Cadogan Energy Solutions Plc · LSE:CAD
Cadogan Energy Solutions — Cadogan Petroleum — Investor Presentation (September 2008)
34 slides from Cadogan Energy Solutions's investor presentation, September 2008
Slide 1: Analyst Presentation
Analyst Presentation September 2008
Slide 2: Disclaimer
Disclaimer This presentation comprising the slides within this document and any oral representations (together, this "Communication") has been prepared by and is the sole responsibility of Cadogan Petroleum plc (the "Company"). The slides are for sole use at a presentation to research analysts conce
Slide 3: Agenda
Agenda Overview and Licence Update 3 Investment Highlights and Strategy 6 Operations and Asset Base 11 2008 Interim Financial Results 21 Appendices 23 2
Slide 4: Overview and Licence Update
Overview and Licence Update 3
Slide 5: Cadogan at a Glance
Cadogan at a Glance Company overview Location Cadogan Petroleum plc is an E&P company incorporated in the UK, with operations based in Ukraine Listed on Main Market of LSE in June 08 raising US$270m (net) Approximately US$220m raised in several private rounds pre-IPO The Company currentlY mo
Slide 6: Cadogan's Assets Overview
Cadogan’s Assets Overview Assets location Pirkovskoe licence area Dniepr-Donets Reserves: Basin 1P: 27.1 mmboe 2P: 79.7 mmboe 3P: 147.3 mmboe Kiev Prospective resources Corporate HQ Zagoryanska licence area Contingent resources: 1C: 7.7 mmboe 2C: 18.5 mmboe Carpathian Basin 3C: 47.7 mmboe Prospectiv
Slide 7: Reserves and Resources
Reserves and Resources Reserves and resources (mmboe) Portfolio composition (2P case) Oil 1% 27.4 1P reserves Condensate 27% 80.4 2P reserves Gas 3P reserves 72% 149.4 2C contingent 334.4 resources Source: GCA reserve report Source: GCA reserve report (gas in bcf; converted to mmboe by Company) Note
Slide 8: Licence Update
Licence Update Legal proceedings surrounding Pirkovskoe and Zagoryanska licences Operations continue on track on both licence areas All licenses acquired and restructured in accordance with all regulatory and legal requirements. Several steps now taken to resolve licence issues, including: • O
Slide 9: Key Investment Highlights and Strategy
Key Investment Highlights and Strategy 8
Slide 10: Ukraine Gas Price Convergence
Ukraine Gas Price Convergence Drivers of gas price in Ukraine Ukrainian gas import price forecast Western European gas markets are forecast to remain reliant on Russia for the supply of natural gas. Given this high level of dependence, Russia has significant influence on gas prices Ukraine curre
Slide 11: Appraisal and Development Play on Discovered Resources
Appraisal and Development play on Discovered Resources Investment highlights of portfolio 2P reserves—upside potential Asset base concentrated within two major onshore hydrocarbon basins in Ukraine: Dniepr-Donets and Carpathian • Focus in Ukraine allows the Group to achieve operational efficiencie
Slide 12: Attractive Fiscal Regime and Efficient Operations
Attractive Fiscal Regime and Efficient Operations Attractive fiscal regime Attractive investment climate Ukraine has a liberal tax and royalty based fiscal regime Ukrainian government is eager to reduce its dependency on stimulating international investment into the energy sector foreign gas imp
Slide 13: Gas Sold on Unregulated Terms
Gas Sold on Unregulated Terms Restructuring schematic Post restructuring benefits Pre-restructuring Post-restructuring Increased Cadogan working interest in assets • On major fields, working interest levels have increased from around 70% to well over 90% Cadogan NAK Nadra Cadogan NAK Nadra • Typic
Slide 14: Company Strategy
Company Strategy Prioritise development of Pirkovskoe core asset Continued focus on existing Continue appraisal of other major fields and convert resources to reserves via the assets focused solely in drill bit Ukraine Apply modern Western industry practices to Ukrainian gas/condensate plays
Slide 15: Operations and Asset Base
CADOGAN' Operations and Asset Base 14
Slide 16: Pirkovskoe Licence Area
Pirkovskoe Licence Area Summary Facilities and infrastructure programme on major fields Cadogan has a 97% working interest holding 79.7 mmboe of proved Field Targeted Facilities being constructed and probable reserves and 195.0 mmboe of contingent and prospective Production resources Start Date
Slide 17: Pokrovskoe Licence Area
Pokrovskoe Licence Area Summary Facilities and infrastructure programme on major fields Cadogan has a 100% working interest in the licence, holding 58.6 Field Targeted Facilities being constructed mmboe of prospective resources Production Start Date The exploration and appraisal licence c covers
Slide 18: Zagoryanska Licence Area
Zagoryanska Licence Area Summary Key field developments Cadogan has a 90% working interest in the licence, holding 44.4 Zagoryanska #3 mmboe of contingent and prospective resources Well is currently drilling at a TD of 5,110 metres in the Lower Visean located immediately to the east of the Pir
Slide 19: Bitlyanska Licence Area
Bitlyanska Licence Area Summary Key field developments Cadogan has a 96.5% to 97.2% working interest in this licence, Borynya #3 holding 44.4 mmboe of contingent and prospective resources Well was spudded on 15 December 2007 and is currently drilling at Located immediately to the east of the P
Slide 20: Minor Fields in Western Ukraine
Minor Fields in Western Ukraine Summary The Group also has a number of fields classified as minor fields, all located within Western Ukraine. These include the following: • Monastyretske licence • Krasnoyilske licence • Debeslavestska licence • Cherememkhivskoe licence • Slobodo-Rungurske licence
Slide 21: Capital Expenditure and Operational Activity
Capital Expenditure and Operational Activity Capex and field development (US$ ‘000) Targeted production programme on major fields to December 2010 250,000 8 196,706 200,000 6 No. wells 166,000 125,970 4 150,000 2 100,000 0 50,000 Pirkovskoe Zagoryanska Pokrovskoe Borynya Bitlya 0 2008 2009 2010 2008
Slide 22: 2008 Interim Financial Results
2008 Interim Financial Results £‘000s June December June 2007 Financial highlights 2008 2007 BALANCE SHEET IPO raising total gross proceeds of £152.8 million and net Cash 151.4 14.0 2.5 proceeds £145.0 million Net assets 240.3 68.2 29.1 Private equity financing raising total net proceeds of £29.
Slide 23: Summary
Summary Balanced portfolio of exploration, appraisal and near term production assets Active drilling programme with significant potential for increase in reserves Strategic location in rising gas price market with attractive fiscal regime and cost efficient operations Strong financial platfo
Slide 24: Appendices
CADOGAN Appendices PETROLEUM PLC 23
Slide 25: Company History
Company History Illustrative reserves and resources development Growth through M&A and restructuring Date Event Dec-05 Acquisition of interests in the Pirkovskoe and Pokrovskoe licences in East Ukraine Sep-06 Acquisition of interests in the Bitlanska and Krasnoilska licences, in West Ukraine Sep-06
Slide 26: Licence Summary
Licence Summary Fields Working Interest % Licence Expiry Current Status Licence Type Major Pirkovskoe 97.0 19/10/10 Non-producing E&D Pokrovskoe 100.0 10/08/11 Non-producing E&D Zagoryanska 90.0 19/10/10 Non-producing E&D Bitlya 97.1 23/12/09 Non-producing E&D Borynya 96.5 23/12/09 Non-producing E&D
Slide 27: Strong Ukrainian and Western management team
Strong Ukrainian and Western management team Cadogan combines Ukrainian and Western management with extensive industry experience. 24 years’ international experience in the oil Previously held a number of roles both industry in government and industry Last 13 years working primarily in the CIS
Slide 28: Shareholding Summary
Shareholding Summary Breakdown of fully diluted share capital Lock-in arrangements for fully diluted share capital Total shares outstanding 231.1 Free float 49% Options 14.3 Warrants 5.1 Shares subject to lock-in until 23 Fully diluted shares in issue 250.4 Dec 43% Shares and options subject to 3 ye
Slide 29: Cash Flow Statement
Cash Flow Statement Cash flow statement 1 £000 Group FY05 Group FY06 Group FY07 Group HY08 Net cash outflow from operating activities (1,035) (7,498) (12,286) (8,094) Investing activities Acquisition of subsidiaries (981) (1,146) (18,357) (2,486) Purchases of property, plant and equipment – (5,128)
Slide 30: Balance Sheet
Balance Sheet Balance sheet 1 1 Group Group Group Group £000 Group FY05 Group FY06 Group FY07 Group HY08 £000 FY05 FY06 FY07 HY08 Equity Non-current assets Share capital 21 2,571 4,169 6,933 Goodwill – – 2,804 3,114 Share premium 1,285 23,743 78,028 250,422 Intangible exploration 1,374 5,771 28,687
Slide 31: Dniepr Donets Basin Cross-Section
Dniepr Donets Basin Cross-Section Cross-section Pokrovskoe Pirkovskoe 30
Slide 32: Dniepr Donets basin stratographic summary
Dniepr Donets basin stratographic summary Epoch Code Code Formation Reservoir \ Principal reflectors units Permian P1 (P2) M1 Moscovian C2m M8 b1 Bashkirian C2b b14 Vb 2-p C1s2 S10 Serpukhovian carbonaceous sand / siltstones and thin coals Vb 12 C1s1 S22 Vb 13 major unconformity B14 Upper Visean C1v
Slide 33: Key peer group comparison
Key peer group comparison Market LTM 2P reserves, Number of Rigs currently cap EV Production Ukraine licences in Licence area in No. contracted in Company (US$m) (US$m) (mboe/d) (mmboe) Ukraine Ukraine Employees Ukraine 2 419 152 0.3 80 11 1,151 km 357 8 Ukrainian rigs 2 987 919 12.6 49 7 299 km 481
Slide 34: The Oil and Gas complex of Ukraine
FOR INTERNAL USE ONLY The Oil and Gas complex of Ukraine PRESIDENT President’s Administration State Property Fund National Security & Defence Council Regional Administrations BUSINESS State Owned/Operated PARLIAMENT GOVERNMENT Fuel & Energy Prime Minister NAK NAFTOGAZ Commission Deputy Prime Ministe
Cadogan Petroleum — Investor Presentation (September 2008) on 6ix