Creating Value in the Gulf of Mexico Investor Presentation April 2015

Transcription

1 OTCQB: GSPE Creating Value in the Gulf of Mexico Investor Presentation April 2015

2 Forward-Looking Statements This presentation may contain forward-looking statements about the business, financial condition and prospects of the Company. Forwardlooking statements can be identified by the use of forward-looking terminology such as believes, projects, expects, may, goal, estimates, should, plans, targets, intends, could, or anticipates, or the negative thereof, or other variations thereon, or comparable terminology, or by discussions of strategy or objectives. Forward-looking statements relate to anticipated or expected events, activities, and trends. Because forward-looking statements relate to matters that have not yet occurred, these statements are inherently subject to risks and uncertainties. Forward-looking statements in this presentation include, without limitation, the Company s expectations of oil and oil equivalents, barrels of oil and gas resources, prospects leased, dollar amounts of value creation, undiscovered resources, drilling success rates, resource information, superior economics, consistent value growth and other performance results. The SEC permits oil and gas companies, in their filings with the SEC to disclose only proved, probable and possible reserves, i.e. Items 1201 through 1208 of Regulation S-K ( SEC Oil and Gas Industry Disclosures ). The estimates of recoverable resources used in this presentation do not comply with the SEC Oil and Gas Industry Disclosures, nor should it be assumed that any recoverable resources will be classified as proved, probable or possible reserves consistent with the SEC Oil and Gas Industry Disclosures. Recoverable resources estimates are undiscovered, highly speculative resources estimated where geological and geophysical data suggest the potential for discovery of petroleum but where the level of proof is insufficient for a classification as reserves or contingent resources. In addition, recoverable resources have a great amount of uncertainty as to their existence, absolute amount, and economic feasibility. Although the Company believes that the expectations reflected in forward-looking statements are reasonable, there can be no assurances that such expectations will prove to be accurate. Potential and existing shareholders are cautioned that such forward-looking statements involve risks and uncertainties. The forward-looking statements contained in this presentation speak only as of the date of this presentation, and the Company expressly disclaims any obligation or undertaking to report any updates or revisions to any such statement to reflect any change in the Company s expectations or any change in events, conditions or circumstances on which any such statement is based. Certain factors may cause results to differ materially from those anticipated by some of the statements made in this presentation. Please carefully review our filings with the SEC as we have identified many risk factors that impact our business plan. U.S. investors are urged to consider closely the disclosures in our Forms 10-K, 10-Q, 8-K and other filings with the SEC, which can be electronically accessed from our website at or the SEC's website at Abbreviations: MM Million $ United States dollar B Billion RTM Reverse time migration Boe Barrel of oil equivalent GSPE GulfSlope Energy, Inc. EUR Estimated ultimate recovery SEC Securities and Exchange Commission Mcf Million cubic feet Tcf Trillion cubic feet NPV 10 Net Present Value discounted at 10% 2

3 Corporate Snapshot OTCQB GSPE Market Cap (4/15/15) $79 MM Price (4/15/15) $0.12 Avg. 3 Mo. Daily Volume 196,730 Shares Outstanding MM Insider Ownership 40% GulfSlope Focus Area Shelf Deep Water Established 2013 Focus Area Offshore Gulf of Mexico Target Primarily Shelf Miocene Seismic 2.2 MM Acres (440 Blocks) Lease Blocks 21 Portfolio 17 Drilling Prospects Prospective Resources 2 Billion boe recoverable 3

4 Investment Highlights Significant Oil and Natural Gas Exposure 2 billion boe of net conventional recoverable resources 21 blocks with 17 prospects ranging from MMboe Superior Breakeven Economics World Class Team Leading the Redevelopment of the Shelf Miocene Drilling Program Gulf of Mexico has some of the lowest breakeven costs in the E&P industry today GulfSlope s prospects offer significant return potential in current commodity price environment Former Anadarko executive leadership Proven track record of applying technology to find oil and gas Specialized technical team with extensive Gulf of Mexico success GulfSlope executive team credited for originally discovering this play Strategic advantage from proprietary reprocessed seismic Lease sale establishes GulfSlope s leading acreage position Multiple exploration wells planned by the end of 2016 Currently focused on pre-drill operations Hybrid operating model with preference to operate 4

5 Team In Place to Execute Seasoned industry professionals with unparalleled management and technical expertise lead by former Anadarko CEO John Seitz Chairman and CEO 25 years with Anadarko, most recently as CEO Board member of ION Geophysical BS Geology, MS Geology Ron Bain, PhD President and COO 19 years with Anadarko Formerly with Sohio and Gulf Oil BS Physics, MS Physics, PhD Physics John Malanga VP, Chief Financial Officer Former I-banker with Weisser, Johnson & Co., Sanders Morris Harris and Jefferies & Co. BS Economics, MBA Finance 40 years experience 41 years experience 22 years experience Brady Rodgers VP, Development & Engineering Former I-banker with JP Morgan Former engineer with Venoco, Endeavour and Devon BS Petroleum Eng, MS Energy Management 16 years experience Clint Moore VP, Corporate Secretary & CAE 16 years with Anadarko Formerly with Diamond Shamrock/Maxus, Murphy and ION Geophysical BA Geology, BBA Finance & Econ Richard Heaney Senior Staff Geophysicist Formerly with Amoco, Sohio, BP, Conoco, Repsol and Murphy BS Physics, MS Geophysics Charles Hughes VP, Land 26 years with Anadarko Formerly with Marubeni Oil & Gas BBA, Petroleum Land Management Alex MacKeon Senior Staff Geophysicist Formerly with Mobil, McMoRan, BP, Maxus, Enron and Repsol BS Physics Mike Neese Exploration Manager Formerly with Amoco, BP, Endeavour and Vanco BS Geology, MS Geophysics Terry Stellman Senior Staff Geophysicist Formerly with Shell, Nippon and Vanco BS Geology, MS Geophysics Bill Lefler Senior Staff Geologist Formerly with Texaco, Mesa, BHP and Woodside BS Geology 36 years experience 36 years experience 37 years experience 45 years experience Kevin Bain Geophysicist Formerly with the Institute for Geophysics, Fermi National Accelerator Lab and Marathon BS Physics, MS Geophysics, PhD Geophysics candidate 40 years experience 42 years experience 27 years experience 8 years experience 5

6 A History of Value Creation Through Exploration GulfSlope management has a track record of discovering large oil and gas fields utilizing cutting edge technology, leading to significant shareholder value creation Algeria 3 Billion boe discovered in early 1990s Alaska 500 Million boe discovered in late 1980s 3 Bboe 500 MMboe New seismic tools designed for the desert allowed reinterpretation of the area Deeper horizon was visible upon further seismic analysis, which was previously untested Major oil companies considered the area played-out Majors considered the area played-out Largest discovery in 32 years 3 rd largest Alaska field discovered North Sea Gulf of Mexico 2.4 Tcfe 2.4 Tcfe discovered in mid 2000s Exploration success based on regional seismic advantage Major oil companies considered the area played-out Early independent company entry as majors started to exit 150 Million boe discovered in the 1990s Global pioneers of sub-salt exploration, which led to deepwater GoM, pre-salt Brazil, and others Early vintage sub-salt imaging limited potential 150 MMboe 6

7 New Opportunities Focus on Operations in 2015 Pre-drilling operations started for Phase 1 prospects Preparing to drill as operator, which may change with partnering Corporate Development Current commodity prices and simplified capital structure provides GulfSlope with unique acquisition opportunities Capitalize on strategic advantages provided by exploration work to identify undervalued producing assets Additional prospects identified for future lease sales with regional 3D data set of 2.2 million acres (440 blocks) 7

8 Mean Prospect Size Million Barrels (MMboe) 3 rd Party Resource Report 2 Billion barrels of prospective resources (1) of the 17 Prospects are Included in Phase 1 Drilling Graviton Tau Existing Field Size Range Photon DeGolyer and MacNaughton reviewed GulfSlope s 17 individual prospects: Average size is 120 MMboe Independent 3 rd party evaluation of prospect sizes In-line with previous internal company estimates Consistent with deepwater Miocene evaluations discovered by major oil companies Prospect size range is consistent with offset discoveries from the Tachyon 1990s Onium 0 17 Prospects (1) Potentially recoverable resources. See company website for full DeGolyer and MacNaughton report and disclosures. Net of existing farm-out arrangements. 8

9 Phase 1 Drilling Program 5 of the 17 prospects have been selected for the initial drilling campaign F&D costs of $3-$10 per boe Attractive returns below current oil & gas prices Mean unrisked resource potential of 623 MMboe $7.8 B Phase 1 Total Value Risked NPV 10 $6.2 B $1.5 B Individual Prospect Returns Risked Onium 27 MMboe Tau 252 MMboe Photon 59 MMboe Tachyon 38 MMboe Graviton 247 MMboe Price High Strip Low Oil (bbl) $75 1/21/15 Price $25 Gas (Mcf) $5.50 1/21/15 Price $2.50 Gas Weighted Oil Weighted 1/21/15 Strip Pricing Based on DeGolyer & MacNaughton 3 rd party resource estimates (see company website) and risked at estimated 40% commercial success rate. January 21, 2015 strip pricing for oil(bbl) / gas (Mcf): 2015 $53.92/$3.22, 2016 $60.58/$3.48, $65.18/$3.70, $69.35/$3.89, $70.74/$4.07 9

10 Breakeven - $/bbl How We Compare Gulf of Mexico leads the North American market for lowest cost new oil production Previous deepwater discoveries under development benefit from significant costs spent to date, but new Deepwater Miocene fields breakeven at ~$50/boe GulfSlope s full-cycle breakeven costs of $20-$25 per boe allow drilling through commodity cycles GulfSlope range in breakeven costs vary by water depth and oil vs gas mix $125 $100 $75 $50 $25 $- New Deepwater Discoveries GulfSlope Shelf Miocene Deepwater Miocene Deepwater L Tertiary Oil Sands SAGD Utica Alaska Eagle Ford Permian Breakeven defined as neutral NPV10. GulfSlope full cycle breakeven costs estimated internally based on DeGolyer and MacNaughton audited EURs. Bakken Duvernay Niobrara Wood Mackenzie s North American Oil Plays October

11 Accelerating Shelf Miocene Activity Apache Discoveries on the shelf have quicker cycle times, require less capital, and provide more options to bring oil and gas to market New [seismic] techniques have lead the company to previously invisible parts of the Gulf of Mexico W&T Offshore Mahogany production increases 550% with benefit of drilling based on new RTM seismic GulfSlope Blocks in Yellow Higher Return Shelf Miocene Boundary Tanzanite Mahogany Hickory Walter-W&T Offshore-Castex Megadolon discovery Platform installed Fieldwood (Riverstone) We are re-shooting all of our large fields [with 3D seismic] to make sure that we didn t miss anything. We have combined our deepwater and shelf technical teams to focus on sub-salt and other deeper exploration opportunities in water depths less than 1,000 feet, which have been relatively untested by industry. Auger Conger Greater Miocene Play Prospective Throughout the Area K2 Tahiti Atlantis Mad Dog Noble Energy Katmai Discovery of MMboe, 4Q 2014 LLOG (Blackstone) 20 Blocks leased in Shelf Miocene play at the 2014 Federal Lease Sale Shell [New seismic technology] really allowed us to look underneath the salt and get a more precise image of the subsurface and the potential exploration prospect that were there. Hess Conger Field doubles reserves and returns to peak production 8 years after startup utilizing new seismic technology Energy XXI Today there is better definition of salt and great ability to see seismic amplitudes updip as well as hidden amplitudes underneath [salt] overhangs that previously could not be seen. - Oct

12 Exploring a Proven Petroleum System 420+ MMboe discovered in the 1990s in the Shelf Miocene sub-salt play Conger 243 MMBoe Discovered Production Hickory 47 MMBoe Discovered Production Mahogany >45 MMBoe Discovered Production Enchilada >43 MMBoe Discovered Production Auger Enchilada Conger Mahogany Hickory Tanzanite >30 MMBoe Discovered Production GSPE Lease Blocks Previous Sub- Discoveries Oil and Gas-Producing Field Conger data based on Wood Mackenzie data, other fields based on reported production to date 12

13 Shelf Miocene Geology GulfSlope is focused on a proven area of the Miocene where significant fields have been discovered 10, ' 10,000' 15,000' Ultra-Deep Gas North Lafitte Target Zone Shelf Plio-Pleistocene Supra Shelf Plio-Pleistocene Super- Shelf Miocene North North North Mahogany North Hickory Lafitte Tahiti Lafitte Lafitte JackLafitte ' 10,000' 15,000' Deepwater ' 10,000' 10,000' Plio-Pleistocene Plio-Pleistocene Plio-Pleistocene Plio-Pleistocene 5000' Supra 5000' Supra Supra Supra Target Target Target Zone Zone Zone 15,000' 15,000' 15,000' 0 Shelf Shelf Shelf South North North South South South Mahogany Mahogany Mahogany Mahogany Mahogany Hickory Hickory Hickory Hickory Lafitte Tahiti Tahiti Jack Lafitte Tahiti JackTahiti Jack Hickory Jack Deepwater Deepwater Deepwater Shelf Deepwater ' 10,000' 15,000' Deepwater Miocene & Lower Tertiary Hickory Mahogany Katmai Discovery Conger Tahiti Jack 0 10,000' Target Zone Shelf Deepwater Target Zone 15,000' Plio-Pleistocene 5000' Supra 10,000' Target Zone Shelf Plio-Pleistocene Supra South Mahogany Hickory Deepwater T Sa 20,000 20,000' 25,000' 30,000' Upper Miocene Lower Miocene Lower Miocene Upper Miocene Lower Tertiary 20,000' 25,000' 30,000' 20,000' 20,000' GulfSlope Target Section 20,000' 20,000' 20,000' UpperMiocene Upper Upper Upper Upper Miocene Upper Miocene Upper Miocene Upper Miocene Miocene Miocene Miocene Upper Miocene Upper Miocene Upper Miocene Upper Miocene Miocene Upper Miocene Miocene 25,000' 25,000' 25,000' 25,000' 25,000' Lower Miocene Lower Miocene Lower Miocene Lower Miocene Lower Miocene Lower Miocene Lower Miocene Lower Lower Miocene Lower Miocene Lower Lower Lower Lower Miocene Lower Lower Miocene Lower Miocene Miocene Miocene Miocene Miocene Miocene 30,000' 30,000' Lower Tertiary 30,000' 30,000' Lower Tertiary 30,000' Lower Tertiary Lower Tertiary Lower Tertiary Low Lower Tertiary Lower Tertiary Lower Tertiary Lower Tertiary Lower Tertiary Lower Tertiary Miocene Miocene Upper Miocen 30,000 Lower Tertiary 13

14 Technology has Reduced Entry Costs Large E&P companies no longer have singular access to the most advanced seismic processing technologies Computing Cost Scalable Processing Multi-core Processors Kirchhoff Migration Imaging Capability Wave Equation Migration Beam Migration Parallel Processing Reverse Time Migration Technology Evolution Seismic Processing Advanced algorithms maximize accuracy Processing is now faster and cheaper Reverse Time Migration and other technologies utilized by GulfSlope and industry provide the most accurate view of sub-salt prospects Seismic Capture 1990s: 2D and isolated 3D seismic Today: 3D data now standard Maximize chance of discoveries Improve resource estimates Enable a small team to successfully compete 1980s 1990s

15 Applying Proven Technology in the Gulf Auger Field Mahogany Field Conger Field Shell adds 140 MMboe to 25 year old field with new seismic technology The Cardamom discovery [140 Mmboe] was the result of advances in seismic imaging and extended reach drilling. The potential of Cardamom was first recognized early in the Auger development, but could not be fully assessed due to a layer of salt nearby which affected the quality of traditional seismic images. Advances in seismic imaging helped achieve significant improvements. Shell Oil Shell Oil W&T Offshore continues to grow the initial Shelf Miocene discovery 20 years later with new seismic imaging technology Advanced seismic required to fully develop Mahogany Advanced seismic required to fully develop Mahogany Mahogany production up ~550% since 2011 [with new drilling] as the field continues to grow Advancement in seismic improve understanding of sub-salt targets [Mahogany] New discovery in the T-Sand in June 2013 Deepest production to date [19 years after initial field discovery] 370 of net oil pay from most recent well, 108 from the newly identified T-Sand Additional pay to be developed in the newly identified M, N, and O-Sands with future drilling - W&T Offshore Hess doubles reserves with new seismic New seismic processing used to identify undrained reserves 8 years after startup Redevelopment late in life doubled the reserves Field returned to peak production Mboe/d Daily Production Gas Oil

16 Why We Like the Shelf: Proven Economics What do previous Shelf Miocene fields look like at today s costs and commodity prices? Income Expenses Actual production history priced on 1/21/15 strip Modern service costs estimates (mid-year 2014 estimate) Conger Field Hickory Field Production (EUR) 243 MMboe 47 MMboe Commodity 61% Oil 28% Oil NPV10 $2.7 B $520 MM IRR 47% 49% Breakeven Commodity Price $17.03/bbl /Mcf 19.82/bbl /Mcf Discovery to Production 2 years 2 years Exploration Spend at Today s Cost $105 MM $42 MM Development Spend at Today s Cost $977 MM $353 MM F&D ($/boe) $4.45 $8.46 Discovering E&P Hess Anadarko Development Sub-sea Platform Water Depth 1,594 (Floating Rig Depth) 320 (Jack-up Rig Depth) Reservoir Depth 19,845 15,970 Based January 21, 2015 strip pricing for oil(bbl) / gas (Mcf): 2015 $53.92/$3.22, 2016 $60.58/$3.48, $65.18/$3.70, $69.35/$3.89, $70.74/$4.07. Based on Wood Mackenzie data where available or company estimates. 16

17 Valuation: Cobalt Analog GulfSlope has significant valuation upside vs Cobalt IPO pricing Cobalt At IPO (1/2010) GulfSlope Today (1/2015) Regional Focus Sub-salt GoM & W Africa Sub-salt GoM GSPETarget Area Mgmt History Ex-Unocal & BP Ex-Anadarko Asset Acquisition Prospect Generation Strategy Strategy Lease blocks from federal government at annual lease sale Build veteran team of highly skilled explorationists Utilize regional seismic data with newest technology (RTM) to identify and capture high value prospects Drill high impact Miocene prospects Establish JVs with E&P partners to diversify risk Cobalt Target Area (+W Africa) Resource Estimate 8.2B Boe (1) 2B+ Boe (1) Valuation (2) $0.45 / boe $0.04 / boe Value of GulfSlope is approx. $1 billion assuming Cobalt IPO valuation GulfSlope Advantage: Shorter Cycle Times Exploration Drilling Deepwater Appraisal Drilling Permitting Construction & Development Drilling +/- 9 Years 1 Shelf +/- 3 Years Most of the value destruction occurs in the appraisal phase when you drill too many wells before making the final [development] investment decision. CEO of Deepwater E&P YEARS Source: Company data and public company filings. (1) Based on DeGolyer & MacNaughton Resource Reports. (2) Enterprise value divided by 3 rd party recoverable Resource Estimate. 17

18 Building Momentum GSPE continues to execute on its strategy of exposing investors to multiple high-impact exploration opportunities Uplist to National Exchange Drilling Rig Commitment Spud 1 st Exploration Well Late 15/Early 16 Announce Drilling Plans and File Permits Annual Lease Sale March

19 Investment Highlights Deepwater size prospects at shallow water costs and with shorter cycle times On track to drill late 2015/early 2016 Actively drilling through the oil price downturn with lowest breakeven prices in North America 2 Billion boe of potential oil and natural gas resources Leading the industry redevelopment of the Shelf Miocene play Proven leadership with track record of finding significant oil and gas fields Team fully aligned with investors 19

20 Investor Relations Contacts OTCQB: GSPE GulfSlope Energy Brady Rodgers MZ Group Derek Gradwell