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Emerging Markets Energy
Resources Limited (EMERCO)
Building a leading Oil and
Gas Company in Nigeria
January 2015
Certain information set forth in this presentation contains forward looking statements. Readers are
cautioned that the assumptions used in the preparation of such information, although considered
reasonable at the time of preparation, may prove to be inaccurate
and, as such, reliance should not be placed on forward looking statements.
Emerging Markets Energy Resources Limited (EMERCO) actual results, performance or achievements
could differ materially from those expressed in or implied by these forward looking statements and
therefore no assurance can be given that any of the events discussed herein and anticipated by the
forward looking statements will actually occur in the manner presented or at all.
EMERCO disclaims any forward looking statements, whether as a result of new information, future
events or otherwise.
Forward Looking Statements
2
EMERCO is an indigenous E&P company focussed on acquiring and
developing fallow fields and low risk exploration assets in Nigeria
NIGERIA: • Nigeria is an established and significant global oil and gas producing region
• FGN actively encouraging indigenous companies to acquire assets
• Majors undergoing rationalisation process with steady stream of assets coming to market
• Hundreds of undeveloped discoveries in shallow water and onshore
• Marginal field round expected this year
• Application of Marginal Field technology to add next level of value
• Petroleum systems are world class , low subsurface risk
EMERCO: • Indigenous Nigerian company
• Head office Lagos with subsidiary office London
• Highly respected and credible management team
• Deep understanding of Nigerian petroleum industry gained from many years working with majors
• Significant marginal field experience with direct application to Nigeria
• Undergoing rigorous technical evaluation of all fallow discoveries to identify acquisition targets
• Seeking to become Operator of developments
Overview
3
Investment Summary
First Class
Entrepreneurial
Team
World Class
Opportunity
Proven and
Focused
Strategy
• Deep and extensive experience in all aspects of oil and
gas production, development and exploration
• >100 years working for IOCs in Nigeria and elsewhere
including Shell, Chevron, Exxon, Centrica, Statoil, Conoco
• Proven track record in building successful production
business from small development opportunities
•Many years living and working in developing countries
• Divestment of assets by majors underway
• World class petroleum systems
• FGN Marginal field round in 2014 to license undeveloped
discoveries
• Mature business environment & manageable above
ground risk
• Improve recovery through modern technology
• Selectively acquire development / production assets
onshore and shallow water offshore
• Build portfolio of several developments realistically
targeting 25,000bopd in 5 years
• Low risk exploration in and around core assets
• Acquisition target in 5+ years
Accessible
Funding
• First round equity funding by founders in place
• Seeking significant equity raise alongside first identified
acquisition (c.$100m)
• Debt funding available from leading international and
local banks (c.$200m)
• Considering IPO
Blending
Nigerian and
North Sea
expertise
Quality assets
with
ability to scale
rapidly
Repeating
Success
of Valiant in
Nigeria
Nigeria
attracting
funds from
various sources
Strategy
Acquire and advance a balanced portfolio of oil and gas assets at various stages of development including:
– Production
– Development
– Near field Exploration
Opportunity to leverage indigenous expertise and to export marginal field experience
– Access to local geological and finance
expertise
– Innovative facilities design
– Cost effective development concepts
– Third party tie-in, legal and fiscal
agreements
– Experience in optimising and
maximising production from mature /
marginal fields
c
5
• Acquire 3rd /4th oil
producing and/or
development assets
• Raise further equity of
c.$100m
• Continue development of
operated assets
• Partnerships with
reputable E&P
companies, service
companies etc
• Production c.1.3 -2.3
kbopd
2014/15
2016-17
2018-19
2020/21+
• Established indigenous
Nigerian company
• First round equity funding
in place
• Currently screening
discovered reserves
opportunities
• Target blocks with
demonstrable upside
potential
• Engage with capital
markets
• Establish operatorship
• Acquire 4th /5th oil
producing and/or
development assets
• Continue development of
operated assets
• Exploiting upside
potential in and around
assets-Subsea Tiebacks
• Exploration of near field
and low risk opportunities
• Production c.10 kbopd
• Evaluate M&A
Possibilities
• Continued exploration
and development
activities
• Production 25 kbopd
• Potential Takeover target
Strategic Plan
Equity Raise based on 2/3 assets
First Oil & Equity funding RBL for new deals
• Indigenous company
formed, 60% owned by
Nigerian shareholders
• Acquire 2/3 oil producing
and/or development
assets
• Exploring financing
options
• Raise equity of c.$100m
• Establish RBL debt
facility of $200-300m
• Hedging structures if
required
• Build out team in Lagos
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Increase Production
M&A
Management Team
Olayemi Cardoso-Chairman Chairman-Citibank Nigeria Former Board Member of Chevron Oil Nigeria Plc. (Downstream Company) MSc Harvard University
Peter Buchanan-Founder/Director
Founder and CEO of Valiant Petroleum Plc., a UK listed oil and gas producer sold to
Ithaca for US$ 450 million. Started career with BP as Petroleum Geologist and worked as a Director at Royal
Bank of Scotland where he was involved in over US1 Billion of debt, mezzanine and equity funding.
Peter has received a Letter of Support from a leading Investment Bank.
MSc and PHD in Structural geology from Imperial College, London.
Cyril Odu-Founding Shareholder
39 years’ experience with ExxonMobil.
Cyril was the Vice Chairman of the Board of Mobil Producing Nigeria and the Chief
Financial Officer of the Upstream Affiliates of ExxonMobil in Nigeria.
Joined Mobil as a geologist in 1972 and served in several Technical and Management
positions in Exploration, Production, Joint Interest & Regulatory Affairs, Planning, New
Business Development and Human Resources.
Developed and implemented business strategies and executed several innovative
funding and financing solutions for ExxonMobil in Nigeria.
Cyril attended the University of Ibadan and graduated with a BSc degree in Geology
and an MBA from the Texas Southern University, USA.
Tosin Shobo-Managing Director
25 Years of International Business Development experience with Centrica Plc.,
Marathon Oil Corporation, Citibank, Mobil Oil and 5 years of Gulf of Guinea strategy
consulting experience for Mid Cap (Market Cap circa US$ 20 billion) oil and gas
Exploration and Production companies.
UK ACCA qualified Accountant with MBA and BSc Chemical Engineering from
University of Lagos.
Deep relationships with Financial Institutions and
Private Equity Investors. Access to Capital Markets
Value Creation track record and extensive oil and gas
industry experience in banking and industry, in multiple
countries
Broad range of technical skills and financial,
commercial and strategic acumen
Broad range of technical skills and financial,
commercial and strategic acumen
Long standing Government Relationships with Oil
producing countries in West Africa, IOC’s and
Independents 7
Management Team cont’d.
Rob Gherghetta-Executive Vice President-Finance
•Chartered Accountant with 20 year’s experience in Natural resources, public practice &
investment banking
•Co-Founder of London listed Valiant Petroleum plc.
•Held senior positions with Royal Bank of Scotland, Credit Suisse First Boston
•Bcom
Andrew Macfarlane-Chief Operating Officer
•Asset Manager, Field Development Manager and Engineer with 39 years of Operator
and Non Operator experience in the international Oil & Gas business, working in the
North Sea, Indonesia and Kazakhstan with Conoco & ConocoPhillips.
•Multi discipline skill set covering; the full life cycle of oil and gas field management, field
development concept and front-end engineering, reservoir management, major project
management, drilling and commercial.
•B. Eng. (Tech) Mech. Eng. Hons.
Abiola Ajayi-Technical Director •Niger Delta Geoscience expert having coordinated technical teams in making significant
discoveries
•Diverse international experience with Shell, Schlumberger and PSI
•Founding Geology and Geophysics Manager with Afren Nigeria
•M.Sc.
Extensive financial and commercial experience in
banking, oil and gas and mining
Long career in super-major with broad international
experience and excellent project execution expertise
Niger Delta Geoscience specialist with 25 years +
experience
8
Management Team cont’d.
Rupert Miller - Vice President Sustainable Development
• Qualified in Human Resource Management with Post Graduate studies include
the Executive Leadership Programme at Ashridge Business School and
the completion of the University of Cambridge Post Graduate Certificate in
Sustainable Business.
• Over ten years working overseas within the international development sector.
• Responsible for the planning and delivery of community partnership programmes in
West and East Africa including working with MedecinsSans Frontieres in Kenya,
Somalia and South Sudan.
• Advised on the set up and delivery of two international NGO's in Rwanda
and Uganda including the relevant monitoring and evaluation processes.
Michael Sullivan - General Counsel
• Strong legal, company secretarial and risk management skills gained from working
in top tier law firms and public listed companies
• Highly developed legal skills focusing on oil and gas, mining, public companies and
banking and finance;
• Experienced company secretary;
• In depth knowledge of Listing Rules & Business Rules, Corporations Act, Trade
Practices Act, Income Tax Assessment and Duties Act;
• Strong relationships with stock market regulators and Government revenue services
gained from working on large scale and complex transactions
• Strong risk management, corporate governance & compliance skills;
Extensive community understanding and proven ability
to negotiate
Highly developed legal skills focusing on oil and
gas, public companies, banking and finance. Lived
and worked in emerging markets
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• Northern North Sea marginal fields,
• Production achieved within two years of submitting field
development plan
• Structural complexity addressed with a mix of well types:
long reach and horizontal producers and injector wells to
maximise recovery
• Some wells fitted with submersible
pumps and/or gas lift to enhance
recovery
Management’s Previous Field Development
Experience
10
• Production solutions were innovative and cost
effective.
• Subsea tie-back to floating production platform
shared between two fields
• Early export achieved initially via shuttle tanker
offloading, then subsequently exported via laid
pipeline to 3rd party host platform as access
became available
Management’s Previous Field Development
Experience
11
Corporate Structure
EMERCO Nigerian incorporated
African
Continental Energy UK Registered
Nigerian
Shareholders
40%* 60%
Onshore / Shallow Water Assets
Equity
PSC
Agreement
Selective producing Selective development Low risk exploration
Debt
12 *40% owned by ACE and non Nigerian shareholders
Low geological risk
Focus on historic producing formations
Low execution risk
JVs with leading O&G service & E&P companies
Access to Capital
Debt & Equity
Portfolio of multistage projects
Diversifies risk
Rapid production
Early Cash flow
Valuation underpinned by resources
Scope for resource upgrade
High calibre Management
Proven track record
Value Drivers
Historical exploration success rate 78%
Time to production c.2 years
Targeting London listing, banks willing to lend
Numerous low risk opportunities
Established services sector
Very high quality reservoirs and oil grades
Operational excellence
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Risks and Mitigation
Risks Mitigation
1 Production Disruption EMERCO knowledgeable about communities & will be proactive in agreeing MOU’s with community, appoint CLO and have direct engagement. Indigenous companies have shown that engagement with local communities actively reduces disruption
2 Bunkering-Oil theft Factor down-time into acquisition economics FGN tackling the problem with situation improving, a new agreement between the Navy , Customs and Port authorities was announced in Jan 2014
3 Security Above ground risk present but manageable through established security services
4 Project delays Use of experienced team with strong local and national contacts
5 JV Partner Risk EMERCO will thoroughly screen JV Partners
6 Subsurface Risk Relatively low for Niger Delta
7 Corruption EMERCO will adhere to the strictest Corporate Governance guidelines 14
Investment Themes
Nigeria is opportunity
rich: • Numerous
undeveloped discoveries
• Rationalisation of assets by majors
• Marginal field round from Government
• World class reservoirs
Indigenisation: • Government proactively encouraging local content • Emerco is a Nigerian
company based in Lagos
Technology: • Next phase of development under way
• Deployment of modern technology and knowhow
• Sub sea developments. Horizontal drilling
Strong Management:
• Highly experienced in Nigeria and North Sea • Access to technology, project management and capital markets •Successful track record
in company formation and growth
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Conclusion
1. Nigeria currently presents a realistic opportunity to build a sustainable and profitable company because:
• The country is undergoing major rationalisation with majors divesting of mature or marginal assets
• There are many undeveloped discoveries owned by small companies with no or limited expertise and financial capability
• The FGN is offering fallow fields for re-licensing
2. Nigeria is one of the worlds best petroleum basins because: • Reservoirs are excellent • The source rocks are prolific leading to vast quantities of oil and gas • The oil is generally of a light sweet grade
3. The oil industry in Nigeria is mature and therefore offers: • Significant access to infrastructure
• An established and stable legal / fiscal regime • On the ground services and support
4. There is a trend in Nigeria towards indigenization: • General requirement for local content • There is a specific requirement for indigenous companies to bid for oil assets • Emerco is a fully compliant indigenous company
5. Emerco is in an ideal position to capitalise on the opportunity: • Highly experienced and skilled management team covering all aspects of the oil
industry and deep understanding of Nigeria • Well connected and respected • Ready to move to the next stage of accessing capital
This document is prepared by Emerging Markets Energy Resources Limited (EMERCo) as a presentation to potential
investors and financial institutions. This document is intended to give the recipient a preliminary introduction to the
company, its assets and its opportunities and is not intended to form the basis of a decision to provide funding to
EMERCo.
This presentation is the sole property of EMERCo and its subsidiaries and is the copyright property of EMER. The
information contained therein must be kept and treated as confidential and not be distributed in any form to any third
party without the express written consent of EMERCo.
EMERCo expressly reserves the right at any time, without giving reasons or notice, to revise, supplement or withdraw
any information provided in this document or made available hereunder.
This document does not constitute an offer or invitation to purchase any interest in EMERCo or the assets and should
therefore not be treated as such. EMERCo will make available more information as required and as deemed necessary.
Neither EMERCo nor any of its affiliated companies or any person connected with them, accepts any liability or
responsibility for the accuracy or completeness of, nor makes any express or implied warranty with respect to, the
accuracy or otherwise of the information in this document, or as to the reasonableness of any projections or other
information contained in this document. Only those representations and warranties (if any), which are made in any
financing agreement if and when executed shall have any legal effect.
This document shall not be taken as any form of commitment on the part of EMERCo or any of its affiliates to proceed
with any other transaction envisaged by the issue of this document.
Disclaimer
17
Contact Us
For additional information and enquiries please contact:
Tosin Shobo
Managing Director
Emerco
6 Raymond Njoku Street
Ikoyi
Lagos
Nigeria
Tel +234 (0) 8177245444
Tel +447753811020
Email:[email protected]
Peter Buchanan
Founder
Email: [email protected]
Tel +447799034778
Andrew Macfarlane
COO
Tel: +44 7789 137556
Email: [email protected]
Robert Ghergetta
Executive Vice President Finance
Email: [email protected] or
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