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Transcript of Aurelian Corporate Presentation 010212
Aurelian Oil & Gas PLC
Siekierki Project Update &
Strategic Options Review
Corporate Presentation
February 2012
Disclaimer
This presentation has been issued by Aurelian Oil & Gas PLC (“the Company”). This presentation does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to
purchase or subscribe for or otherwise acquire, any securities of the Company or of any subsidiary or subsidiary undertaking of the Company, nor does this presentation constitute or form part of any
invitation or inducement to engage in investment activity under section 21 of the Financial Services and Markets Act 2000, nor does it constitute a recommendation regarding securities of the Company, nor
shall it or any part of it form the basis of or be relied on in connection with any contract or investment decision. Nothing contained herein should be construed as constituting any form of investment advice,
recommendation, guidance or proposal of a financial nature in respect of any investment issued by the Company or any transaction in relation to the Company.
If you are considering engaging in any investment activity, you should seek appropriate independent financial advice and make your own assessment. Within the United Kingdom this presentation is being
solely issued to and directed at persons who are reasonably believed to be of a kind described in Article 19 (Persons having professional experience in matters relating to investments) or Article 49 (High net
worth companies) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended), and persons who are otherwise permitted by law to receive it (together “relevant
persons”). This presentation must not be acted on or relied on by persons who are not relevant persons. If you have received this presentation and you are not a relevant person you must return it
immediately to the Company.The information contained in this presentation is not for publication or distribution into the United States of America (the “United States”). Neither this presentation nor any copy
of it may be taken or distributed or published, directly or indirectly, in the United States. The material set out in this presentation is for information purposes only and is not intended, and should not be
construed, as an offer for securities for sale in the United States or any other jurisdiction. The securities of the Company described in this presentation have not been and will not be registered under the U.S.
Securities Act of 1933 (as amended) (the “Securities Act”), or the laws of any state, and may not be offered or sold within the United States, except pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act and applicable state laws. There will be no public offer of securities in the United States.This presentation does not constitute an offer to sell or a
solicitation of an offer to purchase any securities in any jurisdiction in which such offer or sale would be unlawful prior to registration, exemption from registration or qualification under the securities laws of
any jurisdiction. The information contained in this presentation is not for publication, release or distribution in Australia, Canada, Japan, the Republic of Ireland, New Zealand or the Republic of South
Africa.Recipients in jurisdictions outside the United Kingdom should inform themselves about and observe any applicable legal or regulatory requirements in relation to the distribution or possession of this
presentation to or in that jurisdiction. In this respect, neither the Company nor any of its connected persons, accepts any liability to any person in relation to the distribution or possession of this presentation
to or in any such jurisdiction. The information contained in this presentation are provided as at the date hereof and are subject to change without notice and the Company is under no obligation to update or
keep current the information contained in this presentation. No reliance may be placed for any purpose whatsoever on the information contained in this presentation or any assumptions made as to its
completeness and no warranty or representation, express or implied, is given by or on behalf of the Company or of any subsidiary company or subsidiary undertaking, or any of their respective directors,
employees, agents or advisors as to the accuracy or completeness of the information contained in this presentation and no responsibility or liability is accepted by any of them for any such information,
provided that nothing in this document shall exclude liability for any representation or warranty made fraudulently.
Certain measures of performance referred to in this presentation, including but not limited to “F&D Costs", “Risked F&D Costs”, “Risked Cash Margin", “Recycle Ratio”, “Risked EMV“, “Unrisked Resources”,
“EMV”, “ECoS” and “Unrisked Net NPV" are not measures of performance under IFRS or US GAAP and may not be comparable to other similarly titled measures of financial performance by other
companies. Estimates of resource depend significantly on the interpretation of geological data obtained from drilling and other sampling techniques, which is extrapolated to estimate size, shape, depth and
quality of resources. In addition, to calculate resources, the Company makes estimates and assumptions regarding a number of economic and technical factors, such as production rates, grades, production
and transport costs and prices. These estimates and assumptions may change in the future in a way that affects the quantity and quality of the Company's resources. No assurance is given that the
resources will be recovered in the quantity estimated or at all. The disclosure of resources in this presentation is based on the Petroleum Resources Management System standards and that such disclosure
standards differ from those under US regulations. In particular, US Regulations do not recognize classification systems other than proven, probable and possible reserves and such resources are not
synonymous with the term "resources" as it is used in this presentation.
This presentation (and any subsequent discussions arising thereon) may contain forward-looking statements relating to the Company’s expected operations that are based on management’s current
expectations, estimates and projections. Words such as “expects,” “intends,” “plans,” “projects,” “believes,” “estimates” and similar expressions are used to identify such forward-looking statements. These
statements are not warranties or guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ
materially from what is expressed or forecast in such forward-looking statements.
By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that may occur in the future. Although the Company believes the
expectations reflected in such statements are reasonable, no assurance can be given that such expectations will prove to be correct. There are a number of factors, many of which are beyond the control of
the Company, which could cause actual results and developments to differ materially from those expressed or implied by forward-looking statements. These factors include, but are not limited to, factors
such as: future revenues being lower than expected; increasing competitive pressures in the industry; and/or general economic conditions or conditions affecting the relevant industry, both domestically and
internationally, being less favourable than expected. We do not intend to publicly debate or revise these projections or other forward-looking statements to reflect events or circumstances after the date
hereof, and we do not assume any responsibility for doing so. This presentation and its contents are confidential and must not be copied, published, reproduced, distributed in whole or in part to others,
whether or not they are relevant persons, at any time by recipients without prior written consent of the Company. This presentation is being provided to recipients on the basis that they keep confidential any
information contained herein or otherwise made available, whether oral or in writing, in connection with the Company. The recipients of this presentation should not base any behaviour in relation to
qualifying investments or relevant products (as defined in the Financial Services and Markets Act 2000 (FSMA) and the Code of Market Conduct made pursuant to FSMA) which would amount to market
abuse for the purposes of FSMA on the information in this presentation until after the information has been made generally available. Nor should the recipient use the information in this presentation in any
way which would constitute "market abuse". This presentation is being provided to recipients on the basis that they keep confidential any information contained herein or otherwise made available, whether
oral or in writing, in connection with the Company. By accepting this presentation, you agree to be bound by the above conditions and limitations.
The content of this presentation has not been approved by an authorised person within the meaning of the Financial Services and Markets Act
2000. Reliance on this presentation for the purpose of engaging in any investment activity may expose an individual to a significant risk of losing
all of the property or other assets invested.
Contents
3
Page
1. Strategic Options Review 3
2. Siekierki Project Update 11
3. Exploration Portfolio 23
Over the past four months the Company has conducted a comprehensive
review of its assets
Key conclusions:
Siekierki is an attractive project(1). The initial problems are now well understood and
a clear plan forward has been developed
The funded exploration portfolio offers significant upside
The cash position at the year-end 2011 was €63mm which allows the Company
to carry out its planned exploration and appraisal activities for the next 18
months
However, unlocking the full upside within the Company is likely to require additional
technical and financial resources
The Board believes that the value of the Company, its skills and its future
opportunities are not fully reflected in the current share price
The Board has therefore appointed Greenhill & Co to review the Company‟s
strategic options
This review will assess a wide range of options for the company including the
sale of assets, or the merger or sale of the Company
The Company will provide further updates in due course
Strategic Review Siekierki Project Update and Strategic Review
4 (1) This is based on the Board’s current view and is supported by AGR-TRACS. The value calculated on an EMV basis will be included in the Competent Person’s Report (“CPR”)
due in March/April 2012
The well tests on Siekierki have been completed and incorporated in a
comprehensive technical and commercial review led by independent consultants
AGR-TRACS.
Key conclusions:
Substantial gas initially in place (“GIIP”) is present. A base case GIIP of 1.1Tcf(1) is now
estimated in Block 207. This does not include gas potentially in Blocks 206 and 208
or the Krzesinki discovery. However, forecast production rates and recoveries have
been lowered relative to the 2009 Gaffney, Cline & Associates CPR
The data acquired during the appraisal phase has significantly improved our
characterisation of the Siekierki reservoir and a new reservoir model has now been
established
The layered Rotliegendes sandstone sequence in Siekierki has a wide range of
ambient porosity and permeability properties ranging from 6-18% and 0.02-
30mD. The higher permeability layers will dominate well performance
The Krzesinki-1 well test result supports the new reservoir model, in terms of the
presence of higher porosity zones within the gas legs of the Krzesinki and
Siekierki fields, with an un-fracced well test producing 0.2mmscf/day (the first
successful un-stimulated gas well flow test on Block 207 to date)
The reservoir is not pervasively fractured and therefore the water production
observed during each of the well tests is formation water from the matrix caused
by relative permeability effects above the free water level
Strategic Review Siekierki Update – A Large Gas Resource Play With Significant Upside
5 (1) This estimate is based on the current Board’s view and is supported by AGR-TRACS.
Strategic Review Siekierki Update – A Large Gas Resource Play With Significant Upside
6
The Trzek-2 multi-fracced horizontal well had mechanical problems with the
completion which reduced fracture effectiveness as had previously been released
The Trzek-3 multi-fracced horizontal well was mechanically well executed with a good
completion. However, the hydraulic fractures are not fully effective and the well bore is
not contacting the high permeability zone encountered in the pilot hole
The combination of the reservoir’s permeability to gas and water and the poor frac
effectiveness explains why the Trzek-2 and Trzek-3 gas flow rates previously reported
of 3mmscf/day and 3.2mmscf/day were significantly lower than had been expected
However, the multi-fracced horizontal wells utilised are the correct technology
application for the field and significant operational lessons and insights have been
learned
Multiple opportunities for significant improvement in initial well rates and recoveries
have been identified for future wells
A revised development plan has been designed, comprising 32 wells recovering
296Bcf of gas, an average recovery of 9.25Bcf/well1. The value of Siekierki
calculated on an EMV basis will be included in Aurelian‟s CPR covering both
appraisal and exploration assets due in March/April 2012. However, following the
comprehensive technical and commercial review supported by independent
consultants AGR-TRACS and on the basis of the new reservoir model described
above, the Board has determined that Siekierki is an attractive project.
(1) This is based on the Board’s current view and is supported by AGR-TRACS. The value calculated on an EMV basis will be included in the Competent Person’s Report (“CPR”)
due in March/April 2012
Aurelian will now seek to implement the next phase of the development plan,
which is likely to involve (subject to necessary approvals):
Identifying and bringing in a farm-in partner
Putting Trzek-2 and 3 on longer term tests
Commercialising gas from these two wells via low pressure low methane tie-in
and a “gas to wire” option as a smaller pilot development, with first gas expected
at the end of 2013, requiring capital expenditure of approximately €12mm net to
Aurelian
A fourth “proof of concept” well incorporating all of the learning to date, in an up
dip area of the field is planned in 2013. A successful appraisal result will support
the full field development plan for first gas in 2016
We have also identified further potential upside for Siekierki from a regional
development as well as additional gas volumes once the prospect inventories on
Blocks 206 and 208 have been delivered
Strategic Review Siekierki Update – A Large Gas Resource Play With Significant Upside
7
Niebieszczany-1 well has discovered 50Bcf gross GIIP in two horizons and identified
a 200Bcf gross GIIP resource play in the Krosno Formation. Two gas/condensate
zones in the Krosno Formation, above the original primary target, were well tested
with gas rates of 0.6 and 0.2mmscf/day plus condensate. A commercialisation plan is
now being developed by the operator PGNiG
Planned well Sosna-1 within the Torzym reef oil play, targeting a prospect with
35mmbbls gross in-place, to be spud in March 2012
Further geological and geophysical surveys planned to de-risk prospects identified on
2011 seismic data including Cybinka-Torzym, Slovakia and Romania (Brodina)
High impact Carpathian well drilling string deferred to Q4 2012. Karpaty East holds
significant upside, although now believed to be gas rather than oil. Company
estimates mid-case 170Bcf gross recoverable resources across two prospects
Further wells pushed back to preserve capital, optionality and value in line with the
strategic options review
All play-unlocking wells are being progressed for drilling
Licences with high working interests will be farmed out in the coming year, where
appropriate, for example: Karpaty East and West, Slovakia and Romania
Commercialisation decision for the Krzesinki-1 discovery made on Poznan Block 207
will be made once the well tests have been completed in Q1 2012
8
Strategic Review - Exploration Exploration Program Sharpened Further
All volumes are aggregated Company mid case estimates
9
Strategic Review - Exploration Exploration Drilling and Testing Schedule until 2013
In addition to the above seven wells, either currently being tested or planned to be
drilled, four contingent wells are also being considered for 2013
Some wells pushed back to preserve capital, optionality and value during Strategic
Options Review
Schedule based on current best estimate and is subject to ongoing review as we
constantly high grade prospects and defer others to try and de-risk them
Sosna-1, the first well to spud in 2012, is targeting 35 MMbbl STOIIP in the Zechstein
Farm outs planned – candidates include high equity exploration and Siekierki
10
Current market capitalisation is approx €100 million
Proforma cash and cash equivalents of €63 million
Current share price 16.5 pence per share* of which 11 pence per share is cash
Key assets are Siekierki and Exploration potential
Organisational capability – relationships built, first mover advantage in Poland,
concluded large program of seismic acquisition, in house expertise
Strategic Review Maximising Shareholder Value
CASH
• SIEKIERKI
• EXPLORATION
• CAPABILITY Share price at
31 January 2012
16.5 pence per
share
Value of Cash
11 pence per
share
* Share price as at 31 January 2012
Capital, time and technology required to unlock value
Appointed to
help
maximise
shareholder
value
Contents
11
Page
1. Strategic Options Review 3
2. Siekierki Project Update 11
3. Exploration Portfolio 23
12
Siekierki Project Update Overview
Ownership • Aurelian 90% (Operator); Avobone 10%
History
• Trzek-1 Vertical Well in 2007, Trzek-2 MFHW in 2010,
Trzek-3 MFHW in 2011, Krzesinki Vertical well in 2011
• 300km of 2D seismic in 2007
• 300km2 3D seismic across Block 207 in 2008
• 120km2 3D seismic across Blocks 206 & 207 in 2011
• 200 km 2D across Block 208 in 2011
• Siekierki – Base case GIIP 1.1 Tcf gross
• Krzesinki – GIIP10-20 Bcf gross
• Block 207 licence renewed for 3 yrs to Feb 2015
• Block 208 licence extension application submitted
• Plawce-2 drilled by PGNiG/FX Energy Q3 2011
Vertical Frac planned H1 2012
Pre-drill Concept:
MFHW(1) would produce dry gas if
fracced above FWL(2)
Tight reservoir with moderate
variation in porosity
GIIP 1.6 TCF mid case
Post-drill concept:
Tight reservoir which contains zones
of significantly higher permeability
Gas is produced with water as
relative permeability effects are
important
GIIP 1.1 TCF base case
Siekierki Project Update Change in understanding of the reservoir
13 (1) Multi Frac Horizontal Well (2) Free Water Level
14
Siekierki Project Update Trzek-2 MFHW diagnosis Illustrative
Siekierki Project Update Trzek-3 MFHW diagnosis Illustrative
Cemented liner allowed far greater control of frac placement compared with Trzek-2
6 fracs pumped, all contributing, but frac efficiency believed to be low (effective half-length around
27m compared with design of 85m)
Data indicates that fracs have not effectively contacted the better permeability zone
15
Siekierki Project Update Krzesinki-1
16
Siekierki Project Update New Hypothesis
17
Hypothesis
Siekierki is very different geologically from our original assumption. That
assumption had only moderate variation in porosity and permeability in the
tight aeolian sandstone matrix
We now believe the reservoir to have streaks of higher permeability (yellow in
the diagram) within that tight matrix, which will dominate well performance
Significantly increased well productivity and gas recovery should be achievable
by combining improved fracs with intersection of better porosity zones
Ongoing studies will also attempt direct detection of improved porosity
zones using existing high-quality 3D seismic
Improved understanding of relative permeability effects, help explain levels of
gas and water production
Evidence
Of the four wells and two pilot holes drilled by Aurelian, two-thirds have had an
occurrence of a zone of permeability significantly higher than the tight matrix.
Neither Trzek-2 nor Trzek-3 was able to exploit such features properly due to
completion and frac performance issues
Various operational and logging evidence points to sub-optimal fracs
Siekierki Project Update New 32 Well Base Case Concept, subject to successful appraisal
18
New Base Case Development Concept
1.1 TCF of GIIP
296 BCF recoverable (average 9.25 BCF per well)
32 well development
First production using 50 mmscf/day facility from 2016
Long term well cost to fall to €8.4mm based on MFHW
Assumes tight rock + better perm streaks (trial direct seismic detection)
Assumes better frac implementation and/or execution
Partial analogue with Leer Field & comparable with Plawce (PGNiG / FX
Energy) to south-east of Siekierki
Subject to any necessary approvals
Upside case
High Case GIIP (greater gas column above FWL away from well control, Block
206 exploration, regional story)
Better recoveries per well
Lower well costs (own rigs, shale gas economics etc.)
FWL – Free Water Level
Siekierki Project Update MFHW Orientation may improve recovery
T-2 and T-3 were drilled
approximately longitudinally.
There were few fractures and
no drilling problems in
reservoir
Future wells drilled in a
transverse direction to
intersect more fractures,
and maximise frac face area
(as per various Rotliegendes
analogues)
19
Siekierki Project Update Next Steps / New Base Case Model
Recommended 3 Stage Appraisal Plan to capture Base Case project
1) Identifying and bringing in a farm-in partner
2) Continued long term testing of Trzek-2 & Trzek-3
3) Commercialising gas from these two wells via low pressure low methane tie-
in and a “gas to wire” option as a smaller pilot development, with first gas
expected at the end of 2013, requiring capital expenditure of approximately
€12mm net to Aurelian.
4) Additional proof of concept well, Trzek-4
Incremental risked appraisal capex of €12mm net to Aurelian
Appraisal plan subject to any necessary approvals
Staged appraisal minimises capital exposure in the early stages
20
Siekierki Project Update Commercialisation
3 Trzek 2
Kostrzyn
Kleszczewo
Trzek 3
Trzek 1
Tie in substation ENEA
Transport HP pipeline
16 kV cable
Flowlines
Wells
Facilities
Export pipeline
Tie in HP pipeline
Long term Appraisal : Electricity Tie in via 16kV cable
Low pressure Low Methane pipeline to local utilisation
Full Development : High Methane High Pressure tie in to High Pressure pipeline
Long term
appraisal
Full
Development
Transport LP pipeline
Krzesinki-1
Tie in LP pipeline
21
Reservoir Crests
Siekierki Project Update Appraisal Plan
22
Staged appraisal plan provides minimum capex exposure
Contents
23
Page
1. Strategic Options Review 3
2. Siekierki Project Update 11
3. Exploration Portfolio 23
Exploration Portfolio
Focusing on 4 distinctive plays
in Central Europe
Exploration Projects
Poland
23 licences / 3.0 million acres
Slovakia
3 licences / 0.6 million acres
Romania
2 licences / 0.6 million acres
Bulgaria – considering divestment
2 licences / 0.6 million acres
Core Area 1: Permian Basin
Zechstein Reef Oil
Rotliegendes Exploration
Core Area 2: Carpathian Basin
Carpathian Fold Belt
Carpathian Foredeep
Source: Company websites
24
Rotliegendes
Gas
Zechstein
Reef Oil
Carpathian Deep
Fold Belt
Aurelian
Carpathian
Foredeep
Poland Licence Acreage Excluding PGNiG
25
Exploration Portfolio Focus
Niebieszczany-1 well has discovered 50Bcf gross GIIP in two horizons and identified
a 200Bcf gross GIIP resource play in the Krosno Formation. Two gas/condensate
zones in the Krosno Formation, above the original primary target, were well tested
with gas rates of 0.6 and 0.2mmscf/day plus condensate. A commercialisation plan is
now being developed by the operator PGNiG
Planned well Sosna-1 within the Torzym reef oil play, targeting a prospect with
35mmbbls gross in-place, to be spud in March 2012
Further geological and geophysical surveys planned to de-risk prospects identified on
2011 seismic data including Cybinka-Torzym, Slovakia and Romania (Brodina)
High impact Carpathian well drilling string deferred to Q4 2012. Karpaty East holds
significant upside, although now believed to be gas rather than oil. Company
estimates mid-case 170Bcf gross recoverable resources across two prospects
Further wells pushed back to preserve capital, optionality and value in line with the
strategic options review
All play-unlocking wells are being progressed for drilling
Licences with high working interests will be farmed out in the coming year, where
appropriate, for example: Karpaty East and West, Slovakia and Romania
Commercialisation decision for the Krzesinki-1 discovery made on Poznan Block 207
will be made once the well tests have been completed in Q1 2012
All volumes are aggregated Company mid case estimates
26
Exploration Drilling and Testing Schedule until
2013 Schedule based on current best estimate and is subject to ongoing review as we
constantly high grade prospects and defer others to try and de-risk them
(1) Company mid case estimate based on the Board’s current view. The value calculated on an EMV basis will be included in the Competent Person’s Report
(“CPR”) due in March/April 2012
In addition to the above seven wells, either currently being tested or planned to be
drilled, four contingent wells are also being considered for 2013
Some wells pushed back to preserve capital, optionality and value during Strategic
Options Review
Sosna-1, the first well to spud in 2012, is targeting 35 MMbbl STOIIP in the Zechstein
Farm outs planned – candidates include high equity exploration and Siekierki
Niebieszczany-1 Summary
TD - 4219m
Depth MD RT
500m
1000m
1500m
2000m
2500m
3000m
3500m
4000m
4500m
0m
Stratigraphy
(Aurelian)
475m
2040m
2960m
2795m
1900m
3175m
3500m
Krosno
Krosno
Transition/Menilite
Transition
Krosno
Transition/Menilite
Transition/Menilite
Transition/Menilite
Lithology Gas
Shows
Co
red
In
terv
als
DrillStem Tests
Oil Shows
3848m 3845m
Oil observed in the pits
Niebieszczany-1 well
Operator PGNiG
TD at 4219m due to increasing pressure
Primary targets of Eocene & Paleocene not reached
Gas/Condensate discovery in Oligocene Krosno Formation
Four Drill Stem Tests completed during drilling
Two zones well tested with modest fracs completed
Rates of 0.6MMscf/d plus 126 bbl/d condensate and
0.2MMscf/d plus 18 bbl/d condensate achieved
50 BCF Gross GIIP estimated (1)
Oil & Gas shows over much of Krosno Formation & Transition
Beds
Krosno Formation Resource Play:
additional 200 BCF GIIP Gross estimated (1)
Further work on well to lead to development in discussion with
Operator
DST #1
DST #2
DST #3
DST #4
Fo
rma
tio
n
To
ps
Core #1
Core #2
Core #3&4
Core #5
Core #6
Well Tests
Test #2
Test #1
Niebieszczany-1 Test #1
Open Hole DST #1 3231-3247m Estimated Gas flow – 0.05 mmscf/d Subhydrostatic pressure
Open Hole DST #2 3483-3535m Estimated Gas flow – 0.71 mmscf/d ~2,700 psi Overpressured Test was aborted before cleaned up
Open Hole DST #3 3656-3698m AOF calc Gas flow – 7.9 mmscf/d ~4,000 psi O/P Cased hole Test #2 3677-3683m Fracced (24t, screened out) Flow 1 mmscf/d reducing to 0.2 mmscf/d over 48 hrs
Open Hole DST #4 3827-3858m Estimated Gas flow – 0.4 mmscf/d ~4,000 psi Overpressured Open Hole Test #1 3825-3857m Fracced (30t), Stabilised rate 0.6mmscf/d + 126 bpd condensate, WHP 4100psi (1) Aggregated Company mid case estimates
Core Area 1: Zechstein Reef Oil Play Exploration assets: Significant additional gas and oil volumes targeted
Ownership • Aurelian 45% (Operator); Romgaz 30%; Sceptre Oil & Gas 25%
Resources (1)
• 176 MMbbl gross STOIIP on blocks (79 MMbbl net) over mapped leads
• 48 MMbbl gross recoverable resource (22 MMbbl net) over mapped leads
• Further ~50 MMbbl gross recoverable potential in areas of low data coverage
Current / Planned Activity
• Acquisition of 10% interest from Avobone in October 2011
• Funded to drill one well in H1 2012 and one well 2013
• First well on Torzym targeting gross 35 MMbbl STOIIP (16 MMbbl net)
Other
• Unexplored Zechstein oil play adjacent to recent oil discoveries to the north requiring 3D seismic to unlock potential
• 100 MMboe fields discovered nearby prolific BMB Area. May contain analogues to one of the largest oilfields in the Central Lowlands of Poland, the Lubiatow complex, with reserves of 54 MMbbl of oil and 194 Bcf of gas
• Basin extends from the prolific UK North Sea
New Reef Oil potential in Cybinka and Torzym licences
Unexplored
„‟Reef and
Slope Play”
BMB
107
MMBOE
LUBIATOW
COMPLEX
104 MMBOE
28 (1) Aggregated Company mid case estimates; Prospects & Leads - based on the Board’s current view. The value calculated on an EMV basis will be
included in the Competent Person’s Report (“CPR”) due in March/April 2012
Poland : Torzym-Cybinka Zechstein Main Dolomite Play Concept
Na3
Na4
Na2
Lower Permian
(Rotliegendes + Volcanics)
Z4
Z3
Z2
Z1
1,000m
Lower Triassic
After Gorska et al. 2003
Ca2
An1 Platform
An2
3,000m
2,500m
2,000m
MIGRATION Oil & Gas within Ca2
Toe of Slope Platform Reefs Isolated Atoll Reefs
<1% H2S
Carboniferous
Zechstein
TVDSS (m)
Oil Gas Condensate Debris/Talus HC Generation
*Organic rich Ca2 carbonates (TOC 0.5-7.0 wt %) are considered to be mature and generating at the present day
TRAP & SEAL Robust Halite & Anyhydrite
(Top and bottom seal)
In situ Ca2 Atolls
(e.g. Gryzyna) Ca2 Toe of Slope Fans
(e.g. Lubiatow) SOURCE* Organic rich Ca2
(Basinal facies)
RESERVOIR Ca2 Reefs
(e.g. BMB, Grotow & Miedzychod)
29
Ownership • Aurelian 80% (Operator); PGNiG 20%
Resources (1)
• 545 Bcf gross GIIP (488 Bcf net) on block
• 172 Bcf gross recoverable resource (138 Bcf net) for 2 large prospects with additional
106 Bcf gross GIIP (85 Bcf net) identified in other leads
Current Activity
• 2 wells planned to target the 2 large prospects
• 136km 2D seismic survey covering approx 25% of Block complete
• Further 95km 2D seismic acquired in 2011 to firm up two drilling prospects and identify further
drilling targets
• Believed to be gas rather than oil
Planned Activity • Reviewing farm out strategy
• Drill Karpaty East-1 Q4 2012; Drill Karpaty East-2 2013
Polish Carpathians
30
East Karpaty 2 Well Programme Planned
(1) Aggregated Company mid case estimates; Prospects & Leads - based on the Board’s current view. The value calculated on an EMV basis will be
included in the Competent Person’s Report (“CPR”) due in March/April 2012
Slovakian Carpathians
31
Ownership • Aurelian 50% (Operator); JKX 25%;
Romgaz 25%
Resources (1)
• 2.0 Tcfe gross GIIP (1.0 Tcfe net)
across blocks
• 1.1 Tcfe gross recoverable resource
(550 Bcfe net) across multiple
prospects
Current
Activity
• Zborov B (Cierne-1) well in 2012
targeting 401 Bcf gross GIIP (200 Bcf
net) and 233 Bcf gross recoverable
resource (116 bcf net)
• Success on Zborov B would de-risk
the regional play
• Additional 300km of 2D seismic
acquired 2011
Planned
Activity
• 2 further exploration wells planned for
2013/2014
Other
• Highly prospective area with surface
oil seeps
• Shallow oil prospect identified on
Medzilaborce licence
• Borders high potential Bieszczady
licence
• Significant exploration potential
Svidnik / Medzilaborce / Snina Blocks
Zborov B
prospect
(1) Aggregated Company mid case estimates; Prospects & Leads - based on the Board’s current view. The value calculated on an EMV basis will be
included in the Competent Person’s Report (“CPR”) due in March/April 2012
32
International Players in Poland Macro-economic picture and resource potential is attracting increasing
number of IOCs to Poland
33
Conclusions Key conclusions:
Siekierki is an attractive project(1). The initial problems are now well understood and
a clear plan forward has been developed
The funded exploration portfolio offers significant upside
The cash position at the year-end 2011 was €63mm which allows the Company
to carry out its planned exploration and appraisal activities for the next 18
months
However, unlocking the full upside within the Company is likely to require additional
technical and financial resources
The Board believes that the value of the Company, its skills and its
future opportunities are not fully reflected in the current share price
The Board has therefore appointed Greenhill & Co to review the
Company‟s strategic options
This review will assess a wide range of options for the company
including the sale of assets, or the merger or sale of the Company
The Company will provide further updates in due course
(1) This is based on the Board’s current view and is supported by AGR-TRACS. The value calculated on an EMV basis will be included in the Competent Person’s Report (“CPR”)
due in March/April 2012
Contact Us
Aurelian Financial Advisor Rowen Bainbridge Brian Cassin or Mark Bentley
Aurelian Oil & Gas PLC Greenhill & Co. LLP
4th Floor, 4 Grosvenor Place Lansdowne House, 57 Berkeley Square
London SW1X 7HJ London W1J 6ER
Phone: +44 (0) 20 7245 4999 Phone: +44 (0) 20 7198 7400
Email: [email protected]
Public Relations Nominated Advisor Nick Elwes or Catherine Maitland Richard Morrison or Jen Boorer
College Hill Ambrian Partners Limited
The Registry, Royal Mint Court Old Change House, 128 Queen Victoria Street
London EC3N 4QN London EC4V 4BJ
Phone: +44 (0) 20 7457 2020 Phone: +44 (0) 20 7634 4700
Email: [email protected] Email: [email protected]