company presentation - asxjan 14, 2013 · company presentation for personal use only 14 january...

Company Presentation 14 January 2013

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ASX Code: FZR www.fitzroyriver.net.au

Disclaimer This presentation has been prepared by Fitzroy River Corporation Ltd (‘FZR’). By accepting or reviewing this presentation, or attending any associated presentation or briefing, each reviewer (the ‘Recipient’) agrees to be bound by the following conditions. The presentation is not a prospectus or other regulated document under Australian law or under any other law. It is for information purposes only. The presentation does not purport to contain all the information that a prospective investor may require in evaluating a possible investment in FZR nor does it contain all the information which would be required in a prospectus or other regulated document prepared in accordance with Australian law or under any other law. Statements in this presentation are made only as of 31 December 2012 and remain subject to change without notice. FZR is not responsible for providing updated information to any Recipient and makes no representation or warranty, express or implied, as to the accuracy, reliability or completeness of any statement or information in this presentation. In making any investment decision, Recipients should rely on their own examination of FZR and consult their own legal, tax, business and/or financial advisors in connection with any acquisition of FZR shares. Certain information in this presentation refers to the intentions of FZR, but these are not intended to be forecasts, forward looking statements, or statements about future matters for the purposes of the Australian Corporations Act 2001 (Cth) or other applicable law. The occurrence of events in the future are subject to risks, uncertainties and other factors that may cause FZR’s actual results, performance or achievements to differ from those referred to in this presentation. Accordingly, FZR, its related bodies corporate and other affiliates, officers, employees, consultants and agents do not give any assurance or guarantee that events referred to in this presentation will occur, or will occur as contemplated. You are cautioned not to place undue reliance on any references to the intentions of FZR. The Recipient acknowledges that neither it nor FZR intends that FZR and any of its related bodies corporate and other affiliates, officers, employees, consultants and agents act or be responsible as a fiduciary to the Recipient, its officers, employees, consultants, agents, securityholders, creditors or any other person. The Recipient and FZR (on behalf of their respective related bodies corporate and other affiliates, officers, employees, consultants and agents), by accepting and providing this presentation respectively, expressly disclaim any fiduciary relationship and agree that it is responsible for making its own independent judgments with respect to any transaction or matter arising in connection with the presentation. As and when FZR becomes aware of information concerning FZR in connection with its Australian royalty and other assets (as well as its European investment) then FZR intends to comply with its continuous disclosure obligations under Australian law. Information about specified events or matters that may have some connection with FZR’s royalty assets is often being made known or generally available by Buru Energy Ltd (ABN 71 130 651 437, ASX Code: BRU) or other listed entities, and other information may consist of readily observable matters. Market participants and Recipients making or drawing their own deductions, conclusions or inferences from any other company’s ASX announcements do so at their own risk.

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Overview of the Company

Fitzroy River Corporation (ASX:FZR) is an Australian based, ASX listed Oil and Gas investment holding company:

• Focus on non-operational assets such as royalties, free-carried interests, minority equity positions (share positions or asset JVs), mis-priced or distressed assets

• Board with relevant skills and experience supported by small corporate office • Primary focus on WA, specifically the ‘Canning Superbasin’ and the 2 existing Buru

royalty streams Management’s main activities:

• Company routine operations & reporting as an ASX listed company • Contract maintenance with Buru, Mitsubishi and others • Title maintenance (ensuring royalty dealings are and remain registered under

Section 75 of the PGER Act against relevant permits) • Monitor operational activities across all 12 royalty permits • Royalty collection • Review of new investment opportunities

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Directors

Malcolm McComas – Chairman Experienced company director and former investment banker. Chairman of Pharmaxis Limited (ASX:PXS), director of BC Iron Limited (ASX:BCI), Consolidated Minerals Limited and Saunders International Limited (ASX:SND).

Sebastian Hempel – Executive Director (and Co Sec) Former commercial lawyer specialising in capital raisings, resources and ASX listed company work. Partner at Minter Ellison until 2008. Director of Prosperity Resources Ltd (ASX:PSP). Chartered Secretary with Graduate diploma in Applied Corporate Governance.

Rod Bresnehan – Non-executive Director Over 30 years reservoir engineering and commercial experience in the upstream oil and gas industry in Australia, Europe and Asia in both an operating and a consultative capacity. Senior positions within Origin Energy and Santos. Successful key CBM start-up ventures in Indonesia and China (NUE, CFT (HK), Triple Energy). Held executive positions within Australian and international gas and oil associations (SPE, Qupex, PESA). Currently CEO of CFT (HK), China.

Susan Thomas – Non-executive Director Experienced business woman who established and ran FlexiPlan, a funds management business until its sale to MLC. Director of Clearview Wealth Limited, Grant Thornton Australia Limited and National Electronic Conveyancing Limited. Chair of Inca Minerals Limited (ASX:ICG). For

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FZR Shareholders

• 1,147 registered shareholders at 31 Dec 2012 (including 215 with less than marketable parcel)

• 75.6m shares - Market cap: A$28m (at A$0.37)

• No options or other convertible securities

• Top 10 shareholders - 41.8m shares (55%)

Name Shares (m) %

Banque Privee Edmond de Rothschild, Monaco - clients 14.35 18.97

Susan Thomas entities 12.43 16.43

JP Morgan Nominees Aust (various custody clients) 3.58 4.73

National Nominees (various custody clients) 3.41 4.51

Mercantile Investment Co Ltd 3.05 4.03

HSBC Custody Nominees (various custody clients) 2.20 2.91

Trojan entities (Troy Harry) 2.03 2.68

Mrs C Rowan 1.37 1.82

Bath Super Fund 0.75 0.99

Nefco Nominees 0.71 0.95

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The 2012 de-merger

In the de-merger, the Company bought back and cancelled 221,615,657 shares and transferred 221,615,657 shares in EGL UK (ie 1 for 1) to shareholders who agreed to have their shares bought back. A$0.192 per share was debited to FZR’s share capital account for each share cancelled.

Before the de-merger After the de-merger

ASX listed entity 297m shares on issue

ASX listed entity 76m shares on issue

European assets - interests in permits in

France

100% of Buru royalty stream

(2 Royalty Deeds)

100% of European Gas Ltd (EGL UK)

100% of Buru royalty stream

(2 Royalty Deeds)

European Gas Ltd (EGL UK) – European parent company

(unlisted) with 297M shares on issue

European assets - interests in permits in

France

Other EGL UK shareholders

25.5% 74.5%

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Company Balance Sheet (A$)

As at 1 July 2012 1

Buy-back Adjustment (26 July 2012)

As at 30 November 2012 2

Current Assets

- Cash at Bank 764,126 482,132

Other Assets

- Shares in EGL UK 1 (0.75) 0.25

- Other share investment 3 63,995 64,318

Total Assets 828,121 546,450

Current Liabilities 84,950 45,779

Net Assets 743,171 500,672

Shareholders’ Funds

- Issued capital & other 77,376,911 (42,550,206) 34,826,705

- Retained Losses (76,633,740) 42,550,206 (34,326,034)

743,171 500,672

1 proforma based on 30 June 2012 audited consolidated balance sheet 2 actual based on Management accounts (unaudited). Shares in EGL UK at historical cost. 3 FZR holds 1.333m shares in Columbus Energy Ltd (TSXV:CEL) Cash at bank at 31 Dec 2012 was $325,500

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Tax treatment of disposal of EGL UK shares

- July 2012

For the Company:

• Capital losses carried forward as at 30 June 2012 - $29.3M

• 221.6m shares transferred 26 July 2012 - at 20.1 cents each (mkt value)

• Potential capital gain - $44.6m (due to tiny cost base), reduced by AFBAP percentage calculation of 79% to give capital gain of $9.3m (section 768G)

• Gain easily absorbed by capital losses carried forward

• COT analysis done by BDO as at buy-back date - OK to use 30/6/12 c/fwd losses

For shareholders who participated and became EGL UK shareholders:

• The distribution was not a dividend (and these shareholders are not taken to have been paid a dividend under s.159GZZZP)

• These shareholders received A$0.192 per share as ‘Sale Consideration’

• Treatment of Sale Consideration for tax purposes depends on whether sale is on capital or revenue account

• Details in ATO Class Ruling CR 2012/57

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The 2 Royalty Deeds

• Lennard Shelf Royalty Deed - covers 3 permits

• Canning Basin Royalty Deed - covers 9 permits

• Both Deeds entered into in 2006 during an Australian asset sale process

• Deeds each registered against all relevant permits

• Counterparties: Buru for 12 permits; Mitsubishi Corp’s Australian subsidiaries (DRF and DRC) for 3 permits each

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Buru’s Permits

Source: Buru presentation Nov 2012

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The Lennard Shelf Royalty Deed

• Royalty Deed - dated 5 September 2006

• Royalty Area - area covered by Licences EP129, L6 and L8

• Royalty paid by Buru Energy - on all ‘Petroleum’ recovered

• Duration - continues and enures for the benefit of FZR until Buru Energy and its successors in title have no further interest whatsoever in any of EP129, L6 or L8 or any ‘Replacement Permit’

• Royalty payment - within 14 days of receipt of payment by Buru for cash sales of ‘Petroleum’ (generally each month)

• Royalty rate - 3% of ‘Well Head Value’ of all Petroleum recovered

• Well Head Value - defined as the price that arms length buyer would pay for Petroleum at the well head being the same price as accepted by the State government under the State Royalty less the amount calculated as ‘Allowable Deductions’

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The 3 Lennard Shelf Licences

covered by this Royalty

• EP129 (R5) (9 blocks, expiry 31.1.14) • L6 (R1) (expires May 2027)

– Blina Oil Field – Boundary Oil Field

• L8 (R1) (expires May 2027) – Sundown Oil Field – West Terrace Oil Field – Lloyd Oil Field (depleted)

• Buru Energy is the registered holder of all 3 Licences under the Petroleum

and Geothermal Energy Resources Act 1967 (WA) • Mitsubishi Corp‘s subsidiary DRF holds a ‘Production Option’ over 50% of

each Licence (via a Production Option Agreement dated 11 June 2010) – if exercised, DRF will be brought into the Royalty Deed F

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Oil Production on L6 and L8 (Buru Energy is Operator)

Field Oil Production 2011 (kL)

Cumulative Oil Production (kL)

Blina (L6) Boundary (L6 (or EP129))

978 220

297,795 20,963

Sundown (L8) West Terrace (L8)

1,241 394

73,508 39,522

Source: PWA Sept 2012 (Table 1); production figures as at 31 December 2011 All these Fields are in the Lennard Shelf area of the Canning Basin. The Lloyd Field (L8, depleted) did not report Oil production in 2011 (cumulative production at 31 Dec 2010 stood at 30,284 kL).

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‘Blina’ Royalty Receipts

• Lennard Shelf Royalty Deed - dated 5 Sept 2006

• Royalty receipts for FY12: $20,363

• Royalty receipts for 5 mths to 30 Nov 2012: $9,808

• Buru Energy is the payer of these royalties

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The Canning Basin Royalty Deed

• Royalty Deed - dated 26 August 2006 - relates to 9 Permits

• Royalty Area - area covered by Permits EP371, EP390, EP391, EP428, EP431, EP436, EP104 (8% participating interest only), R1 (8% participating interest only) and L15 (12% participating interest only)

• Buru Energy to pay FZR a Royalty on the participating interest % in all ‘Petroleum’ recovered from EP104, R1 and L15

• Buru and Mitsubishi subs each (50/50) to pay FZR a Royalty on all ‘Petroleum’ recovered from their 6 JV Permits

• Royalty payments - quarterly

• Royalty rate - 2% of Value of all Petroleum recovered

• Value is defined as the price that an arm’s length buyer would pay for Petroleum at the well head. This Value is the gross value of the Petroleum at the well head (as used for the purpose of calculation of the State Royalty), provided this is the price that an arm’s length buyer would pay for Petroleum at the well head. (nb: Buru is currently disputing what this means and reducing the Value by 50% to match deductions used for the State Royalty)

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The Buru - Mitsubishi JV Permits (1)

• Now 50% owned by Mitsubishi Corp subsidiary Diamond Resources (Canning) Pty Ltd (‘DRC’)

• EP371, EP390, and EP428 • Joint Operating Agreement

(Buru as operator) dated 13 April 2011

• Deed of Assignment and Assumption dated 7 Sept 2012 was registered on 13 December 2012 to make DRC responsible for 50% of royalty payments to FZR under the Royalty Deed

• 2 of these are State Agreement permits

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The Buru - Mitsubishi JV Permits (2)

• Now 50% owned by Mitsubishi Corp subsidiary Diamond Resources (Fitzroy) Pty Ltd (‘DRF’)

• EP391, EP431, and EP436 • Joint Operating Agreement

(Buru as operator) dated 13 April 2011

• Deed of Assignment and Assumption dated 7 Sept 2012 was registered on 13 December 2012 to make DRF responsible for 50% of royalty payments to FZR under the Royalty Deed

• 3 of these are State Agreement permits

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Ungani Discovery and EPT

• Ungani Oil Field - Extended Production Test (EPT) commenced 31 May 2012

• Ungani 1 and Ungani 2 wells are on royalty permit EP391

• Production performance of the Ungani Field encouraging

• Buru’s planned EPT flow rate is 400 bopd (Buru’s expected rate on full production is 1k, rising to 5k bopd)

• Oil currently trucked to Perth (sold to BP Kwinana)

• Production Licence has been applied for

• Total royalty payments received from Buru and DRF so far (June, Sept 2012 Quarters), being the first ever payments under this Deed: $33,781.46*

*calculation under dispute

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The other JV Permits covered • EP 104 (R5) – royalty on 8% participating

interest

- Operator: Buru

- Holders: Buru + 5 others

- Blocks: 9

- Term: expires 31 Jan 2013

- Discoveries: Point Torment Gas Field

• R1 (R1) – royalty on 8% participating interest

- Operator: Buru


- Blocks: 3

- Term: expires 31 Jan 2016

• L15 – royalty on 12% participating interest

- Operator: Buru


- Blocks: 2

- Term: 21 years from 1 April 2010

- Discoveries: West Kora-1 For

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Investment in EGL UK • European Gas Limited – an unlisted private limited company

incorporated in England & Wales (Reg no: 05321791)

• Shares on issue - 297,272,505 • FZR shareholding - 75,656,848 (25.5%) • Director nomination right - >10% under EGL UK’s AoA • Balance date - 30 June • Directors - Julien Moulin, Johannes Niemetz, Frederic Briens • Head Office - France • Auditor - PKF (UK) LLP; Share registry - Computershare UK • Demerged from FZR - to become the parent or holding company

and funding vehicle for various European unconventional gas projects

• Web site - www.europeangas.fr

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http://www.europeangas.fr/


EGL UK’s Shareholders

• Shares on issue - 297.3m • Largest shareholder – FZR - 75.6m shares (25.5%) • Transcor Astra Luxembourg SA - 27.82m shares (9.4%)* • ~160 registered shareholders - resulting from de-merger & buy-back by FZR in

July 2012 • Other shareholders - Maoming Fund (45.8m shares - 15.4%)*; Ocean Dome

(30m shares - 10.1%)* • 7 of Top 10 registered holders - Australian professional nominee companies,

holding approx 188.5m shares on behalf of numerous clients, including Maoming Fund, Ocean Dome, etc.

• 10th largest registered shareholder – 2m shares * NB - these figures are based on substantial holder notices recently given to FZR and the ASX in

connection with shares accepted into the buy-back by FZR; Transcor holds 22m shares directly; Maoming Fund, Ocean Dome and Transcor (5.82m shares) hold shares through professional custodian (nominee) companies

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EGL UK Consolidated Balance Sheet (as at 30 June 2012 – audited)

€’000

Fixed Assets

- Intangible Assets (exploration expenditure) 14,722

- Tangible Assets 80

14,803

Current Assets

- Debtors 304

- Cash at bank 4,720

5,024

Less: Creditors (current liabilities) 736

Net Current Assets 4,288

Net Assets 19,091

Shareholders’ Funds 19,091

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EGL UK Permits - France

• EGL UK’s main projects are 2 exploration permits in the Lorraine Basin (in north-east France) and rights in respect of permits in the Nord Pas de Calais region (in northern France).

• EGL UK is the largest coal bed methane explorer in Western Europe in terms of acreage under exploration.

• Folschviller-2 well in Lorraine a recent success

Nord Pas de

Calais

Lorraine

Jura

Bouches du

Rhône

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EGL UK Permits - Lorraine

Lorraine Contingent Resources (BCF)

1C 2C 3C

Bleue Lorraine 2,657 3,165 3,691

Bleue Lorraine Sud 212 343 529

Bleue Lorraine Nord 930 1052 1167

Total 3,799 4,560 5,387

Lorraine Prospective Resources

Low Best High

Bleue Lorraine 674 854 1049

Bleue Lorraine Sud 2,892 4,061 5,515

Bleue Lorraine Nord 254 346 453

Total 3,820 5,261 7,017

EGL UK holds a 100% interest in two permits, covering 788km2 of the Lorraine Basin. In May 2010, EGL UK received notification of renewal of the Bleue Lorraine exploration permit which covers an area of 262km2 and is valid up to 30 November 2013. The Bleue Lorraine Sud permit was awarded in 2007 and in mid-2012 was in the process of being renewed. In addition, EGL UK has submitted an application for an additional 360km2 area called Bleue Lorraine Nord. Gas resources certification The French Petroleum Institute (IFP) was contracted to carry out an independent gas resources certification of the gas resources in the Lorraine permits. The results are presented in the table below and highlight the very large potential of the Lorraine areas where EGL UK operates or will operate. The IFP also certified prospective gas resources that are outlined in the table below. These prospective resources correspond to areas where coals have been identified by previous wells but for which gas content data were not available, as well as areas where limited well control was available.

(source: EGL UK as quoted in FZR Qtrly Report for 3 months to 30.6.12)

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EGL UK Permits – Nord-pas de Calais

Net Contingent resources Gazonor (BCF) 1C 2C 3C

Poissoniere 674 1,004 1,459

Desiree 80 113 157

Valenciennois 6 35 92

Sud Midi 61 176 361

Total 821 1,327 2,069

Gazonor SA holds the gas exploitation rights over the Poissonnière and Désirée production permits situated in the district of Nord-Pas de Calais in northern France, comprising a total area of 767 km2. In addition two permits were granted for a total surface of 1,352 km2 (Valenciennois and Sud Midi) dedicated for exploration of CMM and CBM. EGL UK has contractual agreements in place with Gazonor under which it can gain 70% of interest in the permits after meeting certain financial commitments. Certification of gas contingent resources for Nord Pas de Calais As for the Lorraine region, a similar exercise for the evaluation of the gas resources held in the Gazonor permits in the Nord Pas de Calais region has been conducted with the IFP. The results are presented in the table below. These results are net to EGL UK; they represent the 70% interest that EGL UK is entitled to receive after meeting certain financial commitments.


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EGL UK Permits - Other

Lons le Saunier permit- Central Eastern France • EGL UK holds a 100% interest in the “Lons le Saunier” permit

in the Jura Basin, originally granted in mid-2007. EGL UK previously completed a review of the conventional hydrocarbons potential of the permit and is now studying its unconventional hydrocarbons potential and preparing the definition of a work program to be followed on this permit.

Gaz de Gardanne permit - Southern France • EGL UK holds a 100% interest in the “Gaz de Gardanne”

permit. This permit is located in an environmentally and socially sensitive area of France and EGL UK is carefully assessing the best path forward to explore and appraise this property while also complying with its exploration commitments.


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FZR - Contact Information

Telephone 1300 003 686 (local call charge)

Fax 02 6738 9999

Postal address PO Box 1117, Armidale NSW 2350

Email [email protected]

www www.fitzroyriver.net.au

Share Registry Computershare:

1300 557 010 or (08) 9323 2000

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mailto:[email protected]

mailto:[email protected]

http://www.fitzroyriver.net.au/

company presentation - asxjan 14, 2013 · company presentation for personal use only 14 january...

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