Slide 1: Equity Raising to Finance Sangomar Phase 1
Equity Raising to Finance Sangomar Phase 1 12 December 2019
Slide 2: Important information & disclaimer
Important information & disclaimer • This presentation has been prepared by FAR Limited (‘FAR’). It should not be • Cautionary Statement for Prospective Resource Estimates – With respect to considered as an offer or invitation to subscribe for or purchase any shares in the Prospective Resource estim
Slide 3: Table of contents
Table of contents 1. Equity raising overview 2. FAR overview 3. Key risks 4. Selling restrictions 5. Appendix
Slide 4: FAR investment highlights
FAR investment highlights FAR is developing one of the largest offshore oil discoveries of the last ten years (Sangomar), which post project delivery in early 2023 is expected to make FAR one of the largest ASX-listed oil producers Developing the world class Sangomar Oil Field in Senegal, the larges
Slide 5: Equity raising overview
Equity raising overview FAR is undertaking a conditional placement to raise A$146 million at AUD 4.25 cents per new share, which represents a 21.3% discount to last close price of AUD 5.40 cents Equity raising • Conditional Placement to raise A$146 million (Placement) which remains subject to a shar
Slide 6: Use of proceeds
Use of proceeds The primary purpose of the placement and underwritten debt facilities is to fund FAR’s share of capex to first oil (US$492 million) for the Sangomar Field Development (Phase 1) (1) (2) ▪ Proceeds from Placement will be used to fund development Sources A$m US$m capex to first oil for
Slide 7: Timeline to FAR FID
Timeline to FAR FID FAR is targeting a Final Investment Decision (FID) for Sangomar Phase 1 by the end of 2019 (1) and first oil by early 2023 Sangomar Phase 1 – Steps to Operator FID Steps to FAR FID Technical • FEED Engineering ✓ 1. Joint venture submission of final ✓ • Technical and integrated as
Slide 8: Senior debt summary
Senior debt summary FAR is in advanced stages of syndicating an underwritten US$350 million senior debt facility and is targeting receiving binding and committed terms from financiers of the facility by the end of 2019 Debt financing update for Sangomar Project Key terms for proposed Senior Debt Fac
Slide 9: Equity raising timetable
Equity raising timetable Event Date (1) Trading halt and announcement of Placement (pre-market) 10 December 2019 Placement opens 10 December 2019 Placement closes 11 December 2019 Trading halt lifted - shares recommence trading on ASX 12 December 2019 SPP opens 16 December 2019 SPP closes (5:00pm) 1
Slide 10: Table of contents
Table of contents 1. Equity raising overview 2. FAR overview 3. Key risks 4. Selling restrictions 5. Appendix
Slide 11: Introduction to FAR
Introduction to FAR FAR is an Africa focused oil and gas exploration and development company, its principal asset is the Sangomar Oil Field, but also has exploration interests in The Gambia and Guinea-Bissau Market data (2) A$ US$ Share Price $0.054 $0.037 Market cap. $339m $232m Cash $31m $21m Debt
Slide 12: Overview of the Sangomar Oil Field (Phase 1)
Overview of the Sangomar Oil Field (Phase 1) The Sangomar Oil Field will be developed using a simple and conventional development concept which involves 23 subsea production and injection wells tied back to a standard FPSO (1) Sangomar Phase 1 oil development: Sangomar Phase 1 development concept –
Slide 13: Sangomar – a phased development strategy
Sangomar – a phased development strategy The joint venture intends to conduct a phased development strategy at the Sangomar Oil Field in order to reduce executions risks and upfront capital requirements Phased development strategy (1) P50 resource position (2) (gross)… Phased development strategy de
Slide 14: Sangomar – phase 1 development timeline
Sangomar – phase 1 development timeline The joint venture is targeting first oil from the Sangomar Oil Field in early 2023 2019 2020 2021 2022 2023 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FID Decision Key project Submission of Development and Steady state milestones production reached Exp
Slide 15: Sangomar – a low cost operation with robust economics
Sangomar – a low cost operation with robust economics The Sangomar Oil Field expected Brent oil price break-even is ~US$30/bbl (life of field) and ~US$22/bbl (from first oil) Indicative net-back price from first oil US$/bbl (3) Development Peak Peak production production 13,670 13,670 bpd bpd (net (
Slide 16: Sangomar – attractive economics for shareholders
Sangomar – attractive economics for shareholders FAR believes that the development and de-risking of the Sangomar Oil Field is likely to generate significant shareholder value (an illustrative NPV10 equity uplift is shown below) FAR (current, pro forma) Sangomar (Phase 1 + 2) Growth potential Post c
Slide 17: Sangomar – upside from improved recovery factors
Sangomar – upside from improved recovery factors Should the Sangomar Oil Field’s recovery factor emulate analogue fields, increased recoverable reserves over the field development should be material Recovery Factors at Analogue West Africa Fields 60% 50% 48% 47% 47% 43% 40% 40% (Recovery Factor) Ave
Slide 18: Sangomar – attractive fiscal terms
Sangomar – attractive fiscal terms Key features Production sharing schematic Gross Revenue Attractive Fiscal & Regulatory Regime Less: Cost Oil (includes exploration spend, operating costs and fixed asset Accelerated Cost depreciation Recovery provides immediate CF to Profit Oil Contractor share FAR
Slide 19: Attractive value proposition
Attractive value proposition EV/2P+2C resource multiples (US$/boe) (1),(2) World class asset with direct v exposure to WPL operated asset 8.0 7.0 v Strong growth outlook 5.8 Median: US$5.0/boe (4) 4.3 v Highly attractive project economics 3.4 2.3 v Significant exploration upside 1.4 Experienced Boar
Slide 20: Environment, social & governance
Environment, social & governance Over 25% of project incomes are recovered by Senegal in the form of government take and taxes1 Thousands of jobs will be created for the people of Senegal directly benefiting the country and its people FAR is a strong advocate and supporter of ESG initiatives and div
Slide 21: Table of contents
Table of contents 1. Equity raising overview 2. FAR overview 3. Key risks 4. Selling restrictions 5. Appendix
Slide 22: Key risks
Key risks This section sets out some key risks associated with any investment in FAR, which may affect the value of shares in FAR. The risks set out are not listed in order of importance and do not constitute an exhaustive list of all risks involved with an investment in FAR. Before investing in FAR
Slide 23: Key risks (cont.)
Key risks (cont.) Requirements In addition to the debt financing described above, FAR may be required to raise additional funds in the future, in respect of the Sangomar oil field development or to raise otherwise. There is no guarantee that FAR will be able to raise such additional capital when it
Slide 24: Key risks (cont.)
Key risks (cont.) Joint The use of joint operations is common in the oil and gas industry and usually exists through all stages of the oil and gas life cycle. Joint operation arrangements, operation risk amongst other things, mainly serve to share the obligations and benefits of exploration, develop
Slide 25: Key risks (cont.)
Key risks (cont.) Environmental Oil and gas operations have inherent risks and liabilities associated with ensuring operations are carried out in a manner that is responsible to the risk environment. Although FAR operates within the prevailing environmental laws and regulations, such laws and regula
Slide 26: Table of contents
Table of contents 1. Equity raising overview 2. FAR overview 3. Key risks 4. Selling restrictions 5. Appendix
Slide 27: International selling restrictions
International selling restrictions This document does not constitute an offer of new ordinary shares ("New Shares") of the 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 28: International selling restrictions
International selling restrictions This document does not constitute an offer of new ordinary shares ("New Shares") of the 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 29: Appendix
Appendix Supporting information on FAR
Slide 30: Senegal overview
Senegal overview Senegal background Senegal statistics ‒ Senegal was a French colony before the country gained independence in Capital Dakar 1960 Government type Presidential Democratic Republic ‒ Senegal has one of the fastest growing economies in Africa with GDP growth in 2018 of 6.8% led by minin
Slide 31: Sangomar – a world class conventional oil field
Sangomar – a world class conventional oil field Sangomar is one of the largest and shallowest offshore oil discoveries of the last ten years Offshore Oil & Gas Discoveries Since 2010 (2C mmbbl) 1000 900 800 700 600 500 400 300 200 100 0 Agogo & Block 31 Angola Owowo Nigeria Liza & Stabroek Guyana Jo
Slide 32: Sangomar – historical growth in 2C resources
Sangomar – historical growth in 2C resources Sangomar has delivered meaningful and consecutive increases in 2C Resources since 2014 Pre-Drill Post Discovery RISC Audited RISC Audited Oct 2014 Nov 2014 Apr 2016 Aug 2016 Prospective Resource 2C Resource 2C Resource 2C Resource P90: 50mmbbls 1C: 150mmb
Slide 33: Sangomar – a well understood and de-risked subsurface
Sangomar – a well understood and de-risked subsurface Sangomar Phase 1 targets the best quality reservoirs to deliver high production rates early Benefitting from a world class data set Field Layout ‒ Extensive coverage of modern seismic data across the entire Sangomar field area, with recent reproc
Slide 34: Material upside potential in Senegal
Material upside potential in Senegal The joint venture has the option to pursue further appraisal drilling in 2021 (FAN and Spica), with both discoveries located within tieback range to the Sangomar Oil Project The Sangomar Field Development provides FAR with numerous and material value upside oppor
Slide 35: Highly prospective exploration portfolio in The Gambia
Highly prospective exploration portfolio in The Gambia Adjacent to the Sangomar Oil Field, drilling planned 2020 ‒ The target reservoirs of Soloo and Bambo were hydrocarbon bearing in the Sangomar wells ‒ The Soloo prospect, the extension of the Sangomar Field into The Gambia, has resource potential
Slide 36: Exploration and development timeline
Exploration and development timeline FAR will continue an active exploration program during the Sangomar Oil Field Development, targeting additional production and resource opportunities within tieback range to proposed infrastructure The Gambia and Guinea-Bissau complement the growth trajectory. 20
Slide 37: Experienced board
Experienced board FAR has a board with extensive experience in oil and gas and the development of large scale projects in emerging markets such as Senegal A professional geophysicist and also has extensive experience as a stockbroker and merchant Nic Limb banker. Nic was formerly executive chairman
Slide 38: Senior management and technical team
Senior management and technical team FAR has established a highly competent technical team for the Sangomar Field Development project, having originally identified the Sangomar prospect and now resourced to assist with development and financing of the project A professional geophysicist with 30 year
Slide 39: Contact us
Contact us Level 17, 530 Collins Street Connect with FAR Limited: Melbourne VIC 3000 Australia T: +61 3 9618 2550 info@far.com.au far.com.au