proposed reverse takeover by warrego energy limited and ... · newly appointed directors nominated...
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Proposed Reverse Takeover
by Warrego Energy Limited
and AIM Listing
David Casey
Managing Director & CEO
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Why?
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Why consider a merger?
▪ Diversify risk
▪ Enhance capabilities
▪ Greater scale increases funding optionality
▪ Provide certainty
✓ Ultimately combined entity provides greater scope and
scale and return for existing and new shareholders
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Why Warrego?
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Why Warrego?
▪ Very material “company making” asset
▪ $11M carry on very near term high impact drilling activity
▪ Accomplished and credentialed corporate and technical
team
▪ Committed to adding shareholder value through the “drill
bit”
▪ Provides funding optionality in Australia and UK
✓ Combined entity not only has complementary assets and
skillsets but a pathway of very material projects…
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Who is Warrego?
What are the terms?
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Reverse take over / raising $10m-$16m / dual listed on AIM and ASX by Feb 2019
Warrego
UK Private company
Assets:
West Erregulla - Perth Basin WA
Strike farming in - $11m for 50%
Latest see ASX:STX news
Petrel
ASX Listed - PRL
Assets:
Tesorillo Southern Spain
North Perth Basin WA
Uruguay medium term optionality
Approved activities 1st half 2019: Planned activities 2nd half 2019:
Drilling West Erregulla-2 in WA Drilling Tesorillo Spain
Proposed Transaction – subject to shareholder approval
77% 23%
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Proposed Transaction
▪ Petrel has negotiated a non binding term sheet for a reverse takeover with
Warrego Energy (UK) Limited (subject to customary conditions precedent)
▪ RTO requires shareholder approval in January 2019
▪ Warrego shareholders will own approximately 77% of Petrel following the RTO
▪ Petrel shareholders will own approximately 23% of Petrel following the RTO
▪ The company will be renamed Warrego Energy Limited
▪ On completion of the RTO the board will consist of Mr Greg Columbus and five
newly appointed directors nominated by Warrego – see next slide for the 4
Warrego nominees
▪ Immediately after the RTO, Warrego Energy Limited, will list on AIM with a
capital raising of approximately A$10m
See Transaction Details later in presentation
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Proposed Warrego Directors
Warrego Management bring a breadth of technical and corporate expertise
Dennis Donald
Managing Director
Co-Founder
Left Shell to form Leading Edge Advantage (“LEA”). Built this to a global business.
Sold LEA and formed Warrego to bring new technology and techniques to play in
unconventional onshore gas. Educated to Masters level at Robert Gordon’s
University.
Duncan MacNiven
Executive Director
Co-Founder
Former corporate/oil & gas lawyer Co-founded LEA in 1998 and Warrego in 2007.
Invested in and sold out of a number of asset and technology projects. Graduate of
Aberdeen University.
Mark Routh
Non-executive Chairman
Over 30 years experience. Chairman of Independent Oil &Gas plc. Previously MD
of CH4 Energy Ltd.10 years with Hess, 6 years with BP and 5 years with
Schlumberger. Msc in Petroleum Engineering from Imperial College.
Owain Franks
Chief Operating Officer
Formerly Commercial Director Independent Resources Group plc. Previously a
senior partner in PwC in the UK for 21 years. Former Senior Adviser to the Board
of Dana Petroleum plc. LLB University of Southampton, Post Graduate Diploma in
Corporate Strategy, Harvard Business School.
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Warrego brings experience…
Warrego brings proven management and entrepreneurial history.
Also deep knowledge of innovative drilling, production techniques/processes.
and technologies to the Perth Basin and to the combined entity.
Warrego has particular skills and networks in:
▪ Underbalanced, coiled tubing and managed pressure drilling techniques.
▪ Access to proven cutting edge technologies as example in the following areas
▪ Ballistics, Perforator with proven capability to dramatically reduce fracture
breakdown pressure and improve productivity in suitable reservoirs by 20%.
▪ Fibre Optic Logging Tool for Well and Field Evaluation. “Disposable” fibre optic
logging tool can be deployed to give well logs and extrapolation onto filed
characteristics.
▪ Cuttings evaluation technology that can give real time well characteristics and the
ability to extrapolate into successful field management and development.
Warrego’s technical skills are ideally suited to West Erregulla and WA’s unlocked
unconventional potential
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…and a potential world class asset
▪ $11m farm-in by Strike Energy Ltd
for 50% of EP469 signed in June
2018
▪ West-Erregulla 2 well scheduled to
commence drilling during H1
2019 to test 3 horizons including
the Kingia-High Cliff sand sequence
(the Waitsia conventional gas
prospect)
▪ Significant additional
unconventional potential also
identified subject to lifting of
moratorium on fracking
▪ Exploration and appraisal
agreements already in place with
indigenous communities
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North Perth Basin…Australia’s next gas province
Waitsia now ranked in the top 5 largest gas fields ever discovered onshore Australia
North West Shelf to Perth Pipeline
Waitsia-2P Reserves
recently increased to
811PJ (gross); 78%
higher than AWE’s 2P
Waitsia Reserves as at
30 June 2017
Waitsia-2 42m perf. avg.
rate of 38.5Mmscf/d
Waitsia-3 42m perf. avg.
rate of 49.5Mmscf/d
Waitsia-4 50m perf. avg.
rate of 89.6Mmscf/d
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Targets
Multiple conventional and unconventional targets
COOLCALALAYA
1st Unconventional target STP-EPA-0127
2nd Unconventional target STP-EPA-0127
EP-469 & Waitsia
Conventional target
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Strike Energy (STX) agrees…
On 8 June 2018 Warrego completed the farm-out of part of EP469 to Strike
Energy Limited (“Strike”), an ASX listed company on the following terms:
▪ 50% of EP469 was transferred to Strike
▪ Strike became operator
▪ Strike has paid A$600,000 to Warrego and operations are under way
▪ Strike carries Warrego for the first A$11,000,000 of expenditure on the West
Erregulla Deep well
▪ Warrego has equal representation on the Operating and Technical
Committees of the joint venture (“JV”).
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Third Party Validation…
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AWE Valuation of Waitsia vs. West Erregulla
83% of the AWE’s 2P Reserves were attributable to Waitsia providing a market valuation of
$503m for its 50% of Waitsia.
1. Source: Mitsui & Co presentation dated 18 May 2018 “TOB of AWE Limited”.
2. Assumes 100% of the acquisition value is attributable to 2P Reserves. Calculated as AWE acquisition value $605m x 83% = $503m.
3. West Erregulla Kingia- High Cliff Prospective Resource as disclosed by Strike Energy Limited in an announcement entitled West Erregulla Update released on the 13th
June 2018.
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West Erregulla– A tier 1 asset in the making
West Erregulla is a material standalone conventional gas prospect with prospective
volumes up to 1.24 TCF
Source: West Erregulla Kingia- High Cliff Prospective Resource as disclosed by Strike Energy Limited in an announcement entitled West Erregulla Update released on the 13th June 2018.
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West Erregulla – Additional Prospectivity
Source: West Erregulla Lower Dongara Prospective Resource as disclosed by Strike Energy Limited in an announcement entitled October 2018 Update released on the 12th October 2018.
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West Erregulla - Advanced reprocessing
Advanced reprocessing & spacial stacking yields further confidence in Kingia-High Cliff
Source: West Erregulla Advanced reprocessing as disclosed by Strike Energy Limited in an announcement entitled October 2018 Update released on the 12th October 2018.
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West Erregulla-2 Well Delivery
Source: Waitsia drill rig photo from AWE presentation to WA Petroleum Club on 28 March 2018
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In Summary…with complementary assets
and exploration philosophies this clearly
represents a compelling opportunity for
existing shareholders in both companies,
where the whole is definitely worth more than
the parts.
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Transaction details
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Pro Forma Capital Structure
The indicative capital structure of Petrel following completion of the RTO, based on
the current securities on issue, including the Convertible Note issue, and AIM Listing
(each assuming full subscription), will be as follows:
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Preliminary Timetable
A preliminary timetable for the Transaction and associated events is set out below
and is subject to change:
Event Date
Execution of definitive agreements 5 December 2018
Dispatch of Notice of General Meeting for Petrel 19 December 2018
Petrel General Meeting to approve share issue for RTO 31 January 2019
Finalisation of AIM Public Offer fundraise 1 February 2019
Target date for AIM Admission 15 February 2019
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