Oilbarrel.com Presentation - April 2009
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Victoria Oil & Gas (VOG) is an oil and gas exploration and production company focused on Africa and the Former Soviet Union (FSU). VOG's key asset is the Logbaba gas field in Cameroon, which is expected to become a significant cash flow driver for the company with first commercial gas deliveries by mid-2010. VOG also has exploration assets in Russia, Kazakhstan, Ethiopia and Mali totaling over 1.5 billion barrels of oil equivalent of resources. The company aims to build production in Africa while pursuing long-term exploration potential in the FSU.
Oilbarrel.com Presentation - April 2009
- 1. Oilbarrel Conference 1 April 2009
- 2. The Turnaround Strong exploration base; 1 Billion BOE resources in FSU New focus on Africa (acquisitions and options) Cameroon Logbaba project will be the significant driver of the turnaround: Capacity to turn VOG into a profitable company with first commercial deliveries expected by 1H 2010 Net 2P of 65Bcf attributed to only a tiny portion of the licence, with significant upside All wells drilled penetrated multiple gas reservoirs with high flow rates, some over 60Mmcf/d Focus on production (revenue) in Africa complements FSU long-term exploration/appraisal potential 2
- 3. Corporate Snapshot Background Share Structure Noor Listed on AIM in July Petroleum (18%) 2004 Free Float (46%) Completed the acquisition Management (14%) of Logbaba gas field in Cameroon in December Hydrocarbons 2008 Tech. (10%) Compass Two assets located in the RSM (6%) Asset Mgmt (6%) FSU with combined reserves of 40 Mmboe Corporate Profile and resources of over Share price £0.04 1.1Bnboe Shares in issue 447.6 million Experienced Board and Market Cap £17.9 million management with Advisers: technical assistance from Nomad Strand Partners Blackwatch Petroleum Brokers Fox-Davies Capital Services 3 As at close 27 March 2009
- 4. A Global Footprint VOG is building a presence in highly prospective hydrocarbon regions 4
- 5. Operational Structure Board of Directors Executive Management Team Blackwatch Petroleum London / Houston Services African Operations Kazakh Operations Russian Operations Development of Technical office in Main office to be Logbaba field to be Almaty, the moved to Orenburg run from existing commercial centre to facilitate pursuit office in Douala of Kazakhstan of opportunities in the region 5
- 6. Logbaba, Cameroon Bramlin’s key asset is a farm-in for 60% of the Logbaba natural gas and condensate project in Cameroon Logbaba is located in the northern Douala Basin within the eastern suburbs of Douala, the economic capital of Cameroon Four wells were drilled in the 1950s, all encountering gas – three were tested at Logbaba between 12Mmcf/d and Licence area 62Mmcf/d 6
- 7. Logbaba Reserves and Valuation RPS Energy Competent Person’s Report Net Attributable Reserves and Resources 1P 2P 3P Total Liquids Mmbbl 0.28 2.35 4.51 Natural Gas Bcf 7.92 64.53 123.91 Total Mmboe 1.71 13.97 26.81 NPV valuation at 10% $Mm 18.17 168.65 412.16 RPS Energy undertook an evaluation of limited section of the Logbaba field in July 2008 Using the data provided, they determined 14Mmboe of 2P reserves with an RPS review area (6km2): NPV10 valuation of 10% of block $169Mm 7
- 8. Logbaba Development Plan PHASE 1: Gas production to serve existing contracts Drill and test a twin to Well 104 down to 10,000 ft Production expected to be min. 12Mmcf/d against current local industrial demand of 8Mmcf/d Install surface facilities 12Mmcf/d capacity gas processing facility 15 km, 10” pipeline to the industrial users Sell gas to industrial market in Douala Letters of intent already signed with potential customers for a total of 8Mmcf/d at an indicative price of $16/mcf A study by Tradex in partnership with SNH indicates initial demand increasing to over 25MMcf/d within 5 years PHASE 2: Gas to additional clients and swing production Drill second well to increase production to meet expected industrial demand of >25Mmcf/d 8 Provide swing production for users and new consumers
- 9. Cameroon Gas Market 10-Yr Gas Demand Forecast Most fuels currently imported 70,000 Power Load VOG has signed gas off-take Industrial Load 60,000 agreements and letters of intent for 8Mmcf/d 50,000 Gas Demand (mcf/d) The indicative price is set at $16/MmBTU ($15/mcf) 40,000 A study by Tradex estimates 30,000 demand to increase to 25Mmcf/d within 5 years 20,000 A gas-fired power station 10,000 could initially increase demand by up to 25Mmcf/d 0 1 2 3 4 5 6 7 8 9 10 Source: Tradex, Company estimates 9
- 10. Exploration Potential The Logbaba project is complemented by VOG’s portfolio of exploration options in Africa and assets in the FSU offering significant upside potential West Medvezhye in Siberia has independently assessed prospective resources of over 1.1Bnboe of gas, condensate and light oil for the 1,220km2 licence area First discovery well was completed in late 2007 Field located in the largest gas producing region on Earth In September 2008, VOG acquired an option to acquire Falcon Petroleum, an E&P company with PSAs over 45,000km2 in Ethiopia and Mali Virgin exploration territory, but with good geological leads and oil seeps 10
- 11. West Medvezhye, Russia West Med lies adjacent to the super-giant Medvezhye field and about 120km from Urengoy, currently the world’s largest gas and gas condensate field VOG has successfully West Med completed a passive seismic survey over an area surrounding discovery Well 103 The results of the survey will be correlated to the existing subsurface interpretation to confirm the location of the next well to be drilled in 2010/11 Source: Merrill Lynch 11
- 12. Kemerkol, Kazakhstan The Kemerkol project has State-classified oil reserves and resources of: C1 8.7 Mmbbl C2 26.3 Mmbbl C3 25.1 Mmbbl Production from the field is temporarily suspended following illegitimate ownership dispute In March 2009 Kazakh General Prosecutor has sent a letter of protest to the highest court in Atyrau supporting VOG Judgement won against the former owner in High Court VOG preparing $30M 12 damages claim
- 13. Falcon Petroleum, Mali and Ethiopia VOG has signed a 12 month option to acquire the assets of Falcon Petroleum Falcon has a 50% interest in the PSA for Block 17 in Mali and 90% of PSA over Blocks Ab1, Ab4 and Ab7 in the Blue Nile Basin in Ethiopia Total acreage covers over 45,000km2 Logbaba 13
- 14. In Summary Logbaba represents proven reserves and fast-track cash flow generation from a captive market with significant expansion potential Positioning in Cameroon power generation market can transform VOG into the premier energy supplier in the region Exposure to huge hydrocarbon potential of the FSU still of primary importance Technical management greatly enhanced through new appointments and assumption of existing Bramlin team Continuing financial and strategic support of Noor Petroleum adds significant advantage during economic instability 14
- 15. APPENDICES 15
- 16. Directors and Management Board of Directors Senior Management Kevin Foo, Chairman Radwan Hadi 36 year career in the resources sector COO of VOG; Senior petroleum engineer including 16 years in the FSU; former MD with Blackwatch with over 25 yrs of Celtic Resources Holdings experience in oil and gas including in Grant Manheim, Deputy Chairman Nigeria, Ghana and Equatorial Guinea 37 years at N M Rothschild and Sons Sam Metcalfe Limited, with 25 years as a board director Managing Director and Principal Robert Palmer, Finance Director Reservoir Engineer with Blackwatch, over Chartered accountant with extensive 25 years oil industry experience, experience in corporate finance worldwide George Donne, Executive Director Jim Ford Former investment banker and General 30 years experience in the energy sector Manager of VOG and previously president of Daytona Rashed Al Suwaidi, Non-Exec Director Energy Petroleum engineer and former E&P Ernie Miller Director of ADNOC. Director of some of the largest investment companies in UAE 16 years of energy experience in both public and private companies, including Philip Rand, Non-Exec Director BPZ Energy, Calpine Corporation and +30 years financial experience and Pan Canadian currently the CEO of Equator Exploration Eckhard Mueller Mukhtar Tuyakbayev, Non-Exec Director 27 years experience in exploration and Previously an executive director of Celtic production, including 4 years as chief geologist for KazGerMunay; 16
- 17. Cameroon Cameroon's GDP of $21bn in 2007 one of the top ten in sub- Saharan Africa Majority of electricity from hydroelectric power stations, susceptible to droughts Electricity generating capacity of around 900MW: 95% hydroelectric Source: EIA Government wants to add a further 450MW capacity Other operators in region: Addax Petroleum Amerada Hess Bowleven Perenco Noble Corporation Santa Oil & Gas 17
- 18. West Med Progress during 2008 Confirmation of commercial discovery by Russian Ministry of Natural Resources (MNR) Confirmation of proven recoverable reserves Geochemical analysis of target location by Exotrad Limited Reassessment of subsurface data by local institute, SibNats Recoverable Reserves confirmed by MNR C1 Oil 1.49 Mmbbl Gas 1.71 Bcf C2 Oil 10.41 Mmbbl Gas 12.10 Bcf C1+C2 Oil 11.90 Mmbbl Gas 13.81 Bcf Total 14.39 Mmboe Well 103 18
- 19. West Med Programme for 2009 During winter 2008/9, GeoDynamics (GDR) conducted a passive seismic survey focused on new target location Drilling of next exploration well, Well 105, expected in 2010 with a further two wells to be drilled by the end of 2012 SibNats Prognosis New target area Exotrad Prognosis identified by both Exotrad and SibNats Well 103 Well 103 19
- 20. Kemerkol Programme for 2009 Production from the field is temporarily suspended following a claim against VOG’s ownership during 2008 The short-term development programme remains: Shoot a passive seismic survey to determine next drilling locations and analyse subsalt and salt overhang potential Initial drilling plan of two exploration wells to target best locations and confirm correlation of passive seismic Full development drilling on confirmation of further discoveries 20
- 21. Falcon Petroleum Assets Mali Ethiopia Block 17 is located in the Nara Falcon has been involved in a Trough, the most western of study of the most prospective Mali's four sedimentary basins sedimentary basin in Ethiopia – Block 1 – covering According to aeromagnetic 150,000km2 including the Blue data, sediment thickness may Nile (Abay) Basin amount to over 14,000m – similar to the Precaspian Within this Block, Falcon has Basin in Kazakhstan signed a PSA for sub-Blocks Ab1, Ab4 and Ab7 The Cretaceous reservoir is thought to be similar to that of The Basin contains possible Chad, but the Paleozoic is structural and stratigraphic more comparable with Algeria traps and oil seeps are present in the northern section Block 17’s location in the The oil seeps occur in narrow and relatively elevated Were Ilu, inside Block Ab1 part of the Nara Trough 21
- 22. Abbreviations Bnboe Billion barrels of oil equivalent Mmboe Million barrels of oil equivalent Mmbbl Million barrels of oil bbl/d Barrels per day mcf Thousand cubic feet of natural gas mcf/d Thousand cubic feet per day Mmcf/d Million standard cubic feet of gas per day Bcf Billion cubic feet of natural gas Tcf Trillion cubic feet of natural gas Bcm Billion cubic metres of natural gas $Mm Million US$ km2 Square kilometres m Metres Mt Million tonnes 22 Mtpa Million tonnes per annum
- 23. Resource Categorisations Category Explanation Approx Western Category A Geologically and geophysically examined Delineated by exploration and production Data shows recoverability Represents reserves in current production B Geologically and geophysically examined Evaluated by adequate drilling Proven Data shows recoverability Represents unused producing capacity C1 Reserves adjacent to A and B categories Geologically and geophysically evaluated Verified by minimal drilling Data shows partial recoverability C2 Presumed to exist based on favourable geological and Probable geophysical data analogous to that of verified reserves C3/D1 Speculative resources presumed to exist based on Possible favourable geological analogy to reference areas Source: IEA and Russian Ministry of Natural Resources 23
- 24. VICTORIA OIL & GAS PLC HATFIELD HOUSE 52-54 STAMFORD STREET LONDON SE1 9LX Tel: + 44 (0)207 921 8820 Fax: +44 (0)207 921 8821 www.victoriaoilandgas.com info@victoriaoilandgas.com