UK Oil & Gas Investments PLC Corporate Presentation • November 2014
UK Oil & Gas Investments PLC Corporate Presentation • November 2014 Acquisition of Northern Petroleum (GB) Limited, NP Solent Limited and NP Weald Limited AIM: UKOG Disclaimer This presentation is being made on behalf of UK Oil & Gas Investments PLC (the “Company”). This presentation has not been approved for issue as a financial promotion for the purposes of section 21 of the Financial Services and Markets Act (2000) (“FSMA”). Neither the presentation, nor any part of it, nor anything contained or referred to in it, nor the fact of its distribution, should form the basis of or be relied on in any connection with or act as an inducement in relation to a decision to purchase or subscribe for or enter into any contract or make any other commitment whatsoever in relation to any such securities. Details included in this presentation are subject to updating, revision, verification and amendment, and refer to events as having occurred which have not occurred at the date of this presentation, but which are expected to happen in the future. This presentation does not constitute a recommendation regarding the securities of the Company. No reliance may be placed for any purpose whatsoever on the information contained in this presentation or on its completeness. No representation or warranty, express or implied, is given by the Company or its advisors or their representative directors, officers, employees, agents or advisors as to the accuracy, fairness, sufficiency or completeness of the information, opinions or beliefs contained in this presentation and, save in the case of fraud, no responsibility or liability is accepted by any of them for the loss, cost or damage suffered or incurred as a result of the reliance on such information, opinions or beliefs. In particular, no representation or warranty is given as to the achievement of reasonableness of, and no reliance should be placed on, any projections, targets, estimates or forecasts and nothing in this presentation is or should be relied on as a promise or representation as to the future. This presentation is confidential. This presentation may not be copied, reproduced, shown, distributed or issued to any other person at any time without the prior written consent of the Company, nor may the information contained herein be discussed with any other person without the prior written consent of the Company. By receiving and/or attending this presentation, you agree to be bound by the restrictions in this disclaimer. If you are in any doubt about the contents of this presentation, you should consult a person authorised under FSMA who specialises in advising on the acquisition of shares and other securities. Corporate Presentation • November 2014 • www.ukogplc.com 2 Qualified Persons’ Statement The information contained in this presentation has been reviewed and approved by Matt Cartwright, Business Advisor and Stephen Sanderson, Exploration Advisor to UK Oil & Gas Investments PLC. Mr. Cartwright has over 31 years of relevant experience in the oil industry. He is a UK Chartered Engineer and a member of the Society of Petroleum Engineers. Mr. Sanderson has over 33 years of relevant experience in the oil industry. He is a Fellow of the Geological Society of London and is an active member of the American Association of Petroleum Geologists. In this presentation, the estimates of reserves for Horndean and Avington and Contingent Resources for Baxters Copse, have been extracted without material amendment or adjustment (other than the calculation of net attributable interest), from the Competent Person’s Report (independent reserves evaluation, “CPR”) prepared by Senergy (GB) Limited (“Senergy”), dated July 2014, and which has been provided to UKOG by IGas, the operator. The Senergy CPR is available at the following publicly available link: http://www.igasplc.com/media/10852/competent-persons-report-2014.pdf Senergy confirmed in its CPR that in respect of the Standard used in reporting the information, Senergy had used the definitions and guidelines set out in the 2007 Petroleum Resources Management System prepared by the Oil and Gas Reserves Committee of the Society of Petroleum Engineers (SPE) and reviewed and jointly sponsored by the World Petroleum Council (WPC), the American Association of Petroleum Geologists (AAPG) and the Society of Petroleum Evaluation Engineers (SPEE). Corporate Presentation • November 2014 • www.ukogplc.com 3 UKOG’s NOP UK Acquisition - Summary UK Oil & Gas Investments PLC (“UKOG”) has acquired the entire issued share capital of Northern Petroleum Plc’s (“NOP”) wholly-owned UK subsidiaries: Northern Petroleum (GB) Limited (“NPGBL”), NP Solent Limited (“NPSL”) and NP Weald Limited (“NPWL”). These companies have been renamed, respectively, UKOG (GB) Limited, UKOG Solent Limited and UKOG Weald Limited. The aggregate base consideration payable by UKOG to NOP is £1,500,000: - £1,311,999 for NPGBL, £1 for NPSL and £188,000 for NPWL - UKOG had an option to elect to pay up to £500,000 of the consideration in new UKOG ordinary shares, but this option has been waived The effective date of the transaction is 23 July 2014; completion was on 17 October 2014. UKOG’s new subsidiaries have interests in five UK licences, four onshore and one offshore: - PL 211, Weald Basin, containing the Horndean onshore producing oil field, UKOG 10%, IGas operator - PEDL 070, Weald Basin, containing the Avington onshore producing oil field, UKOG 5%, IGas operator - PEDL 233, Weald Basin, containing the Baxters Copse onshore oil discovery, UKOG 50%, IGas operator - PEDL 126, Weald Basin, containing the Markwells Wood onshore oil discovery, UKOG 50% and operator - P 1916, Wessex Basin, an offshore exploration licence, located SW of the Isle of Wight, UKOG 65% and operator NOP recently relinquished three further UK onshore licences: - PEDL 155, PEDL 240, PEDL 256 Corporate Presentation • November 2014 • www.ukogplc.com 4 Location of UKOG’s UK Licences Source: NOP, July 2014 Corporate Presentation • November 2014 • www.ukogplc.com 5 PL 211, Horndean Oil Field History/Description - - - - - UKOG 10% interest, IGas operator Located in Hampshire, close to the Singleton and Storrington oil fields Discovered in 1983, commenced production in 1987 Seven wells drilled to date into the Jurassic, Great Oolite reservoir Produced oil is 39°API, transported by truck to the nearby Holybourne Oil Terminal. Production - Gross production peaked at 670 barrels per day (“bopd”) in 1993 - IGas’ 2014/15 forecast for production, from four wells, is around 150 bopd (gross) - Gross cumulative production totals 2.39 million barrels (“mmbbl”, at 23 July 2014), Source: IGas’ weekly production reports - Production is expected to continue for a further 33 years (Source: Senergy CPR July 2014, Table 2.21). Reserves - IGas’ most recent CPR on Horndean was prepared by Senergy in July 2014, with an effective date of 1 January 2014 - With IGas’ consent, UKOG has published below Horndean’s reserves, which have been extracted without any material amendment or adjustment from the Senergy CPR - Senergy’s estimates of Horndean’s gross reserves are provided below in Table 1, for the three cases of Proven (“1P”) reserves, Proven plus Probable (“2P”) reserves and Proven plus Probable plus Possible (“3P”) reserves - Net attributable reserves has been calculated by UKOG management based on the Company’s 10% interest in the Horndean licence - Since 1 January 2014, actual Horndean gross production has been 0.031 mmbbl - On the basis that the economic parameters used by Senergy in their CPR still remain unchanged, UKOG’s management calculation of its net attributable (10%) reserves at 23 July 2014 as reduced by production are: 1P 0.0686 mmbbl, 2P 0.0825 mmbbl, 3P 0.1112 mmbbl. Corporate Presentation • November 2014 • www.ukogplc.com 6 PL 211, Horndean Oil Field Table 1: Estimated Horndean Reserves (Source: Senergy CPR July 2014, Section 2.4.7, p19) Note: In accordance with Appendix 3 of the AIM Note for Mining and Oil and Gas Companies June 2009 the Company has calculated its net attributable interest which are those reserves attributable to the Company based on its 10% interest in the Horndean licence Corporate Presentation • November 2014 • www.ukogplc.com 7 Oil Rate (bbl/ day) OR Water Cut (%) 180 2,400,000 160 2,350,000 140 2,300,000 120 2,250,000 100 2,200,000 80 2,150,000 60 2,100,000 40 2,050,000 20 2,000,000 0 Jan-‐12 1,950,000 Apr-‐12 Jul-‐12 Sep-‐12 Dec-‐12 Apr-‐13 Average daily oil (bbls/day) Jul-‐13 Sep-‐13 Water Cut (%) Corporate Presentation • November 2014 • www.ukogplc.com Dec-‐13 Mar-‐14 Jul-‐14 Cum Oil (bbls) 8 Cumula&ve Oil (bbl) Horndean Produc&on Jan '12 -‐ July '14 200 PEDL 070, Avington Oil Field History/Description - - - - - UKOG 5% interest, IGas operator Located in Hampshire, close to the Stockbridge oil field Discovered in 1987, commenced production in 2007 Five wells and side-tracks drilled to date into the Jurassic, Great Oolite reservoir Produced oil is 38°API, transported by truck to the Stockbridge oil field. Production - - - - Gross production peaked at over 600 bopd in 2007 IGas’ 2014/15 forecast for production, from two wells, is around 60-70 bopd (gross) Gross cumulative production totals 221,000 barrels, at 23 July 2014, Source IGas’ weekly production reports Production is expected to continue for a further 7 years (Source: Senergy CPR July 2014, Table 2.18). Reserves - IGas’ most recent CPR on Avington was prepared by Senergy in July 2014, with an effective date of 1 January 2014 - With IGas’ consent, UKOG has published below Avington’s reserves, which have been extracted without any material amendment or adjustment from the Senergy CPR - Senergy’s estimates of Avington’s gross reserves are provided below in Table 2, for the three cases of 1P reserves, 2P reserves and 3P reserves - Net attributable reserves has been calculated by UKOG management based on the Company’s 5% interest in the Avington licence - Since 1 January 2014, actual Avington gross production has been 0.013 mmbbl - Therefore, on the basis that the economic parameters used by Senergy in their CPR still remain unchanged, UKOG’s management calculation of its net attributable (5%) reserves at 23 July 2014 as reduced by production are: 1P 0.00135 mmbbl, 2P 0.00250 mmbbl, 3P 0.00560 mmbbl. Corporate Presentation • November 2014 • www.ukogplc.com 9 PEDL 070, Avington Oil Field Table 2: Estimated Avington Reserves (Source: Senergy CPR July 2014, Section 2.4.2, p16) Note: In accordance with Appendix 3 of the AIM Note for Mining and Oil and Gas Companies June 2009 the Company has calculated its net attributable interest which are those reserves attributable to the Company based on its 5% interest in the Avington licence Corporate Presentation • November 2014 • www.ukogplc.com 10 Avington Produc&on July '12 -‐ July '14 100 250000 90 200000 70 60 150000 50 40 100000 30 20 50000 10 0 Jul-‐12 0 Aug-‐12 Oct-‐12 Dec-‐12 Mar-‐13 May-‐13 Average Daily Oil bbls/day Jul-‐13 Sep-‐13 Water Cut (%) Nov-‐13 Jan-‐14 Mar-‐14 May-‐14 Jul-‐14 CumulaMve Oil (bbls) Corporate Presentation • November 2014 • www.ukogplc.com 11 Cumula&ve Oil (bbls) Water Cut (%) Average Daily Oil (bbls/day) 80 P1916, Offshore Exploration, Isle of Wight History/Description - - - - - UKOG 65% interest, UKOG operator Located offshore, SW of Isle of Wight The licence was awarded to a bidding group led by NOP in July 2012 In order to extend the licence into a second term, a well has to be drilled by February 2016 If no drilling takes place, the licence will be relinquished (“drill or drop”). Prospectivity (see following slides) - The P1916 licence contains a large drill-ready prospect (“M”) and one lead - This prospect and lead contain stacked reservoir objectives in the Triassic Sherwood sandstone and overlying Jurassic limestones and sandstones - 2D seismic mapping demonstrates the M prospect extends into the adjacent onshore Isle of Wight. - Regional geochemical studies indicate the P 1916 area likely received a hydrocarbon charge from the immediate south and southwest of the block from thermally mature oil-prone Liassic and Oxford Clay shales - UKOG is investigating the possibility that early oil-mature Kimmeridge Clay hot shales might also have directly charged interbedded Kimmeridge limestones, analogous to the Kimmeridge and Balcombe fields and as interpreted from the preliminary results of UKOG’s Horse Hill-1 well - UKOG has applied (with Angus Energy Limited and Solo Oil plc) for the adjacent onshore acreage in the UK 14th Landward Licencing Round. Corporate Presentation • November 2014 • www.ukogplc.com 12 P1916, Offshore Exploration, Isle of Wight Trap Types and Prospects (see map) - Post-Oligocene age inversion hangingwall anticlines and tilted fault blocks, defined from reprocessed 2D seismic data; analogous to the Kimmeridge field, 98/11-2 and Southard Quarry discoveries - Prospect M exhibits a well defined, 4-way dip anticlinal closure, at Triassic and Jurassic reservoir objectives - Most likely Triassic closure is circa 2,200 acres with 325 feet vertical column, likely sealed by in excess of 700 feet of Mercia Mudstones; upside trap closure potential exists via downthrown fault seal against basement. Identified Reservoir Objectives - Primary: Triassic Sherwood Sandstone, as productive in the Wytch Farm field, 98/7-2, 98/11-2, and Southard Quarry-1 discoveries; nearby Chessel-1, 98/13-1 and Arreton-2 wells to the north indicate a gross Sherwood sandstone thickness in excess of 300 feet with average porosities between 10-17.5% could be expected - Secondary: Jurassic Limestone within: (i) fracture enhanced Kimmeridgian to Callovian age coccolithic micrites within or overlain by Kimmeridge Clay hot shales, (ii) Portland grainstones as found oil bearing in nearby Arreton-2, (iii) Osmington (dolomitic) Oolite as found by Arreton-2, (iv) Great Oolite (as found by the Sandhills wells); minor upsides also exist within Forest Marble, Fullers Earth and Bridport sands. Hydrocarbon Charge - Updip oil in the Portland of Arreton-2, the Great Oolite of Sandhills, plus oil shows in Triassic and Jurassic of 98/13-1, likely indicates Liassic and/or Oxford Clay sourced oil has migrated from SW - A 600m gross Lower Liassic shale sequence mapped to the direct south and southwest, possibly analogous to the rich thermally mature equivalent section of Southard Quarry-1 to the west, is interpreted to contain >100m of net hot shale and likely reached late peak-oil to wet gas-condensate generation at the time of trap formation - Kimmeridge Clay hot shales may also be within the early oil generative window in the south of P 1916. Corporate Presentation • November 2014 • www.ukogplc.com 13 P1916, Offshore Exploration, Isle of Wight Identified Triassic and Jurassic Prospectivity Map Triassic Prospect, Lead Jurassic Prospect, Lead Jurassic Oil Discovery UKOG Licence Block M Prospect 98/13-‐1, Triassic and Jurassic oil shows Chessel-‐1 Sandhills-‐1, 2, 2z Arreton-‐1, 2 P1916 Source: UKOG, November 2014 Corporate Presentation • November 2014 • www.ukogplc.com 14 PEDL233, Baxters Copse Oil Discovery History/Description - - - - UKOG 50% interest, IGas operator Located in Hampshire, adjacent to the Singleton oil field Baxters Copse was discovered in 1983, with oil in the Jurassic, Great Oolite reservoir The licence also contains the Burton Down and Selhurst Park oil prospects - The operator plans to drill a Baxters Copse appraisal well in 2015. Contingent Resources - IGas’ most recent CPR on Baxters Copse was prepared by Senergy in July 2014, with an effective date of 1 January 2014 - With IGas’ consent, UKOG has published below Baxters Copse Contingent Resources, which have been extracted without any material amendment or adjustment from the Senergy CPR - Senergy’s estimates of Baxters Copse Contingent Resources are provided below in Table 3, for the three cases of Low (“1C”) Contingent Resources, Best (“2C”) Contingent Resources and High (“3C”) Contingent Resources - Baxters Copse is an undeveloped discovery - Net attributable Contingent Resources has been calculated by UKOG management based on the Company’s 50% interest in the Baxters Copse licence. Corporate Presentation • November 2014 • www.ukogplc.com 15 PEDL233, Baxters Copse Oil Discovery Table 3: Estimated Baxters Copse Contingent Resources (Source: Senergy CPR July 2014, Section 2.4.3, p17) Note: In accordance with Appendix 3 of the AIM Note for Mining and Oil and Gas Companies June 2009 the Company has calculated its net attributable interest which are those Contingent Resources attributable to the Company based on its 50% interest in the Baxters Copse licence Corporate Presentation • November 2014 • www.ukogplc.com 16 PEDL126, Markwells Wood Oil Discovery History/Description - UKOG 50% interest, UKOG operator - Located in Hampshire, immediately east of the Horndean oil field - Markwells Wood was discovered in 2011, with oil in the Jurassic, Great Oolite reservoir, with a 6-month extended well test carried out by NOP - 3,931 barrels was produced during the extended well test, with a peak flow rate of 53 barrels per day - The discovery is believed to be an eastern extension of the Horndean oil field - The licence also contains the small Chilgrove, Clanfield and Hinton Manor oil discoveries, however, these discoveries are not considered commercial - UKOG will evaluate this discovery, including giving consideration to drilling a side-track of the Markwells Wood discovery well, in order to appraise the discovery Contingent Resources - No independent Contingent Resources evaluation (CPR) has yet been carried out since the drilling of the Markwells Wood discovery well (MW-1). Corporate Presentation • November 2014 • www.ukogplc.com 17 Acquisition Summary A strategic direct entry for UKOG into UK onshore - - - UKOG’s NOP acquisition is fully in line with our strategy of establishing and growing a material presence in the UK onshore conventional oil and gas play It provides UKOG with direct cash flow, from net production, of around 20 bopd The NOP Weald Basin assets are located close to UKOG’s existing Horse Hill interest, providing potential synergies. Horndean and Avington oil fields - The Horndean and Avington oil fields are long-life, with a reputable operator and stable, profitable production - UKOG anticipates significant future reserves upgrades at both fields, due to consistent, better than forecast production and stable water cuts. Offshore Isle of Wight - The offshore Isle of Wight licence contains a prospect and lead with very significant upside value - UKOG (with partners) is looking to quickly build on this offshore position. Baxters Copse and Markwells Wood oil discoveries - The Baxters Copse and Markwells Wood oil discoveries offer the potential to add significant reserves and value to UKOG in the future - Both discoveries are close to the Horndean and Avington oil fields. Corporate Presentation • November 2014 • www.ukogplc.com 18 Contacts UK Oil & Gas Investments PLC Princes House, Suite 3B 38 Jermyn Street London, SW1Y 6DN T: +44 (0) 207 440 0640
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