Chairman. Seplat Petroleum Development Company. 20 November 2013. 1 .... Signed GMoU with host communities. June 2011. I
Oil Council World Assembly Dr A.B.C Orjiako Chairman Seplat Petroleum Development Company 20 November 2013 1 1
Important notice This presentation includes forward-looking statements. Forward-looking statements include all matters that are not historical facts and include, by way of example, statements concerning our plans, objectives, goals, strategies, future events, future performance, capital expenditures, financing needs and business trends. In some cases, these forward-looking statements can be identified by words such as “aims”, “believes”, “estimates”, “anticipates”, “expects”, “intends”, “may”, “will”, “plans”, “continue” or “should” and similar expressions but these words are not the exclusive means of identifying such statements. These forward-looking statements may appear in a number of places throughout this presentation. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of our control, that could cause actual results to differ materially from the results discussed in the forward-looking statements. You should not place undue reliance on these forward-looking statements. Any forward-looking statements are based upon information available to us on the date of this presentation and we do not intend, and do not assume any obligation, to update forward-looking statements set forth in this presentation. Many factors may cause our results of operations, financial condition, liquidity, dividend policy and the development of the industry in which we compete to differ materially from those expressed or implied by the forward-looking statements contained in this presentation. This presentation does not purport to describe all risks and factors that could adversely affect our results of operations, financial condition, liquidity and dividend policy and our development plans, including those which in the future may be attributable to the global oil, gas and resources industry or to an investment in an emerging market. Moreover, new risks can emerge from time to time, and it is not possible for us to predict all such risks, nor can we assess the impact of all such risks on our business or the extent to which any risks, or combination of risks and other factors, may cause actual results to differ materially from those contained in any forward-looking statements. Given these risks and uncertainties, you should not rely on forward-looking statements as a prediction of actual results. No information included in this presentation is intended to be a profit forecast or a financial projection or prediction. No representations or warranties, express or implied, are given as to the achievement or reasonableness of, and no reliance should be placed on, statements pertaining to financial performance, including (but not limited to) any estimates, forecasts or targets contained herein. You are cautioned not to rely on such statements. The achievability of SEPLAT's proposed strategy set out in this presentation cannot be guaranteed. Certain financial information contained herein has not been audited, comforted, confirmed or otherwise covered by a report by independent accountants. When and if audited financial information for SEPLAT is published or becomes available, the data could vary, possibly significantly, from the data set forth herein. In addition, past performance of the Company cannot be relied on as a guide to future performance. The financial information for SEPLAT has been derived from the current draft of the historical financial information for SEPLAT, which is subject to change.
Except as otherwise indicated, statements contained in this presentation are only as of the date hereof. In no circumstances shall the distribution of the information contained in this presentation create any implication that there has been no change in the affairs of SEPLAT after the date hereof. SEPLAT gives no undertaking to provide the recipient with access to any additional information or to update this presentation or any additional information or to correct any inaccuracies in it which may become apparent.
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Seplat - overview OUR VISION
OUR MISSION
“To build and sustain a world class, indigenous
“To be a world class energy company
oil and gas company in Nigeria through innovative partnerships and premium value delivery”
delivering premium value to all stakeholders”
SHAREHOLDING STRUCTURE
MPI 35%
Mecuria
Blakeney
6%
Shebah
4%
(Listed on Euronext Paris)
OUR CORE VALUES
31%
Seplat (Operator)
Platform 24%
afety nvironment artnership
eadership
45%
NPDC
55%
OMLs 4, 38, 41 (onshore Nigeria)
ccountability eamwork
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Seplat – track record
Oct. 2010 Achieved operated production of 30Mbpd
Dec. 2011 Achieved YE2011 operated production target of 40Mbpd
Jan. 2013 Achieved YE2012 operated production target of 50Mbpd April 2013 Added 24MMbbl reserves
March 2010 US$340MM acquisition price
2009 Seplat formed by Shebah and Platform
July 2010 Closing of the acquisition. Seplat operator
Jan. 2010 Initiated acquisition of OMLs 4, 38, 41 April 2010 Production restarts 14Mbpd
May 2013 Achieved 2013 YE operated production target of 60Mbpd
Dec. 2010 Signed GMoU with host communities
Oct. 2010 Successful transition of management & technical teams
June 2011 Increase in debt finance commitments from African banks
August 2012 Added 23MMbbl reserves
Feb. 2013 Agreement with SPDC reducing loss allocation + LACT unit commissioned
June 2013 Closed 40% farm-in to Pillar Oil’s Umuseti & Igbuku marginal fields
March 2011 US$550MM refinancing and acquisition financing
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Seplat - asset location
Umuseti (Pillar)
Igbuku (Pillar)
Seplat – company snapshot OIL & CONDENSATE PRODUCTION (Mbpd) OUR KEY STATS (1) 50 Operated pro ductio n (100%)
Indigenous Operator
Shut down of the TransForcados export pipeline for repair works
Seplat Wo rking Interest (45%) 40
30
c.60Mbpd operated production
20
10
c.130MMcfd gas operated production
A ug. 2 0 10
112MMbbl WI 2P oil & condensate reserves
H 2 2 0 10
H 1 2 0 11
H 2 2 0 11
H 1 2 0 12
587Bcf WI 2P gas reserves
81MMbbl WI 2C oil & condensate resources
3P
Gas (Bcf)
1P 74
3C 145
2P 145 112 2C 81
3P 2P 684 587 1P 323
1C 22
122Bcf WI 2C gas resources Reserves (1) Source: DeGolyer & MacNaughton (“D&M”) (figures as of 30 April 2013). Excludes impact of 40% farm-in to Pillar Oil Umuseti/Igbuku marginal fields (transaction effective as of 1st June 2013). 2P WI reserves estimated c. 10MMbbl
Q 1 2 0 13
WI RESERVES AND RESOURCES (1) (2) Oil & Condensate (MMbbl)
H 2 2 0 12
Contingent resources
Reserves
3C 2C 206 1C 122 32 Contingent resources
Source: DeGolyer & MacNaughton (“D&M”) (figures as of 30 April 2013) (1) Excluding impact of 40% farm-in to Pillar Oil Umuseti/Igbuku marginal fields (2) 45% pre-royalties
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Community-oriented with strong local ties Seplat has built strong relationships with key local communities COMMUNITY RELATIONS STRATEGY
Host communities regarded as stakeholders –
Capacity building and empowerment are the primary objective in the partnership
–
4 major stake-holding communities - hosting production assets
–
35 impacted communities – pipelines and access
–
–
Commitment to proactive implementation of sustainable development programmes
–
Development of a 5-year Global Memorandum of Understanding (GMoU) with the host communities
Community engagement meetings –
Dialogue with host communities to keep them updated about the company’s operations
Execution of Corporate Social Investments in the communities - widespread healthcare programmes, scholarship awards, employment opportunities, community electrification, water projects, etc.
Number of incidents due to 3rd parties (sabotage, theft) decreased from 6 in 2011 to 4 in 2012 and 0 in Q1 2013
3RD PARTY INTERFERENCE ON INFRASTRUCTURE 4
Number of Events
Production at Sapele up from 1.5 Mbpd to 26.5Mbpd Production at Oben up from 1.0 Mbpd to 13.5Mbpd
Expansion of the local economy through job creation has provided a disincentive for oil “bunkering” amongst the youths in the host community:
STRATEGY IMPLEMENTATION
Production of fields classified as “non-material” and in a state of decline far higher since acquisition by Seplat
3 2 1
0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
BUSINESS IMPACT
2011
Source: company data
2012
2013
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Seplat - strategy and targets Aiming to deliver mid / long term growth and premium value to all stakeholders 1 Maximise production and cash flows from existing assets
Increase operated oil production to reach c.100Mbpd (100%) by YE 2016
Achieve 100% reserves replacement year on year
Continuously add reserves through active reservoir management and conversion of contingent resources into reserves
Exploration campaign - numerous prospects and leads existing across the licences
Take advantage of the increasing gas demand, improving pricing dynamics and low taxes on the domestic market to monetise Seplat’s significant gas reserves
Grow a robust integrated gas business, maximising value from existing and new gas resources: grow gas sales capacity to c.300MMcfd by YE2016 (100%)
Leverage existing platform and indigenous status to further expand in Nigeria
Credible bidder (twice proved), yet exercising price discipline
Target assets with early production and cash flow and reserve replacement potential
Opportunities expected - divestments by Majors, local companies. Govt. bid rounds
2 Move-up 2C into 2P
3 Commercialise gas production
4 Pursue a focused acquisition strategy
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Existing assets - producing fields, discoveries, prospects Numerous unexplored reservoirs, prospects and leads
5 producing fields – sustaining operated gross 60 Mbpd and 130 MMcfd
7 fields with undeveloped discoveries - gross contingent 2C resources of 200 MMbbl
113 prospects and leads identified across the OMLs – 9 highest ranked selected for further work
UGO SOUTH WEST
OBEN
AZIMIRI
OML 4
NUGU NORTH
NUGU EAST
IJOMI
IGUELEBA DEEP
NUGU
OBEN EAST
OKWEFE OWEFE NORTH EAST
IGUELEBA EAST
JESSE NORTH
USONIGBE
EWUSSE
EWUSSE WEST
IJOMI DEEP
USONIGBE NORTH
ABRAKA NE UMUTU NORTH
OLOKUN NORTH
OMOJA SAPELE NORTH
OKWEFE SOUTH EAST
JESSE
OML 38
OKPORHURU
OLOKUN SOUTH EAST
SAPELE
OLOKUN OBIARUKU
MOSOGAR
SAPELE SOUTH
JESSE DEEP
UMUTU
ETHIOPE DEEP
ASUOPKU
OROGHO NORTH MAYUKU CREEK NW
OML 41
MAYUKU CREEK SW
OVHOR WEST
UBALEME
AMUKPE
ONITCHA SOUTH
ABRAKA NE
OGEGERE
UTAGBA UNO ETHIOPE SOUTH
ABRAKA
OROGHO
OGUME NORTH
OVHOR
OVHOR
OVHOR DEEP
EJEKIMONI
ORIOMU
Scale = 1: 250,000
ABRAKA DEEP AJALOMI DEEP
Legend
OKOPORO
OGUME OGUME SOUTH
EJEKIMONI EAST
ELUME
SEPLAT Concessions ARUONE EAST
OGUME SE
Faults
ELUME SOUTH
Producing Oil/Gas Fields Undeveloped Oil Discovery Undeveloped Gas Discovery Prospects ABC
Top high-grade prospects
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Commercialise gas production Well positioned to develop gas business NIGERIA’S KEY GAS INFRASTRUCTURE Three pipelines originating from Oben give Seplat access to strategic gas infrastructure serving major demand clusters Central Processing Facility Western Network System
Northern Network System
Gas Plant Jebba
Geregu NIPP
Eastern Network System
Oil Terminal
Ajaokuta
Olorunshogo
Power Station
Ibadan Omotosho Oben 24” x 31km ELPS 2 36” x 324km
Industrial User
UNICEM
Aba Industries
Lagos Egbin
Koko CPF Escravos
ELPS 1 36” x 104km
Existing Pipeline
Alaoji NIPP
Calabar NIPP
Obite Obiafu / Obrikom CPF
Imo River
Uquo
Eastern CPF Indorama
Cawthrone Channel
Obigbo ALSCON
Alakiri
Notore
Oso
Ongoing Pipeline Project Source: NNPC Note: Not drawn to scale
Ibom Power
Gas Master Plan provides favourable framework for development
Power generation, industrialisation, exports
Seplat achieving higher prices in Gas Sales Contracts
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Acquisitions - pursuing a focused, price-disciplined strategy Expanding in Nigeria, replicating success of first acquisition
Further opportunities expected in Nigeria
More divestments by majors and local companies
Seplat Other Indigenous AGIP/Oando ER * Non-Indigenous
Government licencing rounds
LNG terminal Oil terminal
Seplat is well positioned to pursue opportunities
Indigenous status
Track record in OMLs 4, 38, 41
Experienced board and management team
Funding capacity
Attractive partner for co-investments
Gulf of Guinea
Price discipline & measured approach will deliver value and returns
Focus is on onshore and shallow water assets, with clear potential for production increase and reserve replacement
Second acquisition completed successfully in 2013
(*) Oando Energy Resources ’ economic interest in the assets is subject to completion
Farm-in for 40% participating interest in Pillar’s Umuseti & Igbuku marginal fields
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Seplat – an attractive proposition Well advanced in the development curve INDIGENOUS OPERATOR 1
The only appointed indigenous operator in recent onshore disposals by Majors Strategically located quality assets: sizeable production, reserves and resources
Community oriented / strong relationships
PROVEN TRACK RECORD
2
Consistent delivery of step-change growth in production - more than tripled since acquisition to current 60Mbpd 2C to 2P reserves conversions – 2P oil & condensate reserves grown by 47% since acquisition to 248MMbbl (gross) SPDC agreement expected to reduce oil allocated losses - reconciliation factor reduced from c.20% to c.8% Strong balance sheet and robust cash flows
GROWTH STRATEGY 3
Exploit existing assets – significant 2C to 2P conversion potential and exploration upside - large number of prospects Develop gas business Selective, price-disciplined acquisitions - onshore, swamp or shallow; production and 2C upside
GOVERNANCE & BEST PRACTICES 4
Strong, experienced and diverse board Management depth with local and international oil & gas knowledge Relationship Agreement and compliance with UK Bribery Act and Nigerian Anti-Corruption
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