Corporate Presentation

Transcription

1 Corporate Presentation

2 DISCLAIMER This presentation is for information only and does not constitute an offer or invitation for the sale or purchase of securities. Any information or documentation provided as part of the presentation may not be reproduced or circulated or used for any other purpose. Certain forward-looking statements may be contained in the presentation materials. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to be accurate. Accordingly, results could differ from those projected as a result of, among other factors, changes in economic and market conditions, changes in the regulatory environment and other business and operational risks. The information provided in the presentation has not been independently verified. No representation or warranty, express or implied, is given as to the accuracy, fairness or completeness of the information or opinions contained in the presentation and no liability is accepted for any such information or opinions (which should not be relied upon) or for any loss howsoever arising, directly or indirectly, from any use of the information provided. 2

3 ZOLTAV AT A GLANCE Zoltav is a Russia-focused, AIM-listed, full-cycle E&P company Current assets (100% held): - Bortovoy Licence (Saratov region) - Existing material gas production (Western Gas Plant) - Substantial upside from further appraisal, development and exploration - Koltogor Licences (Western Siberia) - Two oil field discoveries - Significant conventional potential Organic growth strategy Driving profitable growth from Bortovoy Western Gas Plant Reviewing feasibility and economic viability of development options for East Bortovoy Intention to bring in partner at appropriate time to assist with further appraisal and development of significant resource at Koltogor Licences Operating a profitable and cost efficient business Group 2P reserves: 210 mmboe (c.62% gas) 2015 production: ~3.1mmboe (440mToe) Achieved maiden profit before tax in H of USD 1.6 million for the half year FINLAND BELARUS Moscow Saratov UKRAINE Bortovoy RUSSIA Khanty-Mansiysk KAZAKHSTAN Koltogor Principal shareholders Arkadiy Abramovich / Valentin Bukhtoyarov 3

4 H FINANCIAL HIGHLIGHTS RUB denominated revenue rose 21% to RUB 1,003 million (H1 2015: RUB 828 million); USD denominated revenue flat at USD 14.3 million (H1 2015: USD 14.4 million) as a result of RUB devaluation EBITDA increased by 130% to USD 6.2 million (H1 2015: USD 2.7 million) Maiden profit before tax of USD 1.6 million (H1 2015: loss USD 2.5 million) - achieved as a result of excellent operational performance and ongoing cost optimisation programme USD 0.8 million of net profit (H1 2015: loss USD 2.8 million) Strong operating cash flow of USD 4.8 million (H1 2015: USD 2.9 million) Reduced borrowings by 8% (RUB denominated) through repayment of RUB 180 million of PJSC Sberbank debt - in line with all covenants Total cash at period end of USD 5.5 million (at 31 December 2015: USD 5.9 million) 4

5 INVESTMENT PROPOSITION Attractive asset base with substantial organic appraisal and development upside across all licences Maximising profit potential of Western Gas Plant through operational excellence Operating a lean and cost efficient business Experienced board and management team with high principles of corporate governance - Experienced in-country operating team utilising modern technology and operating practices Supportive principal shareholders - Arkadiy Abramovich / Valentin Bukhtoyarov 5

6 COMPANY BUILT ON ACQUISITIONS & OPERATIONAL EXCELLENCE March 2013: Announced acquisition of Koltogor Licences 2P reserves: 79 mmboe December 2013: Announced acquisition of Bortovoy Licence 2P reserves: 131 mmboe October 2014: Achieved plant capacity ahead of schedule at Bortovoy 48.4 mmcf/d December 2015: Bortovoy Western Gas Plant turns profitable Plant operating profitably since 2015 April 2011: ARA Capital investment July 2013: Completion of acquisition of Koltogor Licences $26 million June 2014: Completion of acquisition of Bortovoy Licence $180 million March 2015: Increased Koltogor Russian Standard C1+C2 reserves >1 billion barrels 6

7 Bortovoy Licence

8 BORTOVOY LICENCE - OVERVIEW Zoltav acquired the 3,215 km 2 Bortovoy Licence in the Saratov Region for US$180 million (including assumed debt) in June 2014 Near-insolvency of prior owners resulted in lack of investment in the assets Fair value of assets at 31 December 2014 resulted in US$ 35 million gain on acquisition BELARUS Moscow 2015 total production: 3.1mmboe (440mT) substantial uplift since Zoltav became owner Avg. daily production in 2015 was 8,853 boe/d (1,256 Toe/d) compared to 7,656 boe/d in mmcf/d (1.32mmcm/d) of gas and 587 bbls/d (75 T/d) of oil and condensate Avg. daily production has risen to 9,019 boe/d (1,280 Toe/d) in H P Reserves on licence: mmboe (20.7 mmtoe): Gas: 750 Bcf (21.2 bcm); Liquids: 3.9 mmbbls (488 mt) Mean Prospective Resources: 163 mmboe (97% gas) UKRAINE Bortovoy Saratov Working to better understand the feasibility and economic viability of the development options for East Bortovoy CPR valuation of Bortovoy Licence (PV10): US$603 million Gazprom pipeline Gazprom trunkline from Kazakhstan/ Turkmenistan to Central Russia Mokrousovskoye Pavlovskoye West Lipovskoye Kochkurovskoye Lipovskoye Nepryakhinskoye Existing Gazprom pipelines Pipelines to be constructed Oil and Gas Field Gas processing plant Existing sales pipelines Krasnokutskoye Karpenskoye RUSSIA KAZAKHSTAN Railroads Gas field Other field Zhdanovskoye 0 100km 8 8

9 Koltogor Licences

10 KOLTOGOR LICENCES OVERVIEW Zoltav acquired the 695 km 2 Koltogor Licences in the Khanty-Mansiysk Autonomous Okrug (Western Siberia) in July 2013 for US$26 million Excellent existing infrastructure, including proximity to roads and pipeline CPR valuation (PV10): US$282 million Intention to bring in partner at appropriate time to assist with further appraisal and development Koltogor Koltogor E&P Licence Licence valid through to February 2033 Contains Koltogor oil field with 2P Reserves: 79.2 mmboe (10.3 mmtoe) (95% Liquids) Possible reserves: 183 mmboe (23.9 mmtoe) Year-round access road to well 141 Moscow RUSSIA Khantiy-Mansisk Koltogor E&P Licence 10 Licence valid through to March 2036 West Koltogor oil field discovered

11 Conclusion

12 CONCLUSION Creating value through operational excellence, organic growth of existing assets and cost efficiencies Bortovoy delivered immediate production (cash flow) and highly prospective low-risk appraisal upside from undeveloped Eastern Fields Company trading profitably in 2016 as a result of Bortovoy Western Gas Plant operational performance Koltogor delivered two oil fields with current 2P reserves of 79.2 mmboe, with good infrastructure and compelling development prospects (updated CPR to be commissioned when appropriate) Experienced board and management 12

13 Appendices

14 BOARD Marcus Rhodes Non-executive Chairman/Senior Independent Director Marcus Rhodes was appointed as a non-executive director in May 2014 and subsequently as non-executive chairman in September He is an experienced director of major publicly-listed companies operating in Russia and the CIS. He is a qualified chartered accountant and a member of the Institute of Accountants in England & Wales. Marcus Rhodes is currently a non-executive director and the chairman of the audit committee of NASDAQ-listed QIWI plc, a major provider of payment solutions in Russia and the CIS. He is also a non-executive director and chairman of the audit committee for the Russian company PhosAgro OJSC, one of the world s leading producers of phosphate-based fertilisers and listed on the London Stock Exchange, Tethys Petroleum Limited, the London Stock Exchange-listed company with assets in Central Asia and the Caspian region, London Stock Exchange-listed Cherkizovo Group OJSC, Russia s largest meat producer and the MICEX and RTS-listed Rosinter Restaurants Holding OJSC, the leading casual dining chain operator in Russia and the CIS. From , Marcus Rhodes was a non-executive director and the chairman of the audit committee for NYSElisted Wimm-Bill-Dann Foods OJSC, one of Europe's largest dairy products companies, headquartered in Moscow. From he was a non-executive director and the chairman of the audit committee for London Stock Exchange-listed Ros Agro plc, one of the largest agriculture industry holding companies in Russia. Marcus Rhodes was an audit partner for Ernst & Young from Prior to that, he was an audit partner for Arthur Andersen from Alexander Gorodetsky Independent Non-executive Director Alexander Gorodetsky was appointed as a non-executive director in September He has a wealth of commercial experience in Russia and the CIS, including over two decades in the international oil and gas industry. He began his career in 1995 within Alfa-Eco, a leading gas and oil trading business in Russia, before joining TNK and, later, TNK-BP. He is currently the general partner of Strategy Capital Advisor Limited, a private equity fund established in 2009 with approximately $0.5 billion under management and a mandate to invest in projects, including within the oil and gas sector, across the former Soviet Union. Alexander Gorodetsky led the successful sale in 2015 of SANORS, a leading Russian petrochemical company under the management of Strategy Capital Advisor Limited, to Rosneft. Prior to Strategy Capital Advisor Limited, Alexander Gorodetsky was first deputy to the chairman of the board of East One Group, an international investment advisory group providing strategic and investment management services to a diversified portfolio of companies. During his time at East One Group, he assisted in the strategic development of over 25 portfolio companies including GEO ALLIANCE Group, one of the leading independent oil and gas exploration and production groups in Ukraine. From , Alexander Gorodetsky was president/business unit leader for TNK-BP Ukraine. He contributed significantly to the increased brand awareness of TNK-BP in the Ukrainian market, where it is among the leading oil and gas companies. Andrey Immel Non-executive Director Andrey Immel was appointed as a non-executive director in September He is an experienced Russian corporate lawyer. He has, since 2012, been the head of the legal department of Moscow-based Contact-Service LLC, a real estate company, where his responsibilities include corporate governance and the provision of legal support for transactions. From , Andrey Immel worked for Himuglemet, a manufacturer of conveyer band and other components for coal mines, both as legal counsel and as a corporate and tax lawyer. His responsibilities included legal due diligence and support for corporate transactions. 14

15 SENIOR MANAGEMENT Andrey Komarov Chief Executive Andrey Komarov joined Zoltav in November 2014; and subsequently became an executive director in December He is a very experienced Russian oil and gas professional having held senior managerial positions with a number of major Russian energy businesses. Between 2006 and 2013 Andrey Komarov served as Vice President, Gas Business Development & Sales, and latterly as Vice President, Gas & Power, at TNK-BP, where he worked with Alastair Ferguson (also a director of Zoltav). In 2002 Andrey Komarov joined Sibneft OJSC (now Gazprom Neft), one of Russia s leading oil producers, as Director, Regional Sales and was subsequently appointed as the group s Vice President, Downstream in Prior to Sibneft OJSC, Andrey Komarov held the positions of Deputy General Director and Commercial Director of the Moscow Oil Refinery and served as an advisor to the Minister of Fuel and Energy of the Russian Federation. Denis Golubovskiy, Director of Finance Denis Golubovskiy has an extensive background in economics and finance and holds an MBA from the Moscow School of Management (Skolkovo). After a number of roles as Chief Accountant, Denis Golubovskiy joined Novatek where he worked for seven years including as CFO of Novatek s largest E&P business, Novatek-Yurkharovneftegaz. From 2010, Denis Golubovskiy worked for SeverEnergia where he was Director of the Planning and Economic Department, gaining experience working in one of Russia s largest hydrocarbon JV s with foreign involvement. 15

16 BORTOVOY LICENCE RESERVES AND RESOURCES 1P 2P 3P Reserves English Metric English Metric English Metric Sales Gas bcf 10.0 bcm bcf 21.2 bcm 1,389.7 bcf 39.4 bcm Liquids 2.0 mmbbls 0.3 mmt 3.9 mmbbls 0.5 mmt 6.3 mmbbls 0.8 mmt Total 62.0 mmboe 8.3 mmtoe mmboe 17.5 mmtoe mmboe 32.3 Toe 1C 2C 3C Contingent Resources English Metric English Metric English Metric Sales Gas 4.9 bcf 0.1 bcm 26.1 bcf 0.7 bcm 41.0 bcf 1.2 bcm Liquids 0.1 mmbbls 0.0 mmt 0.3 mmbbls 0.0 mmt 0.5 mmbbls 0.1 mmt Total 1.0 mmboe 0.0 mmtoe 4.8 mmboe 0.0 mmtoe 7.5 mmboe 0.1 mmtoe Low Estimate Mean Estimate High Estimate Prospective Resources English Metric English Metric English Metric Sales Gas bcf 13.6 bcm bcf 26.2 bcm 1,486.1 bcf 42.1 bcm Liquids 3.5 mmbbls 0.5 mmt 5.5 mmbbls 0.8 mmt 7.9 mmbbls 1.1 mmt Total 85.1 mmboe 11.4 mmtoe mmboe 21.0 mmtoe mmboe 34.8 mmtoe NPV 1P 2P US$377.6 mm US$602.5 mm US$267.2 mm US$375.3 mm Source: DeGolyer and & MacNaughton 16

17 KOLTOGOR LICENCES RESERVES Western Reserves (PRMS) 1P 2P 3P NPV 2P (US$mm) English Metric English Metric English Metric Oil 1.6 mmbbls 0.2 mmt 75.2 mmbbls 9.8 mmt mmbbls 32.5 mmt Sales Gas 0.5 bcf 0.0 bcm 25.3 bcf 0.7 bcm 80.9 bcf 2.3 bcm Total 1.7 mmboe 0.2 mmtoe 79.2 mmboe 10.3 mmtoe mmboe 34.3 mmtoe Source: DeGolyer and & MacNaughton Russian Reserves Starting Reserves (at time of Zoltav acquisition) Registered Reserves as at 24 July 2015 English (mmbbls) Metric (mmt) English (mmbbls) Metric (mmt) Koltogor E&P Licence Bazhenov (Ju0) Ju Ju Ju Total Koltogor 10 English (mmbbls) Metric (mmt) English (mmbbls) Metric (mmt) Bazhenov (Ju0) Ju Total Combined Total , Source: Company data 17

18 PUBLIC RELATIONS Tel: +44 (0)