txo presentation

7/28/2019 TXO Presentation

1/24

January 2013


2/24


3/24

TXOPLCPage 2

Summary of the Proposed Placing1

Proposed Placing Price: 0.20 pence per share

Proposed Placing Amount: up to 2 million (approx. US$3.2 million)

Issued Shares (before Placing): 526.4 million

Issued Shares (after Placing)2: 1,395.9 million

Fully-diluted Share Capital (post Placing) 2,144.8 million

Enlarged Fully-diluted Market Cap. 5.4 million

Former Directors & Management Shares & Options: 33 million (1.5% of fully-diluted capital after Placing)

Use of Proceeds:$2.2m Take up part of the option to increase holding in GBG from 23.64% to 34%, allowing GBG to see the project

through to production and profit in 3rd quarter 2013$0.5m Take up option to increase holding in TOG from 25% to 33%, allowing TOG to promote the prospect with a CPR

Report and upgraded marketing material$0.5m Provide general working capital for the Plc

Nominated Adviser and Broker: Fox-Davies Capital Ltd

Listing: AIM (symbol: TXO)

Admission: Nov 2012Notes:1.Information concerning the Placing, including the Proposed Placing Price and Amount, are subject to change at the discretion of the Company and its advisers.2.Assumes issuance of total Proposed Placing amount at the Proposed Placing Price.


4/24

TXOPLCPage 3

TXO Assets>>TXO Assets

TXOPLC$0.5m of proposed placingproceeds take this from 25.0%to 33% interest

$2m of proposed placing proceedsincrease this interest from 23.64% to 34%

Option remains to take this to 42.2% witha further investment of 1.35m

Kentucky production asset

Nov 2011 CPR:

NPV10% value $28m

Tasmanianoil

andgas

exploration

TXO share of combined NPV10% post current investment round is approx. $18.4m Potential of mean prospectiveresources of 500 million BOEwith a 18-24% chance ofsuccess

Exclusive rights to collectand reprocess waste oil inFreeport

NPV10% value* $26m

*See Appendix 1 for calculation

100% owned subsidiaries


5/24

TXOPLCPage 4

Freeport, Grand Bahama

Morgan Oil Marine (MOM), established in 2009 tosupply range of goods and services to ships dockingor anchoring off Freeport, Grand Bahamas.

Located in free trade zone approximately 65 milesoff coast of Florida.

Strategically placed for ships on transatlanticcrossings and those en route to Panama Canal.

Circa 4,800 ships visit it annually (Lloyds List).

Panama canal expansion programme (is estimatedto be completed in 2014) will significantly increasepassing inter-continental traffic and also visitingships as Freeport becomes a "load centre" for goodscross-docked onto different ships to head to GulfCoast and other Eastern US ports.

Freeport has the deepest harbour in the region

TXO Assets>>Grand Bahama Group>>Morgan Oil Marine

Freeport - a high-growth port


6/24

TXOPLCPage 5

Morgan Oil Marine (MOM) business plan

The area needs a service to treat ship bilge water and effluent water from ships

Ship yard has around 100 ships docking annually.

Remove ~17,000 tonnes of ship bilge water and the same in sewage each year.

Local harbour services cruise ships, cargo ships, cement ships, and other commercial

vessels.

Large cruise ships spend 3 days in port twice a week generating ship bilge and effluentwater during the stay.

Proposes to establish its own waste oil and hydrocarbon recovery facility to offerships services to collect and reprocess waste oils and oily sludge (details of the useof proceeds can be found in Appendix 4).

MOM also has a second revenue stream through the provision of BP Castrol brandedmarine lubricants via its exclusive distributor agreement for the Caribbean

Looking into the longer term MOM has reached a verbal agreement in principle tosupply the re-processed fuels oil as feedstock to the Grand Bahamas Power Station.



7/24

TXOPLCPage 6

Freeport quayside development plans

Secured exclusive licence to operate within the port and a 3.5 acre site lease with quayside frontage inthe port. The location will enable it to offer its services to the adjoining expanding Shipyard, OilTerminals and Container Port.

Ariel view of Freeport Port



8/24

TXOPLCPage 7

Morgan Oil Marine process overview

Advised in the design, construction and operation of its newwaste oil and hydrocarbon recovery facility in Freeport by

Paul Waine, Managing Director of RE:Group Ltd, a company with over 20years experience in the field of marine waste oil and hydrocarbon recovery

Slops treatment through thermal fluid heating. Technologyused successfully by Eco-Oil in Portugal who are seeking tooperate or JV with MOM on the Freeport facility

Eco-Oil has 11 years of serving tankers and other large vessels at the Lisnaveshipyard near the Port of Setbal, Portugal. They can collect up to 5000m3

and treat 1000m3 per day.The output of the process

The Electrocoagulation Process


Advised in the design, construction andoperation of the marine sewage andwastewater treatment facility by

Dr Paul Orlowski and Scott Powell of Powell WaterSystems Inc. Powell Water Systems Inc. has over 25years experience in electrocoagulation and wastewatertreatment


9/24

TXOPLCPage 8

Morgan Oil Marine summary

Notes:1.As a forward-looking statement, the Company makes no representations or warranties regarding the above estimated economics2.Morgan Oil Marine is bonded therefore is not subject to local import duty or taxes.3.See Appendix 1 for summary of NPV assumptions. The Base Casevaluation is based on income for slops and sludge collection of USD 0.65 / gallon and No 4 OilAPI index for re-processed fuel of USD 2.65 / gallon.

The Base Casevaluation is on post-tax project cash flows and assumes no leverage.The Base Casevaluation assumes no terminal value after 10 years. The exclusive Port Authority license to operate is in perpetuity therefore

cashflows can be expected outside the discount period but are excluded from this model4.These normalisedcashflows are an average of the undiscounted cost and EBITDA projections for the full trading years 2-10

Summary of Freeport Project, Base Case estimate1

Location: Freeport, Grand Bahama Island,Commonwealth of The Bahamas

Expected facility life: 20 years

Phase 1 Phases 1 & 2

Ship bilge water(slops)

Slops pluseffluent water

Forecast annual col lection: 17,000 tonnes 34,000 tonnes

Assumed in it ial capital costs2: US$ 2.2m US$ 6.0m

Forecast average operating cost3,4: US$ 1.5m US$ 1.9m

Forecast average EBITDA3,4: US$ 5.4m US$ 7.8m

Project NPV at 10%3: US$ 26m US $35.4m

Project IRR3: 120% 77%



10/24

TXOPLCPage 9

Morgan Oil Marine highlights

Significant work already undertaken to secure exclusive licences in the fast growing, port of the region

Exclusive licence and lease secured to operate within Port Authority area

Grand Bahama Shipyard, BORCO oil terminal, Statoil terminal StatOil and container port all haveunderway, or are due to commence, a major expansion programmes underway, new 3 million bbl of

tankage facility for Mid-Atlantic Petroleum approved Panama canal expansion programme (completion 2014) will increase passing inter-continental traffic

Collection and processing scale upside

Base cases based on historic Shipyard business only, but no. of ships serviced in the shipyard is over2% of the total ships currently visiting Freeport annually. Collection volumes will increase as MOMestablishes a local market for the remaining 97%, at the same time overall ship numbers increase

Phases 1 and 2 NPV increases to $81m from $35m with 68,000 tonnes of ship bilge water & sewage Related business upside

Potential to provide other waste to energy services on the Island

Potential to develop a service dock adjacent to the quayside lease area with funding from theshipyard

Geographic expansion upside

Potential to collect and process waste oil from S. America, USA and other Islands in the Bahamas

Project length upside - The exclusive Port Authority license to operate is in perpetuity

>10 year project life as collection is on-going revenue (albeit with some replacement capex)



11/24

TXOPLCPage 10

Morgan Oil USA LLC

Morgan Oil USA LLC (MOUSA) is a sweet, light, crude oil producer in the Illinois basin inWestern Kentucky with an 87.5% WI in remaining recoverable gross reserves of 1.4mbarrels per Nov 2011 CPR:

TXO Assets>>Grand Bahama Group>>Morgan Oil USA

MOUSAlease

area

MOUSAlease

area

NetReservesNet

Present

Value1

(Barrels) ($US)

ProvedDevelopedPrimary

ProvedDevelopedSecondary 13,000 300,000

ProvedUndevelopedPrimary

ProvedUndeveloped

Secondary 1,170,000

27,713,000

GrandTotal 1,183,000 28,013,000

The 5 leases near Poole, KY are operated by TreyExploration Inc (TEI) on behalf of MOUSA

TEI currently operate 25 leases (representing over 150active production and injection wells that collectivelyproduce over 125 bopd) in the Illinois Basin


12/24

TXOPLCPage 11

Morgan Oil USA LLC

Production has increased from 7.6 bopd in Jan 2011 to 16.1 bopd in Sep 2012 as a resultof the ongoing workover programme being funded by net production proceeds

Annual operating expenses to maintain current production are circa $250k

TEI estimates that further old well work-overs could increase production by over 50% at acost of around $200k

TEI has identified 6 potential horizontal drilling locations in MOUSA held acreage andestimate horizontal drilling circa $900k per well

"in-fill" drilling is a viable option but should be researched further. TEI estimate $180kfor a completed, pumping vertical well

The development plan put forward by TEI could increase production to 282 bopd with$28m NPV

The board of GBG are currently studying all options to realise the value in theseassets, including disposal to a regional consolidator

TXO Assets>>Grand Bahama Group>>Morgan Oil USA


13/24

TXOPLCPage 12

Tasmania Oil and Gas Limited (TOG)

New SPV company being developed between TXO Plc(25%), Alpha Prospects Plc (20%), Hill StreetInvestments Plc (10%) and Empire Energy InternationalCorporation (45%).

Established to fund and develop oil and gas explorationlicence EL14/2009 in Tasmania, Australia through theacquisition of the licence from Empires subsidiaryGSLM.

TXO Plcs shareholding is gained through an equity

investment in TOG of $100k and capitalising its $1.5million loan in Empire, subject to the deed of companyarrangement (DOCA) being successfully completed andlicense continuing.

TXO has the option to invest a further $500k through aconvertible loan note for a further 8%.

GSLMs ~$26m debt and relevant mortgage debentureto Empire has been assigned to TOG. Administratorproposes DOCA to creditors to be approved by creditorsat end Jan 2013. TOG now represents theoverwhelming majority of creditors by value.

>>TXO Assets>>Tasmania Oil and Gas Limited

EL14/2009 Licence area


14/24

TXOPLCPage 13

Tasmania Oil and Gas Limited (TOG)

Use of $500k funds received:

To lift GSLM out of administration ($250k) Upgrade the existing Competent Persons Report (CPR) relevant to the licence areas

($100k)

Upgrade marketing material and promote TOG as a means to raising finance

TOG aims to raise $10 million of gross funds to complete Bellevue, Thunderbolt and MountLloyd drilling programmes

Subject to investor consent, seek market listing to raise funds

>>TXO Assets>>Tasmania Oil and Gas Limited


15/24

TXOPLCPage 14

Tasmania Oil and Gas Limited (TOG)>>TXO Assets>>Tasmania Oil and Gas Limited

Expert opinion (Enzo Zappaterra Global Exploration Services summary of opportunities inTasmania 14 May 2012 Appendix 5)

Two distinct and independent systems where licence is located

Gondwana Petroleum System

Larapintine Petroleum System

Both petroleum systems have potential source rocks that are mature for oil/gasgeneration.

Favourable for impact potential hydrocarbon accumulation both oil and gas.

Estimated geological probability for success for Bellevue 22% to 24%

Estimated geological probability for success for Thunderbolt 18% to 22%


16/24

TXOPLCPage 15

Tasmania Oil and Gas Limited (TOG)>>TXO Assets>>Tasmania Oil and Gas Limited

Attractive onshore Tasmania exploration opportunities with multi-million barrel oil or oil-equivalent potential

Bellevue and Thunderbolt prospects are attractive exploration opportunities onshoreTasmania and can be drilled at moderate and affordable cost

Opportunities associated with moderate to high geological risk (1:5 to 1:6) consistentwith exploration risk in frontier areas, but low commercial and political risk, as Tasmaniahas attractive fiscal terms and a stable political environment

Preliminary 2D seismic evaluation completed and an inventory of drillable prospects andleads, prepared

Total mean prospective resources estimate from all prospects and leads exceeds 500million barrels of oil or oil equivalent.


17/24

TXOPLCPage 16

TXO people

TIM BALDWIN, EXECUTIVE CHAIRMAN

Executive Chairman Hill Street Investments Plc (an investment holding group).

An investment analyst who has worked as a corporate broker in the City with Canaccord Capital and Investec.

Has experience of AIM companies as both an advisor and as a director.

Extensive knowledge of the oil and gas and mining sectors due to being involved in the due diligence and marketing of many quoted

mining companies.

ANDREW GLENDINNING, NON EXECUTIVE DIRECTOR

Qualified chartered accountant

Significant experience in the oil and gas industry acquired from setting up and running the treasury department for Hamilton BrothersOil and Gas Limited from 1981-1991.

Appointed director of BHP Petroleum Limited in 1999 and was responsible for BHPs London treasury operations.

RICHARD HARVEY, NON EXECUTIVE DIRECTOR

Richard has over 30 years experience in the oil industry as a legal counsel, in exploration, development and production, initially withthe British National Oil Corporation, then with Hamilton Brothers Oil & Gas Limited, and subsequently with BHP Billiton PetroleumLimited companies

CHRISTOPHER FOSTER, NON EXECUTIVE DIRECTOR

Christopher previously served as a founding Director of Chase Corporation plc and was responsible for an extensive acquisitionprogramme which centred on the purchase of five publicly-listed companies. He was also an Executive Director and majorshareholder of AIM listed, Active Energy Group Plc


18/24

TXOPLCPage 17

Conclusion

TXO represents a balanced portfolio of O&G related assets/business

GBG low risk cash generative business

Freeport - Oil recovery business using proven tried and tested technology

Exclusivity in jurisdiction

Prime location in established and rapidly expanding port already secured

Low complexity, low costs

Appealing return on capital

Kentucky - O&G Production assets

Proven production

Substantial low cost development opportunity

TOG has secured control of a highly prospective asset

~500 million boe (un-risked prospective resources) in Tasmania

3 year license extension pending confirmation


19/24

Appendix


20/24

TXOPLCPage 19

Appendix 1 Freeport project NPVs

This Phase 1 NPV 10 % valuation of $26m

Collection of 17,00 tonnes of ship bilge water(Slops) annually

Capital costs $2.2m Year 2-10 average variable costs $0.5m

Year 2-10 average fixed costs $1m

Year 2-10 average EBITDA 5.4m

This Phase 1 + Phase 2 NPV 10 % valuation of$35.4m is based on:

Collection of 17,00 tonnes of ship bilge water(Slops) and 17,000 tonnes of sewage annually

Capital costs $6m

Year 2-10 average variable costs $0.9m

Year 2-10 average fixed costs $1m

Year 2-10 average EBITDA 7.8m


21/24

TXOPLCPage 20

Appendix 2 Freeport NPV sensitivities

Phases 1 NPV Base valuation increases rapidly from $26m to $59m as collection tonnes of ship bilge water(Slops) increases

NPV relatively insensitive to changes in the price per gallon charge for slops and sludge collection and the resaleprice of No 4 Oil re-processed fuel


22/24

TXOPLCPage 21

Appendix 3 Freeport NPV sensitivities

Phases 1 and 2 NPV Base valuation increases rapidly from $35m to $81m as collection tonnes of ship bilgewater (Slops) and effluent water (Sewage) increases

NPV relatively insensitive to changes in the price per gallon charge for slops and sludge collection and the resaleprice of No 4 Oil re-processed fuel


23/24

TXOPLCPage 22

Appendix 4 TXO use of funds

TXO will use thesubstantialmajority of thefunds to see the

Morgan Oil projectthrough toproduction andprofit in 3rdquarter 2013

Acti vi tyMonth

Grand TotalJanuary February November December

2012

TXO Plc

Capital Expenditure - -

Working Capital32,000 48,000

GBG

Capital Expenditure 71,500 139,700

Working Capital 33,300 3,150

TOG Ltd

Administration 315,000

2012 Total 136,800 505,850

2013

Corporate

Capital Expenditure

Working Capital 45,500 40,000

GBGCapital Expenditure

Working Capital

1,079,300-

6,30050,300

TOG Ltd

Administration

2013 Total 1,124,800 96,600

Grand Total


24/24

TXOPLCPage 23

Appendix 5 Tasmania EL 14/2009 License

Prospect

Permo-Triassic Ordovician

UnriskedTotal (mmbl)

Risked Total(mmbl)

Estimate(mmbl)

Chance ofsuccess (%)

RiskedEstimate(mmbl)

Estimate(mmbl)

Chance ofsuccess (%)

RiskedEstimate(mmbl)

Belluve 129 24 30.96 220 22 48.4 349 79.36

Thunderbolt 63 22 13.88 88 18 15.8 151 29.68

Total 192 44.84 308 64.2 500 109.04

Mean Prospective Resources (mmbl)

txo presentation

Documents