Pa resources agm 2013 presentation 14 may 2013
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Transcript of Pa resources agm 2013 presentation 14 may 2013
AGM 2013
PA Resources AGM 2013
Bo Askvik,
President & CEO
Stockholm, 14 May 2013
Today’s outline
2
Q1
>> FINANCIAL HIGHLIGHTS
Full-year 2012 and Q1 2013
>> RECAPITALISATION
Two step transaction
>> PA RESOURCES BUSINESS PLAN
Strategy and investment focus
>> OPERATIONAL UPDATE
Key assets and progress
Financials highlights
Q1
4
Production and sales in 2012 and Q1 2013
bopd Full-year
2012
Q1
2013
April
2013
West Africa 5,600 4,800 4,200
North Africa 2,300 2,000 1,900
Group Total 7,900 6,800 6,100
• ASENG: Production now off plateau level, affected
by limitations in gas handling capacity, overall field
oil rates on expected levels.
• AZURITE: Production continue to be affected by
by intermittent well instability.
• TUNISIA: Onshore production impacted by well
intervention, successfully completed in March
• PRICE: PA Resources realised price of USD 113
per barrel equal to Brent average
Average production per country (bopd)
Average sales price (USD/bbl)
97
109 106 104
120
109 109 106 113
106
117 113 109 119
108 109 110 113
20
40
60
80
100
120
140
Q12011
Q22011
Q32011
Q42011
Q12012
Q22012
Q32012
Q42012
Q12013
PA Resources Brent
0
2 000
4 000
6 000
8 000
10 000
Q12011
Q22011
Q32011
Q42011
Q12012
Q22012
Q32012
Q42012
Q12013
Congo: Azurite EG: Aseng Tunisia: Didon & Onshore
Earnings and key ratios
5
Q1 2013 Q4 2012 FY 2012 FY 2011
Production (bopd) 6,800 7,100 7,900 8,600
Oil price (USD/barrel) 113 106 111 103
Revenue (SEK million) 446 467 2,184 2,154
EBITDA (SEK million) 242 266 1,255 1,295
Profit before tax
(SEK million)* 131 -16 85 158
Profit for the period
(SEK million) 34 -340 -1,966 -2,084
Earnings per share (SEK)** 0.003 -0.04 -1.93 -2,67
* Figures for Q1 2013 exclude non-cash, one-off costs of SEK 21 million. Figures for Q4 and
full-year 2012, exclude non-cash, one-off costs of SEK 169 million respectively SEK 1,748 million.
** The righs Issue in February 2013 gave rise to retrospective adjustments
Capital expenditures and 2013 forecast
Actual Forecasted
Capex development and forecast (SEK million)
KEY COMMENTS
• Capex in Q1 amounted to SEK 58 million,
at the lower end of the forecast range
• Main part of Q1 investments relates to West
Africa/Azurite sidetrack
• 2013 forecast of SEK 250 – 380 million
unchanged assuming no farm-outs reducing
investments
6
1,613
255
58
250-380
0
200
400
600
800
1 000
1 200
1 400
1 600
1 800
2011 2012 2013
MS
EK
58
Cash flow
7
SEK million
Q1
2013
Q4 2012 FY 2012 FY 2011
Operating cash flow -70 175 838 812
of which income
taxes paid
-54 0 -5 -45
CAPEX -58 -186 -255 -1,613
Financing activities 359 65 -568 -408
Net cash flow 231 54 15 -1,209
KEY COMMENTS
• Operating cash flow of SEK -70 million
mainly relating to reduction of accounts
payable and other liabilities in connection
to Azurite sidetrack
• Income taxes of SEK 54 million relating
mainly to one-off payments in Tunisia and
Equatorial Guinea
• Capex of SEK 58 million, at the lower end
of the forecast range
• Righs issue of SEK 604 million, net after
transaction costs
• Amortisations of SEK 245 million in Q1
• Cash and cash equivalents at the end of
the period amounted to SEK 288 million
Recapitalisation
Q1
» Convertible bondholders offered to set-off their claim against newly issued shares at
SEK 0.15
» Approx. 90% of nominal amount converted into newly issued shares
» Equity increased with SEK 968 million and nominal debt decreased with SEK 890
million (net debt reduced by SEK 819 million)
Recapitalisation – two step transaction
Completed two-step transaction strengthened equity with approx. SEK 1.570 billion
Set-off issue
9
1
» Fully underwritten rights issue at SEK 0.10 (~50% to old shareholders and ~50% to
convertible bondholders)
» 51% of shares (3,570 million) were subscribed with preferential right
» Increases equity with SEK 604 million after transaction related costs and reduced net
debt with SEK 602 million
» Outcome of transactions resulted in changes in shareholder structure
Fully underwritten rights issue increased equity with SEK 604 million
2
Current equity and debt situation
10
KEY COMMENTS
• Recapitalisation restored Equity and
Book equity/Capital employed above
requirement in covenants
• Amortisations of SEK 245 million in Q1
• Net debt reduced to SEK 2,111 million
Equity and net debt before and after recapitalisation (SEK million)
Q1 2013 Q4 2012 Q3 2012 Covenant
Book Equity (SEK
million) 2, 201 1,590 956 >2,000
Book Equity to
Capital Employed 48% 37% 22% >40%
Net debt (SEK
million) 2,111 2,630 3,410 N/A
Covenants and Net Debt development
956
3,410
2,201 2,111
0
500
1 000
1 500
2 000
2 500
3 000
3 500
4 000
Equity Net Debt
30 Sept. 2012 31 March 2013
Reverse share split
11
SUMMARY
• The EGM on 9 April 2013 resolved in favour of a reversed share
split and a minor new share issue of 28 shares
• 500 present shares are consolidated into one share, with record
date 2 May 2013
• Shareholdings is rounded off downward, any excess shares will
come under the Company’s ownership and is thereafter sold
• Proceeds to be automatically distributed among the owners
• Following the reverse split the total number of shares in
PA Resources amounts to 28,291,998
Largest shareholders
12
The 10 largest shareholders
per 28 March 2013
Capital/
votes
GUNVOR GROUP LTD 9.9%
AVANZA PENSION 6.8%
CREDIT AGRICOLE (SUISSE) SA 3.8%
AB TRACTION 3.0%
NORDNET PENSIONSFÖRSÄKRING AB 2.8%
ÅGERUP FASTIGHETER AB 2.7%
LUX-NON-RESIDENT/DOMESTIC RATES 1.9%
JP MORGAN BANK 1.7%
SEB S.A. 1.7%
ORIGINAT AB 1.4%
10 largest shareholders 35.7%
Other shareholders 64.3%
Total 100.0%
NOMINATION COMMITTEE
• Sven A. Olsson (Gunvor Group Ltd),
Chairman of the Nomination Committee
• Bengt Stillström (AB Traction)
• Göran Ågerup (Ågerup Fastigheter)
• Hans Kristian Rød, Chairman of the Board
BOARD PROPOSAL
• Sven A. Olsson (Chairman - new)
• Philippe R Probst (Board member - new)
• Philippe R Ziegler (Board member - new)
• Paul Waern (Board member since 2009)
Operations update
Q1
Changes in Reserves and Resources 2012
14
Working
Interest
Net
Entitlement
End 2011:
Proven and probable reserves*
Production
Revision
1P/P90 2P/P50 1P/P90 2P/P50
39.1 60.2
-2.9
+1.9
-2.9
-1.6
-2.1
+1.3
-2.1
-1.4
25.9 40.4
End 2012: 38.1 55.7 25.1 36.9
* Reserves are classified accordingly to the SPE-PRMS 2007 guideline
KEY COMMENTS:
» Improved 1P to 2P ratio from 65 to 68%
» 1P reserves impacted by;
• Increase of 1P volume for the Aseng field
(1.03 mmboe) and the Tunisian fields (1.0
mmboe) based on production performance
• Reduction for Azurite of 0.15 mmboe
» 2P reserves impacted primarily by;
• Downwards revision of Azurite reserves by
2.9 mmboe on a working interest based
• Upwards revision of the producing Tunisian
fields (1 mmboe)
» Resources approximately unchanged
• Contingent resources of 142 mmboe (145)
• Risked prospective resources of 406 mmboe
(409) at a mid-case level
15
Licence changes and transactions 2012-2013
SUMMARY
• Tunisia: Small producing fields Ezzaouia and
El Bibane sold to Candax Energy
• Denmark: 9/95 Maja relinquished, 12/06 and 9/96
Gita extended with two years
• Congo: Marine XIV relinquished, PA Resources
working interest in MPS increased from 35% to 85%
• UK: Awarded new licence Block 22/19A in the 27th UK
licensing round (100%), Block 17/4b relinquished
• Germany: 10% of licence B20008-73 farmed out to
Danoil Exploration A/S
Capex forecast and drilling programme
DK: 12/06 Lille John 2013/2014 Appraisal/
Exploration/1-2
EG: Block I Carla South Ongoing Exploration/1
EG: Block I Diega 2013 Appraisal/1
EG: Block H 2013 Exploration/1
NL: Q7/10a Q7-FA 2013/2014 Appraisal/
Development/1
Tunisia: Zarat Elyssa 2013/2014 Appraisal/1
Tunisia: Makthar 2014 Exploration/1
Drilling programme/planned wells 2013-2014 Capex forecast 2013 includes:
• Drilling campaign ín Block I in EG, Carla
South exploration ongoing
• Drilling campaign on 12/06 high priority
• Drilling on 12/06, Block H and Q7/10a
dependent on rig availability
• Operational expenditures in producing
fields
• Elyssa well assumes successful farm-out
of Zarat licence
• The drilling programme is revised
continuously based on the capex budget
and prioritised commitments
16
EG Block I Aseng – Foundation asset for growth PA Resources 5.7%
• First oil from Aseng in November 2011, plateau level of
around 60,000 bopd sustained from March 2012 until
March 2013
• Total field production since start in November 2011 of
~31 mmbo + 1.8 million barrels to PA Resources
• Profitable barrels – foundation for future growth
» Investments of SEK 500 million recovered in 2012
» Opex per barrel will reduce after Alen commencement in
Q3 2013
» 6-9 liftings per quarter generate frequent cash flow
• 1P reserves upgrade substantially replaces 2012 production
• Field has come off plateau levels and production affected by
vessel’s gas handling capacity which operator is assessing
• Overall field oil rates on expected levels – reservoir
performance monitored
17
Licence Group: Operator Noble Energy (38%),
Atlas Petroleum Int. (27.55%), Glencore (23.75%),
PA Resources (5.7%), GEPetrol (5%)
EG Block I – Carla South oil discovery PA Resources 5.7%
• 2013 drilling programme with Atwood Hunter rig
in progress
• Progressing two exciting fields towards develop-
ment
1. Carla North and South
» 2011 discovery in adjacent Block O (Carla
North) appraised 2013 in Block O, where
operator has announced additional oil
reservoir found
» Carla South om Block I exploration well
spudded before Easter, oil discovery in good
quality sandstones at target level in late April,
well now being sidetracked to adjacent target
2. Diega
» Expect appraisal well and 3 to 4 week
production test in Block I Q3 2013
18
Licence Group: Operator Noble Energy (38%), Atlas Petroleum
(27.55%), Glencore (23.75%), PA Resources (5.7%),
GEPetrol (5%)
Block I Drilling program
Carla South
1 2
Congo – Potential in extended MPS-licence PA Resources 85%
• PA Resources granted additional 50% working
interest and operatorship, licence extended by
authorities until November 2013
• Prospect and lead inventory at various
stratigraphic levels
» Miocene (proven play)
» Albian (proven play on the shelf,
developing play in deep water)
» Possibly pre-salt (frontier play)
• Miocene inventory to be re-interpreted on the
2011 reprocessed 3D data which is better
suited to evaluation at this level
• Intention during extension period to seek
farmees/farmee operator to progress
exploration
19
Licence Group: Operator PA Resources (85%), SNPC (15%)
Mer Profonde Sud – exploration licence area
• Located in the Gulf of Gabes near large producing fields
(Ashtart, Miskar, Hasdrubal & Al Jurf)
• Extensively appraised discoveries with 7 wells drilled
• Zarat field the third largest liquids field found in Tunisia
and the largest remaining field to be developed
• Total gross recoverables of c. 170 mmboe (123 mmboe
net) and c. 40% liquids
Zarat AshtartJenein NordHasdrubalAdam Fields
Za
rat
fie
ld
Zarat and Elyssa Fields
• Onstream since 1998, 31 mmbbl oil produced to date
• Infill production wells and ESP’s evaluated as technically
feasible, to extend field production life cycle
BRING
MAP
20
Producing Didon Field
Top 10 remaining liquids fields in Tunisia
Tunisia – Overview Zarat permit PA Resources Operator 100%
» Tunisian gas deficit growing – more gas projects required
» Submit Unit Plan of Development for approval in Q2 2013
» Agree unitisation with Joint Oil Block
» Actively participate in Government infrastructure initiative
Zarat Field – Largest undeveloped field in Tunisia
1992 Discovery
2010-2011 ZRT-N1 Appraisal
1995 Appraisal Well
2011-2012 POD Update, Unitisation
2017/2018 First production
2013-2017 Development
2013 UPOD, UUOA
Gross
Recoverable
Volumes
• c. 80 mmbbl liquids
• c. 600 Bscf gas incl. inerts
• Largest undeveloped discovery in Tunisia
Subsurface
Aspects
Outlook - Forward Plan
• El Gueria fm reservoir
• 30m oil rim with > 70m rich gas cap
• 40° API oil, 53° API condensate
• Significant inert component in gas
Facilities and
Development
Aspects
Development Concept
• 40,000 bopd initial oil/cond. rate
• 200 mmscf/d initial raw gas rate
• 9 producer wells, 4 gas injectors
• Objective to maximise liquid recovery
• Plan assumes a 7yr gas recycling phase
• Followed by gas cap blowdown
• 25yr + production life
2005 PA Acquisition
1990 Permit Award
21
Tunisia: Significant onshore exploration acreage
Tunis
Sfax
4
3
1
2
Algeria Libya
Tunisia
1 Makthar Permit
Tunis
Sfax
4
3
1
2
Algeria Libya
Tunisia
Producing Asset
1
1 Jelma Permit
2
1 Douleb, Semmama
& Tamesmida
3
1 Jenein Centre Permit 4
Exploration Acreage
PA Resources onshore assets:
• Jelma-Makthar permits surround
producing Douleb, Semmama and
Tamesmida (DST) fields onshore Tunisia
• Both permits cover areas of 7,216 km²
and 3,828 km², contains several onshore
exploration prospects
• Successful exploration and production
history in the region, Serdj play proved
as working petroleum system for Douleb,
Semmama & Tamesmida fields
• Shell preparing drilling in adjacent
licence
22
Denmark 12/06 - Progressing discoveries PA Resources Operator with 64%
• High quality Middle Jurassic reservoir proved by wells
• Mid to high case assessment of c. 25-50 mmboe gross
of contingent resources including liquids
• Technical and commercial studies continuing towards a
year end decision point on either appraisal drilling or to
move into development Front End Engineering Design
(FEED)
• Ongoing discussions with owners of infrastructure for tie
back as one of range of possible development concepts
• Wells established 35 API oil in Miocene sandstone
at c. 900m – exceptionally light oil for shallow depth
• Remaining deeper potential likely – Chalk and Middle
Jurassic
• Efforts to locate available rig for appraisal drilling continue
in tight rig market
• Development options dependent on appraisal results –
successful appraisal could lead to tieback to nearby
infrastructure or standalone development
23
Licence Group: Operator PA Resources (64%),
Nordsøfonden (20%), Spyker Energy (8%), Danoil (8%)
B20008-73
12/06 Broder Tuck-2
Lille John-1
Broder Tuck
Lille John
Business plan 2013 - 2018
Q1
Attractive Asset Portfolio
25
22 oil and gas licences
6 producing fields
9 potentially commercial
discoveries
Operator of 11 licences
PA Resources’ strategy and focus
26
2013 - 2018
Development of
prioritised projects
with reduced risk
>> LONG TERM GROWTH
Development of ~ 32 mmboe for
long-term production growth
>> BALANCED INVESTMENTS
Farm-out of assets reducing invest-
ments and risk, financing from produc-
tion and debt financing at lower level
Business plan 2013 - 2018
27
Operating cash flow and
strengthened liquidity enables
maintenance, financing and
amortisations
» Cash flow from producing assets to finance operational expenditures at
the Aseng and Didon fields
» Strengthened balance sheet, in combination with new debt financing,
enables planned amortizations of bond loans and credit facilities
Lower interest reduces
the level of investment and risk
» Farm-out processes ongoing to reduce interest in prioritised assets
• Zarat license in Tunisia (Elyssa, Zarat and Didon)
• 12/06 in Denmark (Broder Tuck and Lille John)
» Reduced risk exposure to individual projects and share of investment
» Strengthened balance sheet enhances position for future transactions
Development of
prioritised assets for
long-term production growth
» Cash flow from producing fields combined with new debt financing
enables development of ~32 mmboe to production from 2016-2018
» Advance Broder Tuck in Denmark and Zarat in Tunisia towards into
development. Progress the appraisal of Lille John in Denmark , Elyssa in
Tunisia and Diega in EG towards development
» Maintain debt level near post-transaction level during investment phase
Selective exploration to further
expand the resource base
» Active and selective exploration activities to further expand the
discovered resource base - few scheduled commitment wells in the
coming two years
Developed reserves and resources after farm-out
28
MMboe 2P
Reserves
Contingent
Resources
Risked Prospective
Resources
Assets included
Didon, Azurite, Aseng
liquids, Alen, Zarat field
liquids, DST-fields
Block I, MPS, 12/06,
Zarat permit, Netherlands
Block I, Block H, MPS,
Zarat permit, Jelma,
Makthar, Jenein Centre,
Gita, 12/06, Block 8,
Netherlands, UK
Total per 2012.12.31 55.7 142 406
Whereof:
Tunisia: Zarat 43.9 29.3
Tunisia: Elyssa 42.2
Denmark: Lille John 9.1 9.1
Denmark: Broder Tuck 21.4
Total before farm-out 43.9 102.2 9.1
Developed 32 mmboe net
after farm-out 8.8 21.5 2.2
>> Business plan farm-out assumptions: Zarat licence from 100%
to 20%, Didon field from 100%% to 50% and 12/06 from 64% to 15%%
0
5
10
15
20
25
30
35
40
2013 2014 2015 2016 2017 2018
Producing Fields Fields to be developed
0
2 500
5 000
7 500
10 000
12 500
15 000
17 500
2013 2014 2015 2016 2017 2018
Producing Fields Fields to be developed
Expected outcome of Business Plan
29
Estimated development of reserves (mmboe) Estimated future average production (boepd)
32 MMBOE
32 mmboe
>> The foundation of the business plan is to
gradually increase production and reserves
Planned investments 2013 – 2018
30
KEY ASSUMPTIONS:
Development is not progressed until farm-out
successful
• Continued operational expenditures on
producing fields
• Development of existing reserves and
resources of 155 mmboe will after farm-out add
32 mmboe
• Farm-out of prioritised assets to reach
preferred working interest level and reduce risk
on individual assets
» Zarat licence from 100% to 20%
» Didon field from 100%% to 50%
» 12/06 from 64% to 15%
• Present operatorship in farm-out assets
secures development planning
• Oil price of 110 USD/bbl and USD/SEK of 6.53
Capex forecast 2013-2018 before and
after farm out transactions (SEK million)
1,613
255 170 270
540 590
230
520
680
970
300
0 0
200
400
600
800
1 000
1 200
1 400
1 600
1 800
2011 2012 2013E 2014E 2015E 2016E 2017E 2018E
PA Resources' share of investments Partners' share of investments
Expected outcome of planned development
31
KEY ASSUMPTIONS:
• Development of existing
reserves adding after farm-out
32 mmboe for long-term
production growth
• Debt maintained around
current level
• Expected net cash position in
2018
Estimated development of net debt
and average production
0
2 000
4 000
6 000
8 000
10 000
12 000
14 000
16 000
-1,0
0,0
1,0
2,0
3,0
4,0
5,0
2010 2011 2012 2013E 2014E 2015E 2016E 2017E 2018E
ba
rrels
pe
r da
y
SE
K b
illio
n
Net debt actual Production Net debt estimate
Thank you! Q1
Q2 Report on 14 August 2013