Seascape Energy Asia (LSE:SEA) — Post AGM Presentation

0:00 Good morning, and welcome to the SEASCAPE ENERGY ASIA PLC post AGM presentation. Throughout the quarter presentation, attendees will be in listen only mode. Questions are encouraged, and they can be submitted at any time by the q and a tab situated in the right corner of your screen. Just simply type in your questions and press send. I'd now like to hand you over to the executive chairman, James Fences. Good morning, sir. Thank you very much, and good morning, everyone. Welcome to our post AGM presentation.

0:27 We're gonna do a brief presentation this morning because I know we've just recently given you quite a fulsome presentation and q and a on on our recent tomorrow's signing. So what we thought we'd do today is really just hit the highlights of the portfolio and just be available for questions. So Nick, myself, and and Pierre are obviously on hand to to answer any questions you have. But before that, I'll let Nick talk you through the portfolio, where we are at with it, and what's going on.

1:03 Great. Thank you, James. Let me just turn the microphone, make sure everyone can hear me. Good morning, everyone. Thank you for joining. We think these are important to do on a regular basis. We've just had our AGM. We're pleased to say that all resolutions were were passed by a very wide margin. So that's fantastic. And we just thought we'd give everyone a chance to ask us a few more questions, you know, in the follow-up from our meeting last week, and certainly just kind of a quick run through the portfolio as it stands today. So those of you who followed the story, you know, the last year has been, really transformational for the business. And and during the past twenty eight months, we've been awarded three, PSCs, all of which are in Malaysia, giving us a really material, position there now.

1:48 So, the one we talked about last week was the the tomorrow's cluster, which has discovered resources with significant exploration upside around about 250 BCF, we believe, between two fields in Peninsula Malaysia, where we are the 100% owner and and operator there, and we'll be progressing in the weeks and months to come. Our original block, Block 2 A, which has the Kerthing prospect on it, which is a super high impact exploration, block with a nine TCF giant. We'll come on to that in a little while, but we believe it's one of the largest undrilled structures in Malaysia, that we farmed out at the back end of last year, to impacts for a full carry. And then the Daiwa Cluster, which is a shallow water set of gas fields, which, were discovered quite some time ago and are now subject to a development being led by EnQuest.

2:40 So this gives us a a great starting point from which to sort of relaunch the business, with a significant amount of resources of both, I guess, firm value, which we'll kinda come on and talk about, as well as blue sky, upside. You know, just a a quick slide. We've we've done this slide in the past, but I love to sort of bring this up once in a while, especially when I've gotten back from a long trip in Asia because it just helps kind of, get across what an exciting place Asia is to be. You know, you have huge amount of energy demand forecast, out into the twenty thirties, which is really being driven by, you know, quite a low a young population aspirational. We've talked about this in the past, you know, people wanting, good services, and growth.

3:28 And indeed, that's reflected in in the sort of per capita GDP, which is still, you know, just a tiny fraction, of what we have here in Europe and indeed The US. And so, you know, helping fuel that growth is really something that we're focused in on. And the gas that we will be, producing will be going directly into grids to to fire power generation, both in Malaysia and abroad through through LNG. So so that's kinda really exciting to be part of that and that energy, and that growth that we're seeing in Southeast Asia. You know, talking in terms of our our sort of resources, we wanted to try and put into context what has happened over the past year, especially with, gaining the, TMR's PSC last week in terms of just our sort of listed peer group in this in Southeast Asia. And you can see there we're right in the middle with, you know, something close to 60,000,000 barrels of oil equivalent of resources, which we will be having a CPR done for at the moment and hope to have the results of that at some point this summer. But it just helps contextualize, you know, just how far we've come, what a significant player SEASCAPE is is on the course to be in Southeast Asia.

4:46 And indeed, you know, we will be looking to move those two c resources into two p reserves, you know, as we go through the development, cycle, with our two development assets. And certainly, we don't have our perspective resources on there. Not everybody renounces those. But but certainly, if you were to include those, then we'd be right at the top end there in terms of potential for this business. Yet the market cap remains, you know, a a fraction of some of our peers. And so, you know, the hope is that that as the market begins to recognize with the value that we've created and the value we are going to be creating that that will start to correct itself, and we will see the market cap going up quite significantly to reflect the resources that that we've got. In terms of just a a quick reminder around the asset base, tomorrow's, this was the PSC that we were awarded last week in KL with a at a fantastic ceremony as part of the the wonderful ENERGY ASIA conference attended by sort of CEOs of all the major companies. So it's a very exciting place to be, and Petchnow's hosting a, you know, a huge amount of thought and and discussion around the energy space, especially in Asia.

5:58 So tomorrow's, you have the Tempekau and the Mengkwang fields. They're originally drilled by Lundin in about a decade ago, and they were relinquished really because of the geographic priorities of of IPC, who's now focused on on heavy oil in Canada. As with DEWAL beforehand, we have this great dataset which came for free with the award, which is really one of the differentiating factors we see in Malaysia, which is this access to data, which allows us to do, you know, significant amount of work when we're deciding whether or not to go into something and and, you know, how hard to push. So we've got full three d seismic. We've got drill stem tests. We've got a huge amount of core. We've got DSTs up to 60,000,000 scuffs a day. And and the gas here is is very, very dry, very low impurities, which will make it very easy to develop. And that's one thing we really like about TIMARIS is that this would be a great initial development for SEASCAPE and the team that we're building out in in KL.

6:57 Shallow water, it's near infrastructure. So this should be a really low cost development with minimal unmanned facilities and quite a significant, production plateau, of a 100,000,000 scuffs a day, which is equivalent to about 17,000 barrels of oil equivalent a day. So that's it's a huge amount, of production that we'll be looking to put on stream in the next few years. And so we've got our heads down now. We're building out the team. Pierre is is is very hard at work, putting together the development team there in KL, which is gonna take this exciting development forward. It's not just the discovered resource that we're excited about in tomorrow's when we first started talking about this several months ago internally. The thing we're really, really excited about was just how much exploration acreage so how much exploration prospectivity there is on our acreage.

7:44 So the difference between, I believe, when when IPC held the acreage and and now us is that we have a much larger PSC. So that entire box there, over a thousand square kilometers, is the PSC, which allows us to chase this additional gas upside, which we see on the block, which could make it quite a significant hub, for gas production in Peninsula Malaysia. Peninsula Malaysia is now very short gas. They're importing, LNG into Peninsula Malaysia. So that's that's LNG that they're not selling on the international markets. And there's a huge demand for this gas, and we're looking to help fill that. Pierre, hopefully, will talk a little bit in some of the q and a about a conference he was just at on the East Coast talking about the the importance of of this gas into Peninsula and Malaysia.

8:33 And so we're hoping that we'll be able to chase a lot of this exploration upside as part of the overall sort of development campaign. And we're hoping to put a little bit more depth around the size of that perspective resource, which we're going to include in the upcoming CPR, which we published this summer.

8:53 Dewa, this was our first gas cluster that we picked up. This is in Sarawak now, so we're now in Eastern Malaysia. This is a series of of a dozen fields that were discovered in the sort of eighties and then in the two thousands. Really, the the the companies who were exploring at the time were looking for oil. So when they found gas, they they they sort of discarded and and and walked away. And and their losses are gain. You've got, the Bintulu LNG plant that's just there onshore, one of the largest, LNG facilities in the world. It is hungry for gas. It gets exported mainly, up to Japan. There's, six fields that we've high graded initially, which we believe are gonna have between three hundred and four hundred BCF recoverable. Again, a production plateau of around a 100,000,000 scuffs a day, possibly even higher.

9:42 Shallow water near infrastructure, kind of all of these ticks has been fantastic. EnQuest has been doing a great job with the subsurface models, moving that forward, and now looking at where the preferred development route is. Like I said, there's quite a bit of infrastructure right nearby, and it's gonna be a process of nailing that down, and moving that into development. Block two a, this was our initial, PSC in, Malaysia. So this is our our our the the where we initially planted our flag. We've got 10 a percent stake, which is fully carried on an uncapped basis through the whole exploration program, which is an exploration well plus a a contingent appraisal well.

10:29 This is a giant block, 12,000 square kilometers, and by far the largest prospect on it is Keratang. We've tried to give an idea of just how large it is. For those of you in The UK, putting it over a map of London, showing the Big Ring Road around London, the M 25. So this is a 220 square kilometer closure prospect, which we believe is the largest undrilled structure in Malaysia, could contain, you know, 90 CF even more on an upside basis. And impacts who took over as operator a little bit earlier this year after the farm in, has has really done a great job moving this forward towards a a firm well commitment over the next couple of months. Impacts themselves have become a real, significant operator in Malaysia, especially in Sarawak, over the past couple of years, entering at the same time that we did.

11:19 And they've got a multi well deepwater drilling campaign really looking for gas to fill up that into LNG for export. So we're really excited about that. A huge, huge upside at absolutely no cost to us. So it's one that we're watching very closely. We're hoping to have more clarity in terms of the timing on drilling as we get towards the back end of the summer and and into the sort of, later part of this year, as MPEX looks to put together that whole drilling campaign, across Sarawak.

11:51 I wanna do a quick update on the slide, I believe, we showed, around the time of the farm out, which is really trying to get, you know, in into people's heads, you know, just how much value we've created, at such a minimal cost, so far, post pivot to Southeast Asia and and really Malaysia in in particular. So we've got our cash balances, the value of the carry, so that see through value that we did, previously.

12:17 But, you know, you can see with with Dewa and tomorrow is now, which are are firm value. These are discovered resources, which we'll have a CPR for shortly, you know, being attributed almost no value in the share price or or indeed heavily risked. And so actually from a firm basis, on an unrisked basis, we've got sort of over £3 of value, we believe. If you use recent precedent transaction in SEASCAPE, where Total bought a business called Super OMV for about $4 a barrel of oil equivalent.

12:48 This is a very analogous business to what we have that was sort of a little bit of production, but, you know, mainly gas developments. And then if you start adding in the Keratang upside, you know, you can get to numbers 20 times our current share price. So there is a long way to go with this one. And, you know, we're pleased to see our brokers, Stifel and Cavendish, you know, pushing up their their target prices on the back, of the tomorrow's award.

13:12 And, we're really excited of all the sort of things to come. So, you know, we we sort of described this, I think, a little bit as a sort of asymmetric risk here where you've got, quite a bit of firm value back in the share price and then a huge amount of upside. In terms of our our near term, catalyst, I know that's what everyone is focused in on as are we. As mentioned, the block two a well commitment, should be coming in the third quarter, after which, impacts will be going to secure a rig. So hopefully, that will that news will start to come out during the second half of the year. The thing we're most focused in on the moment is, the independent CPR, of which we've commissioned sprule ERCE, to put together to help put some definition for the market at large as to the size of tomorrow's and day one, and indeed, of the upside we see associated with those.

14:04 So so the hope is that that will be out in in the next month or so, which will publish and and perhaps to a short, investor made company as before things start to sort of wind down a little bit for the summer here in in the London markets. So it's something to keep your eye out for. You know, stuff we don't have on here, we got the seismic reprocessing that's been kicked off already, which is gonna help define that upside on tomorrow's. And and indeed, we've been, now hiring significantly in, in KL, putting on some of those key positions to move the tomorrow's PSC forward through to the development phase. We're really looking to get after that quickly. It's a it's a huge resource. It's very valuable, and we really want to, move that down, up the development curve quite quickly.

14:50 So just in summary before we go to q and a, you know, we think very strongly we've have this proven ability to deliver. We've shown that we can amass material high quality portfolio, and I think the high quality bit is is something we're incredibly proud of. These are really high quality assets, and we put them together with with very, very little capital, which is something that that has taken a huge amount of hard work from from, you know, a small group of individuals, who've really been pushing this business. And now we're in this position where we've got, production potential, over 20,000 barrels of oil equivalent net to us within the next three years. You know, that's not far off, what we see Valeura producing today. You know? And that business is is probably ten ten times our size. So that's, you know, something really exciting we've got coming up. And we've also taken this next crucial step to become a development operator.

15:44 I think that that's really important for us as we move forward, because it it it allows us, I think, to open up more opportunities across Southeast Asia

15:52 both in Malaysia and elsewhere. We're offering investors a sort of asymmetric risk reward profile, so hard value with the developments as well as the the sort of step out exploration, which gives us incremental upside, and then huge amount of blue sky upside with, for for all nil cost. So that's absolutely fantastic. And in terms of sort of, you know, our positioning versus peers, I really do believe that that you've got a rare opportunity with with SEASCAPE. Our positioning in Southeast Asia is is sort of second to none. We are really competitively advantaged in Malaysia as we've proved time and time again, you know, leveraging our our network and our technical expertise, which I'm I'm incredibly proud of. You know, people come to us and bring us opportunities and ideas, because we've really been able to to carve out this excellent niche for for ourselves in in Southeast Asia, in Malaysia in particular, and it's, you know, down to to really our colleagues, out there, who are working tirelessly, to help build this business.

16:53 So with that, I think I'll sort of finish up. Probably gone on a little bit too long as was. And I'll hand back to James, who I think is gonna let us do a little bit of q and a. Yeah. Please do submit your questions. The the q and a is looking a bit thin at the moment, but we do have one. What?

17:14 We do have one, and it's about the the the your comments on valuation, Nick. We're showing £3.24 per share of firm unrisked value. Yes. And we're and we're sitting at 50 p a share right now. So, obviously, there's a a gap to be

17:32 to be bridged. And and how do we see that that gap being bridged? And what are the main catalysts?

17:39 I guess I guess project definition is the first one. So CPR, as Nick's been alluding to, will go a long way to, you know, to validating what we're talking about and coming up with firm numbers from an independent source and then financing. Yeah. And then financing, you know, I I the question that always comes up with these things really is around, okay. So that's great. You've got all this resource, but how are you gonna finance it? I think we talked a little bit about that last week when when when we had tomorrow's, you know, with a 100%, we have got a lot of flexibility in terms of how we move that project forward in particular and how that gets financed. I think we've already seen a lot of interest in it. This was a hotly contested block. It's a it's a well known asset, quite a coveted one.

18:25 And we've been pleasantly surprised by the number of inbound calls we had saying, oh, you've got a 100%. Are you gonna keep it? What are you gonna do with it? So, you know, that gives me confidence that we will be able to do something with it either, you know, partial farm out. We could partner with someone. Maybe we'll just keep it a 100% ourselves. You know, I think that the banking market is is reopening. I think that there are opportunities to partner with sort of nontraditional finance parties who are looking at doing interesting things, especially out in Southeast Asia.

18:54 And I think the great news is that we don't have to make any of those decisions right now. I think the key focus is is get the CPR done, get that project definition, you know, better down. And then once we we have more detail that we can share with the large, I think that we're gonna have, I think we we could quite well be spoilt for choice. Very good. Do we expect to make any other asset additions in 2025? I mean, yes. We're certainly chasing, quite a number of things. I think, you know, there's obviously a round bid round going on in Malaysia right now as we speak. There are bid rounds going on elsewhere in Southeast Asia, which we've talked about before. And, you know, whilst we haven't got the resources or the bandwidth to chase everything, we we we like to be quite selective but put a lot of effort in into the things that we, yeah, we high grade that we believe in. And,

19:50 you know, I think it's fair to say there are a couple of those out there right now. So, you know, I don't think we're gonna announce another tomorrow morning, but we are yeah. I mean, there's there's a lot more to do. I think I I was just speaking to some of the shareholders here at AGM and and and saying a lot of the mistakes small companies make at this point is to stop and kind of hold an asset and prod it and fiddle around with it. And and, actually, you know, we've we've we've we've got some things. We've acquired some things. We picked them up. We got the team to work on them. That's fantastic, but we need to keep moving. And we don't we don't stop. So, you know, that's that's our thought process. I mean, I'm gonna have a brief vacation, but I I guess that we can. Maybe maybe we ask Pierre. I I know, Pierre, you were at you had a great conference this week. I've lost track of time now.

20:42 Yeah. It was it was on it was on Monday and last Monday and Tuesday, Nick. And I I think it's actually worth commenting on that because so it was up in up in Kualaq Teranganu, which is up in Teranganu stage, which is in Northeast Peninsula Malaysia, and it's where the gas all the gas lands into a town called Kirti just south of south of where I was and all all the gas fields from from Peninsula and Malaysia and and where the Temerus gas would land. And I think I guess the message I got from the conference and and it was very well attended was really we're part of the energy ecosystem in Malaysia, and we got an awful lot of attention. Everybody want seeing us as the new kid on the block, operating this very important PSC, delivering new gas to Peninsula and Malaysia where there is a huge need for new energy supply.

21:33 And and, you know, all the comments from all the panelists was really need for new energy, more gas, more gas from the Eastern gas fields, but also, you know, to to feed the growing energy demand and the and the growth in the data centers that are planned for Malaysia. And that'll also be counterbalanced with with coal that's also being burnt in Malaysia and imported LNG. So it was kind of a it was a narrative of and and and in terms of energy, which I which I thought was very interesting, but certainly very, very positive energy. And and the the the the need for for for more gas from the from the Eastern fields, which which obviously fits fits perfectly with what we're doing and and and the whole Temera story.

22:19 Excellent. Question here on the CPR. Is it feasible that it's it it can be published in a month? Better. I hope so. Yeah. I mean, look. It's we we've been working with, Sproll ERC, for quite some time now. In fact, they've they've they've worked with us since since really the inception of the business. They have a good handle on our assets, and we've been working with them, you know, quite, for for a few weeks now, I should say, in terms of making sure they're up to speed with with our assets and and and what have you. So I I'm I'm hoping that that that will be the case. I I I asked the same question of of the staff earlier on this week, and I was I was given a I was given a positive indication. So so I hope I'm I really am hoping we'll get something out, before, you know, things quiet down for the summer. Yeah. Yeah. As you say, I mean, these are these are not new assets to the auditor. So, yeah, it it should be it should be possible.

23:19 We're we're confident. I think a couple of questions on on production and rough timescales to to become a producing com company, which I guess is x any kind of m and a would be through the day while we would look at as as at the moment as being the the first producing asset for us. Timescales to production? Yeah. I mean, look, debate is whether or not we could we could move even faster tomorrow. Maybe. Yeah. I think they're gonna be competing, to be honest with you. They're not competing in a sense of they're actually two different markets that they go into. But I think that, you know, '27, you know, we've talked about that as being a really sort of seminal year for the business. It probably won't be the front end of '27, but, you know, could indeed be the back end of '27 in terms of sort of production for us from an organic, from an organic sense, from day one. You know, especially because day one is it could be in indeed staged.

24:19 There are sort of three main fairways there, that we're going to be looking at. So it may be that that sort of some initial production, you know, it gets done in a bit of a phased way. And certainly, tomorrow, as we are working, you know, incredibly quickly, we will have a field development, plan submitted by the back end of next year. And, you know, we're looking at ways to really do do things differently.

25:11 You know, I I don't think any of us have the interest in in just doing the same old same old here at SEASCAPE. You know, we've been looking at all sorts of interesting things such as, like, reusing platforms. So I think this is something we've mentioned a few times that gave us a sort of a menu of of things that that, you know, we might be able to use, and reuse, and and that has a huge advantage of accelerating things enormously. I mean, obviously, you need to check that they're appropriate and what have you, but especially for something like tomorrow's, which is very straightforward. The gas is, you know, it's it's very clean. There's there's nothing. There's no nasties in it. It's very dry. So indeed, that could be a really interesting way of monetizing that asset, you know, incredibly quickly. Okay. Question on Dewa EnQuest EnQuest's capacity to develop Dewa. Is it competing with tomorrow? So I think it's EnQuest are the operator of. We're the operator of. So it doesn't compete for resources.

26:09 We, of course, are are following what EnQuest is doing, and so we meet with them regularly and and get updates on their and progress reports, etcetera. But we're not actually doing the work. They are doing the work. So we don't have that as a concern. In fact, one of the attractions, I think, for Petronas, the regulator for in SEASCAPE was that this would be our only operated project. And so our you know, we would devote all our time to focusing on that. Two a timing for drilling. MPEX is it's in the hands of MPEX. What would we what would we say? So, look, there's still lots of moving pieces on this, and so we're hoping to get some more clarity towards, you know, alongside the well commitment. It is still our, you know, keen hope that it's gonna get drilled during '26, but it could certainly sneak into '27, you know, depending on where it gets slotted in. So what they'll do is they'll bring in a rig, and it's got impacts actually has sort of three PSCs, and it has wells that needs drilling on all of them. One of those PSCs, of course, is is two a. And so it just ends up being this sort of timing and logistics issue for them, but it's all part of the same campaign, which is great. It also means that we'll have a, you know, a hot rig, a hot crew, and, you know, that that should make for sort of safe and quick operations.

27:27 Excellent. We've only got a couple of minutes left. There's a couple of questions have appeared about, takeovers. And I'm sorry. Which way? Are we concerned about a takeover approach given the current modest market cap? Are we concerned about a you know, the the reality is, of course, corporate takeovers are just a fact of life. You know, they happen. I've been involved in quite a few myself. You know, the reality is is that, you know, we know what we've got here. This is a this is a an incredibly interesting and, dare I say, special business. And certainly, if anyone wanted to benefit from what we've created, they would need to pay, you know, a huge premium to do that. So we know what the value is here. So there's to my mind, there is no chance of this, getting taken out, at anything that would not be, you know, quite a substantial premium. And if that's the case, then then that's the case, and shareholders will get to sort of vote on that. But, you know, I I don't think that there's anything near term that I would be that worried about.

28:31 Certainly, you know, we're just kinda sticking to our knitting. Let's let's build a a great business here. Sounds good. Very good. Alright. Well, thank you all for your questions. And thank you, Nick, for the presentation. And I think that concludes the q and a. Thank you all. Just a quick plug in terms of we're we're gonna be reaching out doing sort of quite a bit of shareholder stuff coming up. You know, I'd I'd be keen to hear from our shareholders how you would like to hear from us. You know, trying to figure out, you know, which socials you you use, which which mediums you'd like to hear from us on. So, you know, you've you've got stuff there. You know, please sign up on those different things. You know, shoot us an email at our and let us know how you would like to hear from us, the formats and the mediums, so that we can ensure that we're reaching the widest audience with relevant information.

29:18 And TikTok bounces very much in the in the You are free? Yeah. We can do it. We'll we'll do it quick. Exactly. A little executive TikTok. Okay. Thank you very much. Thank everyone. Perfect. Well, thank you very much for updating attendees today on the on behalf of the board of SEASCAPE ENERGY ASIA PLC. We'd like to thank you for attending today's meeting, and good afternoon to you all.