Dana Gas PJSC · ADX:DANA

Dana Gas PJSC — Dana Gas — Investor Presentation (November 2015)

46 slides from Dana Gas PJSC's investor presentation, November 2015

  1. Slide 1: Clean Energy For the MENA Region's Tomorrow

    Clean Energy For the MENA Region’s Tomorrow Dana Gas Investors Presentation November 2015 www.danagas.com 1

  2. Slide 2: Forward Looking Statement

    Forward Looking Statement This presentation contains forward-looking statements Forward-looking statements are based on certain assumptions which may be identified by their use of words like “plans,” and expectations of future events. The Company, its “expects,” “will,” “anticipates,” “believes,” “i

  3. Slide 3: Presentation Outline

    Presentation Outline  Gas – Growth fuel in MENA  Dana Gas – Overview  Country Operations – Egypt and KRI  Project Update – Zora Gas, UAE  Credit Metrics  Relative Valuations  Summary www.danagas.com 3

  4. Slide 4: Gas is the growth fuel of the 21st Century

    Gas is the growth fuel of the 21st Century. Gas has strong environmental credentials and is cost competitive Current full lifecycle costs for new-build power generation including CO2 emissions from fuel externalities (US$/boe) (% share of global emissions) Gas 20% Coal 44% Oil 36% Switching from coa

  5. Slide 5: MENA region has strong economic growth credentials

    MENA region has strong economic growth credentials. Energy requirements of the region are expected to increase. Population growth in MENA countries 400 Bahrain 350 Qatar Kuwait Population (millions) 300 Oman 250 Libya UAE 200 Tunisia 150 Yemen Saudi Arabia 100 Iraq 50 Algeria Egypt 0 GDP growth in M

  6. Slide 6: Gas is a key fuel in the primary energy mix in MENA

    Gas is a key fuel in the primary energy mix in MENA Gas is the fuel of choice in power generation and has significant room to displace oil in power Primary energy sources of selected MENA countries Saudi Arabia Kuwait Egypt Algeria Oil Iran UAE 4.8 0.8 1.7 Natural Gas mmboe/d mmboe/d mmboe/d Coal 1

  7. Slide 7: MENA gas producers striving to maintain domestic needs and exports

    MENA region gas producers striving to maintain domestic needs and export obligations MENA region annual gas demand growth rates are one of the highest globally 2014 MENA gas production (bcm) 2014 MENA gas exports (bcm) 2014 MENA gas demand (bcm) Qatar Iran LNG Pipe Iran 24% 120 31% 24% 100 Saudi Ara

  8. Slide 8: Dana Gas as regional gas integrated player

    Dana Gas as regional gas integrated player focused on matching resource with markets Gas Resource* Holders in MENA (Total Reserves: c. 92 tcm) 40 Proved gas reserves, tcm Access to Private Capital Open 30 Potentially Open Closed/inaccessible 20 10 0 Iran Qatar Iraq^ Saudi UAE Algeria Egypt Kuwait Li

  9. Slide 9: Dana Gas – Business Profile

    Dana Gas – Business Profile www.danagas.com 9

  10. Slide 10: Dana Gas: Independent E&P company listed on the ADX

    Dana Gas: Independent E&P company listed on the ADX Dana Gas is operating at the heart of the world’s  Dana Gas is a MENA focused gas largest hydrocarbon region independent headquartered in the UAE  Quoted in the Abu Dhabi Securities Exchange. Bloomberg: DANA:UH  Shares outstanding: c. 6969 milli

  11. Slide 11: Dana Gas works across the gas value chain

    Dana Gas works across the gas value chain addressing both domestic and export market needs in MENA region Dana Gas is operating at the heart of the Production Profile 80 world’s largest hydrocarbon bearing region Iraq 68.9 70 64.7 65.1 Egypt WI Production (kbopd) 60 50 40 30 20 10 0 2007 2008 2009 2

  12. Slide 12: Consistent growth, delivery and financial performance since 2007

    Consistent growth, delivery and financial performance since 2007 Production Revenue 80 68.9 800 CAGR: 2% Iraq 70 64.7 65.1 Egypt 700 WI Production (kbopd) 60 600 50 USD Million 500 40 400 690 683 30 300 636 652 487 20 200 CAGR: 11% 311 349 324 282 10 100 0 0 2007 2008 2009 2010 2011 2012 2013 2014 9

  13. Slide 13: Dana Gas: Country Business Highlights – Egypt

    Dana Gas: Country Business Highlights EGYPT www.danagas.com 13

  14. Slide 14: Egypt gas market fundamentals are sound

    Egypt gas market fundamental are sound. New gas discoveries and gas imports are likely to return Egypt’s domestic demand to its historic growth trajectory Egypt annual gas supply/demand balance (post Zohr) Egypt’s current and planned regas capacity Producing Sanctioned Projects LNG Exports LNG Impor

  15. Slide 15: Dana Gas is the 6th largest operator in Egypt

    Dana Gas is the 6th largest operator and 4th largest onshore producer in Egypt 2015e Gas Production Ranking in Egypt (* denotes company is an operator) 1,000 900 2015 WI Production, mmcfpd 800 Dana Gas Egypt Credentials: 700 8th largest producer 600 6th largest operator th 4 largest onshore producer

  16. Slide 16: Egypt: Nile Delta Operations

    Egypt: Nile Delta Operations El Wastani Development Leases: • Onshore acreage consisting of 14 Development Leases in the prolific Nile Delta region Production: • 3Q 2015 avg 32.1 kboe/d versus 40.5 kboe/d for 3Q 2014. Decline is due to natural field production decline which will be Balsam 3 Balsam 2

  17. Slide 17: Gas Production Enhancement Agreement (GPEA)

    Gas Production Enhancement Agreement (GPEA) helps Egypt increase production while delivering long term value to Dana Gas Gas Enhancement Project – Execution Progress • 3 drilling and workover rigs secured with spud dates during May/June o 2000 HP rig - Balsam-2 o 1500 HP rig - Balsam-3, Salma Delta-

  18. Slide 18: Block 6 – North El Arish Offshore Opportunity

    Block 6 – North El Arish Offshore Opportunity • 1782 sq km of full fold 3D seismic acquired in Sept-Oct 2015 by PGS Ramform Titan boat. • Boat product PSTM seismic processing to be completed by mid/end December 2015 • Farm-out activity initiated • Integration of regional 2D multi client seismic data

  19. Slide 19: Egypt: Block 1 - North El Salhiya Exploration

    Egypt: Block 1 - North El Salhiya Exploration Newly awarded exploration blocks in Nile Delta enables Dana Gas to build on its core area production and utilising existing infrastructure • North El Salhiya (Block-1) onshore concession in the Nile Delta ratified on 15th January 2015 • Block-1 (100% WI)

  20. Slide 20: Egypt: Block 3 - El Matariya Exploration

    Egypt: Block 3 - El Matariya Exploration Newly awarded exploration blocks in Nile Delta enables Dana Gas to build on its core area production and utilising existing infrastructure • El Matariya (Block-3) onshore concession in the Nile Delta ratified on 15th January 2015 • Block-3 (50% WI); BP to ope

  21. Slide 21: Country Business Highlights – Kurdistan Region of Iraq

    Dana Gas: Country Business Highlights Kurdistan Region of Iraq www.danagas.com 21

  22. Slide 22: Operations in Kurdistan Region of Iraq

    Operations in Kurdistan Region of Iraq  DG share of production (40%) averaged 28,000 boepd during 3Q 2015. Gross production details are as follows: o 300 MMscfd of natural gas o 12,627 bbl/d of condensates o 633 MT/d LPG  The Mol sieve bed for the first train at Kor Mor plant was replaced in Octob

  23. Slide 23: Rich gas and condensate producer with strong growth track record

    Rich gas and condensate producer with strong growth track record Khor Mor Field Production, Dana Gas net share (40%) 30 Gas 3 Liquids(Condensate + LPG) 25 20 Production (kboed) 15 10 5 0 www.danagas.com 3. Current Condensate Gas Ratio (CGR) on Khor Mor is c. 45 bbl/mmscf comparable to Qatar North Fi

  24. Slide 24: Khor Mor and Chemchemal potentially largest gas fields in the KRI

    Khor Mor and Chemchemal are potentially largest gas fields in the KRI and comparable to large scale gas developments in the region Large Gas Developments in MENA (Source: Company disclosure) 110 100 90 Gas initially in place resources (tcf) 80 70 60 50 40 30 20 10 0 KhorMor + Miran Bina Bawi Khazzan

  25. Slide 25: Project Update – Zora Gas, UAE

    Dana Gas: Project Update – Zora Gas, UAE www.danagas.com 25

  26. Slide 26: Zora Offshore drilling activity – First Gas Achieved

    Zora Offshore drilling activity – First Gas Achieved  Drilling of Sharjah well Lateral A and Lateral B completed  Well cleaned up and flowed at 50 MMSCFD - first gas 18th September 2015  Drilling Rig SGD-2 demobilized and departed Zora on 22nd October 2015 www.danagas.com 26

  27. Slide 27: Zora Offshore Platform - Successfully Installed

    Zora Offshore Platform - Successfully Installed  Topsides installed offshore on 30th October and Platform installation complete  Accommodation vessels and hook up team being mobilized  Offshore Hook-up and Commissioning work ongoing  First gas delivery for plant commissioning expected 4Q 2015 ww

  28. Slide 28: Zora Gas Processing Plant - Nearing Completion

    Zora Gas Processing Plant - Nearing Completion  Main construction, Installation and Erection complete  Systems powered up, Pre- commissioning activities ongoing in preparation to receive gas www.danagas.com 28

  29. Slide 29: Dana Gas: Credit Metrics

    Dana Gas: Credit Metrics www.danagas.com 29

  30. Slide 30: Additional financial information

    Additional financial information Dana Gas additional financial metrics Period Unit Value EBITDA LTM US$m 186 EBIT LTM US$m 92 Net debt Current US$m 709 Net debt / EBITDA LTM x 3.8 Interest cover ratio LTM x 1.4 Book leverage (Net debt / Total assets) Current x 19% Average years to maturity Current Y

  31. Slide 31: Financing Update

    Financing Update Sukuk  Ordinary Sukuk (9%) outstanding of approx. $400 million following buy back of $25 million  Convertible Sukuk (7%) outstanding of approx. $350 million post buy back of US$2 million  2014 redemptions of Convertible Sukuk worth $73 million – approx. 357 million shares issued

  32. Slide 32: Dana Gas Sukuk Instruments

    Dana Gas Sukuk Instruments Dana Gas share price vs. convertible trading value Sukuk convertible trading value (USD) Dana Gas share price (AED) Convertible Sukuk: 140 1.2 Convertible trading value (USD) 120 1.0  Principal amount: $352 mln Share price (AED) 100 0.8 80 0.6  Coupon: 7% (payable 60 qua

  33. Slide 33: Leverage and interest coverage ratio in line with peers

    Leverage and interest coverage ratio in line with peers Debt servicing: Net debt / EBITDA 6 4 2 Net debt / EBITDA 0 -2 -4 -6 -8 -10 -12 -14 Dana Gas DNO Premier Petroceltic Genel Tullow Lundin Note: Net debt is as of latest reports. EBITDA is a LTM value. Interest cover ratio 4 2 EBIT / Interest exp

  34. Slide 34: Book gearing and leverage comparable to industry peers

    Book gearing and Leverage comparable to industry peers Total debt to total assets 80 70 Total debt to total assets 60 50 40 30 20 10 0 Lundin Premier Tullow Petroceltic DNO Dana Gas Genel Debt to common equity 600 Debt to common equity 500 400 300 200 100 0 Lundin Premier Tullow DNO Petroceltic Dana

  35. Slide 35: Reserve life vs average years to maturity of debt

    Reserve life c. 2 x average year to maturity of Debt Years to average maturity 6 Years to average maturity (#) 5 4 3 2 1 0 Tullow DNO Premier Genel Dana Gas Lundin Petroceltic 2P reserve life 20 18 Note: Dana Gas Reserve life excludes 16 2P reserve life (years) KRI production & 14 reserves 12 10 8 6

  36. Slide 36: Dana Gas: Relative Valuations

    Dana Gas: Relative Valuations www.danagas.com 36

  37. Slide 37: EV and Production valuation relative to peers

    EV and Production valuation relative to peers Enterprise Value vs. Production (2015E) EV ($bn) 2015E Production (kboepd) 10 100 9 90 8 80 WI Production (kboepd) 7 70 Enterprise Value ($ bn) 6 60 5 50 4 40 3 30 2 20 1 10 0 0 Lundin Tullow Premier Dana Gas Genel DNO Gulf Petroceltic Transglobe Circle

  38. Slide 38: Significantly undervalued relative to peers

    Significantly undervalued relative to peers EV / EBITDA (2016E) Price / EPS (2016E) 8 30 7.0 7.0 26.4 7 25 Price / EPS (2016E) EV / EBITDA (2016E) 6 5.3 Mean* ~4.9 19.2 20 18.6 Mean * ~15.3 5 4.3 3.7 3.6 4 3.5 15 11.4 10.1 3 10 6.4 2 5 1 n.a. 0 0 Petroceltic Lundin Tullow Genel Premier DNO Dana Gas

  39. Slide 39: Relative Performance

    Relative Performance www.danagas.com -80% -40% -20% -60% 0% -100% 20% 40% 60% Ithaca Africa Oil Lekoil Det Norske Source: Bloomberg, performance as of 16/11/2015 Soco Intl. Lundin Petroleum DanaGas Cairn Energy Kosmos Cobalt Brent Kris Energy Bowleven Inter oil Indus gas Vaalco Gulf Keystone DNO Ban

  40. Slide 40: Relative Performance

    Relative Performance www.danagas.com -80% -60% -40% -20% 0% -100% 20% 40% 60% Det Norske Africa Oil Lundin Petroleum Lekoil Source: Bloomberg, performance as of 16/11/2015 Cobalt Kosmos Faroe Petroleum Brent Shamaran Ithaca Bowleven Cairn Energy Inter oil DanaGas Ophir Energy EnQuest Bankers Petrole

  41. Slide 41: Relative share price performance of Dana Gas

    Relative share price performance of Dana Gas 140% 120% Received Abu Dhabi Index +57% US$53mln from Egypt Signed the Partial award GPEA in Egypt in KRI 100% Arbitration Achieved record 80% 2013 production S&P GCC Index +31% Relative market performance (%) in Egypt 60% Approval of Sukuk refinancing 40

  42. Slide 42: Dana Gas has mostly outperformed International and ME peers since Jan 2013

    Dana Gas has mostly outperformed International and Middle Eastern (ME) peers since Jan 2013 International Peers ME Peers 150% 200% Dana Gas +16% Dana Gas -13% DNO -42% Lundin -46% Genel -70% Premier -81% 150% 100% Petroceltic -79% Tullow -85% Gulf Keystone -86% Relative performance (% ) Relative per

  43. Slide 43: Dana Gas has outperformed its ME peers throughout 2015

    Dana Gas has outperformed its Middle Eastern (ME) peers throughout 2015 ME Peers since January 2015 ME Peers since July 2015 40% 40% Dana Gas -22% Dana Gas -20% DNO -55% DNO -28% 30% Gulf Keystone -63% Gulf Keystone -30% 20% Genel -65% Genel -52% 20% Petroceltic -70% Petroceltic -62% 10% Relative pe

  44. Slide 44: Summary

    Summary www.danagas.com 44

  45. Slide 45: Summary

    Summary  9M 2015 revenue is US$324 million, net profit is US$10 million and average production is 65,100 boepd  First major gas discovery in Egypt in 2015 in Balsam-3 . In addition to the Balsam-3 discovery we have also proved up additions to our field reserves with the Balsam-2 development well.

  46. Slide 46: Reach Us: Dana Gas PJSC

    Reach Us: Dana Gas PJSC P. O. Box 2011, Sharjah, UAE www.danagas.com E-mail : [email protected] Direct : +971 6 519 4401 Fax : +971 6 556 6522 www.danagas.com 46

Dana Gas — Investor Presentation (November 2015) on 6ix