investor presentation - pandora lng development pathway ... · investor presentation - pandora lng...
TRANSCRIPT
Investor Presentation - Pandora LNG Development Pathway ASX:CMT
9th July 2014
www.cottoilandgas.com.au
For
per
sona
l use
onl
y
Certain statements or estimates contained in this presentation, including information as to the future financial or operating performance of Cott Oil & Gas Ltd (Cott) and its projects, are forward-looking statements or estimates. Such forward looking statements or estimates are necessarily based upon a number of assumptions and estimates that, while considered reasonable by Cott, are inherently subject to significant technical, business, economic, competitive, political and social uncertainties and contingencies; involve known and unknown risks and uncertainties that could cause actual events or results to differ materially from estimated or anticipated events or results reflected in such forward-looking statements; and may include, among other things, statements regarding targets, estimates and assumptions in respect of production, prices, operating costs, results, capital expenditures, reserves, resources and anticipated flow rates, and are or may be based on assumptions and estimates related to future technical, economic, market, political, social and other conditions. Cott disclaims any intent or obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. All forward-looking statements or estimates made in this presentation are qualified by the foregoing cautionary statements. Investors are cautioned that forward-looking statements and estimates are not guarantees of future performance and accordingly investors are cautioned not to rely on forward-looking statements or estimates due to the inherent uncertainty therein. This presentation is not an offer of securities and is not a disclosure document.
2
For
per
sona
l use
onl
y
PNG focused oil & gas explorer and project developer with 4 licenses and 1 gas discovery
Flagship asset is the Pandora Gas Field (CMT:40%) an offshore gas discovery with 2C 800BCF with exploration upside
Previous license holders suggest Pandora could contain up to 1.3 Tcf gas in place
Recently developed Concept Study by FLNG developer Wison Offshore and Marine demonstrates Pandora is technically and commercially viable
PNG is a growing LNG hub for Asia – Cott’s licenses offer excellent exposure to this market
Development of Pandora LNG project now advancing
Several vessel owners and infrastructure partners have expressed strong interest in Build Own Operate – tolling model for gas owners
Also holds net 9,617km2 of highly prospective onshore licenses in PNG’s Western Province
3
For
per
sona
l use
onl
y
ASX Code: CMT Issued Capital: Ordinary Shares 77.0m Options ($0.20, Dec 2015) 22.8m Options ($0.25, Dec 2015) 4.4m Options ($0.30, Dec 2015) 4.4m Market Capitalisation: ($0.13/share as at 6 June 2014) $10.1m Cash (31 March 2013): $2.7m 10m Shares in Kina Petroleum Ltd (KPL): $4.0m Debt: Nil Major Shareholders: 12.9% International Exploration Services Ltd 8.7% Michael O’Keeffe (ex-Riversdale Mining Chairman/
founder) 19.9% Cott Management/ Founders (escrowed until Jan
2015)
4
Directors: Mr Stephen Dennis - Chairman Mr Andrew Dimsey - Managing Director Mr David Bradley - Non Executive Director Company Secretary: Ms Sarah Smith Management: Mr Marc Jamet – Technical Manager Mr Alistair Jobling – Commercial Manager Chief PNG Advisor: Mr Simon Korua Head Office: 945 Wellington Street West Perth WA Australia 6005 www.cottoilandgas.com.au
For
per
sona
l use
onl
y
License (Area) % Operator Target Resource Location Comment
5
Exploration Assets
PPL 437 (1,104km2) 20% Kina Petroleum Multi Tcf/MMbbls
Onshore Western Province, PNG
Prospective for Wet Gas Seismic acquired 2H 14
PPL 435 (5,670 km2) 50% Kina Petroleum Multi Tcf/MMbbls Large acreage provides development and
commercial opportunities PPL 436 (13,122km2) 50% Kina Petroleum Multi Tcf/MMbbls
Joint Study Area 25% Transform Exploration Multi Tcf/MMbbls Onshore West
Papua, Indonesia PSC currently under
application
Development Assets
PRL 38 (Pandora) 40% Talisman Energy 2C 800BCF + Offshore Gulf of Papua, PNG
Proposed FLNG or Near Shore LNG Project
For
per
sona
l use
onl
y
Joint Venture: Cott 40% Talisman 25% (Operator) Kina 25% Santos 10%
Pandora Gas Fields located in Gulf of Papua midway between Port Moresby and Daru in 120m of water at approx 1,400m TVD
Carbonate reef structure with excellent porosity and deliverability
Pandora 1X drilled in 1988 over A Structure discovering a 298m gas column which was tested at 57 mmscfpd
Pandora B1X drilled in 1992 over B Structure discovering a 110m gas column which was tested at 43 mmscfpd
Several other prospects have been identified within the licence by 3D seismic
6
For
per
sona
l use
onl
y
Discovered by IPC in 1988 with follow-up well drilled in 1992
Previous license (PRL1) expired in February 2013 and was re-gazetted as PRL 38
Previous joint venture acquired 515 km2 of 3D seismic over permit to define a 2C Contingent Resource of 792 BCF 1 and focussed on bringing gas onshore for aggregation
Extensive evaluation included production and pipeline studies, field development plan, sulphur management and metocean studies
Joint Venture concluded that onshore development was not economic based on cost estimates received
Growing awareness that many gas fields will not be developed other than with FLNG is driving technological development and reducing costs making FLNG far more commercially and technically viable
1 Oil Search Ltd - 2013 Annual Report
7
For
per
sona
l use
onl
y
Cott engaged Wison Offshore & Marine to undertake Concept Study for Pandora Gas Field
Option 1 – Offshore FLNG
3 well development with subsea completions
1 mtpa vessel with 170,000m3 storage
Onboard gas treatment and re-injection of sour gas
Estimated Capex US$900m – US$1,100m (US$900 – US$1,100/ tpa)
Option 2 – Near Shore LNG
Field Production via a Buoyant Tower for processing and sour gas reinjection
160km clean gas pipeline to near shore location
170,000m3 storage barge with 1 mtpa liquefaction capacity
Estimated Capex incl pipeline and tower - US$1,300m - US$1,400m
Funding likely to come from vessel and infrastructure owners – tolling model
8
For
per
sona
l use
onl
y
FLNG vessel with 170,000m3 storage
2 x 0.5 mtpa water-cooled liquefaction trains (Black & Veatch PRICO™)
External turret mooring Side-by-side or turret
offloading to be determined (subject to review of metocean conditions)
Onboard gas treatment (amine tower, mercury bed) and reinjection of sour gas stream into reservoir
9
For
per
sona
l use
onl
y
Dry completions on Buoyant Tower where gas clean-up and sour gas re-injection will take place
Clean gas pipeline to near-shore location (approx 160km) 170,000m3 storage ‘barge’ jetty/dolphin moored in min 14m depth 1 mtpa liquefaction capacity (expandable up to 2.5 mtpa if to be shared with
onshore gas) Side-by-side offloading
10
For
per
sona
l use
onl
y
11
For
per
sona
l use
onl
y
Offshore Solution
Vessel operational expense (includes manning, maintenance, reagents) of US$1.50 – US$2.00/mmBtu
‘Cost of ownership’ approximately US$2.50 – US$3.20/mmBtu 1
Combined operating cost of US$4 – US$5.20/mmBtu should enable owner/operator to provide toll service at less than US$6/mmBtu
Near Shore Solution
Total operational expense (incl liquefaction vessel, Buoyant Tower and pipeline) of between US$2.00 – US$2.50/mmBtu
Cost of ownership between US$3.50 – US$4.50/mmBtu 1
Combined operating cost of US$5.50 – US$6.50/mmBtu based on 1 mtpa but will be reduced if capacity expanded to include onshore gas
With field development costs and transport costs both at less than $1.00/mmBtu, the Joint Venture should be able to deliver LNG to North Asia for approximately US$8/mmBtu 1 Based on complete amortisation over 10 years at 8% cost of capital
12
For
per
sona
l use
onl
y
Several parties with expertise in shipping seeking to Build, Own and Operate (BOO) vessel on behalf of gas owners services on a toll treatment basis (similar to FPSO Model)
Project sponsor, which is likely to be an LNG shipping company, will establish a midstream company to own and operate the vessel and bring in gas suppliers, off-takers, National Oil Co and/or technology providers as shareholders/co-sponsors
Vessel would be funded by equity and debt and therefore requires proponents with strong technical and financial credentials as well as appropriate insurance cover
Liquefaction tariff to be determined to achieve vessel owner’s required return on investment but likely to be around US$4-6/mmBtu depending on scale
Commercially acceptable liquefaction tariff to be determined through open-book analysis of construction, operation and finance costs
Debt funding may be available from Export Credit Agencies, such as World Bank, China EXIM Bank and Australian Export Finance Insurance Corp (EFIC)
13
For
per
sona
l use
onl
y
14
For
per
sona
l use
onl
y
Pandora FLNG has potential to be a high margin LNG project: Acquired as an existing discovery therefore
minimal sunk costs to recover Field development requires max 4 shallow
wells with dry completions H2S can be removed on vessel or floating
platform and re-injected For Near Shore option, cost of pipeline and
tower are offset by lower vessel capex and lower opex
Toll treatment of pipeline quality gas can be delivered for less than US$6/mmBtu
LNG can be transported to key Asian markets for US$1/mmBtu
15
For
per
sona
l use
onl
y
16
Cott has identified the optimum pathway for development of the Pandora Gas Field and, potentially, other gas discoveries. It now looks to develop a working group that includes potential owner-operators, contractors and adjoining licensees
For
per
sona
l use
onl
y
17
Talisman and Horizon seeking to aggregate 4 TCF to underpin a 2 mtpa LNG facility
Focus is on PRL4 and PRL 21 to north of province where up to 2 TCF of wet gas has been discovered
Stanley (PDL 10) and PRL 21 to initially be developed as condensate stripping
Horizon proposes to commercialise onshore gas by way of a “potential Near Shore LNG development”1
Approx 1-1.5 TCF dry gas in central WP held by Talisman, Mitsubishi and Santos
1 TCF available from Pandora would accelerate FID for aggregation
Opportunity for Near Shore LNG Hub in western Gulf of Papua
1 Horizon Oil Announcement 2 June 2014
For
per
sona
l use
onl
y
1,140 km2 permit bordering PRL 21 (Ketu/Elevala/Tingu) where 1.2TCF and 66 mmbl condensate have been discovered to date
Net Prospective Resource: BEST 91 BCFE (15 MMBOE) HIGH 648 BCFE (108 MMBOE)
Close proximity to proposed liquids processing and gas transport infrastructure
Heritage Oil plc farmed into Kina’s interests in 2013
Infill seismic to be acquired in 2H 2014 ahead of exploration well in 2015
18
For
per
sona
l use
onl
y
13,122 km2 permit with good liquids potential, access to river and proposed gas export infrastructure
Good seismic correlation with existing aerogravity No wells drilled on Oriomo High Fairway structure
19
5,346 km2 licence approximately 50 Km southwest of PRL 21
2 large leads with basal Cretaceous sand potential adjacent to Lake Murray-1 gas flow
Good potential port infrastructure at Aiambak Aerogravity and aeromagnetic survey being acquired
over PPL435 and PPL 436 in Q1 2014
For
per
sona
l use
onl
y
20
For
per
sona
l use
onl
y
21
The following chart shows the value of recent pre-development transactions for PNG gas discoveries compared to the current value of Cott
Upside
Base
For
per
sona
l use
onl
y
22
For
per
sona
l use
onl
y
23
For
per
sona
l use
onl
y
World class petroleum region, proven active hydrocarbon systems, close to Asian LNG demand
Attractive fiscal regime with 2% royalty and 30% corporate tax rate
First shipment from 6.9 mtpa PNG LNG project in May 2014
Talisman-Horizon gas aggregation continues with the aim of establishing a mid-scale LNG project in Western Province
Recent Horizon (Osaka Gas) and Talisman (Mitsubishi and Santos) transactions demonstrate commitment to LNG development in Western Province
Continued corporate activity with acquisition of Eaglewood Energy by Transform Exploration
24
For
per
sona
l use
onl
y
Stephen Dennis (Non-Executive Chairman) 25 years active involvement in the resources industry. He spent 14 years in senior management roles at MIM Holdings Limited, was Group General Manager and Chief Financial Officer of Minara Resources Limited until late 2005. Mr Dennis is currently the CEO and Managing Director of CBH Resources Limited.
Andrew Dimsey (Managing Director) Co-founder of Cott. 30 years of commercial experience as a senior executive of Beach Petroleum, Alliance Oil, Claremont Petroleum, Elders Resources, Arc Energy, Origin Energy. Focus on all commercial aspects of O&G industry -- mergers and acquisition, corporate restructuring, JV arrangements, operations and production.
David Bradley (Non-Executive Director) Energy industry commercial specialist with 30 years of business development experience including senior management roles with El Paso Corporation, Epic Energy, and consulting roles with Wood McKenzie as well as privately advising a broad range of upstream, midstream and downstream energy players in developing and executing commercialization strategies and business development initiatives. Experience includes significant M&A coordination roles realising over $2 billion in closed transactions.
Board with considerable senior experience with ASX-listed resources companies.
25
For
per
sona
l use
onl
y
26
Traditional LNG transporters and FPSO operators looking to move upstream by developing and leasing FLNG facilities
For
per
sona
l use
onl
y