t5 oil & gas corporate presentationdev.t5oilandgas.com/corporate presentation website.pdf ·...

T5 Oil & Gas

Corporate Presentation

www.T5oilandgas.com 2

Disclaimer

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This document does not constitute or form any part of any offer or invitation or other solicitation or recommendation to purchase anysecurities and contains information designed only to provide a broad overview for discussion purposes. As such, all information andresearch material provided herein is subject to change and this document does not purport to provide a complete description of theinvestment opportunity. All expressions of opinion are subject to change without notice and do not constitute advice and should notbe relied upon. T5 Oil & Gas Limited (the “Company”) does not undertake any obligation to update or revise the information in orcontents of this document. Recipients of this document who may consider acquiring shares in the Company are reminded that anysuch acquisition should not be made on the basis of the information contained in this document.

The Company nor its employees, advisers or representatives nor any other person makes any guarantee, representation,undertaking or warranty, express or implied as to the accuracy, completeness, correctness or fairness of the information andopinions contained in this document (or as to the reasonableness of any assumptions on which any of the same is based or the useof any of the same), nor does the Company nor its employees, advisers or representatives nor any other person accept anyresponsibility or liability whatsoever his for any loss howsoever arising from any use of this document or its contents or otherwisearising in connection therewith.


Experienced Board and Executive Management

Board and Management team with proven track record

Matt O’Donoghue

Non-executive Directors

Andrew Windham Cathal Friel

Gerry SheehanExploration Director

Executive Directors

Peter HeintzelmanChief Financial Officer

Phil CrookallChief Operating Officer

Chairman

Pat Plunkett


Board and Management Team

Patrick Plunkett – Chairman

Pat Plunkett was Chairman of Tullow Oil plc. from 2000 to 2011, during which time the company grew

from a small cap oil and gas plc. to Africa’s leading independent oil company, worth over £12bn

Peter Heintzelman – Chief Financial Officer

Previous Head of Energy – Middle East with Standard Bank in Dubai, and Head of Oil and Gas for East

Africa in London. Peter’s most recent role was as a consultant to the executive team of Shelf Drilling as it

prepared for a stock market listing

Former CFO of Atlantic Energy, a large Western Africa focussed O&G company

Gerry Sheehan – Exploration Director

Gerry has 30+ years experience in the oil and gas industry with a large part of this as a senior

international Exploration Manager at Tullow Oil, during the discovery of Jubilee oil field

Philip Crookall – Chief Operating Officer

Philip has over 26 years’ international experience, in subsurface geoscience and corporate management

and was a co-founder and Technical Director of Valiant Petroleum plcfrom private start up to a UK listed

$450mm production company. He was also at RPS as Reserve Auditor, Advisor on Algerian equity

determination, and consultant for government entities

Matt O’Donoghue – Non-executive Director

Matt O’Donoghue served on the Board of Tullow as an Executive Director 1998 until 2008. He was

Director of International Operations, Projects, Contracts and Procurement

Andrew Windham – Non-executive Director

Andrew served as Managing Director of the Africa Region for Tullow Oil plc. from 2007 until January

2012 following its acquisition of Energy Africa in 2004, where he served as Commercial Director on the

Board since 2001

Previous Experience


Building a diversified publicly listed

oil and gas company of scale

Certain listed companies require

enhanced board/management

team and access to City capital

T5 is in a unique position to bring

these required solutions to a new

entity

Reverse Takeover (“RTO”)

Corporates with trapped value

Acquire IPO-friendly

asset(s)

Selective

exploration

Disciplined approach to assets

which will excite investors in

an IPO process and attract

material funding

Material, producing or

development asset(s) required

Operator of Louga asset

in Senegal

Only outstanding

opportunities will be

considered, which could

create substantial and

sustainable value

A clear and disciplined 3-tiered strategy:


T5 reverse takeover structure

T5 / Listco Hybrid

Management Team

T5 / Listco

Hybrid BoardStructured Debt

(T5 Arranged)

ListedCompany

Director’s Service Contract

Employment Contracts Equity

Placement(T5 Arranged)

Acquisition of stock


Strategic focus areas: Africa & Middle-East

T5’s main regions of

interest include the

following geographies

MSGBC Basin

West Africa Transform

Margin

Gulf of Guinea

Coastal Basin

Central Africa Rift Basins

North Africa

Middle East


Why T5 Oil & Gas?

Expertise, credibility and relationships to structure and access further funding in the capital

markets

Optimal funding assessment target by target, project by project

Disciplined SG&A cost control

Realistic and opportunistic approach to valuations and returns

Focus on asset level capital requirements and project cost control

No funding gaps

Production assets – deliver cash flow

Development assets – optimize/solve funding for development plan and avoid cost overruns

Exploration assets to benefit from low cycle entry point leading to enhanced returns

Experienced operators, currently operating initial asset in Senegal

Acquisition pipeline of corporate and asset targets meeting returns and execution criteria

identified

Key experience and network in targeted geographic areas yielding many transaction leads

Track Record

Experienced Operators

with Deal Access

Portfolio Objectives

Capital discipline

Funding

Majority of team, including Chairman Pat Plunkett, were members of Tullow Oil’s Board and

senior management when its market cap grew from £233mm to over £12bn (2000 – 2011) and

delivered key transformational acquisitions – BP SNS assets, Energy Africa, Hardman Res.


Current Portfolio – Louga Licence in Senegal

Senegal is considered one of Africa’s

most politically and economically stable

countries

Significant recent discovery and activity:

Cairn Energy made a P50, 950

mmbbls discovery offshore with the

FAN-1 well

Kosmos signed a $400 million

farm-in agreement for two offshore

blocks

Recent TCF sized discovery

southern Mauritania

T5 have significant experience of

Senegal, including Operating World Bank

funded gas to power projects

It hosts some of the best transportation,

telecommunications and communication

infrastructure in West Africa

Contract terms are excellent with

attractive production sharing in the event

of a discovery, and income tax at 30%

Senegal – Industry closely watching increased activity

Sources: Company websites & Petrosen


T5 Oil & Gas - Senegal Palaeozoic Basin

Petroleum exploration efforts in Senegal have

historically been focused upon the Mesocenozoic

Basin

T5 chasing Palaeozoic conventional play similar to

highly prolific plays in Libya and Algeria

Palaeozoic Basin provides serious hydrocarbon

potential

Presence of Ordovican and Devonian sandstone

reservoirs with excellent fracture porosity

Proven by DM-1 and KO-1 wells in the southern part

of Senegal’s Palaeozoic basin

Technical data indicates potential for multi-TCF gas

and / or 100+ million barrel plus oil traps


Senegal in the vast Silurian depocentre

Regional stratigraphic data from Bove basin and

from Diana-Malari and Kolda wells prove presence

of Silurian “black shales” with good organic content

Regional seismic lines indicate the possible

deposition of thick Palaeozoic sequences

Widespread structuration is obvious on the 2D

huge traps could host very large volumes of oil/gas

East-West 2D Profile

Northern Senegal, Louga Block

Southern Senegal Palaeozoic

Casamance Area

Louga - Palaeozoic Basin: Regional 2D Seismic


Countercyclical Investment Opportunity

T5 is well positioned to replicate Tullow Oil’s acquisition success

1Moody’s as of May 2015 2Financial Times June 2015 3Woodmackenzie as of April 2015 4Preqin 5Mergermarket

$861mm

Ophir Energy

acquisition of

Salamander EnergyNov-14

$12.7bn

Repsol acquisition of

Talisman EnergyDec-14

$81bn

Shell acquisition of BG

Group Apr-15

$6.2bn

ENOC acquisition of

Dragon Oil Jun-15

Stranded listed and private E&P companies

End of $75+/bbl hedging set to increase default rate from 3% to 7%1

$2.5tn of debt outstanding, 50% non-US2

Trapped value – limited access to capital markets/RBL

Banks cutting exposure to the O&G industry

Valuation of non-US focussed E&P independents remains around 10-year low

Reduced break-even thresholds

Costs of operations have drastically decreased

Exploration costs expected to drop by over 30% in 20163

Private Equity funds have raised energy and upstream specific funds of c. $40bn4 in anticipation of distress and default

Consolidation transactions5:

$191mm

All share merger of

Rockhopper Exploration

and Falklands Oil & GasNov-15


-

20.0

40.0

60.0

80.0

100.0

120.0

140.0

160.0

180.0

Brent

FTSE All-Share Oil & Gas Producers Index (rebased to Brent)

FTSE AIM All-Share Oil & Gas Index (rebased to Brent)

S&P Oil & Gas Exploration & Production Index (rebased to Brent)

S&P/TSX Composite Index Oil & Gas Exploration & Production (rebased to Brent)

Valuations near “Floor of the cycle”……..

(31%)

2%

(23%)

(59%)

(78%)

Source: Capital IQ and Bloomberg

$/bbl


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Listed E&P independents out of favour

Price / Target Price

Producers Developers Explorers

Sep-15 avg: 46%Sep-15 avg: 43%

Sep-15 avg: 39%

% of 52 weeks high

Sep-15 avg: 35%Sep-15 avg: 41% Sep-15 avg: 40%

Producers Developers Explorers

Source: Capital IQ and Bloomberg


Acquisition Parameters and Target Returns

Oil price assumptions

Asset targets including overall company portfolios must be economic at $45/bbl

Acquisition targets will be assessed using forward market curve at the time

Capital structure

The use of leverage will be incorporated in assets where realistic

Gearing will be assessed on a reasonable and responsible basis given the current market scenario

Potential utilisation and level of debt will be determined by the life cycle stage of the assets

Target IRRs

IRR targets will be based on the life cycle stage of the asset with the aim of creating an overall minimum IRR of 25% through a

balanced and well managed portfolio

Estimated breakdowns of the various IRRs will be as follows:

Production – 20-30%

Development – 25-50% plus exploration upside

Exploration – 50-100%

Play type and geography

Onshore and shallow and intermediate depth offshore. Deep offshore plays are not within the T5 target scope

Oil and gas are of equal interest, however only gas plays with a clear path to early monetisation will be pursued

Disciplined approach focusing on play types in which the team has substantial experience

Africa and Middle East focus, operating within our area of expertise


Summary

Why T5 Oil & Gas?

Timing

Experience and track record

Execution strategy

Attractive returns

Operational and exploration track record

Successful acquisition history

Capital discipline – optimal capital structure and cost control

Approaching the “floor of the cycle” with undervalued quality assets and stranded E&P

companies

Africa and Middle-East focus reflecting T5’s experience and connections

West African transform margin largely misunderstood and poorly explored

Financial and technical approach via full DD, 5 year financial and operational model,

and minimum hurdle IRRs

Minimum 25% IRR target across a balanced and well managed portfolio

Clear path to de-risking and commercialisation for exploration assets

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