riu good oil conference fremantle, wa32 years with eni /agip exploration manager (north italy);...
TRANSCRIPT
RIU GOOD OIL CONFERENCE
FREMANTLE, WA
September 2010
Page 1
ITALY AND PO VALLEY
Gas Consumption
Growing at
3 tcf p.a.
2-3% p.a
High gas prices USD11/mcf
Gas Production 27 tcf to date
Europe’s 2nd largest
onshore gas province
Po Valley
Europe’s largest
onshore oil field
Val D’Agri
Po Valley/Northern Adriatic was
monopoly of ENI/Agip for 50 years
Page 2
PVE JANUARY 2005
Castello 100% Undrilled
Sillaro 100% Undrilled
Sant’Alberto 50% 1 well drilled
ITALIAN GAS PRICE: EUR14cents/cubic metre
Page 3
Castello 100% 1 well drilled + Surface plant installed + Production
Sillaro 100% 2 wells drilled + Surface plant installed + Production
Sant’Alberto 100% 1 well drilled + Production concession appl.
Bezzecca 100% 1 well drilled + Production concession appl.
Fantuzza 100% Drilling planned for 2nd half 2010
Correggio 100% Drilling planned for 2011
Offshore
adriatic
100% Preliminary award
12 Exploration
Projects
100% Gradizza, Cembalina planned for drilling in the next 18
months
PVE MAY 2010
ITALIAN GAS PRICE: EUR27cents/cubic metre
Page 4
RESOURCE BASE
Po Valley Assets
11 License areas
2 Production projects
Sillaro
Castello
2 Drilling projects
Sant’ Alberto
Bezzecca
5 Gas Discoveries for appraisal
12 Gas Exploration prospects
2 Oil opportunities
Page 5
PRICES RISING DUE TO FALLING EUR AND RISING OIL PRICES
ITALIAN ENI GAS RELEASE PRICE:
SEPTEMBER UPDATE
Source: ENI Gas Release and forecast sourced from Alba Soluzioni; Driver parameters and forward curves sourced from Bloomberg
Page 6
PVE RESERVE & RESOURCE CATEGORIZATION
Page 7
PROJECT CURRENT ASSESSMENT (BCF)TIMING OF RESERVES /
RESOURCES REVIEW
RESERVES 1P 2P
CASTELLO 0.1 3.7 Completed
SILLARO 8.1 8.8 Completed
TOTAL RESERVES 8.2 12.5
CONTINGENT RESOURCES 1C 2C
SANT’ ALBERTO 8.0 12.9 4Q 2010
BEZZECCA 0.7 3.1 Completed
FANTUZZA 1.5 5.4 Completed
CORREGGIO - 35.0 Started
AR.168PY LICENCE TBD TBD 1Q 2011
RAVIZZA TBD TBD 1Q 2011
BAGNOLO IN PIANO TBD TBD 1Q 2011
TOTAL
CONTINGENT RESOURCES10.2 56.4
TOTAL REMAINING
RESERVES & RESOURCES18.4 68.9
RESERVES AND RESOURCES MANAGEMENT ASSESSMENT
Page 8
2010/2011 GAME PLAN
Produce steadily from Sillaro and look to expand through Fantuzza-1
Drill new Castello well and recommence at original target production rates
Achieve preliminary development approval for Sant’Alberto and Bezzecca
Secure full award of Cadelbosco di Sopra (Correggio) and AR168PY
(Azzurra) licences and drill Correggio-1
Commence Gradizza and Cembalina exploration drilling funded by
farm-outs
Generate free cashflows, EBITDA and reduce debt levels
Continue to build and strenghten management team
Page 9
SILLARO SUCCESSFULLY DRILLED AND TESTED
6 reservoir levels confirmed
2 new previously untested levels
Well completed safely on schedule on budget
Initial
Production
Page 10
SILLARO PLANT 100% COMPLETE AND IN PRODUCTION
On the left side the
Major of Medicina
town visiting the
plant with Po Valley
Chairman
ON THE LEFT SIDE THE REPRESENTATIVE OF BOLOGNA
MINISTRY MR . GIACCHETTA AND THE MAJOR OF THE
MEDICINA TOWN MR. RAMBALDI VISITING SILLARO PLANT
Page 11
SILLARO PRODUCTION SUMMARY: 18 MAY- 28 AUGUST 2010
Page 12
FANTUZZA CAN FEED INTO SILLARO
Targeting 2,600m Miocene structure
Previously drilled and tested by ENI
50km of seismic acquired and processed
Fantuzza-1 site selected, drilling approvals in process, equipment purchased and drilling rig contracted
Sillaro surface plant and pipeline sized to process Fantuzza (2km away)
Cost €4m
Key uncertainties: reservoir quality, producibility
Page 13
2010/2011 GAME PLAN
Produce steadily from Sillaro and look to expand through Fantuzza-1
Drill new Castello well and recommence at original target production rates
Achieve preliminary development approval for Sant’Alberto and Bezzecca
Secure full award of Cadelbosco di Sopra (Correggio) and AR168PY
(Azzurra) licences and drill Correggio-1
Commence Gradizza and Cembalina exploration drilling funded by
farm-outs
Generate free cashflows, EBITDA and reduce debt levels
Continue to build and strenghten management team
Page 14
CASTELLO PLANT INAUGURATION: 12 JANUARY 2010
Page 15
CASTELLO STRUCTURE
Page 16
CASTELLO PRODUCTION SCENARIO
Action Plan:
Acquire key seismic
Plan and secure approval
to drill new well
Drill Vitalba-1dirA
Connect to Castello plantNEW WELL
Page 17
2010/2011 GAME PLAN
Produce steadily from Sillaro and look to expand through Fantuzza-1
Drill new Castello well and recommence at original target production rates
Achieve preliminary development approval for Sant’Alberto and Bezzecca
Secure full award of Cadelbosco di Sopra (Correggio) and AR168PY
(Azzurra) licences and drill Correggio-1
Commence Gradizza and Cembalina exploration drilling funded by
farm-outs
Generate free cashflows, EBITDA and reduce debt levels
Continue to build and strenghten management team
Page 18
Block 5
SANT’ALBERTO – SEISMIC TO BE ACQUIRED 3rd QRT
Page 19
da inserire
Target depth 2000m
Pliocene - Miocene
Contingent Resources 3.1Bcf
a’
a
a a’
BEZZECCA-2 (CASCINA S.PIETRO PERMIT)
Page 20
BEZZECCA CAN FEED INTO CASTELLO
Page 21
2010/2011 GAME PLAN
Produce steadily from Sillaro and look to expand through Fantuzza-1
Drill new Castello well and recommence at original target production rates
Achieve preliminary development approval for Sant’Alberto and Bezzecca
Secure full award of Cadelbosco di Sopra (Correggio) and AR168PY
(Azzurra) licences and drill Correggio-1
Commence Gradizza and Cembalina exploration drilling funded by
farm-outs
Generate free cashflows, EBITDA and reduce debt levels
Continue to build and strenghten management team
Page 22
CORREGGIO: STRONG ADDITION TO THE PORTFOLIO
Production to date ~240 bcf
Potential P50 gas discoveries ~ 35 bcf
Planned 3D seismic coverage
Quaternary and Pliocene targets
Pliocene potential
Pliocene potential
Quaternary potential
Page 23
EXPANSION OFFSHORE: AZZURRA (AR168PY)
Major gas production zone in Italy
Shallow water depth ~20m
Full 3D seismic coverage
4 drilled and tested prospects
Preliminary award to Po Valley:
July 2008
G&G work underway
Pipeline connection through licence
Court Case decided in
favour of Ministry and Po Valley
Azzurra Ginevra
Adele Irma/Carola
Page 24
2010/2011 GAME PLAN
Produce steadily from Sillaro and look to expand through Fantuzza-1
Drill new Castello well and recommence at original target production rates
Achieve preliminary development approval for Sant’Alberto and Bezzecca
Secure full award of Cadelbosco di Sopra (Correggio) and AR168PY
(Azzurra) licences and drill Correggio-1
Commence Gradizza and Cembalina exploration drilling funded by
farm-outs
Generate free cashflows, EBITDA and reduce debt levels
Continue to build and strenghten management team
Page 25
12 NEW PROSPECTS
Page 26
2010/2011 GAME PLAN
Produce steadily from Sillaro and look to expand through Fantuzza-1
Drill new Castello well and recommence at original target production rates
Achieve preliminary development approval for Sant’Alberto and Bezzecca
Secure full award of Cadelbosco di Sopra (Correggio) and AR168PY
(Azzurra) licences and drill Correggio-1
Commence Gradizza and Cembalina exploration drilling funded by
farmouts
Generate free cashflows, EBITDA and reduce debt levels
Continue to build and strenghten management team
Page 27
PO VALLEY CAPITAL STRUCTURE
Substantial ShareholdersShares (m) held
as at 31 August 2010%
Michael Masterman 26.0 23.6%
Hunter Hall 13.3 12.1%
Beronia Investments 7.1 6.5%
Other Investors 63.7 57.8%
TOTAL SHARES 110.1
Market Capitalization (at A$0.25*) (€19.5m) A$27.5m
Cash at Bank (July 10) (€1.9m) A$2.8m
Drawing on €20m BOS Facility (€7.0m) A$10.1m
Enterprise Value (€24.7m) A$34.8m
* At 31 August 2010
Page 28
BANK OF SCOTLAND - RESERVOIR FACILITY
Facility Size: €20 million (Current Borrowing base EUR8m)
Use of Funds: Put Castello in production (EUR3m)
Drill Sillaro 2 and Install Surface plant (EUR7m)
Term: 5 years expiring 15 November 2013
Borrowing base limit set on semi annual basis
Interest Rate:
- Current EURIBOR +300bp Margin = Currently 3.4%
- Post Completion EURIBOR +180bp Margin = Currently 2.2%
Drawings:
-Current €7 million (30 August 2010)
- Target €5 million (31 Dec 2010)
*Civil Works and Well Equipment purchased
Page 29
Mr Graham BradleyNon-executive Chairman
Former CEO - Perpetual, Blake Dawson Waldron
Director – Singtel
Chairman – HSBC, Stockland, Boart Longyear
Mr David McEvoyNon-executive Director
33 years Exxon/Esso
Director - Woodside Petroleum, AWE, Innamincka Petroleum
Mr Greg Short
Non-executive Director
33 years with Exxon
Non Executive Director of MEO Australia and Pryme Oil and Gas
Limited
Dr Byron PirolaNon-executive Director
23 years McKinsey/Port Jackson Partners Limited
Founder and major shareholder
Mr Michael MastermanChief Executive & Managing Director
8 years McKinsey
7 years CFO Anaconda Nickel
Executive Chairman Caspian Holdings Plc
Founder and major shareholder
BOARD OF DIRECTORS
Page 30
Mr Giovanni CatalanoDeputy Chief Executive Officer
32 years’ experience in the upstream oil and gas industry
Chief Executive Officer of Mediterranean Oil & Gas Plc
Prior Business Manager for Woodside Energy
Mr Franco BenelliChairman Technical
35 years with ENI
Formerly ENI VP Exploration (Po Valley)
Over 300 wells drilled
Mr Pierluigi VecchiaOperation Manager
13 years with Northsun Italia/PVE
Senior consulting geologist for E&P operators in Italy
Mr Giorgio Bertuzzi
Exploration and New Projects Manager
32 years with Eni /Agip
Exploration Manager (north Italy); Prefeasibility Studies Manager (Italy); Exploration, Planning and control (W&E Africa)
Mr Christian MasiniPetroleum Engineer
7 years experience in the oil and gas industry
Formerly with Shell and Eni/Agip
Ms Sara Edmonson
Finance and Administration Manager
5 years with Ernst & Young Transaction Advisory Services
2 years Oil & Gas finance
MANAGEMENT TEAM
Page 31
Gas Production with strong growth potential
Active appraisal and exploration program funded by farmouts
Completed reserve review – solid base to build
Conservative balance sheet
Profit and earnings growth
GROWTH AND PROFIT OUTLOOK
Page 32
Disclaimer
This presentation should not be considered as an invitation or recommendation to purchase securities in PVE.
PVE has not audited or investigated the accuracy or completeness of the information, statements and opinions contained in this presentation. Accordingly, to the maximum extent permitted by applicable laws, PVE makes no representation and can give no assurance, guarantee or warranty, express or implied, as to, and take no responsibility and assume no liability for, the authenticity, validity, accuracy, suitability or completeness of, or any errors in or omission, from any information, statement or opinion contained in this presentation.
You should not act or refrain from acting in reliance on this presentation material. This overview of PVE does not purport to be all inclusive or to contain all information which its recipients may require in order to make an informed assessment of PVE’s prospects.You should conduct your own investigation and perform your own analysis in order to satisfy yourself as to the accuracy and completeness of the information, statements and opinions contained in this presentation and making any investment decision.
The contents of this presentation are confidential. This presentation is being provided to you on the condition that you do not reproduce or communicate it or disclose it to, or discuss it with, any other person without the prior written permission of PVE.