Australis Oil & Gas Ltd. · ASX:ATS
Australis Oil & Gas — Investor Presentation (February 2019)
44 slides from Australis Oil & Gas's investor presentation, Feb 15, 2019
Slide 1: Early results from initial drilling program validate value of large undeveloped oil position
Early results from initial drilling program validate value of large undeveloped oil position Equity Raising Presentation 15 February 2019 ASX: ATS
Slide 2: Important Notice and Disclaimer
Important Notice and Disclaimer This presentation has been prepared by Australis Oil & Gas Limited ACN 609 262 937 (ASX: ATS) (Australis). Summary of information: This presentation contains general and background information about Australis' activities current as at the date of the presentation and
Slide 3: Transaction Overview
Transaction Overview Executive Summary Tuscaloosa Marine Shale (TMS) Portugal Appendix
Slide 4: Equity Raising Overview & Timetable
Equity Raising Overview & Timetable Australis is considering an equity raising of up to approx. US$21.6 million (A$30.5 million) through a private placement to existing and new investors ▪ Australis is seeking to place new equity to raise up to approximately Indicative Financing Timetable US$21.6 mi
Slide 5: Australis Indicative Capital Structure
Australis Indicative Capital Structure Indicative capital structure assuming US$21.6m raised via equity placement Shares Options Ownership % Shares and Options (millions) (millions)(A) Pre options Post Options On Issue: - Directors & Management 101.5 87.9(B) 10.3% 17.0% - Existing Shareholders 794.5
Slide 6: Executive Summary
Transaction Overview Executive Summary Tuscaloosa Marine Shale (TMS) Portugal Appendix
Slide 7: Investment Highlights
Investment Highlights Large undeveloped TMS oil position with proven economics and multiple near term upside catalysts ▪ Asset is focused in production delineated core of the TMS Operator of Quality ▪ First well in Australis drilling program under budget and materially outperforming type curve Asset
Slide 8: Corporate Overview
Corporate Overview Existing reserves, production and revenue with an institutionally supported register ▪ Founded in 2014 with significant capital contribution by the founders & key management of Aurora Oil & Gas, Capital Structure (Feb 2019)(A) listed on the ASX in July 2016 (ASX:ATS). Ordinary Sha
Slide 9: Australis TMS Land Position
Australis TMS Land Position During 2018 Australis has increased and extended the life of its ‘core’ land position Australis TMS Position Australis TMS Map Land Position Jan 19 Jan 18 HBP (acres) 31,400 27,600 Total Core Area (net acres only 110,000 95,000 within core area) Future Net Well 410 350 Lo
Slide 10: Initial Drilling Program – Objectives & Results
Initial Drilling Program – Objectives & Results Initial well program seeks to demonstrate value proposition by repeating historical well performance at updated cost base. TMS Type Curve Wells ▪ Key objectives of TMS Drilling Program: ✓ Repeat historical well performance at updated cost base ✓ Demons
Slide 11: Initial Drilling Program Results – Stewart 30H-1
Initial Drilling Program Results – Stewart 30H-1 Australis’ first new well materially outperforming the TMS Type Curve Cumulative Oil Production: Stewart 30H-1 v TMS Type Curve ▪ Commenced oil production on 30 December 2018 40,000 Stewart 30H-1: ▪ Stewart 30H-1 IP30 average is 35,000 35,302 bbls Cum
Slide 12: Initial Drilling Program – Status – Early February
Initial Drilling Program – Status – Early February All drilling and completion operations have been executed without any reportable safety or environmental incidents Drilling Operations Summary Running Casing on Stewart 30H-1 Well Status ▪ Lateral length drilled of 6,900ft, completed 20 stages - $10
Slide 13: Initial Drilling Program – Costs and Schedule
Initial Drilling Program – Costs and Schedule Extensive planning delivering on-time and on-budget program ▪ The drilling and completion timetable is ahead of schedule and costs are currently under budget - Well D, C & T cost for Stewart 30H-1 is US$10.3 million - Bergold 29H-2 well D, C & T cost ant
Slide 14: Pathway to Value
Pathway to Value TMS Core acreage has multiple catalysts to realise and increase value Value Catalysts Single Well Economics - Pre-tax NPV10 (US$ in millions) ▪ Type curves conservatively based on $3.4 $14.1 Well historical average well productivity Performance ▪ Technology improvements over last 4
Slide 15: Significant Underlying Value
Significant Underlying Value Australis continues to add oil inventory on a highly accretive basis ▪ Australis’ business strategy to accumulate Evolution of Oil Reserves and Resources(1) ‘oil in the ground’ reflected in our substantial reserves and resources 197 MMbbl 200 growth since IPO ▪ Considere
Slide 16: Tuscaloosa Marine Shale (TMS)
Transaction Overview Executive Summary Tuscaloosa Marine Shale (TMS) Portugal Appendix
Slide 17: What is the TMS?
What is the TMS? The TMS is an emerging shale play: its ‘core’ is comparable with other prolific unconventional plays in the US TMS Location ▪ Onshore basin - Louisiana and Mississippi. ▪ On trend with Eagle Ford Basin in Texas, similar depositional history and age. ▪ 80 horizontal wells were drille
Slide 18: Australis TMS Well Performance
Australis TMS Well Performance The 15 wells drilled in 2014/15 within Australis’ core acreage demonstrate significantly higher average productivity than the average of other TMS wells drilled in Mississippi Individual 24 Month Cumulative Production Per Well – TMS Mississippi4,5 Australis TMS 15 Well
Slide 19: TMS Core Type Curve
TMS Core Type Curve ATS type curve is history matched to production from the most recent 15 Mississippi ATS wells Total oil production per well initial, 24 months (mbbls) Production profiles (see appendix for full data set and analysis) 40,000 Produced oil volume (bbls) Lawson 25-13HA) 318 Stewart 3
Slide 20: TMS Oil Productivity Compared to Permian
TMS Oil Productivity Compared to Permian The average production from Australis’ TMS wells drilled in 2014 are significantly higher than Permian wells drilled in the same year. Industry improvements since 2014 have yet to be applied to the TMS Midland Basin Delaware Basin 200 200 Cumulative oil produ
Slide 21: Capital Cost Profile of Early TMS Wells
Capital Cost Profile of Early TMS Wells TMS well costs trending downwards over time in line with other plays ▪ The first well drilled and completed by Australis (Stewart 30H-1) cost US$1,503 /ft which is the lowest cost per foot well drilled in the TMS to date ▪ Other play participants have quoted U
Slide 22: Well Cost Overview
Well Cost Overview The major US shale plays have seen significant cost declines, and initial costs from Australis’ current well program indicate this will be replicated in the TMS Comparable Plays Well Cost Trends10 ▪ TMS Drilling costs incurred prior to 2015 were already following the same trend as
Slide 23: Austin Chalk Trend
Austin Chalk Trend Following recent EOG well results, there is significant activity in the South West targeting Austin Chalk Austin Chalk Trend ▪ EOG drilled the Eagles Ranch 14H-1 well during Q3 2017 ‐ Public data indicates liquids rich production ‐ Well performance on par with Australis TMS type c
Slide 24: Portugal
Transaction Overview Executive Summary Tuscaloosa Marine Shale (TMS) Portugal Appendix
Slide 25: Portugal Concessions Overview
Portugal Concessions Overview Australis owns two concessions onshore Portugal with significant development potential Asset Highlights Asset Location Significant Gas ▪ Large in-place discovered and tested gas Resource accumulation with 2C resources of 458 Bcf2 ▪ Limited exploration activity but regul
Slide 26: Portugal Prospectivity & Volumetrics
Portugal Prospectivity & Volumetrics Appraisal of a gas discovery with multiple nearby prospects and leads with a significant resource base Proposed Work Program Batalha Gas Discovery Batalha Concession Prospects ▪ Drill and test the gas discovery with a vertical well ▪ Drill and core a deep Lamede
Slide 27: Portugal Concessions Status
Portugal Concessions Status Australis is working with Portuguese Authorities to achieve the necessary regulatory approvals to commence exploration and appraisal activity Work Program to Date ▪ Australis has completed a number of detailed subsurface engineering studies to review historical data and e
Slide 28: Appendix
Transaction Overview Executive Summary Tuscaloosa Marine Shale (TMS) Portugal Appendix
Slide 29: Directors & Management
Directors & Management Demonstrated track record in oil & gas John Stewart Ian Lusted Darren Wasylucha Non-Executive Chairman Managing Director & CEO Chief Corporate Officer ▪ >25 years in the upstream oil and gas industry ▪ >25years in the upstream oil & gas industry ▪ Former Executive VP Corporate
Slide 30: TMS Core Type Curve
TMS Core Type Curve Summary of monthly oil production data for the most recent 15 Encana drilled, ATS operated modern offset Mississippi wells Lewis 7- Pintard Lyons Pintard Longleaf Longleaf Mathis Mathis Lawson Ash 13H Sabine Sabine McIntosh Reese Stewart Well Name Ash 13H 2 Average Cumulative 18H
Slide 31: Single Well TMS Core Type Curve
Single Well TMS Core Type Curve ATS type curve is history matched to production from the most recent 15 Mississippi wells (drilled by ECA, operated by ATS) TMS Core TC – Assumptions TMS Core Type Curve v TMS Production 250,000 ▪ Oil EUR – 610 Mbbls ▪ Gas EUR – 159 MMscf 200,000 ▪ NGL EUR – 20 Mbbls
Slide 32: TMS Value Potential
TMS Value Potential 410 future net well locations with strong economics Single Well Economics and Sensitivities – Pre-tax NPV10 (US$ in millions) $11 million/well $10 million/well $9 million/well $14.1 $13.2 $12.2 $4.0 $4.0 $10.7 $4.0 $9.7 $8.8 $3.5 $3.5 $7.2 $3.5 $6.3 $5.3 $2.9 $2.9 $10.1 $9.1 $3.0
Slide 33: Single Well Economics – IRR Sensitivities
Single Well Economics – IRR Sensitivities 410 future wells with attractive return profile Single Well Economics and Sensitivities – Pre-tax IRR D, C & T $11 MM/well D, C & T $10 MM/well D, C & T $9 MM/well 113% 89% 79% 71% 62% 73% 49% 51% 57% 40% 51% 46% 31% 39% 31% 32% 24% 19% $50 $60 $70 $50 $60 $
Slide 34: TMS Base Case Economics – Key Assumptions
TMS Base Case Economics – Key Assumptions The production and opex assumptions are based on history and the capex costs are current third party service providers’ estimates Base Case Assumptions* Production Forecast EUR (30 Years) 30,000 700,000 Gas 0.16 Bcf Oil/Condensate 610 Mbbl 25,000 600,000 Pro
Slide 35: Reserves and Resource Update
Reserves and Resource Update Australis continues to grow reserves and resources ▪ As an ASX participant Australis reports to the TMS Reserves & Resource Estimates1 SPE PRMS which requires any undeveloped Net Oil reserves, that are to be assessed for reserves 2018 Ryder Scott Reserves Estimate (MMbbl
Slide 36: Financial & Operational Summary
Financial & Operational Summary Field Cashflow financing overhead and land capex program in 2018 Key Financial Metrics - 2018 Sales Volumes (WI – before royalties) 506,000 bbls Realised Price US$68.80 Sales Revenue US$35 million Field Netback US$16 million Cash as at 31 December 2018 US$38 million P
Slide 37: TMS Crude Oil Price
TMS Crude Oil Price The premium pricing of LLS to other onshore US crude benchmarks is becoming increasingly more attractive Crude Oil Spot Price, Daily Settlement, US$/bbl ▪ Because of the proximity of Australis’ wells to the St. James Oil Terminal in Louisiana and the high quality of the crude pro
Slide 38: Option Terms Summary
Option Terms Summary Cash payable on Grant dates Exercise Price (A$) Vesting Expiry Number exercise (A$) Directors, Executives & Management 13 Nov 2015 $0.25 Vested 31 Dec 2020 19,500,000 $4,875,000 13 Nov 2015 $0.30 (Series A) Vested 31 Dec 2020 27,600,000 $8,280,000 28 Apr 2016 $0.30 (Series B) Ve
Slide 39: Footnotes
Footnotes 1. All estimates and risk factors taken from Ryder Scott, report prepared as at 31 December 2018 and generated for the Australis concessions to SPE standards. See ASX announcement released on 6 February 2019 titled “Reserves and Resources Update Year End 2018”. The analysis was based on a
Slide 40: Glossary
Glossary Unit Measure Unit Measure B Prefix - Billions bbl Barrel of oil MM or mm Prefix - Millions boe Barrel of oil equivalent (1bbl = 6 mscf) M or m Prefix - Thousands scf Standard cubic foot of gas /d Suffix - per day Bcf Billion standard cubic foot of gas Abbreviation Description TMS Core The A
Slide 41: Risk Factors
Risk Factors Investing in the placement involves inherent risks. Prospective investors should carefully consider, among other things, the risk factors set out below before making an investment decision. The list of risk factors is not exhaustive and there may be other risks relevant to Australis whi
Slide 42: International Offer Restrictions
International Offer Restrictions This document does not constitute an offer of new ordinary shares ("New Shares") of Statutory rights of action for damages and rescission Australis in any jurisdiction in which it would be unlawful. In particular, this document may not be distributed to any person, a
Slide 43: International Offer Restrictions
International Offer Restrictions United Kingdom Certain Canadian income tax considerations: Prospective purchasers of the New Shares Neither this document nor any other document relating to the offer has been delivered should consult their own tax adviser with respect to any taxes payable in connect
Slide 44: International Offer Restrictions
International Offer Restrictions Hong Kong Singapore WARNING: This document has not been, and will not be, registered as a prospectus This document and any other materials relating to the New Shares have not been, and under the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32)
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