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: 282 TcfShale resources: 60 Tcf
CBM resources: 106 TcfShale resources: 180 TcfNatural gas reserves: 3.5 Tcf
CBM resources: 106 TcfShale resources: 7 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 �
Reserves certified �
Exploration �
Pilot testing �
Reserves certified �
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.
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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
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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,
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directive may violate applicable laws.
APPENDIX:
AUSTRALIA / CHINA / INDIA / INDONESIA / UNITED KINGDOM / POLAND / BELGIUM / GERMANY
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:
AUSTRALIA / CHINA / INDIA / INDONESIA / UNITED KINGDOM / POLAND / BELGIUM / GERMANY
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