Enwell Energy Plc · LSE:ENW
Enwell Energy — Regal Petroleum — H1 2005 Earnings Presentation
41 slides from Enwell Energy's earnings presentation, September 2005
Slide 1: Regal Petroleum plc: A Strategy for Success
Regal Petroleum plc A Strategy for Success September 2005 Dr. Rex Gaisford – Chief Executive Officer Roger Phillips – Finance Director David Mackertich – Exploration & New Ventures Manager
Slide 2: "Walk the Talk"
“Walk the Talk” Say what you are going to do and do what you say 2
Slide 3: Presentation outline
Presentation outline ¾ The legacy of the past ¾ Recent re-structuring ¾ Our commitments and goals ¾ Financials ¾ Operational Update 3
Slide 4: A corporate turnaround in progress
A corporate turnaround in progress ! Objectives: 1. Address the fundamental problems 2. Tackle the underlying causes (rather than the symptoms) 3. Be broad and deep enough in scope to resolve all the key issues Current situation 4
Slide 5: The Company has good assets and real opportunities
The Company has good assets and real opportunities – we need to create value from these to succeed we must (and have) separated out how to deal with: ¾ the legacy of the past Well underway 9 ¾ building the company’s future The task ahead 9 5
Slide 6: The Legacy of the Past
The Legacy of the Past 6
Slide 7: Expectation exceeded results - confidence and credibility evaporated
Expectation exceeded results - confidence and credibility evaporated ¾ Successful opportunity generation and acquisition ¾ Ukraine, Greece, Egypt, Romania, Liberia ¾ Followed by: ¾ Management that over promised & under delivered ¾ Inadequate professional management (technical and commercial) ¾ Compa
Slide 8: May 2004 to May 2005 over promising – under delivering
May 2004 to May 2005 over promising – under delivering Placing at £3.90 -ve results of testing Resignation of Results of SE-1 per share of Kallirachi-2 well chairman / well in Romania CEO Daily closing share price (£ pence) November 29 2004 - September 26 2005 600 Ukrainian issues 500 400 300 200 10
Slide 9: Recent re-structuring
Recent re-structuring 9
Slide 10: New management team has been in place for 3 months
New management team has been in place for 3 months from a standing start in mid June The focus is.. ¾ Crisis stabilisation ¾ Fire fighting ¾ Building relationships ¾ Climbing a huge learning curve ¾ Building capability and functionality ¾ Restoring confidence – internally and externally Current situ
Slide 11: New CEO & major changes at board level
New CEO & major changes at board level ¾ Credible track record ¾ Diversity ¾ Clearly defined roles ¾ Clear reporting lines ¾ Delegated responsibility ¾ Accountability for their actions and decisions ¾ Open and trustworthy ¾ A team of motivated, inter- dependent, high quality and high performance peo
Slide 12: Organisational Structure
Organisational Structure Chairman CEO & Board Finance Exploration Production & Legal & Director Director operations Director company secretary Financial controller Exploration Manager Drilling Manager Chief Economist Lead Geologist Production Manager Office Manager Geologist MD Ukraine Lead Geophysi
Slide 13: New management and technical team that can deliver
New management and technical team that can deliver ¾ Proven track record of finding and New technical team developing oil and gas reserves ¾ NW. Europe, Middle East, South Andrew O’Connell (4) Helen Prior (6) East Asia, North Africa Geologist Geoscientist ¾ Technical team’s experience has Richard Ha
Slide 14: Our commitments and goals
Our commitments and goals 14
Slide 15: Plans must be matched by delivery and results
Critically, from now on, the Company’s plans must, and will, be matched by delivery and results. ¾ To succeed, the Company must… ¾ Generate a positive relationship between its management team, its employees and its owners by… ¾ Effective communication ¾ Openness & transparency ¾ Timely delivery of p
Slide 16: Our commitments – clear, credible, courageous
Our commitments – clear, credible, courageous ¾ Simple goals ¾ Produce strong growth in underlying asset value ¾ Become a professional oil and gas company returning upper quartile returns for our peer group to shareholders ¾ Framework for a successful turnaround ¾ 10 point ‘tool kit’ ¾ Clear and sim
Slide 17: A 10 point tool-kit for regeneration and success
A 10 point tool-kit for regeneration and success The way forward 1. Assemble & empower the crew 9 2. Clear the decks (eliminate problems & establish a proper baseline) 9 3. Rigorously control and eliminate all unnecessary expenditure 9 4. Understand the basics : technology 9 5. Assess the real poten
Slide 18: Planning milestones
Planning milestones Action Milestone Stem the flow: Costs reduced and / or Greece: September 2005 production increased to achieve breakeven Company: Previously position going forward published end 2006 likely to slip Set the course: Board approves programme for November 2005 1 – 5 year and 1st year
Slide 19: Our aim is to be a 'proper' oil & gas company
Our aim is to be a ‘proper’ oil & gas company delivering upper quartile returns for our peer group The company has adopted three major objectives:- First major objective ¾ To clear the decks of all legacy problems ¾ Become a well respected and professionally managed enterprise ¾ Restore confidence a
Slide 20: Second major objective
Second major objective ¾ Develop a balanced portfolio of assets ¾ This will involve both acquisitions and divestments ¾ The aim being to optimise the risk profile and to have a broader spectrum of opportunities ¾ Access and share knowledge and experience with other oil & gas companies (ie partnering
Slide 21: Third major objective
Third major objective ¾ To create significant growth in asset value and free cash flow from operations to fuel further growth through exploration and acquisition and increase shareholder value ¾ Undertake excellent technical work and evaluation – employ the best people ¾ The adopted strategy is capa
Slide 22: Financials
Financials 22
Slide 23: Financial Highlights
Financial Highlights ¾ Turnover increased to $16.7 million due to additional condensate sales ¾ Half year results were net losses of $21.7 million due to; ¾ write downs of principally King Alexander rig ($10 million) ¾ unrealised foreign exchange effects ($8 million) ¾ The second half year results w
Slide 24: Financials June 2005 vs June 2004
Financials June 2005 June 2004 • Production boepd 3,800 4,800 • Sales Price $/boe 28 22 • Turnover ($mm) 16.7 13.4 • Net Loss ($mm) (21.7) (2.5) • Loss per Share (pence) 10.6 1.3 • Net Assets (30 June) ($mm) 181.0 131.5 Financials 24
Slide 25: Cashflow June 2005 vs June 2004
Cashflow $ millions June 2005 June 2004 • Opening Net Cash 25.6 28.5 • Cashflow from Operations (15.1) (10.3) • Capital Expenditure (36.4) (22.9) • Issue of Share Capital (Net) 83.0 70.4 • Other (2.7) - • Closing Net Cash 54.0 65.7 Financials 25
Slide 26: Operational Update
Operational Update 26
Slide 27: Assets: where we are at present
Assets: where we are at present The company has a mixed asset base : ¾ exploration acreage (with leads and prospects), ¾ fields under appraisal ¾ fields in decline ¾ production / developments ¾ none of these had been sufficiently well defined nor understood technically ¾ ‘entrepreneurial’ acquisitio
Slide 28: Current asset portfolio
Current asset portfolio Production / development :- Ukraine, Greece Exploration :- Romania, Egypt } 95-100% working interest Frontier Exploration :- Liberia (25%) 28 Assets - overview
Slide 29: Operational update - Greece
Operational update - Greece ¾ Kavala Oil under the day-to-day management of its Greek Board - no further funding from Company ¾ Regal owns c.100% of Kavala Oil ¾ Kavala Oil retains concession licences ¾ Operations still proceeding with Prinos production at c.1,900 bbl/d ¾ Regal is intending to capit
Slide 30: Operational update - Greece
Operational update - Greece The Company’s Kavala Oil subsidiary has caused immense difficulties since the failure of the K2 well ¾ We have dealt with the industrial unrest and eliminated the future outflow of funds – required breakeven production was c. 2,300 bopd ¾ The Company has failed to impleme
Slide 31: Greece – medium term plans
Greece – medium term plans Target c. mid 2007 Depending on previous decisions, especially the economic viability of future investment: ¾ Professionally direct and review the external studies being carried out by GEUS (Denmark), PGS (Aberdeen) and Landmark (Aberdeen) on the whole Prinos basin ¾ Ident
Slide 32: Ukraine – Current position
Ukraine – Current position ¾ Complete independent certification of reserves estimates (incl. possible upside potential). ¾ Finalise our position with Peak Resources ¾ Settle the value to be attributed to the previous joint physical assets of the JV between the Company and CNGG. This has been determi
Slide 33: Ukraine – near term plans (end 2006)
Ukraine – near term plans (end 2006) ¾ Assuming that the Company retains the asset: ¾ Improve the understanding of the sub- surface – 3D seismic ¾ Implement the short-term workover and de-bottlenecking plan to increase existing “pilot” production ¾ Plan and commence execution of the full field devel
Slide 34: Ukraine – medium term plans
Ukraine – medium term plans Target 2008> ¾ This asset has significant potential and needs to be managed as such. ¾ Continue to implement the full field development plan and achieve full field production. (c.50,000 boepd) Operations – Ukraine 34
Slide 35: Romania – short term
Romania – short term ¾ Seismic program completed as planned, currently being processed Suceava and evaluated ¾ Continue technical sub-surface work using new seismic, historic seismic, SE-1 historic wells and the most recent Regal well RSD-1 ¾ Firm-up and approve the next Barlad prospect (D) for dril
Slide 36: Romania – medium to long term
Romania – medium to long term ¾ Carry out further seismic program as planned, process and evaluate ¾ Undertake a thorough technical (in house) evaluation of the acreage… ¾ culminating in a risked prospect inventory ¾ Following the upcoming exploration well (D), a program of 3 – 4 wells is likely ¾ D
Slide 37: Egypt – current activity & forward plan
Egypt – current activity & forward plan ¾ Drill 1st exploration well, planning in final stages ¾ Spud date probably March 2006 (depends on drilling slot) ¾ Anticipated well cost c. $ 4 mm ¾ Location and well site approved by Egyptian authorities ¾ Drilling contract under active negotiation with othe
Slide 38: Liberia – current activity & forward plan
Liberia – current activity & forward plan ¾ Awaiting ratification of licences Regal (Blocks 8 & 9) acreage ¾ Regal 25% interest ¾ Use all available data from regional seismic and historic wells to develop a risked prospect inventory ¾ Firm-up the first prospect for drilling ¾ Desire to farm down int
Slide 39: Conclusion
Conclusion ¾ The Legacy of the past ¾ Almost behind us ¾ Recent restructuring ¾ Management and technical staff in place ¾ Clear goals / targets ¾ Commitment to a successful future 39
Slide 40: Walking the talk
The management team is totally aware and totally committed to: “Walking the talk” In the Interest of providing Regal Petroleum plc’s shareholders and potential investors with information regarding the Company, including management’s assessment of the Company’s future plans and operations, certain st
Slide 41: Forward-looking statements
In the Interest of providing Regal Petroleum plc’s shareholders and potential investors with information regarding the Company, including management’s assessment of the Company’s future plans and operations, certain statements and graphs throughout this presentation are “forward-looking statements”