Otto Energy Limited · ASX:OEL
Otto Energy — Euroz Rottnest Conference March 2008
47 slides from Otto Energy's conference presentation, March 2008
Slide 1: Euroz Rottnest Conference March 2008
EUROZ ROTTNEST CONFERENCE MARCH 2008 ASX CODE : OEL 1
Slide 2: Disclaimer
Euroz Conference March 2008 2 DISCLAIMER • This presentation does not constitute an offer to sell securities and is not a solicitation of an offer to buy securities. It is not to be distributed to third parties without the consent of Ott Energy Otto E Ltd (th (the “C “Company”). ”) • This presentati
Slide 3: Otto's Key Strengths
Euroz Conference March 2008 OTTO’S KEY STRENGTHS A strong t b board, d ttechnical h i l andd managementt tteam iin P Perth th and Manila to oversee the transformation from explorer to producer and from junior to mid-cap. We are opportunity rich: 1 field due to commence production in April 2008 ~ 350
Slide 4: Otto's Goals
Euroz Conference March 2008 4 OTTO’S GOALS Grow to a multi $billion market cap and be recognised as an Independent Oil company through: Realisation of asset value 1. Getting the current development assets to production. 2. Farming out and drilling of key prospects whilst retaining meaningful project
Slide 5: Corporate Board
Euroz Conference March 2008 CORPORATE BOARD RICK CRABB RUFINO BOMASANG JAAP POLL IAN MACLIVER JOHN JETTER CHAIRMAN DIRECTOR DIRECTOR DIRECTOR DIRECTOR (NON - EXECUTIVE) (NON - EXECUTIVE) (NON - EXECUTIVE) (NON - EXECUTIVE) (NON – EXECUTIVE) B JURIS (HONS) LLB NORASIAN CHAIRMAN PHD PHILOSOPHY AND MBA
Slide 6: Corporate Executives
Euroz Conference March 2008 6 CORPORATE EXECUTIVES ALEX PARKS CRAIG MARTIN BRUCE ELSHOLZ EMMA MCCORMACK KRIS FELLOWES CHIEF EXECUTIVE CHIEF OPERATIONS CHIEF FINANCIAL COMPANY SECRETARY CHIEF EXECUTIVE OFFICER OFFICER OFFICER OFFICER-NORASIAN Mr Alex Parks has a Mr Craig Martin has over Mr Bruce Elsh
Slide 7: Capital Structure
Euroz Conference March 2008 7 CAPITAL STRUCTURE SHARES OPTIONS ISSUED 437,812,325* ~39,700,000** MARKET CAP A$135m @ 0.31 cps CASH (1 MARCH 2008) ~A$12m*** $ and Galoc debt of ~ A$24 $ million Note: • Not included: 2m shares to project vendors on re-entry of Calauit and 10m shares + 20m options (30c
Slide 8: Corporate Structure
Euroz Conference March 2008 8 CORPORATE STRUCTURE Otto Energy ASX Listed Australian Public Company (ASX - OEL) 32.48% (Option to 41.24%) 100% 100% 100% Edirne NorAsian Cynthia “New Co” 100% (Turkish Comp.) (BVI Comp.) (Italian Comp) (Bermuda Comp) Turkey Argentina Italy Philippines 100% 100% Thrace
Slide 9: Current Areas of Interest
Euroz Conference March 2008 9 CURRENT AREAS OF INTEREST NON-OPERATED OPERATED ITALY Onshore Gas in Po Valley Licences TURKEY PHILIPPINES Onshore Gas in Thrace Offshore Oil & Gas in Basin Licences Phili i Licences Philippine Li ARGENTINA Onshore Oil Exploration in Argentina / Santa PERTH, Rosa Block
Slide 10: The Philippines
Euroz Conference March 2008 10 THE PHILIPPINES OTTO’S OTTO S PROJECT LOCATIONS SC14 C Galoc SATELLITE PHOTO PHILIPPINES OTTO LICENCE MAP OF PHILIPPINES
Slide 11: Why Explore in the Philippines?
Euroz Conference March 2008 11 WHY EXPLORE IN THE PHILIPPINES? • The Philippines has numerous proven hydrocarbon basins • The offshore areas are under explored with less than 100 exploration wells drilled offshore • 40 discoveries and 11 commercial fields offshore • The fiscal regime is one of the b
Slide 12: Otto's Philippines Acreage
Euroz Conference March 2008 12 OTTO’S PHILIPPINES ACREAGE 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 potential for development in 2009 G Gross 2P Reserves R off 5
Slide 13: Galoc SC14C (18.28%)
Euroz Conference March 2008 13 GALOC SC14C (18.28%) Otto has an 18.28% net revenue interest in the Galoc oil field through acquisition of a 32% shareholding in a dedicated Joint Venture company, Galoc G l Production P d ti Company C (GPC) • GPC is the field operator Galoc Galoc Location Location • G
Slide 14: Galoc / SC14C Working Interests
Euroz Conference March 2008 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
Slide 15: Galoc Oil Field
Euroz Conference March 2008 15 GALOC OIL FIELD GCA CERTIFIED GROSS RESERVES FOR GALOC 1st Phase 2nd Phase 1P 9.7 MMstb 3P 41.9 MMstb 2P 23.5 MMstb Galoc-3 Energy Searcher Flaring Gas (20 February 2008)
Slide 16: Value of 18.28% of Galoc to Otto
Euroz Conference March 2008 VALUE OF 18.28% OF GALOC TO OTTO • Acquisition cost of ~A$45 million + cash bond on deposit of A$14.5 million for fully financed project j to first production in April 2008. • Whole deal NPV10 to Otto of ~ A$122 million (post tax) for 2P reserves at US$80/bbl • Net 3-4000
Slide 17: Calauit Oil Field
Euroz Conference March 2008 17 SC50 (84%) CALAUIT OIL FIELD Possible Fracture Swarms within closure 2007 3D SEISMIC TO DELINEATE CALAUIT AND OPTIMIZE DEVELOPMENT DRILLING
Slide 18: SC50 - Calauit Oil Field
Euroz Conference March 2008 18 SC50 - CALAUIT OIL FIELD OTTO HAS A 98% BENEFICIAL INTEREST • 3D seismic was shot by Otto in June 2007, to better delineate the field and plan for drilling in 2009. • 2 oil discoveries • Post-3D seismic volumetric g of 1.5 – 12 estimates range MMstb resources • Calauit
Slide 19: SC51 (80%)
Euroz Conference March 2008 19 SC51 (80%) 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 20: SC51 Southern Block with >100 MMbbls Targets
Euroz Conference March 2008 SC51 SOUTHERN BLOCK WITH >100 MMBBLS TARGETS 8 RESERVOIR LEVELS THAT EACH COULD CONTAIN BETWEEN 40 AND 300 MILLION BARRELS IN PLACE DHI SUGGESTS GAS CAP AVO ANOMALIES SUGGEST E-W E W SECTION OVER ARGAO AND CABILAO POSSIBLE GAS ON OIL…. OIL WITH AMPLITUDE ANOMALIES (“HYDRO
Slide 21: Area 8 (70%)
Euroz Conference March 2008 AREA 8 (70%) PREFERRED BIDDER OTTO HAS BEEN SELECTED AS THE PREFERRED BIDDER FOR AREA 8 • Area 8 lies between Cebu & Bohol. The area consists of 7,440km2. There is approximately Leads and Prospects 3,000km of existing 2D seismic covering the area • The area is considered
Slide 22: SC55 (85%) Elephant Country
Euroz Conference March 2008 22 SC55 (85%) “ELEPHANT ELEPHANT COUNTRY” COUNTRY DEEP WATER BLOCK WITH MASSIVE POTENTIAL • Area of 9,000km2 • Never previously licensed as an Exploration Permit • Massive Reef and Turbidite potential OTTO HAS ACQUIRED 2D SEISMIC IN TWO SURVEYS • 400km of prospect specifi
Slide 23: Giant Marantao Reef Prospect
Euroz Conference March 2008 SC 55 Deep Water GIANT MARANTAO REEF PROSPECT Licence ( (Potentially y 5 x Malampaya p y Size)) Shell/Conoco with amplitude anomalies and seabed oil and gas seeps Phillips oil discovery MARANTAO MALAMPAYA (AT SAME SCALE)
Slide 24: Marantao Volumetric Scenarios
Euroz Conference March 2008 24 MARANTAO VOLUMETRIC SCENARIOS Base Case 50m Oil with Gas Cap (Malampaya has a 56m oil column) P90 P50 P10 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 1,118 567 OIL ONLY AND
Slide 25: Non-Operated Assets Summary
Euroz Conference March 2008 NON-OPERATED ASSETS SUMMARY Otto has exposure to three non-operated onshore project areas, providing low risk incremental growth to the portfolio, low maintenance, regular exploration drilling and stable future income from onshore gas production TURKEY • Very low cost exp
Slide 26: Turkey
Euroz Conference March 2008 26 TURKEY PROJECT LOCATION SATELLITE PHOTO WESTERN TURKEY & THRACE BASIN LICENCE LOCATION AND INFRASTRUCTURE OF THE THRACE BASIN
Slide 27: Turkey
Euroz Conference March 2008 27 TURKEY THREE GAS DISCOVERIES • First production expected late 2008 top tier gas price at US$8-10/Mscf + Revenues: Initially US$3m/year, targeting US$10m/year within 18 months assuming further discoveries • Strong farm-in farm in partner with operating experience in Tur
Slide 28: Provisional Prospects from New 3D
Euroz Conference March 2008 28 PROVISIONAL PROSPECTS FROM NEW 3D Ortakci K Kavakli kli Yagci Karabas Kuzey Kuzey Suloglu PROGRAM • 5 wells starting in Kuzey Koyustu Feb 2008 Koyustu • Development mid 2008 Gerdelli • First gas sales Kuzey Suloglu late 2008 Arpaci Bati Umur Urun Discovery Prospect
Slide 29: Italy
Euroz Conference March 2008 ITALY BASTIGLIA-CENTO PERMITS,, PO VALLEY SATELLITE PHOTO ITALY SHOWING LICENCE LOCATION PO VALLEY REGION AND INFRASTRUCTURE OF THE PO VALLEY BASIN
Slide 30: Italy Project Details
Euroz Conference March 2008 30 ITALY PROJECT OJ C DETAILS S Gas Field Gazzata Oil Field • Operated by Ascent Resources g in for 50% • Otto farming • First well Gazzata-1 drilling in September 2008 • Funded from existing capital and Galoc revenues • Gazzata Ga ata aalone o e cou couldd be NPV of A$20
Slide 31: Italy Project Details
Euroz Conference March 2008 31 ITALY PROJECT DETAILS GAZZATA PROSPECT POTENTIALLY >130 BSCF RESOURCES • Numerous prospects Gas/Water Contact ? • Good local pipe line infrastructure over permits • European p gas g prices >$10 /Mscf “HAMPSON RUSSELL” PROCESSING - ALL LINES SHOW AVO TERMINATING AT THE
Slide 32: Argentina
Euroz Conference March 2008 32 ARGENTINA PROJECT OVERVIEW OTTO ACQUIRES 32.48% IN 1 BILLION BARREL OIIP POTENTIAL SANTA ROSA DOME SATELLITE PHOTO ARGENTINA
Slide 33: Argentina Cuyana Basin
Euroz Conference March 2008 33 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$900,000 The Santa Rosa block contains the giant Santa Rosa Dome with potentially
Slide 34: Cuyana Basin and Santa Rosa Dome
Euroz Conference March 2008 34 CUYANA BASIN AND SANTA ROSA DOME E-W E W profile fil showing h i oil il fields fi ld in i western t partt off basin, b i source beds b d in i basin b i centre and likely migration paths eastwards towards the Santa Rosa Dome
Slide 35: Statistically Meaningful Exploration
Euroz Conference March 2008 STATISTICALLY MEANINGFUL EXPLORATION Area / 1st COS COF Project NPV10 Notes Prospect ($Million) ITALY / Gazzata 50% 50% 152 Low risk follow up in Rubiera SC51 / Argao 30% 70% 158 Low risk follow up in Carcar & Bahay Argentina / Santa 5% 95% 224 Unlocks new play type Rosa
Slide 36: The Potential Impact of Success
Euroz Conference March 2008 THE POTENTIAL IMPACT OF SUCCESS Assumptions • Oil Price $90/stb • Gas Price $10/Mscf • Developments p 60% debt financed The series of charts show the net revenue stream to Otto after current exploration and development commitments assuming Otto has farmed down to 30-50% W
Slide 37: The Potential Impact of Success
Euroz Conference March 2008 THE POTENTIAL IMPACT OF SUCCESS Base Case Philippines - Galoc Phase 1 & 2 Net Cash in 2018 = $86 Million Turkey – Edirne Gas Philippines – Calauit Oil
Slide 38: The Potential Impact of Success
Euroz Conference March 2008 THE POTENTIAL IMPACT OF SUCCESS Philippines - Galoc Phase 1 & 2 Turkey – Edirne Gas Net Cash in 2018 = $351 Million Philippines – Calauit Oil Italy – Gazzata Gas
Slide 39: The Potential Impact of Success
Euroz Conference March 2008 THE POTENTIAL IMPACT OF SUCCESS Philippines - Galoc Phase 1 & 2 Turkey – Edirne Gas Net Cash in 2018 = $351 Million Philippines – Calauit Oil Philippines – Argao Oil
Slide 40: The Potential Impact of Success
Euroz Conference March 2008 THE POTENTIAL IMPACT OF SUCCESS Philippines - Galoc Phase 1 & 2 Turkeyy – Edirne Gas Net Cash in 2018 = $357 Million Philippines – Calauit Oil Argentina – Santa Rosa
Slide 41: The Potential Impact of Success
Euroz Conference March 2008 THE POTENTIAL IMPACT OF SUCCESS Philippines - Galoc Phase 1 & 2 Philippines – Argao Oil Turkey – Edirne Gas Italy – Gazzata Gas Philippines – Calauit Oil Net Cash in 2018 = $616 Million
Slide 42: The Potential Impact of Success
Euroz Conference March 2008 THE POTENTIAL IMPACT OF SUCCESS Philippines - Galoc Phase 1 & 2 Philippines – Argao Oil Turkey – Edirne Gas Italy – Gazzata Gas Argentina - Santa Rosa Philippines – Calauit Oil Net Cash in 2018= $886 Million
Slide 43: The Potential Impact of Success
Euroz Conference March 2008 THE POTENTIAL IMPACT OF SUCCESS Philippines - Galoc Phase 1 & 2 Philippines – Argao Oil Italy – Gazzata Gas Turkey – Edirne Gas Argentina – Santa Rosa Philippines - Marantao Philippines – Calauit Oil Cum Cashflow = $1,419 Million
Slide 44: The Potential Impact of Success
Euroz Conference March 2008 THE POTENTIAL IMPACT OF SUCCESS Philippines - Galoc Phase 1 & 2 Turkey – Edirne Gas Net Cash in 2018 = $559 Million Philippines – Marantao
Slide 45: Project Value per Share
Euroz Conference March 2008 Project Value per share (based on mid case NPV10, $90/stb) Country/Permit Project Project Maturity NPV/share Risked NPV/share Philippines – SC14C Galoc Phase 1 Under Development $0.18 $0.18 Philippines – SC14C Galoc Phase 2 Under Development $0.05 $0.03 Philippines – SC50
Slide 46: Prognosis of Upcoming News and Activities
Euroz Conference March 2008 PROGNOSIS OF UPCOMING NEWS AND ACTIVITIES • Drilling of Galoc development wells • Award of Argentina • Drilling in Turkey starting March 08 - five wells • Commence production at Galoc in April 08 1ST CASH FLOW $30 – $60 MILLION / YEAR pp • Farm-out of Philippines p projec
Slide 47: Finally in Summary
Euroz Conference March 2008 FINALLY IN SUMMARY • Otto is a dynamic company with significant growth potential • Otto has a strong board and management team to oversee the growth from explorer to producer and junior to mid-cap • The cash flow from Galoc production means Otto is now funded to g equity