RATIO OIL EXPLORATION (1992) - ratio-media.s3-eu …žצגת... · October 2016 . DISCLAIMER This...
Transcript of RATIO OIL EXPLORATION (1992) - ratio-media.s3-eu …žצגת... · October 2016 . DISCLAIMER This...
DISCLAIMER This presentation was prepared by Ratio Oil Exploration (1992) – Limited Partnership (the “Partnership” or “Ratio”). It is not an offer to buy or sell securities of the Partnership, nor an invitation to receive such offers, and is designed, as aforesaid, for the provision of information only. The information used to make the presentation (the “Information”) is given for convenience purposes only and is neither a basis for making any investment decision, nor a recommendation nor an opinion, and is no substitute for the investor’s discretion.
Everything stated in this presentation with respect to an analysis of the Partnership’s business is merely a summary. To obtain a full picture of the Partnership’s business and the risks facing the Partnership, review the Partnership’s Periodical Reports and Immediate Reports, as filed to the Israeli Securities Authority on the Magna website. The Partnership does not warrant that the Information is either complete or accurate, nor will bear any liability for any damages and/or losses which may result from the use of the Information.
Various issues addressed in this presentation, which include forecasts, goals, estimates, assessments and other information pertaining to future events and/or matters, whose materialization is neither certain nor within the Partnership’s control, including in connection with data, income forecasts, the value of the Partnership, costs of projects, development plans and concepts and construction thereof etc., are forward-looking information, as defined in the Israeli Securities Law. Such Information is based solely on the Partnership’s subjective assessment, based on facts and figures concerning the status of the Partnership’s business, and macro-economic facts and figures, all as are known to the Partnership on the date of preparation of this presentation. The Partnership does not undertake to update and/or change any such forecast and/or estimate to reflect events and/or circumstances occurring after the date of preparation of this presentation. The materialization or non-materialization of the forward-looking information will be affected, inter alia, by risk factors characterizing the Partnership’s business, as well as by developments in the general environment and external factors affecting the Partnership’s business, third-party representations not materializing, delays in the receipt of permits, etc., which cannot be estimated in advance and are beyond the Partnership’s control. The Partnership’s results of operations may differ materially from the results estimated or implied from the aforesaid, inter alia due to a change in any one of the foregoing factors.
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THE LEVANT BASIN
[4]
Ratio focuses on
hydrocarbon
exploration and
production in the
deep-water of the
Eastern Mediterranean
Sea
THE LEVANT BASIN POTENTIAL (*)
[5]
Natural Gas ~ 75 TCF
Oil ~ 6.6 Billion BBL
* Source: Ministry of Energy: Israeli Oil and
Gas Opportunities publication, October 2016. Prospective , Yet-to-Find, in place resources, P50 Best Guess category (excluding discoveries)
The Israeli Ministry of
Energy intends to launch
a bid round for 24
offshore exploration
blocks in November 2016
LEVIATHAN PROJECT
• Eitan Aizenberg, Ratio’s geologist and one of its
founders, is the prospect generator of the Leviathan and
Dolphin discoveries.
• Ratio held 100% interest in the “Ratio Yam” exploration
areas (where the Leviathan and Dolphin discoveries are
located) and in 2007 invited its current partners to farm-
in to the asset.
• The Leviathan field is located in the Leviathan South &
Leviathan North Leases, approx. 135km west of Haifa,
Israel in water depths of approx. 1,630 meter, and
covers approx. 325 square km
• Israel’s Export Policy permits export sales of 50% from
Leviathan plus up to an additional 25% following swap
transactions. Current Leviathan export potential is
approx. 16.4 TCF
• NSAI most updated resources (2C) estimates:
• Natural gas: 21.9 trillion cubic feet (TCF)
• Condensate: 39.4 million barrels (MMBBL) [6]
Leviathan is a World-class asset in terms of quantity, quality and potential for high production delivery Leviathan field is the major discovery of natural gas reservoir in the Levant Basin
LEVIATHAN PROJECT
[7]
Scale & location allow for several commercialization possibilities
Leviathan targets for domestic and regional markets: Israel, Jordan, Egypt and Turkey
LEVIATHAN PROJECT
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First Phase Pipeline Project Focused on Israel & regional export markets
Domestic Supply Module (DSM):
Time Schedule (*) FID – End 2016 First Gas – Q4/2019
CAPEX estimation (*) USD 3.5-4.0B (initial processing capacity ~ 12 BCM/A)
Regional Export Module (REM):
CAPEX estimation (*) USD 1.5-2.0B (additional processing capacity ~ 9 BCM/A) (**)
(*)Based on Operator’s forecasts (**) FID for additional capacity is contingent on markets maturity
• According to Approved Development Plan, a fixed
platform with capacity of 2,100 mmcf/d, will be built in
two modules:
• DSM: A supply of up to 1,200 mmcf/d for Israeli
consumers and adjacent countries and territories, such
as: Jordan, PA, Egypt (Domestic demand)
• REM: A supply of up to 1,200 mmcf/d through a dedicated
pipeline which will connect the production platform with
neighboring counties, such as: Egypt (Idku ELNG) or
Turkey
LEVIATHAN DEVELOPMENT SYSTEM
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Noble presents
similarities between
Leviathan and the
successful Tamar
Project
• Focus on safety and reliability
• Proven design concepts
• Fixed production platform fabrication
• Jacket and Topsides transportation and installation
• Majority of senior personnel worked for Tamar project
• Contractual & Execution Strategy
[10]
Regulation Gas Outline The final approval of the Governmental Gas Outline in May 2016 paved the road to accelerate Leviathan project development
Allowed Transfer export quota
from Karish & Tanin fields to Leviathan
Allowed joint marketing with
other Leviathan partners
Exercised article 52 of the Restrictive Trade
Practices Law by the PM in his role as the minister
of economy and trade
Established time table for first gas from Leviathan
(Scheduled for December 2019)
Main elements of the Gas Outline
applicable to Ratio
Recognized providing economic incentives for
exploration & development of small/medium scale
gas fields, such as Royee license (70% WI)
LEVIATHAN MARKETING Up-To-Date Contractual Arrangements Leviathan partners pursue extensive discussions and negotiations towards execution of additional GSPAs
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Gas Sale & Purchase Agreements (GSPA)
* TCQ - Total Contract Quantity (measured in BCM)
** Duration - Years from commencement of commercial gas supply
*** forecasted Revenue - Assumes Clients will consume the TCQ and based on the
Partnership's estimation regarding the gas price during the GSPA duration
Letters of Intent (LOI) • Shell-BG (Egypt, ELNG): A supply of 105 BCM
• Dolphinus (Egypt, domestic): A supply of up to 60 BCM
Client TCQ (*) Duration
(**) Forecasted Revenue (USD Million) (***)
NEPCO (Jordan) 45 15 10,000
IPM Be’er Tuvia (Israel) 13 18 3,000
Edeltech (Israel) 6 18 1,300
LEVIATHAN MARKETING
ISRAEL
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Solid visibility for strong and growing demand in the Domestic Market Potential for gas utilization following Coal-to-Gas conversions up to 3.5 BCM/A
(*) Source: BDO Gas Demand Forecast , October 2016 (Inc. Palestinian Authority demand)
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Electricity Cogen & Industry CNG and Chemical Industry Further coal reduction
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Natural Gas Demand Forecast (BCM)
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30.2
REGIONAL MARKETS JORDAN
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In September 2016 a GSPA executed with National Electric Power Company of Jordan (NEPCO)
• Seller: Noble Jordan Marketing Ltd. (SPC owned by Leviathan
partners)
• Total Contract Quantity: 45 BCM
• Term: 15 years from commencement of commercial of gas
supply
• Delivery Point: Israel-Jordan border
NEPCO’s GSPA main parameters
REGIONAL MARKETS EGYPT: Supply & Demand
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bcfd
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LNG Imports
Piped imports Onstream Fields
Probable Developments
Under Development
Good Technical
YTFDemand
Domestic Gas Supply / Demand (2010-2035)
Demand - includes only local gas consumption (excludes LNG facilities’ demand)
Supply – Mostly Zohr (shown as “Probable Development”)
Source : WoodMackenzie, January 2016
[15]
In February 2016 Shell-BG scheme of arrangement became effective Leviathan Partners continue the discussions with Shell
• Annual Contract Quantity: 7 BCM
• Term: 15 years of gas supply
• Delivery Point: Leviathan production platform outlet
Highlights of BG’s MOU
Potential to increase of both annual and total quantities (on top of the MOU)
REGIONAL MARKETS EGYPT: ELNG Facility
REGIONAL MARKETS EGYPT: Domestic
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In November 2015 the Leviathan partners and Dolphinus Holdings signed a Letter of Intent (LOI) to negotiate a GSA to supply gas to the Egyptian market through the existing EMG pipeline
• Quantity: up to 4 BCM per annum
• Term: 10-15 years of gas supply
Potential to deliver gas through the existing Israeli transmission system and the existing EMG operated pipeline to Egypt
Highlights of Dolphinus LOI
REGIONAL MARKETS Turkey
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Turkey is a significant potential market for natural gas
Based on the forecasted Turkish demand, Leviathan has a potential to supply up to 10 BCM per annum to the Turkish market
Gas supply diversification In 2015, approx. 70% of Turkey's gas was imported from Russia and Iran
Potential Transit Hub from East to West Several regional transmission lines are planned / constructed (TAP, TANAP)
Expected gas shortage As of 2021, expected shortage of approx. 10 BCM per annum
(*) IHS April 2015 forecast
LEVIATHAN DEEP OIL PROSPECT
[18]
Play-opening opportunity
Prospective Resources, NSAI pre-drill estimation
Geologic Success: Middle Cretaceous 15% Lower Cretaceous 21%
• Operator forecasts 25% geologic chance of success
• Mesozoic rocks produce hydrocarbons throughout the Middle East
and northern Africa
• Enormous regional implications, especially on neighboring structures,
if hydrocarbons are found
LEVIATHAN FINANCING CAPEX
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Potential Funding Sources
Estimated Partnership’s share in Capex for development of the Domestic Supply Module ~ $550M - $600M In final stages of securing a bridge to project finance senior loan lead by top tier international banks
• Senior loan by international and domestic banks
up to an amount of $400M.
Loan expected to be signed prior to obtaining FID
Maintaining maximum flexibility
Consortium of international and domestic banks
• Capital markets subordinated debt secured by
royalties.
• Outstanding capital market warrants
Partnership's equity that has been invested in
Leviathan amounts to ~$160M
LEVIATHAN FINANCING ISSUANCE OF BONDS ( SERIES B ) by Ratio Oil Explorations (Finance) Ltd.
[20]
Package of Subordinated Bonds
and Warrants
• 7 year bond to be repaid in 3 equal installments
in 2021 through 2023.
• Lower coupons through 2020 and higher
coupons from 2021 through 2023.
• Bonds are secured by new royalty related to
Leviathan asset.
• Issued package will also include warrants
issued by the Partnership.
• Other terms substantially similar to
Bonds (Series A).
LEVIATHAN FINANCING ISSUANCE OF BONDS ( SERIES B ) by Ratio Oil Explorations (Finance) Ltd.
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General Structure
RATIO OIL EXPLORATION
) LP1992(
EXPLORATIONSRATIO OIL
(FINANCE) Ltd.
Rights to
receive a
royalty from oil
& gas
production from
Leviathan
Loan for
financing
Ratio’s share
related to
Leviathan lease
BOND (series B) issued by
RATIO OIL EXPLORATIONS (FINANCE) Ltd.
OPTIONS exercisable to participation units
RATIO OIL EXPLORATIONissued by
) LP1992(
Proceeds from
issuance of
Bonds
First fixed lien on the
royalty issued by the
partnership and its
recording in the
Petroleum Register
ADDITIONAL ASSETS
[22]
ROYEE LICENSE (70%) (Operator – Edison)
NSAI estimated the pre-drill
prospective resources in
Royee Prospect at ~ 3.2
TCF of natural gas (Best
Estimate) with a forecasted
36% geological chance of
success
Hanna & Eran LICENSES( *) (15% each): (Operator - Noble Energy) (*) Eran License has expired. A mediation process with the State of Israel is being conducted these days. Hanna License has expired and appeal has been submitted to the minister on this decision.
GLOBAL OPPORTUNITIES
[23]
Guyana (Block B) 50%* WI
• Executed farm-in agreement with a
• subsidiary of ExxonMobil
• Upon closing, ExxonMobil will hold 50%**
WI and be nominated as field operator
• Exxon Mobil discovered “Liza” – a world
class oil field (0.8-1.4 BBOE), which is
located adjacent to Block B
Malta (Area 5) 100% WI
• 3D seismic survey is planned to be
executed in Q4-2016 / Q1-2017
Philippines (Area 4) 100% WI
• announced as winning bidder by the
Government of The Philippines
Ireland (LO 16/28) 100% WI
• Licensing Option has been granted
* The other 50% WI is hold by a local partner
** Upon closing, Ratio and the local partner will hold
25% WI each
The Partnership plans to invest in a new Limited Partnership (“RPL”) that will engage in E&P activity outside Israel. RPL plans to issue securities in the TASE Following the issuing of securities, RPL will control entities(*) that has rights in four offshore assets in - Guyana, Malta, Ireland and Philippines (*) the main shareholders in these entities are Landau & Rotlevy families and Eitan Aizenberg
Block
B
Area
5
LO
16/28
Area 4
Liza
CONTACT DETAILS
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Ratio Oil Exploration (1992) Limited Partnership
85 Yehuda Halevy St. Tel Aviv 6579614 Israel Tel: +972-3-5661338 Fax: +972-3-5661280 [email protected]