Investor Presentation • Apr 26, 2017
Investor Presentation
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April 2017
This Presentation has been prepared by African Petroleum Corporation Limited (Company).
This Presentation contains summary information about the Company and its subsidiaries (Company Group) and their activities. The information in this Presentation does not purport to be complete or comprehensive, and does not purport to summarise all information that an investor should consider when making an investment decision. It should be read in conjunction with the Company's other periodic and continuous disclosure announcements lodged with Oslo Axess, which are available at www.oslobors.no
This Presentation is for information purposes only and is not a prospectus, product disclosure statement or other offer document under Australian law or the law of any other jurisdiction. This Presentation is not financial advice, a recommendation to acquire Company shares or accounting, legal or tax advice. It has been prepared without taking into account the objectives, financial or tax situation or needs of individuals. Before making an investment decision, prospective investors should consider the appropriateness of the information having regard to their own objectives, financial and tax situation and needs and seek such legal, financial and/or taxation advice as they deem necessary or appropriate to their jurisdiction. The Company is not licensed to provide financial product advice in respect of Company shares.
This Presentation contains certain forward looking statements. The words anticipated, expected, projections, forecast, estimates, could, may, target, consider and will and other similar expressions are intended to identify forward looking statements. Forward looking statements, opinions and estimates provided in this Presentation are based on assumptions and contingencies which are subject to change without notice, as are statements about market and industry trends, which are based on interpretations of current market conditions. Forward looking statements including projections, indications or guidance on future earnings or financial position and estimates are provided as a general guide only and should not be relied on as an indication or guarantee of future performance. There can be no assurance that actual outcomes will not differ materially from these statements. This difference may be due to various factors, including, among others: general business, economic, competitive, political and social uncertainties; the actual results of current exploration activities; actual results of reclamation activities; the outcome of negotiations, conclusions of economic evaluations and studies; changes in project parameters and returns as plans continue to be refined; future price of oil and gas; drilling risks; political instability; insurrection or war; arbitrary changes in law; delays in obtaining governmental approvals or financing or in the completion of development activities. The forward looking statements in this Presentation speak only as of the date of this Presentation. To the full extent permitted by law, the Company and its directors, officers, employees, advisers, agents and intermediaries disclaim any obligation or undertaking to release any updates or revisions to the information to reflect any change in expectations or assumptions. Nothing in this Presentation will
under any circumstances create an implication that there has been no change in the affairs of Company Group since the date of this Presentation.
An investment in the Company shares is subject to investment and other known and unknown risks, some of which are beyond the control of the Company Group. The Company does not guarantee the performance of the Company or any particular rate of return on the performance on the Company Group, nor does it guarantee the repayment of capital from the Company or any particular tax treatment.
This Presentation is not and should not be considered an offer or an invitation to acquire Company shares or any other financial products and does not and will not form any part of any contract for the acquisition of the Company shares. This Presentation does not constitute an offer to sell, or the solicitation of an offer to buy, any securities in the United States. Company shares have not been, and will not be, registered under the US Securities Act of 1933 and may not be offered or sold in the United States except in a transaction exempt from, or not subject to, the registration requirements of the US Securities Act and applicable US state securities laws.
The information in this Presentation relating to hydrocarbon resource estimates includes information compiled by Dr Adam Law, Geoscience Director of ERC Equipoise Ltd. Dr Law, is a post-graduate in Geology, a Fellow of the Geological Society and a member of the Society of Petroleum Evaluation Engineers. He has 18 years relevant experience in the evaluation of oil and gas fields and exploration acreage, preparation of development plans and assessment of reserves and resources. Dr Law has consented to the inclusion in this Presentation of the matters based on the information in the form and context in which it appears.
Company's advisers have not authorised, permitted or caused the issue, lodgement, submission, despatch or provision of this Presentation and do not make or purport to make any statement in this Presentation and there is no statement in this Presentation which is based on any statement by the advisers. To the maximum extent permitted by law, the Company, its representatives, advisers and their respective officers, directors, employees, agents or controlling persons (collectively, the Representatives) expressly disclaim all liabilities in respect of, and make no representation or warranty, express or implied, as to the accuracy or completeness of the information contained in this Presentation or in any other documents furnished by the foregoing persons.
Statements made in this Presentation are made only at the date of this Presentation. The information in this Presentation remains subject to change without notice.
Large acreage position in West Africa Margin: 4 countries, 8 licences#
7.4bn+ barrels net unrisked prospective oil resources~#
Several material oil/gas discoveries made in adjacent acreage by Total and Anadarko in Côte d'Ivoire, and Cairn Energy and Kosmos in Senegal
Discoveries are on trend with prospects in African Petroleum acreage
Successfully bringing in partners to share risk/reward on licences:
May 2017: Exploration well with Ophir Energy in Côte d'Ivoire (CI-513) targeting 350+ million barrels*
Possible further two wells in The Gambia and Senegal in 2018#
Strong trading support from Norwegian retail investors
Retail support complements blue chip institutional shareholder base
| Listing | OAX (APCL) |
|---|---|
| Shares on Issue |
117,924,204 |
| Market Cap | NOK 1.03b (US\$120.4m) |
| Share Price | NOK 8.70 (US\$1.02) |
| Debt | Nil |
~Prospective resource volumes taken from ERC Equipoise 2014 & 2015 (adjusted for Ophir Energy deal); #assumes government extensions and/or amendments to existing and future work obligations on certain licences; *mean gross unrisked prospective resource
30 years at BP, and heritage company Amoco, gaining E&P leadership experience in Africa, Europe and Russia
Managed an active exploration portfolio for BP in North Africa
Additional experience in the areas of field development and as commercial manager
20+ years of financial and corporate experience from public practice, oil & gas, mining and investment banking
Chartered Accountant with Bachelor of Commerce (Accounting and Business Law)
Non-Executive Director of Apollo Consolidated (ASX:AOP) and Zeta Petroleum (ASX:ZTA)
20+ years global exploration experience at Chevron, Addax International
Specialised in Play and Prospect risk assessment, volumetric analysis, commercial evaluation and portfolio management
Background in quantitative geophysics, stratigraphic interpretation workflows and 3D visualisation
30+ years experience in natural resources
Co-founded and held executive and non-executive board positions in a number of successful ASX listed companies
Fellow at the Australian Institute of Company Directors, the Australian Institute of Geoscientists, and Australasian Institute of Mining & Metallurgy
Chairman of two ASX listed companies: Galilee Energy Limited and Cellmid Limited
#Estimated net unrisked mean prospective oil resources, ERC Equipoise CPR (adjusted for Ophir Energy deal); @assumes government extensions and/or amendments to existing and future work obligations on certain licences; *mean gross unrisked recoverable resource
New PSC negotiated for CI-513 licence in Côte d'Ivoire: better fiscal terms, lower holding costs and an extension to work commitments
Ophir Energy holds a 45% Operated interest
African Petroleum received US\$16.9m in cash at completion
Exploration well being drilled May 2017
Non-binding Heads of Terms and binding Exclusivity Agreement with a well funded, listed oil and gas company with a strong track record in offshore deep-water drilling
Framework for incoming party to secure 70% operated interest in SOSP (Senegal) and A1 & A4 ( Gambia)
Conditional upon extension of the exploration period for SOSP, approval to enter into the next phase of A1 & A4, completed due diligence and agreement of farm-in documentation
Incoming party to pay up to US\$8.5m to the Company, fund 100% of at least two deep water offshore wells, fund 100% of a 3D seismic acquisition, fund 100% of PSDM processing/reprocessing, and option to fund 100% and 85% respectively of a further two wells
Partners: Ophir Energy (Operator) 45% African Petroleum 45% Petroci (carried) 10%
Rig: Seadrill West Saturn
Target: Santonian & Turonian turbidite channel complexes
Prospect size: 352MMbbls#
Water depth: 2,835 metres MSL
Planned TD: 5,459 metres TVDSS
Expected duration: 26.4 days (dry hole)
Well cost estimate: US\$23.8 million (dry hole)
Expected spud date: 1 May 2017
#mean gross unrisked prospective resource
1Kosmos Energy news releases; 2Cairn Energy news releases; 3AfrOil Week Oil and Gas Monitor, Issue 597, 7 July 2015; 4Total news release 17 April 2014; 5Impact Oil & Gas press release 29 March 2017; 6FAR press release 31 March 2017
Corporate Presentation – April 2017 Page 9
The industry is benefitting from a significant decrease in prices for drilling rigs and seismic vessels
Estimated well cost of <\$30m, compared to +\$80m two years ago
Significant activity in the West African Margin during last two years with positive results by Total and Anadarko in Côte d'Ivoire, Cairn Energy in Senegal and Kosmos in Mauritania and Senegal
Attractive PSC/licence terms: our projects are economic, even at current low oil prices
Ophir Energy deal for Côte d'Ivoire (completed in Mar 2016) and Heads of Terms/Exclusivity Agreement for Senegal & The Gambia (Apr 2017) indicates industry interest remains for world class exploration assets despite the weak oil price environment
Recent transaction between BP and Kosmos in Senegal/Mauritania indicates a growing appetite for exploration and appraisal activity amongst the oil Majors
Oil exploration is for the long term: our long term strategy is to realise potential value of our 7.4bnbbls+ assets
2014-16: transformational exploration/appraisal in Senegal, Mauritania and Côte d'Ivoire
CPR inventory is diverse and material
Our large equity position provides room for partners to participate in the transformation
#Resource volumes extracted from 2014 CPR and ERCE Audits January 2015
CI-513: 45% Ophir (Operator), 45% African Petroleum
CI-509: 90% African Petroleum (Operator)#
High quality proprietary 3D seismic over both blocks
Apr 2014: Total oil discovery at Saphir-1XB (Block CI-514) 40m net oil pay 34º API
Oct 2016: Anadarko 2016 announced two oil discoveries in licences with analogous geology
Well defined fan systems with numerous material prospects identified
Drilling Ayame-1X exploration well in the Ayame Fan with Ophir Energy on CI-513 in May 2017
Corporate Presentation – April 2017 Page 12 #current phase ended Mar 2016; however, MOU for new PSC under discussion with government
Amplitude extraction at Ayame West – high N:G reservoir distribution
| Ayame West – Competent Persons Report Recoverable Resource (gross un-risked) - MMbbl |
||||
|---|---|---|---|---|
| P90 | P50 | Mean | P10 |
58 216 352 788
3D basin modelling shows proven source rocks are expected to be locally oil-mature
Reservoir interval penetrated in adjacent Saphir -1XB discovery maps into CI-513 on 3D seismic – expecting similar thick reservoir units
Drilling exploration well targeting 352MMbbls in May 2017
Well-defined basin floor fan with excellent trap definition
Used recent seismic inversion to select optimised final well location with operator
Rig selected: Seadrill West Saturn
Expected well cost of \$23.8m (dry hole)
High potential frontier exploration area
90% working interest in Senegal (ROP & SOSP), 100% Gambia (A1 & A4)
Multiple prospects analogous to Cairn Energy operated oil discoveries each approx. 1 Billion barrels in place (with 3.5 bnbbls follow up potential1)
Basin opening Kosmos multi-TCF gas discoveries in Mauritania and Senegal in 2015/20162
Farm-in work program outlined in Heads of Terms under discussion with Gambian and Senegalese governments
1FAR, Investor Presentation November 2014; 2Kosmos Energy news releases
2,500km2 3D seismic acquired over licences
Material discoveries by Cairn Energy in Senegal on trend with African Petroleum acreage
Unrisked resource potential 3,079 MMbbls1
1ERC Equipoise March 2015
Prospects: Sierra Leone licences SL-03 & SL-4A-10
100% working interest in licences SL-03 & SL-4A-10
Licences covered by high quality 3D seismic
Company portfolio comprises prospective and untested basin-floor fan play in ultra deep-water
Amplitude support for stacked hydrocarbon plays at multiple Upper Cretaceous levels
| i. | ||
|---|---|---|
48 Dover Street London W1S 4FF
Mirabaud Securities Limited (UK) EAS Advisors LLC (New York) Pareto Securities (Norway)
BDO
ERC Equipoise Limited
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