Otto Energy Limited · ASX:OEL
Otto Energy — Investor Presentation (October 2007)
40 slides from Otto Energy's investor presentation, October 2007
Slide 1: Investor Presentation October 2007
INVESTOR PRESENTATION OCTOBER 2007 ASX CODE : OEL
Slide 2: Disclaimer
2 DISCLAIMER This presentation Thi t ti does d nott constitute tit t an offer ff to t sellll securities iti andd is i nott a solicitation li it ti off an offer ff tot buy securities. It is not to be distributed to third parties without the consent of Otto Energy Ltd (the “Company”). This presentatio
Slide 3: Why Invest in Otto?
3 WHY INVEST IN OTTO? Otto Energy Limited (OEL) has: – a balanced E&P portfolio in proven oil and gas provinces; and – executed a major transaction with the acquisition of a 18.28% beneficial interest in the Galoc oil field Cash flow expected from three projects in the next 18 months: – Oil producti
Slide 4: Corporate Board
4 CORPORATE BOARD Rick Crabb Jaap Poll B Juris (Hons) LLB MBA PhD Philosophy and Geology Chairman (Non Exec.) Director (Non Exec. ex-MD) Mr Rick Crabb holds a degree in law and Dr Jaap Poll is the founder of the company business administration from UWA . He with a distinguished 40 years career in pr
Slide 5: Corporate Executives
5 CORPORATE EXECUTIVES Alex Parks Bruce Elsholz Chief Executive Officer Chief Financial Officer Mr Alex Parks has a Masters of Petroleum Mr Bruce Elzholz has been involved in the oil Engineering Degree from Imperial College, i d industry in i Australia A li andd Canada C d as a Financial Fi i l Cont
Slide 6: Capital Structure Pre Galoc Acquisition
6 CAPITAL STRUCTURE PRE GALOC ACQUISITION Shares Unlisted Options Performance Shares (Gas Production in Turkey) Issued 209,812,325* ~14,450,000** 2,500,000 Market Cap A$63m @ 0.30 cps Cash A$12 m and no debt ((1 October 2007)) Otto’s Otto s market cap has increased from A$15m to ~ A$63m in the last
Slide 7: Corporate Structure (Post Galoc Acquisition)
7 CORPORATE STRUCTURE(POST GALOC ACQUISITION) Otto Energy ASX Listed Australian Public Company (ASX - OEL) 100% % 100% 32.48% (Option to 41.24%) Edirne NorAsian Cynthia (Turkish Comp.) (Bermuda Comp.) (BVI Comp.) Turkey Philippines Argentina 100% Agreement to acquire i Oromin 20-35% Exploraciones Th
Slide 8: Current Areas of Interest
8 CURRENT AREAS OF INTEREST A balanced E&P portfolio within proven oil & gas basins TURKEY Onshore Gas in Thrace Basin Licences PHILIPPINES Offshore Oil & Gas in Philippine Licences ARGENTINA Onshore Oil Exploration in Argentina / Santa Rosa Block Perth, Australia Corporate office Otto is opportunit
Slide 9: The Philippines: Otto's Project Locations
9 THE PHILIPPINES OTTO OTTO’S S PROJECT LOCATIONS Galoc Satellite Photo - Philippines NorAsian Licence Map of Philippines
Slide 10: Why Explore in the Philippines?
WHY EXPLORE IN THE PHILIPPINES? The Philippines pp has numerous p proven hydrocarbon y basins The offshore areas are under explored with less than 100 exploration p wells drilled offshore. 40 discoveries and 11 commercial fields offshore The fiscal regime is one of the best in Asia with strong local
Slide 11: Otto's Philippines Acreage
OTTO’S OTTO S PHILIPPINES ACREAGE High equity positions in five world class permits • SC14c Galoc Oil Field (Otto 18.28%) - under development with first oil expected April 2008. Gross 2P Reserves of 23 MMbbls •SC50 (Otto 98%) – Calauit Oil Field: under appraisal with initial oil sales expected late
Slide 12: Galoc Acquisition
12 GALOC ACQUISITION Otto is acquiring an 18.3% net revenue interest in the Galoc oil field through acquisition of a 32% shareholding in a dedicated Joint Venture company, Galoc Production Company (GPC) – GPC is the field operator Galoc Location – GPC has debt finance already in place to fund the dr
Slide 13: Galoc Oil Field Fact Sheet
13 GALOC OIL FIELD FACT SHEET Galoc Location Location: SC14c Galoc Block Philippines Water Water Depth: 290m Discovered: 1981 Geological Setting: Turbidite sandstone with 57+m oil column Past Drilling: Two wells Test in 1988 produced 385,000 bbl 35o API oil Seismic: 3D seismic coverage over fi
Slide 14: Galoc / SC14c Working Interests
14 GALOC / SC14c WORKING INTERESTS Company % Galoc Production Company (“GPC”) 58.29% - Vitol (68.62% of GPC) - 40.01% - Otto Energy (31.38% of GPC) * - 18.28% Nido Petroleum Limited 22.28% Oriental/LOGPOCOR 7.58% Philodrill Corporation 7.02% Forum Energy 2.27% Alcorn Gold Resources 1 53% 1.53% Petro
Slide 15: Galoc Oil Field
15 GALOC OIL FIELD GCA CERTIFIED GROSS RESERVES FOR GALOC 1st Phase 2nd Phase 1P 99.7 7 MM MMstb tb 3P 41 41.9 9 MM MMstb tb 2P 23.5 MMstb Images from Nido website
Slide 16: Galoc – Field Development
16 GALOC – FIELD DEVELOPMENT Drill Ship ‘Energy Searcher’ spudded Galoc 3 on 8 October 2007 Initially Two development wells Galoc 3, and Galoc 4 with pilot hole, expected to be completed and production tested by end 4Q 2007 Drilling of Pilot well is designed to confirm reserves by evaluati
Slide 17: Drilling Galoc Development Wells
17 DRILLING GALOC DEVELOPMENT WELLS 1. Drill Galoc 3 ‘top hole’ to 133/8” Casing point (~950m) 6 Days = 14 October 2. Drill Galoc 4 ’top hole’ to 133/8” Casing point (~950m) 7 Days = 21 October 3. Drill 121/4‘Pilot Hole’ through reservoir & into water leg; 9 Days = 1 November core 54m of reservoir r
Slide 18: Galoc Production Sharing Contract Terms
18 Galoc Production Sharing Contract Terms Revenue Allocation PHILIPPINES REGIME FAVOURABLE Gross Oil Revenue Contractor Government ¾ Cost recovery ¾ FPIA (Filipino Participation Incentive Allowance) ¾ Production Allowance $70 ¾ Profit oil share Cost ¾ Philippines prima-facie tax rate of 35%, fall
Slide 19: Value of 18.28% of Galoc to Otto
19 VALUE OF 18 28% OF GALOC TO OTTO 18.28% Acquisition cost of ~A$45 million + cash bond on deposit of A$14 A$14.5 5 million for fully financed project to first production in April 2008. Whole deal NPV10 to Otto of ~A$54 million (post tax) for 2P reserves at US$60/bbl Whole deal NPV10 to Otto of ~ A
Slide 20: SC50 – Calauit Oil Field
20 SC50 – CALAUIT OIL FIELD Calauit SC50, Showing Regional 2007 3D seismic to delineate Calauit and optimize development drilling Oil & Gas Fairway •Green Area = Calauit & Calauit South •Pink Area = Possible field extent •Blue Dotted = Further small leads
Slide 21: SC50 – Calauit Oil Field
21 SC50 - CALAUIT OIL FIELD Calauit STOIIP ~ 40 m bbls Rec. reserves ~ 6.6 m bbls (1.5 – 12 m bbls range) Otto 98% beneficial interest EPT Q4 2008 att initial i iti l ttargett of ~12,000 barrels oil per day Calauit “Early Production System” When Calauit performs well in EPT, rapid full field develop
Slide 22: SC51 – Summary
22 SC51 – SUMMARY SC51 water depths generally < 300m already contains one gas discovery has both on-and offshore potential with variety of oil and gas plays Cebu market is hungry for energy 3D Seismic Completed June 2007 East Visayan Basin SC51 - Licence Location Map
Slide 23: SC51 Southern Block with >100 MMbbls Targets
23 SC51 SOUTHERN BLOCK WITH >100 MMBBLS TARGETS AVO anomalies li suggest possibly gas on oil…. Potentially up to 270 m bbl bbls recoverable bl Potentially up to 145 m bbls recoverable E-W Section over Argao and Cabilao with amplitude anomalies (“hydrocarbon indicators”)
Slide 24: SC51 – Potential
24 SC51– POTENTIAL Resource estimates (previous Prospective Resources mmbo p Operator TransAsia)) (Otto share 80% SC 51) SC51 Low Mean High Argao 33 123 ( 98.4 mmbo) 270 Cabilao 37 84 ( 67 67.2 2 mmbo) 145 Total SC51 South block 70 207 (165.6 mmbo) 415 North Block San Isidro Onshore Potentially > 20
Slide 25: Area 8 – Preferred Bidder
25 AREA 8 – PREFERRED BIDDER Otto has been selected as the preferred bidder for Area 8 Area 8 lies between Cebu & Bohol The Leads and Prospects area consists of 7,440km2. There is approximately 3,000km of existing 2D seismic covering the area The area is considered highly prospective with over 20 id
Slide 26: SC55 Elephant Country
26 SC55 “ELEPHANT ELEPHANT COUNTRY” COUNTRY SC55 Ultra Deep Water Blocks Giant Marantao Reef Prospect Multiple play-types & leads identified (p (potentially y 5 x Malampaya p y size)) second 2D survey completed June 2007 with amplitude anomalies and seabed oil and gas seeps
Slide 27: 2D Seismic - June 2007
27 SC 55 Deep Water Licence Shell/Conoco Sh ll/C Phillips oil discovery 2D Seismic - June 2007
Slide 28: Marantao Reef Complex
28 MARANTAOREEFCOMPLEX MARANTAO Marantao Potential: MALAMPAYA Vertical closure: 510m (AT SAME SCALE) Area: 96 sq km = 2.44 * Malampaya GRV assuming same geometric factor • Proportional GEF to GOC 4.7 – 6.0 TCF Rec. Gas • Proportional Condensate Reserves: 160MMBC • Proportional STOOIP: 813-1260 MMBO
Slide 29: Marantao Volumetric Scenarios
29 MARANTAO VOLUMETRIC SCENARIOS Base Case 50m Oil with Gas Cap (Malampaya has a 56m oil column) P90 P50 P10 M Mean GIP (Bcf) 724 2,311 5,367 2,746 OIP (mmbbls) 379 1,193 2,773 1,416 Rec. Gas (Bcf) 468 1,508 3,602 1,812 Rec. Oil (mmbbls) 144 469 1,118 567 Oil only and Gas Only P90 P50 P10 Mean range
Slide 30: Turkey Project Location
30 TURKEY PROJECT LOCATION Satellite Photo – Licence location and infrastructure of Thrace Basin Western Turkey & Thrace Basin
Slide 31: Turkey
31 TURKEY • Three gas discoveries - first production expected late 2008 • Top tier gas price at US$8-10/Mscf + • Revenues: Initially US$3.5m/year, targeting US$10m/year within 18 months assuming further discoveries • Strong farm-in partner with operating experience in Turkey – Incremental Petroleum
Slide 32: Thrace Basin - Edirne Licence
32 THRACE BASIN - EDIRNE LICENCE NOT NOT TESTED! TESTED! • Potentially three by-passed by passed gas discoveries of 30bcf+ each • PEMI rig booked for 5 wells commencing Jan 08 Ru ss ian Ga sP ip eli e n KORUCU-2 YAGCI KIRKLARELI SOFULAR-1 KOYUSTU-1 GERDELLI-1 BATI UMUR-1 GAS FIRED EDIRNE ction er Co
Slide 33: Thrace Basin - Edirne Licence
33 THRACE BASIN - EDIRNE LICENCE PROGRAM 3D Seismic Q3 2007 2D Seismic Q2 2007 Yagci Prospect Gerdelli Prospect p 5 wells starting in Jan 2008 Koyustu-1 gas discovery Development mid 2008 First gas sales late 2008 Bati Umur-1 gas discovery Arpaci-1 drilled at 1980’s Umur-1 by-passed edge of gas fiel
Slide 34: Argentina Project Overview
34 ARGENTINA PROJECT OVERVIEW OTTO acquires 32.48% in 1 billion barrel OIP potential Santa Rosa Dome
Slide 35: Argentina – Cuyana Basin
35 ARGENTINA – CUYANA BASIN Otto agreed to farm-in on the Santa Rosa Licence • Otto earns 32.48% from Oromin by spending US$1.4 million • Otto has option to increase to 41.24% for a further US$900,000 The Santa Rosa block contains the giant Santa Rosa Dome with potentially up to 1 billion bbls of oi
Slide 36: Cuyana Basin and Santa Rosa Dome
36 CUYANA BASIN AND SANTA ROSA DOME E W profile E-W fil showing h i oil il fields fi ld in i western t partt off basin, b i source beds b d in i basin b i centre t and d likely migration paths eastwards towards the Santa Rosa Dome
Slide 37: The Potential Impact of Success
37 THE POTENTIAL IMPACT OF SUCCESS Philippines – Galoc and Calauit are worth > 27c per share and > A$70million net cash in 2008. – Argao potentially up to 270 million bbls recoverable (Otto 80%) (~$2 per share at 40% WI) – Marantao – has huge potential with 2P Resources > 3.5 Tcf and 1.1 billion bbl
Slide 38: Prognosis of Upcoming News and Activities
38 PROGNOSIS OF UPCOMING NEWS AND ACTIVITIES Drilling of Galoc De Development elopment wells ells Award of Argentina potentially within weeks D illi iin T Drilling Turkey k starting t ti JJan 08 - five fi wells ll Commence production at Galoc by April 08 $$ Farm-out of Philippines Projects H1 2008 D
Slide 39: New Capital Structure
39 NEW CAPITAL STRUCTURE 226 million shares placed at A$0.30 per share to raise approximately A$68 million – Tranche T h 1 (Unconditional): (U diti l) Approximately A i t l 3131.4 4 million illi shares h att $0 $0.30 30 tto raise i approximately i t l A$9 A$9.4 4 million illi ((under d C Company’s ’
Slide 40: Finally in Summary
40 FINALLY IN SUMMARY Otto is a dynamic y company p y with significant g g growth p potential Otto has a strong board and management team to oversee the growth from explorer to producer and junior to mid-cap The Galoc acquisition means Otto is now funded to maintain high equity q yp positions in the