for personal use only 3 introductions board of directors dr neale taylor chairman mr bob cook...

1

For

per

sona

l use

onl

y

22

WELCOME

Chairman of Meeting

Quorum

Notice of Meeting

Meeting Procedures

For

per

sona

l use

onl

y

33

INTRODUCTIONSBoard of DirectorsDr Neale Taylor Chairman

Mr Bob Cook Non-Executive Director

Mr Tony Strasser Non-Executive Director

Mr Barry Smith Non-Executive Director

Mr Matthew Healy Non-Executive Director

Chief Executive OfficerDr Scott Hornafius

Company SecretaryMr David Franks

Company Auditor’s RepresentativeMr Gareth Few Partner, BDO

For

per

sona

l use

onl

y

4

BUSINESS AGENDA

Minutes

Ordinary Business

Presentations by Chairman & CEO

Accounts

Resolutions 1 to 10, noting Resolutions 1 and 8 have been withdrawn

4

For

per

sona

l use

onl

y

5

MINUTES

Minutes of the previous Extraordinary General Meeting held on 26 June 2014 have been signed by Dr. Neale Taylor as a true and correct record and are available for inspection.

5

For

per

sona

l use

onl

y

6

PRESENTATIONS Neale Taylor - Chairman Scott Hornafius - CEO

For

per

sona

l use

onl

y

7

2013-14 FINANCIAL SUMMARY

77

2013-14 2012-13

A$’000 A$’000

Revenue 340.12 398.95

Oil Price, US$/B 90.16 81.04

Expenses:

Cost of sales 802.56 1,386.94

Professional & corporate services 866.365 662.77

Admin 588.50 593.24

Directors & employees 1781.86 2,132.50

Financial & Other expenses 3647.88 1,219.17

NPAT (LOSS) (7,346.97) (5,595.66)

Forex Gain (219.30) 759.26

Total NPAT (loss) (7,566.27) (4,836.40)

Development Expenditure 390.93 2,638.48For

per

sona

l use

onl

y

888

From major milestone achievements in 2012-13 to funding challenges consequent to Grieve 1st oil deferral by JV Operator in April 2014

June-August: Sale process for Wyoming AssetsSeptember: Sold Ash CreekAug – Sept: Placement & SPPPost August: Pursuing corporate transaction, debt

financing, and new private investorsNovember: Denbury announces 2015 cost reductions

Scott Hornafius, CEO, will address:

Project progress at Grieve (Wyoming) and Singleton (Nebraska) Forward funding plans

2013-14: GRIEVE 1ST OIL DEFERRAL BY JV OPERATOR

For

per

sona

l use

onl

y

9

2013-2014PROJECT HIGHLIGHTS

For

per

sona

l use

onl

y

10

ELK’S EXISTING ASSETS

10

For

per

sona

l use

onl

y

11

GRIEVE CO2-EOR PROJECT

11

For

per

sona

l use

onl

y

12

DEVELOPMENT STATUS OF THE GRIEVE CO2-EOR PROJECT- ELK’s current primary asset

12

Project Status on 1 Nov 2014 Completed Work

Wells and flow lines Site works & testing manifold 3-mile CO2 supply line

12.2 Bcf of CO2 injected Sufficient to achieve initial

production CO2 injection suspended until

close to first oil

6.0+ million barrels of water injected

Project expenditure >US$70 million to date by JV partners

Grieve Pressure Surveys vs Simulated Pressure Response Range

Reservoir pressure rising in line with forecast (see figure)

200

400

600

800

1000

1200

1400

1600

1800

2000

2200

2400

2600

2800

3000

3200

Res

ervo

ir P

ress

ure

(psi

g) MMP = 2250 (psig)

BHP is at FreeFlowing Condition

0

Well #20

Well #22

Well #30

Well #11

Well #5

Well #10

Well #18

Well #12

Well #6A

First Oil Sept. 2015

First Oil Sept. 2016

For

per

sona

l use

onl

y

13

DENBURY-OPERATED GRIEVE CO2-EOR PROJECT

13

100

200

300

400

500

600

700

800

900

1000

1100

1200

1300

1400

1500

1600

1700

1800

Res

ervo

ir P

ress

ure

(psi

g)0

DRI Simulation FirstSales Sept 2016

Well #20

Well #22

Well #30

Well #11

Well #5

Well #10

Well #18

Well #12

Well #6A

Development scenario for Grieve

Grieve Average Daily CO2 and Water Injection RatesCumulative Injection Through September 2014 = 12.2 BCF of CO2 & 5.7 MMBW

Grieve Pressure Survey vs Simulated Pressure Response

10,000

0

20,000

30,000

CO

2 In

ject

ion

(MC

FD)

Wat

er In

ject

ion

(BW

PD

)

40,000

50,000

5,000

0

10,000

15,000

20,000

25,000

CO2 (MCFD) Water (BWPD)

For

per

sona

l use

onl

y

1414

GRIEVE PROJECT – PROGRESS IN 2014 Operator-owned Grieve substation completed in October 2014

Construction commenced in May 2014; Commissioned on October 28

Installed high-voltage power line to the Grieve Field (230-kV) Additional power to the field will allow water injection to 37,000 BWPD

Higher water injection rates will accelerate re-pressurization

Foundation work for CO2 recycling facilities completed in October 2014

For

per

sona

l use

onl

y

1515

Project Update From Denbury On 21 November 2014

Continue to build reservoir pressure through water injection

Increase water injection capacity through installation of dual ESP in water source well

Optimize timing of compressor installation with timing of reservoir reaching desired operating pressure (3000 psi)

Continue gathering bottom-hole pressure and injection profile data

Elk capital expenditure reduced to US$0.65 million in 2015

Elk expected lease operating expense (LOE) reduced to ~$US1.25 million in 2015

First oil/facility start-up expected on 1 March 2017

DEVELOPMENT STATUS OF THE GRIEVE CO2-EOR PROJECT- ELK’s current primary asset

For

per

sona

l use

onl

y

1616

GRIEVE PROJECT – REMAINING STEPS TO FIRST OIL

Denbury-owned oil processing & CO2 recompression facilities Construction commenced in August 2014

Complete remaining production facilities and well work in 2016 Drill one producing well in 2016 immediately prior to first oil production

Complete remaining flow lines and well work-overs in 2016

CO2 injection into the field planned to restart prior to first oil

For

per

sona

l use

onl

y

1717

EXISTING WYOMING CO2-EOR PROJECT – EXAMPLE 1

Anadarko’s Patrick Draw – Monell FieldPurchased CO2 Utilization 7.46 MCF/BO

For

per

sona

l use

onl

y

1818

EXISTING WYOMING CO2-EOR PROJECT – EXAMPLE 2

Devon Energy’s – Beaver CreekPurchased CO2 Utilization 7.59 MCF/BO

For

per

sona

l use

onl

y

19

GRIEVE CRUDE OIL EXPORT PIPELINE

19

Focus has changed from seeking private investors in a new pipeline company to asset sale

Current discussions are progressing with two bidders regarding a sale of the pipeline

Due diligence has been started with one company

Buyer is required to put pipeline into service prior to first oil production

A firm transportation tariff for Elk will be a condition of the sale

Plan is to monetize the pipeline

For

per

sona

l use

onl

y

20

SINGLETON EOR DEVELOPMENT

20

Elk completed purchase of the Singleton Unit effective 1 May 2014 Elk resumed water injection into the field to maintain the Unit

Wells tested for compliance with regulatory requirements Fluid levels indicate uniform pressures across the field

CO2 supply secured from Bridgeport Ethanol in December 2013 Three-year option on 10-year supply contract for CO2 starting in December 2016, plus 5-

acre lease on property adjacent to ethanol plant

Facilities design work started at the the Bridgeport ethanol plant

CO2 pipeline right-of-way acquisition progressing First five miles of ROW acquired from private landowners

County commissioners support using road right-of-ways for remaining ROW

For

per

sona

l use

onl

y

2121

SINGLETON OIL FIELD – SUITABLE FOR EOR DEVELOPMENT

Excellent reservoir quality

Ideal for CO2-EOR

Reservoir close to MMP

About 20 well bores available

Injection water available

Potential for early oil

2-4 million EOR oil barrels

Low cost operating area

Favourable fiscal regime

Singleton Unit - J Sand Isopach

For

per

sona

l use

onl

y

2222

BRIDGEPORT, NEBRASKA – EOR DEVELOPMENT

Singleton Field is 25 miles to Bridgeport

10 nearby oil fields produced 51 million barrels

Development concept: CO2 pipeline to Singleton which is hub for future project

Elk AOI has 25 million BO potential

Singleton project has 25%-35% IRR

Elk AOI in Panhandle of Nebraska Provides Low Cost Entry to New CO2 Area

Singleton

Bridgeport

For

per

sona

l use

onl

y

23

ELK FORWARD FUNDING PLAN

For

per

sona

l use

onl

y

2424

ELK FORWARD FUNDING OPTIONS

Corporate Transaction Discussions have advanced with an ASX listed company regarding a corporate

transaction While these negotiations are incomplete and non-binding, agreement could be

reached in the next few weeks If agreement is reached, Elk will advise the market and seek shareholder approval

Debt Transaction Indicative term sheet for debt facility has been obtained To finalise terms, technical due diligence is required If agreement is reached, Elk will advise the market

For

per

sona

l use

onl

y

25

QUESTIONS TO MANAGEMENT & DIRECTORS

RETURN TO ORDINARY BUSINESS OF AGM

For

per

sona

l use

onl

y

2626

ACCOUNTS FOR THE YEAR TO 30 JUNE 2014

Accounts in 2014 Annual Report Receive

Consider any questions or comments

For

per

sona

l use

onl

y

27

RESOLUTIONS

For

per

sona

l use

onl

y

2828

RESOLUTIONS1. Re-election of a Director – Mr Barry Smith WITHDRAWN

2. Re-election of a Director – Mr Robert Cook

3. Adoption of Remuneration Report

4. Approval of Employee Incentive Rights Plan

5. Approval of Non-Executive Director and Adviser Rights Plan

6. Grant of Performance Rights and Retention Rights to Dr Neale Taylor (NED)

7. Grant of Performance Rights and Retention Rights to Mr Robert Cook (NED)

8. Grant of Performance Rights and Retention Rights to Mr Barry Smith (NED) WITHDRAWN

9. Grant of Performance Rights and Retention Rights to Mr Anthony Strasser (NED)

10. Grant of Performance Rights and Retention Rights to Mr Matthew Healy (NED)

For

per

sona

l use

onl

y

29

RESOLUTION 1– RE-ELECTION OF DIRECTOR - MR BARRY SMITH

To consider and if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution:

“That Mr Barry Smith be re-elected as a Director of the Company.”

29

For

per

sona

l use

onl

y

30

RESOLUTION 2– RE-ELECTION OF DIRECTOR - MR ROBERT COOK


“That Mr Robert Cook be re-elected as a Director of the Company.”

30

For

per

sona

l use

onl

y

31

To consider and if thought fit, to pass, with or without amendment, the following resolution as a non-binding resolution:

“To adopt the Elk Remuneration Report for the year ended 30 June 2014.”

NOTE: the vote on this resolution is advisory only and does not bind the Directors.

31

RESOLUTION 3– ADOPTION OF REMUNERATION REPORT

For

per

sona

l use

onl

y

32

RESOLUTION 4– APPROVAL OF EMPLOYEE INCENTIVES RIGHTS PLAN


“That the Employee Incentives Rights Plan (EIR Plan), a summary of the rules of which are set out in the Explanatory Statement accompanying this Notice of Meeting, and the issue of shares under the EIR Plan, be approved for purposes including ASX Listing Rule 7.2 Exception 9.”

32

For

per

sona

l use

onl

y

33

RESOLUTION 5– APPROVAL OF NON-EXECUTIVE DIRECTOR AND ADVISER RIGHTS PLAN


“That the Non-Executive Director and Adviser Rights Plan (NEDA Plan), a summary of the rules of which are set out in the Explanatory Statement accompanying this Notice of Meeting, and the issue of shares under the NEDA Plan, be approved for purposes including ASX Listing Rule 7.2 Exception 9.”

33

For

per

sona

l use

onl

y

3434

RESOLUTION 6– GRANT PERFORMANCE RIGHTS AND RETENTION RIGHTS TO DR NEALE TAYLOR


“That approval be given for all purposes, including of Listing Rule 10.14, for the grant of up to 1,200,000 Performance Rights and up to 600,000 Retention Rights to Dr Neale Taylor, a Non-Executive Director of the Company, over the next three years, in accordance with the NEDA Plan and on the terms set out in the Explanatory Statement accompanying this Notice of Meeting.”

For

per

sona

l use

onl

y

35


“That approval be given for all purposes, including of Listing Rule 10.14, for the grant of up to 600,000 Performance Rights and up to 300,000 Retention Rights to Mr Robert Cook, a Non-Executive Director of the Company, over the next three years, in accordance with the NEDA Plan and on the terms set out in the Explanatory Statement accompanying this Notice of Meeting.”

35

RESOLUTION 7– GRANT PERFORMANCE RIGHTS AND RETENTION RIGHTS TO MR ROBERT COOK

For

per

sona

l use

onl

y

3636


“That approval be given for all purposes, including of Listing Rule 10.14, for the grant of up to 600,000 Performance Rights and up to 300,000 Retention Rights to Mr Barry Smith, a Non-Executive Director of the Company, over the next three years, in accordance with the NEDA Plan and on the terms set out in the Explanatory Statement accompanying this Notice of Meeting.”

RESOLUTION 8– GRANT PERFORMANCE RIGHTS AND RETENTION RIGHTS TO MR BARRY SMITH

For

per

sona

l use

onl

y

3737


“That approval be given for all purposes, including of Listing Rule 10.14, for the grant of up to 600,000 Performance Rights and up to 300,000 Retention Rights to Mr Anthony Strasser, a Non-Executive Director of the Company, over the next three years, in accordance with the NEDA Plan and on the terms set out in the Explanatory Statement accompanying this Notice of Meeting.”

RESOLUTION 9– GRANT PERFORMANCE RIGHTS AND RETENTION RIGHTS TO MR ANTHONY STRASSER

For

per

sona

l use

onl

y

38


“That approval be given for all purposes, including of Listing Rule 10.14, for the grant of up to 600,000 Performance Rights and up to 300,000 Retention Rights to Mr Matthew Healy, a Non-Executive Director of the Company, over the next three years, in accordance with the NEDA Plan and on the terms set out in the Explanatory Statement accompanying this Notice of Meeting.”

38

RESOLUTION 10– GRANT PERFORMANCE RIGHTS AND RETENTION RIGHTS TO MR MATTHEW HEALY

For

per

sona

l use

onl

y

393939

CLOSE OF MEETING

No other business

Meeting closed

Thank you for your attendance

For

per

sona

l use

onl

y

40

Please join the Directors, CEO and Elk’s advisorsfor refreshments

Please join the Directors, CEO and Elk’s advisorsfor refreshments

For

per

sona

l use

onl

y

41

For

per

sona

l use

onl

y

for personal use only 3 introductions board of directors dr neale taylor chairman mr bob cook...

Documents