Excellence in Oil and Gas 2009 Narrabri Coal Seam Gas Project
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Excellence in Oil and Gas 2009 Narrabri Coal Seam Gas Project 6 April 2009 David Casey, Managing Director
Transcript of Excellence in Oil and Gas 2009 Narrabri Coal Seam Gas Project
Excellence in Oil and Gas 2009Narrabri Coal Seam Gas Project
6 April 2009
David Casey, Managing Director
Company Overview
Excellence in Oil and Gas 2009Narrabri Coal Seam Gas Project Update
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Company Overview - Delivering on Predictions
May 2008 Expectations 2008 to 2009 April 2009
Share Price $0.685 - $0.810
Market Cap. $520m - $692m
Acreage CSG focus Identify farmin opportunities Largest operated CSG acreage
2P Gas Reserves 185 PJ 1,300 PJ by December 2009 Upgrade to 336 PJ (Sept ‘08)
Work Programme NSW’s largest ever programme underway
Undertake seismic, corehole and pilot production work
Seismic, 7 x coreholes and first multi-lateral complete
Market
Commitment to expand Wilga Park P.S. Staged expansion to 40 MW Part 3A Approval received and
expansion underway
MoU’s for 1,300 PJ Continue phased approach HoA with APA Group for Pipeline access (Jul ‘08)
ESG’s vision is to be NSW’s leading supplier of natural gas
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Company Overview - Highlights of last 12 months
Operating Highlights Operated Acreage Comparison
• ASX (‘ESG’) and OTCQX (‘ESGLY’) listed
• Included in ASX200
• Largest operated CSG acreage position
• Reserves Upgrade Programme early successes:
Dewhurst coreholes confirm easterly extension of thick Bohena coal seam
Edgeroi-1 wildcat corehole confirms potential of northern portion of PEL 238
First multi-lateral pilot freeflows 3,400 bwpd
Contingent resources independently certified
• Market development progressing
HoA with APA Group to access NSW markets
ESG
Origin
QGC-BG
Santos
Arrow
AGL
Pure Energy
Other
Location
Operator
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Company Overview - ESG Acreage
Key Assets - Substantive CSG Position with Focus on Narrabri CSG Project
PEL 2389,095 km2
(Narrabri CSG Project)ESG 65%
PEL’s 433 & 43415,399 km2
ESG 65%
Arckaringa Basin27,922 km2
25% to 50% CSG farm-in
Orion Petroleum(ESG holding 23%)
Pursuing conventional opportunities
PELs 6, 427, 42818,200 km2
40% - 50% - 75% farm-in
Location
NSW
SA
Victoria
Wilga Park Power StationExpandable to 40MW
ESG 65%
70,616 km2 operated, including 42,694 km2 in NSW. Net ESG interest 31,400 to 39,671km2.
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Company Overview - Recent CSG Industry Transactions
Source: ESG, company announcementsKey: QGC: Queensland Gas Company, Sunshine: Sunshine Gas, Gloucester: Gloucester Basin Project, SGL: Sydney Gas LimitedNotes:1 BG Group acquired a 10% equity stake in QGC (plus 20% stake in QGC’s assets) in February 2008 and acquired the remaining 90% stake in October 20082 Based on total value ascribed by AGL to SGL, taking into account options and cash. AGL allocated $115mm of the consideration to the Hunter Valley gas project,which has no certified reserves, and $49mm for the Camden assets (taking into account options and cash) which had 2P and 3P reserves of 41PJ and 54PJ respectively, which on this basis implies $1.19/GJ and $0.90/GJ for SGL’s certified 2P and 3P reserves respectively
3 Based on BG Group’s offer of 27 February 2009, and Pure Energy’s publicly stated reserves as at the same date
Transaction metrics (A$/GJ)
A$/GJ
0.67
1.65
0.77 0.74
1.88
0.77 1.00
3.03
0.40
1.94
3.99
2.111.991.74
2.72
1.57
0.00
1.00
2.00
3.00
4.00
5.00
6.00
BG Group/QGC
PETRONAS/Santos
Shell/ ArrowEnergy
QGC/Sunshine
Conoco/ OriginEnergy
BG Group/QGC
AGL Energy/Gloucester
AGL Energy/SGL
BG Group/Pure Energy
A$/GJ 3P A$/GJ 2P
A$1.21/GJ 3P (mean) A$2.78/GJ 2P (mean)
1 1
February 2008 February 2009
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4.91
4.02
Narrabri CSG Project
Excellence in Oil and Gas 2009Narrabri Coal Seam Gas Project Update
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Narrabri CSG Project - Current Operations
NSW Permits Current Operations
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Outstanding results so far from 2008/09 Reserves Upgrade Program
Narrabri CSG Project- Gas Reserves Upgrade Program
Dewhurst Coreholes:already contributing to certified reserves
Total Coal Thickness: 33.5m to 42.5m
Bohena Seam Thickness: 16.2m to 21.7m
Bohena Coal Permeabilities: up to ~100 mD
Edgeroi Corehole Results
Confirmed permit-wide development of thick, gas saturated coal
Unique Architecture of Bohena Coal
Typical Coal
BohenaCoal
Programme Potential in excess of 5,000 PJ Recoverable
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Narrabri CSG Project - Multi-lateral Wells
Schramm TXD Drilling Rig on site at Narrabri
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Narrabri CSG Project - Multi-lateral Wells
Animation of Multi-lateral drilling process
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Narrabri CSG Project - Multi-lateral Wells
Multiple lateral wells, drilled perpendicular to the natural fracturing system
Connectivity with the coal and, in turn, gas production are maximised
BBD-18H BBD-12 BBD-14 BBD-13
~1,000 m
~1,000 m
Realising Project Potential
Excellence in Oil and Gas 2009Narrabri Coal Seam Gas Project Update
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Realising Project Potential - Reserves and Resources
Independently Certified Reserves and Contingent Resources are Already Material
PEL 238 Certified Gas Reserves
1P 2P 3P
21 PJ 336 PJ 1,300 PJ
PEL 238 Certified Contingent Resources
1C 2C 3C
1,195 PJ 3,053 PJ 6,128 PJ
0
2000
4000
6000
8000
Narrabri CSG Project 20% NSW Gas Market 20 years
1,500 MW (60% capacity, 20 years)
3.5 Mtpa LNG (20 years)
PJ
Gas Requirement NSW Annual Gas Use Contingent Resource 3P Reserves
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Realising Project Potential - Development Stages
Stage 1: Wilga Park Expansion (underway) and Stage 2: Early Access to NSW Gas Market
Longford
SydneyNewcastle
Tamworth
Brisbane
Gladstone
Townsville
Mt Isa Moranbah
WallumbillaBallera
Narrabri
Melbourne
FlowlineExtension
ExistingPipelines
GasProcessing
Lateral toAPA System
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Realising Project Potential - Development Stages
Stage 3: Major Domestic Greenfield Opportunities and Stage 4: ‘Global’ Opportunities
Longford
Sydney
Brisbane
Gladstone
Townsville
Mt Isa Moranbah
WallumbillaBallera
Narrabri
Melbourne
Moomba
Adelaide
Newcastle
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Realising Project Potential– path to commercialisation
Eastern Star Gas – ticking off the prerequisites for success
Gas reserves
Infrastructure
Gas market
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This presentation may contain forward looking statements that are subject to risk factors associated with oil and gas businesses. 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 in various countries and regions, political risks, project delay or advancement, approvals and cost estimates.
Investors should undertake their own analysis and obtain independent advice before investing in ESG shares.
All references to dollars, cents or $ in this presentation are to Australian currency, unless otherwise stated.
Disclaimer
