June 2, 2017 - PetroEnergypetroenergy.com.ph/resources/reports/PERC Investors... · Nabas-Malay,...

Operational & Financial Highlights Investors and Analysts Briefing 1Q 2017 June 2, 2017

Disclaimer

The material in this presentation has been prepared by PetroEnergy Resources Corporation (PERC) and contains general background information about PERC's activities as of the date of this presentation. The Information provided herein is presented in summarized form merely for purpose of clarity and expediency and does not purport to be complete. No warranties, promises and/or representation of any kind, express or implied, are given as to the accuracy, nature or standard of the information provided. While due care has been exercised in the disclosure of any and all information, said information should nonetheless be treated as expert/legal advise or recommendation to investors or potential investors in relation to the holding, purchasing or selling securities or other financial products or instruments nor considered as a valid offer to sell securities or solicitation of an offer to buy securities. Forward looking statements, declaration of intent or current expectations with respect to PERC's businesses and operations, market conditions, financial conditions and results of operations should not be taken with absolute certainty as they are subject to various risks and contingencies that may cause PERC's future results to be different from the statements given. Neither PERC, nor its advisors, make any representation and assumes no responsibility for the accuracy or completeness of any information given herein.

Investors & Analysts Briefing 1Q 2017 | June 2, 2017

1Q 2017 Results

US$4.31 MM

327%

Diversified revenue stream

Petroleum | Renewable Energy | Power Generation

US$7.89 MM

71%

EBITDA

EPS

COMPANY PROFILE

VISION: To grow as a

profitable energy

company


Net Income

Php0.348

500%

VISION:

To grow as a

profitable company

MISSION: Optimum value for

shareholders

Total dividends

(2002 to 2013)

Php453 MM

Subscribed

Shares

410,736,330

Market

Capitalization (June 1, 2017)

Php2,501 MM

Building greater

long-term value

through continuous

business

expansion

COMPANY PROFILE


STRATEGIES: Judicious selection of

investments & partners

COMPANY PROFILE

40% 65%

90%

56%

CORPORATE STRUCTURE

MILESTONES


VALUES: Integrity, Credibility,

& Passion for Growth

COMPANY PROFILE

Banking & Finance

Insurance

Education & IT

Construction

LENDERS

PARTNERS

Belongs to a

diversified & profitable

conglomerate

Has extensive network

for resource

mobilization

ADVISERS




COMPANY PROFILE Governed by

Distinguished

Board of Directors


COMPANY PROFILE



Ensures that the

Company’s success

translates to social

benefits for our host

communities

STRATEGIES: Judicious selection of

investments & partners

MISSION: Optimum value for

shareholders

VISION: To grow as a

profitable energy

company


• International partners from US, South Africa, Switzerland, & Japan since 1995

• PERC’s participating interest is 2.525%

• ~100 MMBO extracted since

2002; US$6.77 Billion gross revenue(Consortium);

PERC share – US$121 MM

• Ramped-up production to maintain ~18k BOPD

• 400k – 600k BBLS sold to

Glencore for 1Q 2017 (offtaker)

• New Hydrocarbon law and PSC regime to kick in by 2021

BACKGROUND UPDATE

Oil producing fields in

Gabon, West Africa

~86 MMBO remaining recoverable reserves

Etame license renewal by 2021


Developing PH Oil Projects to be Drill-ready Area PERC

Interest Partners Status

Service Contract 6A (Octon-Malajon, Northwest Palawan)

16.670%

Philodrill Corp. (Operator) Anglo-Philippine Holdings

Trans-Asia Petroleum Forum Energy Corp.

PXP Energy Corp. Alcorn Petroleum

On-going re-processing and quantitative interpretation of 2013 3D seismic data,

for eventual drilling of the Octon, Malajon, & Salvacion prospects

Service Contract 14C2 (West Linapacan, Northwest Palawan)

4.137%

Philodrill Corp. (Operator) Nido Petroleum

Oriental Petroleum Forum Energy Corp.

Alcorn Petroleum

On-going quantitative interpretation of 2014 3D seismic data for new field

development plans

Service Contract 51 (East Visayan Basin)

20.050% Trans-Asia Petroleum (Operator)

Alcorn Petroleum

Planned conduct of Pore Pressure study gravity survey to evaluate further leads

Service Contract 75 (Offshore Northwest Palawan)

15.000% PXP Energy Corp. (Operator)

PNOC-Exploration Corp.

Completed acquisition of 2,200 line-km

of 2D seismic data Under Force Majeure since December 27, 2015


BACKGROUND UPDATE

20MW Maibarara-1

Geothermal Power Project (MGPP) Sto. Tomas, Batangas

• Joint Venture of PGEC (65%), PHINMA Energy (25%), & PNOC RC (10%)

• Integrated steamfield, power plant, switchyard facility in a 7.5 hectare area

• COD - Feb. 8, 2014

• P50 and P90 reserves of 61.6MW to 40.2MW

(GSI, 2015)

• First major preventive maintenance shutdown in March 2016 resulted in increased generation and plant efficiency

2016 Results 153.07 GWh Net Generation

Php141 MM Net Income

97.91% Net Capacity Factor 99.54% Availability Factor


BACKGROUND UPDATE

36MW Nabas-1

Wind Power Project (NWPP) Nabas-Malay, Aklan

• Joint Venture of PGEC (40%), BCPG Wind Cooperatief U.A. (40%), & EEI Power Corp. (20%)

• Phase 1 with 18 2-MW Gamesa G90 Class IA wind turbine generators

• COD - June 10, 2015

• Feed-in-tariff rate of Php 7.40/kWh from 2015 to 2035

• Thai-listed company BCPG Public Company Ltd. as new partner

• Approved 2016 Fit-All rate will improve Transco remittance

2016 Results

103.5 GWh Net Generation Php134 MM Net Income

33.5% Net Capacity Factor 99.5% Ave. Plant Availability


BACKGROUND UPDATE

50MWDC Tarlac-1

Solar Power Project (TSPP) Central Technopark, Tarlac City

• Joint Venture of PGEC (56%) and EEI Power Corp. (44%)

• Situated in a 55-hectare lot inside a PEZA zone and completed in 4 mos. from start of construction

• COD – Feb. 10, 2016

• Feed-in-tariff rate of Php 8.69/kWh from 2016 to

2036

2016 Results

64.27 GWh Net Generation Php167 MM Net Income

21.03% Net Capacity Factor 43.2% Ave. Plant Availability

• Approved 2016 Fit-All rate will improve Transco remittance


BACKGROUND UPDATE

Newest Project : 5-10MWDC

Puerto Princesa Solar Power Project

• Service Contract awarded to PGEC on February 27, 2017

• Energy storage option • In line with Palawan’s

increasing energy demand & thrust on environmental sustainability

• City Council endorsement secured on May 10, 2017

• Distribution Impact Study (DIS) on-going


FINANCIAL HIGHLIGHTS EXPANSION IN RE DRIVES INCREASES IN ASSETS, LIABILITIES, & EQUITY

2012 2013 2014 2015 2016

Total assets 91 116 142 237 214

Total liabilities 44 65 83 155 125

Total equity 47 51 59 82 89

50

100

150

200

250

USD

MM

Consolidated Asset

Distribution

(2016)

2012 2013 2014 2015 2016


14%

13%

41%

32%

Oil

Investment inAssociate

Geothermal

Solar

FINANCIAL HIGHLIGHTS

11.99 13.72

25.87

23.54

33.63

2.34 1.52

9.75

4.61 5.86

5.11 5.15

14.27

11.55

21.60

.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

40.00

2012 2013 2014 2015 2016

Revenues

Net income

EBITDA

In USD MM

SUBSTANTIAL INCREASE IN REVENUE AND EBITDA DUE TO RE OPERATIONS

20MW Geothermal COD – Feb. 8, 2014

36MW Wind COD – June 10, 2015

50MW Solar COD – Feb. 10, 2016

Electricity Sales

Oil Revenues

15%

85%

2016 REVENUE ALLOCATION



METRIC 20MW

GEOTHERMAL

36MW

WIND

50MWDC SOLAR

2016 1Q 2017 2016 1Q 2017 2016 1Q 2017

Net Generation (GWh) 153.07 40.86 103.50 42.47 64.27 19.58

Capacity Factor (%) 97.91 99.56 33.49 53.38 21.03 22.96

Gross Revenue (Php MM) 784.61 209.08 769.94 314.27 558.52 170.11

Net Income (Php MM) 140.90 83.82 134.11 167.10 166.70 63.24

Return on Sales (%) 18 40 17 53 30 37

SIGNIFICANT RETURN ON SALES FROM RE UNITS



RE EXPANSION REFLECTED IN INCREASING BOOK VALUE PER SHARE

2012 2013 2014 2015 2016 1Q

2017

Market Closing Price (Php/Share) –

6.10 5.42 6.20 3.50 4.15 4.01

Book value/share (Php) 6.19 6.69 8.18 8.83 7.90 8.26

Earnings per share (Php) 0.395 0.343 1.376 0.297 0.205 0.348


• Market Closing Price as of June 1, 2017 – Php6.09 / share

FINANCIAL HIGHLIGHTS HEALTHY FINANCIAL RESULTS FOR 1Q (Amounts in USD MM except ratios)

FY 2016 1Q 2017 Variance (%)

Financial Position

Total assets 214.30 228.01 6.01

Total liabilities 125.02 135.03 7.41

Total equity 89.28 92.98 3.98

Book value per share (in Php) 7.90 8.26 4.37

1Q 2016 1Q 2017 Variance (%)

Financial Performance

Revenues 6.41 9.30 45.13

Electricity sales 5.36 7.58 41.57

Oil revenues 1.05 1.72 63.20

Gross income 2.40 5.18 115.60

EBITDA 4.61 7.89 71.10

Net income 1.01 4.31 326.85

Selected Financial Parameters

Book value (in Php) 7.59 8.26 8.82

Earnings per share (in Php) 0.058 0.348 500.10

Price / earnings ratio 64.15 11.52 -82.04

Market Closing Price (Php/Shr) 3.72 4.01 7.80




Cash Balance, Dec 2016 12.91

Net Cash from Operations 4.32 Net Cash from Investing (CAPEX) -12.76 Net Cash from Financing: Loans (net of interest payment) 6.29 Equity contribution 2.47

Others -.35

Net Cashflows -.03

Cash Balance, Mar. 2017 12.89

CASH FLOW SUFFICIENT TO FUND ON-GOING OPERATIONS

Net Cashflows for 1Q 2017 Amounts in USD MM


FINANCIAL HIGHLIGHTS RATIOS COMPLIANT WITH LOAN COVENANTS

MGI (Geothermal)

PSC (Solar)

PWEI (Wind)

Debt Service Coverage Ratio (DSCR)

Threshold 1.1:1 1.1:1 1.1:1

Current - 2016 1.92:1 2.26:1 1.33:1

Debt to Equity Ratio (D/E)

Threshold 2.33:1 3:1 2.33:1

Current - 2016 1.63:1 2.86:1 2.21:1


Coal 46.2%

Nat Gas 25.2%

Diesel/Oil 1.3%

Geothermal 13.2%

Hydro 9.4%

Wind 2.3%

Biomass 1.3%

Solar 1.2%

2.0

2.3

3.3

3.4

2.7

4.7

2.8

4.0

2.8 2.4 2.3

2.1

1.8

3.3 3.6

-1.0

1.0

3.0

5.0

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

P/K

WH

2016 2017

DOE data indicate sufficient supply to meet demand until 2021 FIT-supported RE capacity still below 15% of total energy mix

Supply and Demand Outlook (2017-2030) Energy Mix (2017, Luzon, Visayas, Mindanao))

Average WESM price down below P3/kWh Despite these market trends, room for growth in RE can be found in:

o Feed-in-Tariff (Hydro & Biomass)

o Bilateral Contract (DUs and ECs)

o Retail Electricity Supply

o Off-Grid/Missionary/SPUG Areas

o Economic Zones

Average Monthly WESM Price (2016-2017)

MARKET OUTLOOK & BUSINESS EXPANSION

0

10,000

20,000

30,000

2016 2018 2020 2022 2024 2026 2028 2030

Total Existing Available Capacity

Total Capacity Addition

System Peak Demand

MW

MARKET OUTLOOK & PROJECT EXPANSION

Offtake Options for New RE Projects


1. Feed-in-Tariff (FIT)2. Bilateral Supply Agreement/

Renewable Portfolio Standard (RPS)

Key Features

Market

Constraints

• Solar - fully subscribed (525.95 MW) • Wind- fully subscribed (426.9 MW)• Runoff River - 26.6 MW out of 250 MW• Biomass - 145 MW out of 250 MW

• Fixed rate• Long-term (20 years)• Priority and must-dispatch

• DOE policy is technology-neutral and focuses on rate reduction

• Fixed rate• Short to long-term (Meralco -20 years)• Priority and must-dispatch • Requires CSP and ERC rate approval

• Competitive selection process (CSP) • RPS Implementing Rules and Guidelines

not yet approved

• Bilateral Supply Agreement

o Meralco and other Distribution Utilities (DUs)

o Rural Electric Cooperatives

• Renewable Portfolio Standard (RPS)

RPS Target by 2030 - 35% of total demand

MARKET OUTLOOK & PROJECT EXPANSION


Offtake Options for New RE Projects

5. Economic Zones3. Retail Electricity Supply (RES) 4. Off-Grid/SPUG Areas

Key Features

Market

Constraints

• Fixed rate• Short-term (2-5 years)• Priority and must-dispatch

o Off-Grid Areas (Palawan) o Off-Grid Ancillary Services

• Fixed rate• Long-term (20-25 years)• Priority and must-dispatch • Requires CSP and ERC rate approval

• Competitive selection process (CSP) • Higher CAPEX

o Contestable Market• > 750 kW to 999 kW - 79 • > 1 MW - 178 • Total No. of Expected Customers- 1, 554 • 2016 Market Share - 13, 620 GWh (15%)

• Short-term• Exposed to price volatility

• Fixed-rate• Short to long-term • Priority and must-

dispatch • Entitled to PEZA

• Exposed to price volatility

• PEZA locators

Ceremonial Groundbreaking for M2 held on October 27, 2016

12MW Maibarara-2 Geothermal Power Project

Target COD by 4Q 2017 Secured offtake with PHINMA Energy Total project cost of Php1.9 Billion (USD38 MM)



PROPOSED TSPP-2 (49 MWDC) (48 hectares)

TSPP-1 (50 MWDC) (55 hectares)

49MWDC Tarlac-2 Solar Power Project

Target COD by 1Q 2018 • 90% of permits secured • technical studies completed • offtake proposal submitted to potential buyer

Estimated project cost of Php2.4 Billion (USD48 MM)



14 MW Nabas-2 Wind

Power Project

http://myphilippinelife.com/wp-content/uploads/antique_pandan_nwmtns.jpg

14MW Nabas-2 Wind Power Project


• Expected higher wind speed and capacity factor

• Takes advantage of existing infrastructure for Nabas-1

• 4-7 Wind Turbine Generators

• Estimated project cost of Php1.6 Billion (USD32 MM)

Nabas-2 Location Met Mast WTG 11


Ulugan Bay

Puerto Princesa

SULU SEA

Service Contract area

5-10 MWDC Puerto Princesa Solar Power Project

Honda Bay

Target COD by 1Q 2018 Estimated project cost of Php855 MM (USD17 MM)


Underground River


KEY TAKEAWAYS

• Growing RE revenue stream with potential medium-term upside on oil

• Greater focus on renewable energy and power generation RE revenues constitute 85% of PERC ‘s total consolidated revenues PERC currently supplies 8.4 % of wind power and 7.1% of solar power capacities in

the country Building the only new geothermal power station in the country

• PERC as stable and worthy investment in PH energy sector Low offtake risk of existing projects Technical and management expertise Proven track record in project execution

• PERC plans to develop four (4) new projects over two (2) years with total estimated cost of Php6.7 Billion


END OF PRESENTATION

PetroEnergy Resources Corporation 7th floor JMT Bldg. ADB Ave., Ortigas Center, Pasig City T: (02) 637-2917 F: (02) 6346066 E: [email protected]

June 2, 2017 - PetroEnergypetroenergy.com.ph/resources/reports/PERC Investors... · Nabas-Malay,...

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