Production, Appraisal & Exploration
Transcript of Production, Appraisal & Exploration
www.elandoilandgas.com ELAND OIL & GAS PLC
Capital Markets Day17th May 2018
Production, Appraisal & Explorationof oil and gas in West Africa
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Eland Oil and Gas Capital Markets DaySlide: 2
A Strong Track Record
ELAND OVERVIEW
ORGANISATIONAL CHART
Eland Oil and Gas Capital Markets DaySlide: 4
George MaxwellCEO & Founder
Pieter vander Groen
COO
Ron BainCFO
John DowneyChief Technical
Officer
Adebayo AyorindeMD Nigeria
Giel KrijgerTechnical Director
Edward CozensGeneral Manager
Commercial
CORPORATE ORGANISATIONAL CHART
Eland Oil and Gas Capital Markets DaySlide: 5
ELAND OIL & GAS PLCWESTPORT OIL LIMITED
WESTER ORD OIL & GAS (NIGERIA) LIMITED
UBIMAALL GRACE
ENERGY LIMITED
ELAND NIGERIA LIMITED
ELCREST EXPLORATION AND PRODUCTION NIGERIA
LIMITED
OML 40
NIGERIA PETROLEUM DEVELOPMENT
COMPANY
STARCREST NIGERIA ENERGY LIMITED
45%
40%
60%
100%
55%
55%
45%
Existing Lender
Lender
The Most SuccessfulYear in Eland’s History
ELAND OVERVIEW
COMPANY SUCCESSES SINCE LAST CMD
◆ Completion of successful export through shipping and return to export from Forcadosterminal
◆ Successful equity placing in June 2017 raising $19.5m
◆ Elcrest signs maiden rig contract for the OES Teamwork rig
◆ Successful OP-7 sidetrack resulting in initial production of 7,500 bopd gross
◆ Successful OP-8 infill well with initial production in excess of 6,000 bopd gross. Contributed to record high production rate for OML 40 of 23,164 bopd from the four producing wells (Opuama-1, 3, 7 and 8) in March
Eland Oil and Gas Capital Markets DaySlide: 7
6,716
11,84912,460
17,304
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
Q2 Q3 Q4 Q1
OML 40 Average and Record Quarterly Production During 2017 & 2018 (BOPD) Gross
2017 2018
12,203
12,620 20,066
23,164
COMPANY SUCCESS SINCE LAST CMD
◆ Delivery of LACT unit into Nigeria and installation of SPDC facility
◆ Deployment of dewatering unit at Opuama to reduce water cut in exported crude to significantly reduce opex
◆ Successful syndication of RBL facility
◆ Opuama-9 initial targeted D1000 and D2000 reservoirs reached and cased off
◆ Signed rig contract with KCA Deutag for T57 land rig. Mobilising to Ubima in May, onsite in June.
◆ Over 90% uptime achieved from June 2017 to Q1 2018.
◆ 80% increase in share price equating to £120 million increase in market cap since last CMD
Eland Oil and Gas Capital Markets DaySlide: 8
-7.4
6.7
10.1
23.9
-10.0
-5.0
0.0
5.0
10.0
15.0
20.0
25.0
30.0
Q217 Q317 Q417 Q118
EBITDA
0
6000
9000
12000
15000
18,000
3000
Avg. Daily Production
-3000
-6000
6.7
11.9
12.5
17.3
THE MOST SUCCESSFUL YEAR IN ELAND’S HISTORY
ELAND SHARE PRICE
Eland Oil and Gas Capital Markets DaySlide: 9
0
20
40
60
80
100
120
27/04/2017 27/05/2017 27/06/2017 27/07/2017 27/08/2017 27/09/2017 27/10/2017 27/11/2017 27/12/2017 27/01/2018 27/02/2018 27/03/2018 27/04/2018
Shar
e p
rice
(re
bas
ed t
o 5
7.2
5p
)
Eland rebased FTSE AIM All Share rebased FTSE AIM Oil & Gas rebased
Forcadoson stream
InterimResults
Opuama-7Initial Results
Opuama-8Results
Full YearResults
RBLSyndication
$19.5mEquity Raise
OES RigContracted
Apr2017
May2017
June2017
July2017
Aug2017
Sept2017
Oct2017
Nov2017
Dec2017
Jan2018
Feb2018
Mar2018
Apr2018
Near Term Strategy and Vision
ELAND OVERVIEW
SUSTAINING SUCCESS AND SHARE PRICE GROWTH
Opuama Infill Drilling
Solid baseline of production and resulting solid foundation of cashflow with material upside remaining
Sustaining the company financially to push into the full E&P cycle
Eland Oil and Gas Capital Markets DaySlide: 11
PRODUCTION APPRAISAL EXPLORATION
Gbetiokun Early Production System
Ubima-1 Re-entry Amobe prospect
Further accretive development potentially adding a further
50% to production base
Appraisal to significantly increase reserves & diversifying
production base
Low-cost, high-impact exploration opportunity with potential to double company’s
reserves
NOW A FULL CYCLE EXPLORATION & PRODUCTION COMPANY
2018-20 WORK PROGRAMME (DRILLING)
Eland Oil and Gas Capital Markets DaySlide: 12
TECHNICAL WORKPROGRAMME
2018 2019 2020
Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
OML 40
Opuama
Gbetiokun
Amobe
Ubima
Appraisal & FFD
Rig Refurbishment
Opu-9 Opu-10
Gbe-1 Gbe-3
Opu-11
Opu-12 Opu-13
Amo-1
Gbe-4
Gbe-5
Gbe-6
Gbe-7
Gbe-8
Development Well Exploration Well
Ubima-1 Ub-5 Ub-7
Ub-8Ub-6
Appraisal Well
Opu-5
Workover Well
RUNNING ORDER
Eland Oil and Gas Capital Markets DaySlide: 13
SECTION PRESENTER
NEAR-TERM STRATEGY & VISION George Maxwell
NIGERIAN OVERVIEWCovering the Nigerian E&P Industry, CSR, Governance, Legal Structure, Government and Government Funding
Adebayo Ayorinde
OPERATIONS & DEVELOPMENT: ACHIEVEMENTS AND MEDIUM TERM WORK PROGRAMMECovering Opuama, Export Routes, Gbetiokun, Ubima and Amobe
Pieter van der Groen
FINANCECovering Q1 Financials, Net Backs, Capex Investment, Financing Debt, Tax and Hedging.
Ron Bain
INVESTMENT CASE & OUTLOOKCovering organization and continued growth
George Maxwell
Q&A
Nigerian Overview
ELAND OIL AND GAS CAPITAL MARKETS DAY
Slide: 1
CONTENTS
Eland Oil and Gas Capital Markets DaySlide: 2
SECTION PAGE
The Nigerian Oil industry 3
In-country Environment 10
Eland in Nigeria 12
Eland/Governance 26
Summary & Conclusion 29
The Nigerian Oil & Gas Industry
ELAND OIL AND GAS CAPITAL MARKETS DAY
ECONOMY: OIL PRICE, SECURITY, ELECTIONS
◆ Nigeria recently emerged from a recession, and over the past year has seen strong economic growth with the Economic Recovery and Growth Plan (ERGP) largely playing a key factor
◆ The economic outlook has been positive due to the increase in production, high oil prices, increase in foreign reserves and stability of the Naira
◆ Sabotage around oil installations has abated largely due to strong dialogue between the FGN and Niger Delta resulting in limited militancy around oil operations
◆ Current security concerns have shifted largely from the Niger Delta region to the North, largely due to remnants of Boko Haram, and the recent Cattle Herdsmen crisis
◆ Recent $15Billion investment announcement by Shell and funding by other companies highlight the economic uptick in the E&P industry in Nigeria, which is a clear indication of the confidence investors have in the sector and economy
◆ Government target of 2.5million barrels of oil a day by 2020
.
Eland Oil and Gas Capital Markets DaySlide: 4
NIGERIA – INDUSTRY UPDATE
◆ IOCs and NNPC moving away from traditional Cash Call funding of Joint Venture arrangements to new funding structure where IOC/Partners are to fund and make recoveries from incremental production
◆ Considerable number of assets up for renewal and this may force deals as inactive operators struggle to implement work programs and justify renewal from authorities.
◆ Opportunities continue to exist for Technical and financial partnerships with asset awardees, to fund and provide technical services and accelerate development
◆ The increasing confidence has also led to the return of funding from banks and credit funds.
◆ New funding structure emerging with service companies providing funds to acreage holders thereby promoting their services and securing market share and often securing equity positions.
DEVELOPMENT OVER THE LAST 12 MONTHS
Eland Oil and Gas Capital Markets DaySlide: 5
NNPC/NPDC FUNDING & STRUCTURES
◆ NNPC/NPDC has commenced the use of alternative funding mechanisms that allow JV’s to finance itself
◆ Within the last three years NNPC has embarked on several successful Alternative Funding Programs totaling $3.7 billion, to sustain and increase the national daily production
◆ NNPC has also embarked on the use of contractor financing to finance other projects such as the recently executed $2.8Billion contractor financing agreement for the 614Km Ajaokuta-Abuja- Kaduna-Kano (AKK) gas pipeline project to deliver gas to the on-going Abuja, Kaduna and Kano Power Plants
◆ The Federal Government is currently seeking financiers for its $5.5Billion crude oil forward sales to fund other selected oil and gas projects.
◆ Shell announced an investment inflow of $15Billion in gas and deep offshore developments.
ALTERNATIVE FUNDING
Eland Oil and Gas Capital Markets DaySlide: 6
STATUS OF THE PETROLEUM INDUSTRY BILL
◆ The Petroleum Industry Bill (PIB) has been unbundled into separate bills by the National Assembly as follows:
- Petroleum Industry Governance Bill (PIGB)
- Petroleum Host Community Bill (PHCB)
- Petroleum Industry Administration Bill (PIAB)
- Petroleum Industry Fiscal Bill (PIFB)
◆ National Assembly and Senate have passed thePIGB, which is focused on the administrative andregulatory aspects of the industry
◆ The PIGB has been transmitted toPresident Muhammadu Buhari for assent
◆ The other three bills are at different levels of review at the National Assembly and expected to be submitted for Presidential assent by Q3-2018
Eland Oil and Gas Capital Markets DaySlide: 7
PIB
PHCB
PIFB
PIAB PIBB
Petroleum Host
Community Bill
Petroleum Industry Fiscal Bill
Petroleum Industry
Administration Bill
Petroleum Industry
Governance Bill
THE PETROLEUM INDUSTRY GOVERNANCEBILL AS PASSED BY THE NATIONAL ASSEMBLYCURRENT STATUS-PASSED BY BOTH HOUSES OF THE NATIONAL ASSEMBLY ON 28 MARCH 2018 WAITING FOR THE PRESIDENT’S ASSENT
Eland Oil and Gas Capital Markets DaySlide: 8
Scraps the Department of Petroleum Resources (DPR), the Petroleum Inspectorate and the
Petroleum Products Pricing Regulatory Agency (PPPRA);
Establishes the Nigeria Petroleum Regulatory Commission (NPRC) which will take over the
functions of the 3 agencies
Unbundles NNPC :
Establishes the Nigerian Petroleum Assets Management Commission
(NPAMC) and the National Petroleum Company (NPC)
Imposes a five per cent (5%) levy on fuel sold across the
country, to be used to finance the Petroleum Equalisation
Fund.
The Minister can only grant, amend, renew, extend or revoke petroleum exploration and production licenses and on the recommendation of the
Nigeria Petroleum Regulatory Commission (NPRC).
PIGB
Provides governance and institutional framework for
the industry
The Bill is silent on the procedure for applying for an
amendment, renewal, extension or revocation of a
license or lease
SUMMARY AND CONCLUSIONS
◆ There are no immediate impact expected from the passage of the fragmented Petroleum Industry Bill
◆ Eland Management through the Oil Producers Trade Section (OPTS) and the Independent Petroleum Producers Group (IPPG) to which Elcrest, its JV company belongs will continue to monitor the situations with the bills very closely.
◆ We will continue to monitor the situation of the PIB very closely.
Eland Oil and Gas Capital Markets DaySlide: 9
In-Country Environment
ELAND OIL AND GAS CAPITAL MARKETS DAY
IN-COUNTRY ENVIRONMENT
◆ No Militant attacks onshore have been recorded in 2018.
◆ Pipeline incidents that have been reported are linked to vandalism/product theft with Illegal bunkering remaining an issue.
◆ OML 40 JV exports through the Trans Escravos Pipeline, which has significantly less downtime than Trans Forcados Pipeline
◆ The Security Management System developed by Eland is a fundamental part of the strategy to mitigate the current and future
◆ Nothing to suggest that 2019 elections will be marred by the typical violence of the past
SECURITY-FORECAST OUTLOOK
Eland Oil and Gas Capital Markets DaySlide: 11
Eland in Nigeria
ELAND OIL AND GAS CAPITAL MARKETS DAY
ELAND IN NIGERIA
Elcrest has become the partner of choice to NPDC
◆ The Project Management Team (PMT) adopted on the OML 40 JV , which is inclusive and run on a project by project basis with Elcrest funding, has proved superior to the Asset Management Team (AMT) adopted on other JVs with NPDC
◆ Following the concession of some value adding projects by the Operator, NPDC to Elcrest in 2017, Elcrest has emerged the partner of choice with its continued delivery of the projects. Elcrest are recognised as a company offering quality and value at competitive rates
◆ The OML 40 JV has become the reference point for fast track development and rapid production increase
◆ The unique PMT is recognised at NNPC as the initiative that has delivered most value to NPDC and it’s being referenced as the bastion of accelerated development
◆ NNPC’s recognition of the unique partnership and the value proposition it offers lends credence to the success of the PMT model
THE NPDC/ELCREST JV PMT
Eland Oil and Gas Capital Markets DaySlide: 13
ELAND IN NIGERIA
Policy Highlights
◆ Comply with relevant national and international regulations, framework, guidelines and best practices at all time
◆ Our goal is to achieve the widest possible level of local agreement throughout the lifespan of our projects.
◆ We use local contractors
◆ We invest in local projects
COMMUNITY RELATIONS POLICY
Eland Oil and Gas Capital Markets DaySlide: 14
Key ObjectiveTo contribute positively to the development of our host communities
In practice this means
◆ A systematic and flexible approachto managing community affairs
- Engagement
- Development
- Employment Creation
- Visibility
- Impactful
- Transparency
◆ Proactive steps to build and maintain strong relationships with host communities
◆ Best practices based on experience within the team
ELAND IN NIGERIASUMMARY OF MAJOR INVESTMENTS IN THE COMMUNITY
Eland Oil and Gas Capital Markets DaySlide: 15
Community $m
Flowstation Operation $3.7
Community Electrification $0.7
Skills Acquisition $0.2
Rig Operations $9.2
Freedom to Operate (FTOs) $0.2
Total $14m
Major community related investments in excess of $14m
ELAND IN NIGERIA
Benefits to the community:
ELCREST HAS FULLY REENGAGED WITH THE COMMUNITIES THROUGH ITS ACTIVITIES
Eland Oil and Gas Capital Markets DaySlide: 16
Catering Services
DieselSupply
SurveillanceServices
Flow Station Vegetation Clearing
2 Tugboats
2 House boats
Daily and EmergencyOperations Boat
2 Barges
Production Support Staff
Communityemployment for
Dewatering
Surveillance during Barging Operations January to May 2017
Flow Station Operations
ELAND IN NIGERIA
Benefits to Communities
◆ CD Project Maintenance
- Provided Two 500kva Power Generating Sets, supply of fuel and O&M for Opuama and Tsekelewu Communities
◆ Skill Acquisition
- Trained 60 Youths in welding & Fabrication, Motor Maintenance and Repair, plus Fashion Designing and provided them with starter packs
◆ Rig Operations to date
- Supported communities for sporting and outdoor facilities, Dredging, Marine spread, escort and security equipment, engaged 42 and 7 Youths of Opuama/Tsekelewu and Olero Youths Respectively, other community labour and surveillance activities, Waste Disposal, Fumigation Services, Vegetation Clearing of Rig Site etc.
ELCREST HAS FULLY REENGAGED WITH THE COMMUNITIES THROUGH ITS ACTIVITIES
Eland Oil and Gas Capital Markets DaySlide: 17
ELAND IN NIGERIA
Benefits to Communities
◆ FTOs
- LACT Unit Otumara
- Supported communities for sporting and outdoor facilities for Ugbegungun, Ogborodo and DegheleCommunities
- Engaged 9 Youths
- One Boat
◆ Well Hardening of Opuama 1 & 3
- Supported communities for sporting and outdoor facilities
- Engaged 2 Youths
- Community boat supply
ELCREST HAS FULLY REENGAGED WITH THE COMMUNITIES THROUGH ITS ACTIVITIES
Eland Oil and Gas Capital Markets DaySlide: 18
COTTAGE HOSPITAL
Eland Oil and Gas Capital Markets DaySlide: 19
WATER BOREHOLE PROJECTPROJECT COMPLETED IN 2017
Eland Oil and Gas Capital Markets DaySlide: 20
Tsekelewu Potable Water Borehole Project. Completed in
2017
OPUAMA POTABLE WATER BOREHOLEPROJECT COMPLETED IN 2017
Eland Oil and Gas Capital Markets DaySlide: 21
Opuama Potable Water Borehole Project completed in 2017
CONCRETE JETTY AT OPUAMA ZION
◆ Jetty constructed at the request of the people to stimulate the local economy and open the hinterland for sustainable development.
◆ Project was constructed by Gemudok Global Services, an indigenous contractorfrom Opuama.
◆ During construction, 46 CommunityYouths were employed.
◆ Jetty currently in Use serving as an economic gateway to OpuamaCommunity since 2015
Eland Oil and Gas Capital Markets DaySlide: 22
TSEKELEWU ELEVATED CONCRETE WALKWAY
◆ This 400 metre elevated concrete Walkway completed in 2016, links the community by providing easy access to the homesteads scattered around the area
◆ Fredgbas an indigenous contractor from Tsekelewu executed the project . 65 Community Youths were employed during the construction phase
◆ Walkway currently in use facilitating trade and communication in the community
Eland Oil and Gas Capital Markets DaySlide: 23
MEDICAL OUTREACH AT UBIMA
◆ Registration and vital signs
◆ Gynecology consultation & Treatment of Pregnant Women
◆ Ophthalmology consultation and treatment –frames and lenses
◆ Dental – Tooth extraction
◆ Cervical examination for women
◆ General laboratory
◆ Pharmacy for dispensing drugs
◆ Children’s Medical Administration
◆ Distribution of treated mosquito nets
Eland Oil and Gas Capital Markets DaySlide: 24
ELAND IN NIGERIA
Forward Plan
◆ Medical outreach
Preparation is ongoing for an extensive medical outreach targeted at achieving the following
◆ Awareness on malaria for the communities
◆ Distribution of drugs and eye glasses to the community after required medical tests
◆ Medical tests and treatment for malaria, high blood pressure and water borne diseases
◆ Distribution of mosquito nets to the communities
◆ Distribution of wheel chairs to assist the physically challenged
◆ Continuous education of the community on the various illnesses and diseases common in the communities and the need to seek medical help as opposed to self medication
UBIMA
Eland Oil and Gas Capital Markets DaySlide: 25
Eland / Governance
ELAND OIL AND GAS CAPITAL MARKETS DAY
ELAND GOVERNANCE POLICY
Our guiding principles are to:
◆ Provide a safe, secure and healthy workplace
◆ Reduce the effect of our activities on the environment
◆ Conduct our business ethically, fairly and in a transparent manner
◆ Partner positively with our local Communities for host community development and social development
◆ Be an employer of first choice
Eland Oil and Gas Capital Markets DaySlide: 27
ELAND GOVERNANCE POLICY
◆ All employees sign (new and existing) undertake annual course on ethics and sign annual declaration
◆ Nigeria based Compliance Manager employed in 2017
◆ Supply Chain and legal Manager employed and based in Nigeria
◆ HSE Manager employed and based in Nigeria
◆ Related party policy in place
◆ Centralised gift register maintained within the group
◆ IT security system constantly reviewed
◆ Within our contracting strategy we have a supplier undertaking to our code of conduct
INCREASED EMPHASIS ON COMPLIANCE
Eland Oil and Gas Capital Markets DaySlide: 28
Summary & Conclusion
ELAND OIL AND GAS CAPITAL MARKETS DAY
SUMMARY & CONCLUSIONSUMMARY
Eland Oil and Gas Capital Markets DaySlide: 30
◆ Opportunities continue to abound in Nigeria
◆ Growing investor confidence in Nigeria’s business environment particularly the oil and gas sector
◆ Significant improvement of security in the Niger Delta
◆ The Nigerian Government is committed to providing the right environment for the growth of reserves and production
◆ Significant improvement in oil price a plus for investors
◆ Eland enjoying excellent relationship with government based on unique working model, its performance and quality delivery
SUMMARY & CONCLUSION
Eland is positioned to continue to take advantage of the improved environment which we predicted last year
CONCLUSION
Eland Oil and Gas Capital Markets DaySlide: 31
Back-up Slides
ELAND OIL AND GAS CAPITAL MARKETS DAY
EXAMPLES OF COMMUNITY CONSTRUCTION PROJECTOPUAMA JETTY
Eland Oil and Gas Capital Markets DaySlide: 33
EXAMPLES OF COMMUNITY CONSTRUCTION PROJECTTSEKELEWU WALKWAY
Eland Oil and Gas Capital Markets DaySlide: 34
HIERARCHY OF THE NIGERIAN OIL AND GAS INDUSTRY
Eland Oil and Gas Capital Markets DaySlide: 35
MIN. OF PETROLEUM
MIN. OF STATE FOR
PETROLEUM
DPR
NNPC
NPDC
◆ Under the current regime, the Ministry for Petroleum Resources is headed by the President and Commander in Chief as the Minister or Petroleum Resources
◆ Under the present administration, the Minister of State for Petroleum Resources manages the day to day business of the Ministry Resources. The Minister of State represents the Federal Government and supervises and oversees the affairs of the oil and gas industry. He reports to the Minister of Petroleum Resources.
◆ DPR is a department of the Ministry responsible for regulation of all entities involved in the oil and gas industry. The DPR reports directly to the Minister of State.
◆ NNPC is a state-owned corporation responsible for representing the government’s interests in the oil and gas industry.
◆ NPDC is a wholly owned subsidiary of NNPC responsible for upstream exploration and development of petroleum resources. NPDC is run by a Board of Directors and reports to NNPC.
DPR ORGANOGRAM
Eland Oil and Gas Capital Markets DaySlide: 36
Special Category
Major Category
General Category
DPR
Upstream Operations Monitoring and Regulation
Downstream Operations Monitoring and Regulation
Service ProvidersMonitoring and Regulation
NNPC (NPDC, NAPIMS, IDSL, JV, PSC)
IOC (JV, PSC, SC)
IO (SR,PSC,MF)
NNPC (Refineries, PPMC, NHC)
Major Marketers
Independent Marketers
THE NIGERIAN NATIONAL PETROLEUM COMPANY (NNPC)
◆ NNPC is the national oil company with subsidiaries across the broad energy value chain – exploration and production, gas development, refining, distribution, petrochemicals, engineering and commercial investments
◆ On the upstream end, the NNPC is the Joint Venture partner in to the International Oil Companies (and the post divestment acquirers), in the Royalty/PPT fiscal arrangement
- The State interest in the JV’s is between 55% and 60%
◆ Under the Production Sharing Contract, the NNPC serves as theconcessionaire for the State, while the IOC and/or indigenous companies act as contractors
- Receives the Profit Oil, on behalf of the State
CURRENT STRUCTURE
Eland Oil and Gas Capital Markets DaySlide: 37
NPDC
◆ The Nigerian Petroleum Development Company (NPDC) is a fully owned subsidiary of the Nigerian National Petroleum Corporation, focused on Oil and Gas Exploration and Production
◆ The entity was assigned NNPC’s interest in some of the IOC divested assets – OML 4, 38, 41, 26, 30, 40, 42
◆ Some of this asset awards are now serving as the test case for a long term plan of the Federal Government to pursue Incorporated Joint Ventures. Asset Management Teams were formed with new JV partners in 2016
◆ NPDC also is the concessionaire in the Governments Risk ServiceContracts with Agip and Sinopec
◆ The assets under the NPDC are expected to form part of the assetswhich will be transferred to the Nigerian Petroleum Company, when the Petroleum Industry Governance Bill is enacted
CURRENT ROLE AND POLICY FUTURE
Eland Oil and Gas Capital Markets DaySlide: 38
THANK YOU
For Further Information Contact:
2nd Floor20 North Audley StreetLondonW1K 6WE
Tel: +44 207 016 3180
Email: [email protected]
www.elandoilandgas.com
A Strong Track Record
FINANCE OVERVIEW
Slide: 1
FINANCIAL OVERVIEW
Highlights
◆ Positive operating cashflow
◆ Reducing cost per barrel
◆ Record EBITDA
◆ Improving balance sheet working capital
◆ Bank RBL re-profiled no payments due in 2018
◆ Borrowing Base at $70M
◆ Cash repatriated from Elcrestto Group servicing loan
◆ Self-funded Opuama 8
2018 QUARTER ONE PERFORMANCE
Eland Oil and Gas Capital Markets DaySlide: 2
Q1 2018 * VAR v's Q4 2017
Revenue 39.8 143% $m
Opex 8.26 -25% $/bbl
EBITDA 23.9 136% $m
Elcrest Liftings 598,622 109% bbls
Working Capital (Movement) 14.1 48% $m
Cash ** 18.0
* Q1 2018 unaudited financial metrics** Lifting receipt delayed from end March. Cash of $35.6 million following receipt on 3rd April
WORKING CAPITAL
Eland Oil and Gas Capital Markets DaySlide: 3
(60.000)
(50.000)
(40.000)
(30.000)
(20.000)
(10.000)
0.000
May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18
Net Current Liabilities
New wells on stream:◆ Nov-17 – Opuama 7
◆ Jan-18 –Opuama 8
Highlights
◆ May 17: Return to Forcados
◆ June 17: Equity raise of $19.5million (net $18.5m); Long to Short term debt included $4.3m
◆ Funding capex programme commenced Q3 2017
◆ As wells brought on stream significant working capital pick up; combination of increasing production and improving prices
◆ Working capital deficit improvement from $49million in May 2017 to $15m by March 2018
◆ Expected to be a net asset position during Q2 2018, ~$50m improvement since peak
EBITDA
Eland Oil and Gas Capital Markets DaySlide: 4
Highlights
◆ Shipping with restricted production volumes in Q2 – single well.
◆ Extremely quick tie-in of new wells enabling rapid EBITDA improvement
◆ EBITDA increasingly benefitting from increased production and improving commodity prices
◆ Further ramp up in production during 2018 will result in continued acceleration in EBITDA
◆ Cashflow generation being utilised for further growth opportunities
-7.4
6.7
10.1
23.9
-10.0
-5.0
0.0
5.0
10.0
15.0
20.0
25.0
30.0
Q217 Q317 Q417 Q118
EBITDA
0
6000
9000
12000
15000
18,000
3000
Avg. Daily Production
-3000
-6000
6.7
11.912.5
17.3
Opuama 7
NETBACKS & PAYBACKS
Eland Oil and Gas Capital Markets DaySlide: 5
Initial production at
7,500 bbl/d
Cost
$18.6mPayback in
90 Days
Opuama 8
First “new” well drilled since 1980 Completed in less than 2 months
Initial production at
6,500 bbl/d
Cost
$14mPayback in
65 Days
13.00 13.00 13.00
0.48
0.39 0.23
2.96
3.04 2.93
2017 SHIP LOGISTICS @22,000 PIPELINE @22,000 PIPELINE @30,000
Opuama Netbacks @ $65 Oil
Royalty Opex Transport Direct Taxes Corporate Costs Net Cash Flow
35.29 36.71 39.61
8.234.86
4.10
5.03 6.99 5.33
600
400
200
0
300
500
700
100
Netback per day (Eland WI) x $’000
USE OF FUNDS
Eland Oil and Gas Capital Markets DaySlide: 6
US
$ m
illi
on
14.8
17.2
30.5
7.1
18.5
11.3
24.5
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
Opuama-9 Opuama-10 Gbetiokun EarlyProduction System
Facilities
Gbetiokun-1 Gbetiokun-3 Ubima Other *
Use of Funds2018 Capex spend $000’s – Q2 onwards (Gross)
Adding4,000–6,000bopd of oil
Adding4,000–6,000bopd of oil
Adding8,000 bopd
of oil
Adding7,000 bopd
of oil
Significant conversion of
contingent resources into
reserves
* Includes licence renewal, Opuama flowstation upgrades, dewatering upgrades and other
OIL AND GAS AIMG&A COSTS COMPARISON
Eland Oil and Gas Capital Markets DaySlide: 7
Peer group comprises: Amerisur, Bowleven, Diversified O&G, Faroe Petroleum, Genel Energy, Gulf Keystone, Lekoil, Ophir Energy, President Energy, Providence Resources, Rockhopper Expl, San Leon, Savannah Petroleum, SDX Energy, Serica, Sound Energy and Victoria O&G
0
2
4
6
8
10
12
14
16
18
20
Eland
Annual G&A Cost ($US millions)
4.5
CONSERVATIVE CAPITAL STRUCTURE
Eland Oil and Gas Capital Markets DaySlide: 8
Low Gearing – Current Facility
◆ Conservative capital structure: acquisition development work and production restart supported by equity
◆ Debt proportion to increase with production an development (inclusion of producing reserves into the debt facilities)
◆ Low gearing < 10%
Key Debt Parameters
◆ Reserves Based Lending Facility
◆ BB re-determined as at March 2018
◆ 2 Repayments Q1 & Q2 2019 max $17.5m each
◆ Facility ends June 2019
Current Facility Gearing At year end Current With Incr. Debt
E=market value of the firm’s equity $214 $309 $309
D= market value of the firm’s debt $27 $27 $70
V=E + D $241 $336 $379
E/V= percentage of financing that is equity 88.8% 91.9% 81.5%
D/V= percentage of financing that is debt 11.2% 8.1% 18.5%
AMOUNT $27MM drawn under a $35MM commitment - $70MM BBA
PRODUCTION Opuama 1, 3, 7, 8 (2P)
PRICE DECK $53 flat (2017-19)
UPSIDE Price deck; incremental wells & production; export performace
REFINANCING
◆ Strong balance sheet and earnings allowing us to increase leverage through development phase
◆ Ensure Debt/EBITDA and Debt/Equity ratios are below mandated levels
◆ Opportunity to diversify funding source
Eland Oil and Gas Capital Markets DaySlide: 9
Timeline & Indicative Headline
Early H2 2018
$150-$200m Headline
3-5 Year Tenor
Ability to Tranche Funds drawdowns
Debt/Equity<30-35% and
Debt/EBITDA <1.5x
INTERCOMPANY DEBT
Eland Oil and Gas Capital Markets DaySlide: 10
Intercompany Loans
◆ Borrower: Elcrest (Starcrest 55%, Eland 45%)
◆ Amount outstanding 31.3.18: ~$425M
◆ Purpose: Fund acquisition and development costs of OML40
◆ Repayment: 100% of Elcrest free cash flow to Westport until repaid
◆ Interest: 12% from 1.7.2018
◆ Elcrest Bank Account within Standard Chartered facility and swept to London
◆ Eland retains Financial control until loan repaid in full
ELAND OIL & GAS PLC
ELCREST EXPLORATION AND PRODUCTION NIGERIA
LIMITED
Existing Lender
WESTPORT OIL LIMITED
TAX SHIELDS
Pioneer Status
◆ Period
- 5-year from April 2014
- 3-year to April 2017
- 1-year x 2 to April 2019 (reconfirmation issued April 2017)
◆ Incentive
- Tax exemption for indigenous companies during Pioneer Period
Tax Loss Pool
◆ Tax Shield
- >$500m of unutilised tax losses as at FYE17 (per submitted tax reports)
◆ Effective Tax Rate (Management Estimate*)
- 0% during pioneer period
- 35-40% following 2 years (utilisation of tax losses & CA’s)
- 30-35% following 3 years (utilisation of pre-prod loss & CA’s)
- Headline rate 85% (assuming no further investment/tax shield)
ELCREST TAX STATUS
Eland Oil and Gas Capital Markets DaySlide: 11
Existing Tax-balances
AS AT FYE17 AMORT
Capital Allowances 20% p.a.
Pre-production losses (IT April 2014) 20% p.a.
Post production losses (May 2014 TD) 100%
Mgnt estimated utilisation year 1 c. 50%
Taxable losses $295m
Capital Allowances $208m
* Based on NSAI CPR model financials 31/12/2017 incorporating known tax losses and allowances @ $66.54 oil
HEDGING
Reduce uncertainty where possible - introduction of active hedging programme
◆ Policy 30-50% of future oil volumes on a rolling 6 month basis
◆ Minimum required under existing lender agreement is 0%
◆ Use of 'put' options to allow for full upside exposure
Eland Oil and Gas Capital Markets DaySlide: 12
$65/bbl50%
Floor PriceProduction hedged Scenarios:
◆ High oil price: exposed to full upside for minimal premium
◆ Low oil price: 50% at $65, 50% at market rate
Outcome
◆ Protects EBITDA and work programme delivery
CONCLUSION
◆ Benefitting from growing production and improving oil prices
◆ Further increases in production as new wells brought on stream strengthening financials further
◆ Strong Quarter One financials underpinning our expectations for 2018
◆ Low cost, high margin netback with continued investment in Opuama wells delivering extremely fast payback
◆ We have repaired working capital deficit
◆ Operating cashflow now directed to underpin continued investment in OML 40 and evaluation of Ubima
◆ Ability to refinance from a position of strength, $150m of debt would be serviceable at the lowest Debt/EBITDA levels of our peer group
◆ Pioneer period continues through 2019 with tax losses and capital allowances shielding our position further
◆ Hedged position in place to take advantage of favourable commodity pricing with a put floor through December 2018
Eland Oil and Gas Capital Markets DaySlide: 13
Operations and Development Overview
ELAND OIL AND GAS CAPITAL MARKETS DAY
Slide: 1
ACHIEVEMENTS AND MEDIUM TERM WORK PROGRAMME
◆ Overview of assets
◆ Production history since acquisition, result workovers and infill drilling
◆ Work Programme
◆ Opuama: ongoing infill drilling campaign
◆ Exploration potential near Opuama, the Amobe prospect
◆ Opuama: Flow-Station production capacity upgrade, de-watering pilot and water re-injection
◆ Export pipeline, LACT unit, alternative export route
◆ New Field Developments- Gbetiokun Early Production System and Full Field Development
- Ubima Production Test
◆ Reserves and Resources
Eland Oil and Gas Capital Markets DaySlide: 2
ELAND OIL AND GAS PLC
Eland Oil and Gas Capital Markets DaySlide: 3
OML 40: Fields, discoveries, prospects and leads UBIMA
Opuama:Results Workover Programme
ELAND OIL AND GAS CAPITAL MARKETS DAY
Slide: 4
OPUAMA-1 RECOMPLETIONRE-ENTRY IN NOVEMBER 2015
Eland Oil and Gas Capital Markets DaySlide: 5
Plug set in LS to isolate E2000
LS perforated using 2” guns in D5000 (10 feet interval)
Plugged-off E2000, perforated Long String to access D5000.
Short String and Long String producing D5000
Production from well increasedby ~1,400 bopd
Cost: < $1 million
OPUAMA-3 RE-COMPLETIONWELL RE-ENTRY IN APRIL 2016
Eland Oil and Gas Capital Markets DaySlide: 6
Production test 10,000 bopd at zero water-cut
Cost: $2 million
Punched hole in LS and spotted cement across D5000 perforations, shutting off water
Perforated 28 feet of D1000 Upper in LS (orientated perforating).
Perforated 20 feet interval in D2000 in SS orientated perforating
ELAND OIL AND GAS CAPITAL MARKETS DAY
Slide: 7
Drilling: Opuama-7 ST
OPUAMA-7
◆ Well drilled in 1980 and completed in D2000 using cased hole gravel pack.
◆ Gravel pack failed in 1990 after production of only 2.4 MMstb.
SUMMARY
Eland Oil and Gas Capital Markets DaySlide: 8
OPUAMA-7ST: RESULTS
Eland Oil and Gas Capital Markets DaySlide: 9
OPUAMA 7 ST MONO BORE DRAFT RE-COMPLETION SCHEMATIC REV 2
D2000 (SAND)
ELCREST OPUAMA PROD
OPUAMA 7 ST MONO BORE REV 2DRAFT COMPLETION STATUS
AUTHOR D&C DEPT Date: JUNE. 2017LAST REVIEW Date: 19-10-2017ELECTRONIC VERSION Blessing PeppleCHECKED Sign: Hilary Azoba
ITEM TYPE SIZE PSI REMARK
XMAS TREE CAMERON 11" x 4-1/16" API 5000 PSI WP New
SURFACE SAFETY VALVE CAMERON TBC API 5000 PSI WP New
TUBING HEAD SPOOL CAMERON 11" TOP x 11" BOTTOM 5000 x 5000 PSI New
CASING HEAD Housing CAMERON 10-3/4" x 11" API 3000 PSI WP Existing
CONTROL UNIT CAMERON TBC 5000 x 5000 PSI Not Installed
BEAN BOX CAMERON TBC API 5000 PSI WP Not Intsalled
1/4” Stainless Control Line
4-1/2” x 3.813“ HCS Box x Pin Baker Self Equalizing TRSCSSSSV
4-1/2” Vam Ace Box x Box Hanger
4-1/2” 12.75ppf HCS Box x Pin Gas Lift Mandrels
4-1/2” 12.60ppf HCS Box x Pin Flow Coupling
4-1/2” x 3.81” Vam Top Box x Pin Baker ”CMU” Sliding Sleeve w/ Otis ”X” Profile Shift Up To Open
7” x 5” x 4-1/2” WFD Liner Hanger/Packer (TOL) 5494’ – 250FT O/L
4-1/2” 12.60ppf Vam Top Box Up WFD Float SHOE 7615’
4-1/2” 12.75ppf HCS Box x Pin Tubing
WFD 5” Vam Top Box Up Locator Tie Back Seal Assembly
1522ft
2730ft
3698ft
7402’-7422’;7357’-7387’;7348’-7353’;7338’-7344’
4-1/2” 12.75ppf Vam Ace Pin X HCS Pin X/O Nipple
7” SHOE 5744’
4-1/2” 12.60ppf HCS Box x Pin Flow Coupling
4-1/2” HCS Box X 5” 18ppf Vam Top Pin X/O Sub
4-1/2” x 3.812” HCS Box x Pin Otis “X” Profile Nipple
4-1/2” 12.75ppf HCS Box X Vam Top Pin X/O Sub
4-1/2” 12.75ppf Vam Top Box X HCS Pin X/O Sub
4-1/2” 12.60ppf Vam Top Box x Pin WFD F/C
4-1/2” 12.60ppf Vam Top Box x Pin WFD L/C
4-1/2” 12.60ppf Vam Top Box x Pin Cemented Liner
7620’ TD
6.000” Open Hole
5” 18ppf Vam Top Box x 4-1/2” 12.6ppf Vam Top Pin X/O Sub
OPUAMA-7ST: RESULTS
Eland Oil and Gas Capital Markets DaySlide: 10
Opuma-7ST Reservoir data
Production 7,500 bopdMono-bore Completion D2000
Cost: $14 million
◆ Good quality oil bearing D1000 and D2000 sands encountered
◆ D1000 and D2000 reservoirs thinner than prognosed – likely caused by small scale faulting not imaged on seismic
Reservoir Gross Net NTG Phie Swe
D1000 21.49 20.51 0.954 0.251 0.433
D2000 108.1 98.54 0.912 0.245 0.256
Reservoir Summary
Reservoir Gross Net NTG Phie Swe
D1000 21.49 11.78 0.548 0.272 0.332
D2000 108.1 84.29 0.78 0.252 0.2
Pay Summary
Summary Phie Swe Vcl
D1000 0.125 - 0.4
D2000 0.125 0.5 0.4
Cut-offs
ELAND OIL AND GAS CAPITAL MARKETS DAY
Slide: 11
Drilling: Opuama-8 (dual string)
OPUAMA-8: RESULTS
◆ Encountered D3500, D4000 and D5000 but in previously unrecognised fault terrace -deep to prognosis.
◆ Dual completion with D3500 on SS; D4000 and D5000 on LS.
Initial flow rates
◆ D3500 - 3,500 bopd on 40/64” choke
◆ D4000 – 2,800 bopd on 36/64” choke
◆ D5000 - 3,300 bopd on 40/64” choke
◆ Currently producing at about 6,000 bopdfrom D3,500 (SS) and D4000 (LS)
Eland Oil and Gas Capital Markets DaySlide: 12
OPUAMA-8: RESULTS
Eland Oil and Gas Capital Markets DaySlide: 13
Current production about 6,000 bopd fromD3,500 (SS) and D4,000 (LS) at zero water-cut
Cost: $18.6 million
OPUAMA-8 DUAL AS RUN COMPLETION DRAWING
ELCREST E&P Opuama PROD
OPUAMA 8 AS RUN COMPLETION STATUS
AUTHOR D&C DEPT Date: January, 201LAST REVIEW As Run Re 01 Date: 0 -01-1ELECTRONIC VERSION ary So erallCHECKED Sign:
D4000 (SAND)
ITEM TYPE SIZE PSI REMARK
XMAS TREE CAMERON 11" x 3-1/8" x 3-1/8" API 5000 PSI WP New
SURFACE SAFETY VALVE CAMERON 3-1/8" API 5000 PSI WP New
TUBING HEAD SPOOL CAMERON 11" TOP x 13-5/8" BOTTOM 5000 x 5000 PSI New
CASING HEAD SPOOL CAMERON 13-5/8" API 5000 PSI WP New
CONTROL UNIT CAMERON 3-1/8" x 3-1/8" 5000 x 5000 PSI Not Installed
BEAN BOX CAMERON 3-1/8" x 3-1/8" API 5000 PSI WP Not Intsalled
¼” x 0.49” Incoloy Control Line
204’ 3-1/2” x 2.812” HCS Box x Pin TRSCSSSSV
SPILT HANGER 3-1/2” 9.3ppf HCS Box x Box SPILT HANGER 3-1/2” 9.3ppf HCS Box x Box
3-1/2” 9.3ppf HCS Box L-80 WEGS 8408’
8880’ 3-1/2” 9.3ppf HCS Box x Pin BLAST JT TOP
9-5/8” 47ppf x 3-1/2” 9.3ppf HCS Baker “HS” Single String Packer 8799’
TD 9461’
D5000 (SAND)
3-1/2” x 2.75" OTIS ‘X’ NIPPLE w/3-1/2” 9.3ppf HCS Box x Pin 8390'
D3500 (SAND)
9-5/8” x 3-1/2“ 9.3ppf Baker “GT” DUAL PACKER 8380'
3-1/2” 9.3ppf HCS Box Up L-80 WEGS 9051’
8302’ 3-1/2” x 2.812” HCS Box x Pin Otis ”X” SSD Shift Up To Open
3-1/2” 9.3ppf HCS Box x Pin SLIM HOLE GLM
8490’-8559’; 8604’-8609’ 8631’-8648’
8897.5’– 8914’
9246’– 9266’
3-1/2” x 2.75” OTIS ‘X’ Nipple 9044' w/ 3-1/2” 9.3ppf HCS Box x Pin
3-1/2” 9.3ppf HCS Box x Pin Hydro Trip Pressure Sub 8401'
6-5/8” BTC Pin x Pin x 20ft MOOE
3-1/2” 9.3ppf HCS Box x Pin Telescoping Tubing Swivel Sub
3-1/2” x 2.812” HCS Box x Pin Otis ”X” SSD Shift Up To Open 8876’
6-5/8” BTC Box x 3-1/2” HCS Pin Cross Over Sub
3-1/2” 9.3ppf HCS Box x Pin Telescoping Tubing Swivel Sub
3-1/2” x 2.812” HCS Box x Pin TRSCSSSSV 172’
3-1/2” Vam Ace Pin x 3-1/2” HCS Pin Cross Over Nipple
3-1/2” 9.3ppf HCS Box x Pin F/C
3-1/2” x 2.812” HCS Box x Pin 8335’ Otis ”X” SSD Shift Up To Open
8408’ 3-1/2” x 2.812” HCS Box x Pin Otis ”X” SSD Shift Up To Open
3-1/2” x 2.75” OTIS ‘XN’ Nipple w/ 3-1/2” 9.3ppf HCS Box x Pin 8406'
3-1/2” 9.3ppf HCS Box x Pin BLAST JT BTM 8651’
3-1/2” x 2.75” OTIS ‘XN’ Nipple 9049' w/ 3-1/2” 9.3ppf HCS Box x Pin
3-1/2” 9.3ppf HCS Box x Pin Hydro Trip Pressure Sub 9028'
3-1/2” 9.3ppf HCS Box x Pin Perforated Pup Joint Assy
3-1/2” 9.3ppf HCS Box x Pin Perforated Pup Joint Assy
9-5/8” x 3-1/2“ 9.3ppf DUAL PACKER 8380’
1708’
3053’
3903’
1728’ 3103’ 4157’
3-1/2” 9.3ppf HCS Box x Pin BLAST JT TOP 8475’
9-5/8” x 6” Baker “SC-1” Seal BORE RETRIEVABLE PACKER 9014’
9-5/8” 47ppf Casing Shoe 9451’
3-1/2” 9.3ppf HCS Box x Pin BLAST JT BTM 8919’
3-1/2” x 2.81” OTIS ‘X’ NIPPLE w/3-1/2” 9.3ppf HCS Box x Pin 9022'
9-5/8” 47ppf Casing F/C 9367’
RESULTS WORKOVERS AND DRILLING
Eland Oil and Gas Capital Markets DaySlide: 14
CURRENT PRODUCTION 22,500 BOPD GROSS
Opuama 1SS (D5000)7%
Opuama 1LS (D5000)5%
Opuama 3SS (D2000)16%
Opuama 3LS (D1000)22%Opuama 7ST (D2000)
22%
Opuama 8SS (D3500)16%
Opuama 8LS (D5000)Shut-in
Opuama 8LS (D4000)12%
Opuama Allocated Oil Production by Well April-18 - Opuama Oil Production by well
Opuama-9 Current
ELAND OIL AND GAS CAPITAL MARKETS DAY
OPUAMA-9: PROGNOSIS
◆ Primary target: D1000
◆ Secondary target: D2000 (if un-swept)
◆ Exploration objective: test for presence of oil in shallow‘C’ reservoirs
◆ Appraisal objective: determine present depths of gas-oil and oil-water contacts in E2000.
Eland Oil and Gas Capital Markets DaySlide: 16
Opuama-8 Opuama-9
D1000
D2000
D3500
D4000
D5000
E2000
E1000
IFF1
SBF
NBF
IFF3IFF2IFF4
?
?
Oil
Opuama Canyon Shale
OPUAMA-9: RESULTS TO DATE
◆ ‘C’ reservoirs about 70 feet deep to prognosis and water-bearing (residual oil only).
◆ D1000 reservoir 73 feet deep to prognosis but sands good quality and oil-bearing.
◆ D2000 reservoir 44 feet deep to prognosis but sands good quality and upper sands oil-bearing.
◆ Oil-water contact in D2000.4, at similar depth (about 7,385 feet TVDSS) to “original” oil-water contact.
12¼” HOLE SECTION
Eland Oil and Gas Capital Markets DaySlide: 17
OPUAMA-9: RESULTS TO DATE 12¼” HOLE SECTION
Eland Oil and Gas Capital Markets DaySlide: 18
D1000
Net to gross 88%
Porosity 22.7%
Oil saturation 82%
Plan to perforate 30 feet
(28 feet in Opuama-3)
D2000.6 and D2000.5
Net to gross 73%
Porosity 20%
Oil saturation 77%
Plan to perforate 32 feet
(20 feet in Opuama-3)
Indicative reservoir parameters
Eland Oil and Gas Capital Markets DaySlide: 19 Eland Oil and Gas Capital Markets DaySlide: 19
OML-40 Drilling Programme
ELAND OIL AND GAS CAPITAL MARKETS DAY
OML 40: 2018-20 WORK PROGRAMME
Eland Oil and Gas Capital Markets DaySlide: 21
LegendDevelopment Well
Workover Well
Exploration Well
Mob/De-mob
FEED
Detailed Engineering/Procurement
Facilities
Pre-FEED
TECHNICAL WORK PROGRAMQ 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4
2018 2019 2020
OML 40 Development Opu-9 Gbe-1 Gbe-6 Abia-3 Abia-4Gbe-8Gbe-4
Opu-10Opu-11 Opu-13
Gbe-3 Gbe-5Amo-1 Gbe-7 Abia-2 Dudu-1Opu-12
OML 40 DrillingOpu-5 Abia-1
OML 40 Workover
Opuama FacilitiesProduced Water Re-entry Facilities
Opuama Flow-station Capacity Upgrade
Dredging (Opuama 5 Access Way)
Electrification Project
Gbetiokun FacilitiesPIpeline Surveys + ROW Access
Land Acquistion
EIA
Dredging (Gbetiokun 1 Access Way)
Clearing and Destumping (3-8 Slots + Barge + EPF)
Dreging (3-8 Slots + Barge + EPF)
Flowlines
EPF
BRVS
Storage & Shuttle Vessel
Shuttling Operation
Pipeline (Gbetiokun - Adagbassa M/F)
Production Module Installation
Abia-5
Rig Upgrade
2018 DRILLING PROGRAMME
OML 40 - Opuama
◆ Complete Opuama-9 end May (D1000 and D2000 reservoirs); drill and complete Opuama-10 end July (D1000 and D5000 reservoirs)
OML 40 - Gbetiokun
◆ Gbetiokun EPS (re-enter and complete Gbetiokun-1; drill and complete Gbetiokun-3 by Q3 2018; commence production at 15,000 bopd gross using leased floating facilities with oil export by ship along the Benin River to the Benin River Valve Station, prior to injection into the pipeline to Forcados).
Eland Oil and Gas Capital Markets DaySlide: 22
2019 DRILLING PROGRAMME
OML 40 – Opuama
◆ Drill and complete Opuama-11 to -13, targeting a) the E2000 oil leg and b) the D3500 and D4000 reservoirs near Opuama-10.
OML 40 - Amobe
◆ Drill Amobe-1 exploration well.
OML 40 – Gbetiokun
◆ Full field development (drill and complete Gbetiokun-4 to -8; install purchased floating production facilities (45,000 bpd capacity) and oil export line to Adagbassa Manifold).
Eland Oil and Gas Capital Markets DaySlide: 23
Opuama-10 Prognosis
ELAND OIL AND GAS CAPITAL MARKETS DAY
OPUAMA-10: PROGNOSIS
◆ Located on structural high to north of Opuama-7ST.
◆ Primary targets are D1000 and D5000 (dual completion)
◆ Secondary targets are D3500 and D4000: a second well at this location may be required to produce these reservoirs (2019 drilling)
Eland Oil and Gas Capital Markets DaySlide: 25
Opuama Exploration
ELAND OIL AND GAS CAPITAL MARKETS DAY
AMOBELOCATED ONLY 6KM FROM OPUAMA
Eland Oil and Gas Capital Markets DaySlide: 27
◆ Nine exploration wells; eight discoveries.
◆ Two fields and three significant discoveries
◆ 371 sq.km 3D seismic on block
Opuama Field
~ 6 km from Opuama
AmobeProspect
REGIONAL DEPTH CROSS SECTIONILLUSTRATING HYDROCARBON MIGRATION PATHWAYS
Eland Oil and Gas Capital Markets DaySlide: 28
Base Opuama Channel Cut
Akata Fm
Depth m SS
Opuekeba Amobe
OML 40
Opuama Panel
~100o C
~150o C
Approx. Peak Oil
and Onset
Gas
Conceptual HC Migration paths
Agbada Fm
Vertical to horizontal ratio – 1:1
AgbadaFm
Akata Fm
AMOBE PROSPECT
Eland Oil and Gas Capital Markets DaySlide: 29
Amobe-1
D5000
C3000
D3500
D2000
D1000
C4000
D2500
D2000 DEPTH STRUCTURE
Eland Oil and Gas Capital Markets DaySlide: 30
Prospect limited 3 Way DipMax Column: ~350ftMax Area 6.4 sq.kmOML40
AMOBE
OPUAMA
D5000 DEPTH STRUCTURE
Eland Oil and Gas Capital Markets DaySlide: 31
Prospect limited 3 Way DipMax Column ~370ft.Max Area 6.6 sq.km
OPUAMA
OML40
AMOBE
Prospect limited 3 Way DipMax column ~490ft.Max Area ~7 sq.km.
OPUAMA
OML40
AMOBE
E2000 DEPTH STRUCTURE
Eland Oil and Gas Capital Markets DaySlide: 32
AMOBE PROSPECT
◆ Large, low-risk, prospect only 6km from Opuama Flow-Station
◆ Similar to Opuama structurally and on adjoining fault terrace
◆ NSAI: 15 – 78 – 340 MMstb with PoS of 42%
◆ Eland: 15 – 74 – 189 MMstb with PoS of 61%
◆ Plan to drill in 2019
Eland Oil and Gas Capital Markets DaySlide: 33
0
50
100
150
200
250
300
350
400
LOW MEDIUM HIGH
PR
OS
PE
CT
IVE
RE
SO
UR
CE
S (
MM
bb
l)
Amobe ProspectRecoverable Resources (NSAI)
OML 40: Installation of LACT Unit
ELAND OIL AND GAS CAPITAL MARKETS DAY
OML 40 LACT UNIT
◆ A LACT (Lease Automatic Custody Transfer) Unit has been installed at Otumara and is being commissioned
◆ The LACT Unit will automatically fiscally measure the quality and quantity of crude that is transferred from Elcrest to SPDC’s custody at the Otumara Manifold
◆ Its installation is a requirement of both the DPR and SPDC and is expected to reduce loss allocations to below 5% downstream of the custody transfer point
Eland Oil and Gas Capital Markets DaySlide: 35
LACT UNIT ASSOCIATED FACILITIESLACT UNIT SKID AND CONTROL ROOM – BEFORE INSTALLATION
Eland Oil and Gas Capital Markets DaySlide: 36
OML 40 LACT UNITOTUMARA LACT UNIT – TIE-IN TO SPDC MANIFOLD
Eland Oil and Gas Capital Markets DaySlide: 37
Alternative Export Route
ELAND OIL AND GAS CAPITAL MARKETS DAY
ALTERNATE EVACUATION ROUTE
BENIN RIVER VALVE STATION(central hub)
◆ Mooring system installed
◆ Export option (during ForcadosOil Terminal shut-in periods)
◆ Injection option (Gbetiokun oil and optional third parties)
SHIPPING
Eland Oil and Gas Capital Markets DaySlide: 39
Mayfair- Shuttle Vessel
The Hinde- Storage vessel
FPSO
Benin River Mooring System
BENIN RIVER MOORING SYSTEMWESTMINSTER ALONGSIDE HINDE STORAGE VESSEL AT THE BENIN RIVER TIE-IN POINT
Eland Oil and Gas Capital Markets DaySlide: 40
The Westminster
The Hinde
Hinde storage vessel
BENIN RIVER VALVE STATION
◆ Skid-mounted crude oil export pumps at Benin River location for storage of Opuama crude and injection of Gbetiokun into trunk-line to Otumara – Forcados
OIL STORAGE AND INJECTION
Eland Oil and Gas Capital Markets DaySlide: 41
BRVSCRUDE OIL STORAGE BARGE
OPUAMA – OTUMARA TRUNKLINE
OIL EXPORT PUMPS
OIL EXPORT PUMPS SKID
INJECTION POINT
PD FLOWMETER
$3.8 MMfacilities capex
Gbetiokun
ELAND OIL AND GAS CAPITAL MARKETS DAY
OML 40 GBETIOKUN FIELD
Eland Oil and Gas Capital Markets DaySlide: 43
Gbetiokun
GBETIOKUN
◆ Areally confined, un-faulted, structure located in south east of OML 40.
◆ Discovered 1987 and appraised 1991. 3D acquired 1995 and reprocessed 1999 and 2008.
◆ Oil in twenty stacked reservoir sands.
◆ Excellent quality reservoirs.
◆ Light, under-saturated, oil in deeper reservoirs (D8.1 to E7.0)
◆ Quality of oil (Contingent Resources) in shallower D5.0 and D7.3 reservoirs unknown – requires appraisal.
◆ Initial phase of development produces the deeper reservoirs (D8.1 to E7.0)
Eland Oil and Gas Capital Markets DaySlide: 44
D5.0
D7.3
D8.9/D9.0/D9.1
E2.0-E7.0
GBETIOKUNRESERVES ESTIMATES
Eland Oil and Gas Capital Markets DaySlide: 45
CASE STOIIP (MMstb) Recoverable (MMstb)
1P 84 35.0
2P 124 56.0
3P 149 75.2
CASE STOIIP (MMstb) Recoverable (MMstb)
1P 103 21.5
2P 114 38.0
3P 130 53.8
Eland, May 2017 NSAI, 31 December 2017
Gbetiokun: Early Production System
ELAND OIL AND GAS CAPITAL MARKETS DAY
GBETIOKUN-1 EPS
◆ Re-enter Gbetiokun-1, drill out cement, and complete, producing E2.0 and E6.0 reservoirs (dual completion)
◆ Drill and complete Gbetiokun-3, producing D9.0 and E7.0 reservoirs (dual completion)
◆ Install floating facilities with 15,000 bpd capacity. Initial export by ship to the Benin River Valve Station.
◆ Eland forecasts an initial facilities-constrained production rate of 15,000 bopd from Gbetiokun-1 and Gbetiokun-3.
Eland Oil and Gas Capital Markets DaySlide: 47
GBETIOKUN-1
◆ Target reservoirs: E2.0 and E6.0
◆ Close to crestal position in both reservoirs
Activities
◆ Drill out cement plug to gain access to target E2.0 and E6.0 reservoirs
◆ Perforate target sands
◆ Dual string completion
Eland Oil and Gas Capital Markets DaySlide: 48
GBETIOKUN-3
Eland Oil and Gas Capital Markets DaySlide: 49
◆ Crestal position in all reservoirs
◆ Dual string completion in D9.0 and E7.0
Activities
◆ Drill build and drop well (max 14 deg)
◆ 12 ¼” through reservoirs to 10,400ft MD
◆ LWD suite + pressures/samples +RST RSCT
◆ Perforate target sands
◆ Dual string completion
WNW ESE
GBETIOKUN EPS
Gbetiokun Field:
◆ Barge-mounted Production facility, nominal processing capacity 15kb/d, complete with process/master control units and utilities (power, air, HVAC, etc.)
◆ Temporary crude oil storage (barge) facility, 30 – 40,000 bbls capacity,
◆ High-volume, low pressure crude oil transfer/loading pumps (temporary, leased)
◆ Crude-oil transfer pipeline from storage barge location to shuttle vessels loading jetty
Benin River Valve Station:
◆ Crude oil storage (barge) facility; about100,000 bbls capacity
◆ Crude-oil export pumps for injection from storagefacility into the Opuama-Otumara Trunk line.
FACILITIES
Eland Oil and Gas Capital Markets DaySlide: 50
INJECTION POINT AT BENIN RIVER VALVE
STATION
GBETIOKUN FACILITIES
OPUAMA – OTUMARA M/F TRUNKLINE
Gbetiokun:Development Deep Reservoirs
ELAND OIL AND GAS CAPITAL MARKETS DAY
EPS AND PHASE I DEVELOPMENT WELLSDEEP RESERVOIRS
Eland Oil and Gas Capital Markets DaySlide: 52
Phase I Development
GBET-A
GBET-B
GBET-C
GBET-D
GBET-EGBET-F
GBET-G
GBET-HGBET-L
D7.3
D7.4 (Gas)
D8.1
D8.9-D9.0-D9.1
E2.0-E3.0-E4.0-E5.0
E6.0-E6.5-E7.0-E8.0
GBETIOKUNDEVELOPMENT WELLS BY PHASE
Eland Oil and Gas Capital Markets DaySlide: 53
Gbetiokun Field Proposed Development Wells
GBETIOKUN FFDOIL PIPELINE TO ADAGBASSA MANIFOLD
Eland Oil and Gas Capital Markets DaySlide: 54
Adagbassa M/F
Opuama M/F
Opuama Flow Station
Field Tie-In M/F
Abiala M/F
Gbetiokun Flow Station
GBETIOKUNEPS AND PHASE I PRODUCTION PROFILE
Eland Oil and Gas Capital Markets DaySlide: 55
Ubima:Production Testing June 2018
ELAND OIL AND GAS CAPITAL MARKETS DAY
UBIMA
◆ Located in centre of delta, north of Port Harcourt.Dry land.
◆ Relatively low relief rollover structure developed against east-west trending, down to the south listricfault.
◆ Discovered by Shell (Ubima-1) in 1963. Hydrocarbons in six reservoirs between 4,800 and 9,000 feet.
◆ Appraised by three wells drilled on 2D seismic in 1965, 1967 and 1980. (Essentially a single well discovery.)
◆ 3D seismic acquired in 1997.
◆ Awarded to All Grace in December 2013.
◆ Eland farmed-in (40%) as equity partner and ‘Technical and Financial Partner’ in August 2014.
Eland Oil and Gas Capital Markets DaySlide: 57
UBIMA-1
◆ The Ubima-1 well is suspended.
◆ It found light oil in the relatively deep F7000 reservoir, oil in the intermediate depth E1000 and E2000 reservoirs and oil in the relatively shallow D1000 reservoirs.
◆ Uncertainties: - STOIIP in D1000 reservoirs (ODT only - depth of OWCs
not known).
- Oil properties, especially the D1.0 reservoirs.
Objectives:
◆ Ubima-1 re-entry and production test three reservoirs
◆ Convert Contingent Resources to Reserves (substantial upside, especially D1.0 reservoirs)
Eland Oil and Gas Capital Markets DaySlide: 58
UBIMA-1
◆ Eland will re-enter Ubima-1, drill out cement, and install dual completion, testing F7000 and ‘E’ reservoirs on LS; D1000 reservoirs on SS.
◆ AGR-TRACS has contingent resources (2C) of 31.2 MMstb gross from full field development (four horizontal wells draining D1000 and ‘E’ reservoirs).
◆ Development could act as regional hub.
◆ Exploration potential to east.
PRODUCTION TESTING
Eland Oil and Gas Capital Markets DaySlide: 59
LS2. Open sliding sleeve to produceE1/E2 (IGP)
1. Produce F7 reservoir before isolating with plug
SSProduce D1 reservoir (IGP)
UBIMA-1CIVILS WORK (ACCESS ROAD AND WELLSITE)
Eland Oil and Gas Capital Markets DaySlide: 60
Reserves & Resources
ELAND OIL AND GAS CAPITAL MARKETS DAY
ELAND OIL AND GAS PLC
Eland Oil and Gas Capital Markets DaySlide: 62
Reserves, Contingent Resources and Prospective Resources, Gross
0
20
40
60
80
100
120
140
1P 2P 3P
CPR Gross Reserves (MMstb)December 2017
Opuama Gbetiokun Ubima
40.4
85.8
121.1
48
75
115
0
20
40
60
80
100
120
140
1C 2C 3C
OML 40 Unrisked Contingent Resources (MMstb)(Material STOIIP On Block – EOG Aug 2015)
48
231
539
0
100
200
300
400
500
600
Low Mean High
OML 40 Risked Prospective Resources (MMstb)(Material STOIIP On Block – EOG Aug 2015)
THANK YOU
For Further Information Contact:
2nd Floor20 North Audley StreetLondonW1K 6WE
Tel: +44 207 016 3180
Email: [email protected]
www.elandoilandgas.com
Organisational Growth
ELAND OVERVIEW
ELAND’S ORGANISATION JOURNEY
◆ This time last year minimal human resources. However, the Company was fully planned for growth
◆ For more than five years the company’s organisation model has focused on strict cost control and overhead discipline
◆ It is this focus of low cost, project delivery and partner relationships that, in part, has established the reputation we enjoy today
◆ In short, the Eland team has overperformed
A LOOK BACK
Eland Oil and Gas Capital Markets DaySlide: 2
ELAND’S ORGANISATION JOURNEY
◆ The production goals we have set in 2018 and beyond, combined with the new opportunities that we see in the sector and moving towards a two rig operation requires a step change in our organisation;
- Investment in experience drilling personnel and operations staff to support optimize performance in the coming two year programme
- Adding production operations capacity in Nigeria including Production Maintenance Planning and Project Mgt
- Building on our Geoscience capability and fostering staff development between UK and Nigeria
- Maintaining the focus on cost control, but investing in capacity where we see the needs and opportunities
◆ Organisation Capacity is as important a goal in 2018 as any of our other corporate objectives
A LOOK FORWARD
Eland Oil and Gas Capital Markets DaySlide: 3
Why Invest?
ELAND OVERVIEW
NEXT 12-MONTH GROWTH CATALYSTS
Eland Oil and Gas Capital Markets DaySlide: 5
Opuama Infill Drilling
Completion of Opuama Infill drilling to increase baseline OML 40 production to over 30,000 barrels of oil a day
PRODUCTION APPRAISAL EXPLORATION
Gbetiokun Early Production System
Ubima-1 Re-entry Amobe prospect
Increasing the OML 40 JV’s production by a further 50% to approximately
45,000bopd
Potential moving 31.1million barrels of 2C
Contingent Resources into Reserves
Potentially turning 78 million best estimate
barrels into 2P reserves
SIGNIFICANT 12 MONTH SHARE PRICE DRIVERS
SIGNIFICANT VALUE PROPOSITION
◆ Last 12 months of successful execution further proving Company’s operating track record
◆ 2 year work programme confirmed
◆ OML 40 twenty year license renewal process approved and agreed by all stakeholder. Now awaiting final ministerial consent
◆ Multiple transformational financing opportunities available early H2 2018
◆ Strong operating cash generation with outstanding netbacks. Drilling ROI less than 3-months a well
◆ Material exploration upside with near term production potential
◆ Potential to review dividend policy in light of future financial performance
A LOOK FORWARD
Eland Oil and Gas Capital Markets DaySlide: 6
OML 40 FORECAST PRODUCTION PROFILE
Eland Oil and Gas Capital Markets DaySlide: 7