Carnarvon Energy Limited · ASX:CVN
Carnarvon Energy — Carnarvon Petroleum — Investor Presentation (April 2010)
57 slides from Carnarvon Energy's investor presentation, Apr 12, 2010
Slide 1: Investor Presentation April 2010
Investor th Presentation April 8 , 2010 For personal use only Carnarvon Investor Presentation Please find attached Carnarvon’s latest investor presentation. Registered Office Ground Floor 1322 Hay Street West Perth WA 6005 PO Box 99 West Perth WA 6872 Telephone: 08 9321 2665 Fax: 08 9321 8867 Email:
Slide 2: Investor Update
Investor Update For personal use only April 2010 www.carnarvon.com.au
Slide 3: Disclaimer
For personal use only Disclaimer The information in this document, that relates to oil exploration results and reserves, is based on information compiled by the Company’s Chief Operating Officer, Mr Philip Huizenga, who is a full-time employee of the Company. Mr Huizenga consents to the inclusion of
Slide 4: Introduction / Latest News
Introduction / Latest News CARNARVON 2 Strategic Position 3 Current Asset Position 4 People 7 Latest News 9 Upcoming Activities
Slide 5: Strategic Position
. gs m Strategic Position CARNARVON Direct oil & gas asset holding Compelling Means to grow technical & ’ Experienced team __| Onshore & f shallow water economic Cash & cash flow fundamentals offshore Balance sheet Concentrating on Australasia & S.E Asia
Slide 6: Current Asset Position
nie o4 Current Asset Position CARNARVON 5 1 6 =>ellele-lielam Onshore offshore onshore Carnarvon’s permits permits permit growth plans 3 are focused : P PNejele-itt-lmm onshore on adding assets perenne that create a P quality portfolio 6 ageleleiaiielam Onshore licences
Slide 7: Experienced Board of Directors
Peter Leonhardt — Chairman FCA, FAICD (Life) Independent non-executive director Finance, accounting, business management, governance Edward (Ted) Jacobson — Chief Executive Officer B.Sc (Hons) Geology Executive director Company founder, geologist, corporate strategy Neil Fearis — Chairman of the Aud
Slide 8: People
People CARNARVON * Carnarvon has expanded nearly ten-fold (on a market capitalisation basis) over the last four years Ted Jacobson * The Board recognises that the management structure needs to evolve with the growth in the business * The Board recently strengthened the management team with the addit
Slide 9: Latest News
Latest News a PETROLEUM LTD Dec 23 2009 + Camarvon Appendix 38 Dec 22 2009 + Thailand Update New Production Licence Dec 18 2009 + Camarvon Operations Update - Offshore Western Australis Gec 17 2009 : Thailand Update Further appr yal succes in Bo Rang Nov 30 2009 1 Results of Annual General Meeting N
Slide 10: Latest News
Latest News CARNARVON 48% reserves upgrade in L44 permit (Thailand) * L44 permit (Thailand) production currently at ~7,500 bopd gross * L20/50 permit (Thailand) drilling plans announced (drilling Q4, 2010) ¢ L52 & L53 permits (Thailand) awarded (Feb 2010) * First half (Dec 2009) NPAT of $7.4m from 4
Slide 11: Upcoming Activities
nn sssseseE—eeeeee Upcoming Activities CARNARVON Carnarvon Signs Two Concessions in ul streamonline.com Thailand Tsay, Mae €2, 2008 BUSINESS* ‘WITH THE WALL STREET JOURNAL. actind (38/90 ond (3038 Concreson osed Ser seals Thal block WA, NT offshore oil exploration permits awarded Lancutnes of Carnan
Slide 12: Upcoming Activities
Upcoming Activities CARNARVON ¢ L44 (Thailand) drilling 25 to 30 production & exploration wells throughout the year - production focus ° WA-435-P, WA-436-P, WA-437-P & WA-438-P (Australia) seismic acquisition program commencing Q2, 2010 * L52 &L53 (Thailand) seismic plans expected to be finalised in
Slide 13: Operations – Thailand
For personal use only Operations – Thailand
Slide 14: Operations - Thailand
Operations - Thailand CARNARVON 11 L44/33 — Field Overview 13 L44/33 — Production Overview 15 L44/33 — 2009 Drilling Results 19 L44/33 - 2010 Drilling Program 21 L20/50 — Permit Overview 25 L52 & L53 — Permit Overview
Slide 15: Field Overview — L33, L44 & SW1A
me Field Overview — L33, L44 & SW1A CARNARVON High margin production with exploration upside * Onshore close to quality infrastructure * Opex & trucking ~US$7.50/bbI * Depreciation / amortisation ~US$7/bbI (°) (*) Based on current accounting policy and estimates « Production ~1.0 to 1.3 mmbbls p.a.
Slide 16: Field Overview — L33, L44 & SW1A
Field Overview — L33, L44 & SW1A CARNARVON e- | months
Slide 17: Production Overview
Production Overview comune * 35 producing wells currently in operation * Several wells awaiting workovers * Six production licences * 20 year life * optional 10 year extension period * Long field life on current production rates and reserves * Reserves spread across several oil fields - notably Bo R
Slide 18: Production Overview
Production Overview CARNARVON Daily Production * Production predominately from iis ten eee ea fractured reservoirs (differs from jean! sandstone reservoirs refer slides 17 & 18) 16000. - « Production levels driven by: 14000. | * number of wells on flush _. 12000. production in a given period; Bask *
Slide 19: 2009 Drilling - Q3 & Q4 wells
m 2009 Drilling - Q3 & Q4 wells CARNARVON * Q3 & Q4 drilling assessed Bo Rang, L44-W & Si Thep prospects * Production licence granted for 20 years with additional 10 year option * Clear strategic reasons to convert exploration to production licences production licence Exploration drilling in 2009 yi
Slide 20: 2009 Drilling - Exploration Results
2009 Drilling - Exploration Results CARNARVON * High exploration success rates * December 2009 year end reserves increased 48% to 24.5 mmbblis as a consequence of 2009 exploration activities « The majority of 2P reserves additions were across the four NSE-F1 Discovery main fields (Bo Rang A, Bo NSE-
Slide 21: Fractured Reservoirs in L33, L44 & SW1A
Sa a a ea Fractured Reservoirs in L33, L44 & SW1A CARNARVON L33, L44 & SW1A contain multi layered fractured reservoirs Heterogenous nature of fracturing means individual well performance varies: * 100,000 bbls to 1.5 million bbls per well ¢ Potential for infill locations Fracturing also results in v
Slide 22: Fractured Reservoirs in Other Regions
Fractured Reservoirs in Other Regions CARNARVON PETROLEUM UD Example from fractured reservoir of Austin Chalk:- * Well production rate is dependent on number of fractures intersected * Wells that penetrate heavily fractured areas adjacent to fault outperform wells that miss fracture network by as li
Slide 23: 2010 Drilling — Production Focus
2010 Drilling — Production Focus CARNARVON * Development drilling in Q1 * Review balance in Q2 * Exploration drilling later in the year rc = 25 — 30 wells Exploration Appraisal Development Focus on high margin production in 2010
Slide 24: 2010 Drilling - Exploration Upside
2010 Drilling - Exploration Upside cARMaRvoN Fractured reservoirs Sandstone * High initial rate wells * Good initial rate wells * Flow rates from 500 to * Flow rates from 10 to 350 bopd 4,000 bopd * Medium recovery rates * High but variable recovery rates * 50,000 to 500,000 bbis * 100,000 bbls to 1
Slide 25: L20/50
EEE L20/50 CARNARVON Southeast and on trend of the 200 million barrel Sirikit Oil Field (produced over 150 mmbbIs and still producing ~20,000 bopd) wer * ~1,000km of 1980s vintage 2D seismic interpreted WAY] { * 550 kms of 2D seismic acquired in 2009 * Nong Bua-1 well drilled by Shell in 1982 with o
Slide 26: L20/50
L20/50 CARNARVON * 20-30 leads identified * Nine locations highlighted to commence approvals * Government, environmental and local permitting approval work has commenced — anticipate conclusion Q3 2010 * Work on securing a rig, contractors and personnel has commenced e Drilling planned for Q4 2010 —
Slide 27: L20/50
L20/50 CARNARVON Several play types to be explored
Slide 28: L20/50
L20/50 cannanvon if Wi us AZ) Ay é Volcanics? One to three wells targeted for drilling in 2010 * Most leads have multiple targets at } AM. several locations at depths of less Western Platform ( : . Y % \ 7 i than 1,500 m * Recoverable volumes per lead O09 \\))\ a (based on 2D seismic) in the Se 7G)
Slide 29: L52/50 & L53/50
L52/50 & L53/50 cannanvon * Exploration concession formally granted February 2010 ¢ The combined area of the two blocks is large, comprising approximately 6,950 km? * Both permits are lightly explored, with only two deep wells and limited seismic data available * On trend, and in a similar basin, to
Slide 30: L52/50 & L53/50
L52/50 & L53/50 CARNARVON Commitments — 18 Three Year Obligation * geological studies; * geophysical data acquisition; and * two wells total expenditure of around US$2.6 million gross (US$ 1.3 million net to Carnarvon). Work Program - 2010 & 2011 * geological surface mapping; and * shallow geophysic
Slide 31: Operations – Other Regions
For personal use only Operations – Other Regions
Slide 32: Operations — Other Regions
Operations — Other Regions CARNARVON 28 WA-435-P, WA-436-P, WA-437-P & WA-438-P (Australia) 32 Rangkas PSC (Indonesia) 33 WA-399-P (Australia)
Slide 33: WA-435-P, WA-436-P, WA-437-P & WA-438-P
WA-435-P, WA-436-P, WA-437-P & WA-438-P caRNaRvoN PETROLEUM UD . . Four large permits secured * Four permits acquired reueh senetal mecwes during early 2009 when gng P most of the industry was 7 distracted with GFC issues * Partnership with Finder Exploration which has a history of successful farm o
Slide 34: WA-435-P, WA-436-P, WA-437-P & WA-438-P
WA-435-P, WA-436-P, WA-437-P & WA-438-P carnanvon Year one work program underway * Acquisition of 1,100 km? of = 3D data .o—. 7 iT” * Acquisition of 410 km of 2D data * Acquisition of 15,100 km? of aeromagnetic data * Acquisitions scheduled to ie ie | commence in May 2010 — ea —, * 2010 budget of A$
Slide 35: WA-435-P, WA-436-P, WA-437-P & WA-438-P
WA-435-P, WA-436-P, WA-437-P & WA-438-P cannanvon WA-435-P Phoenix Area Closures Full Closure Phoenix-1 + South Combined Individual Phoenix and P. South * Total permit area is around 21,000 km? in Bedout Sub Basin (offshore WA) gross gas * The permits are in ~35m to 265m water depth with the key tar
Slide 36: WA-435-P, WA-436-P, WA-437-P & WA-438-P
WA-435-P, WA-436-P, WA-437-P & WA-438-P CARNARVON * Gas discoveries in ~100 m water depth * Field is within ~250 km of current and proposed onshore LNG plant « The Joint Venture has a window of several years in which to realise value from the asset ¢ The Joint Venture intends to seek a farmin partne
Slide 37: Rangkas PSC
Rangkas PSC CARNARVON * Carnarvon farmed into the permit in September 2009 « Large permit located onshore West Java, close to Jakarta * Last wells drilled 1991 + Evidence of oil play from seeps and previous exploration + Gas discoveries can be commercialised * Acquisition of up to 500 km of 2D seism
Slide 38: WA-399-P
WA-399-P camwinvon * Located in the Exmouth Sub- * Multiple play types basin, ~30km NNE of Exmouth * Nearby and on trend with * 2D acquisition in planning large oil and gas fields 1 = Carnarvon 50% and Operator Data acquisition expected to facilitate introduction of farmin partner
Slide 39: Corporate / Finance
For personal use only Corporate / Finance
Slide 40: Corporate / Finance
Corporate / Finance CARNARVON 35 Capital Structure 36 ASX Listed E & P Company Comparison 37 2009 Half Year Financial Summary 38 Reserves 39 Key Metrics and Sensitivity Analysis 42 Broker Valuations 43 Taxes Explained
Slide 41: Capital Structure
. ¢ Capital Structure CARNARVON * Issued shares 687m Significant Shareholdings (4 Mar 2010) * Options nil BlackRock Investment Group 5.2% : Directors & staff 12.2% ¢ Share price (as at 9 Mar 2010) $0.50 * Market capitalisation 344m Carnarvon Petroleum 1.00 25.0 0.90 0.80 20.0 0.70 0.60 15.0 AS 0.50
Slide 42: ASX listed E&P Company Comparison
fn —_ ae ASX listed E&P Company Comparison axe" $500,000,000 $450,000,000 $400,000,000 $350,000,000 $300,000,000 $250,000,000 $200,000,000 Market Capitalisation (A$) $150,000,000 $100,000,000 $50,000,000 S ~L S SP CF O PS EC FS | oe FF FS Ra * oe oe & € FS SF F ge + v ) > 4 a r Se & s S& Material po
Slide 43: 2009 Half Year Financial Summary
2009 Half Year Financial Summary AS A$m Revenue $31.6m $60.0m NPAT $7.4m $21.7m Op Cash Flow $17.0m $39.5m Cash $28.6m $66.2m Debt Nil Nil Tax provisions ($10.0m) ($41.4m) Production levels impacted by 2009 drilling activities focused on exploration wells (reserves increase) Revenue was influenced b
Slide 44: Reserves (net to CVN)
ne ee eee ell rr lr lll ll eee Reserves (net to CVN) ARNARVC 30 25 20 + = a E 15 + 10 s+ i 5 Reserve Production Reserve Production Reserve Production 2P Reserve Production Increase flasarve Increase Wile Increase Reserve Increase ize CY 2006 CY 2007 CY 2008 CY 2009 Strong base for further reserve gr
Slide 45: Key Metrics
Key Metrics CARNARVON Production (net) 3,000 bopd Enterprise value $315 m 2P reserves (net) 24.5 mmbblis 3P reserves (net) 57.0 mmbblis Reserve life 22 years EV/2P reserves 12.8 times NPAT / bbl $17.3 / bbl EBIT / bbl $39.7 / bbl High margin long life oil fields
Slide 46: Sensitivity Analysis
Sensitivity Analysis CARNARVON USS/bbI 27% of WTI 30% of WTI ae aa ea $F FS & SF EF oF f Sa ro A PIT means provision for Thai income tax Strong financial position from low operating cost base
Slide 47: Broker Reports
Broker Reports CARNARVON Weekly Informer EUROZ Amt Boer cna fate B86 Camarvon Petroleum Ltd (CVN $0.51) Buy + benno + hee oi Coverage by r key broking
Slide 48: Broker Valuations
= ¢ Broker Valuations CARNARVON Company value range $0.60 to $0.98 Consensus $0.77 Exploration and appraisal assets value range $0.29 to $0.40 Consensus $0.34 Production assets (reserves) value range $0.27 to $0.59 Gaffney, Cline & Associates recently valued production Ealasonie soe assets (reserves
Slide 49: Thai SRB Explained
Thai SRB Explained CARNARVON ¢ Thailand Ill regime Rate Baht per Baht per per * Designed to tax ‘excessive profits’ past Paine ae ra 0 4.800 0 0 () 4,801 14,400 240 0 40% * Applied to each concession area a lOO Source’ Hartiny's, Department of Mevaral Fuate, Thailand ¢ Paid annually SRB Rate 100% *
Slide 50: Thai Royalty Explained
Thai Royalty Explained CARNARVON Tiered Effective j i Barrels per Day Barrelsper Royalty Royalty * Thailand Ill regime poatian paneslon? oid ewe 0 2,000 0.0500 5 * Royalty is applied over each 2,001 5,000 O0825 = 8058 é 5,001 10,000 0.1000 5.8-7.9 concession area 10,001 20,000 0.1250 7.9-10.2 >20,00
Slide 51: Upcoming Activities
For personal use only Upcoming Activities
Slide 52: Upcoming Activities
Upcoming Activities CARNARVON 46 Past Achievements and Forward Plan 48 2010 Work Programme 49 Growth Plan
Slide 53: Past Achievements
: < Past Achievements CARNARVON 4 Oil discoveries in Thailand transformed L20/ 50 Carnarvon froma _—~ Permit secured : Bi ~$35m market cap company in Rangkas PSC WA-435, 2006 to ~$350m permit secured 436, 437 & 438 today permits secured (Australia) L52 & L53 permits secured (Thailand)
Slide 54: Forward Plan
Forward Plan Rs oe o* yy RS L44 & L33 production drilling L20/50 exploration drilling WA-435, 436, 437 & 438 seismic L44 & L33 production & exploration drilling CARNARVON PETROLEUM LTD Rangkas PSC seismic & exploration drilling L20/50 seismic & exploration drilling WA-435, 436, 437 & 438 farm-out &
Slide 55: 2010 Work Programme
2010 Work Programme CARNARVON _— Eee Thailand L44 production 20 to 25 wells throughout the year Thailand L exploration Thailand L20/50 4 to 3 wells exploration Thailand L52/53 Geophysical exploration data acq’n Australia Phoenix ~1,100km? of 3D & exploration ~410km of 2D seismic acq'n 3 to 8 wells t
Slide 56: Growth Plan
rs Growth Plan CARNARVON regions Significant short term and medium term upside within Exploration the existing exploration asset portfolio Significant short Appraisal term upside Strong long life cash flows to support growth Production
Slide 57: For personal use only
For personal use only Ground Floor 1322 Hay Street West Perth WA 6005 Telephone: +61 (8) 9321 2665 Fax: +61 (8) 9321 8867 www.carnarvon.com.au
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