Blue Energy Limited · ASX:BLU
Blue Energy — Investor Presentation (July 2009)
41 slides from Blue Energy's investor presentation, Jul 16, 2009
Slide 1: Poised for Growth
POISED FOR GROWTH London 16 July 2009 Slide 1
Slide 2: Coal Seam Gas in Australia
Coal Seam Gas in Australia Slide 2
Slide 3: Coal Bed Methane (CBM)
COAL BED METHANE (CBM) • CBM is commonly known as coal seam gas (CSG) or coal seam methane(CSM) in Australia. • These names are used interchangeably, but all refer to projects where coal is dewatered resulting in the production of gas at the surface. In these projects, once the gas ceases to be prod
Slide 4: Typical CBM Development
( Typical CBM Development blueenergy limited JUNDER-REAMING| Source: wew.chd.com.au
Slide 5: CSG - Overview
CSG - Overview The process of extracting methane from coal seams and naturally fractured stacked thin coaliferous beds has gathered pace in Asia. Methane to Produced Pipeline water A broad range of experience is evident N with: Reduced Water O N well established Australian Pressure - C O devel
Slide 6: CSG Operations
( CSG Operations blueenergy limited = Well depths 350-1,000 m = Seam thickness 3-10 m = Net coal thickness 10-80 m = Gas content 3-15 m:/tonne daf = Gas Permeabilities 1 mD-500 mD = Well Spacing 500-1,000 m (25-100 ha) = Typical Well Productivity 0.75 TJ/d (4 wells will produce approx 1 PJ/yr) Slide
Slide 7: Coal Seam Gas History
COAL SEAM GAS HISTORY • CSG exploration commenced in the Bowen Basin in 1976 • In the 1980s and 1990s exploration and development activities were principally carried out in the Bowen Basin • By the mid-1990s increased understanding in the Bowen Basin resulted in successful identification of coal tar
Slide 8: Coal Seam Gas History
Coal Seam Gas History • From 2000 the lessons learnt in the Bowen Basin were applied to the Walloon Coal Measures in the Surat Basin. • More recently, they have been utilised for programs in the Clarence-Moreton, Galilee, Gloucester, Gunnedah and other basins in Eastern Australia. • In only a decade
Slide 9: Current CSG Operations
Current CSG Operations • From a production of 1 PJ in 1996 from the Bowen Basin, CSG output in eastern Australia has grown rapidly. • As at 31 December 2008, it was 458 TJ per day (167 PJ per year). • 96.7% of this production (443 TJ per day) is from Queensland. • Eastern Australian gas demand is 67
Slide 10: Eastern Australian Gas Infrastructure
Eastern Australian Gas Infrastructure Slide 10
Slide 11: CSG Production
CSG Production • The Eastern Australian gas market is currently estimated to be 1,835 TJ per day or 670 PJ per year. • At 31 December 2008 CSG was being produced at an estimated rate of 458 TJ per day (167 PJ per year). • Of this, 443 TJ per day (162 PJ per year) is produced in Queensland and the ba
Slide 12: CSG Reserves Growth
CSG Reserves Growth ( blueenergy limited Growth of 2P CSG Reserves in Eastern Australia in PJ (26 February 2009) 20000 16000 = 12000 8000 4000 0 * 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009" Slide 12
Slide 13: Natural Gas Pricing
Natural Gas Pricing • Natural gas in Eastern Australia has mostly been sold on a long term, cost plus basis. • Gas has been in strong competition with coal for power generation through state government mandates (13% rising to 18% by 2020). • Policy moves to a carbon constrained economy will increase
Slide 14: Consolidation of CSG Ownership
Consolidation of CSG Ownership • Over the last 12 months there has been major consolidation of ownership of CSG groups. • ASX listed Companies that have gone from the register include Pure Energy Resources, Queensland Gas Company, Roma Petroleum, Sunshine Gas and Sydney Gas. • The four major LNG pro
Slide 15: CSG Sector Performance
CSG Sector Performance Slide 15
Slide 16: CSG Sector Value Growth
CSG Sector Value Growth Slide 16
Slide 17: CSG Sector Transactions
CSG Sector Transactions Slide 17
Slide 18: Blue Energy: The next CSG growth company?
Blue Energy The next CSG growth company? Slide 18
Slide 19: Corporate Details
BLUE ENERGY Corporate Details Australian listed Energy Company (BUL) Brisbane Head Office Shares on Issue 565.7m Market Capitalisation $120m Cash $31.9m* Major Shareholders ANZ Nominees 20.3% Stanwell 15.4% Coal Seam Gas Acreage 27,577km2 Conventional Acreage 71,574km2 * as at 9 June 2009 post SPP S
Slide 20: Mission and Strategy
BLUE ENERGY Mission and Strategy Blue Energy’s Mission: To be a profitable gas company within 3 years. To achieve our Mission: Blue Energy will conduct its activities with technical rigour combined with peer review of technical assumptions and findings. Blue Energy’s focused commercial objectives ar
Slide 21: People
BLUE ENERGY People Board Management Team – Peter Cockcroft - Executive Chairman – Peter Cockcroft - Executive Chairman – Brian McGillivray - Non-Executive Director – John Phillips - Chief Operating Officer – Dr. Paul Massarotto - Non-Executive Director – Stuart Owen - Chief Financial Officer – Steph
Slide 22: Corporate History
BLUE ENERGY Corporate History • Nov 2004: Blue Energy commenced as a private petroleum exploration company with assets in several producing Australian Basins. • Feb 2006: Energy Investments Ltd (EIV) invested in Blue Energy and gained control. • May 2007: EIV changes name to Blue Energy Ltd. • Jul 2
Slide 23: Top Shareholders
BLUE ENERGY Top 20 Shareholders (as at 30 June 2009) Slide 23
Slide 24: Share Price History
BLUE ENERGY Share Price History Slide 24
Slide 25: Two Pronged Strategy
BLUE ENERGY Two Pronged Strategy Domestic Gas – Power Generation Commercialisation Strategy Export LNG Market Slide 25
Slide 26: Strategic Partners
BLUE ENERGY Strategic Partners • Korean State owned gas company. • Qld Government Owned Corporation. • World‟s largest LNG Importer (26.3 mt in 2008). • Generation capacity in excess of 1,500 MW of electricity. • 3 LNG Receiving terminals (2.7 mt storage). • Both Hydro (4 sites) and thermal generati
Slide 27: Share Purchase Plan Results
BLUE ENERGY Share Purchase Plan Results SHARE PURCHASE PLAN (SPP) RESULTS • Attracted 1685 new shareholders added to register using a variable record date. • Maximum share parcel of $15,000 per shareholder. • 48% of all shareholders took up the offer (34% of pre-existing shareholders & 73% of new sh
Slide 28: KOGAS Strategic Investment
BLUE ENERGY KOGAS Strategic Investment • HOA agreement reached between KOGAS and Blue Energy on 29th May 2009. • Blue will make a private placement of Blue shares to KOGAS representing 10% of Blue Energy stock post SPP allotments. • A Board position will be offered to KOGAS. • The share placement ag
Slide 29: Stanwell Strategic Alliance
BLUE ENERGY Stanwell Strategic Alliance Stanwell Alliance • Agreement reached between Stanwell and Blue Energy in August 2008. • Blue Energy to supply 8.5 PJ per annum to Stanwell over 25 years for gas fired power project. • Blue Energy‟s funding requirement is through to initial certification of re
Slide 30: Two Pronged Strategy
BLUE ENERGY Two Pronged Strategy SHORT TERM STRATEGY - DOMESTIC GAS (1 – 3 Years) • Focus on shallow Walloon Coal Measures to supply to the expanding Southeast Queensland gas market with initial drilling / pilots in ATP 854P. • Leverage the Stanwell Alliance Agreement in the reserve certification pr
Slide 31: Why Domestic Gas?
BLUE ENERGY Why Domestic Gas? DOMESTIC GAS MARKET Demand • Current estimated Eastern Australian Gas demand is approximately 670 PJ per annum (1,835 TJ/day). • Demand has shown strong increase in 2007 largely due to drought related issues (hydro generation decline), but this is expected to level out
Slide 32: Why Domestic Gas?
BLUE ENERGY Why Domestic Gas? DOMESTIC GAS MARKET Price • Successful development of an export LNG project in Gladstone will put upward pressure on gas prices. • Rebound in oil price will impact LNG prices and CSG netback. This will affect domestic gas prices (high side case). • Rationalisation of CS
Slide 33: Why Domestic Gas?
BLUE ENERGY Why Domestic Gas? GAS IS THE FUEL OF THE FUTURE • Eastern Australian generation growth forecast to be fuelled by gas. • Decline in coal fired generation from CPRS. • Renewable energy growth not forecast until 2018. Source: Wood Mackenzie 2009 Slide 33
Slide 34: Why Domestic Gas?
BLUE ENERGY Why Domestic Gas? With a base case LNG assumption, “additional potential” is required to meet the supply gap post 2016 given the contingent CSG resources are proved up. Source: Wood Mackenzie 2009 Slide 34
Slide 35: Why Domestic Gas?
Why Domestic Gas? Approximately 85% of the current 2P reserves in Queensland are earmarked for LNG. “Green “ acreage is allocated to LNG Source: RLMS Slide 35
Slide 36: Blue Energy's Reserve Development Projects
BLUE ENERGY’S RESERVE DEVELOPMENT PROJECTS Blue Energy is currently initiating drilling programs to move current Prospective and Contingent Resource to Independently Certified Reserves to fast track the pathway to revenue: Domestic Gas (1 - 3 Years) • ATP 854P (BUL 100%) Targeting the Walloon Coal M
Slide 37: ATP 813P Potential pipeline routes
ATP 813P Potential pipeline routes •Blue has commissioned a pipeline route study from ATP 813 P to the Queensland Coast. •Route options include Abbot point and Gladstone, with additional option to connect to a potential Moranbah hub. Slide 37
Slide 38: Reserve Targets
BLUE ENERGY Reserve Targets Slide 38
Slide 39: Schedule of Activity
BLUE ENERGY Schedule of Activity Permit Target Cost Activity 2009 2010 2011 3P Estimate Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 ATP 854P 150PJ $1.5MM Coreholes (3) Walloons $2.0MM Pilot Certified Reserves GSA Development ATP 818 / 200PJ $2.0MM Coreholes (3-5) ATP 896P $2.0MM Pilot Walloons Certified Reserves
Slide 40: Disclaimer
Disclaimer This presentation may contain forward looking statements that are subject to risk factors associated with the gas and energy industry. It is believed that the expectations reflected in the statements contained within are reasonable, but they may be affected by a range of variables which c
Slide 41: Contact
www.blueenergy.com.au info@blueenergy.com.au REGISTERED OFFICE Suite 15A 421 Brunswick Street Fortitude Valley QLD 4006 Ph: +61 7 3332 8800 Fax: +61 7 3332 8867 Slide 41