Beetaloo Energy Australia Limited · ASX:BTL
Beetaloo Energy Australia — Empire Energy Group — Investor Presentation (November 2017)
39 slides from Beetaloo Energy Australia's investor presentation, November 2017
Slide 1: Empire Energy Group Limited Presentation November 2017
EMPIRE ENERGY GROUP LIMITED Presentation November 2017
Slide 2: Disclaimer & Confidentiality
2 Disclaimer & Confidentiality This presentation has been prepared by Empire Energy Group Limited (“Empire” or the “Company”). The information in this presentation is information of a general nature and is subject to change without notice. The information in this presentation does not purport to be
Slide 3: Agenda
3 1. Executive Summary 2. USA Assets 3. USA Growth Strategy 4. Australian Assets 5. Detailed Financials 6. Appendices
Slide 4: Operations - Snap Shot
4 Operations - Snap Shot ~300,000 acres Australia USA 100% owned subsidiary Conventional & unconventional oil & gas exploration Prospective Resource P(50) ~22,500 acres Australia 2.2 Billion Boe, or ~13 Tcfe 14.6 million acres US$175 million farm-out with American Energy Partners terminated early 20
Slide 5: Corporate - Snap Shot
5 Corporate - Snap Shot ASX:EEG OTC-QB:EEGNY • Share Price = A$0.008 Fracking ban NY • Mkt Cap(1) = US$7.0mm • EV = US$43.0mm Oil price realignment • US EBITDA Est 2017) = US$4.0mm • Grp EBITDA (Est 2017) = US$3.0mm • 2P PV10 (Dec 2016) = US$91.5mm • 2P Reserves(3) = 14.0mmBoe • EV/2P = $3.07/Boe •
Slide 6: History of value creation
6 History of value creation 80% PA - Sold Farmout Land for for $24.6mm $75mm(1) + $100mm(2) PA - gas Assets KS – NY & PA – OK – Miss $8.2mm + KS – oil NY & KS – agreement gas & oil Lime acreage Land $56.6mm too small bolt on over $38mm $1.1mm $1.1mm 70,000ac expensive, NT Aust – 14.6mm ac failing to
Slide 7: Agenda
7 1. Executive Summary 2. USA Assets 3. USA Growth Strategy 4. Australian Assets 5. Detailed Financials 6. Appendices
Slide 8: USA Operations - Conventional
8 USA Operations - Conventional Operator of all Mid-Con and Short Term Growth Appalachia assets • Current production ~1,200Boe/d. • Acquisitions - USA onshore. Empire has • Stable cash flow with +2,000, slow monitored and bid on a number of high decline, long life oil & gas wells. quality assets ove
Slide 9: USA – Proven Oil Field Development
9 USA – Proven Oil Field Development Existing Puds (KS) Production (KS) (included in reserves) (included in reserves) • +30 Puds ready for drilling • ~210 operating wells • Puds based on 3D • ~330Bbl/d • Waterflood project • 1P PV10 $38.9mm • Performance based on type curve/s • 2P Cashflow $93.5mm •
Slide 10: Assets – Unconventional (NY & PA)
10 Assets – Unconventional (NY & PA) Reserves and Resources • New York State currently has a fracking ban in place. • Empire has resources which cannot be accessed: • Marcellus Shale 270,000 net acres: • 3P proved reserves 92.8 million Boe. • Prospective Resource P(50) of 407 million Boe. • Utica Sh
Slide 11: Agenda
11 1. Executive Summary 2. USA Assets 3. USA Growth Strategy 4. Australian Assets 5. Detailed Financials 6. Appendices
Slide 12: Growth Objectives
12 Growth Objectives Take advantage of the: • The ‘generational’ decline in the value of global oil assets; • Expected increase in oil/gas values as oil demand reaches inflection point over supply; • Experienced management team with additional expertise identified to strengthen operations; • Exitwit
Slide 13: Why Now?
13 Why Now? Oil multiples distorted by the surge in activity in the Delaware and Midland Basins, Texas Current multiples are $45,750/Bbl for oil & $3,070/Mcf for gas a 15:1 economic ratio
Slide 14: Asset Growth Strategy
14 Asset Growth Strategy INTIAL OBJECTIVE TO ACHIEVE +5,000Boe/d • Target the USA market, which provides: • Unparalleled market liquidity in oil and gas assets. • Producing assets in many regions available at competitive prices. • Deploy capital to: • Selective conventional and unconventional produc
Slide 15: Acquisition Metrics
15 Acquisition Metrics Focus on strategic/risk metrics and priority oil & gas acquisition targets: • RED ZONE: Build production base. Seen as low risk, but low return VALUE DRIVER (rewarded from oil price & operations Commodity prices Decreasing Value Creation improvement). Operating Efficiency, Tar
Slide 16: Management - USA
16 Management - USA Bruce W. McLeod • 25 years experience in managing and financing resource and property projects in Executive Australasia/Asia/USA. Chairman & CEO • Raised over A$1.5 billion for property and resource projects. • Prior, Executive Director for BA Australia Limited a subsidiary of Ba
Slide 17: Operations - USA
17 Operations - USA Jim Farthing, VP • 1979 to 2012 with Conoco-Phillips in North America. Mid-Con Region • Retired - 2012 as Ops Manager Conoco-Phillips L48 E&P Central Region/Gulf Coast. • 20 years in a supervisory capacity operating shallow low pressure wells in Kansas, deep high pressure wells (
Slide 18: Reserves / Resources
18 Reserves / Resources NET RESERVES & PROJECTED CASH FLOW (NYMEX STRIP) JUNE 30, 2017 Reserves Gross Wells Oil (Mbbls) Gas (MMcf) MBoe Capex US$M PV0 US$M PV10 US$M Region (Reserves) - USA Proved Developed Producing 1,414 1,487 22,975 5,316 $0 $56,268 $28,166 Proved Developed Non-producing 9 489 28
Slide 19: Assets & Operations (2017 estimates)
19 Assets & Operations (2017 estimates) Annual Cash Flow - US$M Annual Production - Boe 600,000 $30,000 $25,000 500,000 $20,000 400,000 $15,000 300,000 $10,000 200,000 $5,000 $- 100,000 2010 2011 2012 2013 2014 2015 2016 2017 -$5,000 0 Revenue EBITDAX Interest 2009 2010 2011 2012 2013 2014 2015 2016
Slide 20: Hedging - Existing PDP Production
20 Hedging - Existing PDP Production Risk Reduction - approx 95% oil production hedged through 2017 and 83% gas production to 2017. Market-to-market gain of ~$3.3mm at 6/2017 Hedging - Oil Swaps Hedging - Natural Gas 140,000 $80.00 1,800,000 $4.20 $4.11 $68.65 $70.00 1,600,000 120,000 $4.00 $66.95 1
Slide 21: Agenda
21 1. Executive Summary 2. USA Assets 3. USA Growth Strategy 4. Australian Assets 5. Detailed Financials 6. Appendices
Slide 22: McArthur Basin Introduction
22 McArthur Basin Introduction • Imperial Oil & Gas (100% subsidiary of Empire) owns 14.6 million acres In the McArthur Basin, Northern Territory, Australia. • Imperial holds ~85% of ‘McArthur Basin Central Trough’ considered as the depositional basin for whole Basin. • Unparalleled unconventional p
Slide 23: McArthur Basin Trough
23 McArthur Basin Introduction Vast areas prospective for shale: ▪ >240Tcfe of recoverable sale gas estimated (1) ▪ NTGS report 2C P50 200Tcfe (GIP) in the Beetaloo sub-basin(2). McArthur Sub-Basins… McArthur Basin Trough Santos Hancock Santos Origin Armour Armour Armour *See Page 26 (1) Deloitte 20
Slide 24: Why Australia vs USA?
24 Why Australia vs USA? A world-class commercial shale project needs: No longer possible to discover new large-scale (>100k acres) shale plays in the USA with high deliverability and low cost …Great rocks… ✓ Significant core and seismic data Massive USA shale gas development with a virtually limitl
Slide 25: Management - Australia
25 Management - Australia Bruce McLeod • Refer to page 16. Executive Chairman Prof John Warburton • Over 30 years of technical & leadership experience in leading E&P companies including BP and LASMO-Eni. Director • Sits on Advisory Board of Centre for Integrated Petroleum Engineering & Geoscience, L
Slide 26: Australian Operations - Unconventional
26 Australian Operations - Unconventional • 14.6mm acres - WI =100%, NRI = ~87%. • Farmout with American Energy Partners,. terminated in early 2017. • Prospective Resource: • Targets – 5 shale formations. • Prospective Resource P50 2.2 Billion Boe (~13Tcfe). • Strong analogy with Marcellus/Utica sha
Slide 27: Proven Working Petroleum System
27 Proven Working Petroleum System Most shale wells drilled (~60) have produced gas or live oil. Joint Venture activity in the McArthur Basin • Origin Farm-in • Energy & Minerals Group, LP Farm-in • Falcon Oil & Gas - 2014 a $185mm - Origin earns 70% WI. • Pangaea - 2015 (terms undisclosed) • A 3 we
Slide 28: Velkerri Shale – early production
28 Velkerri Shale – early production “Tanumbirini #1 - The best shale well I have seen” Aubrey McClendon, AELP Velkerri Velkerri1 Metric Marcellus (Mid-Velkerri) (Mid-Velkerri) Nhulunbuy Appalachia - Beetaloo / Beetaloo/ Region NE USA McArthur McArthur Amungee NW- Well Generic 1H Tanumbirini #1 Prim
Slide 29: The Seven Shale Mineralogy
29 The Seven Shale Mineralogy Mineralogical analysis reveals the McArthur Basin holds two distinct shale classics with clearly identified US analogs
Slide 30: Early Commercialisation
30 Early Commercialisation Existing Large Scale Markets • Australian pipeline infrastructure divides the country: • Northern Territory: pipeline network running from Alice Springs to Darwin carrying conventional production to supply Darwin LNG . • Eastern Australia: onshore conventional/CSG shortfal
Slide 31: Imperial Resource Estimate
31 Imperial Resource Estimate Independent Prospective Resource developed to date considered to be conservative: ▪ Total average thickness of Velkerri & Barney Creek Shale assumed ~150m, but in some sections up to +600m to 1,500m thick. ▪ Geological Factor Discount applied to take account of variatio
Slide 32: Beetaloo sub-basin – Volumetric Resource Estimate
32 Beetaloo sub-basin – Volumetric Resource Estimate(1) Total Beetaloo sub-basin Gas in Place calculation NGTS, 2017 ▪ Cont. Resource (P90/P10) = 118/293Tcfe (GIP). ▪ Cont. Resource (P90/P10) = 476/1,277MMBbl (OIP). ▪ Desktop study~ 6,300 historical samples. ▪ Sampling ~1,600 new samples. Velkerri A
Slide 33: World Class Resource
33 World Class Resource McArthur Basin Imperial Acreage Palaeo-Proterozoic 5.3 million acres identified Imperial Un-risked Marcellus Basin Prospective Prospective Basin (million ac) Recoverable Devonian Resources P50 McArthur P50* 5.3 mm 13 Tcfe** Marcellus 66.0 mm 262 Tcfe Fayetteville 6.0 mm 42 Tc
Slide 34: Agenda
34 1. Executive Summary 2. USA Assets 3. USA Growth Strategy 4. Australian Assets 5. Detailed Financials 6. Appendices
Slide 35: Financials - Detail (2011 to 2017)
35 Financials - Detail (2011 to 2017) Currency: - US Dollars For the 12 Months Ending 9 Months Ending Acct Description Dec 2011 Dec 2012 Dec 2013 Dec 2014 Dec 2015 Dec 2016 Sep 2017 US Operations: Net Revenue: Oil Sales 15,377,893 15,743,156 14,146,108 13,646,849 10,170,617 7,663,223 5,746,401 Natur
Slide 36: US Operations - Detail (2011 to 2017)
36 US Operations - Detail (2011 to 2017) Currency: - US Dollars For the 12 Months Ending 9 Months Ending Acct Description Dec 2011 Dec 2012 Dec 2013 Dec 2014 Dec 2015 Dec 2016 Sep 2017 US Operating Statistics: - US Dollars Gross Production: Oil (Bbls) 278,082 286,135 256,777 258,010 218,475 194,419
Slide 37: Balance Sheet (30 June 2017)
37 Balance Sheet (30 June 2017) As at Currency - US Dollars 30 June 2017 CURRENT ASSETS Cash and cash equivalents 1,895,864 Trade and other receivables 2,115,385 Financial assets, including derivatives 2,235,508 Other 1,166,566 TOTAL CURRENT ASSETS 7,413,323 NON-CURRENT ASSETS Financial assets, incl
Slide 38: Agenda
38 1. Executive Summary 2. USA Assets 3. USA Growth Strategy 4. Australian Assets 5. Detailed Financials 6. Appendices
Slide 39: Definitions & Reserves Information
39 Definitions & Reserves Information Notes to Reserves • The scope of the Reserve Studies reviewed basic information to prepare estimates of the reserves and contingent resources. • The quantities presented are estimated reserves and resources of oil and natural gas that geologic and engineering da
Empire Energy Group — Investor Presentation (November 2017) on 6ix