Pa resources q2 2013 final_14 aug 2013
Upcoming SlideShare
Loading in...5
×
 

Pa resources q2 2013 final_14 aug 2013

on

  • 2,619 views

 

Statistics

Views

Total Views
2,619
Views on SlideShare
470
Embed Views
2,149

Actions

Likes
0
Downloads
1
Comments
0

2 Embeds 2,149

http://www.paresources.se 2147
https://www.google.se 2

Accessibility

Upload Details

Uploaded via as Adobe PDF

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

Pa resources q2 2013 final_14 aug 2013 Pa resources q2 2013 final_14 aug 2013 Presentation Transcript

  • Second Quarter 2013 Philippe Probst, CEO Tomas Hedström, CFO Stockholm, 14 August 2013
  • Today’s four topics 2 Q2 >> AN EVENTFUL QUARTER Strategic review, farm-out processes and operational progress >> FINANCIAL HIGHLIGHTS Earnings, key ratios and one-offs >> RIGHTS ISSUE Strengthened balance sheet and short-term financing >> WAY FORWARD Medium to long-term outlook
  • Operational progress Q1
  • 4 An eventful second quarter HIGHLIGHTS • New Board of Directors and Management Team • Initiated review of strategy, assets, organisation and financing • Short-term funding to be secured through rights issue and planned new bond • Gunvor Group becoming major shareholder with industry expertise • Farm-out in Tunisia signed, ongoing process in Denmark and Congo • Oil discovery and new field on stream in Equatorial Guinea
  • Farm-out of Tunisian offshore to EnQuest 5 • Farm-out of 70% of PA Resources working interest in the Zarat permit and Didon concession • Operatorship transferred to EnQuest • Structured as two separate transactions, effective date 1 January 2013, subject to necessary approvals • Cash consideration of USD 23 million for Didon • Additional payment of USD 93 million for PA Resources’ share of Zarat development cost • Additional considerations of up to USD 133 million, contingent on achieving certain revenue and cost targets • EnQuest - an experienced operator with track record • PA Resources retains significant share of upside in its remaining 30% interest Farm-out agreement with EnQuest signed in late May Consideration Secures assets’ underlying value with remaining upside potential
  • • Located in the Gulf of Gabes within access to existing infrastructure • Appraised discoveries with 7 wells drilled • Zarat: largest remaining Tunisian field to be developed • Total gross recoverable hydrocarbons of c. 123 mmboe (c. 40% liquids) • 2 additional undeveloped discoveries with tie-back potential to existing/planned infrastructure • Additional prospects and leads Zarat and Elyssa Fields Tunisia: Overview of farmed-out assets Zarat Permit • Onstream since 1998, 31 mmbbl oil produced to date • Current gross production of some 1,400 bopd (approx. 400 bopd to PA Resources after farm-out) • Infill production well(s) and ESPs to extend field life • Didon FSO-vessel currently undergoing recertification programme, field shut down until late September BRING MAP 6 Producing Didon Field
  • 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: • Douleb, Semmama and Tamesmida (DST) in production since late sixties. Current production around 400 bopd • Permits extended to 2035. Field reviews initiated. • Surrounding Makthar and Jelma permits cover areas of 7,216 km² and 3,828 km² • Seismic programme to mature prospects and to identify deep potential • Jenein Centre: » Discovery in Accacus play » Importance/extend to be assessed » Additional prospectivity, » Commitments fulfilled for current period (to 2015) 7
  • 8 Congo – Azurite field has reached its economic limit PA Resources 35% • Full field development reached in 2011 • Disappointing production performance due to severe reservoir problems • Remedial sidetrack failed in early 2013 • Total field recovery now estimated at <17 mmbbl, compared with the initial plan of 40-98 mmbbl • Plans for abandonment are well-advanced. Expected to commence in H2 2013 • Final lifting in H2 2013 expected to mainly cover PA Resources’ share of abandonment cash cost. • Further provisions may be necessary. Licence Group: Operator Murph Oil (50%), PA Resources 35%, SNPC (15%) Azurite field
  • Congo – MPS farm-out process initiated PA Resources 85% • Following Murphy’s withdrawal, PA Resources obtained additional 50% working interest and operatorship • Second exploration phase extended until November 2013, allowing time to assess exploration potential and offering a farm-out to industry • Data room closed, visited by 14 Companies. Awaiting responses • Decision point expected in Q3 2013 whether to enter the third and final exploration period which carries one firm well commitment • A possible relinquishment would give rise to an impairment loss of current book value of approx. SEK 800 million 9 Licence Group: Operator PA Resources (85%), SNPC (15%) Mer Profonde Sud – exploration licence area
  • 10 EG – Production summary Aseng Field PA Resources 5.7.% • Total field production of 36.8 mmbo since start in November 2011 (+2 mmbo to PA Resources) • Initial plateau level of around 50,000 was increased to around 60,000 • Field began coming of plateau in April 2013, average production of 50,000 bopd in Q2 2013 (2,850 bopd net to PA Resources) • Production reduced due to increased associated gas production having reached facility’s capacity • Profitable barrels and frequent liftings • Investments recovered in 2012, current investments recovered almost immediately Aseng field in Bock I Licence Group: Operator Noble Energy (38%), Atlas Petroleum (27.55%), Glencore (23.75%), PA Resources (5.7%), GEPetrol (5%)
  • 11 EG – Production commenced at the Alen field PA Resources 0.29% • Production commenced in Q3 2013 • Volumes slowly ramped up optimising all major component systems, full operations expected later in Q3 2013 • Alen field production contribution to PA Resources modest ( ~100 bopd at peak condensate production level) • Sharing of facilities and costs with Aseng field expected to reduce Aseng operating costs in excess of USD 3 million for PA Resources • Alen field development project delivered ahead of schedule and slightly below sanctioned cost of USD 1,370 million (PA Resources’ share approx. USD 4.1 million) Alen Field Unitisation: Operator Noble Energy (44.65%), GEPetrol (28.75%), Glencore (27.55%), Atlas Petroleum (1.38%), PA Resources (0.285%), Alen field in Bock I/Block O
  • EG Block I – Successful drilling campaign underway PA Resources 5.7% Progressing two exciting fields towards development 1. Carla North and South exploration/appraisal » 2011 discovery in adjacent Block O (’Carla North’) appraised in 2013 with additional oil reservoir found » Carla South exploration well in Block I and its sidetrack encountered oil in two different good quality sandstone reservoirs » Implication of results being evaluated 2. Diega appraisal » Appraisal well currently being drilled » Plans to perform a long-term flow test following the drilling of a horizontal reservoir penetration 12 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 Diega
  • Denmark 12/06 – Farm-out negotiations ongoing 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 decision in Q1 2014 on either appraisal drilling or to move into development Front End Engineering Design (FEED) • Ongoing discussions with owners of infrastructure within reach for a potential tie- back • Wells established 35 API oil in Miocene sandstone at c. 900m – exceptionally light oil for shallow depth • Remaining deeper potential in Chalk and Middle Jurassic • Efforts to locate available rig for appraisal drilling continue for a 2014 drilling campaign • Negotiations regarding a farm-out of a 40% interest ongoing 13 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 12/06 farm-out
  • Financial highlights Q1
  • 15 Production and sales in Q2 bopd Ytd 2013 Q2 2013 July 2013 West Africa 4,300 4,000 3,800 North Africa 800 800 400 Group Total 5,100 4,800 4,200 • ASENG: Oil production constrained by associated gas production having reached facility’s capacity • AZURITE: Declining production, field reached its economic limit, abandonment planning underway • PRICE: PA Resources realised price of USD 103 per barrel compared to Brent average of USD 102 • TUNISIA: Shut down of Didon on1 July due to maintenance work programme with expected completion in late September Average production (bopd) Average sales price (USD/bbl) 0 2 000 4 000 6 000 8 000 10 000 12 000 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 120 109 109 106 113 103 119 108 109 110 113 102 20 40 60 80 100 120 140 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 PA Resources Brent
  • Earnings and key ratios 16 Q2 2013 Q1 2013 Production (bopd)* 4,800 5,600 Oil price (USD/barrel) 103 113 Revenue (SEK million) 332 446 EBITDA (SEK million)** 140 242 Profit before tax (SEK million)*** -2 131 Profit for the period (SEK million) -350 34 Earnings per share (SEK)**** -12.37 1.50 * Subject to the necessary approvals, PA Resources´ working interest in the Didon field in Tunisia has been reduced from 100% to 30% through the farm-out transaction with EnQuest. The production numbers have been retrospectively adjusted to a 30% interest as per 1 January 2013. ** Figures for Q2 exclude non-cash, one-off costs of SEK 462 million *** Figures for Q2 and Q1 exclude non-cash, one-off costs of SEK 647 million and SEK 21 million respectively. **** The reverse share split in May 2013 gave rise to retrospective adjustments KEY COMMENTS Q2 vs Q1 • Revenue negatively impacted by lower production and lower sales price • Capital loss from Tunisian farm-out: before tax SEK -462 million and after tax SEK -117 million, presented as one-off costs • Impairment loss of SEK 97 million due to relinquished Greenlandic licence 2008/17 (Block 8), and of SEK 88 million due to impairment of Danish licence 9/06, presented as one-off costs
  • Q2 & Q1 comparison after one-offs 17 SEK million Q2 2013 Q1 2013 Profit for the period -350 34 One-off costs Azurite 0 21 9/06 (Gita) 88 0 2008/17 (Block 8) 97 0 Tunisian farm-out 117 0 -48 55 Net exchange gains/losses 3 -45 Didon 70% net result impact 8 -5 Profit for the period (Adjusted) -38 6 KEY COMMENTS • Adjusted profit for Q2 and Q1 amounted to SEK -38 million and SEK 6 million respectively • Difference of SEK -44 million is mainly explained by lower adjusted revenue of SEK 63 million Q2 2013 Q1 2013 Production (bopd) 4,800 5,600 Oil price USD(barrel) 103 113 Currency (USDSEK) 6.50 6.43
  • Q2 adjusted P&L 18 SEK million Q2 2013 Adjustments Q2 adjusted Revenue 332 -31 301 Capital loss -462 462 0 Cost of sales & other expenses -192 11 -180 Depreciation & WD -246 206 -40 Operating profit -568 650 81 Total financial items -81 6 -75 Profit before income tax -648 656 6 Income tax 298 -343 -45 Profit for the period -350 313 -38 KEY COMMENTS • Adjusted profit for the second quarter amounted to SEK -38 million. • Adjustment made for the following figures: » Tunisian farm-out: 1. Capital loss of SEK -462 million reversed deferred tax liability of SEK 345 million 2. Didon impact 2 months of 100% (row by row) » Write-downs of SEK -185 million » FX effects of SEK -3 million
  • Cash flow 19 SEK million Q2 2013 Q1 2013 H1 2012 Cash flow from operations -27 -70 -98 Capex -38 -58 -96 New share issue 0 604 604 Loans raised 38 0 38 Amortisation of debt -121 -245 -365 Cash flow from financing -83 359 276 Net cash flow -149 231 82 KEY COMMENTS • Q2 capex of SEK 38 million, mainly in Alen, Aseng and 12/06 • Full year capex forecast of SEK 250-380 million, expected outcome at the lower part of the range • Amortisations of SEK 121 million in Q2 • Cash and cash equivalents at the end of the period, SEK 141 million
  • Current equity and debt situation 20 KEY COMMENTS • Equity just below SEK 2,000 million • Granted waiver and amendment to reduce covenant to SEK 1,000 million, conditional upon rights issue completion in Q3 • NOK bond amortisation of SEK 101 million in Q2 • Rights issue in Q3 of SEK 891 million before transaction costs • New bond loan of up to SEK 1 billion to be issued in September Q2 2013 Q1 2013 Q4 2012 Covenants Book Equity (SEK million) 1, 973 2,201 1,590 >2,000 Book Equity to Capital Employed 46% 48% 37% >40% Net debt (SEK million) 2,197 2,111 2,630 N/A Covenants and Net Debt development 0 100 200 300 400 500 600 700 800 900 October 2013 January 2014 April 2014 Bond Loan 900m NOK Bond Loan 850m SEK Convertible Bond Debt maturity (SEK million)
  • Reserves and resources after Tunisian farm-out 21 KEY COMMENTS • 2P reserves reduced from 55.7 to 23.5 mmboe • Contingent resources reduced from 142 to 78 mmboe mmboe Reserves Contingent resources Key assets 1P 2P 2C North Africa 11.0 16.2 27 Zarat, Elyssa, Didon West Africa 4.9 7.3 18 Aseng, Alen, Diega, Yolanda, Azurite North Sea 0.0 0.0 34 Broder Tuck, Lille John Total 15.9 23.5 78
  • Capital expenditure 2013 Actual Forecasted Capex development and forecast (SEK million) KEY COMMENTS • Capex in Q2 amounted to SEK 38 million and for H1 period to SEK 96 million • Main part of Q2 investments relates to the Alen and Aseng fields in EG and preparatory activities ahead of on Danish licence 12/06 • 2013 forecast of SEK 250 – 380 million unchanged, with outcome expected in the lower part of the range 22 58 1,613 255 96 250-380 0 200 400 600 800 1 000 1 200 1 400 1 600 1 800 2011 2012 2013
  • Rights issue Q1
  • Minimum funding requirements of SEK 1.7 billion 24 -0.8 Estimated funding need Q3 2013 until year-end 2014 (SEK billion) -0.8 -0.8 Assumptions for cash projection: • Minimum funding requirements Q3 2013 – Q4 2014 are based on: » Best estimate of production profiles » Oil price level of USD 100 » Current committed capex » Does not include planned, but not yet committed capex
  • Commited investment plan: Q3 2013-Q4 2014 25 *12/06 wells assume carry through farm-out DRILLING PROGRAM/FIRM WELLS: Tunisia: Didon Didon 2014 Development/1 Tunisia: Zarat Elyssa 2014 2015 Appraisal/1 Exploration/1 Tunisia: Makthar 2014/ 2015 Exploration/1 EG: Block I Diega Ongoing Appraisal/1 Denmark: 12/06* Lille John 2014 Appraisal/ Exploration/1-2 Tunisia offshore: • Didon field: ESP + infill well • Zarat permit: Elyssa appraisal well and exploration well Tunisia onshore exploration: • Seismic and exploration well EG: • Block I development (Alen), exploration and appraisal (Carla South and Diega) Congo: • MPS licence reprocessing/interpretation of seismic Denmark: • 12/06 work program ahead of drilling Committed capex projects – Total of USD 100 million
  • Rights issue key facts • Shareholders with 17% holding/votes have committed to subscribe for their pro rata share • Remainder is underwritten by Gunvor Group, Lorito Holdings and a guarantee consortium put together by Carnegie Investment Bank • Each existing share will entitle to subscribe for 3 new shares at SEK 10.50 per new share • Rights issue carried out at discount of approx. 19% to the theoretical ex-rights price based on closing share price on 4 June 2013 • EGM on 5 July resolved on the rights issue 26 Rights issue of SEK 891 million fully underwritten
  • Debt refinancing 27 • PA Resources has secured commitments from two larger institutional investors for undertakings in excess of SEK 500 million • Terms for the bond undertakings similar to terms for the current SEK bond but with a minimum equity covenant of SEK 1,000 million instead of SEK 2,000 million • Waivers granted for both the NOK and SEK bond and amendment of terms and conditions New bond issue in September/October of up to SEK 1,000 million
  • Rights issue time table 28 » 14 August The prospectus is made public » 15 August Record date to participate » 19 August – 2 September Subscription period » Around 5 September Announcement of outcome Q2 Report and prospectus made public 14 August Record date 15 August Subscription period 19 August – 2 September Outcome announced Around 5 September Where to find more info • Prospectus and subscription forms available on www.carnegie.se or www.paresources.se Trading in subscription rights 19 August – 28 August
  • Outlook Q1
  • Medium to long-term Outlook 30 FIRST SCENARIO BASED ON ONGOING REVIEW • A comprehensive review is currently undertaken by the board and management • Such review is not completed and therefore the outlook presented can be subject to changes • The objective is to present investors a realistic scenario based on reason- able, not too optimistic assumptions DIVERSIFIED PORTFOLIO OF ASSETS • PA Resources has a relatively large, diversified portfolio of assets, both in terms of geography and maturity • The portfolio contains several assets with a high likelihood for production in the next few years • A number of these assets are included in the outlook for estimating future capex and production levels • However, a number of assets have not been included, could provide additional production in the future
  • Outlook scenario Assumptions 31 Didon Field*  Continuing production with one in-fill well and successful ESP installations Zarat Permit*  Development of the Zarat and Elyssa fields in 2015-2017 (Capex includes the drilling of two committed exploration wells)  No ETAP back-in has been assumed (ETAP back-in would reduce projected development costs and production level proportionally) Block I  Continuation of the current production from the Aseng and Alen fields  Development of one notional additional field in Block I (e.g. Diega) with total reserves of 30 mmboe in 2015-2017 (given results of recent wells, such additional development is considered likely) Denmark 12/06**  Development of only one of the two discoveries made, with assumed total field reserves of 32 mmboe Tunisia onshore  The capex profile includes USD 23 million for committed exploration expenditures onshore Tunisia in 2014 and 2015, no success assumed * 30% Equity after farm-out. Work programme from the new operator EnQuest not yet available, may lead to changed ** PA Resources’ working interest is assumed to be 24 per cent after farm-out (appraisal wells carried)
  • Investment outlook: Medium to long-term 32 Capital expenditure plan (MUSD) • Total capital expenditures of approx. USD 600 million until 2017 • Majority of capital expenditures are related to development costs • Successful rights issue in combination with new bond loan expected to finance plans until year- end 2014 • Further funding required after 2014 • Limited maintenance expenditures in 2018 and onwards 0 50 100 150 200 250 300 2013 2014 2015 2016 2017 2018 Projected Capex 2013 H1
  • Production projection: Medium to long-term 33 Production profile (barrels per day) • The scenario entails an average production of approx. 15,000 – 20.000 boepd in 2018 to PA Resources • It includes the following assets to be developed into production (PA Resources’ share of reserves) » Zarat field (13.7 mmboe in 2P and 6 mmboe in 2C), first oil 2017 » Elyssa field (16 mmboe in 2C), first gas 2016 » Notional field in Block I (Diega or Carla South), first oil 2017. » Notional field in Danish licence 12/06 (Broder Tuck or Lille John), first gas 2018 0 5 000 10 000 15 000 20 000 25 000 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Fields to be developed Currently producing
  • Outlook scenario: Risks and upside 34 » Reserves in undeveloped fields may be lower than projected » Capex higher than projected » One or several of the assumed new field develop- ments (Zarat, Elyssa, Block I, 12/06) may not be realised » General risks in project execution (in particular in terms of schedule) • As in any projection, the presented scenario is subject to various risk • All risks presented are usually attached to any E&P project and forward projection Main risks
  • Outlook scenario: Risks and upside 35 » EnQuest’s track record could lead to potential increase in Didon reserves through enhanced recovery and extended field life » Over-performance of one or more developments, e.g. • EnQuest development plans may be more efficient • The notional field development in Block I may be larger than assumed (well results point in this direction) » Gas developments and sales in Block I » Success in one or more ventures currently assumed abortive, e.g. • Only one development assumed in the North Sea, whereas PA Resources’ portfolio has four discoveries in Denmark, UK and Netherlands • Successful farm-out of MPS license (not assumed) • Successful farm-out of and/or development(s) of Tunisian onshore assets ADDITIONAL UPSIDE • The presented scenario is relatively conservative • Tangible upside not considered Significant upsides not included, such as:
  • PA Resources’ short-term focus 36 • Complete the rights issue • Issue of new bond loan in September/October • Proceed ongoing 12/06 farm-out negotiations and MPS farm-out process • Nominate permanent CEO • Map PA Resources’ medium-term way forward
  • Thank you! Q1Q3 Report on 23 October 2013