’s) Caley Fluids that escape from a structure can create a seismic signature – often a sign that hydrocarbons are, or were, present Apus In N the Bedout S • A FEF looks to have
Slide 29: Quality 3D seismic data now covers most of the Bedout basin
Quality 3D seismic data now covers most of the Bedout basin Two new 2021 3D seismic surveys will mature and de-risk key leads and prospects • Archer 3D, 595 km2 – Dorado near-field prospects • Keraudren Ext. 3D, 2,534km2 – eastern lead complex Processed data available early 2022 2,534 km2 Permits no
Slide 30: Renewable Fuel Development
7. CARNARVON ENERGY LTD Renewable Fuel Development
Slide 31: Carnarvon is committed to be part of the energy transition
Carnarvon is committed to be part of the energy transition Net zero Sustainability Renewable diesel commitment reporting investment GENERATING VALUE THROUGH THE ENERGY TRANSITION 31
Slide 32: Renewable diesel is a part of Australia's Bioenergy Roadmap
Renewable diesel is a part of Australia’s Bioenergy Roadmap ➢ In November 2021, the Australian Federal Government released its roadmap to guide the growing bioenergy sector and its role in Australia’s future energy mix ➢ Renewable diesel was identified by ARENA to play a role in lowering emissions i
Slide 33: About renewable diesel
About renewable diesel ➢ Key benefits of the fuel vs. petroleum diesel: ➢ Lower tailpipe emissions ➢ including particulate matter, CO and NOx ➢ Higher fuel efficiency, milage, power ➢ Reduces engine wear ➢ Indicative lifecycle GHG emissions show fuel has the potential to be carbon neutral ➢ Meets Eu
Slide 34: Carnarvon's first project is to be in the Narrogin Shire (WA)
Carnarvon’s first project is to be in the Narrogin Shire (WA) ➢ Technip Energies is currently undertaking project FEED covering the technology and proposed site ➢ Rights to acquire a 64 ha site in the Narrogin Shire have been secured ➢ Significant inbound interest has been received from companies in
Slide 35: Additional products associated with renewable diesel production
Additional products associated with renewable diesel production Biochar - applications include: • Carbon Soil Enhancer • Water Reduction & filtration • Metallurgical Charcoal • Animal feed Approx. 8,300 tons / annum projected production Wood vinegar - applications include: • Fertiliser • Fungicide &
Slide 36: Appendix
Appendix 1 Supporting material
Slide 37: Bedout Basin Contingent Resources
Bedout Basin Contingent Resources Gross resources (100% basis) Oil and Condensate Natural Gas Barrels of Oil Equivalent 1 MMbbl BCF MMboe 1C 2C 3C 1C 2C 3C 1C 2C 3C Dorado 86 162 285 367 748 1358 176 344 614 Roc 12 20 35 205 332 580 48 78 137 Bedout Project Sub Total 98 182 320 572 1080 1938 224 422
Slide 38: Bedout Basin Selected Prospective Resources
Bedout Basin Selected Prospective Resources Prospective Resources (100% basis) Light Oil Natural Gas Barrels of Oil equivalent Pg MMbbl BCF MMboe % P90 P50 Mean P10 P90 P50 Mean P10 P90 P50 Mean P10 Pavo Resource estimate to be revised following completion of the Pavo-1 well Apus 26 160 235 537 537
Slide 39: Appendix 2: Key Risks
Appendix 2: Key Risks
Slide 40: Key Risks
Key Risks General ▪ This section discusses some of the key risks associated with an investment in Carnarvon. The risks may affect the future operating and financial performance of Carnarvon and/or the value at which its shares may trade in the future. ▪ The risk factors described in this presentatio
Slide 41: Key Risks
Key Risks Exploration, ▪ The future profitability of Carnarvon and the value of its shares are directly related to the results of exploration, development and production activities. ▪ Exploration is a speculative endeavour and no assurances can be given that funds spent on exploration will result in
Slide 42: Key Risks
Key Risks Reserve and ▪ Oil and gas resource and reserves estimates are expressions of judgement based on knowledge, experience and industry practice. Estimates which were valid when originally calculated may alter significantly or become uncertain when new information becomes available through addi
Slide 43: Key Risks
Key Risks Risk of foreign ▪ Carnarvon primarily conducts its operations in Australia. However, the Buffalo project falls within the jurisdiction of Timor-Leste under a Production Sharing Contract (PSC) regime. Timor-Leste may be more stringent in ensuring compliance, and therefore require further ex
Slide 44: Key Risks
Key Risks Reliance on third ▪ As is common in the oil and gas sector industry, Carnarvon may rely on access to operating infrastructure and shared facilities that may not be directly controlled by Carnarvon in order to deliver its production to the market. There can be no guarantee that Carnarvon wi
Slide 45: Key Risks
Key Risks Litigation and ▪ The nature of Carnarvon's business means that it may, from time to time, be involved in litigation, regulatory actions or similar disputes arising from a range of matters. Carnarvon may also be involved in investigations, inquiries, audits, disputes or claims. Any of these
Slide 46: Key Risks
Key Risks General economic ▪ Economic conditions, both domestic and global, may affect the performance of Carnarvon. Adverse changes in macroeconomic conditions, including global and country-by-country economic growth, the cost and general availability of credit, the level of inflation, interest rat
Slide 47: Appendix 3: Foreign Selling Restrictions
Appendix 3: Foreign Selling Restrictions
Slide 48: Foreign Selling Restrictions
Foreign Selling Restrictions This document does not constitute an offer of new ordinary shares (New Shares) of Carnarvon (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 a
Slide 49: Foreign Selling Restrictions
Foreign Selling Restrictions New Zealand This document has not been registered, filed with or approved by any New Zealand regulatory authority under the Financial Markets Conduct Act 2013 (the FMC Act). The New Shares are not being offered or sold in New Zealand (or allotted with a view to being off
Slide 50: Generating value through the energy transition
Generating value through the energy transition – a contemporary approach that integrates conventional assets and renewables HEAD OFFICE Level 2, 76 Kings Park Road T. +61 8 9321 2665 West Perth WA 6005 E. admin@cvn.com.au
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