Egdon Resources — H1 2015 Earnings Presentation
26 slides from Egdon Resources's earnings presentation, Apr 21, 2015
Slide 1: Egdon Resources plc Interim Results for the six months ended 31 January 2015
Egdon Resources plc Interim Results for the six months ended 31 January 2015 & Business Review Slide 1 Interim Results April 2015
Slide 2: Egdon at a Glance
Egdon at a Glance AIM Listed (EDR) Formed 1997 Established oil & gas exploration & production company Onshore UK focus Existing UK production and cash flow Substantial unused tax shield of £32.9m 34 Licences in the UK and France Strong opportunity base for growth Participant in 14th Round Value Driv
Slide 3: Egdon at a Glance
Egdon at a Glance Slide 3 Interim Results April 2015
Slide 4: Highlights – Six months ended 31 January 2015
Highlights – Six months ended 31 January 2015 • Production of 27,232 barrels of oil equivalent (“boe”) equating to 148 barrels of oil equivalent per day (“boepd”) (H1 2014: 35,773 boe; 194 boepd) • Revised full year production guidance of 180 boepd • Successful drilling and testing of the Wressle-1
Slide 5: Financial Highlights - Six months ended 31 January 2015
Financial Highlights - Six months ended 31 January 2015 • Oil and gas revenues during the period £0.91 million (H1 2014: £ 1.41 million) • Loss for the period of £1.74 million including losses on disposals/farm-outs and impairments in relation to Waddock Cross, Burton on the Wolds and Kiln Lane (H1
Slide 6: Egdon's Strategy
Egdon’s Strategy Egdon’s Strategy: “To create shareholder value by building a material asset base through carried unconventional exploration and significant near term conventional exploration onshore UK ” Three key near-term strategic objectives to drive shareholder value: • UK Unconventional Resour
Slide 7: Value Drivers – UK Unconventional Resources – Strategy and Assets
Value Drivers – UK Unconventional Resources – Strategy and Assets • Edgon is focused on brittle high TOC Carboniferous marine shale plays that have sourced oil and gas in Northern England • Independently assessed mean undiscovered gas initially in place (“GIIP”) of approximately 28 trillion cubic fe
Slide 8: Value Drivers – UK Unconventional Resources – Deal Value $/acre
Value Drivers – UK Unconventional Resources- Deal Value $/acre (non N. America) / Argentina / Deal $423/acre Neuquen Example US Deal High $648/acre Sasol/Talisman / $38,000/acre $938/acre Australia Cooper Note LOG SCALE $/acre Gainsborough / farm-in/optin Deal $2,977/acre Deals $2,067/acre IMPLIES L
Slide 9: Value Drivers – UK Unconventional Resources - Sector Outlook
Value Drivers – UK Unconventional Resources - Sector Outlook 14th Round focus • Infrastructure Act 2015 removes considerable regulatory uncertainty regarding horizontal drilling and enhances an already strong and workable regulatory regime • 14th Round awards likely post UK general election • Egdon
Slide 10: Value Drivers - UK Exploration – Wressle discovery
Value Drivers - UK Exploration – Wressle discovery Wressle Field PEDL180 : Egdon 25% operated • Oil and Gas discovery drilling completed September 2014 • Extensive testing with work-over rig January-March 2015 • Penistone Flags – two zones tested • Shallower “Gas” zone - Equipment constrained 1.7mmc
Slide 11: Laughton Prospect PEDL209
Value Drivers - UK Exploration - Northern England Laughton Prospect PEDL209 : Egdon 60% operated • Laughton Prospect on trend with nearby existing production at Corringham (5 km to SE) • Multiple conventional reservoir targets • Net Egdon Best Estimate Prospective Resources of 0.6 mmbo • Site constr
Slide 12: Value Drivers - UK Exploration - Northern England
Value Drivers - UK Exploration - Northern England North Kelsey Prospect PEDL241 : Egdon 40% operated • Conventional prospect defined on 3D seismic data with multiple reservoir targets • Farmed-out 10% interest (2:1 promote) to Union Jack Oil Plc • Net Egdon Best Estimate Prospective Resources of 2.4
Slide 13: UK Appraisal - Northern England
UK Appraisal - Northern England “A” Prospect P.1929 (41/18 & 41/19) : Egdon 100% operated • 26th UK Seaward Licensing Round award in April 2013 • One of the earliest North Sea discoveries drilled by Total in 1966 • Tested gas at 2.5 mmcfg/d • Net Egdon Best Estimate Prospective Resources of 150 bcfg
Slide 14: Robust Break Even Economics for Active 2015 drilling programme
Robust Break Even Economics for Active 2015 drilling programme • Robust break even economics* for Active 2015 conventional resources drilling programme • Compared to Rystad Energy analysis of break even economics of a variety of major worldwide projects *EDR Estimates Slide 14 Interim Results April
Slide 15: Value Drivers - UK Production
Value Drivers - UK Production • Revised full year production guidance of c. 180 boepd Keddington Oil Field PEDL005 (remainder) : Egdon 75% operated • Gross production of c. 35-40 bopd • Additional development wells being planned possibly as early as Q3 2015 Ceres Gas Field P.1241 : Egdon 10% non-ope
Slide 16: Egdon Outlook – Timeline/Resources
Egdon Outlook – Timeline/Resources Conventional oil Conventional gas Source: Egdon and external estimates *Post targeted farm down **Subject to planning appeal Bubble size is relative to Gross resources Slide 16 Interim Results April 2015
Slide 17: Outlook
Outlook Production • Revised full year production guidance of c.180 boepd • Lower oil prices will reduce revenues, although bias is to gas production (60:40 gas:oil) • Additional production wells under consideration (e.g. Keddington) UK Unconventional Resources • UK unconventional resources are expe
Slide 18: Summary
Summary • UK unconventional resources are a key near term value driver for the business with, of listed companies, Egdon holding the second largest portfolio of acreage with unconventional resource potential and partnered with IGas and Total in key play with initial carried well anticipated in 2015-
Slide 19: Appendices
Appendices Photograph showing Egdon Field Trip to Edale Shales (black shales in foreground) of the Upper Bowland-Hodder Group at outcrop in North Derbyshire beneath the Mam Tor beds Slide 19 Interim Results April 2015
Slide 20: Egdon Resources plc - Timeline
Egdon Resources plc - Timeline Summary timeline: 1997 : Egdon formed by Andrew Hindle and Mark Abbott 1998 : First licence awarded in Wessex Basin 1999 : First French licence awarded 2000 : Listed on OFEX market and raised first equity 2000 : First licence awarded as operator 2003 : Drilled first ex
Slide 21: Key Shareholdings
Key Shareholdings • The issued share capital of Egdon Resources plc consists of 221,345,811 ordinary shares of 1 pence each with voting rights • Shareholdings in the Company of >3% as advised at 18th March 2015 are: Shareholder % Alkane Energy UK 18.07 Premier Oil plc 17.71 Hargreave Hale & Co 13.43
Slide 22: Egdon Board
Egdon Board 3 Walter Roberts (Non-Executive Director) Walter is an oil and gas lawyer with an engineering background. He qualified as a solicitor with Simmons & Simmons before joining Phillips Petroleum in 1980. In 1986 he set up the legal department for Lasmo in Australia and later became the princ
Slide 23: Advisors
Advisors Nominated Advisor and Broker: Cantor Fitzgerald Europe Limited Joint Broker: VSA Capital Limited Corporate Advisors: Evercore Financial Public Relations: Buchanan Reporting Accountants and Advisors: Nexia Smith & Williamson Solicitors: Norton Rose Fullbright Registrars: Capita IRG plc Banke
Slide 24: UK Shale-Gas Deal Timeline – An Active Period
UK Shale-Gas Deal Timeline – An Active Period Major new entrants pay high premiums…………. ….Even with lower oil and gas prices / / / / $423/acre 2 deals $2,977/acre $648/acre $1,707-2,615/acre Aug 2010 PRE May 2013 2013 2014 2015 May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct
Slide 25: The Weald Basin – PEDL143 and UKOG Jurassic Hybrid play
The Weald Basin – PEDL143 and UKOG Jurassic Hybrid play Announced April 2015 a Jurassic Hybrid play, in licences immediately east of PEDL143 in the Weald Basin with reported oil in place of 158 million barrels per square mile UKOG believe pay thickness and natural fractures will allow successful pro
Slide 26: Disclaimer
Disclaimer This document comprises the written materials/slides for a presentation (together with any accompanying information communicated verbally (including any questions and answers session and any material distributed with it), the Presentation) by Egdon Resources plc (the Company). This Presen