Presentation held at Oil Museum in Stavanger in May 22, 2014 by Rovik Energy Partner. The presentation discusses strategy, business development and portfolio management within oil and gas
2. Note:
This document was prepared for the sole purpose of being presentation aid rather than being a standalone document. The material in this presentation should therefore be viewed in context of the actual presentation given at the event.
3. Rovik Energy Partner AS
•Company started in 2012
•Realizing potential and generating value in the energy industry
•Providing commercial, strategy, and business development services
•Based in Stavanger – working in Norway and internationally
•Shall be your partner of choice for your company development
•Founded on the values of:
Integrity - always maintain the integrity of the client
Value contribution - always leave the company more valuable
Professionalism - always apply best practices
Long term - always think value development
Qualified by Achilles for their network of suppliers
4. Oil & Gas value chain
Exploration
Development
Production
Transport
Refining
Product sale
Focus today
5. Examples of companies` participation through the Oil & Gas value chain
Exploration
Development
Production
Transport
Refining
Product sale
Source: Publicly available information
6.
7. How to deliver on objectives?
0
20
40
60
80
100
120
140
160
Production profile - kboe/d
Probable development
Sanctioned development
Production base
Production target
Gap
Objectives - examples
• Production
• RRR (Reserves Replacements)
• IRR (Internal Rate of Return)
• NPV (Net Present Value)
• Share price
• Profitability
Means to achieve objectives
• Exploration
• Business development
• Increased oil recovery
• Cost cut & efficiency measures
Acqusitions & Divestments • Other
8. Identify growth areas
Align and Define
Opportunity identification
Execute
Context
Strategic beliefs
Constraints
Ambitions
Selection criteria
Areas and scenarios for growth
Portfolio analysis
Concrete business development
Screening for opportunities
Development of opportunity portfolio
Evaluations
Engagement planning
Dataroom & DD
Bids & Negotiations
Alignment of context, objectives and constraints
Alignment on growth steps
Alignment on business development plan
Strategy achievements and deals secured
Phased Business Development process – high level
9. -200
-150
-100
-50
0
50
100
150
M USD
Cash flow after tax
CF after tax
Cumulative CF after
tax
BD tools
Align and Define Identify growth areas Opportunity
identification Execute
Context
Strategic beliefs
Constraints
Ambitions
Selection criteria
Areas and scenarios for
growth
Portfolio analysis
Concrete business
development
Screening for
opportunities
Development of
opportunity portfolio
Evaluations
Engagement planning
Dataroom & DD
Bids & Negotiations
Alignment of context,
objectives and
constraints
Alignment on growth
steps
Alignment on business
development plan
Strategy achievements
and deals secured
Phased Business Development process
Process
Evaluation tools
Templates
Data
Networking
Align and Define Identify growth areas Opportunity
identification Execute
10.
11. Key BD terms – Process terms
Due diligence
Screening
CA (Confidentiality Agreement)
Dataroom
SPA
(Sales Purchase Agreement)
Identify growth areasAlign and DefineOpportunity identificationExecute
12. Key BD terms
Carry
2:1
Swap
Align and Define Identify growth areas Opportunity
identification Execute
Farm-in/out
Ground
floor
13. Identify growth areas
Align and Define
Opportunity identification
Execute
Context
Strategic beliefs
Constraints
Ambitions
Selection criteria
Areas and scenarios for growth
Portfolio analysis
Concrete business development
Screening for opportunities
Development of opportunity portfolio
Evaluations
Engagement planning
Dataroom & DD
Bids & Negotiations
Alignment of context, objectives and constraints
Alignment on growth steps
Alignment on business development plan
Strategy achievements and deals secured
Phased Business Development process – high level
14. Valuation of assets and portfolio
Inputs
Costs
0
20
40
60
80
100
120
140
160
Production profile - kboe/d
Probable development
Sanctioned development
Production base
Production
profiles
Tax balances
Assumptions
• Discount rate
• Tax
• Prices
• Inflation
• FOREX
• Other
Output
• NPV
• IRR
• Payback period
-200
-150
-100
-50
0
50
100
150
M USD
Cash flow after tax
CF after tax
Cumulative CF after
tax
Cash flow after tax
Align and Define Identify growth areas Opportunity
identification Execute
Source: RovikEP portfolio model, example data
15. Execution – example (buy side)
Interim period
Signing of SPA
Completion
Authority approval
CP closeout
Negotiations
Due diligence
Dataroom
Financial evaluation
Signing of CA
Initial bid
Preparation
Transaction
Peer review
Technical (G&G, engineering…) evaluation
Setup of BD team
Approval to pursue opportunity
BD plan/strategy
Deal structuring & Bid Identify growth areas Align and Define Opportunity identification Execute
16. Recent transactions on NCS - examples
Major asset deal
Lotos buy Heimdal assets
Norske AEDC
KUFPEC acquires AEDC
Tullow acquires Spring Energy
Shell acquires 18.36% in Draugen
Swap of assets
2013
2013
2013
2012
2012
2012
2012
Major asset deal
2011
Major asset deal
Source: Publicly available information
17. Examples of recent BD activity throughout the value chain
Rig consortiums
Rig Management Norway
Q35 development options
Exploration
Development
Transport
Gassled transactions
Quadrant 35
New Gassled owners
Source: Publicly available information
18. Kenneth Fossøy Partner Rovik Energy Partner AS Sjøveien 34 4316 Sandnes kenneth.fossoy@rovikep.no Phone: +47 993 82 845
Thor Magnus Rovik Managing Partner Rovik Energy Partner AS Sjøveien 34 4316 Sandnes thor.magnus.rovik@rovikep.no Phone: +47 975 63 588
www.rovikep.no
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