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UNLOCKING THE
HYDROCARBON
PROMISE OF MOROCCO.
PetroMaroc
Investor Presentation June 2014
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PETROMAROCS VISION
TO BE THE LEADING
HYDROCARBON PRODUCER
IN MOROCCO.
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PETROMAROCS MISSION
PETROMAROC APPLIES DISCIPLINED,
WELL PROVEN TECHNOLOGIES AND RISK
MANAGEMENT PRACTICES TO CREATE
LONG-TERM VALUE FROM NATURAL GAS
AND OIL FOR ITS SHAREHOLDERS AND
THE PEOPLE OF MOROCCO.
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PetroMaroc leadership team
Dennis A. Sharp, Executive Chairman
D. Campbell Deacon, Non-ExecutiveDirector
Yogeshwar Sharma, Non-ExecutiveDirector
Thomas R. Vukovich, Non-ExecutiveDirector
Gregory Boland, Non-Executive Director
Benjamin Yi, Non-Executive Director
Nicholas Brigstocke, Non-ExecutiveDirector
Dennis Sharp, InterimExecutive Officer
Martin Arch, Chief Fi
Tom Feuchtwanger, V
Neil Hamzaoui, VP Co
Development
DIRECTORS MANAGEMEN
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PetroMaroc Corporate Snapshot
Market Information
Stock Exchange TSX-V Trading Symbol (Longreach) LOI
PetroMaroc symbol (pending) PMA
Share Price (at June 6, 2014) C$0.31
Basic Shares Outstanding 81.1MM
Market Capitalization (Basic) C$25.1MM
Cash balance:
31 March 2014 US$ 2.8M (unaudited)
Major Shareholders1
Dundee Corporation:
Blakeney LLP:
West Face Capital:
(1) As per Management Information Circular, at May 15,
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PetroMaroc Organization
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PetroMaroc operational update; Summary and Conclusions
The Kechoula drilling campaign has discovered a significant natur
opportunity in the lower Liassic formation. The Lower Liassic formation has the geological characteristics of a
(conventional and unconventional) natural gas reservoir.
North America is on the leading edge of using both conventional unconventional technologies to economically extract hydrocarbosimilar looking reservoirs.
PetroMaroc has access to the experience and expertise required thydrocarbons from such reservoirs at very economic rates.
Development of this asset into a producing gas field will benefit nshareholders but also introduce the Moroccan hydrocarbon sectothe innovative technologies currently being used in North Americ
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PetroMarocsresource value-creation process
Identify the potential
Where do we choose to operate? Capture the opportunity
Acquire exploration licenses.
Explore for drillable prospects Obtain seismic, drill and test etc.
Appraise the discoveries Understand the size and productive capacity of the
reservoir.
Develop the natural gas/oil Achieve cost-effective production.
Optimize Production Generate maximum returns for our shareholders and
Moroccans.
Concept
Play/Lead
Prospect/s
Field
Pool/s
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The Kingdom of Morocco
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Identifying the potential Morocco
FAVOURABLE
ECONOMICS
PROVEN
PETROLEUM
SYSTEM
HUGE DEMAND
Price of gas
Royalty and taxation
Price of entry
H
M
R
S
Energy deficit
Political stability
Development an
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Gas Monetisation Opportunities
Moroccan Economic Landscape
Undersupplied Morocco imports 99% of oil, 91% of gas Africas 2ndlargest importer
Energy bill of US$10.7 billion in 2011, half of the trade deficit
Strong domestic market Energy demand +54% over last decade, on steady riseFiscal incentives 25% state participation
Gas royalty 5%, Oil 10%
10 year corporate tax holiday on discovery
Local Gas Market: opportunities and upside potential
Phosphate
Industry / OCP
Morocco is home to 85% (51 billion tons) of the worlds known phosphate reserve
African Development Bank loaned $250 million to OCP for industrial platform at Jorf Lasfar Moroccan exports as share of world trade: 32% phosphate rock, 11% fertilizers
OCP plans to double production of rock and triple production of MAP / DAP / AP by 2020
Electricity Potential gas conversion into electricity
Tahaddart: gas intake capacity 49 mmcf/day
Ain Beni Mathar: gas intake capacity 34 mmcf/day Gas
80% of electricity primary energy source is thermic
Fundamental
economics
Competitive gas price
Spot condensate price
Trade D
Source: ONHYM, OCP, ONE
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Producing basins in Morocco and neighboring countries
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The Kingdom of Morocco
Capital: Rabat. Official language: Arabic
Area: 172,414 sq mi (446,550 sq km) Population: About 32 million
Chief products: Agriculture, Manufacturing, Miningphosphate rock, phosph
Political system: Morocco is a constitutional monarchy under a hereditary kinlegislature has two housesthe Chamber of Representatives, members electConsultative Chamber, members chosen by electoral college. The king appoinminister and cabinet.
Oil and natural gas: 5,057 bbl/day (2012 est.), world ranking: 99
Crude oilimports: 122,900 bbl/day (2010 est.)
Crude oilproved reserves:680,000 bbl (1 January 2013 est.)
Moroccos world ranking: 98
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Capturing the Opportunity; Acquiring exploration licenses
Sidi Moktar: Drilled two wells
(100% gross interest 50% nSidi Moussa: Farmed out to Gene
Well planned for 4Q
(2% gross interest 1.5% ne
FoumDraa: Farmed out to Cairn
Dry hole
(3.3% gross interest 2.5% n
Zag License: Expires May2015
(30% gross interest 22.5%
Tarfaya: Transferring interest
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Explore for drillable prospects; seismic, drilling etc
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The Kechoula prospect in the Sidi Moktar Exploration License
KOBA
KECHOU
STRUCT
MESKALA
POOL
HYDROCARBONSOURCE/KITCHEN
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KOBA-1; Drilling results
INCREASE IN GAS CONTENT
(in ppm)_
45M OF GROSS
LOWER LIASSICRESERVOIR
SAND.
WITH A
VERYSTRONG
INFLUX O
GAS.
LITHOLOG GAS CHROMATOGRAP
SIGNIFICANT INFLOW OF
WATER AT 1873m
HIGH FORMATION
PRESSURE (6000psi)
REQUIRED THAT THE
MUD WEIGHT BE
INCREASED TO 2.3SG TO
CONTROL INFLOW
DUE TO THE DAMA
RESERVOIR AND W
HEAVY DRILLING M
EFFECTIVENESS OF
AND THE COLLECT
AND FLUID SAMPL
LIMITED.
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Koba-1; a Discovery or an Occurrence?
Occurrence: Gas inflow from chromatograph
Visual description of reservoir quality
Lithology from well cuttings
Clean sand from Gamma ray log
Mineralogy and petrography from core
Visual porosity estimation
Formation pressures from drilling data.
Discovery: Quantitative data from wireline logs:
Effective porosity from neutron/density logs
Water/gas saturations from resistivity logs
Net and gross pay from logs
Quantitative data from cores: Porosity and permeability
Wettability and electrical properties
Area from Geology/geophysics.
Quantitative data from tests: Formation pressures
Gas composition
Size and deliverability.
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Results of core analyses; rock descriptions from thin sections
Conventional reservoir:
High porosity and
permeability.
Unconventional reservoir:
Low porosity and
permeability
Non-Reserv
No porosity
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Core Analyses; Permeability vs Porosity
CURRENT
PRODUCTION
FROM
MESKALA.
High Quality
Medium Quality
Tight Gas
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Classification of the Lower Liassic reservoir quality for Koba-1
K b 1 d t t d th t th K h l t t h L Li i
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Koba-1 demonstrated that the Kechoula structure has Lower Liassic
reservoir which is gas charged
KOBA-1 KAMAR
Th K h l St t i 3 D h i th K b d
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The Kechoula Structure in 3-D, showing the Koba and
Kamar drilling locations
KOBA KAMAR
KECHOU
STRUCTU
MESKALA
POOL
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KAMAR-1; Geological prognosis and drilling design
Kamar 1:
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Kamar-1:
Drilling Curve
Contract de
Pressure in
Planned Fina
LOWER
LIASSIC
TRIASSIC
?
?
Actual Fina
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Kamar-1: Slow drilling
Hard and abrasive rocksin the shallower section
damaged the PDC bits
which dramatically
reduced the rate of
penetration
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Kamar-1: New gas bearing zone encountered
LITHOLOG
Kamar-1: Lower Liassic reservoir section & logs showing gas
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Kamar 1: Lower Liassic reservoir section & logs showing gas
pay
LITHOLOG
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Log analysis: Lower Liassic zone Kamar-1
GAS SAND
b l d l k f h h l
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How Koba & Kamar lowered exploration risk of the Kechoula structur
KOBA-1 KAMAR
K b & K d t t th t th ti K h l t t i fi
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Koba & Kamar demonstrate that the entire Kechoula structure is gas fi
KECHOULA
STRUCTRE
MESKALA
KOBAKAMAR
Cl ifi ti f th L Li i i lit f K b 1
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Classification of the Lower Liassic reservoir quality for Koba-1
CONVENTIONAL
UNCONVENTIONAL
K h l t t i f th i
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Kechoula structure: size of the prize
350-
500BCF
CONVENTIONAL
UNCONVENTIONAL
Multiple
TCFs
K b d K h b d d
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Koba and Kamar have been suspended
KAMARKOBA-1
Our resource value creation process Where we are now?
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Our resource value-creation process. Where we are now?
Identify the potential Where do we want to operate?
Capture the opportunity Acquire exploration licenses.
Explore for drillable prospects Obtain seismic, drill and test etc.
Appraise the discoveries Understand the size and productive capacity of
the reservoir.
Develop the natural gas/oil Achieve cost-effective production.
Optimize Production Generate maximum returns for our
shareholders and Moroccans.
Concept
Play/Lead
Prospect/s
Field
Pool/s
Understand the size and productive capacity of the reservoir
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Understand the size and productive capacity of the reservoir
Appraise these natural gas finds with the most cost-effective
technologies, including advanced completion techniques, to highest potential value
Testing program elementsboth wells in Q4 2014
Procure and deploy rig and completion equipment to complete pros
Conduct drill-stem or production tests to determine flow, volume, p
recovery, rock properties etc.
Evaluate test results and determine reserves potential and po
deliverability with internationally recognized independent qu
reserves evaluator.
Immediate funding required for the appraisal phase is $45 million
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Immediate funding required for the appraisal phase is $45 million
Proposed operations, timing and budget:
Testing and evaluating the existing wells and data (~$5 millio2014).
Acquire 3D seismic over the Kechoula structure (~$10 million
Drill 2-3 additional delineation and appraisal wells on the Ke
structure. (~$30 million, Q3/Q 42015).
Our resource value-creation process Where we are now?
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Our resource value-creation process. Where we are now?
Identify the potential Where do we want to operate?
Capture the opportunity Acquire exploration licenses.
Explore for drillable prospects Obtain seismic, drill and test etc.
Appraise the discoveries Understand the size and productive capacity of
the reservoir.
Develop the natural gas/oil Achieve cost-effective production.
Optimize Production Generate maximum returns for our
shareholders and Moroccans.
Concept
Play/Lead
Prospect/s
Field
Pool/s
Kechoula development will probably use conventional and
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unconventional technologies
Existing Infrastructure and Opportunities
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Existing Infrastructure and Opportunities
Existing infrastructure
Gas moved via 8 pipeline with spare
capacity to OCP phosphate minesparecapacity, subject to technical feasibility
ONHYM moving condensate toMohammedia refinery on truck mountedtanks
Condensate separation plants Toukimt: capacity 2.8 mmcf/d
Meskala: capacity 6 mmcf/d
Nearby industrial ports
KO-1KA-1
Source: ONHYM, Ministry of Energy
PetroMaroc operational update; Summary and Conclusions
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PetroMaroc operational update; Summary and Conclusions
The Kechoula drilling campaign has discovered a significant naturopportunity in the lower Liassic formation.
The Lower Liassic formation has the geological characteristics of a(conventional and unconventional) natural gas reservoir.
North America is on the leading edge of using both conventional unconventional technologies to economically extract hydrocarbosimilar looking reservoirs.
PetroMaroc has access to the experience and expertise required t
hydrocarbons from such reservoirs at very economic rates. Development of this asset into a producing gas field will benefit n
shareholders but also introduce the Moroccan hydrocarbon sectothe innovative technologies currently being used in North Americ
Join PetroMaroc in its promising pursuit of unlocking Moroccos prom
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Join PetroMaroc in its promising pursuit of unlocking Morocco s prom
May 16 (Reuters) - Moroccan authorities said on Friday gas drilling by L(PetroMaroc) had found encouraging signs in the Kamar-1 well, located
Moktar, near the city of Essaouira.
The announcement by the Office of Hydrocarbonsand Mining (ONHYM) [that the Kamar well] was themost positive result so far since Morocco started to award dozen of pforeign oil companies in the past few years to develop its energy reso
"The drilling has encountered signs of gas in two levels inside a JurassicONHYM said in a statement carried by the state news agency MAP.
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UNLOCKING THE
HYDROCARBON
PROMISE OF MOROCCO.
PetroMaroc
Investor Presentation June 2014