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 INDEX ZOLTAV AT A GLANCE 4 INVESTMENT PROPOSITION 5 DIFFERENTIATED OFFERING 6 COMPANY BUILT ON ACQUISITIONS & OPERATIONAL EXCELLENCE 7 BORTOVOY LICENCE 8 OVERVIEW 9 PROGRESS TO DATE 10 KOLTOGOR LICENCES 11 OVERVIEW 12 CONCLUSION 14 APPENDICES 15 BOARD EXECUTIVE DIRECTORS 16 BOARD NON-EXECUTIVE DIRECTORS 17 SENIOR MANAGEMENT 19 BORTOVOY LICENCE WORK PROGRAMME 20 KOLTOGOR LICENCES WORK PROGRAMME 21 BORTOVOY LICENCE RESERVES AND RESOURCES 22 KOLTOGOR LICENCES RESERVES 23 FINANCIAL HIGHLIGHTS - GROUP 24 CONTACTS 25 3

4 ZOLTAV AT A GLANCE Zoltav is an AIM-listed, full-cycle E&P company with assets in Russia / CIS High impact organic and acquisitional growth strategy in Russia / CIS - Demonstrable operational track record - Unparalleled access to deal flow and cornerstone finance through principal shareholders: (Arkadiy Abramovich / Valentin Bukhtoyarov / David Davidovich) Current assets (100% held): - Bortovoy Licence (Saratov region) - Existing material gas production - Substantial upside from further appraisal, development and exploration - Koltogor Licences (Western Siberia) - Discovery currently being appraised - Significant conventional exploration potential Group 2P reserves: 210 mmboe (c.62% gas) Daily production: ~48.4 mmcf/d / 1.4 mmcm/d of gas (total 2014 production: 2.8 mmboe (396 mtoe)) FINLAND BELARUS Moscow Saratov UKRAINE Bortovoy RUSSIA Khanty-Mansiysk KAZAKHSTAN Koltogor Building the leading mid-cap, multi-asset, CIS focused E&P company 4

5 INVESTMENT PROPOSITION Zoltav is focused on building a mid-size, multi-asset oil and gas business focused on the CIS. There are five characteristics which demonstrate why we are distinctive and uniquely positioned to achieve this: Attractive asset base with substantial organic appraisal and development upside Proven ability to add considerable value to assets in a short space of time - Two value-accretive acquisitions to date, incl. Bortovoy Licence - US$35m gain on acquisition - Significant exploration upside and further organic growth options identified Actively targeting further value-accretive acquisitions in Russia / CIS to generate additional cash flows with exploration and development upside - Current commodity price and geopolitical backdrop provides Zoltav with unique opportunity - Highly disciplined acquisition approach Support of significant shareholders - Strong Russian connections; access to off-market transactions - Provides cornerstone access to finance for acquisitions Experienced board and management team with high principles of corporate governance - Experienced in-country operating team utilising modern technology and operating practices Zoltav is extraordinarily well positioned to generate significant value from the CIS region 5

6 DIFFERENTIATED OFFERING SHAREHOLDERS Strong relationships & connections Investor confidence ASSET SOURCING & ACQUISITION Access to high quality off-market deals through board and shareholders Delivery track record EXPERIENCED BOARD & MANAGEMENT Significant in-country operating and development experience Highly disciplined acquisition screening ASSET ENHANCEMENT & VALUE DELIVERY Application of operating leverage Increased shareholder value ACCESS TO FUNDING Financial support of major shareholders 6

7 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 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 7

8 Bortovoy Licence

9 BORTOVOY LICENCE - OVERVIEW Zoltav acquired the 3,215 km 2 Bortovoy Licence in the Saratov Region (European Russia) for US$180 million (including assumed debt) in June Near-insolvency of prior owners resulted in lack of investment in the assets BELARUS Moscow - Fair value of assets at 31 December 2014 resulted in US$ 35 million gain on acquisition UKRAINE Saratov 2014 production: 2.8 mmboe (396 mtoe): Gas: 14.7 bcf (416 mcm); Liquids: 174,429 bbls (21,938 T) Bortovoy 2P Reserves: mmboe (20.7 mmtoe): Liquids: 3.9 mmbbls (488 mt); Gas: 750 Bcf (21.2 bcm) Mean Prospective Resources: 163 mmboe (97% gas) Plans to add second gas plant to exploit significant gas potential in the East of the licence (mainly Nepryakhinskoye) CPR valuation (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 9 9

10 BORTOVOY LICENCE - PROGRESS TO DATE WHAT ZOLTAV ACQUIRED WHAT ZOLTAV HAS DONE SO FAR Western Fields Four fields, one in production (Karpenskoye) Western Gas Plant operational since 2010; capacity of 48.4 mmcf/d - Plant supplied by production from the Karpenskoye field only - Plant produced at capacity in 2012 but at reduced volumes in 2013 due to lack of investment by prior owners - Issues with Gazprom due to sales gas specifications Eastern Fields Five oil and gas fields not yet in production Western Fields Resolved the sales gas specifications issues Reduced Karpenskoye field gas production decline rate and added 16.2mmcf/d of gas production Brought 2 nd field into production (Zhdanovskoye) Brought Western Gas Plant up to full capacity Reduced OPEX per barrel by US$0.30 to US$5.60 and operational downtime by 4% Identified additional exploration potential Eastern Fields Started process to develop Eastern fields Gazprom pipeline tie-in approval obtained 10

11 Koltogor Licences

12 KOLTOGOR LICENCES OVERVIEW Zoltav acquired the 700 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 Koltogor E&P Licence Koltogor 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 Exploration Licence 10 West Koltogor oil field discovered

13 Conclusion

14 CONCLUSION Clear ambition to build the leading mid-cap, CIS focused E&P company Creating value through operational excellence, organic growth of existing assets, and selective off-market M&A transactions Bortovoy delivered immediate production (cash flow) and highly prospective low-risk appraisal upside from undeveloped Eastern Fields Koltogor delivered an oil field with 2P reserves of 79.2 mmboe, with good infrastructure and a compelling near term development strategy Zoltav s shareholders provide unparalleled access to assets and cornerstone financing Potential transactions under consideration Board, senior management and operational team enhanced credible international and independent management 14

15 Appendices

16 BOARD EXECUTIVE DIRECTORS Alastair Ferguson Executive Chairman Alastair Ferguson was appointed as a non-executive director in May 2014; and subsequently became the executive chairman in December He has an extensive background in the oil and gas industry and considerable experience of the Russian gas market. He is a non-executive director of Kazmunaigaz Exploration and Production, an oil and gas exploration and production company focused on the Caspian region in Kazakhstan. Alastair Ferguson was an executive vice-president gas & power with TNK-BP between having successfully led its gas and power business in Russia and Ukraine. He continues to work in Moscow as an independent advisor on energy issues. Prior to that, he held a wide range of senior positions with BP during his 35 year career in the oil and gas industry. Andrey Komarov Executive Director Andrey Komarov was appointed as a non-executive director 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. 16

17 BOARD NON-EXECUTIVE DIRECTORS Stephen Lowden Senior Independent Director Stephen Lowden was appointed as a non-executive director in August He has over 25 years experience in the international oil and gas industry across exploration, development, production and gas liquefaction. Throughout his career in the oil and gas industry, Stephen Lowden has worked around the world but has spent a considerable time working on projects in the CIS, where Zoltav is focused. Stephen Lowden has previously held positions with Premier Oil plc. including chief petroleum engineer, general manager for development and production and an executive director of the board, and, more recently, at Marathon Oil Company as president of Marathon International and head of corporate business development. Stephen Lowden is also involved with two private energy businesses. Marcus Rhodes Non-executive Director Marcus Rhodes was appointed as a non-executive director in May Marcus Rhodes 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 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 and London Stock Exchange-listed Cherkizovo Group OJSC, Russia s largest meat producer. From , Marcus Rhodes was a non-executive director and chairman of the audit committee for NYSE-listed Wimm-Bill-Dann Foods OJSC, one of Europe s largest dairy products companies, headquartered in Moscow. Marcus Rhodes was an audit partner for Ernst & Young from Prior to that, he was an audit partner for Arthur Andersen from

18 BOARD NON-EXECUTIVE DIRECTORS Alexander Gorodetsky 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. 18

19 SENIOR MANAGEMENT Denis Golubovskiy, Director 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. 19

20 BORTOVOY LICENCE - WORK PROGRAMME Western Fields Maintain Western Gas Plant at full capacity through to 2022 Further de-bottleneck Western Gas Plant to decrease down-time Evaluating options to increase gas sales price Commence additional step-out appraisal activity Eastern Fields Eastern Gas Plant feasibility study commenced Reviewing appraisal programme for Nepryakhinskoye to convert 899 bcf (25.5 bcm) 3P reserves to 2P reserves 20

21 KOLTOGOR LICENCES WORK PROGRAMME Considering options for advancing appraisal well drilling programme PRMS-compliant resources and reserves report due in 2H 2015 Considering farm-out options 21

22 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 22

23 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 23

24 FINANCIAL HIGHLIGHTS - GROUP $ 000 $ 000 Revenue 20, Gross profit 6,499 - Loss before exceptional items (7,559) (4,389) Profit / (loss) after exceptional items 27,415 2 (4,389) Profit / (loss) before tax 24,106 (4,366) Cash 10,694 7,265 Total current assets 14,352 8,400 Total assets 180,437 46,504 Net assets 117,906 38,001 1 Revenue from 196 days of production from Bortovoy Licence 2 Includes $35m gain on acquisition of Bortovoy Licence 24

25 INVESTOR RELATIONS Tel: +44 (0)