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Latam Oil & Gas Summit – September 2013
The Pre Salt Play of Paraguay
August 2013 Yacoraite Formation
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Disclaimer
2 © 2013 President Energy PLC
The Pre Salt Play of Paraguay September 2013
Notes: (1) Investors are not entitled to receive or request a copy of the report from Schlumberger or the Company
Brazil
Argentina
Uruguay Chile
Peru Bolivia Paraguay
Paraguay – open for business
3 © 2013 President Energy PLC
The Pre Salt Play of Paraguay September 2013
Constitutional Republic, population 6.5 million President Cartes inaugurated August 2013
Strong, business friendly, Colorado Party government
Pro USA/European political climate with UK and USA Embassies in Asuncion
Strong 2013 economic growth
IMF forecast a robust growth of 10.5% in 2013
Paraguay issued inaugural $500 million in 10-year international bonds
Moody’s upgraded government bond rating to Ba3 from B1, citing stable currency
Very attractive Hydrocarbon Law
Tax – Royalty Law 779, enacted December 1995
Sliding scale Royalty, 10% <5,000 bopd, 14% >50,000 bopd
Flat 10% tax on all business profits
International oil pricing at well head (Brent index)
Petropar off-take rights at well head up to 27,000 bopd
Dormant domestic downstream sector will be fed by new domestic production
E & P Sector Opening Up
Only 2 wells drilled in Paraguay during the past 25 years
New emphasis on unconventional resources + conventional oil in Chaco
8 Concessions now granted (including Pirity / Demattei oil plays)
5 further Concessions currently under negotiation
10 Prospecting Permits and Contracts being processed
4 © 2013 President Energy PLC
The Pre Salt Play of Paraguay September 2013
Paraguay concession map
Source: SSME Geoprocessing Department VMME-San Lorenzo Last updated: 30 April 2013
Proven petroleum system – inaccessible in Paraguay for past 25 years
5 © 2013 President Energy PLC
The Pre Salt Play of Paraguay September 2013
60w 63w
24s
N
Caimancito 59 mmb
Puesto Guardian Area 18 Fields
Total 30 mmb
Palmar Largo 50+ mmb
Olmeda Sub Basin 155 NFWs
152 mmboe cum. prod.
Pirity Sub Basin 8 NFWs (pre-1987)
DEMATTEI
PIRITY
Los Naranjos Jurumi
Carmen East
North Flank play Giant Palaeozoic
gas fields
Kilometres
0 100 200
Cretaceous Rift Basin
Proven Oil Field
Untested Prospect
Rift Basin crossing country border
150+ mmbboe produced in Argentine sector
No seismic or drilling in Paraguay sector since 1987
Untested prospects in Paraguay sector on trend with Palmar Largo Field
Structures get larger and reservoirs improve to the east
Pirity Pre Salt petroleum system
6 © 2013 President Energy PLC
The Pre Salt Play of Paraguay September 2013
REGIONAL TOP SEAL
and source rock
SOURCE ROCK,
reservoirs and
top seal
RESERVOIR
Olmedo shales + anhydrites
Halite evaporite
Olmedo shales + anhydrites
Yacoraite, interbedded lime mudstones, lime grainstones, thin sandstones and dolomitic mud stones
Lower Puesto Guardian Member Source Rock & Top Seal in Palmar Largo
Lecho Sandstone*
Basal transgressive marine/aeolian reservoir
* Lecho Sandstone replaced by porous volcanics in Palmar Largo
Proven source rock – identified by well logs and seismic
7 © 2013 President Energy PLC
The Pre Salt Play of Paraguay September 2013
6,000 km2 area / 78m average gross thickness – Yacoraite Formation, Lower Puesto Guardian Member
TOC up to 12%, Type II / III amorphous / algal kerogen – Lacustrine to restricted marine black shales
Image Source: Please refer to slide 2
Distribution of the Yacoraite source unit in the Pirity Sub-basin
N
Migration
Demattei
Pirity
0 25 Kilometers
High value prospect inventory – multiple play types
8 © 2013 President Energy PLC
The Pre Salt Play of Paraguay September 2013
9 prospects in Pirity
7 prospects in Demattei
Numerous additional leads
Seismic program to further de-risk
DEMATTEI BLOCK
Carmen East Play
PIRITY BLOCK
Jurumi Play
Los Naranjos Play
Palmer Largo Analog
Balbuena Este Analog
Selva Maria Analog
Northwest Flank Play North Flank Play
N
0 Km 100
Image Source: Please refer to slide 2 (1) Resource estimate by Crescent Global Oil LLC / Petro Victory LLC
Prospect Structure Seal Reservoir
Source Score Recoverable Resources(1)
(mmb)
Jurumi 1 5 4 5 4 64% 144
Jurumi 2 5 3 5 4 48% 207
Los Naranjos 5 5 2 5 40% 135
Carmen East 1 2 5 5 5 40% 13
Carmen East 2 2 5 5 5 40% TBD
Jurumi 3 3 4 5 4 38% TBD
North Flank D1 4 2 5 4 26% TBD
NW Flank 4 2 3 5 19% TBD
Jurumi 4 2 3 5 4 19% TBD
North Flank D2 4 2 3 4 15% TBD
North Flank D3 4 2 3 4 15% TBD
Demattei Basin 2 3 3 2.5 4 14% 41
Demattei Basin 1 2 4 2.5 4 13% 28
Confianza 3 2 2.5 5 12% TBD
Demattei Basin 3 1 4 2.5 4 6% 21
Demattei Bain 4 1 4 2.5 4 6% TBD
Total 589
Rank prospect inventory
Low risk Moderate risk High risk
2008 2D interpretation of old data
9 © 2013 President Energy PLC
The Pre Salt Play of Paraguay September 2013
May 10 2013, Day 1, First 3D survey in Paraguay
10 © 2013 President Energy PLC
The Pre Salt Play of Paraguay September 2013
Hacienda San Marcos Base Camp – April 2013
Jurumi 3D Area – five large structural closures
11 © 2013 President Energy PLC
The Pre Salt Play of Paraguay September 2013
16 Tapir 33 km2
17 Jurumi 35 km2
17A NW Jurumi
14 km2
17B NE Jurumi
4.5 km2
18 Pecari 14 km2
Tapir Jurumi
NE Jurumi NW
Jurumi
Pecari
100 km2 total
closed Lecho area
Pirity Basin – 20 Structural Prospects and Leads
12 © 2013 President Energy PLC
The Pre Salt Play of Paraguay September 2013
2013 interpretation of new 3D + 2D data
1
2
3
4 5 6
7
8 9
10 11 12
13
14 15
16
17
18 19
20
DEMATTEI
PIRITY
Palmar Largo 2013 Seismic 3D 793 km² 2D 800+ km
NW FLANK
3D Los Naranjos
3D Jurumi
Argentina Paraguay
Palmar Largo – Los Naranjos – Jurumi Trend
13 © 2013 President Energy PLC
The Pre Salt Play of Paraguay September 2013
Palmar Largo
Los Naranjos 3D
Yacare Prospect
Jurumi 3D
Tapir Prospect
Double Play System – Cretaceous + Paleozoic potential - 1979 CPC Gloria #1
14 © 2013 President Energy PLC
The Pre Salt Play of Paraguay September 2013
Untested Paleozoic and
Cretaceous High
Pirgua
Top Yacoraite
New 2D data shows well missed structure at both Cretaceous AND Paleozoic levels
Well encountered minor shows in Late Cretaceous Yacoraite and Lecho overlying red beds in the Early Cretacoeus syn-rift (Pirgua)
Cretaceous closure and very large subcropping Paleozoic fault block untested and offset just 1 km to north
Palo Santo #1 well, located 20km south, penetrated Paleozoic source rock
N S
Two hydrocarbon charge systems
15 © 2013 President Energy PLC
The Pre Salt Play of Paraguay September 2013
SO
UR
CE
RO
CK
RE
SE
RV
OIR
SE
AL
SO
UR
CE
RO
CK
RE
SE
RV
OIR
SE
AL
Paleozoic Devonian + Silurian
Source Rocks
Cretaceous Olmedo
+ Yacoraite Source Rocks
Cretaceous Paleozoic
Paraguay Chaco Devonian Resources* – 67 tcf gas + 3.2 bbbls oil
16 © 2013 President Energy PLC
The Pre Salt Play of Paraguay September 2013
The Devonian Los Monos black shale is the main source rock for world-class conventional gas fields in the Tarija Basin foothills of SE Bolivia
In the Paraguay portion of the Chaco Basin, risked, technically recoverable shale gas and shale oil resources from the Devonian are estimated at 67 Tcf of shale gas and 3.2 billion barrels of shale oil and condensate
* EIA/ARI World Shale Gas and Shale Oil Resource Assessment 2013
Schematic Regional Cross Section Across Fold Belt & Foreland Play Areas of Bolivia & Paraguay
Don Quixote
17 © 2013 President Energy PLC
The Pre Salt Play of Paraguay September 2013
Company making potential
Concession economics
Very attractive economic and fiscal regime
– Sliding scale royalty of 10% to 14%
– Corporate tax rate of 10%
Transport & Marketing
Petropar expressed written interest in off-take right up to 27,000 bopd
– Hydrocarbons to be purchased at well head at international pricing (Brent index)
Export options to Argentina (approx. 250km)
Success case - management estimate
>150 mmb gross risked recoverable resource potential(1)
> $25 / bbl (NPV 10)
Analogue field size 50 mmbo based on Palmar Largo
50 mmbo field discovery
15 wells with IP 2,000 bopd
Brent: $100 / bbl
Capex: $9 / bbl
Opex: $15 / bbl
ORRI: 5%
President estimates > $25 / bbl (NPV 10)
Notes: (1) Estimate by President management, based on technical reports and field analogs and economic data and assumptions
18 © 2013 President Energy PLC
The Pre Salt Play of Paraguay September 2013
SEISMIC DEFINITION
OF DRILLING LOCATIONS
DRILL KEY WELLS AND
PRODUCE ANY
DISCOVERY
CONTINUE DEVELOPMENT
OF ANY DISCOVERY
19 © 2013 President Energy PLC
The Pre Salt Play of Paraguay September 2013
John Hamilton
Ben Wilkinson
Richard Hubbard
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