: Unlocking material value in the UK North Sea through development

Transcription

1 : Unlocking material value in the UK North Sea through development : CORPORATE UPDATE Q i3 ENERGY (LON:i3E)

2 Forward looking statements This presentation contains forward-looking statements and information that both represent i3 management's current expectations or beliefs concerning future events and are subject to known and unknown risks and uncertainties. A number of factors could cause actual results, performance or events to differ materially from those expressed or implied by these forward-looking statements. : CORPORATE UPDATE Q

3 i3 highlights TEAM Deep E&P experience: third time creating a North Sea energy company proven developers of overlooked opportunities DEVELOPMENT UPSIDE FUNDING Liberator development sanctioning expected early 2019 with Phase I delivering initial rates up to 20,000 bopd (1) under staged 3-well programme Liberator audited third party estimate of 80 MMbbls (2) mid-case recoverable reserves and resources, with material on-block Serenity prospect under assessment JV partnering process underway and UK-based lenders engaged to upsize Liberator development facility; completion expected alongside 2019 FDP approval 1. Highly productive Liberator horizontal wells will be constrained for reservoir management purposes 2. Recoverable 2P Reserves from AGR Liberator CPR plus 2C Contingent Resources plus recoverable Best-case Prospective Resources from AGR Phase II CPR : CORPORATE UPDATE Q

4 i3 executive & board Majid Shafiq, CEO 30 years technical and investment banking experience focused on the global E&P sector i3 Energy Non-executive Director from July 2017 to October 2018 CEO of Àrgentil Capital Partners (UK) Limited, Managing Director at First Energy Capital LLP, MD at Tristone, Director at Waterous and Co. 13 years at Mobil Oil Corporation in engineering and commercial roles in the UK and the Netherlands Graham Heath, CFO & Co-founder VP Corporate Development and Interim CFO at Iona Energy Go-public listing of Iona via RTO in 2011, structured total financing of $670 MM in North America and Europe 19 years oil & gas experience Consultant to PanCanadian Petroleum, EnCana Corporation, Cenovus Energy Co-founded energy-related tech startups focused on enhanced oil recovery David Knox, Non-executive Chairman Chief Executive Officer and Managing Director of Santos Limited from 2008 to 2015 Global experience in the Petroleum Industry Managing Director of BP Exploration and Production in Australasia Management and Engineering roles at BP, ARCO and Shell across Australia, UK, Pakistan, United States, Netherlands and Norway Neill Carson, Non-executive Director & Co-founder Principal Founder and Executive of both Iona Energy (CEO) and Ithaca Energy (COO) Constructed portfolios totaling 75+ MMboe with production of 20 kboepd 35 years international oil & gas experience Geophysicist and manager in Europe, Latin America, Middle East, Far East at Amoco/BP Discovered 400 MMbbl oil field in the UK Richard Ames, Non-executive Director 34 years broad range experience in the oil and gas industry with senior executive roles in full-cycle oil and gas E&P VP positions in TNK-BP, Sidanco, and Amoco Responsible for government liaison, implementation of business strategies, exploration, new venture management Joined Amoco in 1981 as geologist responsible for reserve definition in international petroleum basins including the North Sea : CORPORATE UPDATE Q

5 100% operated interest in Liberator and Serenity Liberator Development & Appraisal 100% i3 operated working interest in near term production and low risk appraisal World class Captain reservoir with fluid properties analogous to neighbouring prolific Blake field Mid-case total discovered and prospective STOIIP estimated at 237 MMbbls by AGR Tracs 2017 and 314 MMbbls by i3 Energy 2P and mid-case recoverable reserves and resources of 80 MMbbls oil and 30 Bcf gas (AGR Tracs 2017) Highly attractive project economics i3 s 100% operated interest in 13/23c and 13/23d Serenity Prospect The Serenity prospect (areal extent of c.10km 2 compared to Liberator at 9km 2 ), is an amplitude supported feature located in the hanging wall of the Halibut Horst, on trend with and immediately west of the Tain discovery The Tain discovery encountered 32 API oil in Coracle and Captain sands and was subsequently appraised by three wells Provides exposure to low cost/high return exploration upside with tie-in potential to the incremental Phase II Liberator development infrastructure Serenity Prospect 13/23c 13/23d Tain Discovery : CORPORATE UPDATE Q

6 Reserves and resources 234 MMBO upside potential (1) Liberator Phase I Strong 2P Reserves base Phase I targets 11 MMbbls 2P reserves and, upon A3 appraisal well success, 7 MMbbls (3) 2C contingent resources with planned initial flow rates up to 20,000 bopd Phase II Phase I pre-tax NPV10 of $795mm with 385% IRR, post-tax NPV10 of $483mm with 273% IRR (4) A3 Liberator Phase II Highly strategic resources Perform seismic and appraisal program in 2020 Objective to unlock and monetise Western area of Liberator field to access Phase II 2C contingent resources of 15 MMbbls (3) and mid-case prospective resources of 47 MMbbls Phase I Phase II delivered by 4 development wells via standalone FPSO producing multi-billion dollar NPV10s with similar metrics to Liberator Phase I Phase I Reserves Phase II East Contingent Resources Phase II West Prospective Resources Phase I and II Total Reserves + Resources 1P 2P 3P 1C 2C 3C Low Mid High Low Mid High STOIIP RF% 22% 28% 29% 20% 35% 50% 20% 35% 50% 21% 34% 48% Recoverable (MMbbl) % chance of commerciality (2) 56% chance of commerciality (2) 1. Liberator Reserves from AGR Liberator CPR , Phase II (Liberator West) Contingent Resources and Prospective Resources from AGR Liberator Phase II CPR Liberator Phase II (East) CoS: 70% chance of finding sufficiently large volume, Liberator Phase II (West) CoS: Geological CoS 56.25% 3. i3 Energy expects recoverable resources from the L4 well location of c.7 MMbbls 4. i3 Energy view based on current Phase I development programme and mid-case production expectations using Sproule September 2017 Brent price curve : CORPORATE UPDATE Q

7 TVDSS ft Liberator cluster - subsurface overview Liberator 13/23d-8 well Phase II West K50 Phase II East Phase I Blake Field A3 Shale OWC = 5270 ft Valhall Shale metres Gross thickness inexcess of 300ft Net to gross of ~98% Average porosity of 28% and permeability ranging from md Discovery well 13/23d-8 encountered a 24ft hydrocarbon column sand thickness materially increases moving westward from discovery well through Phase I and into Phase II capture area Fluid properties indicate under-saturated oil of similar quality to Blake field; 30.3 API, 1.9 cp viscosity at reservoir conditions and a GOR of 341 scf/stb. OWC at 5270ft TVDSS, confirmed by logs and MDT, consistent with Blake OWC and regional analogue data : CORPORATE UPDATE Q

8 Enlarged phase I development plan Phase I FDP being revised to optimise the drilling program and well locations to efficiently drain the eastern area of the Liberator field Submission of new enlarged FDP is on track for December 2018, with FDP approval and FID targeting end Q Low risk, low capex development strategy utilising two initial subsea production wells from a single drill centre (DC1) tied back to the Bleo Holm FPSO First development well (L2) and appraisal well (A3) drilled in summer 2019; A3 appraisal well will optimize second development well location (L4 or L1) Second development well and pipeline installation to be completed the following spring, with first oil expected summer 2020 Phase I targets 11 MMbbls 2P reserves and 7 MMbbls 2C contingent resources with planned initial flow rates up to 20,000 bopd Firm A3 appraisal well will target conversion of additional 22 MMbbls of 2C contingent resources to reserves and de-risk Liberator s western extension Horizontal wells completed with standalone sand screens, analogous to successful Blake field completions, with the addition of proven inflow control devices Well placement to be optimised via Logging-While-Drilling (LWD) geo-steering technology Minimal modification required on Bleo Holm FPSO to accommodate Liberator production Long lead items procured including two Xmas trees and subsea wellheads John Woods, i3 s Chief Developments Officer with Liberator Xmas Tree : CORPORATE UPDATE Q

9 Liberator phased development and upside Liberator Phase II Appraisal and Development Thorough regional analysis of all available data has identified a material extension of the Liberator accumulation to the North West AGR Tracs independently assessed 22 MMbbls 2C contingent resources and 47 MMbbls mid case prospective resources Firm A3 appraisal well targeting conversion of contingent resources to reserves and to de-risk prospective resources of 47 MMbbls in Liberator s Phase II extension Additional 2020 seismic and appraisal programme to delineate structure and optimise Phase II well locations following Liberator Phase I first oil Current conceptual design includes 4 development wells via standalone FPSO or platform producing multi-billion dollar NPV10s under similar economic metrics to Liberator Phase I Phase II can be organically funded from Phase I cash flow Serenity Prospect Recently secured acreage in the UK s 30 th Licencing Round provides potentially material structure, the Serenity prospect, in northern area of Block 13/23c The Serenity prospect is interpreted as the westerly extension of the Tain Discovery into Block 13/23c and has an areal extent of c.10km 2 (compared to Liberator at 9km 2 ) The Tain discovery encountered 32 API oil in Coracle and Captain sands and was subsequently appraised by three wells Serenity provides exposure to low cost/high return exploration upside with tie-in potential to the incremental Phase II Liberator development infrastructure : CORPORATE UPDATE Q

10 Investment highlights Proven and Prolific Geology Liberator Field Resource Base Near Term Production Liberator is analogous to the neighbouring prolific Blake producing field with an areal extent of 9km 2 World class multi-darcy range Lower Cretaceous Captain sands High quality 30.3 API reservoir fluid properties AGR Tracs audited mid case STOIIP of 237 MMbbls in Phase I & Phase II developments, i3 estimates 314 MMbbls midcase STOIIP AGR Tracs independently assessed 11 MMbbls 2P reserves, 22 MMbbls 2C resources and 47 MMbbls mid case prospective resources Phased development to optimise project operations and cash flow Low risk Phase I development accesses c.18 MMbbls (1) with planned initial rates up to 20,000 bopd Upside Potential Block 13/23c (Liberator Phase II) secured in the UK s 30 th Offshore Licensing Round in May 2018 with significant upside potential Firm A3 appraisal well to convert contingent resources to reserves and de-risk prospective resources of 47 MMbbls in Liberator s Phase II extension Additional high impact Serenity exploration prospect identified in the North of block 13/23c on trend with existing oil discovery Strategy and Development Straightforward development strategy utilising horizontal wells and a subsea tie-back of the Phase I Liberator Drill Centre to the Bleo Holm FPSO facility i3 advancing FDP regulatory approval and supply chain scheduling Technical and commercial offtake design and planning with Bleo Holm FPSO operator (Repsol Sinopec Resources UK Ltd) in progress Attractive Economics Robust project economics with extremely attractive investment metrics (1) Phase I pre-tax NPV10 of $795mm (c. $41/boe) with 385% IRR, post-tax NPV10 of $483mm (c. $25/boe) with 273% IRR using Sproule September 2018 Brent deck Phase II delivered via 4 development wells via standalone FPSO producing multi-billion dollar NPV10s under similar metrics to Liberator Phase I Experience Experienced team with extensive relevant technical and commercial capability 1. Source: i3 Energy view based on current Phase I development programme and mid-case production expectations using Sproule September 2017 Brent price curve : CORPORATE UPDATE Q

11 Appendix : CORPORATE UPDATE Q

12 Depth seismic section through liberator & blake (TVDSS feet) Phase II Development Phase I Development The Liberator structure is covered by a number of 3D seismic surveys of good quality as proven by the reliable synthetic and VSP matches for all wells. The data allows the recognition of a distinctive seismic-facies within the Captain sands at both Blake and Liberator within the main channel complexes contrasting with the age-equivalent sequence outside the mapped sand fairways. The Liberator area time-depth conversion (which includes modelling of a north-south oriented shallow channel) provides an excellent match for all surfaces at target intervals and intermediate levels. : CORPORATE UPDATE Q

13 Liberator field geology and reservoir characteristics Liberator Depositional Model Overbank Slide Channel Proximal Levee The sands were deposited in a constructive-destructive mechanism which resulted in a distinctive channel levee architecture defining both the Liberator and Blake fields. Liberator Seismic Section West Liberator 13/24a-6 Blake East Rodby The K50 sands which form the reservoir at both Blake and Liberator are interpreted as turbiditic sands, sourced locally from the Halibut Horst regional high in the Moray Firth Basin. K50 Barremian Unconformity The Liberator reservoir sequence comprises thick sandstone units in which biostratigraphic evidence indicates that the interval belongs to the K50 sequence which is Late Aptian to Early Albian in age. : CORPORATE UPDATE Q