for personal use only producer and explorer - asx · for personal use only producer and explorer ....
TRANSCRIPT
3-6 DECEMBER 2013
ASIAN ROAD SHOW PRESENTATION
A pure Cooper Basin producer and explorer
For
per
sona
l use
onl
y
IAN BUCKNELL CHIEF FINANCIAL OFFICER
BRAD LINGO MANAGING DIRECTOR
General Overview
The Plan
The Projects
Appendices
For
per
sona
l use
onl
y
ASIAN ROAD SHOW PRESENTATION
3
Investment Highlights
• Pure Cooper Basin focus highly leveraged to key equity investment themes
• Focused strategy delivering consistent strong reserve and production growth leveraged to oil and NGL production
• Continuing strong growth pipeline supported by extensive conventional exploration, appraisal and development drilling inventory
• Growing gas supplier with proven access to infrastructure and markets
• Material unconventional exploration and appraisal program with LNG export market exposure
• Near term catalysts driven by strong conventional production cash flow and growth combined with proving up multi-TCF unconventional resources
• Fully funded projected work programs from internal cash flow through 2016
For
per
sona
l use
onl
y
ASIAN ROAD SHOW PRESENTATION
4
Corporate Profile
Financial
ASX Ticker ASX: DLS
S&P/ASX Index ASX 200
Market Cap (A$m) 547
Shares on Issue (m) 432
Share Price (2 December 2013) (A$/sh) 1.265
Cash (30 September 2013) (A$m) 25
Total Debt (30 September 2013) (A$m) 140
FY 2013 Earnings (A$m) 45.1
FY 2013 EPS (A$/sh) 0.135
Operational
Reserves-2P (mmboe) ~30.0
Resources-2C (mmboe) 14.8
Production (Sept Quarter 2013) (boepd) ~9,200
FY 2014 Forecast Production (mmboe) 2.3-2.5
Share Price Performance (Since 1 Jun 2011)
Institutions, 38%
Brokers, 8%
Private, 26%
Corporate, 14%
Employees etc., 3%
Unanalysed, 10%
Shareholder Structure
75%
125%
175%
225%
275%
325%
375%
01 Jul 11 18 Nov 11 06 Apr 12 24 Aug 12 16 Jan 13 12 Jun 13 30 Oct 13
DLS.ASX XEJ.ASX
For
per
sona
l use
onl
y
ASIAN ROAD SHOW PRESENTATION
5
Drillsearch – A material Cooper Basin player
Drillsearch is the only pure Cooper Basin focused company
For
per
sona
l use
onl
y
ASIAN ROAD SHOW PRESENTATION
6
A year of record results – and we’re in the black
Change on 2012
Reserves* 28.5 mmboe 157%
Production 1.1 mmboe 173%
Revenue $102.2 million 356%
Reported NPAT $45.1 million 351%
Operating cash flow $21.4 million 110%
New Debt $104.3 million 100%
Drillsearch is focused on growing Reserves, production and cash flow
For
per
sona
l use
onl
y
ASIAN ROAD SHOW PRESENTATION
7
1.4 1.3
8.5 11.1
28.5
2009 2010 2011 2012 2013
mm
boe
Proven Probable
A year of record results
10.0 6.1 14.4
22.4
102.2
2009 2010 2011 2012 2013
$Mil
lio
ns
Oil Gas
2P Reserves up 157%
• Western Flank Oil exploration success
• New Wet Gas discoveries in Western Wet Gas
• Successful commercialisation of Western Wet Gas discoveries
Net Production up 173% Sales Revenue up 356%
• Start-up of Bauer-to-Lycium Oil Export Pipeline
• New Middleton-Brownlow Wet Gas GSA delivers increased production
• Significant increase in oil production
• New firm GSA with SACBJV
• Strong oil and NGL prices
Drillsearch included in the S&P / ASX 200 Index
For
per
sona
l use
onl
y
ASIAN ROAD SHOW PRESENTATION
8
1.0
(1.7)
2.6 8.1
58.9
90.592
83 93
111 116 118
2009 2010 2011 2012 2013 YTD 2014
Gross ProfitRealised oil price ($/bbl) Gross prof it ($Millions)
10.0 6.1 14.4
22.4
102.2
122.20
2009 2010 2011 2012 2013 YTD 2014
$Mill
ions
Sales Revenue
FY 2014 – How are we doing so far?
YTD FY 2014* FYE 2013 Total Production (mmboe) 1.14 1.06
Sales Revenue ($M) 122.2 102.2
EBITDAX ($M) 76.8 32.9
Gross Profit ($M) 90.5 58.9 *Unaudited results through 31 October 2013
1.8
(6.4) (1.1)
7.6
32.9
76.8
2009 2010 2011 2012 2013 YTD 2014
$Mill
ions
EBITDAX
0.2 0.2 0.1 0.4
1.1
2.3 - 2.5
1.1
2009 2010 2011 2012 2013 2014 Guidance
YTD 2014
mm
boe
Net ProductionOil Gas
*YTD includes 1 July to 31 October 2013 and is unaudited
YTD 2014 performance already exceeding FYE 2013 results
For
per
sona
l use
onl
y
General Overview
The Plan
The Projects
Appendices
For
per
sona
l use
onl
y
ASIAN ROAD SHOW PRESENTATION
10
• Focused use of all of our human and financial capital
• Target our numerous, high return oil exploration prospects
• Commercialise our substantial portfolio of wet gas discoveries
• Prove the unconventional gas potential of our acreage
Deliver strong growth in reserves, production and cash flow
Our strategy remains unchanged F
or p
erso
nal u
se o
nly
ASIAN ROAD SHOW PRESENTATION
11
Three factors are driving the Cooper Basin and investor interest: • Growth in Oil Production - Dramatic growth in oil exploration success with the
emergence of the Western Flank as a prolific oil fairway
• Growth in Conventional Gas Demand – Rapid growth in Eastern Australian gas demand driven by complexity of CSG-to-LNG projects
• Emergence of Unconventional Play Potential – Significant unconventional gas resources identified and encouraging early exploration results are emerging
Drillsearch is the only pure Cooper focused company and is well positioned to capture these opportunities
Why the Cooper Basin? F
or p
erso
nal u
se o
nly
ASIAN ROAD SHOW PRESENTATION
12
Cooper Basin Social License to Operate
• Long history of successful oil and gas operations
• Few landholders but all experienced in successfully co-existing with oil and gas operations
• No prime arable land, primarily desert with agricultural use limited to seasonal cattle grazing
• Shale gas area stakeholders limited to a single land owner - Santos
ATP 940P, October 2011
Aerial photo of the Cooper Basin, October 2011
For
per
sona
l use
onl
y
ASIAN ROAD SHOW PRESENTATION
13
The Australian – US interests growing
11 October 2013
For
per
sona
l use
onl
y
ASIAN ROAD SHOW PRESENTATION
14
East Coast Gas – Once-in-a-generation opportunity
Cooper Basin is the best placed oil and gas province to supply east coast gas demand and Drillsearch is well positioned to capitalise of this opportunity…
Substantial Wet Gas Reserves and Resources
Established access to the Cooper Basin infrastructure
Commercialisation partnerships in place with Santos and BG
Leadership with proven ability to deliver on strategy and execute
Drillsearch offers the purest leverage to the east coast gas market thematic
For
per
sona
l use
onl
y
ASIAN ROAD SHOW PRESENTATION
15
Drillsearch’s capacity to supply gas is increasing while both LNG and uncontracted domestic gas demand is emerging from 2012-17
Poised to capitalise on East Coast gas demand F
or p
erso
nal u
se o
nly
ASIAN ROAD SHOW PRESENTATION
16
CIF Price $15.00
Shipping of $1.00 Fuel shrink3 of $0.25
Transport to terminal of $1.30 Processing of $4.25 Plant losses of2 of $0.25 Upstream netback of $7.95
Transport to terminal of $0.30 Processing of $2.75 Plant losses of2 of $0.30 Upstream netback of $8.15
Transport of $1.00 Fuel shrink3 of $0.50
Transport of $0.75 Fuel shrink3 of $0.20
Transport to terminal of $1.00 Processing of $5.25 Plant losses of2 of $0.40 Upstream netback of $7.40
LNG Project Capital Cost (US$/mmtpa) Gladstone Kitimat Sabine Pass
Project type Australia greenfield
British Columbia greenfield
Gulf of Mexico brownfield1
Pipeline cost $250 $280 N/A
Downstream cost
$1,200 $1,000 $550
Total cost $1,450 $1,280 $550
Sour
ce:
Woo
dmac
, Che
nier
com
pany
rele
ases
& p
rese
ntat
ions
; JP
Mor
gan
& b
roke
r rep
orts
1: Building off brownfield infrastructure where facilities are already in place for regassification 2: Based on 7.5% of estimated local gas market price 3: Based on $0.05/mmbtu per 1,000nmi
Cooper Basin gas prices will be robust F
or p
erso
nal u
se o
nly
General Overview
The Plan
The Projects
Appendices
For
per
sona
l use
onl
y
ASIAN ROAD SHOW PRESENTATION
18
Oil Business - Highlights
Key Data
Net Acreage: ~12,000 km²
FY2013 Production: 775,374 bbls
FY2013 Revenues: A$91.3m
Q1 2014 Production (BOPD) 7,624 bbls
Q1 2014 Production: 701,419 bbls
Q1 2014 Revenues: A$80.2m
Reserves (2P): 9.6 mmbbls
Contingent Resources (2C): 5.1 mmbbls
3D Seismic Coverage 2,458km²
Discoveries 32
Fields in production 13
FY 2014 – Exploration wells 7
FY 2014 – Development wells 15 For
per
sona
l use
onl
y
ASIAN ROAD SHOW PRESENTATION
19
Oil – Driving near-term growth
Key deliveries in FY 2013
Major Reserves upgrades through Bauer Oil Field appraisal program
Expansion of Bauer production plant to 33,000 BOFPD
Completion of 10,000 BOPD Bauer-to-Lycium Oil Export Pipeline
Major new oil discovery at Pennington-1
New oil discoveries at Kalledeina, Congony and Sceale extend oil fairway
New Western Flank Oil Fairway 3D delivers high quality prospect portfolio
Western Flank prospect seriatim now exceeds over 100 potential targets – many 3D controlled
PEL 91 - Bauer Central Production Facility
PEL 91 – Construction of Bauer-to-Lycium Oil Pipeline
For
per
sona
l use
onl
y
ASIAN ROAD SHOW PRESENTATION
20
Oil – The road ahead
How do we deliver the plan…. Robust portfolio of 10 existing discoveries in
Western Flank Oil Fairway
Current production levels coming from 3 fields only – Bauer, Chiton and Hanson – with other fields awaiting connection
Current Western Flank prospect seriatim now exceeds over 100 potential targets and aggregate gross unrisked prospective oil potential of 44 mmbbls – many 3D controlled
Large undrilled oil prospects in Inland-Cook Oil Fairway emerging as potential next big frontier
Large undeveloped oil 2C Contingent Resources already defined in Eastern Margin
PEL 91 – Western Flank Oil Fairway Bauer focus
Inland-Cook Oil Fairway, Hurron Prospect focus
Full development of existing discoveries and only moderate small scale exploration success required beyond 3-years to
maintain current production levels
For
per
sona
l use
onl
y
ASIAN ROAD SHOW PRESENTATION
21
Wet Gas Business - Highlights
Key Data
Net Acreage: ~4,200km²
FY 2013 Production: Gas: 147,320 boe NGLs: 76,710 boe
FY 2013 Revenues A$10.9m
Q1 2014 Production (BOEP) 1,608 boe
Q1 2014 Production: Gas: 59,550 boe NGLs: 88,354 boe
Q1 2014 Revenues A$6.5m
Reserves (2P): 20.4 mmboe
Contingent Resources (2C): 14.7 mmboe
3D Seismic Coverage; 1,927 km²
Discoveries 23
Fields in production 3
FY 2014 – Exploration wells 7
FY 2014 – Development wells 3
For
per
sona
l use
onl
y
ASIAN ROAD SHOW PRESENTATION
22
Wet Gas – Positioned for growth
Key deliveries in FY 2013
New long-term sale agreement with SACBJV delivers strong gas sales
Canunda discovery tie-in to Middleton Gas Plant delivers ultra-liquids rich production
DLS-operated Western Cooper Wet Gas exploration delivers 2 new discoveries
Secured new Wet Gas JV with Santos accelerating development of multiple wet gas discoveries
Commence successful Northern Cooper Wet Gas Project appraisal program with major field extension with Flax South-1 discovery
New 3D seismic programs generate robust prospect seriatim in Northern and Western Wet Gas project areas
PRL 14 – Flax Gas Plant
PEL 106B – Middleton Production Facility
For
per
sona
l use
onl
y
ASIAN ROAD SHOW PRESENTATION
23
Wet Gas – The road ahead
How do we deliver the plan…. Existing Middleton-Brownlow Wet Gas Project and step-out discoveries can
maintain existing production levels for over 10 years
Drillsearch has over 15 existing wet gas discoveries in the Western and Northern Wet Gas Project areas awaiting appraisal and development
These existing wet gas discoveries may support another 2-3 Wet Gas production satellites similar in scale to the Middleton-Brownlow Wet Gas Project
Western Wet Gas Fairway
Northern Wet Gas Fairway
If achieved the Wet Gas business will be generating up to $100m per annum based on
current gas sale arrangements
Drillsearch has also identified a likely new wet gas discovery within its SW Queensland acreage ready for appraisal to support an additional Wet Gas production satellite
Drillsearch is targeting net production of 10-15 mmscf/day of raw gas and liquids from these multiple Wet Gas production satellites
For
per
sona
l use
onl
y
ASIAN ROAD SHOW PRESENTATION
24
Unconventional Business - Highlights
Key data
Net acreage ~3,160km²
Mean Recoverable Prospective Resources
Shale Gas: ~24 TCF
Basin Centred Gas: ~8 TCF
3D Seismic Coverage ~2,790km²
FY 2014 – Exploration wells 4
FY 2014 – Development wells nil
Current unconventional exploration, appraisal and testing program designed to deliver 2-4 TCF contingent resources and funded from operating cash flow through FY 2016
For
per
sona
l use
onl
y
ASIAN ROAD SHOW PRESENTATION
25
Key deliveries in FY 2013
Completed DLS-operated Winnie 1,054km2 3D seismic program – largest, highest specification 3D acquired onshore Australia
Picked initial 4 unconventional well drilling locations targeting REM shale and Permian Basin-centered gas targets with multiple additional drilling locations identified
Commenced Weatherford 826 drilling rig upgrade program to make it the only HPHT drilling rig in Australia
Targeting 2C Continent Resource booking of 1-2 TCF by 2014 year end
ATP 940P – Weatherford 826 rig spudding Anakin-1 shale gas well
ATP 940P – Winnie 3D Seismic Acquisition
Unconventional – Transformational potential F
or p
erso
nal u
se o
nly
ASIAN ROAD SHOW PRESENTATION
26
Unconventional – The road ahead
How do we deliver the plan…. Four well initial exploration/delineation drilling and fraccing
program already underway
Program designed to deliver 1-2 TCF 2C Contingent Resources (gross) by CYE 2014
Program aimed at delivering a further 1-2 TCF 2C Contingent Resources (gross) by mid-CY 2015
JV already planning further six appraisal and delineation pilot production wells following completion of four well drilling and fraccing program
Drillsearch contemplates six additional appraisal and delineation wells will form backbone of initial unconventional production pilot
Production pilot aimed at demonstrating potentially commercially viable unconventional production rates
ATP 940P – Central Unconventional Fairway
Multiple plays require extensive stimulation programs
Delivering up to 6 TCF of 2C Contingent Resources (gross) and commence initial production pilots demonstrating
potentially commercially viable unconventional gas
For
per
sona
l use
onl
y
ASIAN ROAD SHOW PRESENTATION
27
Current ATP 940P Work Plan
Activity 2013 2014 2015
Sept Q
Dec Q
Mar Q
Jun Q
Sept Q
Dec Q
Mar Q
Jun Q
Sept Q
Dec Q
Drilling
Top-hole x 3
Wells completed x 4
Evaluation Period
Fracc and Production Test
Activity
Sept Q
Dec Q
Mar Q
Jun Q
Sept Q
Dec Q
Mar Q
Jun Q
Sept Q
Dec Q
2013 2014 2015
QGC spend $90 million
Book 2C Resource (2 wells)
DLS at 40% funding
Book 2C Resource (4 wells tested)
For
per
sona
l use
onl
y
ASIAN ROAD SHOW PRESENTATION
28
The road ahead
Drillsearch is focused on delivering over the next 3 years…
Oil – Fully developing its large pool of oil discoveries, executing expanded 3D-based exploration programs and delivering production increases, Reserve replacement and Reserve growth
Wet Gas - Delivering additional wet gas production satellites from existing discoveries increasing Wet Gas production to over 50 mmscf/d of raw gas and liquids
Unconventional – Delivering up to 6 TCF of 2C Contingent Resources (gross) and commence initial production pilots demonstrating potentially commercially viable unconventional gas
Financial – Significantly increase conventional production and executing this strategy from internal cash flows flowing from these production increases
Drillsearch is targeting not only growing conventional Reserves but also significantly increasing production
For
per
sona
l use
onl
y
ASIAN ROAD SHOW PRESENTATION
29
Active drilling in all businesses
Permit DLS % Operator
2013 2014 2015 Total Sept
Q Dec Q
Mar Q
Jun Q
Sept Q
Dec Q
Mar Q
Jun Q
Oil
Western Flank 60-43 BPT/SXY 15
Eastern Margin 40 STO 18
Wet Gas
Western 50 BPT 4
Western 40 STO 10
Northern 80-100 DLS 7
Unconventional
Central Cooper 40 DLS/BG 10
Oil Wet Gas Unconventional
For
per
sona
l use
onl
y
ASIAN ROAD SHOW PRESENTATION
30
Delivering for shareholders – Near-term catalysts
Wet Gas Commercialisation
STO commences Western Cooper
development program
December Q 2013
Unconventional Drilling Program
First unconventional exploration wells reach target pay
zones
March Q 2014
Oil Exploration Drilling Program Western Flank Oil
exploration, appraisal and development drilling resumes
March Q 2014
Wet Gas Commercialisation
Northern Cooper Wet Gas Project
production testing begins and Western
Cooper Wet Gas exploration begins
June Q 2014 For
per
sona
l use
onl
y
ASIAN ROAD SHOW PRESENTATION
31
• Focused strategy delivering consistent, strong reserve, production and cash flow growth
• Continuing strong growth pipeline supported by extensive conventional exploration, appraisal and development drilling inventory
• Growing gas supplier with proven access to infrastructure and markets and long-term gas sale arrangements is place
• Material unconventional exploration and appraisal program with LNG export market exposure
• Near-term catalysts driven by strong conventional production and cash flow growth, combined with proving up multi-TCF unconventional resources
Projected work programs are fully funded from internal cash flow through 2016
Outlook highlights
Our vision is to become a leading Australian mid-tier oil and gas exploration and production company
For
per
sona
l use
onl
y
General Overview
The Plan
The Projects
Appendices
For
per
sona
l use
onl
y
ASIAN ROAD SHOW PRESENTATION
33
Reserves and Resources
Net Reserves and Contingent Resources as at 30 June 2013*
Business Segment Reserves 1P mmboe
2P mmboe
3P mmboe
Western Flank Oil 5.05 7.58 11.30
Western Cooper Wet Gas – Middleton Gas Project 6.10 15.87 27.69
Western Cooper Wet Gas – PEL 106A Gas Project 1.48 4.46 12.43
Northern Cooper Wet Gas 0.03 0.05 0.05
Eastern Cooper Oil 0.32 1.83 4.57
Total Reserves 12.99 29.79 56.04
Business Segment Reserves 1C mmboe
2C mmboe
3C mmboe
Western Flank Oil 0.17 0.39 0.64
Western Cooper Wet Gas – Middleton Gas Project 0.44 3.29 9.95
Western Cooper Wet Gas – PEL 106A Gas Project 0.00 0.00 0.00
Northern Cooper Wet Gas 4.68 10.41 25.24
Eastern Cooper Oil 0.04 2.51 6.76
Total Contingent Resources 5.32 16.60 42.59
* Reserves and Resources as at 30 June 2013 as released to the ASX on 15 August 2013 and including the additional 29% interest in Tintaburra.
For
per
sona
l use
onl
y
ASIAN ROAD SHOW PRESENTATION
34
Strong Management Team and Board
Brad Lingo Managing Director
Brad has more than 25 years of oil and gas
experience.
John Whaley Chief Operating Officer
John has extensive experience across
upstream and downstream sectors of the oil and gas
industry.
David Evans Chief Technical Officer
David has over 25 years of upstream oil and gas
exploration experience including over 15 years in
Australia.
Ian Bucknell Chief Financial Officer
Ian is a Certified Practicing Accountant with over 15
years upstream oil and gas accounting experience.
Peter Fox Chief Commercial Officer Peter has over 20 years of experience in the oil and gas industry with a focus
on the upstream and infrastructure sectors.
Jim McKerlie Chairman
Jim has extensive experience as a
Director and Chairman of private
and public companies.
Fiona Robertson Non-Executive
Director Fiona has more than 30 years experience
in the corporate finance and
resources sectors.
Ross Wecker Non-Executive
Director Ross has more than 35 years experience
in the oil and gas industry.
Jean Moore Company Secretary Jean has extensive
experience in corporate law and
corporate governance.
Philip Bainbridge Non-Executive
Director Philip has more than 25 years experience
in the oil and gas industry.
Teik Seng (TS) Cheah Non-Executive
Director TS is a finance and banking executive
based in Singapore with over 25 years
experience working for leading financial
institutions.
Margaret Fittler General Manager – People Margaret has over 15 years
of Australian and International experience as
an Human Resources professional.
For
per
sona
l use
onl
y
ASIAN ROAD SHOW PRESENTATION
35
WET GAS Thargomindah Primary School P&C fund raiser
• HSE – no lost time injuries
• Prioritize importance of corporate social responsibility
• Corporate governance upheld to highest standards
Committed to HSE and good corporate citizenship F
or p
erso
nal u
se o
nly
ASIAN ROAD SHOW PRESENTATION
36
• This presentation contains forward looking statements that are subject to risk factors associated with the Oil and
gas business. It is believed that the expectations reflected in these statements are reasonable but they may be affected by a variety of variables and changes in underlying assumptions which could cause actual results or trends to differ materially, including but not limited to: price fluctuations, actual demand, currency fluctuations, drilling and production results, reserve estimates, loss of market, industry competition, environmental risks, physical risks, legislative, fiscal and regulatory developments, economic and financial market conditions, political risks, project delay and advancement, approvals and cost estimates.
• All references to dollars, cents or $ in this presentation are to AUD, unless otherwise stated.
• References to “Drillsearch” may be references to Drillsearch Energy Limited or its applicable subsidiaries.
• The Reserves and Resources assessment follows guidelines set forth by the Society of Petroleum Engineers - Petroleum Resource Management System (SPE-PRMS). The Reserves estimates used in this presentation were compiled by Mr David Evans, Chief Technical Officer of Drillsearch Energy Ltd, who is a qualified person as defined under ASX Listing Rule 5.11 and has consented to the use of the Reserves figures in the form and context in which they appear in this presentation.
Disclaimer and important notice F
or p
erso
nal u
se o
nly
HEAD OFFICE LEVEL 16
55 CLARENCE STREET
SYDNEY NSW 2000
PH: +61 2 9249 9615
FX: + 61 2 9249 9630
W: WWW.DRILLSEARCH.COM.AU BRAD LINGO – MANAGING DIRECTOR
IAN BUCKNELL – CHIEF FINANCIAL OFFICER
DAVID EVANS – CHIEF TECHNICAL OFFICER
JOHN WHALEY – CHIEF OPERATIONS OFFICER
PETER FOX – CHIEF COMMERCIAL OFFICER
Contact Information F
or p
erso
nal u
se o
nly