Dominion Petroleum Ltd. Goldman Sachs Global Commodities Conference - Asia Singapore September 2011

Transcription

1 Dominion Petroleum Ltd. Goldman Sachs Global Commodities Conference - Asia Singapore 15-16

2 Disclaimer Notice This document ( Presentation ) and the information contained in it is being provided by Dominion Petroleum Limited (the Company ) in connection with a presentation to existing and prospective investors and journalists being carried out by the Company. This document and the information contained in it is solely the responsibility of the Company and its directors. The information in this Presentation, which includes certain information drawn from public sources, does not purport to be comprehensive, and has not been independently verified and is liable to change. 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3 Current Portfolio Offshore Tanzania (Block 7) PSA signed on 29 March ,350 km of 2D seismic acquired in ,236 km2 of 3D seismic acquired in 2010 Offshore Kenya (Blocks L9 & L15) PSC signed in May for L9 L15 awarded in August 3D seismic planned for 1H12 Uganda (Exploration Area 4B) PSA signed on 27 July km of 2D seismic acquired in H2 08 Entered into the second two-year exploration period in July 2009, first exploration well drilled in June % working interest DRC (Block 5) PSA signed on 5 December % interest, partners include SOCO International (38.25%, operator) & Congolese State Aero-gravity & magnetic survey carried out over Block 5 & Block 4 in May

4 Selected East & Central Africa transactions since July 2009 Selected East/Central Africa Transactions Since July 2009 Date Transaction Terms M&P and Cove Energy acquire much of Artumas portfolio in Tanzania and Mozambique July 2009 Cash $11mm, $1mm option fee, carry on 2 wells, carry on 200km2 seismic, option on appraisal wells, royalty on profit oil plus other provisions to bridge Artumas cash call needs ENI announces it will acquire Heritage s Uganda operations Nov 2009 $1.35bn Tullow announces pre-emption of ENI to acquire Heritage s Uganda operations Jan 2010 $1.35bn + $100mm Anadarko acquire 5 deepwater Blocks offshore Kenya Feb 2010 License award from NOCK Exxon farms-in to Statoil s Tanzania deepwater Block 2 Mar 2010 Not disclosed BG to farm-in to Ophir s deepwater Tanzania Block s 1, 3 & 4 May % interest for funding 85% of 3+ wells and 4,000 sq km of 3D plus option to acquire operatorship and continue to fund 85% of an extended work program Afren announces it will acquire Black Marlin Energy June 2010 All stock deal at ~35% premium to Black Marlin share price Cove farm-in to Anadarko/DGA Kenya blocks L5, L7, L11A & B and L12 July % interest for $15mm Centric Energy to farm-out Kenya Block 10B to Tullow Aug % interest for 50% past costs and funding 80% of first $30mm of PSC expenses Africa Oil farms-out Kenya Blocks 10B, 10A, 12A & 13T & Ethiopia Block South Omo to Tullow Sep % interest and operatorship for 50% past costs and funding Africa Oil s share of first $24mm of expenses. Africa Oil announces it will acquire Centric Energy Nov 2010 Largely stock deal at ~71% premium to Centric 20 day VWAP, aggregate equity value approx. C$60 million on fully-diluted basis Apache farms in to 50% of Block L8 in Kenya from Origin Energy Feb Reimbursement of historical Origin Energy s costs of US$13.2mm in exchange for a 50% interest in the asset and operatorship Total farms in to 60% of Block III in the DRC from SacOil and Divine Inspiration Group Mar US$15mm to Block III partners and the funding of all exploration costs up to a final investment decision in return for 60% interest and operatorship Tullow farms in to 10% in Kenyan Block L8 from Pancontinental Mar Tullow to pay Pancontinental US$1mm for historical costs and by funding the future work programme up to a US$9mm cap. Option to acquire further 5% in return for funding second well up to a US$6mm cap Africa Oil signs letter of intent to acquire Lion Energy Mar Stock transaction valuing Lion Energy at ~US$36mm on announcement and issuance of 2.3mm new warrants Afren farms into 74 per cent. of the Tanga Block,Tanzania, from Petrodel Mar Afren to pay percentage of back costs and fund 900 km of 2D plus one exploration well subject to cumulative cap of US$40 million.

5 East Africa An emerging new hydrocarbon province East Africa is the central point of broader industry move Both oil and gas discovered in deepwater in Mozambique Initial deepwater Tanzania wells are successful Discoveries in the region to-date will support LNG* - Anadarko, Apache, BG, ENI, ExxonMobil, Petrobras, Shell, Statoil, Heritage, Afren and Tullow are all actively exploring in the region Offshore East Africa dominated by Major oil companies Dominion retains a operated working interest s (60-100%)in its offshore Tanzanian acreage and is surrounded by Majors The 2nd smallest deepwater operator, by market capitalization, is Anadarko. Petroleum (>40x the size of Dominion). Recent East African and Tanzanian deepwater discoveries help to prove up region Pweza-1 announced as a gas discovery in Block 4 Chewa-1 announced as a gas discovery in Block 4 Chaza-1 announced as a gas discovery in Block 1 Anadarko made 5 gas discoveries offshore Mozambique Petrobras now drilling in Block 5, results due before year end Madagascar is other side of paleo-rift Largest oil resource in region ~29Bbbl in place Pre-tertiary source risk reduced * As per comment from Anadarko on its Rovuma Deep discoveries 5

6 Madagascar has pulled away from East Africa by the start of Cretaceous Drift of Madagascar relative to East Africa is southwards controlled to the West by the Davie lineament. Kenyan and North Madagascar continental margins will be strongly attenuated. Mesozoic extension along the Tanzanian offshore section, will be less attenuated and often oblique. Deep geology in Block 7 likely to be characterised by strike slip structures with some localised growth against active faults. Mid Jurassic shallow marine conditions, as seen at onshore locations, are also likely to be developed in Block 7 area. Potential for localised source rock deposition within restricted rift graben, akin to oil source for Madagascar Heat flow likely to be elevated during Late Jurassic to Early Cretaceous, likely too early to materially affect the maturity of the shallow Jurassic source rocks Potential heat pulses lead to early oil & gas generation from any underlying Permo-Triassic (i.e. Karoo) source rocks. 150Ma Late Jurassic 6

7 Gravity map of Dominion s deepwater acreage offshore East Africa Dominion s acreage is bounded outboard by the Davie Fracture Zone ( DFZ ) The DFZ is the transform Madagascar travelled southward along to its present position Motion along the DFZ has generated structures within the blocks (indicated as red on the map) Both blocks straddle rift grabens, the likely source kitchens (indicated as blue on map) The rift grabens were likely developed by Madagascar pulling away from West Gondwanaland L9 Block 7 L15 Oceanic Crust Davie Fracture Zone 7

8 Significant Expansion to Kenya Deepwater In Dominion was awarded 2 deepwater blocks as operator 8

9 Block L9 Kenya Dominion (60%) Block L9: The deepwater block is currently undrilled, although Total s 1987 Simba-1 dry hole is located near the southern margin. The next nearest well 100 s kms to north. Existing 2D is shown on the location map. 3D seismic is planned for 1H kms Block L9 Dominion 60% The block sits within the offshore Lamu Basin, which is a northerly extension of the Tanzania Coastal Basin. Total area of c.5065 km 2 Water depth ranges from c.400- c.1400m

10 Block L9 Kenya and Structural Elements of the Lamu Basin L9 from Woodside Petroleum 10

11 Play Types Identified in Block L9 Kenya reefs restricted to west Tilted fault blocks & roll over anticlines numerous! Channels/strat traps Inverted structural highs Post Oligocene Paleocene - Oligocene Cretaceous Jurassic Channels/ fan & strat traps Line W03-13D_m

12 Block L15 Kenya and Structural Elements of the Lamu Basin L15 sits atop the start of the Davy Fracture Zone (Davy/Walu Ridge). L15 Kofia-1 well has best oil shows in all of offshore so far. from Woodside Petroleum 12

13 Mbawa Prospect in L8 has Billion Barrel Potential* L15 Prospects along zone of strike slip deformation and inversion related to Davey FZ. These extend into Blocks L9 & L15 as mapped by L8 Partners. L9 Mbawa probably represents largest structural closure on the block. L8 partners show supporting seismic AVO anomalies. Mbawa likely extends into L15 at the Jurassic level. Seal represents a significant risk; structure formed during late Cretaceous-Palaeocene Inversion, with Miocene- Recent inversion and faulting. Blk L9 Mbawa Potential * Tertiary/Cretaceous(P10): 4.9 Billion Barrels oil in place plus- 284 Billion Cubic Feet gas in place plus- Jurassic(P10) 323 Million Barrels oil in place or 525 Bcf in place gas cap plus Tertiary has further potential * Mbawa eatimates are those of PanContinental Oil & Gas NL

14 Block L15 Kenya Dominion (100%) This map also indicates that Kofia-1 was not drilled on an optimal location with respect to structure, SW corner of L15 looks much better. Several large structures have been identified in Blocks 8 & 9 to the south, Mbawa may extend into the south of Block L15. Mbawa Mbawa SW straddles, L8/L9 boundary, majority thereof in L9 Mbawa SW Woodside Mid Paleocene Depth Map

15 Block L15 Kenya Dominion (100%) Kofia -1 Kofia is the only well in Block L15 to date. It was drilled in 1985 by Union Oil and reached a TD of 3630m in the Upper Cretaceous. The well was dry, but had both gas & oil shows mainly in the Palaeocene & older sands. The gas shows were under represented by ongoing problems with gas detector during drilling. Oil shows are summarised to right, from the completion log. These are the best offshore oil shows to date

16 Block L9 Kenya Dominion (60%) N S Block 9 Block 8 Strike line along Davy FZ, shows Mbawa SW straddling Block L8/L9 boundary U. Cret Jurassic? Line W03-62_m

17 Block L9 Kenya Dominion (60%) W E Dip line across Davy FZ, shows Mbawa SW prospect near L9/L8 boundary U. Cret Jurassic/Karoo? Possible hi amp volcanics east of fracture zone? W03-14_m

18 Tanzania Offshore New prospects identified in Block 7 while industry activity ramps up 18

19 Map Showing Distribution of New Prospects within Block 7 3D 1) The Fast Track 3D has highlighted the presence of new opportunities not apparent on the original 2D dataset. 2) Examples of the new Tertiary prospects and leads include: Paleocene fan (Bravo); Eocene fan (E1); and Mio/Pliocene channel (M1). 3) Management estimate that these three currently mapped prospects alone add cumulatively: 1.3 Tcf Tcf (P90 - P10 range) of new prospective resources to Block 7. This range is in addition to 7Tcf (Mean) from Alpha per 2010 CPR. Further work on other potential prospects and leads continues Extent of 3D Anomaly Outline Seismic Pick

20 Tanzania Block 7 Block 7 Overview 100% working interest, operated by Dominion PSA signed ,236km 2 3D acquired (2010) 4,350 km 2D seismic acquired (2008) One prospect only, Alpha Prospect, independently reviewed to date by Energy Resource Consultants Limited (ERC) in June 2010 Alpha Prospect has both Structural and Stratigraphic closures CPR established net prospective resource of 7.1Tcf (Gas Case) and 1.1Bnbbl (Oil Case) ERC risked the prospects with an average 12% CoS Alpha is in water depths of 1,500m and represents multiple drilling objectives Implied risked value of $264mm (at $2.00/boe) Since the CPR in July 2010 there have been 6 discoveries made in deepwater East Africa Currently working to further prospect and lead inventory Completed 3D seismic survey covering the Alpha & other prospects in Nov Final processing and initial results of 3D are being analyzed currently New prospect types within 3D area represents additional prospective resource* range of Tcf (P90-P10) Beta & Gamma represent amplitude anomalies of >100km sq. within the Cretaceous and share same characteristics of Alpha s deepest, largest objective Palaeocene Fan (Bravo) represents amplitude anomalies of nearly 150km sq, looks similar to Barquentine in Mozambique and is directly above Alpha & Beta prospects. * Dominion management estimates 20

21 Alpha prospective resources summary Source: ERC CPR 30 June

22 Alpha, Beta & Gamma prospects in Block 7 3D 3D seismic dip line A A Map of Amplitude Anomalies on Alpha, Beta & Gamma Amplitude Anomaly #16 Alpha Fan Beta Fan Amplitude (1) Anomaly A A Amplitude Anomaly #16 Area = 103 Km 2 Area = 89 Km 2 Area = 16 Km 2 Alpha Fan Beta Fan Amplitude Anomaly Alpha, Beta & Gamma represent 208km sq of amplitude anomalies All 3 prospects are in the intra-cretaceous 22

23 Block 7 Alpha Prospect 3D Near vs. Far (AVO) a a a a Alpha Beta Alpha Beta Near Offsets Far Offsets In-line a a 23

24 AVO Anomalies in Block 7 Seismic Data Alpha Prospect BetaProspect AVO Class 4 Top 4 Base 3 Top 3 Base 2 Top 2 Base 1 Top 1 Base Alpha Channel Beta Channel 24

25 Palaeocene fan Bravo prospect identified in Fast Track 3D Bravo Amplitude Anomaly 3D seismic dip line A A Amplitude Anomaly #7 Amplitude Anomaly #6 Amplitude Anomaly #10 Amplitude Anomaly #6 Area = 68 Km 2 A A Amplitude Anomaly #7 Area = 18 Km 2 Amplitude Anomaly #10 Area = 63 Km2 (within 3D Survey) The Bravo fan prospect represents a 149km sq amplitude anomaly in the Palaeocene (within the 3D area only). Bravo prospect is similar, by type and age, to the Barquentine discovery in deepwater Mozambique. 25

26 Mafia Deep-1* potentially de-risks source offshore Tanzania Mafia Deep-1 (MD-1) * Courtesy of Etablissements Maurel et Prom (M&P) The MD-1 well was drilled to 5632m MD-1 TD d in the lower Cretaceous High gas saturations in well bottom Gas encountered was thermogenic up to C4 Liquids were encountered Eocene Well proves thermally mature source Jurassic Permo-triassic Kimbiji Tan Can-1 Kisarawe-1 Kimbiji East-1 Masaki-2 Latham Mkuranga-1 Kimbiji Main-1 Lukinga-1 Dira-1 Kisangire Bigwa-Rufiji / Mafia Mafia-1 Songo Songo-1 Lukuliro 1 Pweza -1 Songo-Songo Field Nyuni Kiliwani-1 Mita Gamma-1 Mbate-1 Mandawa Kizimbani-1 East Pande East Lika-1 ous Mihambia-1 Mandawa-7 Mbuo-1 Kiswere-5 Lukuledi-1 Lindi Mnazi Bay Lake Kitere-1 Mtwara Shell Dominion Petrobras Petrobras BG BG Statoil/Exxon BG Mnazi Bay-1 Anadarko Block 07 Block 06 Block 05 Block 04 Block 03 Block 02 Block 01 Barquentine - 1 Windjammer - 2 Collier - 1 Mafia Deep-1 is a gas discovery with oil shows TD in Lower Cretaceous, gas seen in Lower Cretaceous Gas is proven to be thermogenically sourced (up to C4) km Statoil 26 Ironclad - 1

27 Block 7 Deepwater Tanzania Recent progress on Block 7 3D seismic survey acquisition completed in November 2010 Final processing completed, interpretation underway to support new CPR for area covered by 3D The long offset, 7km streamer, data will support amplitude variations with offset ("AVO") studies, these studies on the existing 2D data have helped de-risk Alpha and Beta already Additional 2D likely to be acquired as in fill to deeper water portion of block to improve understanding of Lambda & Mu prospects as well as larger Cretaceous structural features beneath The final results of the 3D and ongoing analyses support the Company s re-assessment of volumes and improve chances of success not only for the Alpha prospect but for all prospects mapped within, and immediately adjacent to, the survey area Dominion may seek farm-in partners for Block 7 to commence drilling operations in 2012 Final 3D volume is being interpreted at present, improving the new prospects already identified in Fast Track 3D Dominion may host a formal data-room following completion of in-house analyses of the 3D seismic Management estimates that there will be four to six drilling rigs operating in East Africa in to BG are understood to be continuing drilling operations with 2 rigs in Blocks 1,3 & 4 in Tanzania - Statoil & ExxonMobil are planning to drill one exploration well in Block 2, Tanzania - Petrobras are now drilling the first of two wells in Blocks 5 & 6, Tanzania - ENI are planning to drill two wells offshore Mozambique, mobilizing the Saipem 1000 to East Africa - Anadarko will continue drilling operations in Mozambique and likely Kenya, operating 2 rigs next year - Apache, Origin & Tullow are committed to drilling on Block L8 Kenya 27

28 Deepwater East Africa drilling activity Eight discoveries in deepwater East Africa so far East Africa central part of broader Industry move Industry majors move toward deepwater pre-tertiary around Africa Ghana, Liberia, Sierra Leone and now East Africa More majors enter deepwater East Africa Exxon enters Tanzania Block 2 BG enters Tanzania Blocks 1,3 and 4 Deepwater Mozambique Windjammer discovery - Gas discovery in tertiary deltaics, additional pay in Palaeocene Ironclad discovery* - Oil discovery (likely sub-commercial) in a Cretaceous (pre-tertiary) deep sea fan Barquentine discovery - Gas discovery, successful appraisal of Paleocene in Windammer Lagosta discovery* - Gas discovery, likely confirms sufficient quantities to support LNG Tubarao discovery* - Gas discovery, 34m net pay in the Eocene confirms a new play style Deepwater Tanzania Pweza-1 announced as a gas discovery in Block 4 Chewa-1 announced as a gas discovery in Block 4 Chaza-1 announced as a gas discovery in Block 1 Petrobras currently drilling in Block 5 (Block 6 to follow) *as per statements by the operator 28

29 Block 7 Tanzania Dominion (100%) Alpha Prospect* Scoping Economics Block 7 economics based solely on Alpha Prospect only Dry gas case only liquids case & other all prospects considered upside Scaled economics off deepwater Nile Delta Deep (i.e. Egypt) type developments Assumed 7tcf recoverable 25% sold to local market ~$3-4/mcf 75% LNG ~ 4-6$/mcf to liquefaction plant (post processing) Approximate NPV/boe of $2 CoS of 12% (as per CPR, 3D & recent drilling have increased this to >20%) Implies risked value of $264mm (1100 mmboe * 12% * $2) ~88p un-risked for Alpha Prospect alone. Gas case only ~10.5p risked for Alpha Prospect alone. Gas case only *volumes & chance of success to be re-assessed in 1H11 with 3D and recent drilling results in deepwater East Africa 29

30 Lake Edward Basin A strategic position within the whole of a Central African Rift basin 30

31 Late Pleistocene Early Pleistocene Late Pliocene Late Pleistocene - Holocene Precambrian Toro Formation Bwambara? SM 03 Sand SM 04 Sand SM 04b Sand Depth (m) Lithology Casing Points Oil/Gas Semi - Arid Humid - Seasonal Humid - Seasonal Semi - Arid Humid Operator : DOMINION PETROLEUM Ngaji-1 Key Well Results Scale : 1:2500 TD : m Stage GR Member 30 API NGAJI - 1 TOC 0 Wt % 10 Environment of Deposition Seismic Horizons (depths MDGL) /8" m of Pleistocene Supports overfilled model >1km of very young sediment /8" 322 Arid Seismic Marker Notable increase in TOC in Pliocene Only top Pliocene observed 6.23% TOC is sufficient for source Gas 700 Substantial Basal sand column 56m of ca. 14% porosity Likely migration conduit No Kitchen in Uganda Basin depocenter is in DRC Large sealing fault under Lake Ngaji? Edward /8" 801 Arid Seismic Marker % TOC Seismic Marker 04b Increased TOC Seismic Marker 04d Arid Ngaji 31-1 Seismic Marker 05 Basement

32 Lake Edward Basin Uganda/DRC Cross-Section diagram through Lake Edward A A Elements of an Overfilled basin seen in DRC side Uganda likely an Underfilled sub-basin of DRC side Ngaji-1 in migration shadow from basin depocenter Exploration to focus on ridge which divides basins Uganda sub-basin unlikely to be a source kitchen Thermal gradient is confirmed (C30deg/km) by Ngaji-1 Higher TOC shales likely in basin (anoxic) depocenter Oil seep on Lake Edward, near border may confirm model A DRC Uganda Ngaji-1 A LES-15 lake surface oil seep kitchen 32

33 Seismic line on eastern edge of Izzy, tying to Ngaji-1 Edward Fm appears to continue over high, but Ngaji Fm onlaps NW SE Ngaji Fm Edward Fm Basin depocenter (eg. kitchen ) is downdip and southwest of Izzy Basement high on western end of line. Bounding fault coincides with gravity high limit 33 33

34 Areas defined for Izzy Maximum m EA4B 43% Two broad areas defined using gravity grid Maximum = maximum closure Minimum = arbitrary crestal area Bear in mind this is not a traditionally mapped structural closure based on seismic data Izzy Lead However, it does correspond to a structure evident on seismic lines that impinge on the eastern edge of the feature (see following slides) Assumption that there is continuing correspondence between gravity and structure over the rest of the feature 43% of max area in Uganda EA4B, 57% in DRC Block 5 Minimum m EA4B 24% Gravity Bouguer Full grid 34

35 Izzy volumetric estimates 57% DRC/43% Uganda area m2 thickness m Estimated % fill GRV MMm3 Max 150,250, Min 35,092, Min & max areas measured from polygons on gravity grid in Kingdom GRV estimated from area x reservoir thickness x % fill PARAMETER Units PDF Min. M.L. Max. Comments * Mean and Standard Deviation entered to define Probability Density Function G.R.Volume MMm3 Triangular User Entered calculated from areas x avg res thickness x % fill Area of closure km Depth to Crest m Closing contour m Reservoir thickness m Waste zone thickness m Net/Gross frac Triangular Porosity frac Triangular Hydrocarbon Sat. frac Triangular FVF vol/vol Triangular Recovery factor frac Triangular areas measured from gravity grid Edward Fm 56m in Ngaji -1 14% in Ngaji-1 Edward Fm; Ngaji Fm 27-30% as for other Dominion leads in EA4B as for other Dominion leads in EA4B as for other Dominion leads in EA4B Modified reservoir parameters, run in Monte Carlo using estimated GRVs OUTPUT P90 P50 P10 OIP/GIP mmbbl Reserves mmbbl % on Block EA4B Reserves on block mmbbl Monte Carlo estimation of STOIP and Reserves 35

36 Uganda - Prospect B on Western side of Sealing Fault (52mmbo*) N/S Sealing Fault Prospect B Location 36 *as per mean prospective resource estimate from competent persons report (ERC June 09)

37 Lake Edward Basin Uganda/DRC What next for Lake Edward? Net Prospective Resource Prospect B 49.4mmbo Izzy Prospect 83.7mmbo B + Izzy 133.1mmbo Further seismic, across lake into DRC: km in total for both countries to commence in early Tie reservoirs into the ridge which separates DRC kitchen from Uganda sub-basin Identify sealing faults across Lake & leaking faults which could be sourcing oil observed on lake surface Lake floor coring near oil slicks and shallow cut faults to confirm oil seeps 37

38 Dominion Petroleum Ltd. Summary 38

39 Dominion Petroleum Ltd. - Overview Summary East Africa is gaining the attention of the industry Both oil and gas found in deepwater in Mozambique First deepwater wells in Tanzania is a success Mozambique discoveries likely support LNG Mafia Deep-1 proves source in the Jurassic or older Kenya offshore now a material aspect of portfolio L9 awarded and PSC executed L15 awarded subject to PSC execution Neighbouring companies to drill in 2012 Block 7 s Alpha prospect alone has 7Tcf/1Bbl potential 12% Chance of Success, likely conservative 4 large prospects mapped with Fast Track 3D Huge amplitude anomalies in Palaeocene & Cretaceous Prospectivity of DRC/Uganda supported by Ngaji Key elements proven, target Pliocene for source Izzy represents a robust prospect straddling the border Geological model could be proven with Prospect B 39