Genel Energy PLC · LSE:GENL
Genel Energy — Investor Day (November 2014)
34 slides from Genel Energy's investor day presentation, Nov 13, 2014
Slide 1: Capital Markets Day
Capital Markets Day 13 November 2014
Slide 2: Disclaimer
DISCLAIMER These materials are being supplied to you by Genel Energy plc (the “Company”) solely for your information and for use at this presentation. All numbers and charts included in this presentation are from Company data unless specified otherwise. These materials may not be reproduced in any f
Slide 3: Highlights and strategy; agenda
Highlights and strategy Political update KRI oil business KRI gas business Exploration Financials and guidance Summary and Q&A 3
Slide 4: Highlights
HIGHLIGHTS KRI exports ramp-up Pipeline capacity in Turkey no longer a constraint – currently 500,000 bopd to increase to 700,000 bopd by year-end 2014 Pipeline exports currently at c.300,000 bopd, expected to increase to 400,000 bopd by year-end and 500,000 bopd in Q1 2015 KRG on track to b
Slide 5: Strategy
STRATEGY Maintain the highest level of corporate governance Create value with the drill bit Manage our KRI business on a broadly cash flow neutral basis Maximise shareholder returns by monetising at all points in the exploration, development and production cycle and return excess cash to sha
Slide 6: Political update agenda
Highlights and strategy Political update KRI oil business KRI gas business Exploration Financials and guidance Summary and Q&A 6
Slide 7: Political Update – KRI Emerging as a Regional Force
POLITICAL UPDATE – KRI EMERGING AS A REGIONAL FORCE KRI safe and secure KRG consolidating power in expanded KRI with international support KRG has a prominent position in new Iraqi Government KRG on track to budget equilibrium in Q1 2015 Turkey remains resolute in its support for the KRG 7
Slide 8: KRI Independent Export Route Established
KRI INDEPENDENT EXPORT ROUTE ESTABLISHED 3 month track record of pipe exports to Ceyhan Pipeline export capacity 500,000 bopd by end November, 700,000 bopd by early 2015 Storage capacity of 2.5 mmbbls available for KRI crude at Ceyhan 30 cargoes with over 23 mmbbls of KRI crude lifted, regul
Slide 9: KRI Export Evolution
KRI EXPORT EVOLUTION Total export 58 107 101 163 184 310 380 430 495 525 545 volumes (kb/d) 800 700 700 700 600 KRI budget equilibrium: 500 500 c.500kbpd export volumes kbopd 400 300 300 300 300 480 500 450 150 400 150 200 350 280 107 150 49 44 16 42 59 57 56 34 45 45 45 0 30 30 30 Q1-14 Q2-14 Jul-1
Slide 10: Regional Pipeline Infrastructure
REGIONAL PIPELINE INFRASTRUCTURE Tank Farm = 9.5 mmbbls capacity 40” Pipeline with 500,000 bopd of capacity, Allocated to KRI = 2.5 mmbbls capacity upgrade to 700,000 bopd by year-end 2014 Tawke field, 100,000 bopd of pipeline capacity, rising to >350,000 bopd by year-end 2014 400,000 bopd capacity
Slide 11: KRI oil business agenda
Highlights and strategy Political update KRI oil business KRI gas business Exploration Financials and guidance Summary and Q&A 11
Slide 12: Low Cost and Resilient KRI Oil and Gas Business
LOW COST AND RESILIENT KRI OIL AND GAS BUSINESS Breakeven of non-producing and recently on-stream oil assets Low cost onshore oil and gas: 160 150 Marginal Taq Taq and Tawke life of field F&D costs < $3/bbl heavy oil 140 and deep Taq Taq and Tawke opex < $2/bbl water, Kashagan 130 Miran and
Slide 13: Taq Taq Update
TAQ TAQ UPDATE 9M 2014 average production c.97,000 bopd Taq Taq well locations: Plan View Wells 17 current producing wells with well production capacity of c.150,000 bopd First horizontal well TT-24 to spud in Q4 2014 One additional well to be drilled in 2015 Facilities and infrastructur
Slide 14: Tawke Update
TAWKE UPDATE 9M 2014 average production of c.87,000 bopd Wells Tawke-25 and Tawke-26 (horizontal) recently completed, initially tested at up to 7,500 bopd and 5,000 bopd respectively New Tawke-28 well undergoing stimulation and testing, rig moved and currently drilling Tawke-27 With five h
Slide 15: KRI gas business agenda
Highlights and strategy Political update KRI oil business KRI gas business Exploration Financials and guidance Summary and Q&A 15
Slide 16: Transformational KRI Gas Business
TRANSFORMATIONAL KRI GAS BUSINESS World-class resource 11tcf mean gas resources, 80 mmbbls mean liquid resources Material and growing domestic market opportunity 3-5 bcma of near-term domestic market demand from power plants and industrial users Cost competitive Well positioned on cost c
Slide 17: New Deal – A Win-Win for KRG and Genel
NEW DEAL – A WIN-WIN FOR KRG AND GENEL New gas deal signed Detailed Gas term sheet signed, final PSC Amendment Agreement to be completed by year-end Miran and Bina Bawi to be combined under one PSC Genel to become sole Contractor at Miran & Bina Bawi Genel to acquire OMV’s 36% operated sta
Slide 18: New Deal – Gas & Condensates
NEW DEAL – GAS & CONDENSATES Structure New structure (gas/condensates) Miran and Bina Bawi combined under one PSC with one aggregate production target: 1,400 mmscfd raw gas from 2018 Raw Gas Genel’s responsibilities (development & operation) Wells Export market Contractor Gas wells and flow
Slide 19: New Deal – Oil
NEW DEAL – OIL Structure Miran and Bina Bawi combined under one PSC Responsibilities (development & operation) Contractor responsible for the development and operation of all oil resources Contractor entitlement 100% oil produced until all licence back costs (including historic oil, gas
Slide 20: Miran and Bina Bawi Resources
MIRAN AND BINA BAWI RESOURCES Raw gas (tcf) Liquids (mmbbls)(1) 19tcf 20 80 142mmbls 18 70 16 7 60 14 11tcf 79mmbls 50 12 50 10 40 60 4 48mmbls 8 6tcf 30 32 6 12 2 20 30 4 17 7 23 10 21 2 4 13 11 7 4 0 0 1 Low Low Oil Mean Mean Oil High High Oil Low Mean High Condensate Condensate Condensate Bina Ba
Slide 21: KRI Gas – Gas / Condensate Development Assumptions
KRI GAS – GAS / CONDENSATE DEVELOPMENT ASSUMPTIONS Miran Bina Bawi Mean raw gas 4.3tcf 7.1tcf Mean sales gas 3.5tcf 4.9tcf Mean condensate(1) 32mmbbls 13mmbbls Number of wells c.35 development wells c.35 development wells Average well costs $28m per well $32m per well Trunk/flowlines $5m per well $5
Slide 22: KRI Gas – Road Map to Monetisation
KRI GAS – ROAD MAP TO MONETISATION 2013 2014 2015 2016 2017 2018 DOC HORIZTONTAL Miran EWT OIL WELL OIL PRODUCTION EARLY OIL DOC Bina Bawi OIL PRODUCTION EXPORT GAS/CONDENSATE FEED MW5 EXPORT GAS & EARLY DOMESTIC GAS & EXPORT Miran CONDENSATE SALES CONDENSATE FID SALES TURKEY / KRG GENEL / KRG PSC A
Slide 23: Exploration agenda
Highlights and strategy Political update KRI oil business KRI gas business Exploration Financials and guidance Summary and Q&A 23
Slide 24: Exploration – Focused and Disciplined
EXPLORATION – FOCUSED AND DISCIPLINED KRI Peshkabir exploration Chia Surkh appraisal New opportunities Africa Exit Malta No plans for further drilling offshore Angola Evaluate Morocco Ethiopia first well end 2015/early 2016 Somaliland commence seismic operations by end 2015 Ref
Slide 25: Horn of Africa
HORN OF AFRICA Somaliland – Blocks SL-10B/13 & Odewayne Seismic acquisition in Q4 2015 aimed at unlocking Yemeni equivalent fairway Odewayne Block 50% Op Ethiopia – Adigala Block Berbera Mesozoic prospectivity defined – c.200km2 structure identified on field Hargeisa Burao processed data (20
Slide 26: Financials and guidance agenda
Highlights and strategy Political update KRI oil business KRI gas business Exploration Financials and guidance Summary and Q&A 26
Slide 27: Production and Sales
PRODUCTION AND SALES Net Genel production (kboepd) Net Genel revenues ($m) 100 80 kboepd YTD Average: 66kboepd 60 40 $600-700m(1) 20 @ $100/bbl Jul-14 Jan-14 Jun-14 Aug-14 Sep-14 Feb-14 Mar-14 Apr-14 May-14 $500-600m(1) 90-100 kboepd $500-600m(1) @ $80/bbl 60-70 kboepd 348 44 FY 2013 2014E 2015E FY
Slide 28: Balance Sheet and Capital Expenditure Guidance
BALANCE SHEET AND CAPITAL EXPENDITURE GUIDANCE $650m Strong balance sheet $564m Disciplined capital spend in KRI Focused and disciplined exploration $300-350m programme $229m Potential for cash return to shareholders $86m 2011 2012 2013 2014E 2015E KRI Development KRI Exploration & Appraisal
Slide 29: Transition from Domestic Market Sales to Exports
TRANSITION FROM DOMESTIC MARKET SALES TO EXPORTS Increased profitability Genel working interest production (bopd) 75% of sales now benefitting from pipeline export netback 100,000 2014 Pipeline transportation cost $5-10/bbl 90,000 Export cash flows 80,000 70,000 Q3 cash flow impacted by mo
Slide 30: Summary and Q&A agenda
Highlights and strategy Political update KRI oil business KRI gas business Exploration Financials and guidance Summary and Q&A 30
Slide 31: Summary
SUMMARY KRI remains safe and secure, KRG working closely with international community Politics Progress continues to be made following the formation of the new Iraqi Government Pipeline capacity in Turkey not a constraint – 700,000 bopd by early 2015 Pipeline export volumes currently at c.30
Slide 32: Appendix
Appendix 32
Slide 33: Genel Energy KRI Licenses
GENEL ENERGY KRI LICENSES Khurmala to Fishkhabour, 400,000 bopd capacity Taq Taq to Khurmala 150,000 bopd capacity 33
Slide 34: Capital Markets Day
Capital Markets Day 13 November 2014