Caspian Energy — Investor Presentation (April 2012)
41 slides from Caspian Energy's investor presentation, April 2012
Slide 1: Investor Presentation April 2012
Investor Presentation April 2012
Slide 2: Cautionary Statement Disclaimer
Cautionary Statement Disclaimer The information contained in this presentation has been prepared by Caspian Energy Inc. (the “Company”) and is subject to updating, revision and amendment. While this information has been prepared in good faith, no representation or warranty, express or implied, is ma
Slide 3: Caspian Energy
Caspian Energy Caspian is a TSX-listed O&G E&P company, based in Kazakhstan, offering huge regional potential and the ability to deliver significant shareholder value. The current status is that of a "fully funded" enterprise, with existing production, a 6 well, $35M programme for 2012 actively unde
Slide 4: Contents
Contents Overview 5 Vast Commercial Region 6 Kazakhstan Oil Market 10 Unlocking Value: Corporate 11 Asia Sixth Energy: A Key Partner 15 Revenue from Production 17 Near-term Value Triggers 19 Unlocking Value: The Assets 22 Investment Recap 32 Appendix 35 4
Slide 5: Overview
Overview TSX-listed O&G E&P company in the Caspian Basin of Kazakhstan Production as at December 2011 of 460 BOPD Recoverable reserves of nearly 700m barrels Fully funded via Chinese Partner, Asia Sixth Energy Caspian has financed interest of $80m in Aral (the operating JV) Prominent Chi
Slide 6: Vast Commercial Region
~— CAS IA PIAN»> TSX: CEK.TO _ ee al www.caspianenergyinc.com
Slide 7: Map of Region
Map of Region Kazakhstan Population: 16.3 million GDP: $149 billion Second largest oil reserves and production among FSU republics 7 TSX: CEK.TO WWW.CASPIANENERGYINC.COM
Slide 8: Regional Infrastructure
Regional Infrastructure Key players in the region: Mangistau Munai Gas Recently acquired for $2bn by CNCP (China National Petroleum Company) and KazMunaiGas (Kazakhstan state owned producer) on 50/50 basis Operated by CNPC Owner of Zhetybai oil field (1bn bbls) and the small field adjoining Bl
Slide 9: Peers in the Pre-Caspian Basin
Peers in the Pre-Caspian Basin Holds reserves of 8-9 billion barrels Consortium led by Karachaganak Petroleum Operating (KPO) Caspian’s assets Believed to be the largest known oil field outside the Middle East and the fifth largest in the world in terms of reserves, estimated at 13 billion bar
Slide 10: Kazakhstan Oil Market
Kazakhstan Oil Market Perspective growth in oil production in Kazakhstan Second largest oil reserves and production among FSU republics Proven oil reserves of 30 billion bbls >$100 billion committed in oil ENI, XOM, CVX, COP, Shell, Total, Statoil Principle export markets are China, Russia
Slide 11: Unlocking Value: Corporate
~— CAS IA PIAN»> TSX: CEK.TO _ ee al www.caspianenergyinc.com
Slide 12: The "PLC"
The “PLC” Balance Sheet Highlights Market Capitalization (10 April 2012 Close) US$42.5 million Cash and Cash Equivalent (At 31 Dec 2011) US$2.2 million Investment Highlights NPV after tax and debt repayments US$248 million NPV/Share US$1.11 Operating expenses (As of Dec 2011) US$965,000 Local Kazakh
Slide 13: Strong Management Team
Strong Management Team William Ramsay: Chief Executive Officer Based in Almaty, Kazakhstan 15 years experience of working in Kazakhstan Extensive deal structuring experience – instrumental in the Asia Sixth deal Previously engaged in private equity investments, primarily in Kazakhstan, since
Slide 14: Strong Management Team cont'd
Strong Management Team cont’d Adil Mukhamedzhanov: Non-Executive Director Based in Almaty, Kazakhstan Served as Deputy General Director for Aral Petroleum Capital LLP since March 2004 Worked in the project management department of JSC KazTransOil and the consulting and corporate finance depart
Slide 15: Asia Sixth Energy: A Key Partner
Asia Sixth Energy: A Key Partner Asia Sixth Energy (“ASE”) Owns 60% of Aral Petroleum – the operating business SPV, representing experienced O&G interests in Asia 40% indirectly owned by Strong Petrochemical Aral Petroleum LLP Holdings Ltd, listed on Hong Kong Stock Exchange Technical & admi
Slide 16: Share Price
Share Price Market recognition of the significance of Caspian Energy’s transformational deal with Asia Sixth 16
Slide 17: Revenue from Production
Revenue from Production Well 213 & 301; producing wells Chinese JV partner, Asia Sixth, to finance drilling programme through production Agreed financing for US$80 million Caspian’s current production plans are fully financed through JV, combined with existing revenues from current productio
Slide 18: Forecast Cash Flows
Forecast Cash Flows Caspian’s share of revenues from East Zhagabulak Field alone: 180 160 140 120 100 Cumulative revenues to Caspian ($M) 80 Net cash flow after tax ($M) 60 40 20 Production & reserves $M 0 Cash flows of £20m by 2012 2013 2014 2015 2016 2017 2018 2019 2020 2014 -20 Source: McDa
Slide 19: Near-term Value Triggers
Near-term Value Triggers Event When • Mobilise rig for well 307 and 315 April • Drilling well 306 2012 • Test well 308 (section 1) • Test well 308 (section 2) 302 and 316 Q2 • Drilling well 307 and 315 2012 Q3 • Test well 308 (section 3) 2012 • Test well 307 Q4 • Test well 315 2012 19
Slide 20: Building NAV
Building NAV Caspian Energy – Net Asset Value at 31 Dec 2011 Canadian $(M) Total value excluding reserves 26.6 Proven + Probably + Possible East Zhagabulak @10% 210.3 Total value of Caspian 183.7 Per share (basic) $0.82 Total diluted value of Caspian 187.6 Per share (diluted) $0.77 Share price at 13
Slide 21: Driving Caspian with Asia Sixth
Driving Caspian with Asia Sixth Joint Venture ASE is undertaking the finance of capital expenditures to US$80 million Caspian is permitted to access a total of US$6 million over two years Under the agreement, the approved work program calls for expenditures of US$25.8 million in 2011 and US$22.5 mil
Slide 22: Unlocking Value: The Assets
~— CAS IA PIAN»> TSX: CEK.TO _ ee al www.caspianenergyinc.com
Slide 23: Aral's Well Locations
Aral’s Well Locations Caspian’s assets are divided into 3 sections within the ‘North Block’: East Zhagabulak (EZ): in production; annual volume 17,990 Mbb 315, 213, 308, West Zhagabulak (WZ): point of production 301, 306 Baktygaryn and Kozdysay: moving into testing West Zhagabulak East Zhagabulak {S
Slide 24: Recoverable Reserves In Region
Recoverable Reserves In Region KENKIYAK – 350 mmbbl ZHAGABULAK – 20 mmbbl (CNPC) (Aral) ALIBEKMOLA – 260 mmbbl (Lukoil & KNG) WEST Kenkiyak Kokjide Mortuk Zhagabulak Alibekmola EAST K 0 J T C 2-3 C1 1 P2 P2 P2 P2 2 D 1-2 3 P1 k 4 P1 -C3 5 C2 C1 6 D3 7 km D 1-2 Legend Pre-Salt Limestones 24 TSX: CEK.
Slide 25: Funded Work Programme
Funded Work Programme Commitment Fulfillment Activity Years (quantity/amount) (quantity/amount) Drilling of wells 3 wells/MM $ 20.87 3 wells/ MM $ 23.24 2011 Investments, total MM $ 25.84 MM $ 32.86 Drilling of wells 3 wells/MM $ 20.92 2012 Investments, total MM $ 22.46 TOTAL Investments MM $ 48.30
Slide 26: The 'North Block'
The ‘North Block’ Located on the Eastern margin of the Pre-Caspian basin Near Oblast in Western Kazakhstan Geological interest emerged in early 20th century Zhagabulak field is the primary target due to Extent of the Soviet age 2D seismic survey Kazakhstan: Existence of significant neigh
Slide 27: North Block: Extensive Seismic
North Block: Extensive Seismic 27 WWW.CASPIANENERGYINC.COM
Slide 28: North Block: East Zhagabulak
North Block: East Zhagabulak 25 year production license Number of producing wells is projected to be increased to maximum in 2015: 10 wells Turning two producing wells into injection wells in 2016-17 Applied for a further exploration license of 1500 acres of the North Block NPV of field is
Slide 29: North Block: Greater Zhagabulak
North Block: Greater Zhagabulak 213 308 315 211 306 302 307 303 Greater Zhagabulak area Well 316 – completed by drilling; 4950m Well 307 and 309 – projected for drilling - TD 4700m 29 WWW.CASPIANENERGYINC.COM
Slide 30: The North Block: West Zhagabulak
The North Block: West Zhagabulak 400 km² 3D seismic shoot Twice the size of East Zhagabulak An extra 200m updip Successful drilling of Well 316 Testing to begin by the end of April Subject to obtaining relevant permits Will be progressed with new rig Wells 309 & 307 approved for dril
Slide 31: Exploration Upside: Baktygaryn
Exploration Upside: Baktygaryn 224 MMBBL as per Smart Engineering Wells planned: 3D seismic already shot & oil shows on drilled wells Baktygaryn: Vast target 31 TSX: CEK.TO WWW.CASPIANENERGYINC.COM
Slide 32: Investment Recap
a CASP ed TSX: CEK.TO - = ENERGY INC www.caspianenergyinc.com
Slide 33: Investment Recap
Investment Recap Caspian financed for US$80m of Capex by Asia Sixth for ‘North Block’ development Fully funded through to full production in Zhagabulak field, Kozdesay and Baktygaryn Revenues from existing production in East Zhagabulak Experienced JV partner, Asia Sixth, with significant tec
Slide 34: Final Thoughts
Final Thoughts New Caspian Energy post transformational JV with Asia Sixth Kazakhstan: Production & reserves Low costs & tax Cash flows of £20m by NAV = $0.77 per share Prospectivity 2014 Vast market Strong management team $80m of Capex is financed and partnerships on the Share Price = $0.
Slide 35: Appendix
a CASP ed TSX: CEK.TO - = ENERGY INC www.caspianenergyinc.com
Slide 36: Enlarged Corporate Structure
Enlarged Corporate Structure Joint Executive Management Committee Strong Chinese Operating Partner 36
Slide 37: Aral Daily Oil Production 2011
Aral Daily Oil Production 2011 37 TSX: CEK.TO WWW.CASPIANENERGYINC.COM
Slide 38: East Zhagabulak: Rebased $100 Oil
East Zhagabulak: Rebased $100 Oil Value Sensitivity to Brent Price Various Brent Scenarios After Tax (US$m) $100 Brent Caspian’s $120 Brent Caspian’s (10% discount) 40% Share (10% discount) 40% Share Proved + Probable 167.8 67.1 196.8 76.7 Reserves Possible Reserves 165.8 66.3 193.2 73.3 Proved + Pr
Slide 39: EZ: Forecast Oil Production
EZ: Forecast Oil Production Oil production forecast up to year 2034 M ton 120 110 100 90 80 70 Annual Oil 60 Production 50 40 30 20 10 0 1400 1200 1000 Accumulated 800 Oil Production 600 400 200 0 39 TSX: CEK.TO WWW.CASPIANENERGYINC.COM
Slide 40: EZ: Forecast Gas Production
EZ: Forecast Gas Production Gas production forecast up to year 2034 30 25 20 Annual Gas Production 15 10 5 0 350 300 250 Accumulated Gas 200 Production 150 100 50 0 40 TSX: CEK.TO WWW.CASPIANENERGYINC.COM
Slide 41: Contacts
Contacts Calgary office Auditors and Reporting Accountants Caspian Energy Inc. MNP 410, 396 11th Avenue S.W., 900-700 6th Ave SW Calgary, AB T2R 0C5 Calgary, AB, Tel: +1(403) 252 2462 Canada www.caspianenergyinc.com Legal Advisers Almaty office Cassels Brock & Blackwell LLP Aral Petroleum Capital LL