Seplat Energy Plc · LSE:SEPL
Seplat Energy — Seplat Petroleum Development Company — Investor Day (July 2019)
35 slides from Seplat Energy's investor day presentation, Jul 12, 2019
Slide 1: Gas Business – Capital Markets Day
Seplat Petroleum Development Company Plc GAS BUSINESS – CAPITAL MARKETS DAY Stability Performance Growth GAS BUSINESS – CAPITAL MARKETS DAY – 12th JULY 2019 1 2019 CAPITAL MARKETS PRESENTATION
Slide 2: Important Notice – Disclaimer
IMPORTANT NOTICE DISCLAIMER FORWARD-LOOKING STATEMENTS This announcement may include statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements involve known and unknown risks and uncertainties, many of which are beyond the Company's control and all o
Slide 3: Agenda
AGENDA CONTENT PAGE Stability GAS BUSINESS 5 Growth ANOH 15 Summary Q&A 34 3 2019 CAPITAL MARKETS PRESENTATION
Slide 4: Presentation Team
PRESENTATION TEAM AUSTIN AVURU ROGER THOMPSON BROWN YETUNDE TAIWO Position at Seplat Chief Executive Officer Chief Finance Officer AGPC Managing Director Co-founder of Seplat Over 25 years experience in • 28 years of diversified Background the energy industry upstream experience, Over 30 years
Slide 5: Gas Business
Stability GAS BUSINESS Austin Avuru - Chief Executive Officer 5 2019 CAPITAL MARKETS PRESENTATION Seplat Petroleum Development Company Plc | www. seplatpetroleum.com
Slide 6: The Leading Independent Nigerian Oil and Gas E&P Company
THE LEADING INDEPENDENT NIGERIAN OIL AND GAS E&P COMPANY DUAL LISTED NIGERIAN PURE PLAY WITH A PORTFOLIO OF SIX OIL AND GAS BLOCKS IN THE NIGER DELTA OML 41 A OML 4 OML 53 OML 38 B OPL 283 C • Dual listed on NSE (ticker “SEPLAT”) and LSE main market D (ticker “SEPL”) • Shares in issue 588.4 OML 55 m
Slide 7: Evolution of Seplat's Gas Business
EVOLUTION OF SEPLAT’S GAS BUSINESS RAPID TRANSFROMATION AND GROWTH THROUGH BOLD INVESTMENT AND EARLY MOVER ADVANTAGE Strategic decision Landmark IPO Completed Gas business made to invest & dual listing of Seplat acquisition of 40% achieves another record in the gas business provides domestic and ope
Slide 8: Key Attractions of the Domestic Gas Opportunity
KEY ATTRACTIONS OF THE DOMESTIC GAS OPPORTUNITY EARLY MOVER ADVANTAGE CREATES OPPORTUNITY Tscf 200 189 160 AFRICA’S • Nigeria holds 37% of total proved 120 153 LARGEST gas reserves on the continent 80 GAS • The majority is concentrated in 75 the Niger Delta RESERVES 40 50 42 0 Nigeria Algeria Egypt
Slide 9: Key Attractions of the Domestic Gas Opportunity: Highest Growth Prospect
KEY ATTRACTIONS OF THE DOMESTIC GAS OPPORTUNITY HIGHEST GROWTH PROSPECT IN AFRICA • One of the largest economies in Africa with a population today in excess of 201 million - 50% are urban dwellers while 62% is <25 years in age and 93% is <55 years in age STRONG AND • Projected to grow to a populatio
Slide 10: Gas a Positive for Nigeria's Balance of Payments
KEY ATTRACTIONS OF THE DOMESTIC GAS OPPORTUNITY GAS A POSITIVE FOR NIGERIA’S BALANCE OF PAYMENTS • It is estimated that there is at US$/Mscf 5.0 least 20,000 MW of off-grid 4.5 15 DIESEL diesel generated power in 4.0 DISPLACEMENT Nigeria 3.5 3.0 2.5 2.5 (ATTRACTIVE • The estimated cost of fuelling 2
Slide 11: The Gas Business Today
THE GAS BUSINESS TODAY INCREASING FINANCIAL CONTRIBUTION REALISED FROM LARGE SCALE RESERVES AND PROCESSING CAPACITY SIGNIFICANT RESERVES AND RESOURCE BASE TO UNDERPIN LONG TERM CONTRACTS AN INCREASING AND VALUABLE PRODUCTION AND REVENUE CONTRIBUTION MMscfd US$ MM TOTAL WI 2P GAS RESERVES (Bscf) TOTA
Slide 12: Contribution of the Gas Business in 2018 Broken Down
CONTRIBUTION OF THE GAS BUSINESS IN 2018 BROKEN DOWN OBEN HAS DELIVERED EXCELLENT FINANCIAL OUTCOMES A PROMINENT GAS HUB FOR NIGERIA Gas Revenues Low operating costs US$156 million US$1.98/boe (Naira receipts) (Production opex) FY 2017: US$124 million *FY 2017: N/A Condensate Revenues** Capital Inve
Slide 13: Overview of Seplat's Gas Business
OVERVIEW OF SEPLAT’S GAS BUSINESS ONE OF NIGERIAS’S LARGEST BROWNFIELD GAS AND CONDENSATE DEVELOPMENT PROJECTS BACKGROUND GAS PLANTS CAPACITY AND CONTRACTED VOLUMES • The Oben field on OML 4 is the main NAG producing 600 field with additional gas production also at the Orogho 500 90 and Okporhuru fi
Slide 14: The Long Term Vision for Seplat's Gas Business
THE LONG TERM VISION FOR SEPLAT’S GAS BUSINESS ESTABLISHING AND GROWING CORE GAS HUBS WITH INTERCONNECTIVITY TO NIGERIA’S LARGEST DEMAND CENTRES OBEN HUB • Commissioning phase of the 459MW Azura-Edo IPP completed in Q3 2018. Deliveries now at the contracted level OMLs 4, 38, 41 of 116 MMscfd under t
Slide 15: ANOH
Growth ANOH Yetunde Taiwo - AGPC Managing Director 15 2019 CAPITAL MARKETS PRESENTATION Seplat Petroleum Development Company Plc | www. seplatpetroleum.com
Slide 16: What is ANOH and AGPC?
WHAT IS ANOH AND AGPC? ONE OF NIGERIA’S LARGEST ONSHORE GAS RESERVES WITH DUAL GAS PROCESSING FACILITIES SITUATED ABOVE IT ANOH AND AGPC • The Assa North / Ohaji South (ANOH) gas and condensate field straddles OML 53 (Seplat 40% WI and operator) and OML 21 (Shell JV) • ANOH is unitised 50:50 across
Slide 17: Upstream Development – Source of Feedstock
UPSTREAM DEVELOPMENT - SOURCE OF FEEDSTOCK LARGE SCALE GAS RESERVES IN THE EASTERN NIGER DELTA TO UNDERPIN INCREASED LONG TERM SUPPLY TO THE DOMESTIC MARKET UNITISED INTERESTS – UPSTREAM OML 53 Partners OML 53 interest ANOH upstream unit interest Seplat 40.0% 20.0% NNPC 60.0% 30.0% Total 100.0% 50.0
Slide 18: ANOH Gas Plant Development Overview
ANOH GAS PLANT DEVELOPMENT OVERVIEW LEVERAGING EXPERIENCE AND SUCCESS AT OBEN TO DELIVER A 300 MMSCFD GAS PROCESSING PLANT ANOH GAS PROCESSING PLANT AND ANCILLIARY FACILITIES SCOPE Gas processing plant location • 87 hectare plot, accommodating access roads, rights of ways, flowlines, gas plant, FLB,
Slide 19: Competitive Cost Structure
COMPETITIVE COST STRUCTURE LEAN TEAM AND OVERHEADS DELIVERING EXCEPTIONAL VALUE ACCRETIVE ASSETS IN A BURGEONING MARKET AGPC Costs US$ million Project % COST COMPARATOR AGPC Formation Costs 10 1% Operations Readiness 10 1% Average Project Management Team 40 6% Others ( Taxes , Financing , CSR etc) 7
Slide 20: Project Execution Schedule
PROJECT EXECUTION SCHEDULE SEPLAT HAS A PROVEN TRACK RECORD OF DELIVERING MIDTREAM GAS PROCESSING EXPANSION PROJECTS AT OBEN FIRST GAS TARGETED FOR Q1 2021 • Opportunity for Seplat to leverage repeatability gains from its experience of expanding gas processing capacity at the Oben hub • Oben Phase l
Slide 21: Commercial Structure
COMMERCIAL STRUCTURE UPSTREAM UNIT MIDSTREAM DOWNSTREAM OML 21 JV OML 53 JV NNPC 27.5% NNPC 30.0% NGC Shell 15.0% Seplat 20.0% 50% 50% Domestic Gas Regional Gas Total/Eni 7.5% 50% of upstream Shareholders wet gas production Wet gas purchased from upstream unit Condensate Export LPG sold COMMERCIAL A
Slide 22: Status of Agreements and Outlook
STATUS OF AGREEMENTS 1 2 3 4 5 6 STATUS UPSTREAM SHARE HOLDERS WET GAS SALES NGMC DRY GAS UNITISATION CONDENSATE AGREEMENT AGREEMENT MARKETING AGREEMENT OPERATING EXPORT (SHA) & SSA AGREEMENT Concluded Concluded and 90MMscfd for SHA concluded Concluded and Ongoing and executed NGMC executed negotiat
Slide 23: AGPC Commercial Highlights
AGPC COMMERCIAL HIGHLIGHTS BALANCING UPSTREAM AND DOWNSTREAM DYNAMICS TO MANAGE RISK AND CREATE VALUE FOR AGPC PROCESSED GAS SALES (DOWNSTREAM) DSO (50 MMscfd) US$2.5/Mscf 140 MMscfd already contracted US$3.0/Mscf NGMC (90 MMscfd) (inflated at OECD CPI) WET GAS SALES (UPSTREAM) Anticipated US$3.0/Ms
Slide 24: Interface with Local Communities
INTERFACE WITH LOCAL COMMUNITIES KEY TO ENSURING MINIMUM DOWNTIME ON FACILITIES AND INSTALLATIONS IN THE NIGER DELTA ADOPTING THE “SEPLAT MODEL” COMMUNITY STRATEGY IN PRACTICE • Seplat is already operational in OML 53 and has a good • Worked with all stakeholders to ensure relationship with the loca
Slide 25: Finance
Growth FINANCE Roger Brown - Chief Finance Officer 25 2019 CAPITAL MARKETS PRESENTATION Seplat Petroleum Development Company Plc | www. seplatpetroleum.com
Slide 26: AGPC – Funding Structure
AGPC – FUNDING STRUCTURE SIMPLE STRUCTURE DRAWING ON SEPLAT BRAND AND PARTNERS TO COVER $700m RAISE FINDING STRUCTURE PROPOSED FINANCE STRUCTURE • AGPC a Special Purpose Company (SPC) formed to raise US$ 420million of Equity to de-risk the project Seplat Plc NGC • Equity investors Seplat and NGC gra
Slide 27: AGPC – Milestones and Funding
AGPC – MILESTONES AND FUNDING INTEGRATING PROJECT EXECUTION AND FUNDING PLAN THAT BALANCES UNDERLYING RISK WITH INVESTOR APPETITE FUNDING & CONTRACT EXECUTION • Contracts to contain milestones that permit demobilisation of works with minimal cost exposure and nominal cancellation charges prior to Ph
Slide 28: Debt Market Liquidity
DEBT MARKET LIQUIDITY ACHIEVABLE FUNDING TIMELINE WITH FLEXIBILITY MARKET LIQUIDITY & INDICATIVE PRICING Type of Funding USD Price Amount Available US$m Local Banks 6.00-9.00% 500+ International Banks 4.50-6.00% 200+ Vendor/Export Finance 90 Total Sources of Debt 790+ *Cost of Funding in line with i
Slide 29: Syndication Timeline
SYNDICATION TIMELINE CONSERVATIVE STRUCTURE EXPECTED TO GENERATE A COMPETITIVE ENVIRONMENT May June July August 1 IJV Partners Fund complete Oct-19 2 AGPC FID Mar-19 3 Construction Packages 1 and 2 Awarded Jun-19 4 Independent Due Diligence Commences Jul-19 5 Lenders Pack Issued Jul-19 6 Lenders Let
Slide 30: AGPC Projected Results
AGPC PROJECTED RESULTS GUIDANCE FOR AGPC AT FIRST GAS MID TERM FIVE YEARS AND LATE TERM TEN YEARS FCFE CFADS EBITDA First Gas: US$ 76 million First Gas: US$ 21 million p.a First Gas: US$ 207 million p.a. Mid: US$ 174 million Mid: US$ 107 million p.a. Mid: FY US$US$199 2017: 225 million p.a. million
Slide 31: Summary
SUMMARY Austin Avuru - Chief Executive Officer 31 2019 CAPITAL MARKETS PRESENTATION Seplat Petroleum Development Company Plc | www. seplatpetroleum.com
Slide 32: Concluding Remarks
CONCLUDING REMARKS SEPLAT GAS BUSINESS SHALL CONTINUE TO BREAK GROUND ACHIEVING OPERATIONAL AND FINANCIAL SUCCESS MARKET ACCESS OPPORTUNITY Market prices Seplat’s access to Conventional diesel remain strong, gas infrastructure off-grid power long term outlook positions it to be generation is expecte
Slide 33: Cementing Seplat's Leading Domestic Market Position
CEMENTING SEPLAT’S LEADING DOMESTIC MARKET POSITION THE EXISTING GAS BUSINESS AND FUTURE GROWTH FROM ANOH CAN START TO TRANSFORM NIGERIA’S ENERGY MIX PROCESSING CAPACITY DEDICATED TO THE DOMESTIC MARKET 2018 DOMESTIC GAS SUPPLY 900 700 800 600 700 Pro forma impact of ANOH Phase I 500 600 Pro forma i
Slide 34: Question & Answers
QUESTION & ANSWERS 34 2019 CAPITAL MARKETS PRESENTATION Seplat Petroleum Development Company Plc | www. seplatpetroleum.com
Slide 35: Head Office / London Office
Head Office Seplat Petroleum Development Company Plc Address: 25A, Lugard Avenue, Ikoyi, Lagos, Nigeria. Phone: +234 (0)1 277 0400 Email: info@seplatpetroleum.com ir@seplatpetroleum.com Web: www.seplatpetroleum.com London Office Seplat Petroleum Development Company Plc Address: 4th Floor, 50 Pall Ma
Seplat Petroleum Development Company — Investor Day (July 2019) on 6ix