valero energy Credit Suisse Energy Summit - February 5, 2009
Credit Suisse Energy Summit 6-8 February 2012 - … Suisse... · FEBRUARY 2012 CREDIT SUISSE ENERGY...
Transcript of Credit Suisse Energy Summit 6-8 February 2012 - … Suisse... · FEBRUARY 2012 CREDIT SUISSE ENERGY...
FEBRUARY 2012 CREDIT SUISSE ENERGY SUMMIT 2
Disclaimer
Important Notice Nothing in this presentation or in any accompanying management discussion of this presentation (the "Presentation") constitutes, nor is it intended to constitute: (i) an invitation or inducement to engage in any investment activity, whether in the USA, Canada, the United Kingdom or in any other jurisdiction; (ii) any recommendation or advice in respect of the ordinary shares (the "Shares") in Bowleven plc (the "Company"); (iii) any offer for the sale, purchase or subscription of any Shares; or (iv) any directed selling effort in respect of any Shares. Cautionary note for US investors The Shares are not registered under the US Securities Act of 1933 (as amended) (the "Securities Act") and may not be offered, sold or transferred except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with any other applicable state securities laws. The United States Securities and Exchange Commission ("SEC") permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or formation tests to be economically and legally producible under existing economic and operating conditions. The Company is not required to make filings with the SEC and this presentation includes information on "volumes initially in place", "STOIIP“, "resources" and other similar terms. Such terms do not refer to and are not reserves and US investors are cautioned accordingly. Cautionary note for Canadian investors No securities commission or similar authority in Canada has reviewed or in any way passed upon this presentation or the merits of the Shares, and any representation to the contrary is an offence. Forward-looking statements The Presentation may include statements that are, or may be deemed to be "forward-looking statements". These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "anticipates", "projects", "expects", "intends", "may", "will", "seeks" or "should" or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. These forward-looking statements include all matters that are not historical facts. They include statements regarding the Company's intentions, beliefs or current expectations concerning, amongst other things, the results of operations, financial conditions, liquidity, prospects, growth and strategies of the Company and its direct and indirect subsidiaries (the "Group") and the industry in which the Group operates. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance. The Group’s actual results of operations, financial conditions and liquidity, and the development of the industry in which the Group operates, may differ materially from those suggested by the forward-looking statements contained in the Presentation. Other than in accordance with the Company's obligations under the AIM Rules for Companies, the Company undertakes no obligation to update or revise publicly any forward-looking statement, whether as a result of new information, future events or otherwise. All written and oral forward-looking statements attributable to the Company or to persons acting on the Company's behalf are expressly qualified in their entirety by the cautionary statements referred to above and contained elsewhere in the Presentation.
FEBRUARY 2012 CREDIT SUISSE ENERGY SUMMIT 3
Company Overview
• 5 Blocks in Cameroon covering 4,644km².
• 3 offshore shallow water, 2 onshore; all operated.
• Overall P50 contingent resource base 217 mmboe* (net).
• Extensive 3D & 2D seismic database; expanded significantly during 2010/2011 (Bomono & Etinde).
• Substantial prospect inventory continually being developed across portfolio.
• Offshore Bowleven (operator) 75% Etinde Permit (25% Vitol).
• Onshore Bowleven (operator) 100% Bomono Permit.
• SNH back-in rights 20% (Etinde) and 10% (Bomono) at grant of exploitation licence.
Company Assets
* Source: Annual Report for 2011. Operator’s volumetrics. Volumetrics update post Sapele-3 pending, excludes EOV.
Nigeria
Equatorial Guinea
Cameroon
FEBRUARY 2012 CREDIT SUISSE ENERGY SUMMIT 4
Vision & Strategy
• Strategy focused on creating and realising value through material exploration success and development.
• Seek value adding partnerships and niche acquisitions as appropriate.
• Fostering strong external partnerships and in-country relationships.
• Targeted approach to technical, commercial and political risk.
• Resources to Reserves.
Vision
Strategy – Regional Focus on West Africa
“It is our vision to build an African focused exploration and production company which in time becomes
renowned for its ability to consistently create and realise material shareholder value through exploration led
organic growth and niche acquisitions.”
FEBRUARY 2012 CREDIT SUISSE ENERGY SUMMIT 5
Company Overview
• Current team has drilled 8 wells since joining in early 2007.
• Busiest and most successful Operator in Cameroon. Succeeded in opening up Douala Basin and discovering oil on acreage previously considered as gas prone.
• Multiple discoveries made – all wells encountered hydrocarbons.
• Wells have been targeted to maximise value – oils and rich gas.
• Drill locations have also been considered in context of the desire to maximise the area of retained prospective acreage.
• Extensive additional 3D seismic acquired (Block 6, 4C OBC etc).
Bowleven – Finding Resources & Securing Acreage
†
FEBRUARY 2012 CREDIT SUISSE ENERGY SUMMIT 6
Etinde Drilling History
2007 2008 2009 2010 2011
• 100% Drilling success rate.
• Focus on liquids.
• Gross resources up 166% since 2006.
• Operator’s estimates, excludes Sapele-3 and Alpha-Epsilon System:
Track Record – Wells and Resources
IE-3 (August 2010) Tested 22,909boepd
from 5 zones 40m Net Pay
IE-2z (March 2007) Tested 8,800boepd
55m Net Pay
IF-1R (August 2008) Tested 3,812boepd
61m oil column
D-1R (July 2007) Tested 5,655boepd
11m Net Pay
Sapele-1 (Feb 2011) 33-43m Net Pay
Sapele-1ST (June 2011) Tested 3,101boepd
19m Net Pay
Sapele-2 (Aug 2011) Tested 3,119boepd
35m Net Pay
Sapele-3 (Oct 2011) 19m Net Pay
20km
IC
IM
Sapele-3
IE Manyikebi
SNA-1X
Sapele-1/1ST Sapele-2 D-1R
IF
Etinde P50 Gross Resource
mm
boe
Deep Omicron Fairway
Vitol farm-in
FEBRUARY 2012 CREDIT SUISSE ENERGY SUMMIT 7
Key Events for 2012-2013
Etinde
• Target to sign MOUs for up to 80mmcf of dry gas sales by end H1 2012.
• Draft Etinde Exploitation Application on track for submission on 31st March 2012.
• Rig due to be delivered following completion of operations for Noble Energy. Anticipated around middle of year.
• 2-4 well offshore appraisal and development drilling programme commencing with IM well.
• Project financing - discussions already commenced.
• Gas Sales Agreements, FID and finalisation of debt finance targeted for 2013.
Bomono
• Drilling campaign scheduled to commence mid 2012.
†
Mobilise for Commercialisation
FEBRUARY 2012 CREDIT SUISSE ENERGY SUMMIT 8
Gas Handling – The Key to Monetising Resources
• Etinde resources are predominately gas-associated liquids.
• In order to realise the value of Bowleven’s existing discoveries, finding a solution for the associated gas is key.
• In common with nearly all African countries, Cameroon has only a small but rapidly expanding market for gas.
• Until very recently Cameroon Government had a strong preference for any Cameroon gas, including Etinde gas, to be earmarked for use in aggregated LNG (GdF) scheme.
• Whilst gas sales to a third party is clearly preferable it is not a pre-requisite to development as alternative “in house” solutions exist.
• Commercialising gas is a key objective of the work programme that has been agreed by the JV for 2012.
• Production will provide the cashflow base for ongoing development – plus further exploitation of the existing extensive prospect inventory.
FEBRUARY 2012 CREDIT SUISSE ENERGY SUMMIT 9
Alternative In House Solutions
Gas Solutions – Multiple Options
Fertiliser (Ferrostaal)
70mmscfd
Power (AES Sonel)
10mmscfd
LNG (Cameroon/Bioko)
80-185 mmscfd
Methanol (JV)
60-110 mmscfd
Small Scale LNG
60-110 mmscfd
Third Party led
• Negotiations advancing. • Being progressed in parallel.
Liquids focused – gas enabled
Reinjection (JV)
Dependent on Reservoir
• Gas pricing TBC.
FEBRUARY 2012 CREDIT SUISSE ENERGY SUMMIT 10
C5’s Cond.
Phas
e 1
– M
LHP-
7 Ta
rget
201
5 Su
bseq
uent
Ph
ases
O
nstr
eam
201
6-
Pote
ntia
l Fu
ture
Pha
ses
Maximising Liquids Value
• All liquid offtake is marketable internationally i.e. free marketing rights for oil.
• Strong local and pan-African market for Propane & Butane (Cameroon currently imports from Equatorial Guinea).
• Current concept is phased development.
• Flexibility in gas disposal options maintained.
IM
IE
IF
Omicron Deep & Lower
Epsilon
D-Discovery (D-1R)
Other existing & Future
Discoveries
Oil, Condensate & up to
90mmscfd of wet gas
Liquids Stripping (Primary
Processing) NGL Plant Up to 80mmscfd
Dry Gas
Power (AES) Up to 10mmscfd
Fertiliser (Ferrostaal)
Up to 70mmscfd
LNG Up to 80mmscfd
Delivery Point Gas Options
C4’s Butane
C3’s Propane Methanol
c.60-70mmscfd
Small Scale LNG
c.60-70mmscfd
Reinjection
Total Liquids Production 10-15% Shrinkage
3rd Party Led Alternative In-H
ouse Solutions
FEBRUARY 2012 CREDIT SUISSE ENERGY SUMMIT 11
IF
Sapele Omicron Deep
IE
D1-r
IM
Sapele Lower Omicron
0
100
200
300
400
500
600
0 200 400 600 800 1000 1200 1400
Initi
al Li
quid
s Yie
ld b
bls/
mm
cf
Total Mean WGIIP & Initial Liquids Yield*
1,272
Value Optimisation: Gas supply configuration to maximise liquids yield
Test Yields bbls/mmcf
IF 1,272
Omicron Deep 313-329
IE 127-292
Lower Omicron 121
D1-r 59
IM TBC (IM-5)
Note: D-1r and Lower Omicron based on sample yields; *Operator’s estimates.
• Test yields exclude NGLs which could provide significantly enhanced liquids production e.g. IE Field additional c.70bbls/mmcf.
1,272bbls/mmcf
WGIIP bcf
FEBRUARY 2012 CREDIT SUISSE ENERGY SUMMIT 12
Boundary Conditions
• Development of gas solution “drives” the project.
• The bulk of the value is in the sales of the liquid hydrocarbons.
• JV working to define the technical scope of the processing plant required to maximise the value of the liquids and deliver dry gas at the factory gate.
• Multiple gas utilisation concepts are being evaluated.
• The bulk of the hydrocarbon processing will be performed onshore.
FEBRUARY 2012 CREDIT SUISSE ENERGY SUMMIT 13
IF
IE
Sapele
All Liquids & Gas Condensate to
Limbe
Limbe Hub and Power Plant Douala GTE
and Gas supply
Bomono
20km
Phase 1
Concept: Combined Hub and Spoke Development Fully Integrated Holistic Option to Maximise Synergies
• Potential to accelerate development/production.
• Facilitates phased approach.
• All processing onshore; unmanned offshore platforms.
• Provides flexibility for future expansion.
Indicative Etinde Concept Assumptions (gross) Class 5 Estimates
Core Hub
Limbe Processing facility $275-325million
Each Spoke
2-3 wells $20-30million each
Wellhead Jacket $25-30million each
Pipeline $1-2million/km
IM
FEBRUARY 2012 CREDIT SUISSE ENERGY SUMMIT 14
Key Milestones Gantt Chart 2012 2013 2014 2015
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2012 2013 2014 2015
Debt negotiation ongoing
IM-5 IE-4/IF-2
MLHP-5 MLHP-6
Design, Construction, Installation
Exploitation Authorisation
Export Contracts Negotiation
Concept Selection Pre-FEED
FEED Concept Screening & Pre-Engineering Studies
Exploitation Application & FDP finalised
Draft Exp. Appl.
Gas Utilisation Studies
Dra
ft E
xplo
itatio
n A
pplic
atio
n S
ubm
issi
on
Gas
sal
es M
OU
sig
ned
Fina
l Exp
loita
tion
A
pplic
atio
n S
ubm
issi
on
Reserves Certification
Gas
Sal
es A
gree
men
t si
gned
P
relim
inar
y In
vest
men
t D
ecis
ion
Pha
se 1
Firs
t P
rodu
ctio
n
Fina
l In
vest
men
t D
ecis
ion
Field Mapping and Reserve Simulation
Production Drilling
FEBRUARY 2012 CREDIT SUISSE ENERGY SUMMIT 15
Illustrative Productivity
400bbls/mmcf = 36 mbpd
250bbls/mmcf = 22.5 mbpd
125bbls/mmcf = 11.25 mbpd
250bbls/mmcf Reality
90mmcfd Wet Gas • Economics are based on constant liquids over the plateau period.
• In reality, fields will exhibit higher initial flush production followed by a declining profile.
Note: Operator’s estimate.
FEBRUARY 2012 CREDIT SUISSE ENERGY SUMMIT 16
Illustrative Initial Development Valuation
Bowleven Initial Development Valuation £/share at 1st Jan 2012: Etinde Hub & Spoke $90 Brent; Average Liquids Rates.
Total Liquids Produced = 82 mmbbls (34% of Mean Etinde Liquid Resources).
Total Liquids Produced = 131 mmbbls (56% of Mean Etinde Liquid Resources).
Liquids Yield bbls/mmscf (Includes NGL’s)
2.61
3.92
$70/bbl Brent
$90/bbl Brent
$110/bbl Brent
• 90 mmcf wet gas • 80 mmcf dry gas • Ten year plateau • Total Dry Gas Sales 292bcf • Total Wet gas produced c.330bcf
Note: Bowleven 294 million shares; $1.55=£1; cash includes EOV proceeds; no value for Bomono or tail production. Operator’s estimates.
Total Liquids Produced = 41 mmbbls (17% of Mean Etinde Liquid Resources).
0.35 1.34
0.35 2.95
0.35 4.51
125
250
400
1.69
3.30
4.86
£/share
Cash Etinde Hub & Spoke NAV
FEBRUARY 2012 CREDIT SUISSE ENERGY SUMMIT 17
Bowleven Net Share of Initial Development Cashflow
(2,000)
(1,500)
(1,000)
(500)
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
(400)
(300)
(200)
(100)
0
100
200
300
400
500
600
700
800
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
US$ million Cumulative US$ million Annual Bowleven's Net Share of Initial Development Cash Flow 90mmcfd; 250 bbls/mmcf; US$90/bbl; Gas price TBC.
Cost oil
Profit oil
Capex incl. all fees etc
Opex
Corporation Tax
Annual NCF
Cumm NCF
Cash flow positive ~ 13 months after
1st production
Note: Operator’s estimate.
FEBRUARY 2012 CREDIT SUISSE ENERGY SUMMIT 18
Project Funding
• Forecast net cash balance at 1Q 2012 ~ $160 million, no debt.
• Forecast total 2012 Group expenditure $110 million (assuming 2 wells on Etinde with coring, testing, development studies, plus one Bomono well).
• Estimated net share of development capex over life of fields (post SNH back-in) ~US$550million.
• Estimated net peak working capital requirement c.US$400million*.
• Debt finance market – discussions commenced with a number of banks.
• Strong funding relationships within JV with lending institutions.
• Significant post back-in equity position (60%) gives further financing flexibility.
*(60% of $595 million Phase 1 gross capex =$357million plus taxes of $80million and cost inflation allowance of ~$20million, less corporate cash end 2012 c. $50million).
FEBRUARY 2012 CREDIT SUISSE ENERGY SUMMIT 19
Cameroon Overview Relatively underexplored - an emerging oil story
Douala Basin
• MLHP 5 & 6, OLHP 1 & 2.
• Onshore and shallow offshore areas.
• Highly prospective acreage.
• Number of onshore oil seeps.
• Tertiary and Cretaceous leads.
• Onshore early exploration phase on 2D dataset.
• Offshore mature prospects portfolio on 3D dataset.
Rio del Rey Basin
• MLHP 7.
• Shallow offshore area.
• Highly prospective acreage within a proven active hydrocarbon system.
• Tertiary oil and gas-condensate discoveries.
• Established portfolio of additional Tertiary prospects.
• Maturing exploration with transition into an appraisal/development phase.
Cretaceous Turonian plays accessible in onshore area and shallow waters.
FEBRUARY 2012 CREDIT SUISSE ENERGY SUMMIT 20
Etinde Existing Discoveries Overview of Gross Unrisked Mean Volumes In place*
Deep Omicron fairway
*Operator’s estimates.
FEBRUARY 2012 CREDIT SUISSE ENERGY SUMMIT 21
Etinde Existing Discoveries IM – Gas Condensate Field
• Discovered by TEPCAM in 1967 with the IM-1 well. • 3 additional wells drilled from 1971-1981 discovering and
appraising Gas-Condensate in the Upper and Middle Isongo. • High quality reservoir sands with excellent deliverability.
• Gas composition from IM-4 Upper Isongo DST 11.4mmscfd, 827bcpd yields a CGR 72.5bbl/mmscf – similar to Alba Field (Equatorial Guinea).
• Only one well successfully penetrated Middle Isongo; CGR is uncertain at this reservoir level.
• Mean WGIIP 466bcf (Upper and Middle Isongo)*.
• Bowleven will begin operations on the IM-5 well in late-Q2 2012.
• Well to appraise Middle Isongo reservoir and enhance the established volumes and confirm CGR.
Present
Historical
• The IM-5 well is likely to be used as a future producer.
• It is anticipated that the IM Field will be used as one of the first phase producers into the Etinde Hub & Spoke development.
Future
IM-1 IM-2
IM-1 IM-2
IM-3
IM-4
*Operator’s volume.
FEBRUARY 2012 CREDIT SUISSE ENERGY SUMMIT 22
Etinde Existing Discoveries IE – Gas Condensate/Oil Field
• Discovered by TEPCAM in 1980 with the IE-1 well. • 2 Appraisal wells (IE-2z, IE-3) drilled by Bowleven. • High quality reservoir sands with excellent deliverability.
• IE-3 flowed at a combined rate of 22,909boepd*.
• Rich liquids yield – CGR of 127-292bbl/mmscf, and IE-3 also flowed oil on test.
• Additional NGL component of c.70mmbbls/mmscf.
• Mean WGIIP 408bcf; 95mmbbl liquids†.
• Bowleven acquired a 4C OBC survey for improved crestal imaging of the IE Field.
• New seismic data now being interpreted to refine field structural model and locate the IE-4 appraisal well.
Present
Historical
• It is anticipated that the IE Field will be used as one of the first phase producers into the Etinde Hub & Spoke development.
• Appraisal well to enhance proved volumes and located to maximise liquids production.
Future
*Maximum flow rates per interval ranged from 845 to 11,778boepd with a cumulative maximum rate of 14576bpd liquids and >50mmscf gas (total 22,909boepd). † Operator’s volumes.
IE-3
IE-2z IE-1
ID-1
FEBRUARY 2012 CREDIT SUISSE ENERGY SUMMIT 23
Etinde Existing Discoveries IF – Oil Field
• Discovered by Bowleven in 2008 with the IF-1R well. • 1 well drilled on structure to date. • High quality interbedded reservoir sands with excellent
deliverability.
• Drill stem tested 3,371bopd 35°API oil with 2.65mmscfd associated gas, combined rate 3,812boepd.
• Mean STOIIP 225mmbbls*.
• Bowleven acquired a 4C OBC survey for improved imaging of the IF Field through a prominent gas chimney with extensive seabed expression.
• New seismic data now being interpreted and integrated with previous mapping to further improve structural definition and overall field extent beneath the gas masking effect.
Present
Historical
• It is anticipated that the IF Field will be used as one of the future producers into the Etinde Hub & Spoke development.
• Further wells to target and maximise liquids production.
Future
IF-1R
Biafra Gas
Isongo Oil
4C OBC Data
4C OBC data on periphery of the IF gas chimney. Signal much improved from previous volumes allowing some detail in the western flank of IF to be determined. S-wave data yet to be incorporated.
*Operator’s volume.
FEBRUARY 2012 CREDIT SUISSE ENERGY SUMMIT 24
Etinde Existing Discoveries Etinde – MLHP-7 Biafra Gas Fields
• Shallow play prolific in the Niger Delta and Rio del Rey Basin recognised across the MLHP-7 part of the Etinde PSC area.
• Drilled by 6 wells; 2 of which to specifically target the Biafra interval.
• Dry gas encountered in 5 wells with the exception of IM-1 which encountered oil shows.
• Excellent reservoir quality encountered in all wells.
• IE & Manyikebi - Mean Dry GIIP 136bcf*.
• An areal extensive play being extended into MLHP-6.
• Volumetric resource update during Q1-Q2 2012 for IF, IM, ETM and MLHP-6 Biafra prospectivity.
Present
Historical
• Potential to incorporate into future phases of the Etinde Hub & Spoke Development.
• Possible potential also remains to fast-track development to provide feedstock gas to AES Sonel (Gas to Power scheme) at Limbe.
Future
IE Biafra Field
ETM-1 Gas Response
IF-1R Gas Response
Manyikebi Biafra Discovery
Manyikebi Biafra Extension
Timeslice Optical Stack – Biafra Interval
ID-1 IE-1
IE-2z
IE-3
ETM-1
IF-1R
IM-1 IM-2
IM-3
IM-4
IC-1
Manyikebi
Manyu Oil
*Operator’s volume.
FEBRUARY 2012 CREDIT SUISSE ENERGY SUMMIT 25
Etinde Existing Discoveries Sapele – Deep Omicron Oil Fairway
• Discovered by Bowleven in 2011 with the Sapele-1 well. • 4 wells drilled by Bowleven penetrating the stratigraphically
trapped accumulation. • High quality interbedded reservoir sands with excellent
deliverability, extend across MLHP-5.
• Flow rates for Sapele-1ST =3101boepd*, Sapele-2 =3119boepd†.
• Mean HIIP 477mmboe (not including Sapele-3 extension)‡.
• Integration of ongoing post-well studies to provide volumetric update and define future appraisal and development well locations.
Present
Historical
• Anticipated that the Deep Omicron oil will form part of the second phase for the Etinde Hub & Spoke Development.
Future
*Sapele-1ST flowed at a stabilised rate of 2,023 bopd of 39.2 degree API oil and approximately 6.47 mmscfd of associated gas. †DST1 peak flow rate of 381 boepd, comprising 233 bopd of light oil and 0.89 mmscfd of associated gas and DST 2 comprising 1,818 bopd of light oil and 5.52 mmscfd associated gas. ‡ Operators volume.
FEBRUARY 2012 CREDIT SUISSE ENERGY SUMMIT 27
Etinde Existing Discoveries Sapele – Lower Omicron Gas-Condensate Fairway
• Discovered by Bowleven in 2011 with the Sapele-1 well. • 4 wells drilled by Bowleven penetrating the stratigraphically
trapped gas-condensate accumulation. • Arealy extensive, good quality interbedded reservoir.
• Test in Sapele-2, initially flowed wet gas up to 3.1mmscfd, however test curtailed due to a pressure leak in test string.
• Mean HIIP 203mmboe*.
• Geological model evolving with integration of ongoing post-well studies together with planning for future well locations.
Present
Historical
• Anticipated that the Lower Omicron hydrocarbons will form part of the future phasing for the Etinde Hub & Spoke Development.
Future
*Mean HIIP of 203mmboe comprises 132mmbbls CIIP and 1219bcf WGIIP; operator’s volumes.
FEBRUARY 2012 CREDIT SUISSE ENERGY SUMMIT 28
Sapele Wells Lessons Learnt
• The Sapele wells are drilled in a geologically/operationally challenging environment.
• Interbedded reservoir facies with shale source rocks.
• Lower and Deep Omicron sandstone reservoirs are laterally extensive/connected and are marked by substantial pressure inversions. This was not known prior to the drilling of the Sapele wells.
• The combination of pressure peaks and inversions create situations where the well is markedly over or underbalanced.
• Underbalanced situation leads to influx and well control safety issues.
• Overbalanced situation leads to formation invasion, damage, mud cake and mud loss to formation.
• The overbalance situation in the reservoirs had led to compromise logging and testing results.
• Logging environment very demanding, high downhole temperatures frequently exceeding tool ratings, differential sticking on longer tools also key issues.
• Subsequent wells will be redesigned to case off different pressure regimes during drilling e.g. Sapele-3.
• Sapele-3 drilled within budget and without substantial formation invasion.
Pore pressure chart for one of the Sapele wells, highlighting the operational margins for Mud Weight (to include ECD). Note the c.2ppg EMW drop on entering the Deep Omicron reservoir.
FEBRUARY 2012 CREDIT SUISSE ENERGY SUMMIT 29
Etinde Existing Discoveries D-1R – Gas-Condensate Field
• Discovered by Bowleven in 2007 with the D-1R well. • Single well penetration of the stratigraphically trapped
accumulation. • Good quality reservoir sandstones of Miocene age.
• Well tested 25.4mmscfd with 56bbl/mmscf condensate (combined 5,655boepd); no depletion.
• Well test analysis indicative of greater connected volume than can be seismically mapped.
• Mean WGIIP 71.5bcf, with 4.4mmbbls condensate*.
• Geological and geophysical evaluation ongoing.
Present
Historical
• Possible appraisal drilling for possible GOC/GWC.
• Anticipated that the D-Discovery will form part of the future phasing of the Etinde Hub & Spoke Development.
Future
Far Angle Stack
Type II AVO Anomaly
*Operator’s volume.
FEBRUARY 2012 CREDIT SUISSE ENERGY SUMMIT 30
MLHP-5 MLHP-6
Sapele-1ST Sapele-2
Sapele-1
SNA-1X
D1-R
Sapele-3
Epsilon Complex
Etinde Existing Discoveries Sapele – Palaeocene Alpha-Epsilon System
• E-W trending Palaeocene depositional systems have long been recognised in the Douala Basin.
• Numerous oil shows and discoveries within this petroleum system; CoCo Marine 1 & 2, Moulongo Marine etc.
• Sapele-1 encountered gas and oil shows in Epsilon which was latterly confirmed as Palaeocene in age from biostratigraphy.
• Sapele-3 well also encountered oil in the same Palaeocene interval.
• Pay zones correlate to bright amplitude seismic data.
• Mean GIIP 1819bcf for the system*.
• Gas condensate, dry gas and oil were all encountered at Sapele-1 & 3 validate additional Palaeocene prospectivity.
• Liquids volumetric analysis ongoing with the integration of Sapele-3 well results.
Present
Historical
Palaeocene depositional features from seismic timeslice
• Anticipated that the Alpha-Epsilon System will form part of future phasing for the Etinde Hub & Spoke development.
Future
*Operator’s volume.
FEBRUARY 2012 CREDIT SUISSE ENERGY SUMMIT 31
Etinde Existing Discoveries Sapele – Cretaceous Discovery
• Discovered by Bowleven in 2011 with the Sapele-1 well. • Medium quality interbedded reservoir sandstones of the Upper
Cretaceous. • The stratigraphically trapped accumulation was found to contain
high pressure dry gas. • Sapele-1 was abandoned due to the high pressure influx of gas
to the well bore. • Mean Dry GIIP 1029bcf*.
• Geological and geophysical evaluation of the Cretaceous interval across the Douala Basin of Cameroon is ongoing to define reservoir fairways, future drilling locations and pressure profiles within the basin.
Present
Historical
• Cretaceous gas reservoirs have the potential to provide significant gas volumes to future production phases.
• Pressure encountered require careful operational planning prior to the drilling of future wells into this interval.
• Anticipated that the Cretaceous reservoirs will form part of a future phase to the Etinde Hub & Spoke development.
Future
Cretaceous
Gas Kick
N
Cretaceous Amplitude Map (kick interval).
Sapele-1
Sapele-1
*Operator’s volume.
FEBRUARY 2012 CREDIT SUISSE ENERGY SUMMIT 32
Bomono
Present
Historical
Future
• 6 deep wells and c.10 shallow wells drilled in the 1950’s.
• Wells and onshore oil seeps proved active hydrocarbon system.
• Tertiary and Cretaceous structural and stratigraphic traps defined in area.
• 285km 2D acquired in Q1 2010 dry season. Further 215km 2D acquired by end January 2011.
• New 2D data integrated into existing vintage dataset and now defines a series of structural prospects.
• Prospect selection in progress, with a (commitment) well due
Q3 2012.
• Planning for immediate follow-up appraisal wells.
• Anticipated that Bomono discoveries will be linked into the proposed facilities at Limbe for gas stripping and oil export.
Unrisked Mean HIIP Oil mmbbls Associated Gas
bcf Gas bcf Condensate mmbbls
Tertiary D & E Sands. 355 186
Tertiary B & C Sands. 326 112
FEBRUARY 2012 CREDIT SUISSE ENERGY SUMMIT 33
MLHP-6
Present
Historical
Future
• Sparse 2D data and spec-surveys acquired across the MLHP-6 area.
• Recognition of onshore seeps immediately adjacent to Mt Cameroon, with shows in peripheral wells (Pungo-1X, 1970).
• No wells on block.
• Bowleven acquired full 3D seismic dataset in 2010 which affords a new understanding of the Cameroon Line, its evolution and associated prospectivity.
• Variety of play types to explore for in MLHP-6.
• Highly prospective acreage given its position between proven active hydrocarbon systems.
• Sapele-3 well confirms extension of Deep Omicron & Alpha-Epsilon System into MLHP-6.
• Kosmos recently signed the new Fako block in the equivalent onshore area, on the flanks of Mt Cameroon.
• Further exploration drilling expected on MLHP-6.
FEBRUARY 2012 CREDIT SUISSE ENERGY SUMMIT 34
Summary
• Exploration success has extended Etinde resources into liquids and across the acreage.
• Energy/Momentum/Means to deliver Etinde to first production.
• Key milestones 2012-2013.
• End Q1 2012 – Draft Exploitation Application & Development Plan submitted to SNH.
• Q2 2012 – IM-5 well spuds. Signed MOUs for gas sale agreements.
• Q2/Q3 2012 Bomono operations.
• End Q3 2012 – IM-5 well TD, pre-FEED Etinde Hub & Spoke development commences.
• Q3 2012 – Additional well spud (IE/IF, Block 5, Block 6).
• End Q4 2012 – TD of additional well.
• 2013 – Gas Sales Agreements, FID and finalisation of debt finance targeted.
• 2 - 4 offshore wells are programmed for 2012, not all required before the decision point reached for the Etinde Hub & Spoke development.
• Project financing discussions already commenced.
• Fully funded for 2012.
• With a potential gas solution and liquids focus, significant cash flow is anticipated from first production – enabling further exploration and development.
Liquids focused – gas enabled
oil & gas
Contact: John Brown – Tel: +44 131 524 5678 Kevin Hart – Tel: +44 131 524 5678
www.bowleven.com
Bowleven Plc. 1 North St Andrew Lane, Edinburgh, EH2 1HX, United Kingdom.
FEBRUARY 2012 CREDIT SUISSE ENERGY SUMMIT 37
Valuation Assumptions for Indicative Initial Development Economics
• Cash at 1.1.2012 US$160million including EOV proceeds.
• $1.55=£1.
• 294,455,919 Bowleven shares in issue.
• Bowleven development equity 60%; Vitol and State 20% (State 20% back-in on development sanction).
• Inflation 3% p.a.
• Discount Reference Date 1.1.2012.
• Single PSC Exploitation Area.
• Liquids (oil, condensate and NGL’s) sold as blend at Brent $90 long-term real (2012 terms).
• Gas sales price TBC.
• Post-processing sales gas delivered to Upstream delivery point in Limbe for Fertiliser and Power Plant.
• No value for post-plateau tail gas or liquids production.
• No value for Bomono.
• IM plus 1 well 2012, appraisal costs US$60million included in cash flows.
• Etinde Historic Costs to end 2011 US$536 million; Bowleven share US$394million (net cost recovery $468million).
• Phased Hub and Spoke development; 1st production 2015; Platforms on IE and Sapele; Wellheads on IM and IF; ten development wells; pipelines from IE and Sapele to processing plant including NGLs.
• Total Capex to gas delivery point ~US$910million; opex US$19 million (Phase 1) to US$32 million p.a (all phases).
• Wet Gas plateau production rate 90mmcfd; 10 year plateau; gas shrinkage ~11%; dry gas 80mmcfd.
• Average liquids rate scenarios per mmcf: 125, 250, and 400 bbls.
• Liquids include depletion condensate, oil, additional condensate C5+ generated through NGLs processing, propane and butane.
FEBRUARY 2012 CREDIT SUISSE ENERGY SUMMIT 38
Indicative Cost Estimates and Phasing (Class 5 ±50%)
Real 2011 Capex Phase 1 Processing Subsequent Phases Total
First production Development wells
Date Number
2015 5 wells
2015
2017 5 wells
- 10 wells
Development wells Wellhead Platforms Pipeline/tiebacks
US$million US$million US$million
135 50
100
135 50
130
270 100 230
Total Field US$million 285 0 315 600
Processing & NGL’s Plant US$million 0 310 0 310
Total US$million 285 310 315 910
CAPEX Total 2013/2014 2015/2016 2017 2018/2019
Development Wells 270 135 45 90
Platforms 100 50 20 30
Pipelines/Tie Backs 230 100 20 110
Processing & NGL’s Plant 310 310
Total 910 595 85 0 230
Phase 1 All Phases
Opex p.a. US$million 19 32
Yr of 1st production 2015 2020 onwards
Note: Initial capex will be reduced in the event appraisal wells are suspended as producers.