Aker Exploration: Rig for oil Status and Outlook Bård Johansen, President & CEO.
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Transcript of Aker Exploration: Rig for oil Status and Outlook Bård Johansen, President & CEO.
Aker Exploration:
Rig for oil
Status and OutlookBård Johansen, President & CEO
| 2© Aker |
The preferred partner
part of the Aker group
Business overview 4Q06
Aker Exploration Pre-qualified as license holder on the NCS
by the Norwegian authorities
Company successfully financed in December 2006• NOK 305 million pre-money valuation• NOK 915 million new equity• NOK 457 million convertible bond
Long-term charter agreed for sophisticated and versatile Aker H-6e semisub
Farm-in agreed with Pertra for 15 % of PL 321 in Norwegian Sea
Awarded 15 % ownership in North Sea block 31/8 in Norwegian APA1 round
| 3© Aker |
The preferred partner
part of the Aker group
Business overview 2006
Aker Exploration In line with the business plan
Reflects the start-up of activities
Strengthening the organization
Ready to acquire new licenses
Capital base: NOK 3.2 billion
Key figures(in NOK million) 2005 2006
Revenues - 0EBITDA - (37)
Tax refund receivable - 29
Profit after tax - (8)
* Preliminary figures
The world’s most advanced drilling unit under construction
| 4© Aker |
The preferred partner
part of the Aker group
Rig for Oil
Aker Exploration's unique business modelAker Exploration - a new partner to increase exploration drilling
We are a pure-play exploration company, uniquely positioned to acquire licenses on the NCS
Secure a 5-year contract, on a flexible state-of-the-art rig
Farm-in with oil companies & direct license awards
Access to appropriate rig
Access to licenses
| 5© Aker |
The preferred partner
part of the Aker group
Experienced subsurface organization
Solid financial structure
Focused on building high-quality portfolio
Fully funded for a 3 year drilling programme
Key building blocks
Adding human capital and financial resourcesAccess to appropriate rigAccess to Rig
Access to Licenses
Norwegian Continental Shelf:
Focus on the northern part
PL321
PL416
| 7© Aker |
The preferred partner
part of the Aker group
Focus:
The most attractive areas
Total recoverable resources: 81 billion boe
26%
Undiscovered resources
North Sea- North
- Mid
- South
Norwegian Sea
Barents Sea
17(81%)
4(19%)
Undiscovered resources
21 billion boe
= AKX strategic focus
Source: NPD
| 8© Aker |
The preferred partner
part of the Aker group
Business model economics
Robust financial solution
Cost
Revenues
60%
Size of unrisked resources
x
Expected discovery rate
2. Commercial negotiation 3. Sales value pre PDO1. Geological evaluation
AKX share
vs.
% of exploration costs carried by AKX
$2-5 per barrel
based on historic
comparable
transactions
1. Drilling costs 2. Average cost carry
Rig costs
Third party costs
Other license costs
Own admin costs
3. Tax refund
78%
Fixed net cost base of $50m
Net cash flow of $175m per
year
=
Steady state revenues of
$225m
+
2010
Own share
| 9© Aker |
The preferred partner
part of the Aker group
Significant resources yet to be found on the NCS Government incentives to increase exploration through tax
refund, escalating area fee and drill-or-drop Low exploration activity, industry struggles to secure flexible
rig capacity
Strong industrial rationale
Unique business model, trading “Rig for Oil”
Exploring the most attractive areas of the NCS Offering flexible access to rig for drilling single wells Well positioned for farm-in negotiations and license awards Team focused on building high-quality exploration portfolio
and increase discovery rates by innovative use of new technology
Exploring for the future
Pure exploration play, aiming to sell discoveries pre-PDO 78% tax-cash refund reduces risk for equity investors If drilling success approximates the historical track record, Aker
Exploration's profitability will be excellent
Summary
A New Exploration Venture on NCS
| 10© Aker |
The preferred partner
part of the Aker group
This Presentation includes and is based, inter alia, on forward-looking information and statements that are subject to risks and uncertainties that could cause actual results to differ. These statements and this Presentation are based on current expectations, estimates and projections about global economic conditions, the economic conditions of the regions and industries that are major markets for Aker Exploration ASA and Aker Exploration ASA’s (including subsidiaries’ and affiliates’) lines of business. These expectations, estimates and projections are generally identifiable by statements containing words such as ”expects”, ”believes”, ”estimates” or similar expressions. Important factors that could cause actual results to differ materially from those expectations include, among others, economic and market conditions in the geographic areas and industries that are or will be major markets for Aker Exploration ASA’s businesses, oil prices, market acceptance of new products and services, changes in governmental regulations, interest rates, fluctuations in currency exchange rates and such other factors as may be discussed from time to time in the Presentation. Although Aker Exploration ASA believes that its expectations and the Presentation are based upon reasonable assumptions, it can give no assurance that those expectations will be achieved or that the actual results will be as set out in the Presentation. Aker Exploration ASA is making no representation or warranty, expressed or implied, as to the accuracy, reliability or completeness of the Presentation, and neither Aker Exploration ASA nor any of its directors, officers or employees will have any liability to you or any other persons resulting from your use of the Presentation.
In this presentation we may sometimes use “Aker Exploration", “Company, "we" or "us" when we refer to the Aker Exploration group
This Presentation speaks as of January 24, 2007. Neither the delivery of this Presentation nor any further discussions of the Company with any of the recipients shall, under any circumstances, create any implication that there has been no change in the affairs of the Company since such date
Disclaimer