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Investor Presentation
November 2012
Golden Gate
Petroleum Ltd
(ASX: GGP)
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GOLDEN GATE
PETROLEUM LTD
Disclaimer
• The presentation is not an offer, invitation, solicitation or recommendation with respect to the purchase or sale of any securities and has been provided to investors for information purposes only. This presentation should not be relied upon as a representation of any matter that a potential investor should consider in evaluating Golden Gate Petroleum Limited (the “Company”).
• Investors should undertake their own evaluation of the information in the presentation and otherwise consult their advisors if they wish to make an investment in the Company.
• The Company and its respective directors, agents, officers or employees do not make any representation or warranty, express or implied, as to or endorsement of, the accuracy or completeness of any information, statements, representations or forecasts contained in this presentation, and they do not accept any liability for any statement made in, or omitted from, this presentation. This presentation contains forward looking statements that are subject to risk factors associated with oil and gas businesses. It is believed that the expectations reflected in these statements are reasonable but they may be affected by a variety of variables and changes in underlying assumptions which could cause actual results or trends to differ materially, including but not limited to: price fluctuations, actual demand, currency fluctuations, drilling and production results, resource estimates, loss of market, industry competition, environmental risks, physical risks, legislative, fiscal and regulatory developments, economic and financial market conditions in various countries and regions, political risks, project delay or advancement, approvals and cost estimates.
• Not financial product advice: The presentation is for information purposes only and is not financial product or investment advice or a recommendation to acquire securities in the Company and has been prepared without taking into account the objectives, financial situation or needs of individuals. Prospective investors should seek their own independent advice before making a decision to invest in the Company.
• Investment risk: An investment in the Company is subject to known and unknown investment risk, some of which are beyond the control of the Company.
• All references to dollars, cents or $ in this document are to Australian currency, unless otherwise stated.
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GOLDEN GATE
PETROLEUM LTD
Corporate Overview
• Golden Gate Petroleum Limited (“Golden Gate” or the “Company”) is an oil
and gas producer and operator, with a focussed portfolio of onshore
conventional and unconventional oil & gas projects in Texas and Louisiana
• Golden Gate’s Strategy is to develop a diversified portfolio of oil and gas
exploration and development projects by:– Balancing exploration activities with strong cash flows and
– low risk development projects with high reserve potential
• Golden Gate’s corporate history over the last 10 years has involved:– a transition from an investor in exploration projects in Texas and Louisiana to an
operator of predominately development projects, both conventional and
unconventional
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GOLDEN GATE
PETROLEUM LTD
Board, Senior Management and Technical Team
Executive
Chairman
Steve Graves
Director
Frank Petruzzelli
Director
Frank Brophy
CFO & Company
Secretary
Chris Ritchie
Technical Team
in Houston
Mr Graves has over 35
years in the oil and gas
industry both in
Australia and overseas.
Most recently Mr
Graves was Executive
Chairman of Orchard
Petroleum Ltd. Mr
Graves worked for
Mobil Corporation and
affiliated companies
23 years and has been
a consultant to the
energy industry and a
senior consultant to
Ernst & Young.
Mr Petruzzelli is a
principal of MDB & Co,
an Australian
accounting firm and
has been a director of
the company since
2003. He is an
accounting and
management services
specialist and advises
many ASX listed
companies and large
private organisations.
Mr Petruzzelli is a
Fellow of the National
Tax and Accountants
Assc’n, a Fellow of the
Institute of Public
Accountants and a
registered Tax Agent.
He is Chairman of
Solimar Energy Limited
(ASX: SGY)
Mr Brophy is a
geologist with more
than 45 years
experience in the oil
and gas industry. Mr
Brophy has an
extensive background
in petroleum
exploration,
development and
production projects
across the world with
companies that
became subsidiaries of
Elf Aquitane and
Maurel & Prom.
Mr Ritchie is a FCPA
and FCIS with financial
management
experience of
construction and
engineering companies
involved in major
energy & resources
projects as well as CFO
/ Co Sec experience
with several small to
medium size ASX
listed companies.
• Jim Sloan
Land/Legal
• Donn Pedersen
Petroleum Engineer/
Bus. Dev.
• George Placke
Petroleum Engineer/
Production and
Completion
• David Chang
Finance/Bus. Dev.
• Jeff Smith
Geologist
• Jackie Haney
Reservoir Engineer
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GOLDEN GATE
PETROLEUM LTD
Achievements in the 2011/12 Financial Year
Golden Gate’s main achievements over the last financial year have involved:
• Four (4) new discovery wells (SRH #1, #2, #3 and #4) were drilled in the
exciting Permian Project where the Company has a 100% working interest in
8,800 acres;
• Two (2) new discovery wells were drilled in the Eagle Ford Project (Cutlass
East A#1 and West A#1) where the Company has a 10% working interest in
3,400 gross acres;
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• Two (2) new conventional oil & gas
discoveries were recorded at the Bowtie
West Project (Sugar Valley #1) and at the
Napoleonville Project (Dugas & LeBlanc #3);
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GOLDEN GATE
PETROLEUM LTD
Achievements in the 2011/12 Financial Year (cont’d)
Golden Gate’s main achievements over the last financial year have involved:
• The sale of the Bullseye Project in Louisiana which was providing unsatisfactory
returns for the Company and a farm out at North Edna with a first well carry;
• The opportunity to expand the Company’s portfolio with the addition of the high
return projects at Acadia in Louisiana and Goliad in Texas;
• The increase in the operational expertise in the Houston office;
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• An increase in total barrels of oil
production by 17% from 26,306 BBL in
2010/11 to 30,699 BBL in 2011/12; and
• An increase in total sales revenues from
production by 37% from approx. $2.7
million in 2010/11 to approx. $3.7
million in 2011/12.
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GOLDEN GATE
PETROLEUM LTD
Achievements since the end of the 2011/12 Financial Year
Golden Gate’s main achievements since 30th June 2012 include:
• This added value through development and production will more than compensate the dilutive impact new share issuances have over the next 12 months.
• Also, this development program will allow the Company to book reserves for the first time, greatly increasing GGP’s asset base.
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• An independent Reserves and Resources
Study by leading experts, MHA Petroleum
Consultants LLC (“MHA”), was initiated.
• A Western Drilling rig was contracted to drill
the Company’s first horizontal well (SRH
#5H) at the Permian Project which is to spud
in the first week of November 2012.
• Capital raisings to fund the first horizontal
well for the Permian Project were initiated.
• The new funding base will support a
dramatic increase in revenue and earnings
per share.
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GOLDEN GATE
PETROLEUM LTD
Statement of Cash Flow – Year ended 30 June 2012
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AUD 000's AUD 000's
Cash Inflows Cash Outflows
Receipts from Customers (Revenues) 3,318 Capital Expenditure
Receipts from JV Partners 992 - Permian Project 10,146
Interest revenue 28 - Bullseye Project (Sold Aug 2012) 557
Net Proceeds from Share Issues 10,841 - Eagle Ford Shale Project 895
Proceeds from Convertible Notes 2,670 - Napoleonville Project 204
Proceeds from Asset Sales 118 - Fausse Point Project (Suspended) 10
Proceeds from Sale of Investments 26 - North Edna Project 42
11,854
Operations Cash Outflow 3,638
Overheads Cash Outflow 1,743
Interest Expense 155
Total Cash Inflows 17,993 Total Cash Outflows 17,390
Net Cash Inflow 603
FX adjustment on Opening Cash 44
Opening Cash Balance as at 1 July 2011 2,388
Closing Cash Balance as at 30 June 2012 3,035
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PETROLEUM LTD
Project Locations
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PETROLEUM LTD
Permian Basin Map and Stratigraphy
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GGP
Leasehold
Location
Permian Basin Make-up
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GOLDEN GATE
PETROLEUM LTD
Targets of Opportunity on GGP’s 8,800 Acre Permian Leasehold
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4,000’For
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PETROLEUM LTD
Southern Wolfcamp Horizontal Players[Pioneer (PXP), ConocoPhillips (COP), BHP, Apache, Devon, El Paso, EOG]
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Golden
Gate
Leasehold
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GOLDEN GATE
PETROLEUM LTD
GGP Production Chart
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Projected Production
• Horizontal Well
Impact on
Production:
– 3 Fold Increase
in Production
from initial
Horizontal well
– Exponential
Production and
Revenue Growth
– Planning to drill
6 to 8 Horizontal
wells in 2013For
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PETROLEUM LTD
Horizontal Type Curve & Well Economics*
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Spud Well Complete
Drilling
Fracture
Stimulation
Put Well on
Production
Late October November December / January January / February
Horizontal Type Curve (Wolfcamp Interval)
*Current assumptions based off nearby wells producing from same interval
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PETROLEUM LTD
Lease Map
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• Project
Magnitude:
– 24 Horizontal
Wells between
with 4,500 to
7,500 feet
laterals
– 3 or 4 intervals
suitable for
laterals
– 300,000 to
400,000+ bbls
Recoverable
Hydrocarbons (oil
& Gas) per well
per interval
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Permian Summary Slide
• There are many scenarios GGP is studying for the Permian
project to maximize returns and stay within funding
constraints plus meet continuous drilling requirements:
– Lateral Length for Horizontal Wells
• 7,500 feet (some companies testing out to 10,000 feet)
• 4,500 feet (appears more economic per lateral foot)
– Retaining Specific Acreage – only part Reagan County to all acreage
• Funding requirements to retain acreage:
– $20 - $30 MM for 4,500 to 7,500 foot laterals – All Acreage (8 wells)
– $10 - $15 MM for 4,500 to 7,500 foot laterals – Only part of Reagan
County (4 wells)
– Project goes self funding after approximately 15 months
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PETROLEUM LTD
Eagle Ford Project
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• GGP is participating in a 10% working
interest (WI) on a 40+ horizontal
development well project covering
approximately 3,400 prime acreage in the
oil window of the Eagle Ford Trend.
• The first well, the Cutlass West A #1
horizontal well, is drilled and recorded oil
& gas shows through several intervals
including the Eagle Ford. Critical
information about the shale rock
properties was gathered for the design of
the frac programs. Hole cores were also
taken. Fracture stimulation is planned for
November 2012 followed by a pipeline
connector and hook-up
• The second well, the Cutlass East A#1 well, has been drilled. The current plan is to test and
flowback several of the intervals (outside the Eagle Ford) before drilling the lateral &
completing in the Eagle Ford.
Project Location
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PETROLEUM LTD
Bowtie West Prospect
• The Sugar Valley #1 well was drilled and completed to a depth of 12,750 feet
TVD.
• The electronic logs had a gross pay interval of 32 feet full to base and is highly
laminated in the lower section while being 60 feet high to the down dip well
drilled in the 1970s.
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• Initial production testing recorded 3.2
million cubic feet of gas per day rate plus
31 barrels of high gravity oil per day.
• The Sugar Valley #1 well’s pipeline is
complete and is expected to go on
production as soon as a tie in to the
transmission line can be completed.
• GGP has a 12% working interest in this
prospect.
Sugar Valley #1 Actual Flare During Testing
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PETROLEUM LTD
Napoleonville Salt Dome
• The Company has a 15% non-operating working interest in this prospect.
• The Dugas & Leblanc #3 well had the primary “M” sand perforated and put on
production, and has since become a prolific oil & gas producing well averaging 300
bbls of oil per day and over 500 mcf of gas per day.
• In addition, the 14-52 prospect (called Desiree) commenced drilling of the
Hensarling #1 well in October. Grand Gulf Energy anticipates this prospect is likely
to contain between 600,000 to 800,000 bbls of oil and is a low risk drilling
operation. The Company has a 3.99% working interest in the well.
• The Company entered into a farm out agreement over Napoleonville with a U.S.
company for up to a 2 well carry on subsequent wells. The carried working
interest varies from 3.8% to 4.7% depending on the prospect.
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Well WI Status Monthly Production Notes
Dugas & Leblanc
#315.3% Producing
~6,000 bbls oil
~35,000 mcf gas
On production since October
2011
Hensarling #1 3.99% Drilling N/AScheduled to spud in October
2012
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North Edna Prospect
• The Richardson #1, a discovery well, was drilled in Jefferson Davis Parish,
Louisiana in September 2010 and produced 5,400 bbls of oil before production
ended due to high water volumes.
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• A new up-dip target 1,200 feet
northwest of Richardson #1 has
been identified in the Vicksburg
Sand with a potential reserve of 2
million barrels of oil.
• GGP holds a 11.20% carried working
interest in the first well through
logging.
• The new well targeting the
Vicksburg interval at 9,400 feet is
expected to be drilled by January
2013.For
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Acadia Project (Midland, LA)
• The Company has an option to
take a 45% working interest to
earn 34% in a low risk Louisiana
development project with Kindee
as the operator.
• A new well will twin an
abandoned well that produced for
over 60 days before experiencing
mechanical difficulties when oil
and gas prices were at
uneconomic prices in the 1980s.
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• A fixed turnkey well and completion cost program for $3.0 million has been put
together to drill to 11,500 feet and test the Camerina and Marg 7 targets. One
well should drain the structure.
• This well is scheduled in mid 2013 subject to financial constraints.
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Goliad Project
• GGP has an option over a 25% working
interest in a project covering 752 acres in
Goliad County, Texas
• The acreage is immediately up-dip and
adjacent to two vertical wells drilled and
completed in 2008 which tested approx. 1.5
million cubic feet per day gas and 450 barrels
per day condensate pre-frac
• Initially 2 wells will be drilled with the
possibility of subsequent development
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– The Upper Wilcox and 1st & 2nd Mackhank will be developed.
– Wells will have a 10,800 foot vertical section, with a 2,500 foot horizontal that will
be fracture stimulated in either the 1st or 2nd Mackhank interval based on logging
and testing the vertical section.
– Well #1, including facilities, will cost $3.5 MM.
– First well scheduled to spud in the 1st half of 2013.
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Project Summary
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• 8 new discovery wells over 4 projects in the last 12 months
• 3 new wells to be drilled between now and January 2013
• 12 wells in planning phase for full year 2013 and subject to funding constraints –
Permian (8), Eagle Ford (2), Goliad (1), Acadia (1)
Prospect Status WI % Wells
Permian BasinProducing and New
Well100.00%
• SRH #1 – Discovery
• SRH #2 – Discovery
• SRH #3 – Discovery
• SRH #4 – Discovery
• SRH #5H – New
Horizontal
Eagle Ford Project Completion 10.00%• Cutlass West A #1 – Discovery
• Cutlass East A #1 – Discovery
Bowtie West Producing 12.00%• Sugar Valley #1 – Discovery
– Starts Production in late October 2012
NapoleonvilleProducing and
Drilling
15.30%
3.99%
• Dugas & Leblanc #3 – Discovery
• Hensarling #1 Well – October 2012
North Edna Shut-In 11.20%• Richardson #1 – Discovery
• New Well – January 2013
Acadia Project New Project 34.00% • Well planned for mid 2013
Goliad Project New Project 25.00% • First Well 1st Half 2013For
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