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Tethys Oil Interim report Q1 2013
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  • 1. www.tethysoil.com 1 May, 2013
  • 2. www.tethysoil.com Q1 Highlights • Production from Oman and Lithuania of 368,481 barrels corresponding to 4,094 barrels per day • Exploration well B4EW4 encountered oil and flowed close to 3,000 bopd on test • Tethys Oil books the company’s first reserves in Oman – 14.3 mmbo of 2P- reserves 2 • Tethys receives MUSD 10 bonus payment from Mitsui • Net sales of MSEK 146 (MSEK 145 • Net result after tax MSEK 105 (MSEK 108) • Earnings per share before and after dilution of SEK 2.94 (SEK 3.31) • Listing on NASDAQ OMX Stockholm on May 2
  • 3. www.tethysoil.com Tethys’ assets 3 Sweden - Gotland större - Gotland mindre France - Attila - Permis du Bassin D’Alès Oman - Block 3 & 4 - Block 15 Lithuania - Gargzdai - Rietavas - Raseiniai
  • 4. www.tethysoil.com4 Tethys Oil - An expanding oil & gas company Listing at NASDAQ OMX Main market Company is founded IPO on First North on 6 April 2004 Interest in Block 3 & 4 in Oman acquired Strategic investment in Lithuania – agreement with Odin Energi 2001 2004 2007 2012 Invests in areas with known oil and gas accumulations and extract upside potential through the use of modern technologies • A fast growing oil company • Offering considerable production and strong earnings capacity • Strategic assets with long term potential FDP Block 3 & 4 approved 2013
  • 5. www.tethysoil.com5 Asset overview Production Appraisal/Exploration Country Licence name Total area Tethy’s interest Partners Production Oman Block 3 & 4 34 610 km2 30% CCED, Mitsui Production Oman Block 15 1 389 km2 40% Odin Energi Exploration Lithuania Rietavas 1 594 km2 14% Odin Energi, private investors, Chevron Exploration Lithuania Raseiniai 1 535 km2 26% Odin Energi, private investors Exploration Lithuania Gargzdai 884 km2 25% Odin Energi, Geonafta Production France Attila 1 986 km2 40% Galli Coz Exploration France Alès 215 km2 37,5% Mouvoil Exploration Sweden Gotland större/mindre 581 km2 100% Exploration
  • 6. www.tethysoil.com Total production 6 1 000,00 1 500,00 2 000,00 2 500,00 3 000,00 3 500,00 4 000,00 4 500,00 5 000,00 0,00 20 000,00 40 000,00 60 000,00 80 000,00 100 000,00 120 000,00 140 000,00 160 000,00 180 000,00 200 000,00 bbls/daybbls Tethys Oil daily and monthly production Monthly production Oman Monthly production Lithuania Daily production Oman & Lithuania
  • 7. www.tethysoil.com Oman – Tethys’ core area Three blocks: 3 & 4 and 15 Tethys is one of the largest license holders in Oman, measured by acreage • Two main projects: ‒ Farha South – Conventional oil (Block 3) ‒ Saiwan East – Conventional oil (Block 4) • Other projects: ‒ Saiwan East – Heavy oil (Block 4) ‒ Jebel Aswad – Gas/Condensate (Block 15) 7
  • 8. www.tethysoil.com Oman production 0 2 000 4 000 6 000 8 000 10 000 12 000 14 000 16 000 Total production, BOPD Tethys production, BOPD • ~38° API • Price determined for each calendar months based on two months future price of Omani Blend • Oil sold at USD ~1 premium to Omani Blend prices Produced volume, barrels of oil per day
  • 9. www.tethysoil.com Tethys sale vs Brent and Omani blend 9 80,00 85,00 90,00 95,00 100,00 105,00 110,00 115,00 120,00 125,00 130,00 jan-12 feb-12 mar-12 apr-12 maj-12 jun-12 jul-12 aug-12 sep-12 okt-12 nov-12 dec-12 jan-13 feb-13 mar-13 USDperBarrel Spot Brent and Omani Blend Futures BRENT SPOT OMANI BLEND FUTURES TETHYS OIL SALE PRICE
  • 10. www.tethysoil.com Oman Block 3 & 4 – The primary assets • Tethys 30%, CCED 50% (operator) and Mitsui 20% • Significant light oil resource base • Large upside potential in exploration and increased recovery 10 Reserves December 2012 1P 2P 3P Mmbo 5,3 14,3 18,7
  • 11. www.tethysoil.com Reserves 11 Reserves Blocks 3 and 4, Oman Net Tethys Mmbo 1P 2P 3P Farha South 4,2 12,5 15,7 Saiwan East 0,9 1,4 2,5 B4EW3 0,2 0,4 0,5 As per 31 Dec, 2012 5,3 14,3 18,7
  • 12. www.tethysoil.com Oman - Drilling program Total wells drilled Type of wells 12 4 22 37 6 0 5 10 15 20 25 30 35 40 2010 2011 2012 2013 Q1 4 5 4 8 5 3 2 2 2 1 4 1 2 0 2 4 6 8 10 12 Q1-2012 Q2-2012 Q3-2012 Q4-2012 Q1-2013 Water source wells Exploration wells Water injection wells Wells in previously undrilled fault block Production wells
  • 13. www.tethysoil.com Revenue split - maximum cost recovery 13 1 bbl USD 100 USD 40 USD 48 40+12=U SD 52$ Maximum Cost recovery 40% State of Oman Joint Venture Block 3 & 4 USD 60 Revenue split 20% 80% USD 10:40 USD 26 USD 15:60 Tethys Oil 30% CCED 50% Mitsui 20%
  • 14. www.tethysoil.com Lithuania 3 licences: Gargzdai ( 25%), Rietavas ( 14%), Raseiniai (26%) • Gargzdai in production • Large potential upside in unconventional resources – Shale oil and enhanced oil recovery • Investment through associated companies and licenses held by a subsidiary, operated by Odin 14
  • 15. www.tethysoil.com Lithuanian oil production Produced volume, barrels of oil per day • 42°API oil • Oil sold at USD ~1 discount to Brent • Sold on weekly basis to a nearby refinery 15 0 100 200 300 400 500 600 700 800 Total production BOPD Tethys production BOPD
  • 16. www.tethysoil.com16 Lithuania – Gargzdai license • Tethys Oil 26% (Odin Energi, Geonafta) • 7 producing fields • One exploration well indicates large potential in shale sections ‒ Vast amount of shale core and other data collected in shale section for analysis • 2 undrilled prospects Reserves (Audited) Mmbo 1P 2P 3P The Gargzdai license 0.7 1.7 3.0 Reserves as per 31 December 2011
  • 17. www.tethysoil.com Lithuania - Rietavas & Raiseniai licenses Rietavas • 1 594 km2 • Tethys interest 14% • Partners: Odin Energi, Chevron, private investors • Work programme fully funded by Chevron • Conventional exploration, Gargzdai look a like and shale gas/oil. Raseiniai • 1 535 km2 • Tethys interest: 25% • Partners: Odin Energi, private investors • Exploration for conventional oil in Silurian Reefs, shale potential • Drilling of an exploration well started – Lapgiriai-1 started in April
  • 18. www.tethysoil.com Short facts about shale and fracking 18 • Production of shale gas and fracking common in the US (25% of natural gas production) • No production of shale gas/oil in Europe yet • Exploration mainly in Eastern Europe • Drilling done in Poland • Currently no EU-regulation regarding exploration of shale • Discussions all over Europe about the environmental impact of fracking. Banned in France and Bulgaria.
  • 19. www.tethysoil.com Production (barrels) Avg daily production BOPD Revenue (MSEK) Average achieved oil price (USD/barrel) EBITDA(MSEK) Result for the period (MSEK) Operating cash flow (MSEK) Operating cash flow per share (SEK) First Quarter 2013 368,481 4,094 146 107.63 152 105 62 1.74 Financial highlights Q1 2013 19 First Quarter 2012 299,123 3,287 145 108.61 119 108 186 5.70
  • 20. www.tethysoil.com Sales growth Net sales Sold versus produced volumes of oil 20 0 10 20 30 40 50 60 70 80 90 0 50 000 100 000 150 000 200 000 250 000 2012 Q1 Q2 Q3 Q4 2013 Q1 Sold volumes Sold volumes/Produced volumes, % Bbl % 0 50 100 150 200 250 -50,0 0,0 50,0 100,0 150,0 200,0 250,0 2012 Q1 Q2 Q3 Q4 2013 Q1 Net sales, MSEK Sales growth % % MSEK
  • 21. www.tethysoil.com EBITDA EBITDA Expenses in percentage of sales 21 0,0 20,0 40,0 60,0 80,0 100,0 120,0 2012 Q1 Q2 Q3 Q4 2013 Q1 Operating expenses Administrative expenses EBITDA 0 50 100 150 200 2012 Q1 Q2 Q3 Q4 2013 Q1 EBITDA, MSEK EBITDA-marg %
  • 22. www.tethysoil.com Result overview 22 Net sales of oil and gas MSEK 146 Other income 65 Operating result MSEK 124 Operating expenses MSEK 57 Depreciation of oil and gas properties MSEK 28 Administrative expenses MSEK 5 Revenues Operating result Net profit from associate 3
  • 23. www.tethysoil.com Investments • Majority of investments in infrastructure and production facilities on Blocks 3 & 4 completed in 2012 • Currently investments focus on exploration and water injection programmes 23 0 100 200 300 400 500 600 700 800 900 1000 2011 Q1 Q2 Q3 Q4 2012 Q1 MSEK Investments Accumulated investments (Last 12 months)
  • 24. www.tethysoil.com Share price 24 0 10 20 30 40 50 60 70 0 100 000 200 000 300 000 400 000 500 000 600 000 700 000 # Shares Total volume Closing price SEK
  • 25. www.tethysoil.com 80000 500000 520000 540000 560000 580000 600000 620000 640000 660000 680000 700000 0 10 20 30 40 50km 1:1000000 Block 6 Block 4 Block 3 Farha trend BLOCK 4 Exploration Well # 3 BLOCK 4 Exploration Well # 4 BLOCK 4 Exploration Well #5 Blocks 3 & 4 Saiwan Field
  • 26. www.tethysoil.com Farha Fault Block B Water Injector Pilot N FS-37 FS-29 FS-48
  • 27. www.tethysoil.com 19-Oct-10 17-Jan-11 17-Apr-11 16-Jul-11 14-Oct-11 12-Jan-12 11-Apr-12 10-Jul-12 FlowrateandPressure Well Test Data ProductionModel Flowing Bottomhole Pressure Farha FS-4 • Farha field is undersaturated (Pres< Pbubble) • Oil expansion (depletion) drive • Weak aquifer • Negligable water production => Good candidate for water injection
  • 28. www.tethysoil.com Farha FS-4 Water Injection Pilot 8-Oct-10 5-Feb-11 5-Jun-11 3-Oct-11 31-Jan-12 30-May-12 27-Sep-12 25-Jan-13 25-May-13 22-Sep-13 OilProduction(b/d)andPressure(psia) Well Test Model WI Flowing Bottom Hole Pressure In reality, the well was shut in and then opened, hence the high production and steep drop in pressure and production
  • 29. www.tethysoil.com29 Lower Al Bashair (sandstone): Tested 754 BOPD, 40°API Barik (sandstone): Tested 1,010 BOPD, 42°API Farha South – Appraisal well • Drilled in Q1 2009 • TD 2723 m , TVD 1827 m • 800 m deviated/horizontal section • Encountered oil in 2 layers, Barik and Lower Al Bashair Fm Oman - B3 - Fahra South - Conventional Oil
  • 30. www.tethysoil.com 30 2013 Seismic program
  • 31. www.tethysoil.com Outlook • Capex for Block 3 & 4 estimated MSEK 300 in 2013, fully funded by cash flow • Focus on exploration to increase our reserves and resources • Third rig expected shortly on Blocks 3 & 4 • Ramp up water injection programme on Farha South to increase production • Fast track appraisal of B4EW4 • Awaiting results from Lithuania exploration well 31
  • 32. www.tethysoil.com32