Horizon Petroleum Ltd. · TSXV:HPL
Horizon Petroleum — Investor Presentation (June 2018)
35 slides from Horizon Petroleum's investor presentation, June 2018
Slide 1: Horizon Petroleum Ltd. - Building a European Conventional Natural Gas Development Company
Horizon Petroleum Ltd. June 2018 Building a European Conventional Natural Gas Development Company
Slide 2: Corporate Introduction
Corporate Introduction Please read important legal, risk and resource advisories in Appendix C to this presentation
Slide 3: Summary
Summary Early stage E&P company focusing on conventional natural gas assets in Europe Strategy • Experienced management and Board with international operating and corporate track record • Targeting growing, liberalised natural gas market with high prices (US$8.00-9.00/Mcfe) • Low entry cost opportun
Slide 4: Management and Board
Management and Board David Winter President & Chief Executive Officer, Director Yogeshwar Sharma Non-Executive Chairman Matt Janisch Interim Chief Financial Officer, Director Dr. Charle Gamba Non-Executive Director Martin Roberts Chief Operating Officer Harry Wilson Non-Executive Director David Robi
Slide 5: Corporate Strategy
Corporate Strategy International experience in developing oil and conventional natural gas fields Proven technical and operating track record § 150+ years of international experience, specifically in Europe (Poland, Holland, France, UK) § Production and reserves growth through the drill bit and merg
Slide 6: Corporate Overview
Corporate Overview Key corporate information Share price history TSX-V: HPL 0.50 Listing FRA: HPM1 0.40 37.8 MM (basic) Share price (C$) Common Shares 41.2 MM (fully diluted) 0.30 Share price (1 June 2018) C$0.065 0.20 0.10 Market cap at placing price (pre-money) C$1.9 MM - Jun-15 Dec-15 Jun-16 Dec-
Slide 7: The European Natural Gas Market
The European Natural Gas Market
Slide 8: European Natural Gas: Strong Fundamentals
European Natural Gas: Strong Fundamentals Domestic natural gas production continues to decline • Legacy UK and Dutch natural gas fields are mature • Unconventional natural gas development in past 10 years has been largely unsuccessful • 86% of supply from 3 countries: Russia (42%), Norway (34%), Alg
Slide 9: Polish Natural Gas Market
Polish Natural Gas Market Conventional natural gas fundamentals Polish Power Exchange (POLPX) and Accompanying Natural Gas Price 280 14.00 • Rising demand with increasing imports and flat domestic production 260 Historical Strip 13.00 240 12.00 • Strong political push to reduce reliance on Russian n
Slide 10: The Acquisition
Horizon The Acquisition
Slide 11: Asset Acquisition
Asset Acquisition Acquiring a proven, but undeveloped field and a large acreage position Agreements executed to acquire 100% interests in five concessions from San Leon Energy plc • Closing expected mid-2018 (long-stop date September 19, 2018)1 • US$1 MM in cash, C$1 MM in Horizon common shares and
Slide 12: Bielsko-Biala & Cieszyn Concessions: Location
Bielsko-Biala & Cieszyn Concessions: Location Cieszyn Bielsko-Biala Lachowice Gas Development Legend Current SLE/Horizon concessions Other concessions Lachowice export pipeline ~22 km HP High methane system- Transmission HP High methane system- Distribution Exit points from the HP systems TSX-V: HPL
Slide 13: Bielsko-Biala Concession: Lachowice field
Bielsko-Biala Concession: Lachowice field Lachowice-7 3.0 - 8.9 MMcf/d - multiple tests Warsaw Stryszawa-1K drilled into fault zone, highly reduced formation Bielsko – Biala Lachowice field Stryszawa-2K 2.52 MMcf/d • Located in the Carpathian foothills 50 km south of the city of Krakow • 950 km of l
Slide 14: Lachowice Reserves and Resources
Lachowice Reserves and Resources1,2,3,4 • 2P reserves assigned to the Lachowice-1, Lachowice-7 and Stryszawa-2K wells o Initial development drilling converts to Proven Developed Producing category • Contingent resources in the fractures and matrix tight natural gas reservoirs in Lachowice-1, 2, 3a,
Slide 15: Horizon Lachowice Development Plan
Horizon Lachowice Development Plan1,2,3 C$5 MM is required to close the acquisition and initiate development work Additional C$20-26 MM (combined with free cash flow) required to increase production to 30+ MMscfe/d Appraisal and development beyond that is intended to be fully funded from cash flow E
Slide 16: Horizon Lachowice Development Plan (cont.)
Horizon Lachowice Development Plan (cont.)1,2,3 3. Follow up development drilling to convert remaining 100 Bcfe of risked Contingent Resources and 123 Bcfe of risked Prospective Resources to proven and probable reserves intended to be fully funded from cash flow Lachowice Production Forecast Capital
Slide 17: Kotlarka, Prusice, Buchowice Licences
Kotlarka, Prusice, Buchowice Licences Radziadz 37 bcf Grabowka 20 bcf Kotlarka Wierzchowice Borzecin 442 bcf 188 bcf Buchowice Prusice Brzostowo 117 bcf Czeszow 71 bcf Dorzhen Gas discovery 9-10 bcf estimated reserves, 16 MMscf/d well test rate Potential field re-development PGNIG flowlines • Increm
Slide 18: Growth Strategy
Horizon Growth Strategy
Slide 19: Growth Strategy
Growth Strategy1 • Establish a near-term operated natural gas production platform in Europe through closing the acquisition of San Leon’s conventional natural gas assets in Poland § Targeting first natural gas sales of up to 3.0 MMscfe/d in H2 2019 from the Lachowice natural gas field § Initiate ful
Slide 20: Why Invest In Horizon?
Why Invest In Horizon? • Compelling entry valuation to access 36 Bcfe 2P reserves with US$98 MM NPV10 § US$1 MM, C$1 MM in Horizon shares, 6% Net Profit Interest • Near-term work program to initiate early production and cash flow • Second phase work program to develop large upside gas production and
Slide 21: Corporate Information
Corporate Information Contact Details: Dr. David A. Winter, President & CEO david.winter@horizon-petroleum.com +1 (403) 619-2957 Matt Janisch, Interim CFO matt.janisch@horizon-petroleum.com +1 (403) 975-4941 Office: Suite 1500, 700 4th Ave. S.W. Calgary, AB, T2P 3J4 CANADA Corporate Website www.hori
Slide 22: Appendix A: Additional Information
Appendix A: Additional Information
Slide 23: Reserve and Resource Summary
Reserve and Resource Summary1,2 1. Prepared by APEX Global Energy Inc. effective January 31, 2018 in accordance with NI51-101 and COGEH 2. See important risk advisory and resource advisory at the end of this presentation 3. PIIP: Petroleum-Initially-in-Place – for definitions see disclosure at end o
Slide 24: Lachowice-7 Cross Section
Lachowice-7 Cross Section Devonian Black Shale – 36 m (gross thickness) Lachowice Development: • Targeting naturally fractured carbonates of Devonian age D4 Devonian Unit (fracture and matrix porosity) – 84 m • Thick natural gas columns between 130 to >300 m • Porosity range 2 - 7% D3b Devonian Unit
Slide 25: French Assets
French Assets Permits • 100% operated working interest in the Ger and Ledeuix exploration licenses in the Aquitaine Basin, SW France § The Ledeuix permit contains the Saucède-1 natural gas discovery drilled by Esso in 1979 o Flow rates tested up to 21 MMcf/d averaging 10 MMcf/d over 10 days from nat
Slide 26: Appendix B: Horizon Development Plan Assumptions
Appendix B: Horizon Development Plan Assumptions
Slide 27: Horizon Development Plan Assumptions
Horizon Development Plan Assumptions • HPL maintained the reserves and resources estimated by APEX in the Reserves Report • HPL updated the Reserves Report with the following: § CAPEX: Based on updated 3rd party cost estimates for drilling, completion and processing equipment § Production forecasts:
Slide 28: Appendix C: Legal Notices, Risk and Resources Advisories
Appendix C: Legal Notices, Risk and Resources Advisories
Slide 29: Disclaimer
Disclaimer Forward-Looking Information This information contained in this corporate presentation and the accompanying verbal presentation (the “Presentation”) contains forward-looking statements and forward-looking information (collectively, “forward-looking information”) within the meaning of appli
Slide 30: Disclaimer (cont.)
Disclaimer (cont.) FOFI and other Financial Matters This Presentation contains future-oriented financial information and financial outlook information (collectively, "FOFI") about the Company’s prospective results of operations, operating netbacks and components thereof, all of which are subject to
Slide 31: Disclaimer (cont.)
Disclaimer (cont.) Cautionary Statements (cont.) For the purpose of Section 21 of the Financial Services and Markets Act 2000 of the UK ("FSMA"), any invitation or inducement to engage in any investment activity included within the Presentation is directed only at (i) investment professionals (withi
Slide 32: Risk Advisory
Risk Advisory The reserve and resource estimates of natural gas and natural gas liquids reserves provided in this presentation are estimates only, and there is no guarantee that the estimated reserves and/or resources will be recovered. Actual reserves and resources may eventually prove to be greate
Slide 33: Risk Advisory (cont.)
Risk Advisory (cont.) Estimates of resources always involve uncertainty, and the degree of uncertainty can vary widely between accumulations/projects and over the life of a project. Consequently, estimates of resources should generally be quoted as a range according to the level of confidence associ
Slide 34: Resource Advisory
Resource Advisory Definitions Total Petroleum Initially in Place (“PIIP”) refers to the total quantity of petroleum that is estimated to exist originally in naturally occurring accumulations. It includes the petroleum that exists in known accumulations prior to production and the estimated quantitie
Slide 35: Resource Advisory (cont.)
Resource Advisory (cont.) Resources are defined in the Canadian Oil and Gas Evaluation Handbook (COGEH) Volume 1, section 5 as follows: ! Contingent Resources are those quantities of petroleum estimated, as of a given date, to be potentially ! recoverable from known accumulations, but the applied pr
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