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INVESTOR PRESENTATION September 2014 Energy Resources Inc.

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Page 1: OER Investor Presentation New - Oando · OER 2. Highlights Current Net Production 45,416 Net 2P Reserves 230.6 Net 2C Resources 547.3 6Producing Assets Market Capitalization 1,320

INVESTORPRESENTATION

September 2014

Energy Resources Inc.

Page 2: OER Investor Presentation New - Oando · OER 2. Highlights Current Net Production 45,416 Net 2P Reserves 230.6 Net 2C Resources 547.3 6Producing Assets Market Capitalization 1,320

DisclaimerThis presentation does not constitute an invitation to underwrite, subscribe for, or otherwise acquire or dispose of any Oando Energy Resources Inc (the “Company”) shares or other securities. This presentation includes certain forward looking statements with respect to certain development projects, potential collaborative partnerships, results of operations and certain plans and objectives of the Company including, in particular and without limitation, the statements regarding potential sales revenues from projects, both current and under development, possible launch dates for new projects, and any revenue and profit guidance. By their very nature forward looking statements involve risk and uncertainty that could cause actual results and developments to differ materially from those expressed or implied. The significant risks related to the Company’s business which could cause the Company’s actual results and developments to differ materially from those forward looking statements are discussed in the Company’s annual report and other filings. All forward looking statements in this presentation are based on information known to the Company on the date hereof. The Company will not publicly update or revise any forward looking statements, whether as a result of new information, future events or otherwise.

Past performance is no guide to future performance and persons needing advice should consult an independent financial adviser.All estimates of reserves and resources are classified in line with NI 51-101 regulations and Canadian Oil & Gas Evaluation Handbook standards. All estimates are from

stPetrenel Report dated 31 December 2013.

BOEs [or McfGEs, or other applicable units of equivalency] may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf: 1 bbl [or an McfGE conversion ratio of 1 bbl: 6 Mcf] is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

The estimates of reserves and future net revenue for individual properties may not reflect the same confidence level as estimates of reserves and future net revenue for all properties, due to the effects of aggregation.

Reserves: Reserves are volumes of hydrocarbons and associated substances estimated to be commercially recoverable from known accumulations from a given date forward by established technology under specified economic conditions and government regulations. Specified economic conditions may be current economic conditions in the case of constant price and un-inflated cost forecasts (as required by many financial

regulatory authorities) or they may be reasonably anticipated economic conditions in the case of escalated price and inflated cost forecasts.

Possible Reserves: Possible reserves are quantities of recoverable hydrocarbons estimated on the basis of engineering and geological data that are less complete and less conclusive than the data used in estimates of probable reserves. Possible reserves are less certain to be recovered than proved or probable reserves which means for purposes of reserves classification there is a 10% probability that more than these reserves will be recovered, i.e. there is a 90% probability that less than these reserves will be recovered. This category includes those reserves that may be recovered by an enhanced recovery scheme that is not in operation and where there is reasonable doubt as to its chance of success.

Proved Reserves: Proved reserves are those reserves that can be estimated with a high degree of certainty on the basis of an analysis of drilling, geological, geophysical and engineering data. A high degree of certainty generally means, for the purposes of reserve classification, that it is likely that the actual remaining quantities recovered will exceed the estimated proved reserves and there is a 90% confidence that at least these reserves will be produced, i.e. there is only a 10% probability that less than these reserves will be recovered. In general reserves are considered proved only if supported by actual production or formation testing. In certain instances proved reserves may be assigned on the basis of log and/or core analysis if analogous reservoirs are known to be economically productive. Proved reserves are also assigned for enhanced recovery processes which have been demonstrated to be economically and technically successful in the reservoir either by pilot testing or by analogy to installed projects in analogous reservoirs.

Probable Reserves: Probable reserves are quantities of recoverable hydrocarbons estimated on the basis of engineering and geological data that are similar to those used for proved reserves but that lack, for various reasons, the certainty required to classify the reserves are proved. Probable reserves are less certain to be recovered than proved reserves; which means, for purposes of reserves classification, that there is 50% probability that more than the Proved plus Probable Additional reserves will actually be recovered. These include reserves that would be recoverable if a more efficient recovery mechanism develops than was assumed in estimating proved reserves; reserves that depend on successful work-over or mechanical changes for recovery; reserves that require infill drilling and reserves from an enhanced recovery process which has yet to be established and pilot tested but appears to have favorable conditions

1

OER

Page 3: OER Investor Presentation New - Oando · OER 2. Highlights Current Net Production 45,416 Net 2P Reserves 230.6 Net 2C Resources 547.3 6Producing Assets Market Capitalization 1,320

Oando Energy Resources (OER) is an independent oil and gas company focused on exploration and production opportunities in the highly prolific Niger Delta region of Nigeria and the Exclusive Economic Zone of São Tomé and Príncipe. It is publicly traded on the Toronto Stock Exchange under the symbol OER.

Introduction

Organic:Optimize Existing Portfolio

OER’s primary task is to optimally harness the potentials of our existing portfolio and developing proven but undeveloped assets.

OER plans on participating in governmental bid rounds in Nigeria as well as acquiring unutilized near-term assets from International Oil Companies in order to significantly boost profitable high value production and reserves.

Growth Strategy

Inorganic:Future Acquisitions

OER

2

Page 4: OER Investor Presentation New - Oando · OER 2. Highlights Current Net Production 45,416 Net 2P Reserves 230.6 Net 2C Resources 547.3 6Producing Assets Market Capitalization 1,320

HighlightsCurrent Net Production

45,416Net 2P Reserves

230.6Net 2C Resources

547.3

Producing Assets6

Market Capitalization

1,320Debt

980Cash in Bank

101

2,057.0

Assets Under Development4

boepd~

MMboe

MMboe

Unrisked Best Prospective Resources

MMboe

US$ MM

US$ MM

US$ MM

Market Capitalization as at 26th September 2014 (Share Price of C$1.60)

All Reserves & Resources estimates are classified in line with NI 51-101 regulations and Canadian Oil & Gas Evaluation Handbook standards.

All estimates are from Independent Reserves stEvaluator Report dated 31 December 2013

Current Net Production figure as at August 2014

OER

3

Page 5: OER Investor Presentation New - Oando · OER 2. Highlights Current Net Production 45,416 Net 2P Reserves 230.6 Net 2C Resources 547.3 6Producing Assets Market Capitalization 1,320

Share StructureTSX Symbol

OERShare Price

1.66Net Shares Outstanding

795,419,213

2.29/1.07

C$

Price High/Low Since Listing

C$

8,506,666Options Outstanding

344,673,441Warrants Outstanding

2.00Exercise Price of Warrants

C$

17,535,031Private Placement Purchase Warrants Issued

at C$2.00

93.8Oando Plc Ownership

%Information is as at 26th September 20141Price High/Low represent closing prices

OER

4

Page 6: OER Investor Presentation New - Oando · OER 2. Highlights Current Net Production 45,416 Net 2P Reserves 230.6 Net 2C Resources 547.3 6Producing Assets Market Capitalization 1,320

The OER Portfolio - Gulf of Guinea

OML 125

NIGERIA

OPL 321 & 323

OML 134

OML 122 - Bilabri Field

OML 90 - Akepo Field

OML 56 - Ebendo Field

CAMEROON

EQUATORIALGUINEA

EEZ Block 5

SAO TOME& PRINCIPE

Production Phase

Development Phase

Exploration Phase

SAO TOME & PRINCIPE - NIGERIAJOINT DEVELOPMENT ZONE

GABON

EEZ Block 12

OML 145

OML 131

OM

L 62

OML 60

OML 61

OML 63

OML 13 - Qua Ibo Field

OER

OML 60

OML 61

OML 62

OML 63

OML 125

OML 56

20%

20%

20%

20%

15%

42.75%

AGIP

AGIP

AGIP

AGIP

ENI

Energia

Asset W.I. Operator

OML 90*

OML 13*

OML 134

OML 122*

40%

40%

15%

5% Oil, 12% Gas

Sogenal

Network E&P

ENI

Peak

Asset W.I. Operator

EEZ 5

EEZ 12

OML 321& 323

OML 131

OML 145

100%

N/A

30%

100%

20%

OER

TBD

KNOC

OER

ExxonMobil

Asset W.I. Operator

*OER is Technical Partner

5

Page 7: OER Investor Presentation New - Oando · OER 2. Highlights Current Net Production 45,416 Net 2P Reserves 230.6 Net 2C Resources 547.3 6Producing Assets Market Capitalization 1,320

OER

OER Today - Growing Reserves & Resources

Value creation by and growing reserves production through:

GROWTHSTRATEGY

Indigenous status and capacity

Capital raising capabilities, through TSX listing

Presence in local communities, local partnerships and relationships

Competitive Advantage

IOCs divestment plans

Marginal eld programmes

Government Bid Rounds

M&A activity

Value Drivers

Disciplined approach to capital structure & valuation

Financial discipline

Identication, access & acquisition of opportunities in the O&G Sector

Acquisition of proven reserves

Acquisition of near term producing assets

De-risk existing resources portfolio and bring both

existing and new assets on- stream promptly

6

Page 8: OER Investor Presentation New - Oando · OER 2. Highlights Current Net Production 45,416 Net 2P Reserves 230.6 Net 2C Resources 547.3 6Producing Assets Market Capitalization 1,320

Pro

du

ctio

n b

y O

ML OML 63

6%OML 62 1%

45,416boepd

OML 61 66%

230.6MMboe

OML 62 9%

OML 60 15%

OML 900.3%

2P

Re

serv

es

(MM

bo

e)

OML 63 10%

OML 6158%

OML 565%

OML1253%

OML 130.4%

OML 56 3%

OML 1258%

OML 6016%

2C

Re

sou

rce

s (M

Mb

oe

)

OML 6312%

OML 605%

OML 14516%

OML 6116%547.3

MMboe

OML 131 37%

OML 628%

OML 13 1%

OML 134 2%

OML 122 2%

OML 56 1%

OML 125 1%

45,416boepd

Oil & Consolidate38%

NGL6%

Gas Sales56%

Production, Reserves & Resources

Pro

du

ctio

n b

y P

rod

uc

t (b

oe

pd

)

All Reserves & Resources estimates are classified in line with NI 51-101 regulations and Canadian Oil & Gas Evaluation Handbook standards. stAll estimates are from Independent Reserves Evaluator Report dated 31 December 2013

Current Net Production figure as at August 2014

OER

7

Page 9: OER Investor Presentation New - Oando · OER 2. Highlights Current Net Production 45,416 Net 2P Reserves 230.6 Net 2C Resources 547.3 6Producing Assets Market Capitalization 1,320

Ebendo

OM

L 62

OML 60

480�Capacity

Kwale�Okpai�IPP

MW3.6�Capacity

Brass�River�Terminal

3�Capacity

Gas�Facilities

Gas�Plants� 1,490in�Length

Pipeline�Network

km12�Production�Facilities

ProductionStations

OM

L 61

Eleme

Bonny

Brass River

Qua Ibo

Obama

Oshi

Irri-isoko

Ob-Ob

Umusadege

Kwale-Okpai IPP

Forcados

CloughCreek

Tebidaba

Ebocha

Idu

Akri

Oil & Gas Plant

FPSO

Petrochemical Plant

Power Plant

OM

L 63

Kwale

Oil & NGL Terminal

OML 125

Wellhead Platform

Flowstation

Oil Pipeline

Gas Pipeline

Beniboye

Key

Ogbainbiri

Qua Ibo

Akepo

*Assets highlighted in red do not belong to OER

mmbbls

OER

OER InfrastructurePostConocoPhillipsAcquisition

8

Page 10: OER Investor Presentation New - Oando · OER 2. Highlights Current Net Production 45,416 Net 2P Reserves 230.6 Net 2C Resources 547.3 6Producing Assets Market Capitalization 1,320

OER

ConocoPhillipsAcquisitionFinancing Structure

Equity from PLC$625mm

$373mm

$1.048bn

Corporate DebtTotal Equity$675mm

Private Placement$50mm

Acquisition Equity

Promissory Note$33mm

Structured Debt$100mm

Corporate Debt$240mm

RBL Debt$450mm

- COP Promissory Note

- Structured Debt

- $350mm Senior Secured by OER existing portfolio- $350mm (less $110mm)- $90mm already drawn for COP deposit

$450mmTotal: $1.498bn

Effective Purchased Price

POCNL, CEPNL, PDENLJuly 30, 2014

Transfer of Ownership

100% Share Capitalof Companies

- Senior secured by POCNL Portfolio

OER

9

Page 11: OER Investor Presentation New - Oando · OER 2. Highlights Current Net Production 45,416 Net 2P Reserves 230.6 Net 2C Resources 547.3 6Producing Assets Market Capitalization 1,320

AppendixAll Reserves & Resources estimates are classified in line with NI 51-101 regulations and Canadian Oil & Gas Evaluation Handbook standards.

All estimates are from Petrenel Report dated 31st December 2013

10

Page 12: OER Investor Presentation New - Oando · OER 2. Highlights Current Net Production 45,416 Net 2P Reserves 230.6 Net 2C Resources 547.3 6Producing Assets Market Capitalization 1,320

Producing Assets - OML 60

OML 61:Ob-Ob Plant

Kwale

Kwale-Okpai IPP

Power Plant

Oil & NGL Terminal

Flowstation

Oil Pipeline

Gas Pipeline

Fiscal System

Key

Okpai

Ashaka

KwaleOdugri

AkriAkri

Shallow Offshore Platform

Oil & Gas Field

Oil & Gas Field

Lead

Single Well Discovery

OML 60

Type of Contract

Royalty

Annual Capital Allowance

PPT/CITA

VAT

NDDC Levy

Education Tax

20%

Years 1-4; 20% Years 5+; 19%

7%

Capital Expenditures may be deducted against PPT

Oil Gas

Joint Venture

85% PPT 30% CITA

5%

3%

2%

OER

2014

20%

34.8MMboe

25.7MMboe

~6,000boepd

19

ENI

OML 60

Acquired

Working Interest

Net 2P Reserves

Net 2C Resources

Net Production

Producing Wells

Operator

11

Page 13: OER Investor Presentation New - Oando · OER 2. Highlights Current Net Production 45,416 Net 2P Reserves 230.6 Net 2C Resources 547.3 6Producing Assets Market Capitalization 1,320

Producing Assets - OML 61

OML 61

Type of Contract

Royalty

Annual Capital Allowance

PPT/CITA

VAT

NDDC Levy

Education Tax

20%

Years 1-4; 20% Years 5+; 19%

7%

Capital Expenditures may be deducted against PPT

Joint Venture

85% PPT 30% CITA

5%

3%

2%

Irri-Oleh-IsokoOgbogene

Deep

Ob-Ob

Mbebe

Ob-Ob SW

Oshi Deep

Idu

Oshi

OER

Acquired

Working Interest

Net 2P Reserves

Net 2C Resources

Net Production

Producing Wells

Operator

2014

20%

134.5MMboe

83.1MMboe

~27,000boepd

76

ENI

Power Plant

Oil & NGL Terminal

Flowstation

Oil Pipeline

Gas Pipeline

Key

Shallow Offshore Platform

Oil & Gas Field

Oil & Gas Field

Lead

Single Well Discovery

Fiscal SystemOML 61

Oil Gas

12

Page 14: OER Investor Presentation New - Oando · OER 2. Highlights Current Net Production 45,416 Net 2P Reserves 230.6 Net 2C Resources 547.3 6Producing Assets Market Capitalization 1,320

Producing Assets - OML 62

OML 62

OER

GrangbeneDeep

Nikorogba Deep

Okpo SW Deep

Tuomo WestDeep

Tuomo

Tuomo W

Beniboye

Forcados

20%

Years 1-4; 20% Years 5+; 19%

7%

Capital Expenditures may be deducted against PPT

Joint Venture

85% PPT 30% CITA

5%

3%

2%

Acquired

Working Interest

Net 2P Reserves

Net 2C Resources

Net Production

Producing Wells

Operator

2014

20%

19.4MMboe

44.7MMboe

~216boepd

1

ENI

Power Plant

Oil & NGL Terminal

Flowstation

Oil Pipeline

Gas Pipeline

Key

Shallow Offshore Platform

Oil & Gas Field

Oil & Gas Field

Lead

Single Well Discovery

Type of Contract

Royalty

Annual Capital Allowance

PPT/CITA

VAT

NDDC Levy

Education Tax

Fiscal SystemOML 62

Oil Gas

13

Page 15: OER Investor Presentation New - Oando · OER 2. Highlights Current Net Production 45,416 Net 2P Reserves 230.6 Net 2C Resources 547.3 6Producing Assets Market Capitalization 1,320

Producing Assets - OML 63

OML 63

OER

20%

Years 1-4; 20% Years 5+; 19%

7%

Capital Expenditures may be deducted against PPT

Joint Venture

85% PPT 30% CITA

5%

3%

2%

Acquired

Working Interest

Net 2P Reserves

Net 2C Resources

Net Production

Producing Wells

Operator

2014

20%

22.9MMboe

63.4MMboe

~2,000boepd

30

ENI

Itobolo Creek

Ogboinbiri Deep

Ogboinbiri Clough Creek

Ekedel D

Ogboinbiri

Tebidaba

Tebidaba

Obama

Obama

Nimbe SD

OML 61:Ob-Ob Plant

Crudefrom OML 61

Azuzuomo

Power Plant

Oil & NGL Terminal

Flowstation

Oil Pipeline

Gas Pipeline

Key

Shallow Offshore Platform

Oil & Gas Field

Oil & Gas Field

Lead

Single Well Discovery

Type of Contract

Royalty

Annual Capital Allowance

PPT/CITA

VAT

NDDC Levy

Education Tax

Fiscal SystemOML 63

Oil Gas

14

Page 16: OER Investor Presentation New - Oando · OER 2. Highlights Current Net Production 45,416 Net 2P Reserves 230.6 Net 2C Resources 547.3 6Producing Assets Market Capitalization 1,320

Oil Revenue Royalties Non-Capitalized

Costs

AssessableTax

EducationTax

$100.00 ($20.00)($10.00) $70.00 ($1.37)

Illustrative Profit & Tax Allocation Based on Fiscal TermsOMLs 60-63 NDDC

LevyCapital

AllowancesITA Chargeable

ProfitAssessableTax @ 85%

$0.90 $4.00 $1.00

$62.73 $53.32

Profit

$9.41O

il $/b

bl

Gas Revenue Royalties AssessableProfit

EducationTax

Chargeable Profit

$15.00 $1.05 $13.95 $0.27 $13.68

AssessableTax @ 30%

Profit

$4.10

$9.58

Gas

$/b

oe

OER

15

Page 17: OER Investor Presentation New - Oando · OER 2. Highlights Current Net Production 45,416 Net 2P Reserves 230.6 Net 2C Resources 547.3 6Producing Assets Market Capitalization 1,320

Producing Assets - OML 125

The Abo-8 well was completed as an oil producer on the Anom01 and Anom02 reservoirs, production has not commenced from Abo-8 as the required flow line is a long lead item, delivery of which is expected to be Q3 2014.

The Abo-12 well has been successfully drilled with lower completion performed and flow tested A197 and AN02 sands. The well is temporarily plugged and abandoned in line with work program, pending planned hook in 2015.

Asset Development Plans

OML 125 Fiscal SystemOML 125

Type of Contract

Royalty

Cost Oil Allocation Ceiling

Petroleum Tax

Profit Oil/Cash Flow Allocation

PSC

8%

NA

50%

Varies from 80%-40% based on cumulative

Acquired

Working Interest

Net 2P Reserves

Net 2C Resources

Net Production

Producing Wells

Water Injectors

Gas Injectors

OPEX/barrel

Netback/barrel

Operator

Fiscal System

2008

15%

6.57MMboe

5.10MMboe

~3,300bopd

4

2

2

$12.21

$52.03

ENI (Agip)

2003 PSC

OER

16

Page 18: OER Investor Presentation New - Oando · OER 2. Highlights Current Net Production 45,416 Net 2P Reserves 230.6 Net 2C Resources 547.3 6Producing Assets Market Capitalization 1,320

Producing Assets - OML 56

Ebendo-6 well has been drilled, completed, and tested growing production capacity to 7,140 bbl/d (3,213 bbl/d OER share) via seven strings.

Asset Development Plans

OML 56 Fiscal SystemOML 56

Type of Contract

Royalty

Overriding Royalty

Cost Oil Allocation Ceiling

Tax Oil

Profit Oil/Cash Flow Allocation

Marginal Field

2.5%-18.5% based on production

2.5%-7.5% based on production

NA

55%

Varies from 80%-40% based on cumulative

Export is currently constrained at 3,093 bbbl/d (1,391.85 bbl/d OER share) via the Agip operated Kwale-Brass NAOC/JV infrastructure.

Ebendo-7 has been successfully drilled and completed. The well is currently shut-in, with handover to the production team pending completion of the Umugini Pipeline.

Construction of the Umugini alternative evacuation pipeline has progressed & is expected to be completed and commissioned in the fourth quarter of 2014.

Acquired

Working Interest

Net 2P Reserves

Net 2C Resources

Net Production

Producing Wells

OPEX/barrel

Netback/barrel

Operator

2003

45%

10.82MMboe

6.20MMboe

~1,000bopd

3

$7.84

$56.86

Energia

OER

17

Page 19: OER Investor Presentation New - Oando · OER 2. Highlights Current Net Production 45,416 Net 2P Reserves 230.6 Net 2C Resources 547.3 6Producing Assets Market Capitalization 1,320

OML 125 Abo Fiscal System

OML 56 Fiscal System

Crude OilPrice

Royalty OPEX Tax Netback

Crude OilPrice

Royalty OPEX Tax Netback

$100.00 $8.61 $12.21 $27.14 $52.03

$100.00 $5.63 $7.84 $29.67 $56.86

Illustrative Netback/Barrel Based on Fiscal Terms

Type of Contract

Royalty

Tax Oil

Marginal Field

NA

55%

OverridingRoyalty

Profit Oil/Cash Flow Allocation

Varies from 80%-40% based on cumulative

Cost Oil Allocation Ceiling

2.5%-7.5% basedon production

2.5%-18.5% basedon production

Type of Contract

Royalty

Petroleum Tax

PSC

8%

NA

50%

Cost Oil Allocation Ceiling

Profit Oil/Cash Flow Allocation

Varies from 80%-40% based on cumulative

OER

18

Page 20: OER Investor Presentation New - Oando · OER 2. Highlights Current Net Production 45,416 Net 2P Reserves 230.6 Net 2C Resources 547.3 6Producing Assets Market Capitalization 1,320

Assets UnderDevelopment- OML 90

There have been revisions to the field development plan, which will now involve barging the oil instead of a pipeline to the NAOC Beniboye facilities, with production expected in the near term.

Asset Development Plans

OML 90 - Akepo Fiscal SystemOML 90

Acquired

Working Interest

Net 2P Reserves

Net 2C Resources

Operator

Technical Service Agreement

2008

40%

0.62MMboe

0.30MMboe

Sogenal

OER

Type of Contract

Royalty

Overriding Royalty

Tax Oil

Profit Oil/Cash Flow Allocation

Marginal Field

2.5% -18.5% based on production

2.5%-7.5% based on production

55%

Varies from 80%-40% based on cumulative

OER

19

Page 21: OER Investor Presentation New - Oando · OER 2. Highlights Current Net Production 45,416 Net 2P Reserves 230.6 Net 2C Resources 547.3 6Producing Assets Market Capitalization 1,320

Production Platform Fabrication & CPF EquipmentOML 90 - Akepo Field Development

OER

20

Page 22: OER Investor Presentation New - Oando · OER 2. Highlights Current Net Production 45,416 Net 2P Reserves 230.6 Net 2C Resources 547.3 6Producing Assets Market Capitalization 1,320

Assets UnderDevelopment - OML 13

Qua Ibo Marginal Field development phase 1 started with a drilling campaign in September 2012 and two (2) wells have been successfully drilled and completed; namely Qua Ibo-4 & Qua Ibo-3 St1.

Asset Development Plans

OML 13 - Qua Ibo Fiscal SystemOML 13

Oil production from D5 reservoir is expected to commence in Q3 2014 after the commissioning of the OER/NEPN crude processing facility.

Acquired

Working Interest

Net 2P Reserves

Net 2C Resources

Operator

Technical Service Agreement

2012

40%

0.92MMboe

2.90MMboe

Network E&P

OER/OSL

Type of Contract

Royalty

Overriding Royalty

Tax Oil

Profit Oil/Cash Flow Allocation

Marginal Field

2.5% -18.5% based on production

2.5%-7.5% based on production

55%

100%

OER

21

Page 23: OER Investor Presentation New - Oando · OER 2. Highlights Current Net Production 45,416 Net 2P Reserves 230.6 Net 2C Resources 547.3 6Producing Assets Market Capitalization 1,320

OML 122

Type of Contract

Royalty Oil

Tax Oil

Profit Oil/Cash Flow Allocation

Tax Royalty/CITA

10%

60%

100%

Type of Contract

Royalty Oil

Tax Oil

Profit Oil/Cash Flow Allocation

PSC

8%

50%

Varies from 80%-40% based on cumulative production

Fiscal System

Near Term Assets*

Oando Energy Resources owns 81.5% of Equator Exploration Limited (EEL)EEL Assets: OML 122, OPL 321 & 323, EEZ 5 & 12

*

OML 122 - Bilabiri/Owanare

Acquired

Working Interest

Operator

2009

Oil 5%, Gas 12%

Peak

OML 134 - Oberan

Acquired

Working Interest

Operator

2009

15%

ENI (Agip)

OML 134 Fiscal System

OER

22

Page 24: OER Investor Presentation New - Oando · OER 2. Highlights Current Net Production 45,416 Net 2P Reserves 230.6 Net 2C Resources 547.3 6Producing Assets Market Capitalization 1,320

Exploration Assets - OML 131

The Chota field in OML 131 extends into the adjacent Shell-operated Bolia Field. The principle terms of a Pre-Unitization agreement has been agreed for both fields.

A unitization equity determination is expected to take place in the near term. Development of the unitized field can take place subsequently.

Asset Development Plans

OML 131

OER

Fiscal SystemOML 131

Type of Contract

Royalty

PPT Rate

Investment Tax Rate (ITC)

Profit Oil

<200m water depth: 16.7%201-500m water depth: 12.0%501-800m water depth: 8.0%

801-1,000m water depth: 4.0%>1,001m water depth: 0.0%

PSC

Acquired

Working Interest

Operator

2014

100%

OER

50%

50%

Cum. Production

0-350MMb

351-750MMb

751-1,000MMb

1,001-1,500MMb

1,501-2,000MMb

>2,000MMb

NNPC/Contract or

20%/80%

35%/65%

45%/55%

50%/50%

60%/40%

Negotiable

23

Page 25: OER Investor Presentation New - Oando · OER 2. Highlights Current Net Production 45,416 Net 2P Reserves 230.6 Net 2C Resources 547.3 6Producing Assets Market Capitalization 1,320

Exploration Assets - OML 145

Subsea development consists of 9 producing wells, 7 water injectors and 2 gas injectors, for an ultimate recovery estimated by the Operator of 268 MMbbls of oil and a peak oil rate of 110 Mbopd

Eleven wells would be available at start-up, of which 6 are producers, 3 water and 2 gas injectors.

Asset Development Plans

OML 145

OER

Fiscal SystemOML 145

Type of Contract

Royalty

PPT Rate

Investment Tax Rate (ITC)

Profit Oil

<200m water depth: 16.7%201-500m water depth: 12.0%501-800m water depth: 8.0%

801-1,000m water depth: 4.0%>1,001m water depth: 0.0%

PSC

Acquired

Working Interest

Operator

2014

20%

ExxonMobil

50%

50%

Cum. Production

0-350MMb

351-750MMb

751-1,000MMb

1,001-1,500MMb

1,501-2,000MMb

>2,000MMb

NNPC/Contract or

30%/70%

35%/65%

47.5%/52.5%

55%/45%

65%/35%

Negotiable

24

Page 26: OER Investor Presentation New - Oando · OER 2. Highlights Current Net Production 45,416 Net 2P Reserves 230.6 Net 2C Resources 547.3 6Producing Assets Market Capitalization 1,320

OML 321/323

Acquired

Working Interest

Operator

2009

30%

Knoc

NIGERIA

OPL 321 & 323CAMEROON

EQUATORIALGUINEA

EEZ Block 5

SAO TOME& PRINCIPE

SAO TOME & PRINCIPE - NIGERIAJOINT DEVELOPMENT ZONE

GABON

EEZ Block 12

EEZ 5

Acquired

Working Interest

Operator

2009

100%

Equator

EEZ 5 Fiscal System

EEZ 12

Acquired

Working Interest

2009

PSC Negotiation (ongoing)

Type of Contract

Royalty Oil

Costing Oil Allocation Ceiling

Tax Oil

Profit Oil/Cash Flow Allocation

2%

80%

OER Portfolio - Exploration Assets

Oando Energy Resources owns 81.5% of Equator Exploration Limited (EEL) Assets: OML122, OPL 321 & 323, EEZ 5 & 12OER currently has an un-exercised right to acquire EEZ Block 12

*

**

30%

Varies from 70%-25% based on a formula set out in the PSC

Type of Contract

Royalty Oil

Costing Oil Allocation Ceiling

Tax Oil

Profit Oil/Cash Flow Allocation

PSC

8%

NA

50%

Varies from 70%-25% based on a formula set out in the PSC

*

OML 321/323 Fiscal System

OML EEZ 5 Fiscal System

OER

25

Page 27: OER Investor Presentation New - Oando · OER 2. Highlights Current Net Production 45,416 Net 2P Reserves 230.6 Net 2C Resources 547.3 6Producing Assets Market Capitalization 1,320

2013Capex Breakdown

Q1 Q2 Q3 Q4 Total

(OML 125) Abo

Abo-9 Work Over

$67.6MMAbo-4 Side Track

Up-dip side track of Abo-3

Production & Development Drilling

Other

Exploratory Drilling

Abo-8 Re-entry

Drilling of Ebendo 5 & 6 Wells - $19.1MM

Exploratory drilling onMindiogoro Prospect $7.3MM

Umugini Pipeline: $3.7MM

Drilling of Qua Ibo 4 & Qua Ibo 3 Side Track $21.9MM

Ebendo (OML 56)

(OML 134) Oberan

Qua Ibo (OML 13)

119.9�MM

Production & DevelopmentDrilling91%

Other3%

ExploratoryDrilling6% $

$22.9MM

OER

26

Page 28: OER Investor Presentation New - Oando · OER 2. Highlights Current Net Production 45,416 Net 2P Reserves 230.6 Net 2C Resources 547.3 6Producing Assets Market Capitalization 1,320

2014 Capex Plan - LegacyAssets

Q1 Q2 Q3 Q4 Total

(OML 125) Abo Abo-8 Reentry & Abo 12 drilling - $37.5MM $37.5MM

$22.7MMUmugini Pipeline $4.3MMMaintenance CAPEX - $9.7MM

Qua Ibo Well Drilling and Completion: $23.4 MM

$5.2MM

Ebendo (OML 56)

(OML 134) Oberan

Qua Ibo (OML 13)

$2.0MM

Mindiogoro Well Drilling - $7.4MM

Drilling of Ebendo 7 Well - $8.7MM

Akepo Marine Solution CAPEX - $2.0MM

Construction of Crude Processing Facility - $17.2 MM

Contingency Capex: $7.6MM

Equator Exploration EEZ Commitments: $5.2MM

$40.6MM

$7.4MM

Production & Development Drilling

Other

Exploratory Drilling115.4�MM

Production & DevelopmentDrilling60%

Other33%

ExploratoryDrilling7%

$

OER

27

Page 29: OER Investor Presentation New - Oando · OER 2. Highlights Current Net Production 45,416 Net 2P Reserves 230.6 Net 2C Resources 547.3 6Producing Assets Market Capitalization 1,320

OER

OMLs 60-63 2014 Capital Projects Excluding Drilling

Concession Rentals

Capital Construction Oil

Gas Facilities

Development Safety, Loss Prevention &

Environmental Protection

Movables

Telecoms (Information, Communication &

Technology)

Land and Building

TOTAL CAPEX OIL & GAS

TOTAL CAPEX OIL & GAS NET TO OER (20%)

DESCRIPTION E&P

0.1

61.3

84.0

42.8

12.3

5.3

16.7

222.4

44.5

DOM GAS

-

-

97.0

-

-

-

-

97.0

19.4

-

-

19.0

-

-

-

-

19.0

3.8

T4/5 MCA

-

53.6

-

-

-

-

-

53.6

10.7

EBOCHA MCA

TOTAL

0.1

114.9

200.0

42.8

12.3

5.3

16.7

392.0

78.4

Capital Projects 2014 Budget (excludes Sub Surface). Drilling CAPEX increases budget by $40MM

ConcessionRental

Capital Construction

Safety &Environmental

Movables

47%

Telcoms Land &Building

Gas Facilities

53%

100%

10%

53%

48%

42%

100% 100% 100% 100%

20%

40%

60%

80%

100%

CAPEX CONTRIBUTION

E&P Dom Gas T4/5 MCA Ebocha MCA

28

Page 30: OER Investor Presentation New - Oando · OER 2. Highlights Current Net Production 45,416 Net 2P Reserves 230.6 Net 2C Resources 547.3 6Producing Assets Market Capitalization 1,320

H1 2014 Results Summary

US$'000 H1 2014 H1 2013

Revenue

Production Expenses

General & Admin. Costs

DD&A

Net Financing Expenses

Income (Loss) Before Tax

Income Tax Recovery

Net Income (Loss)

62,603

(15,558)

(41,746)

(21,444)

(155,375)

(171,520)

(6,029)

(177,549)

65,774

(12,730)

(6,973)

(16,125)

(24,829)

5,117

(13,983)

(8,866)

US$'000 H1 2014 H1 2013

Non-Current Assets

Cash

Inventory

Trade & Other Debtors

Trade & Other Creditors

Current Borrowings

Non-Current Borrowings

Shareholders' Equity

1,409,172

209,161

2,612

41,197

223,133

281,915

88,392

725,532

1,247,529

12,677

1,478

37,738

213,169

496,099

124,776

311,330

US$* H1 2014 H1 2013

Barrels of Oil Produced (bbl)

Average Sales Price Per Barrel (Net)**

Production Expense Per Barrel

DD&A Per Barrel

821,786

91.25

18.93

26.09

687,757

95.64

18.51

23.45

OER

All tabular amounts are in US$ unless otherwise stated

Price excludes royalties (8% on OML 125 and 5% on the Ebendo Marginal Field), the Nigerian Government profit share of profit oil in the production sharing contract in respect of OML 125, crude losses, and unrecognised revenues related to increased underlift receivables on OML 125.

*

**

29

Page 31: OER Investor Presentation New - Oando · OER 2. Highlights Current Net Production 45,416 Net 2P Reserves 230.6 Net 2C Resources 547.3 6Producing Assets Market Capitalization 1,320

2013 Full YearResults Summary

US$'000 FYE 2013 FYE 2012

Revenue

Production Expenses

General & Admin. Costs

DD&A

Net Financing Expenses

Income (Loss) Before Tax

Income Tax Recovery

Net Income (Loss)

Net Income/Loss Per Share (Basic)

127,211

(29,962)

(42,583)

(31,513)

(50,365)

(27,212)

(11,018)

(38,230)

(0.36)

135,200

(25,071)

(17,791)

(23,991)

(16,242)

52,105

(36,084)

16,021

0.16

US$'000 FYE 2013 FYE 2012

Long Term Assets

Cash

Inventory

Trade & Other Debtors

Trade & Other Creditors

Current Borrowings

Non-Current Borrowings

Shareholders’ Equity

1,247,529

12,677

1,478

37,738

213,169

496,099

124,776

311,330

1,090,567

4,698

1,015

30,620

128,817

452,263

52,737

355,060

All tabular amounts are in US$ unless otherwise stated

Price excludes royalties (8% on OML 125 and 5% on the Ebendo Marginal Field), the Nigerian Government profit share of profit oil in the production sharing contract in respect of OML 125, crude losses, and unrecognised revenues related to increased underlift receivables on OML 125.

*

**

US$* FYE 2013 FYE 2012

Barrels of Oil Produced (bbl)

Average Sales Price Per Barrel (Net)**

Production Expense Per Barrel

DD&A Per Barrel

1,456,818

110.30

20.57

21.63

1,456,522

110.21

16.91

16.18

OER

30

Page 32: OER Investor Presentation New - Oando · OER 2. Highlights Current Net Production 45,416 Net 2P Reserves 230.6 Net 2C Resources 547.3 6Producing Assets Market Capitalization 1,320

Improved and sustained production levels from Abo wells (OML125)

New drilling campaign to increase production from Ebendo field (OML 56).

Facilities development, Pipeline laying and Well hook-up at the Akepo field (OML 90) are also expected in the near term.

Accelerated development programme on OML’s 60-63.

Access to capital/equity through the TSX listing and access to debt financing through excellent relationships with both local and international banks.

The Company is poised to benefit from all local content initiatives and reforms implemented in the country and the industry. OER plans to be involved in governmental bid rounds for assets as well as divestment programmes by International Oil Companies (IOCs).

Near Term Value Drivers

Indigenous Status:

Financing

Near Term Increased production & resource commercialization:

OER

31

Page 33: OER Investor Presentation New - Oando · OER 2. Highlights Current Net Production 45,416 Net 2P Reserves 230.6 Net 2C Resources 547.3 6Producing Assets Market Capitalization 1,320

The Nigerian Operating Environment

32

Page 34: OER Investor Presentation New - Oando · OER 2. Highlights Current Net Production 45,416 Net 2P Reserves 230.6 Net 2C Resources 547.3 6Producing Assets Market Capitalization 1,320

While exploration in Nigeria began at the turn of the 20th century, periods of interruption through the World Wars and lack of licensing awards issued in the 1970s and 1980s has led to production in Nigeria being slow to develop, with production hovering below 2.5mmboe/day

The Amnesty Programme by the FGN has led to stability in recent years, with the government targeting production of 4mmboe/day by 2020.

It is estimated that there are as many fields with only partial reserves disclosure as with proved reserves, indicating strong potential for future upside

297265

175151 143

102 98 8847 37

10th in World2nd in Africa

Oil Reserves (bnboe)

Gas Reserves (tcf)

1,680

1,168

884 858

300 288 215 195 182 159

11.210.3

7.84.3

4.13.5

3.32.9 2.8

2.72.3

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2.9

Brief History

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Oil Production (mmboe/day)

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10th in World1st in Africa

9th in World1st in Africa

NigeriaOverview

OER

33

Page 35: OER Investor Presentation New - Oando · OER 2. Highlights Current Net Production 45,416 Net 2P Reserves 230.6 Net 2C Resources 547.3 6Producing Assets Market Capitalization 1,320

3000

2500

2000

1500

1000

500

0

1995 2000 2005 2010 2015 2020

Militancy had major impact on production, especially onshore

Deepwater production, increasingly important

Stalled investment from PIB uncertainty

The marginal field programme was initiated in 2001 to encourage growth of indigenous companies in Nigeria.

24 marginal fields were allocated to indigenous companies in 2003.

Reduced royalty and profit tax of 65%

Considerably improved fiscal terms from historical 20% royalty and 85% petroleum profit tax

Sliding-scale royalties to government

Sliding-scale over riding royalties to original field owners

Onshore

OffshoreDeepwater

347 Fields with 2P Reserves < 20mmbbls & 230 Fields with 2P Reserves < 10mmbbls

mbpd

IOCs Targeting Deepwater & Divestingof Onshore Fields

OER

34

Page 36: OER Investor Presentation New - Oando · OER 2. Highlights Current Net Production 45,416 Net 2P Reserves 230.6 Net 2C Resources 547.3 6Producing Assets Market Capitalization 1,320

Omamofe Boyo is a Director of Oando Energy Resources as well as the Deputy Group Chief Executive of Oando plc. Before taking up this position, he doubled as the Executive Director, Marketing of Oando plc and CEO of Oando Supply & Trading. Between 2004 and 2006, he transformed Oando Supply & Trading into Africa’s largest private sector trading company.

Board of Directors & Advisers OER

35

Independent Auditors

Transfer Agent & Registrar

Legal Adviser

Independent Reserves Evaluator

Bill Watson | Director

Wale Tinubu | Chairman, Director Omamofe Boyo | Director

Christopher Harrop | Lead Director

John Orange | Director

Wale Tinubu has pioneered the execution of world-class initiatives in the region as an ethical business leader, entrepreneur and philanthropist. As well as being Chair and Director of Oando Energy Resources, he Co-founded Ocean & Oil Group in 1994 and has been the Group Chief Executive of Oando plc since 2001. In 2002, led the largest ever acquisition of a quoted Nigerian Company, Agip.

Bill Watson is a seasoned oil and gas professional with more than 35 years’ experience, including 20 years in executive and middle management roles worldwide. He most recently served as Husky Energy’s Chief Operating Officer, SE Asia.

Christopher Harrop was the director of Exile Resources Inc. Formerly a senior vice-president and director of Canaccord Capital Corporation, a Canadian broker dealer. He has served as a director for a number of companies including Clublink Corporation and International Uranium Corporation.

John Orange possesses a wide breadth of experience in the oil and gas industry. He served as a senior executive for the BP group from 1967 to 1996, and is on the boards of various public and private exploration and production companies. Other roles include serving as a Director at Premier Oil, Exile, and Vostok Energy

25+ 25+

Pade Durotoye | CEO, Director

Served as the CEO of OEPL from June 2010 until July 2012. Until 2010, Mr. Durotoye served as the Managing Director & CEO of Ocean and Oil Holdings Group. Prior to his work at Ocean and Oil, Mr. Durotoye spent more than 19 years with Schlumberger Oilfield Services where he held various management roles.25+ 40+

35+

40+

Philippe Laborde | Director

Philippe Laborde is an experienced oil and gas professional with 35 years of industry experience. He is the founder and CEO of Olaeum Energy, a start-up venture capital company focused on oil and gas investments across Africa. He also co-founded DB Petroleum – an upstream joint venture between Dubai World and Benny Steinmetz Group – and acted as its CEO for the Africa and the Middle East region. He spent over 20 years in progressively senior international positions at Elf Aquitaine.

35+

Page 37: OER Investor Presentation New - Oando · OER 2. Highlights Current Net Production 45,416 Net 2P Reserves 230.6 Net 2C Resources 547.3 6Producing Assets Market Capitalization 1,320

Contact Details

Energy Resources

Head, Corporate Development & Investor Relations

+234 (1) [email protected]

Tokunboh Akindele

OER

36