Ascent Resources Plc · LSE:AST
Ascent Resources — Investor Presentation (March 2018)
40 slides from Ascent Resources's investor presentation, Mar 7, 2018
Slide 1: Investor Presentation
Investor Presentation Clive Carver, Chairman Colin Hutchinson, Chief Executive Officer Nigel Moore & Cameron Davies, Non-Executive Directors 7 March 2018
Slide 2: Disclaimer
Disclaimer The information contained in these slides and this presentation is being supplied to you by Ascent Resources plc on behalf of itself and its subsidiaries (together “the Company”) solely for your information and may not be reproduced or redistributed in whole or in part to any other person
Slide 3: Summary
Summary ▪ AIM listed, exploration & production company focused on onshore European gas. ▪ Operator of the Petišovci concession in Slovenia. ▪ We have de-risked the asset over the past 12 months on financial, operational and regulatory level. ▪ Debt free & cash generative. ▪ Potential for material in
Slide 4: Organisation
ascent resources plc Organisation
Slide 5: PLC Board of Directors
PLC Board of Directors Clive Carver, Non-executive Chairman • Clive Carver has worked in the City since 1986 and focused exclusively on the small cap sector since 1994. • Chairman of Caspian Sunrise plc, an AIM listed oil and gas exploration and production company operating in Kazakhstan. Also Non-e
Slide 6: Ascent organisational chart
Ascent organisational chart Board of Directors CEO Expert Technical Advisers PLC Office Slovenia Country Manager Manager Financial Technical Operations Co- Controller Manager ordinator Petroleum Office Manager Engineer 6
Slide 7: Technical advisers
Technical advisers Reservoir Engineering Geology & Geoscience - Dr Clive Ninnes, UK based expert. - Geomega (Budapest based) - 7 years with project - 10 years with project - Prepared reservoir model & long - Carried out 3D and identified term production forecast. locations for Pg-10 and Pg-11A - Adv
Slide 8: Project
ascent resources plc Project
Slide 9: Slovenia
Slovenia EU Member Since 2004 Schengen Member Since 2007 Currency Euro Capital Ljubljana Government Parliamentary representative democratic republic. Last elections were 2014; next should be 2018. Population 2 million Language Slovenian Religion 58% Catholic GDP Composition Services 65%, Industry 33
Slide 10: Achievements in 2017
Achievements in 2017 ▪ Revenues for the year of close to €1 million. ▪ Debt reduced from £8.7 million to £49k. ▪ Commenced production locally in April & export in November. ▪ Executed the work programme: ✓ Recompleted two wells. ✓ Constructed flow lines. ✓ Refurbished existing processing equipment.
Slide 11: Production to date
Production to date Production rates - MMscfd 3.0 2.5 2.0 1.5 1.0 0.5 0.0 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 MMscfd ▪ Production to local industrial company from April. ▪ Production suspended in October while export infrastructure put in place. ▪ Rate increas
Slide 12: Targets for 2018
Targets for 2018 ▪ Increase production from Pg-10 and Pg-11A. ▪ Acquire permits to re-enter Pg-10, Pg-11A, Pg-7 & Pg-9. ▪ Prepare permit applications for Pg-6 & Pg-8. ▪ Pre-fracture production test Pg-6 & Pg-9 (no permit required). ▪ Assess the potential of a conventional deviated side track from Pg
Slide 13: Corporate
ascent resources plc Corporate
Slide 14: Financials
Financials six mths to twelve mths to six mths to twelve mths to six mths to 30-Jun-17 31-Dec-16 30-Jun-16 31-Dec-15 30-Jun-15 unaudited audited unaudited audited unaudited ▪ £000s £000s £000s £000s £000s Balance sheet Revenue generating Exploration assets 40,024 37,541 35,214 32,711 31,455 Property
Slide 15: Shares & shareholders
Shares & shareholders Share price (p) & market cap (£m). Market Cap £28m 2.50 60.0 Volume (M) / Value £ 000s traded monthly 2.00 50.0 Daily volume 20m 40.0 Share price (PENCE) 1.50 12 month high 2.75p 30.0 1.00 20.0 12 month low 1.00p 0.50 10.0 0.00 0.0 Shares in issue 2,269m Mkt Cap Average price ▪
Slide 16: Funding
Funding ▪ Cash in the bank of over £1.0 million at year end. ▪ Cashflow from existing wells will fund near term work programme (pre-frac tests etc). ▪ Future infrastructure will be funded by debt or vendor finance. ▪ Potential future equity requirement for first well re-entry – depends on cash gener
Slide 17: Asset
ascent resources plc Asset
Slide 18: Petišovci Joint Venture
Petišovci Joint Venture 50% 50% 100% 100% Service provider to the Joint Venture. Concession holder. Operator Owns infrastructure and drilling equipment. 25% 75% Petišovci Joint Venture 18
Slide 19: Asset
Asset ▪ Pannonian basin. ▪ Production of oil & gas from shallower zones since 1940s – these are pressure depleted but there remains oil in place. ▪ Ascent and partners’ main focus has been the deep gas reservoirs. ▪ Two wells drilled in 2011 proved commercial production was viable. ▪ P50 reserves 88
Slide 20: Structure
Structure ▪ Recomplete upwards as reservoirs deplete, getting multiple uses from each well structure. 20
Slide 21: Reserves & resources
Reserves & resources Recoverable net to AST % Ascent (P50) reserves and resources Reserves Resources Reserves Resources 60% A1 27 31% 53% B3 40 53% 50% C 18 23% Pg-10 Pg-11A D1 3 4% BCF recoverable to Ascent 40% D2 9 11% E1 25 28% 31% 28% E4 9 10% 30% 23% F 3 3% K 4 5% 20% L 2 2% 11% 10% 11% M 4 4%
Slide 22: Permits
ascent resources plc Permits
Slide 23: Permitting process
Permitting process Criteria for environmental permit • Preliminary screening required for drilling, fracturing, constructing mining facilities and infrastructure. Or where production will exceed 280,000 m3/d of gas. • EIA required fracturing with more than 7,500 m3 of water or where production will
Slide 24: Permitting process
Permitting process Commence No project Permit awarded subject to appeal Environmental No Permit required? Yes Prepare ARSO determine Preliminary if significant risk Screening Ascent’s experience on timing: Yes Carry out EIA & - ARSO decision: 3 to 6 months Public consultation - Minister’s decision:
Slide 25: IPPC History
IPPC History June 2014 IPPC Application submitted. December 2014 ARSO approve application and start public consultation. July 2015 ARSO award permit after public consultation – appeal made. November 2015 Environment Minister confirms ARSO decision – appeal to court made. May 2016 Court rules that ap
Slide 26: Field development plan
ascent resources plc Field development plan
Slide 27: Five year field development plan
Five year field development plan CAPEX & Revenue (€m) Wells producing & daily production 80.0 73.0 14 35.0 Average daily production (MMscfd) 70.0 12 30.0 60.0 57.4 10 25.0 Wells producing EURO millions 50.0 8 20.0 40.0 33.3 6 15.0 30.0 23.7 17.5 4 10.0 20.0 12.3 11.6 7.5 2 5.0 10.0 3.8 0.0 0.0 0 0.0
Slide 28: Field development plan
Field development plan Year Drilling & workovers Permitting Facilities 2018 • Perforate and pre-stimulation test • Receive the final IPPC • CPP procurement and production on Pg-6 & Pg-9. Permit. engineering. • Potential re-entry of Pg-10 or Pg-11A • Submit application for wells if required. Pg-7 and
Slide 29: Well locations
Well locations ▪ Existing well locations to be re-completed during the five year field development plan. ▪ All wells are already connected to the CPP via intra-field pipelines. ▪ All wells drilled to 2,000+ metres. 29
Slide 30: Pg-7 well
Pg-7 Date drilled 1988 Total depth 2,993 metres Historic production 15,591,000 (cubic metres) Workover starts 2019 Sands targeted N,M,K,F Perforations 2 intervals from 2,705m to 2,790 ▪ Application ready to submit. ▪ Will be deepened to target lower sands. ▪ Forecast flow rates of around 2 MMscfd 30
Slide 31: Pg-9 well
Pg-9 Date drilled 1989 Total depth 3,011 metres Historic production 204,000 (cubic metres) Workover starts 2019 Sands targeted E4, E3 & E2 Perforations 7 intervals from 2,735m to 2,975m ▪ Application to stimulate ready to submit. ▪ Forecast flow rates of around 3-4 MMscfd. ▪ Intend to carry out a pr
Slide 32: Pg-6 well
Pg-6 Date drilled 1981 Total depth 3,200 metres Historic production 8,815,000 (cubic metres) Workover starts 2020 Sands targeted E4, E3 & E2 Perforations 4 intervals from 2,866m to 3,149m ▪ Application will be prepared during the year and submitted once Pg-7 & Pg-9 have been approved. ▪ Forecast flo
Slide 33: Pg-8 well
Pg-8 Date drilled 1989 Total depth 3,014 metres Historic production 5,639,000 (cubic metres) Workover starts 2020 Sands targeted E4, E3 & E2 Perforations 2 intervals from 2,807m to 2,978m ▪ Application will be prepared during the year and submitted once Pg-7 & Pg-9 have been approved. ▪ Forecast flo
Slide 34: Shallow oil
Shallow oil ▪ Around 6 million barrels produced since 1940s from 110 wells. ▪ Principally produced by depletion. ▪ No field wide secondary recovery project. ▪ Seven wells currently producing small quantities of oil using gas lift. ▪ We will initially pilot secondary recovery initiatives using pumps.
Slide 35: Export production
Export production ▪ Significant technical and operational challenges have been overcome. ▪ Export agreement with INA for untreated gas. ▪ Initial 12 month agreement, scope to extend term and materially increase volumes. ▪ Initial revenues expected at around €300k per month based on around 2.5 MMscfd
Slide 36: Gas to grid
Gas to grid ▪ Construction of our own treatment facility is long-term plan, to sell gas into Slovenian national grid, achieving highest possible price ▪ Acquiring IPPC Permit needed to construct our own gas treatment facility has been a lengthy process. ▪ Administrative court dismissed final appeal
Slide 37: Petišovci economics
Petišovci economics Revenue Production 35.0 14.0 60.0 30.0 12.0 50.0 25.0 10.0 40.0 wells producing 20.0 GBP£ millions 8.0 MMscfd 30.0 15.0 6.0 20.0 10.0 4.0 10.0 5.0 2.0 0.0 0.0 0.0 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2018 2019 2020 2021 2022 2023 20
Slide 38: Growth strategy
Growth strategy Within Petišovci ▪ Increase production from high value gas asset to 35 MMscfd over five year period. ▪ Investigate shallow oil reservoirs. Within Slovenia ▪ Target other concession areas – seismic acquired in the past during a previous joint venture. Within the region ▪ Actively revi
Slide 39: Summary
Summary ▪ Producing from our high value gas asset. ▪ NPV10 of project is a significant multiple of current market cap. ▪ Profitable and cash generative. ▪ Virtually debt free. ▪ Potential to increase production through well recompletions. ▪ Supportive retail shareholder base. ▪ Share price significa
Slide 40: Thank you
ascent resources plc Thank you
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