Enquest Plc · LSE:ENQ
Enquest — FY2011 Earnings Presentation
41 slides from Enquest's earnings presentation, Mar 27, 2012
Slide 1: 2011 Full Year Results: Delivering Strong Growth
2011 Full Year Results Delivering Strong Growth
Slide 2: Agenda
Agenda Overview & Strategy CEO, Amjad Bseisu Financials CFO, Jonathan Swinney Operations COO, Nigel Hares Summary CEO, Amjad Bseisu
Slide 3: EnQuest's Strategy: Turning opportunities into value
EnQuest’s Strategy Turning opportunities into value Focused on Oil Targeting maturing assets and undeveloped oil fields The Right Fit for the Control through operatorship and high working interests Right Time in the Low decommissioning exposure North Sea Proven acquirer of assets Leaders
Slide 4: EnQuest's Strategy: Focused on development and production
EnQuest’s Strategy Focused on development and production Realising the untapped potential in maturing assets and in underdeveloped oil fields Maximising production and exploiting upside potential Focus on Hubs Infill drilling Alma and Galia Extending field life Hub focus reduces costs Near F
Slide 5: Strong Cash Flow, Strong Reserves Growth
Strong Cash Flow, Strong Reserves Growth Full year to 31 December 2011, US dollars 12.5% increase in production, all three hubs showing good growth • Overall nine well drilling programme including four production wells, $361m of capital invested • 2012 average production expected range between 20,
Slide 6: 2011 Operational Results
2011 Operational Results Strong production growth, up 12.5% overall Net production (Boepd) 23,698 21,074 Up 9.5% 12,770 11,660 Up Up 20.0% 12.4% 5,492 4,836 5,436 4,578 Thistle/Deveron The Dons Heather/Broom Total 2010 2011 5
Slide 7: EnQuest's North Sea Assets
EnQuest’s North Sea Assets As at end of 2011, plus acquisitions announced in Q1 2012 6
Slide 8: Consolidating IPO Positions & Building New Ones
Consolidating IPO Positions & Building New Ones Including an additional 18.5% of West Don Crawford/Porter Acquired further 32% for carry up to $55.8m Development decision in 2010 From 19% to 51% Broom Acquired further 8% for $7.5m From 55% to 63% Crathes Farmed in to Crathes prospect, taking
Slide 9: Track Record of Sustainable Delivery and Growth
Track Record of Sustainable Delivery and Growth Reserve replacement ratio of 419%, reserve life of 13.4 years MMboe Full year 2011 Full year 2010 115.2 35.1 15.4 88.5 80.5 (8.4) (7.4) Net 2P reserves Production 2010 Reserve Net 2P reserves Production 2011 Reserve Net 2P reserves start of 2010 additi
Slide 10: Alma and Galia
Alma and Galia EnQuest’s fourth hub, 29MMboe converted to 2P • Proven fields, Alma abandoned at low water cut of 70% • Includes Galia field • Prudent base case with upside • The right facilities for the fields • Dedicated completions for Devonian/Rotliegend/Zechstein • Variable speed drive ESPs • Wa
Slide 11: 2012 Acquisition of 45% of Kraken Discovery
2012 Acquisition of 45% of Kraken Discovery Sustainable reserves and production growth, asset diversification In Q1 2012, EnQuest acquired 20% from Canamens EnQuest then acquired a further 25% from P1573 Nautical EnQuest also acquired a 45% farm in option to P1574 block 9/1a, in return for pay
Slide 12: Expecting To Deliver Over 20% CAGR
Expecting To Deliver Over 20% CAGR* Between 2009 and 2014 Average net production (Boepd) Guidance range Over 40,000 30,000 24,000 25,000 23,698 21,074 20,000 13,613 10,150 2008 2009 2010 2011 2012 2013 2014 * Compound annual growth rate 11 11
Slide 13: EnQuest PLC Financial Highlights
EnQuest PLC Financial Highlights Jonathan Swinney Chief Financial Officer 12 12
Slide 14: Results Summary
Results Summary Full year to 31 December Unless otherwise stated all figures are before exceptional items and depletion of fair value uplift and are in US dollars Unless otherwise stated, all figures are before exceptional items and depletion of fair value uplift and are in US dollars. US dollars Re
Slide 15: Reported Income Statement
Reported Income Statement Full year to 31 December 2011 2010 US dollars Exceptional items and Reported Reported Business performance depletion of fair value uplift $m’s $m’s $m’s $m’s Revenue 936.0 - 936.0 583.5 Cost of sales (491.8) (17.0) (508.8) (400.8) Gross profit 444.2 (17.0) 427.2 182.7 Explo
Slide 16: Balance Sheet
Balance Sheet As at 31 December 2011 2010 US dollars Restated1 $m’s $m’s ASSETS Non-current assets Property, plant and equipment 1,273.6 1,134.2 Goodwill 107.8 107.8 Intangible assets 24.3 9.6 Asset held for sale 1.3 9.8 Investments 6.7 - Deferred tax asset 12.6 13.2 1,426.3 1,274.6 Current assets I
Slide 17: Capital Expenditure $361m
Capital Expenditure* $361m Full year to 31 December 2011 US$m 94 82 78 64 32 10 Thistle/Deveron Dons/Conrie Heather/Broom Alma/Galia E&A Other * Includes accrued expenditure 16
Slide 18: Cash Flow
Cash Flow Full year to 31 December 2011 US$m 656 (278) (11) 379 (29) 41 Cash & equivalents at Cash flow from Tax paid Capex Financing & other Cash & equivalents at 1 January 2011 operations 31 December 2011 17
Slide 19: New $900M Revolving Credit Facility
New $900M Revolving Credit Facility Accordion structure • $525m committed • Further $375m available with lenders’ consent Up to five years Multi-currency 18
Slide 20: Finance Outlook
Finance Outlook Full Year 2012 Capex expectations of around $1,000m Total production and transportation costs to be broadly similar to 2011 Depletion, dependent upon production mix, but anticipated to be similar to 2011, on a per barrel basis G&A, similar to 2011 Finance costs • Guidance t
Slide 21: EnQuest PLC Review of Operations
EnQuest PLC Review of Operations Nigel Hares Chief Operating Officer
Slide 22: Oil And Gas Reserves And Resources
Oil And Gas Reserves And Resources Net 2P reserves up 30.2%, contingent resources up 11.1% Proven and Probable Reserves (Net 2P) MMboe At 1 January 2011 88.51 Production during 2011 (8.36) Revisions to estimates 4.55 Discoveries, extensions and additions 29.69 Acquisitions 0.82 At 31 December 2011 1
Slide 23: 2011 Operational Results
2011 Operational Results Strong production growth, up 12.5% overall Net production (Boepd) 23,698 21,074 Up 9.5% 12,770 11,660 Up Up 20.0% 12.4% 5,492 4,836 5,436 4,578 Thistle/Deveron The Dons Heather/Broom Total 2010 2011 22
Slide 24: Thistle / Deveron
Thistle / Deveron Area6 – I1 2011 A46 Production up 12.4% on 2010 Area6 – P1 NWFB – P2 A56/13 completed A56 Well A57/58 completed A56 w/o NFB – I1 30 MW power upgrade project sanctioned Highest production rate for 10 years A58 WFB – P1 A53 2012 A57 A58 (Dev-P1) well completed A16 w/o A
Slide 25: Dons/Conrie
Dons/Conrie 2011 Production up 9.5% over 2010 Successful exploration well 211/18a-S7, now the Conrie field - on production W1 Increased equity of 44.95% in West Don in late S6 2010 S9 W3Z S8Z producer and the S9 injector wells on Don W2Z S1 S5 Southwest W2 S10 S3Z S8Z and S7 wells declined
Slide 26: Heather/Broom
Heather/Broom 2011 Production up 20.0% over 2010 Else injector Additional 2016 Opportunities Benefit from the 2010 new Broom to Erica 2017 onwards Heather pipeline injector 2015 Successful re-start of Broom BR4 Else Rosea Viking Rubrum 4000m injector & New hydrocyclones injector H62 W/O 2013
Slide 27: Alma and Galia
Alma and Galia EnQuest’s fourth hub, 29MMboe converted to 2P • Proven fields, Alma abandoned at low water cut of 70% • Includes Galia field • Prudent base case with upside • The right facilities for the fields • Dedicated completions for Devonian/Rotliegend/Zechstein • Variable speed drive ESPs • Wa
Slide 28: Alma and Galia: Combined profiles & reserves
Alma and Galia Combined profiles & reserves Alma and Galia - Sales 25000 35.0 Combined Development Alma 20.8 30.0 20000 Galia 8.6 Total MMboe 29.3 25.0 Cumulative Sales (MMstb) 15000 Sales (stb/d) Galia 20.0 Alma Cumulative 15.0 10000 10.0 5000 5.0 0 0.0 2013 2014 2015 2016 2017 2018 2019 2020 2021
Slide 29: The Alma and Galia Development
The Alma and Galia Development First oil Q4 2013 Purchase option exercised for the FPSO, now the EnQuest Producer Currently at the yard in Hamburg, initial destruction work is underway The rig was mobilised and drilling began in January Batch drilling of three wells is underway Procurement
Slide 30: 2012 Acquisition of 45% of Kraken Discovery
2012 Acquisition of 45% of Kraken Discovery Kraken is a heavy oil accumulation in the UK North Sea East Shetland basin Kraken’s operator, Nautical Petroleum, estimated gross contingent resources of 160 P1573 MMboe for blocks 9/2b and 9/2c, which include Kraken Kraken was significantly de-riske
Slide 31: 2012 Outline Programme
2012 Outline Programme Three drilling strings (one platform rig, two mobile rigs) Q1 Q2 Q3 Q4 Thistle Drilling (2 wells, 3 workovers) Heather Rig reactivation Drilling/workovers Dons Drilling (4 wells) Alma & Galia Drilling (batch drilling of 3 wells) Crawford/Porter Development decision Crathes/Sco
Slide 32: EnQuest PLC Summary
EnQuest PLC Summary Amjad Bseisu, CEO 31
Slide 33: 2011 Summary
2011 Summary Strong performance in 2011, building blocks in place for future growth Finance Revenue up 52.3% to $936.0m Cash flow from operations up 145.2% to $656.3m Net cash of $378.9m New $900m credit facility Operations Nine well programme, $360.6m capital programme Production up 12.
Slide 34: Skills Scale Strength
A Substantial Exploitation Company In 2012 And Beyond.. Skills Focus on Hubs Scale Alma and Galia Near Field Appraisal and Exploration Conrie and Crathes Business Development Kildrummy and Kraken Strength 33
Slide 35: EnQuest Q&A
EnQuest Q&A
Slide 36: Largest UK Independent Producer in the UK North Sea
Largest UK Independent Producer in the UK North Sea Government data for UK north sea independent producers Total Production for the year ending November 2011 1,200,000 1,100,000 Total Production in Mass units (tonnes) 1,000,000 900,000 800,000 700,000 600,000 500,000 400,000 300,000 200,000 100,000
Slide 37: Thistle, Conrie and The Dons Infrastructure
Thistle, Conrie and The Dons Infrastructure 36
Slide 38: Heather / Broom Infrastructure
Heather / Broom Infrastructure 37
Slide 39: Project Schedule
Project Schedule ae Knightsbridge Project imeline - [Page 1 of 1] 2011 2012 2013 a3 a4 Qi \ctivity Groups: Long Leads for Early Installation Remaining Long Leads egend Be ositing || Subsea 38
Slide 40: Forward Looking Statements
Forward Looking Statements This presentation may contain certain forward looking statements with respect to EnQuest’s expectation and plans, strategy, management’s objectives, future performance, production, costs, revenues and other trend information. These statements and forecasts involve risk and
Slide 41: Definition of Pro-forma in these Materials
Definition of “Pro-forma” in these Materials ‘Pro-forma’ data reflects the trading results for the combination of legal entities which include all of the production assets from the start of the 2010 calendar year as though the combination was owned by EnQuest for the full 12 calendar months ended 31