Newmed Energy Limited Partnership · TASE:NWMD
Newmed Energy Limited Partnership — Delek Drilling — BofAML Emerging Markets Corporate Conference 2017
30 slides from Newmed Energy Limited Partnership's conference presentation, June 2017
Slide 1: BOAML 2017 Emerging Markets Corporate Conference
BOAML 2017 Emerging Markets Corporate Conference June 2017 Delek Drilling – Energizing The Eastern Med
Slide 2: Disclaimer
Disclaimer This presentation was prepared by Delek Drilling – Limited Partnership – Limited Partnership (jointly, the “Partnerships”), and is given to you only for the provision of concise information for the sake of convenience, and may not be copied or distributed to any other person. This present
Slide 3: Delek Drilling – Business Card
Delek Drilling – Business Card Transforming the Levant Basin into a Natural Gas Export Hub Top 10 Tel-Aviv- 35 index listed LP with a market cap of c. $5 billion World class E&P assets portfolio, from production to development and exploration Senior partner in all major gas discoveries off shore Isr
Slide 4: Recent Structural Change
Recent Structural Change Merger of Avner with and into Delek Drilling to simplify structural holdings ✓ Doubling free float and Volume trade ✓ Economies of scale / Costs saving ✓ Simplify structure and processes, improving efficiency within organizational process ✓ Improved investor proposition / co
Slide 5: Israeli and Cypriot EEZ – Over 42 TCF Discovered
Israeli and Cypriot EEZ – Over 42 TCF Discovered Delek Drilling 2011 2013 Field Working Interest 2012 Aphrodite Karish 4.5 tcf Tanin 1.8 tcf 1.2 tcf Leviathan 45.34% 2009 2010 Tamar Tamar (including TSW) 31.25% Leviathan 2013 10.1 tcf 2 21.9 tcf TSW 2009 Dalit 31.25% 0.9 tcf 2011 Dalit Dolphin 0.5 t
Slide 6: Levant Basin – Geology
Levant Basin – Geology Leviathan Deep Delek Drilling – Energizing The Eastern Med 6
Slide 7: Strong Financial Position
Strong Financial Position Strong balance sheet Long-term, limited recourse-type debt based on significant revenues from the Tamar reservoir only Attractive dividend policy High cash reserves Well-established and stable cash flow Substantial economic value of assets Delek Drilling – Energ
Slide 8: Corporate Financing
Corporate Financing $400 mm corporate Bond series A, new non-recourse unsecured corporate level financing recently raised in the Israeli market : ▪ Bullet payment on December 2021; coupon interest rate of 4.5% (paid semi-annual) ▪ If WI in Tamar decline to less then 10% (combined of the 100%) Dele
Slide 9: Government 'Gas Framework' – Regulatory Certainty
Government ‘Gas Framework’–Regulatory Certainty Resolutions regards three main topics: Structural Changes Pricing & Contracts Development ▪ Tanin and Karish: Delek and ▪ No change to existing contracts ▪ Time table and milestones Noble will sell their entire for investments in ▪ Defined pricing alte
Slide 10: Tamar Project
Tamar Project 10
Slide 11: Tamar – World Class Deepwater Project
Tamar – World Class Deepwater Project Ownership Delek Drilling 31.2%, Isramco 28.7%, Dor Gas 4%, Everest 3.5% Noble Energy (operator) 32.5% 2P Reserves* 10.0 tcf (282 bcm); / 13.3 mmbbl condensate First gas End of Q1 2013 Development budget: $3.1 Billion (100%) Overall Tamar costs to date: $4 Billio
Slide 12: Tamar in Numbers
Tamar in Numbers Robust steady Cash-flow generative project mm$ 2016A 2017E 2018E 2019E Sales (bcm/y) 9.4 10.1 10.7 10.7 Revenue 1,734.8 1,906.6 2,086.8 2,143.7 OPEX 126.8 150.8 153.1 155.5 EBITDA 1,358.5 1,413.4 1,435.9 1,476.9 FCF 1,014.0 1,017.0 1,187.3 1,179.3 • Table represent Performa numbers
Slide 13: Tamar – Contracts and Sales Breakdown
Tamar – Contracts and Sales Breakdown Tamar contractual structure – low exposure to commodity risk Israel Electric IPP & Electricity Industry & Other Corp. Related TCQ : 87 bcm (~3.07 tcf) TCQ : 72 bcm (~2.54 tcf) TCQ : 8.5 bcm (0.3 tcf) + Condensate 15-17 years 15-19 years 5-8 years Pri
Slide 14: Tamar Continued Excellence Performance
Tamar Continued Excellence Performance Tamar-8 well completed and producing, on time on budget 2017 1Q record gas sales : 2014 2015 2016 2017 10.1 3.0 9.4 2.5 CAGR – 12% 2.5 2.5 8.3 2.4 2.3 2.3 7.5 2.2 2.2 2.0 2.1 2.0 1.9 1.7 1.7 1.8 CAGR- 11% BCM 1.5 1.0 0.5 0.0 Q1 Q2 Q3 Q4 2014 2015 2016 2017E
Slide 15: Tamar Expansion – Unlocking Value
Tamar Expansion – Unlocking Value UFG-Damietta option will serve as an anchor for capacity expansion of up to 20.4 bcm/y Expansion program ▪ A third pipeline (20") from the reservoir to Tamar and Mari- B platforms ▪ Development of Tamar SW and additional Tamar wells ▪ Expansion of Mari-B treatment c
Slide 16: Tamar Divestment Process
Tamar Divestment Process Delek will sell its entire working interest in Tamar project According to the “Government Gas Framework” resolutions, Delek is required to sell its entire 31.25% WI in Tamar project by December 2021 Recent benchmark valuation derived from Noble Energy-Harel Insurance Dea
Slide 17: Tamar IPO – Sell out of up to 10% WI
Tamar IPO – Sell out of up to 10% WI Pre IPO Structure Post IPO Structure Delek Drilling Delek Drilling 31.2% WI ~22% WI ~10%% WI Tamar Field Tamar Field Tamar SPV 100% Delek 100% Delek Tamar Bond Tamar Bond Bond Debt LTD. LTD. $1.6 B $1.28 B Senior Secured Note Senior Secured Note Delek Drilling –
Slide 18: Tamar Related Debt
Tamar Related Debt $1.6 B Tamar bond- 4 series of $400 mm bullet payment in years : 2018, 2020, 2023, 2025 ▪ When selling down 3.25% WI in Tamar there are no limitation ▪ Sell down of additional 6.25% requires bond redemption, pro-rata to the sell ▪ Sell down of remining WI in Tamar, all proceeds
Slide 19: Leviathan Project
Leviathan Project 19
Slide 20: Leviathan – A Regional Energy Game Changer
Leviathan – A Regional Energy Game Changer Ownership Delek Drilling 45.3%, Ratio 15%, Noble Energy (operator) 39.7% 2P+2C Resources* 21.9 tcf (613 bcm), 39.4 mmbbl condensate Estimated First Gas 4Q 2019 Production Capacity (to be built in 2 stages) 1.2 bcf/d (~12 bcm/y) – for Domestic, Jordan and PA
Slide 21: Leviathan – Modular Development
Leviathan – Modular Development Phase 1A of Leviathan development sanctioned, future cost efficient expansion Capacity of 1.2 bcf/d (approx. 438 bcf/y) Capacity of 2.1 bcf/d (approx. 766 bcf/y) Development plan for phase 1A includes construction of an offshore fixed platform with a 1.2 bcf/d (appr
Slide 22: Development Work Plan Schedule
Development Work Plan Schedule Source: Leviathan operator (NBL) Delek Drilling – Energizing The Eastern Med 22
Slide 23: Leviathan – Technical Status Update
Leviathan – Technical Status Update ▪ Received Transmission License and critical Building Permits ▪ First 20” Subsea ball valve is ready for shipment ▪ Continuing Detailed Design for Subsea, Onshore, and Host Scopes ▪ Onshore Construction Progress ▪ Ordered 16,600-MT of Platform Steel for Fabricatio
Slide 24: Leviathan – Various Potential Markets
Leviathan – Various Potential Markets Israel – Domestic market Jordan - NEPCO Palestinian Authority Egypt – Domestic market Egypt Turkey Israel EEZ LNG Sites Platform Existing Pipelines Future possible Pipelines Delek Drilling – Energizing The Eastern Med 24
Slide 25: Jordan NEPCO – Ideal Export Offtaker
Jordan NEPCO – Ideal Export Offtaker An anchor contract for Leviathan phase-1 development NEPCO GSPA main parameters: Buyer : National Electric Power Company of Jordan (NEPCO) Seller : NBL Jordan Marketing Limited (SPV owned pro- rata by Leviathan partners, according to their working interests)
Slide 26: Egypt – Supply Demand Imbalance
Egypt – Supply Demand Imbalance ▪ Significant consumption of over 50 bcm/y, and increasing by Approx. 8% year on year (2001 to 2012) ▪ Additional gas is required for two existing LNG facilities, consuming approx. 17 to 20 bcm/y ▪ Natural gas is currently imported using two floating regasification te
Slide 27: Regional Export – Turkey's Huge Potential
Regional Export – Turkey's Huge Potential Turkish Market Consumed approx. 48 bcm/y of natural gas in 2014 and 2015 Is 99% dependent on import for natural gas Approx. 85% imported by pipeline, 15% imported as LNG Highly Developed Natural Gas Transportation Grid, and connection to the decreasi
Slide 28: Leviathan Financing
Leviathan Financing Bridge to bond project finance secured with credit agreement Delek Drilling Capex share of c. $1.75 B DD Development Capex Ramp-Up ($mm) 4 years bridge financing with target to 900 refinance through long term bond financing 600 Funding is based on a combination of debt and
Slide 29: Summary
Summary Recent merger creating an improved investors proposition High quality assets throughout the E&P value chain Strong financial position deriving from Tamar long term robust stable cash-flow Leviathan development funded through to first gas Upside potential from projects expansion to
Slide 30: Thank You
Thank You Delek Drilling – Energizing The Eastern Med 30
Delek Drilling — BofAML Emerging Markets Corporate Conference 2017 on 6ix