dart energy limited - asx · dart energy cbm portfolio –schematic overview global portfolio of...

Developing Unconventional Value

Dart Energy Limited

Presentation to ASX Small Caps Conference

London, February 2013

Eytan Uliel – Chief Commercial Officer

www.dartenergy.com.au

UNCONVENTIONAL GAS - TRANSFORMATIONAL AND GLOBAL

CBM and shale have transformed the energy landscape in North America and Australia

Europe and Asia have significant untapped unconventional gas resources, rising demand and

increased dependence on imported gas

CanadaNatural gas reserves: 70 TcfCBM resources: 1,660 TcfShale resources: 385 Tcf

USANatural gas reserves: 300 Tcf

RussiaNatural gas reserves: 1,575 TcfCBM resources: 1,730 Tcf

United KingdomNatural gas reserves: 7 TcfCBM resources: 71 TcfShale resources: 21 Tcf

PolandNatural gas reserves: 3.5 TcfCBM resources: 106 TcfGermany

2

Proven natural gas reserves

37

Natural gas reserves: 300 TcfCBM resources: 740 Tcf

Shale resources: 850 Tcf

ChinaNatural gas reserves: 110 TcfCBM resources: 1,300 TcfShale resources: 1,260 Tcf

AustraliaNatural gas reserves: 135 TcfCBM resources: 350 TcfShale resources: >400 Tcf

IndonesiaNatural gas reserves: 105 Tcf

CBM resources: 450 TcfShale resources: 575 Tcf

IndiaNatural gas reserves: 42 Tcf


CBM resources: 106 TcfShale resources: 180 TcfNatural gas reserves: 3.5 Tcf


Source: EIA, Datafusion

FAVOURABLE MARKET CONSIDERATIONS

Long term supply deficits

Dependence on gas imports

Security of supply concerns

Large indigenous resource base

High prices

Long-term sector dynamics are favourable

DART ENERGY LIMITED – CORPORATE SNAPSHOT

Diversified global unconventional gas portfolio

One of the largest shale gas exposures in the

UK – embedded optionality

CBM underpins business, offering near-term

production and revenue

Portfolio Summary (as at end February 2013)

Active Licences 53

Countries 8

Corporate Profile

ASX Ticker Symbol DTE

Share price (A$/sh) 0.125

12-Month Weekly High / Low 0.40 / 0.12

Issued Shares (m) 879.8

Issued Options (m) 71.2

Market cap (A$m) 110

Cash (A$m) 37

Enterprise Value*(A$m) 82

Daily Liquidity (3mth av in A$) 0.54m

3

Countries 8

Key Projects 7

Licence Area (km2) 42,000

CBM Shale

Net 3P reserve (Bcf) 140

Net Contingent* Resource (Tcf) 5.4

Net Prospective Resource (Tcf) 14 0.4

Net OGIP (Tcf) 48 78

3 Gas Sales Agreements in place Airth - Scotland

Liulin - China

Fullerton Cove** - Australia

*Contingent = 2C Resource ** Conditional upon supply

Daily Liquidity (3mth av in A$) 0.54m

85%

135%

185%

235%

285%

22 Nov 12 03 Dec 12 12 Dec 12 21 Dec 12 04 Jan 13 15 Jan 13 24 Jan 13 05 Feb 13 14 Feb 13

DTE.ASX AJL.ASX

Relative Performance

* Includes US$9m drawn against US$100m HSBC debt facility as at 31 Dec 2012

DART ENERGY LIMITED - HIGHLIGHTS

Airth, PEDL133

United Kingdom / Europe

Coal Mine Methane Liulin

China

Unconventional gas business with a global portfolio approach - CBM and shale gas assets

Projects in each geography progressing to production / monetisation

4

India

Tanjung Enim

Sangatta West

Fullerton Cove

China

Indonesia

Australia

Restructure in progress (AIM IPO, farmouts)

Deep technical capabilities – Arrow DNA

Drilled 60+ wells since July 2010

Geographically diverse - 8 countries / 18 basins

Operate in high demand markets with

infrastructure in place

HSBC US$100m debt facility in place

Sizeable CBM resource / reserve

Advanced CBM projects - near-term UK CBM

production and gas

Large UK shale positions - shale GIP 76-110 Tcf

300

350

400

450

500

PEDL 133

Liulin

Sangatta West

Tanjung Enim

PEDL 159

De

cre

asin

gDART ENERGY CBM PORTFOLIO – SCHEMATIC OVERVIEW

Global portfolio of CBM assets – 53 licences; 8 countries;

biggest onshore licence holder in UK

Key CBM focus is PEDL133 in Scotland – moving into

development / production within 12 months; GSA in place

5

0

50

100

150

200

250

0 100 200 300 400 500 600EXPLORATION CORE DRILLING & TESTING PILOT TESTING INITIAL

DEVELOPMENT

EARLY

PRODUCTION

Tanjung Enim

USCB

PEDL

161 & 163

Satpura

Assam

East Midlands

Staffordshire

Milejow

OGIPProspective

2C3P2P

FULL

PRODUCTION

20,000 Bcf

15,000 Bcf10,000 Bcf5,000 Bcf2,500 Bcf1,200 Bcf600 Bcf200 Bcf

Cheshire

Muralim

RIS

KIn

cre

asin

g

PEL 456

PEL 458

PEL 459

PEL 460

PEL 461

PEL 463

PEL 464

Net to Dart

THE AIRTH CBM PROJECT – EUROPE’S MOST ADVANCED

WI 100%

ExplorationCompleted; technical case established

(gas content, saturation, permeability)

Reserves and

Resource

72 Bcf 3P / 38 Bcf 2P reserves (NSAI)

597 Bcf 2C resource (upside potential)

Appraisal and

Field Planning

Technical & commercial case validated

Successful production test

Development plan and FEED complete

6

Development

Plan

Now: planning & permitting

Development Phase 1: 10 wells and

complete gathering and compression plant

for 35m scf/d

Development Phase 2: additional 25 wells

Off-take SSE GSA in place; NBP price; up to 10 Bcf/a

Scale options2C resource substantial

Capacity to expand project 3-4x times

PEDL 159 Liulin Indonesia Australia

Solway Basin, UKShanxi Province,

China

Sangatta - East Kalimantan

Muraliam / Tanjung –South Sumatra

PEL 458 – NSW

Exploration �

Initial pilot testing �

Planning �

Reserves certified �

Exploration �

Pilot testing �


Exploration �

Pilot testing �


Seismic �

Exploration �GSA in place �

•Constructing G&C

LOCATION

STATUS

OTHER KEY CBM PROJECTS

7

•Additional pilot testing

•Field development

•Constructing G&C plant

•3rd party CNG facility ready to support pilot gas sales

•Additional pilot testing

•Field development planning

•GSA negotiations

•Additional exploration

•Pilot drilling and production testing

•Pipeline sales•>10 Bcf pa

•3rd party GSA in place with CUCBM

•>5 Bcf pa

•SW - LNG export•Sumatra – pipeline•> 20 Bcf pa

•Local / pipeline sales

NEAR-TERM

PLAN

LONG-TERM

POTENTIAL

DART ENERGY SHALE PORTFOLIO – SCHEMATIC OVERVIEW

150

200

250

Midland Valley

Milejow

Cheshire Basin

De

cre

asin

g

17 UK / Europe licences are prospective for shale

No specific shale commitments; licences preserved through CBM activity

8

0

50

100

0 50 100 150 200 250EXPLORATION CORE DRILLING &

TESTING

PILOT TESTING INITIAL

DEVELOPMENT

PRODUCTION

Gainsborough

Trough

(East Midlands)

Milejow

Saxon I West &

Saxon II

OGIPProspective

40,000 Bcf30,000 Bcf20,000 Bcf10,000 Bcf5,000 Bcf2,000 Bcf1,000 Bcf200 Bcf

Xiushan*

* Dart internal estimates

RISK

Incr

eas

ing

Net to Dart

DART’S KEY UK SHALE PLAY – THE BOWLAND SHALE, WEST AND EAST

Eastern UK

The most exciting shale play

outside of North America

Flow-rate established –

sizeable and potentially

commercial

Dart has one of the largest

acreage positions:

9

Western UK

acreage positions:

• 15 licences

• Independently assessed

shale prospect - up to 110 Tcf

• 100% WI in all but 3 licences

BOWLAND SHALE PLAY (WEST) - MAJOR PLAYERS LICENCE POSITIONS

Cuadrilla IGas Dart

Area (km²) 1185 1363 1041

No. of Licences 4 14 11

Western Bowland Shale play most active, with ongoing exploration activity

Dart has one of the largest acreage positions

Organic-rich, Lower

Carboniferous shales

present

Shale generally thicker

in basins than on

platforms

10

platforms

World-class source

rocks

BOWLAND SHALE PLAY (EAST) – MAJOR PLAYERS LICENCE POSITIONS

e-Corp Farm-in

Shale core & lateral

required to be drilled

Eastern Bowland Shale – little data within Gainsborough Trough, but indications of

hydrocarbon potential, both dry and liquids rich shale gas possible

Dart has the largest acreage position

Cuadrilla IGas Dart

Area (km²) 0 388 1235

No. of Licences 0 9 13

e-Corp Farm-in

Shale core & lateral

required to be

drilled by Sept 2014

Normanby 1 and

Grove 3 drilled as

conventional

exploration wells

Represent a

basinal and

11

required to be drilled

by Sept 2014

drilled by Sept 2014 basinal and

platform setting

in the Eastern UK

areas

Gamma Active

shales present in

both wells

DART ENERGY LIMITED - KEY MESSAGES

Unconventional gas is an exciting sector to invest in� Gas is a primary fuel of the future - share of energy mix to catch up with oil by 20401,2

� Unconventional gas resources are larger than conventional natural gas resources1

� Unconventional gas - both shale and CBM - as a business and investment is proven,

not theory, having changed the energy balance in North America / Australia already

1

2 Unconventional gas in UK (and Europe / Asia) is poised to take off� Large resource – and will be key bridge fuel

� UK Government policy now clear and supportive, and leading Europe in support /

12

Notes:1 DataFusion Associates2 ExxonMobil report: 2012 The Outlook for Energy: A View to 2040

3Dart provides unique exposure to the sector� Large asset base in all the right play-zones – comparable with other companies

� Company underpinned by near-term CBM revenues and lower work obligations

� Risk mitigated through portfolio approach

� Managed by an experienced team with a demonstrated track record

� Attractive value proposition

� UK Government policy now clear and supportive, and leading Europe in support /

regulation for unconventional gas

� Exploration activity / licencing ramping up across UK / Europe / Asia

AUSTRALIA / CHINA / INDIA / INDONESIA / UNITED KINGDOM / POLAND / BELGIUM / GERMANY

END. THANK YOU.

This presentation has been prepared by Dart Energy Limited (“Dart” or the "Company"). By viewing all or part of this presentation, you agree to maintain

confidentiality regarding the information disclosed in this presentation, unless such information is otherwise publicly available. Any failure to comply with

these restrictions may constitute a violation of applicable securities laws.

This presentation is for information purposes only and does not constitute or form part of an offer, solicitation or invitation of any offer, to buy or subscribe

for any securities, nor should it or any part of it form the basis of, or be relied in any connection with, any contract or commitment whatsoever.

The information contained in this presentation has not been independently verified. No representation or warranty expressed or implied is made as to, and

no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained in this presentation. None of

the Company, Dart Energy Limited or any of their respective affiliates, advisers or representatives accept any liability whatsoever (in negligence or otherwise)

for any loss howsoever arising, whether directly or indirectly, from any use, reliance or distribution of this presentation or its contents or otherwise arising in

connection with this presentation.

This presentation includes forward-looking statements. These statements contain the words "anticipate", "believe", "intend", "estimate", "expect“, “plan”

and words of similar meaning. All statements other than statements of historical facts included in this presentation, including, without limitation, those

regarding the Company’s financial position, business strategy, plans and objectives of management for future operations (including development plans and

objectives relating to the Company's business and services) are forward-looking statements. Such forward-looking statements involve known and unknown

risks, uncertainties and other important factors that could cause the actual results, performance or achievements of the Company to be materially different

from results, performance or achievements expressed or implied by such forward-looking statements. These forward-looking statements speak only as at the

IMPORTANT NOTICE.

14

from results, performance or achievements expressed or implied by such forward-looking statements. These forward-looking statements speak only as at the

date of this presentation. Predictions, projections or forecasts of the economy or economic trends of the markets are not necessarily indicative of the future

or likely performance of the Company. Past performance is not necessarily indicative of future performance. The forecast financial performance of the

Company is not guaranteed. You are cautioned not to place undue reliance on these forward-looking statements, which are based on the current views of the

Company on future events. The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions, except as required by

law, to any forward-looking statements contained herein to reflect any change in the Company's expectations with regard thereto or any change in events,

conditions or circumstances on which any such statement is based.

Neither this presentation nor any copy or portion of it may be sent or taken, transmitted or distributed, directly or indirectly, into the United States, Japan,

Australia, Canada or any other jurisdiction which prohibits the same. The securities have not been, and will not be, registered under the U.S. Securities Act of

1933, as amended (the "Securities Act"), or the securities laws of any state or other jurisdiction of the United States or elsewhere, and the securities may not

be offered or sold within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the

Securities Act and applicable state or local securities laws. This presentation is not for distribution in, nor does it constitute an offer for sale of securities in

the United States. The Company does not intend to conduct a public offering of its securities in the United States.

This presentation may not be forwarded or distributed to any other person and may not be copied or reproduced in any manner. Failure to comply with this

directive may violate applicable laws.

APPENDIX:


APPENDIX:

RESOURCE & RESERVES TABLES.

Licences with CBM

prospect (Bcf)

Net OGIP Net Prospective Resources Net Contingent Resources Net Reserves

Low Best High Low Best High 3C 2C 1C 3P 2P 1P

EUROPE

PEDL 133 512 1,093 1,994 - - - 1,247 597 151 72 38 -

PEDLs 161 & 163 39 140 317 - - - 185 41 2 - - -

PEDL 159 363 363 363 38 43 49 134 123 113 47 - -

East Midlands 1,991 4,059 6,850 1 14 47 3,888 1,218 73 - - -

Cheshire 1,937 3,197 5,041 - - - 3,195 1,683 651 - - -

Staffordshire 1,181 1,466 1,751 - - - 1,043 686 402 - - -

USCB 187 526 1,364 19 108 459 - - - - - -

CBM RESOURCES & RESERVES – EUROPE AND ASIA

16

Milejow 50 265 672 3 36 156 - - - - - -

Saxon I West & Saxon II 121 710 3,070 12 138 893 - - - - - -

Europe Total 6,336 11,819 21,422 73 339 1,604 9,692 4,347 1,392 119 38 -

ASIA

Sangatta West 150 250 392 23 44 76 100 62 37 9 - -

Tanjung Enim 278 393 529 60 88 126 154 109 75 - - -

Muralim 1,116 1,357 1,673 528 682 891 - - - - - -

Assam 488 706 982 311 450 626 - - - - - -

Satpura 160 367 714 37 130 332 75 27 8 - - -

Liulin 103 143 197 - 20 - 33 22 12 12 7 -

Asia Total 2,294 3,216 4,485 959 1,414 2,051 362 220 133 21 7 -

Licences with CBM prospect (Bcf)Net OGIP

Net Prospective

ResourcesNet Contingent Resources

Best Best 3C 2C

AUSTRALIA

PEL 456 15,085 6,545 470 -

PEL 458 1,342 - 871 542

PEL 459 1,034 481 - -

PEL 460 1,132 527 - -

PEL 461 158 73 - -

PEL 463 13,641 4,615 143 -

PEL 464 132 61 - -

CBM RESOURCES & RESERVES - AUSTRALIA

17

PEL 464 132 61 - -

Australia Total 32,524 12,302 1,484 542

Licences with shale prospect

Shale OGIP (Tcf)

Gross Participating Interest

BOWLAND SHALE PLAY – DART RESOURCE POTENTIAL

OGIP independently assessed by NSAI , October 2012

Substantial Resource potential: up to 110 Tcf, net to Dart

Indicates substantial prospectivity in both West and East Bowland Shale plays

18

Low Best High Low Best High

Bowland Shale - West

(PEDLs 147, 186, 187, 185, 188, 189)11.0 30.5 52.5 11.0 30.5 52.9

Bowland Shale - East

(EXL288, PEDLs 012, 139, 140, 200, 207, 210)

19.2 47.6 83.4 13.2 32.4 57.1

Total Shale GIP - NSAI Estimate30.2 78.1 135.9 24.2 62.9 110.0

OTHER SHALE PROSPECTS – DART RESOURCE POTENTIAL

Licences with shale prospect

Shale OGIP (Tcf)

Gross Participating Interest

Low Best High Low Best High

Other UK 1.9 4.4 8.9 1.1 2.5 5.5

OGIP independently assessed by NSAI , October 2012

Substantial Resource potential: up to 33 Tcf, net to Dart

19

Milejow

Lublin Basin, Poland2.5 9.5 24.9 2.5 9.5 24.9

Saxon I and Saxon II

North Rhine-Westphalia, Germany0.3 1.0 3.0 0.3 1.0 3.0

Total Shale GIP - NSAI Estimate 4.7 14.9 36.8 3.9 13.0 33.4

APPENDIX:


APPENDIX:

UNCONVENTIONAL GAS PRIMER.

Coal Bed Methane Shale gas Tight gas

Gas is adsorbed onto the

surface of the coal

Gas is “trapped” within

the shale rock

Gas trapped in impermeable

hard rocks or sands

WHAT ARE “UNCONVENTIONALS”?

21

CBM and shale gas is the same end product as

conventional natural gas

Difference is source rock from which natural gas is

produced

Drilling techniques and principles of well completions are

similar to those used in the conventional oil and gas

industry

Advances in horizontal drilling and hydraulic fracturing

make CBM and shale gas economically competitive

surface of the coal the shale rock hard rocks or sands

Conventional natural gas

Gas exists in a free state in

the spaces between the sands

HOW IS IT EXTRACTED?

CBM EXTRACTION

Water is removed from the

coalbeds (“dewatering”),

lowering the pressure in the

22

lowering the pressure in the

coals and the gas is “desorbed”

SHALE GAS EXTRACTION

Water, sand and chemicals are

injected into the rock at high

pressures (“fraccing”) to crack

the rock and liberate the gas

BASIC CBM WELL TYPES.

Vertical Lateral Multi-lateral

Lowest cost

Fastest completion time

Effective for thick coal seams

Used when coal seams are thin

Horizontal drilling techniques

High precision required

Minimise surface footprint

Fastest gas drainage

Most ‘hole in coal’

Cross-Section View

Radius Bend

23

Well design decision to optimise economics

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COAL SEAM

COAL SEAM

Radius Bend

Vertical Collars

Lateral CollarsTypical CBM rig

• Conventional mineral rig

• Truck mounted

• In-seam steering technology

Typical wellhead

• Fully automated pump and

reservoir control

• Optimises production; reduces

field maintenance

60m

45m to

175m

A TYPICAL SHALE WELL.

Deep vertical well with one or more laterals

Main difference is “fraccing” - pumping water

and sand (>98%) and additives (<2%) down

the wellbore at high pressure

The fluid injected at pressure fractures the

shale rock, and the sand (proppant) holds the

cracks open

Process is repeated multiple times along the

lateral wellbore to cover the maximum area

24

Source: Chesapeake Energy

lateral wellbore to cover the maximum area

Fluids are carried up the wellbore for

disposal or treatment and re-use ; sand prop

open the cracks, allowing gas to flow out

Highly regulated, technologically advanced

process which was developed in the USA

Source: Baker HughesSource: Canadian Society for Unconventional Gas

AN UNCONVENTIONAL GAS WELL PRODUCTION PROFILE.

Nature of the source

rock results in a

fundamentally

different production

profile

25

profile

Significant technical

and commercial

impact

UNCONVENTIONAL GAS PROJECT LIFE CYCLE.

1 - 3 yrs1 - 3 yrs

Explore

Appraise1Full Scale

Identification

26

2 - 3 yrs

20+ yrs 1 - 2 yrs

Appraise1

Initial Development1

Full Scale Development1

Note:

1 Once a well has been drilled and is of no further use, it will be abandoned. The

process includes safely sealing the well and rehabilitating the surrounding area, in

accordance with licence terms and applicable local regulations providing for

rehabilitation and industry best practice

RESPONSIBLE ENVIRONMENTAL MANAGEMENT.

LAND USE

� Wells occupy large surface area?

� Land cannot be used for other uses?

� Unsightly and disrupts wildlife habitats?

1

CONCERNS INDUSTRY FACTS

� “Nuisance” / drilling period typically <30 days

� Horizontal drilling requires up to 10X less space

� A well in production requires very little space

allowing land use for other purposes

� Site restoration / remediation stringently

regulated

� Drilling “additives” affect groundwater aquifers?

� Water produced is not fit for other uses?

2� ~80% initial water recovered to potable

standards(1); remaining treated for safe disposal

27

WATER

� Water produced is not fit for other uses?

� Water produced affects the soil?

standards ; remaining treated for safe disposal

� Shale formations are typically several thousand

meters below aquifers

� No clear examples of ground water contamination

since 1982(2)

� Multiple safeguards: steel casings, cementing, etc

FRACCING

� New technology?

� Chemicals used are dangerous?

� Gas can migrate to surface?

� Causes earthquakes?

3� Safe “fraccing” dates back to 1950s, over tens of

thousands of wells globally

� >98% water; < 2% “additives” (common in

household products)

� Used for shale; limited use in CBM

� Strictly regulated

Notes1. Marcellus Shale – Water Treatment Options Worth Considering, www.ventureengr.com2.. Department of Energy & Climate Change (U.K.) Report “Shale gas, NW England earthquakes and UK regulation”, 8 May 2012

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