INVESTORPRESENTATION
September 2014
Energy Resources Inc.
DisclaimerThis presentation does not constitute an invitation to underwrite, subscribe for, or otherwise acquire or dispose of any Oando Energy Resources Inc (the “Company”) shares or other securities. This presentation includes certain forward looking statements with respect to certain development projects, potential collaborative partnerships, results of operations and certain plans and objectives of the Company including, in particular and without limitation, the statements regarding potential sales revenues from projects, both current and under development, possible launch dates for new projects, and any revenue and profit guidance. By their very nature forward looking statements involve risk and uncertainty that could cause actual results and developments to differ materially from those expressed or implied. The significant risks related to the Company’s business which could cause the Company’s actual results and developments to differ materially from those forward looking statements are discussed in the Company’s annual report and other filings. All forward looking statements in this presentation are based on information known to the Company on the date hereof. The Company will not publicly update or revise any forward looking statements, whether as a result of new information, future events or otherwise.
Past performance is no guide to future performance and persons needing advice should consult an independent financial adviser.All estimates of reserves and resources are classified in line with NI 51-101 regulations and Canadian Oil & Gas Evaluation Handbook standards. All estimates are from
stPetrenel Report dated 31 December 2013.
BOEs [or McfGEs, or other applicable units of equivalency] may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf: 1 bbl [or an McfGE conversion ratio of 1 bbl: 6 Mcf] is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
The estimates of reserves and future net revenue for individual properties may not reflect the same confidence level as estimates of reserves and future net revenue for all properties, due to the effects of aggregation.
Reserves: Reserves are volumes of hydrocarbons and associated substances estimated to be commercially recoverable from known accumulations from a given date forward by established technology under specified economic conditions and government regulations. Specified economic conditions may be current economic conditions in the case of constant price and un-inflated cost forecasts (as required by many financial
regulatory authorities) or they may be reasonably anticipated economic conditions in the case of escalated price and inflated cost forecasts.
Possible Reserves: Possible reserves are quantities of recoverable hydrocarbons estimated on the basis of engineering and geological data that are less complete and less conclusive than the data used in estimates of probable reserves. Possible reserves are less certain to be recovered than proved or probable reserves which means for purposes of reserves classification there is a 10% probability that more than these reserves will be recovered, i.e. there is a 90% probability that less than these reserves will be recovered. This category includes those reserves that may be recovered by an enhanced recovery scheme that is not in operation and where there is reasonable doubt as to its chance of success.
Proved Reserves: Proved reserves are those reserves that can be estimated with a high degree of certainty on the basis of an analysis of drilling, geological, geophysical and engineering data. A high degree of certainty generally means, for the purposes of reserve classification, that it is likely that the actual remaining quantities recovered will exceed the estimated proved reserves and there is a 90% confidence that at least these reserves will be produced, i.e. there is only a 10% probability that less than these reserves will be recovered. In general reserves are considered proved only if supported by actual production or formation testing. In certain instances proved reserves may be assigned on the basis of log and/or core analysis if analogous reservoirs are known to be economically productive. Proved reserves are also assigned for enhanced recovery processes which have been demonstrated to be economically and technically successful in the reservoir either by pilot testing or by analogy to installed projects in analogous reservoirs.
Probable Reserves: Probable reserves are quantities of recoverable hydrocarbons estimated on the basis of engineering and geological data that are similar to those used for proved reserves but that lack, for various reasons, the certainty required to classify the reserves are proved. Probable reserves are less certain to be recovered than proved reserves; which means, for purposes of reserves classification, that there is 50% probability that more than the Proved plus Probable Additional reserves will actually be recovered. These include reserves that would be recoverable if a more efficient recovery mechanism develops than was assumed in estimating proved reserves; reserves that depend on successful work-over or mechanical changes for recovery; reserves that require infill drilling and reserves from an enhanced recovery process which has yet to be established and pilot tested but appears to have favorable conditions
1
OER
Oando Energy Resources (OER) is an independent oil and gas company focused on exploration and production opportunities in the highly prolific Niger Delta region of Nigeria and the Exclusive Economic Zone of São Tomé and Príncipe. It is publicly traded on the Toronto Stock Exchange under the symbol OER.
Introduction
Organic:Optimize Existing Portfolio
OER’s primary task is to optimally harness the potentials of our existing portfolio and developing proven but undeveloped assets.
OER plans on participating in governmental bid rounds in Nigeria as well as acquiring unutilized near-term assets from International Oil Companies in order to significantly boost profitable high value production and reserves.
Growth Strategy
Inorganic:Future Acquisitions
OER
2
HighlightsCurrent Net Production
45,416Net 2P Reserves
230.6Net 2C Resources
547.3
Producing Assets6
Market Capitalization
1,320Debt
980Cash in Bank
101
2,057.0
Assets Under Development4
boepd~
MMboe
MMboe
Unrisked Best Prospective Resources
MMboe
US$ MM
US$ MM
US$ MM
Market Capitalization as at 26th September 2014 (Share Price of C$1.60)
All Reserves & Resources estimates are classified in line with NI 51-101 regulations and Canadian Oil & Gas Evaluation Handbook standards.
All estimates are from Independent Reserves stEvaluator Report dated 31 December 2013
Current Net Production figure as at August 2014
OER
3
Share StructureTSX Symbol
OERShare Price
1.66Net Shares Outstanding
795,419,213
2.29/1.07
C$
Price High/Low Since Listing
C$
8,506,666Options Outstanding
344,673,441Warrants Outstanding
2.00Exercise Price of Warrants
C$
17,535,031Private Placement Purchase Warrants Issued
at C$2.00
93.8Oando Plc Ownership
%Information is as at 26th September 20141Price High/Low represent closing prices
OER
4
The OER Portfolio - Gulf of Guinea
OML 125
NIGERIA
OPL 321 & 323
OML 134
OML 122 - Bilabri Field
OML 90 - Akepo Field
OML 56 - Ebendo Field
CAMEROON
EQUATORIALGUINEA
EEZ Block 5
SAO TOME& PRINCIPE
Production Phase
Development Phase
Exploration Phase
SAO TOME & PRINCIPE - NIGERIAJOINT DEVELOPMENT ZONE
GABON
EEZ Block 12
OML 145
OML 131
OM
L 62
OML 60
OML 61
OML 63
OML 13 - Qua Ibo Field
OER
OML 60
OML 61
OML 62
OML 63
OML 125
OML 56
20%
20%
20%
20%
15%
42.75%
AGIP
AGIP
AGIP
AGIP
ENI
Energia
Asset W.I. Operator
OML 90*
OML 13*
OML 134
OML 122*
40%
40%
15%
5% Oil, 12% Gas
Sogenal
Network E&P
ENI
Peak
Asset W.I. Operator
EEZ 5
EEZ 12
OML 321& 323
OML 131
OML 145
100%
N/A
30%
100%
20%
OER
TBD
KNOC
OER
ExxonMobil
Asset W.I. Operator
*OER is Technical Partner
5
OER
OER Today - Growing Reserves & Resources
Value creation by and growing reserves production through:
GROWTHSTRATEGY
Indigenous status and capacity
Capital raising capabilities, through TSX listing
Presence in local communities, local partnerships and relationships
Competitive Advantage
IOCs divestment plans
Marginal eld programmes
Government Bid Rounds
M&A activity
Value Drivers
Disciplined approach to capital structure & valuation
Financial discipline
Identication, access & acquisition of opportunities in the O&G Sector
Acquisition of proven reserves
Acquisition of near term producing assets
De-risk existing resources portfolio and bring both
existing and new assets on- stream promptly
6
Pro
du
ctio
n b
y O
ML OML 63
6%OML 62 1%
45,416boepd
OML 61 66%
230.6MMboe
OML 62 9%
OML 60 15%
OML 900.3%
2P
Re
serv
es
(MM
bo
e)
OML 63 10%
OML 6158%
OML 565%
OML1253%
OML 130.4%
OML 56 3%
OML 1258%
OML 6016%
2C
Re
sou
rce
s (M
Mb
oe
)
OML 6312%
OML 605%
OML 14516%
OML 6116%547.3
MMboe
OML 131 37%
OML 628%
OML 13 1%
OML 134 2%
OML 122 2%
OML 56 1%
OML 125 1%
45,416boepd
Oil & Consolidate38%
NGL6%
Gas Sales56%
Production, Reserves & Resources
Pro
du
ctio
n b
y P
rod
uc
t (b
oe
pd
)
All Reserves & Resources estimates are classified in line with NI 51-101 regulations and Canadian Oil & Gas Evaluation Handbook standards. stAll estimates are from Independent Reserves Evaluator Report dated 31 December 2013
Current Net Production figure as at August 2014
OER
7
Ebendo
OM
L 62
OML 60
480�Capacity
Kwale�Okpai�IPP
MW3.6�Capacity
Brass�River�Terminal
3�Capacity
Gas�Facilities
Gas�Plants� 1,490in�Length
Pipeline�Network
km12�Production�Facilities
ProductionStations
OM
L 61
Eleme
Bonny
Brass River
Qua Ibo
Obama
Oshi
Irri-isoko
Ob-Ob
Umusadege
Kwale-Okpai IPP
Forcados
CloughCreek
Tebidaba
Ebocha
Idu
Akri
Oil & Gas Plant
FPSO
Petrochemical Plant
Power Plant
OM
L 63
Kwale
Oil & NGL Terminal
OML 125
Wellhead Platform
Flowstation
Oil Pipeline
Gas Pipeline
Beniboye
Key
Ogbainbiri
Qua Ibo
Akepo
*Assets highlighted in red do not belong to OER
mmbbls
OER
OER InfrastructurePostConocoPhillipsAcquisition
8
OER
ConocoPhillipsAcquisitionFinancing Structure
Equity from PLC$625mm
$373mm
$1.048bn
Corporate DebtTotal Equity$675mm
Private Placement$50mm
Acquisition Equity
Promissory Note$33mm
Structured Debt$100mm
Corporate Debt$240mm
RBL Debt$450mm
- COP Promissory Note
- Structured Debt
- $350mm Senior Secured by OER existing portfolio- $350mm (less $110mm)- $90mm already drawn for COP deposit
$450mmTotal: $1.498bn
Effective Purchased Price
POCNL, CEPNL, PDENLJuly 30, 2014
Transfer of Ownership
100% Share Capitalof Companies
- Senior secured by POCNL Portfolio
OER
9
AppendixAll Reserves & Resources estimates are classified in line with NI 51-101 regulations and Canadian Oil & Gas Evaluation Handbook standards.
All estimates are from Petrenel Report dated 31st December 2013
10
Producing Assets - OML 60
OML 61:Ob-Ob Plant
Kwale
Kwale-Okpai IPP
Power Plant
Oil & NGL Terminal
Flowstation
Oil Pipeline
Gas Pipeline
Fiscal System
Key
Okpai
Ashaka
KwaleOdugri
AkriAkri
Shallow Offshore Platform
Oil & Gas Field
Oil & Gas Field
Lead
Single Well Discovery
OML 60
Type of Contract
Royalty
Annual Capital Allowance
PPT/CITA
VAT
NDDC Levy
Education Tax
20%
Years 1-4; 20% Years 5+; 19%
7%
Capital Expenditures may be deducted against PPT
Oil Gas
Joint Venture
85% PPT 30% CITA
5%
3%
2%
OER
2014
20%
34.8MMboe
25.7MMboe
~6,000boepd
19
ENI
OML 60
Acquired
Working Interest
Net 2P Reserves
Net 2C Resources
Net Production
Producing Wells
Operator
11
Producing Assets - OML 61
OML 61
Type of Contract
Royalty
Annual Capital Allowance
PPT/CITA
VAT
NDDC Levy
Education Tax
20%
Years 1-4; 20% Years 5+; 19%
7%
Capital Expenditures may be deducted against PPT
Joint Venture
85% PPT 30% CITA
5%
3%
2%
Irri-Oleh-IsokoOgbogene
Deep
Ob-Ob
Mbebe
Ob-Ob SW
Oshi Deep
Idu
Oshi
OER
Acquired
Working Interest
Net 2P Reserves
Net 2C Resources
Net Production
Producing Wells
Operator
2014
20%
134.5MMboe
83.1MMboe
~27,000boepd
76
ENI
Power Plant
Oil & NGL Terminal
Flowstation
Oil Pipeline
Gas Pipeline
Key
Shallow Offshore Platform
Oil & Gas Field
Oil & Gas Field
Lead
Single Well Discovery
Fiscal SystemOML 61
Oil Gas
12
Producing Assets - OML 62
OML 62
OER
GrangbeneDeep
Nikorogba Deep
Okpo SW Deep
Tuomo WestDeep
Tuomo
Tuomo W
Beniboye
Forcados
20%
Years 1-4; 20% Years 5+; 19%
7%
Capital Expenditures may be deducted against PPT
Joint Venture
85% PPT 30% CITA
5%
3%
2%
Acquired
Working Interest
Net 2P Reserves
Net 2C Resources
Net Production
Producing Wells
Operator
2014
20%
19.4MMboe
44.7MMboe
~216boepd
1
ENI
Power Plant
Oil & NGL Terminal
Flowstation
Oil Pipeline
Gas Pipeline
Key
Shallow Offshore Platform
Oil & Gas Field
Oil & Gas Field
Lead
Single Well Discovery
Type of Contract
Royalty
Annual Capital Allowance
PPT/CITA
VAT
NDDC Levy
Education Tax
Fiscal SystemOML 62
Oil Gas
13
Producing Assets - OML 63
OML 63
OER
20%
Years 1-4; 20% Years 5+; 19%
7%
Capital Expenditures may be deducted against PPT
Joint Venture
85% PPT 30% CITA
5%
3%
2%
Acquired
Working Interest
Net 2P Reserves
Net 2C Resources
Net Production
Producing Wells
Operator
2014
20%
22.9MMboe
63.4MMboe
~2,000boepd
30
ENI
Itobolo Creek
Ogboinbiri Deep
Ogboinbiri Clough Creek
Ekedel D
Ogboinbiri
Tebidaba
Tebidaba
Obama
Obama
Nimbe SD
OML 61:Ob-Ob Plant
Crudefrom OML 61
Azuzuomo
Power Plant
Oil & NGL Terminal
Flowstation
Oil Pipeline
Gas Pipeline
Key
Shallow Offshore Platform
Oil & Gas Field
Oil & Gas Field
Lead
Single Well Discovery
Type of Contract
Royalty
Annual Capital Allowance
PPT/CITA
VAT
NDDC Levy
Education Tax
Fiscal SystemOML 63
Oil Gas
14
Oil Revenue Royalties Non-Capitalized
Costs
AssessableTax
EducationTax
$100.00 ($20.00)($10.00) $70.00 ($1.37)
Illustrative Profit & Tax Allocation Based on Fiscal TermsOMLs 60-63 NDDC
LevyCapital
AllowancesITA Chargeable
ProfitAssessableTax @ 85%
$0.90 $4.00 $1.00
$62.73 $53.32
Profit
$9.41O
il $/b
bl
Gas Revenue Royalties AssessableProfit
EducationTax
Chargeable Profit
$15.00 $1.05 $13.95 $0.27 $13.68
AssessableTax @ 30%
Profit
$4.10
$9.58
Gas
$/b
oe
OER
15
Producing Assets - OML 125
The Abo-8 well was completed as an oil producer on the Anom01 and Anom02 reservoirs, production has not commenced from Abo-8 as the required flow line is a long lead item, delivery of which is expected to be Q3 2014.
The Abo-12 well has been successfully drilled with lower completion performed and flow tested A197 and AN02 sands. The well is temporarily plugged and abandoned in line with work program, pending planned hook in 2015.
Asset Development Plans
OML 125 Fiscal SystemOML 125
Type of Contract
Royalty
Cost Oil Allocation Ceiling
Petroleum Tax
Profit Oil/Cash Flow Allocation
PSC
8%
NA
50%
Varies from 80%-40% based on cumulative
Acquired
Working Interest
Net 2P Reserves
Net 2C Resources
Net Production
Producing Wells
Water Injectors
Gas Injectors
OPEX/barrel
Netback/barrel
Operator
Fiscal System
2008
15%
6.57MMboe
5.10MMboe
~3,300bopd
4
2
2
$12.21
$52.03
ENI (Agip)
2003 PSC
OER
16
Producing Assets - OML 56
Ebendo-6 well has been drilled, completed, and tested growing production capacity to 7,140 bbl/d (3,213 bbl/d OER share) via seven strings.
Asset Development Plans
OML 56 Fiscal SystemOML 56
Type of Contract
Royalty
Overriding Royalty
Cost Oil Allocation Ceiling
Tax Oil
Profit Oil/Cash Flow Allocation
Marginal Field
2.5%-18.5% based on production
2.5%-7.5% based on production
NA
55%
Varies from 80%-40% based on cumulative
Export is currently constrained at 3,093 bbbl/d (1,391.85 bbl/d OER share) via the Agip operated Kwale-Brass NAOC/JV infrastructure.
Ebendo-7 has been successfully drilled and completed. The well is currently shut-in, with handover to the production team pending completion of the Umugini Pipeline.
Construction of the Umugini alternative evacuation pipeline has progressed & is expected to be completed and commissioned in the fourth quarter of 2014.
Acquired
Working Interest
Net 2P Reserves
Net 2C Resources
Net Production
Producing Wells
OPEX/barrel
Netback/barrel
Operator
2003
45%
10.82MMboe
6.20MMboe
~1,000bopd
3
$7.84
$56.86
Energia
OER
17
OML 125 Abo Fiscal System
OML 56 Fiscal System
Crude OilPrice
Royalty OPEX Tax Netback
Crude OilPrice
Royalty OPEX Tax Netback
$100.00 $8.61 $12.21 $27.14 $52.03
$100.00 $5.63 $7.84 $29.67 $56.86
Illustrative Netback/Barrel Based on Fiscal Terms
Type of Contract
Royalty
Tax Oil
Marginal Field
NA
55%
OverridingRoyalty
Profit Oil/Cash Flow Allocation
Varies from 80%-40% based on cumulative
Cost Oil Allocation Ceiling
2.5%-7.5% basedon production
2.5%-18.5% basedon production
Type of Contract
Royalty
Petroleum Tax
PSC
8%
NA
50%
Cost Oil Allocation Ceiling
Profit Oil/Cash Flow Allocation
Varies from 80%-40% based on cumulative
OER
18
Assets UnderDevelopment- OML 90
There have been revisions to the field development plan, which will now involve barging the oil instead of a pipeline to the NAOC Beniboye facilities, with production expected in the near term.
Asset Development Plans
OML 90 - Akepo Fiscal SystemOML 90
Acquired
Working Interest
Net 2P Reserves
Net 2C Resources
Operator
Technical Service Agreement
2008
40%
0.62MMboe
0.30MMboe
Sogenal
OER
Type of Contract
Royalty
Overriding Royalty
Tax Oil
Profit Oil/Cash Flow Allocation
Marginal Field
2.5% -18.5% based on production
2.5%-7.5% based on production
55%
Varies from 80%-40% based on cumulative
OER
19
Production Platform Fabrication & CPF EquipmentOML 90 - Akepo Field Development
OER
20
Assets UnderDevelopment - OML 13
Qua Ibo Marginal Field development phase 1 started with a drilling campaign in September 2012 and two (2) wells have been successfully drilled and completed; namely Qua Ibo-4 & Qua Ibo-3 St1.
Asset Development Plans
OML 13 - Qua Ibo Fiscal SystemOML 13
Oil production from D5 reservoir is expected to commence in Q3 2014 after the commissioning of the OER/NEPN crude processing facility.
Acquired
Working Interest
Net 2P Reserves
Net 2C Resources
Operator
Technical Service Agreement
2012
40%
0.92MMboe
2.90MMboe
Network E&P
OER/OSL
Type of Contract
Royalty
Overriding Royalty
Tax Oil
Profit Oil/Cash Flow Allocation
Marginal Field
2.5% -18.5% based on production
2.5%-7.5% based on production
55%
100%
OER
21
OML 122
Type of Contract
Royalty Oil
Tax Oil
Profit Oil/Cash Flow Allocation
Tax Royalty/CITA
10%
60%
100%
Type of Contract
Royalty Oil
Tax Oil
Profit Oil/Cash Flow Allocation
PSC
8%
50%
Varies from 80%-40% based on cumulative production
Fiscal System
Near Term Assets*
Oando Energy Resources owns 81.5% of Equator Exploration Limited (EEL)EEL Assets: OML 122, OPL 321 & 323, EEZ 5 & 12
*
OML 122 - Bilabiri/Owanare
Acquired
Working Interest
Operator
2009
Oil 5%, Gas 12%
Peak
OML 134 - Oberan
Acquired
Working Interest
Operator
2009
15%
ENI (Agip)
OML 134 Fiscal System
OER
22
Exploration Assets - OML 131
The Chota field in OML 131 extends into the adjacent Shell-operated Bolia Field. The principle terms of a Pre-Unitization agreement has been agreed for both fields.
A unitization equity determination is expected to take place in the near term. Development of the unitized field can take place subsequently.
Asset Development Plans
OML 131
OER
Fiscal SystemOML 131
Type of Contract
Royalty
PPT Rate
Investment Tax Rate (ITC)
Profit Oil
<200m water depth: 16.7%201-500m water depth: 12.0%501-800m water depth: 8.0%
801-1,000m water depth: 4.0%>1,001m water depth: 0.0%
PSC
Acquired
Working Interest
Operator
2014
100%
OER
50%
50%
Cum. Production
0-350MMb
351-750MMb
751-1,000MMb
1,001-1,500MMb
1,501-2,000MMb
>2,000MMb
NNPC/Contract or
20%/80%
35%/65%
45%/55%
50%/50%
60%/40%
Negotiable
23
Exploration Assets - OML 145
Subsea development consists of 9 producing wells, 7 water injectors and 2 gas injectors, for an ultimate recovery estimated by the Operator of 268 MMbbls of oil and a peak oil rate of 110 Mbopd
Eleven wells would be available at start-up, of which 6 are producers, 3 water and 2 gas injectors.
Asset Development Plans
OML 145
OER
Fiscal SystemOML 145
Type of Contract
Royalty
PPT Rate
Investment Tax Rate (ITC)
Profit Oil
<200m water depth: 16.7%201-500m water depth: 12.0%501-800m water depth: 8.0%
801-1,000m water depth: 4.0%>1,001m water depth: 0.0%
PSC
Acquired
Working Interest
Operator
2014
20%
ExxonMobil
50%
50%
Cum. Production
0-350MMb
351-750MMb
751-1,000MMb
1,001-1,500MMb
1,501-2,000MMb
>2,000MMb
NNPC/Contract or
30%/70%
35%/65%
47.5%/52.5%
55%/45%
65%/35%
Negotiable
24
OML 321/323
Acquired
Working Interest
Operator
2009
30%
Knoc
NIGERIA
OPL 321 & 323CAMEROON
EQUATORIALGUINEA
EEZ Block 5
SAO TOME& PRINCIPE
SAO TOME & PRINCIPE - NIGERIAJOINT DEVELOPMENT ZONE
GABON
EEZ Block 12
EEZ 5
Acquired
Working Interest
Operator
2009
100%
Equator
EEZ 5 Fiscal System
EEZ 12
Acquired
Working Interest
2009
PSC Negotiation (ongoing)
Type of Contract
Royalty Oil
Costing Oil Allocation Ceiling
Tax Oil
Profit Oil/Cash Flow Allocation
2%
80%
OER Portfolio - Exploration Assets
Oando Energy Resources owns 81.5% of Equator Exploration Limited (EEL) Assets: OML122, OPL 321 & 323, EEZ 5 & 12OER currently has an un-exercised right to acquire EEZ Block 12
*
**
30%
Varies from 70%-25% based on a formula set out in the PSC
Type of Contract
Royalty Oil
Costing Oil Allocation Ceiling
Tax Oil
Profit Oil/Cash Flow Allocation
PSC
8%
NA
50%
Varies from 70%-25% based on a formula set out in the PSC
*
OML 321/323 Fiscal System
OML EEZ 5 Fiscal System
OER
25
2013Capex Breakdown
Q1 Q2 Q3 Q4 Total
(OML 125) Abo
Abo-9 Work Over
$67.6MMAbo-4 Side Track
Up-dip side track of Abo-3
Production & Development Drilling
Other
Exploratory Drilling
Abo-8 Re-entry
Drilling of Ebendo 5 & 6 Wells - $19.1MM
Exploratory drilling onMindiogoro Prospect $7.3MM
Umugini Pipeline: $3.7MM
Drilling of Qua Ibo 4 & Qua Ibo 3 Side Track $21.9MM
Ebendo (OML 56)
(OML 134) Oberan
Qua Ibo (OML 13)
119.9�MM
Production & DevelopmentDrilling91%
Other3%
ExploratoryDrilling6% $
$22.9MM
OER
26
2014 Capex Plan - LegacyAssets
Q1 Q2 Q3 Q4 Total
(OML 125) Abo Abo-8 Reentry & Abo 12 drilling - $37.5MM $37.5MM
$22.7MMUmugini Pipeline $4.3MMMaintenance CAPEX - $9.7MM
Qua Ibo Well Drilling and Completion: $23.4 MM
$5.2MM
Ebendo (OML 56)
(OML 134) Oberan
Qua Ibo (OML 13)
$2.0MM
Mindiogoro Well Drilling - $7.4MM
Drilling of Ebendo 7 Well - $8.7MM
Akepo Marine Solution CAPEX - $2.0MM
Construction of Crude Processing Facility - $17.2 MM
Contingency Capex: $7.6MM
Equator Exploration EEZ Commitments: $5.2MM
$40.6MM
$7.4MM
Production & Development Drilling
Other
Exploratory Drilling115.4�MM
Production & DevelopmentDrilling60%
Other33%
ExploratoryDrilling7%
$
OER
27
OER
OMLs 60-63 2014 Capital Projects Excluding Drilling
Concession Rentals
Capital Construction Oil
Gas Facilities
Development Safety, Loss Prevention &
Environmental Protection
Movables
Telecoms (Information, Communication &
Technology)
Land and Building
TOTAL CAPEX OIL & GAS
TOTAL CAPEX OIL & GAS NET TO OER (20%)
DESCRIPTION E&P
0.1
61.3
84.0
42.8
12.3
5.3
16.7
222.4
44.5
DOM GAS
-
-
97.0
-
-
-
-
97.0
19.4
-
-
19.0
-
-
-
-
19.0
3.8
T4/5 MCA
-
53.6
-
-
-
-
-
53.6
10.7
EBOCHA MCA
TOTAL
0.1
114.9
200.0
42.8
12.3
5.3
16.7
392.0
78.4
Capital Projects 2014 Budget (excludes Sub Surface). Drilling CAPEX increases budget by $40MM
ConcessionRental
Capital Construction
Safety &Environmental
Movables
47%
Telcoms Land &Building
Gas Facilities
53%
100%
10%
53%
48%
42%
100% 100% 100% 100%
20%
40%
60%
80%
100%
CAPEX CONTRIBUTION
E&P Dom Gas T4/5 MCA Ebocha MCA
28
H1 2014 Results Summary
US$'000 H1 2014 H1 2013
Revenue
Production Expenses
General & Admin. Costs
DD&A
Net Financing Expenses
Income (Loss) Before Tax
Income Tax Recovery
Net Income (Loss)
62,603
(15,558)
(41,746)
(21,444)
(155,375)
(171,520)
(6,029)
(177,549)
65,774
(12,730)
(6,973)
(16,125)
(24,829)
5,117
(13,983)
(8,866)
US$'000 H1 2014 H1 2013
Non-Current Assets
Cash
Inventory
Trade & Other Debtors
Trade & Other Creditors
Current Borrowings
Non-Current Borrowings
Shareholders' Equity
1,409,172
209,161
2,612
41,197
223,133
281,915
88,392
725,532
1,247,529
12,677
1,478
37,738
213,169
496,099
124,776
311,330
US$* H1 2014 H1 2013
Barrels of Oil Produced (bbl)
Average Sales Price Per Barrel (Net)**
Production Expense Per Barrel
DD&A Per Barrel
821,786
91.25
18.93
26.09
687,757
95.64
18.51
23.45
OER
All tabular amounts are in US$ unless otherwise stated
Price excludes royalties (8% on OML 125 and 5% on the Ebendo Marginal Field), the Nigerian Government profit share of profit oil in the production sharing contract in respect of OML 125, crude losses, and unrecognised revenues related to increased underlift receivables on OML 125.
*
**
29
2013 Full YearResults Summary
US$'000 FYE 2013 FYE 2012
Revenue
Production Expenses
General & Admin. Costs
DD&A
Net Financing Expenses
Income (Loss) Before Tax
Income Tax Recovery
Net Income (Loss)
Net Income/Loss Per Share (Basic)
127,211
(29,962)
(42,583)
(31,513)
(50,365)
(27,212)
(11,018)
(38,230)
(0.36)
135,200
(25,071)
(17,791)
(23,991)
(16,242)
52,105
(36,084)
16,021
0.16
US$'000 FYE 2013 FYE 2012
Long Term Assets
Cash
Inventory
Trade & Other Debtors
Trade & Other Creditors
Current Borrowings
Non-Current Borrowings
Shareholders’ Equity
1,247,529
12,677
1,478
37,738
213,169
496,099
124,776
311,330
1,090,567
4,698
1,015
30,620
128,817
452,263
52,737
355,060
All tabular amounts are in US$ unless otherwise stated
Price excludes royalties (8% on OML 125 and 5% on the Ebendo Marginal Field), the Nigerian Government profit share of profit oil in the production sharing contract in respect of OML 125, crude losses, and unrecognised revenues related to increased underlift receivables on OML 125.
*
**
US$* FYE 2013 FYE 2012
Barrels of Oil Produced (bbl)
Average Sales Price Per Barrel (Net)**
Production Expense Per Barrel
DD&A Per Barrel
1,456,818
110.30
20.57
21.63
1,456,522
110.21
16.91
16.18
OER
30
Improved and sustained production levels from Abo wells (OML125)
New drilling campaign to increase production from Ebendo field (OML 56).
Facilities development, Pipeline laying and Well hook-up at the Akepo field (OML 90) are also expected in the near term.
Accelerated development programme on OML’s 60-63.
Access to capital/equity through the TSX listing and access to debt financing through excellent relationships with both local and international banks.
The Company is poised to benefit from all local content initiatives and reforms implemented in the country and the industry. OER plans to be involved in governmental bid rounds for assets as well as divestment programmes by International Oil Companies (IOCs).
Near Term Value Drivers
Indigenous Status:
Financing
Near Term Increased production & resource commercialization:
OER
31
The Nigerian Operating Environment
32
While exploration in Nigeria began at the turn of the 20th century, periods of interruption through the World Wars and lack of licensing awards issued in the 1970s and 1980s has led to production in Nigeria being slow to develop, with production hovering below 2.5mmboe/day
The Amnesty Programme by the FGN has led to stability in recent years, with the government targeting production of 4mmboe/day by 2020.
It is estimated that there are as many fields with only partial reserves disclosure as with proved reserves, indicating strong potential for future upside
297265
175151 143
102 98 8847 37
10th in World2nd in Africa
Oil Reserves (bnboe)
Gas Reserves (tcf)
1,680
1,168
884 858
300 288 215 195 182 159
11.210.3
7.84.3
4.13.5
3.32.9 2.8
2.72.3
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2.9
Brief History
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Oil Production (mmboe/day)
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10th in World1st in Africa
9th in World1st in Africa
NigeriaOverview
OER
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3000
2500
2000
1500
1000
500
0
1995 2000 2005 2010 2015 2020
Militancy had major impact on production, especially onshore
Deepwater production, increasingly important
Stalled investment from PIB uncertainty
The marginal field programme was initiated in 2001 to encourage growth of indigenous companies in Nigeria.
24 marginal fields were allocated to indigenous companies in 2003.
Reduced royalty and profit tax of 65%
Considerably improved fiscal terms from historical 20% royalty and 85% petroleum profit tax
Sliding-scale royalties to government
Sliding-scale over riding royalties to original field owners
Onshore
OffshoreDeepwater
347 Fields with 2P Reserves < 20mmbbls & 230 Fields with 2P Reserves < 10mmbbls
mbpd
IOCs Targeting Deepwater & Divestingof Onshore Fields
OER
34
Omamofe Boyo is a Director of Oando Energy Resources as well as the Deputy Group Chief Executive of Oando plc. Before taking up this position, he doubled as the Executive Director, Marketing of Oando plc and CEO of Oando Supply & Trading. Between 2004 and 2006, he transformed Oando Supply & Trading into Africa’s largest private sector trading company.
Board of Directors & Advisers OER
35
Independent Auditors
Transfer Agent & Registrar
Legal Adviser
Independent Reserves Evaluator
Bill Watson | Director
Wale Tinubu | Chairman, Director Omamofe Boyo | Director
Christopher Harrop | Lead Director
John Orange | Director
Wale Tinubu has pioneered the execution of world-class initiatives in the region as an ethical business leader, entrepreneur and philanthropist. As well as being Chair and Director of Oando Energy Resources, he Co-founded Ocean & Oil Group in 1994 and has been the Group Chief Executive of Oando plc since 2001. In 2002, led the largest ever acquisition of a quoted Nigerian Company, Agip.
Bill Watson is a seasoned oil and gas professional with more than 35 years’ experience, including 20 years in executive and middle management roles worldwide. He most recently served as Husky Energy’s Chief Operating Officer, SE Asia.
Christopher Harrop was the director of Exile Resources Inc. Formerly a senior vice-president and director of Canaccord Capital Corporation, a Canadian broker dealer. He has served as a director for a number of companies including Clublink Corporation and International Uranium Corporation.
John Orange possesses a wide breadth of experience in the oil and gas industry. He served as a senior executive for the BP group from 1967 to 1996, and is on the boards of various public and private exploration and production companies. Other roles include serving as a Director at Premier Oil, Exile, and Vostok Energy
25+ 25+
Pade Durotoye | CEO, Director
Served as the CEO of OEPL from June 2010 until July 2012. Until 2010, Mr. Durotoye served as the Managing Director & CEO of Ocean and Oil Holdings Group. Prior to his work at Ocean and Oil, Mr. Durotoye spent more than 19 years with Schlumberger Oilfield Services where he held various management roles.25+ 40+
35+
40+
Philippe Laborde | Director
Philippe Laborde is an experienced oil and gas professional with 35 years of industry experience. He is the founder and CEO of Olaeum Energy, a start-up venture capital company focused on oil and gas investments across Africa. He also co-founded DB Petroleum – an upstream joint venture between Dubai World and Benny Steinmetz Group – and acted as its CEO for the Africa and the Middle East region. He spent over 20 years in progressively senior international positions at Elf Aquitaine.
35+
Contact Details
Energy Resources
Head, Corporate Development & Investor Relations
+234 (1) [email protected]
Tokunboh Akindele
OER
36