Otto Energy Limited · ASX:OEL
Otto Energy — Merger or Acquisition (September 2014)
23 slides from Otto Energy's merger presentation, Sep 22, 2014
Slide 1: Divestment of Galoc Production Company WLL & Capital Return to Shareholders
For personal use only ASX : OEL Divestment of Galoc Production Company WLL & Capital Return to Shareholders 22 September 2014
Slide 2: Disclaimer
Disclaimer For personal use only ASX: OEL This presentation does not constitute an offer to sell securities and is not a solicitation of an offer to buy securities. It is not to be distributed to third parties without the consent of Otto Energy Limited (the “Company”). This presentation contains for
Slide 3: Transaction Background
Transaction Background For personal use only ASX: OEL • Otto has executed a Sale and Purchase Agreement (SPA) to divest all of its shares in the Galoc Production Company WLL (GPC) to Risco Energy Investments Pte Ltd (Risco) • GPC holds a 33% interest in the Galoc oil field (Galoc Interest) • Under t
Slide 4: Highly Attractive Deal Terms
Highly Attractive Deal Terms For personal use only ASX: OEL • Otto to receive a price of US$101.4 million • Adjusted for net proceeds received by Otto from the effective date of the transaction (1 July 2014) • US$10.14m deposit has been received. • Final Proceeds payable at completion, expected to b
Slide 5: Use of Proceeds
Use of Proceeds For personal use only ASX: OEL Divestment Proceeds: US$101.4 million US$62 million US$39 million PROPOSED CAPITAL RETURN WORKING CAPITAL TO SHAREHOLDERS INJECTION • $0.06/share to be returned to shareholders • Net cash balance to fully fund all activities for two years • Demonstrates
Slide 6: Otto value proposition post divestment
Otto value proposition post divestment For personal use only ASX: OEL Strong Financial Position Tanzania Exploration Philippines Exploration > US$105M IN CASH AND NEW, HIGHLY PROSPECTIVE HIGH WORKING INTEREST DEBT FREE FRONTIER REGION WITH SIGNIFICANT FUNDING COMMITMENT • >US$105 million in cash ava
Slide 7: Capital Return to Shareholders
Capital Return to Shareholders For personal use only • Otto proposes to pay a capital return to shareholders of A$0.06 per share in cash • Capital return allows Otto shareholders to participate in substantial upside delivered from the divestment transaction • Capital return is subject to approval by
Slide 8: Transaction Rationale
Transaction Rationale For personal use only ASX: OEL • Monetisation and maximisation of the value created by Otto at Galoc • Price is at top-end of valuations and a 36% premium to the balance sheet value • $0.10/share value of the headline price exceeds current share price by approximately Right Pri
Slide 9: Focused Strategy
Focused Strategy For personal use only ASX: OEL Otto’s strategy to be an integrated petroleum company remains unchanged. We will continue to build shareholder value through successful exploration, which we aim to convert into production. • Conventional petroleum exploration Credible • Clear geograph
Slide 10: Clear Regional Focus
Clear Regional Focus For personal use only Philippines Exploration Focus on conventional hydrocarbon 1 SC55 (Hawkeye/Cinco) exploration and production within South East • 93.18% WI and operator Asia and the East Africa Rift System (“EARS”) • Deep water exploration • 2 drill ready prospects with Cinc
Slide 11: Otto's Tanzania Position is a Material First Step
Tanzania (Otto 50% WI): Otto’s Tanzania Position is a Material First Step For personal use only History Exploration success and Otto acreage South Omo Block • Pre 2006 - No material exploration success (Ethiopia) – being tested by Tullow and Africa Oil. • 2006 Lake Albert: - First discovery in Ugand
Slide 12: High WI in permits covering prospective basins
Tanzania (Otto 50% WI): High WI in permits covering prospective basins For personal use only Work completed to date has provided encouraging results • 2012: Completed airborne gravity, magnetic surveying and sampling over Kilosa-Kilombero and Pangani – five potential basin areas identified • 2013: C
Slide 13: Kilombero Basin analogous to Lokichar Basin
Tanzania (Otto 50% WI): Kilombero Basin analogous to Lokichar Basin For personal use only Kilombero Basin appears analogous to Tanzania: Kilombero Basin Kenya: Lokichar Basin and the Lokichar Basin in Kenya exploration status • Kilombero interpreted as Neogene- age basin with a depth to Airborne Gra
Slide 14: Kito prospect 'best estimate' 60.4 MMbbl Net Prospective Resource
Tanzania (Otto 50% WI): Kito prospect “best estimate” 60.4 MMbbl Net Prospective Resource For personal use only Tanzania: Kilombero Basin Kenya: Lokichar Basin Source: Africa Oil Low Estimate Best Estimate High Estimate (P90) (P50) (P10) (MMbbl) (MMbbl) (MMbbl) Gross undiscovered unrisked oil in pla
Slide 15: High Impact and Drill Ready Prospects SC55
SC55 (Otto 93.18% Operator): High Impact and Drill Ready Prospects SC 55 For personal use only SC55 Permit • Otto is operator with 93.18% interest • Sub-Phase 4 contains a commitment to drill 1 Carbonate Prospect Status exploration well by 23 December 2014 Clastic Prospect Carbonate Lead Exploration
Slide 16: Additional Information
For personal use only ASX : OEL Additional Information 16
Slide 17: Experienced Board & Management Team
Experienced Board & Management Team For personal use only Board of Directors Senior Management Rick Crabb – Chairman. Matthew Allen – Chief Executive Officer. BBus, FCA, BJuris (Hons), LLB, MBA FFin, GAICD Former energy, resources and corporate lawyer Global exposure to the upstream oil and gas indu
Slide 18: Philippines Exploration: SC55 – Hawkeye Prospect
Philippines Exploration: SC55 – Hawkeye Prospect For personal use only Hawkeye Prospect Location Offshore, SW Palawan 50 km2 Area of Closure Up to 500m column height Water Depth 1,690 metres Hawkeye Prospect Areal Closure: 50km2 Objective Depth 2,750 metres STOIIP, 87 - 484 - 1,539 mmstb (Low – Best
Slide 19: Philippines Exploration: SC55 – Cinco Prospect
Philippines Exploration: SC55 – Cinco Prospect For personal use only mss CINCO 3200 3400 3600 3800 4000 4200 4400 4600 500 m 4800 Cinco Prospect 53 km2 Area of Closure Up to 500m column height Water Depth 1,430 metres Objective Depth 3,120 – 4,500 metres GIIP 0.9 – 2.4 – 6.3 Tscf ((Low – Best- High)
Slide 20: SC55 – Additional Leads Post Hawkeye/Cinco
Philippines Exploration: SC55 – Additional Leads Post Hawkeye/Cinco For personal use only An impressive gas and condensate portfolio, developed on an emerging major regional trend, parallel to the island of Palawan SC55 SW Palawan SC 55 Area = 9,880 km2 Arithmetically Aggregated ‘Best Estimate’ • GI
Slide 21: SC14C Galoc Field: Reliable Production and Reserves
SC14C Galoc Field (Otto 33% Operator): Reliable Production and Reserves For personal use only Galoc Daily Oil Production • Successful delivery of major upgrade in 2013 underpins 14,000 strong production performance in 2014 – six cargoes 13,000 Phase II Start-up Well Testing for Allocation 12,000 del
Slide 22: Improved understanding of field structure and reservoir
SC14C Galoc Field (Otto 33% Operator): Improved understanding of field structure and reservoir For personal use only • Incorporated Phase II drilling results into detailed analysis of the Galoc oil field • Resulted in a clearer understanding of the structure and reservoir distribution between the Ga
Slide 23: Investor Queries
For personal use only ASX: OEL Investor Queries: Media: Matthew Allen John Gardner or Richard Glass Chief Executive Officer MAGNUS Investor Relations Otto Energy Limited + Corporate Communication Ph: +61 8 6467 8800 Ph:+ 61 2 6160 4900 Email: info@ottoenergy.com Email: jgardner@magnus.net.au / rglas