Private and Confidential Investor presentation August 2015 1 Agenda Table of contents: 1. The opportunity 2. The team 3. Asset portfolio and strategy for growth Elise-1 well site in the Siraseki North license 2 Investment highlights World class E&P opportunity profitable below USD 30/bbl Exploration on trend with Northern Iraq Strong team with proven track-record from Northern Iraq Turkey: Politically stable and set for low cost E&P • • • • • • Exploration acreage on trend with giant discoveries in Iraq and Syria Prospects mapped with resources up to 500 mmbbl Currently holding 6 licenses with ~475 mmboe net prospective resources Applied for several new licenses in core area, expected awards 3Q 2015 Exploration program with 3 high-impact wells during 2016-2018 Significant build opportunities by farm-ins and / or company / portfolio acquisitions • • • Experienced Board and Management with success from E&P industry and the region Technical team with proven track-record Instrumental in DNO’s success in Northern Iraq, where DNO has discovered ~1bn barrels, currently producing ~125,000 boepd gross Significant interest from international companies to partner up with OPC for exploring the Zagros trend in Turkey • • • • • Stable business environment; new oil law in full effect from June 2014 Very attractive fiscal terms for E&P: Value of 1 barrel in Turkey equivalent to more than 5 barrels in Northern Iraq Efficient and low cost oil service industry in place Access to local oil offtake market at international prices 3 OPC’s Business Idea Unlock the oil and gas potential of South Eastern Turkey OPC’s business idea is to bring its unique knowledge from Northern Iraq to Turkey and pursue the extension of the giant Iraqi oil fields Iran Bati Raman >200 mmboe Tawke >750 mmboe Exploration wells: Turkey 1900-1980: <50 1980-2004: 10-20 Since 2005: <10 Atrush & Swara Tika Syria Iraq OPC Licenses License Applications Fields and discoveries Oudeh Souedieh Karatchok Shaikan >300 mmboe >1,000 mmboe >1,000 mmboe >300 mmboe Exploration wells: 1900-1980: 28 1980-2004: 0 Since 2005: >100 4 OPC’s Business Plan Strong position in a proven petroleum province • Onshore South East Anatolian Basin – the targeted core area – Focus on low cost onshore oil and gas opportunities – Low cost exploration and development – Projects with break even oil prices of less than 30 USD/bbl TURKEY Cizre/Cavushan IRAN Yazman • Regional focus – Target the Iraqi oil field trend that extends into the SE Anatolian Basin of Turkey – Proven oil and gas province – Several major discoveries in the last 5-10 years Hakkari Bakuk South SYRIA Idil IRAQ • Team – Utilize the team’s experience from the Zagros fold belt – First team to move from the successful exploration area in Northern Iraq to South East Turkey • Turkey – – – – – Highly competitive fiscal regime Well developed oil and gas infrastructure Strong service industry presence Strategically located for oil and gas export to Europe High domestic demand for oil and gas Portfolio overview License Interest Operator Basin P50 gross resource Cizre 100% OPC SE Anatolia 250 Cavushan 100% OPC SE Anatolia 75 Yazman 100% OPC SE Anatolia 103 Idil 50% TransAtlantic (50%) SE Anatolia 25 Bakuk S. 25% Tiway Oil (25%) SE Anatolia 35 Hakkari* 10% Tiway Oil (90%) SE Anatolia 252 ** Three licenses, OPC with option to increase to 15% 5 E&P Business Environment in Turkey World leading incentives and fiscal regime • Stable business environment with attractive fiscal terms OilCo’s share of revenue in Turkey vs N. Iraq** – Royalty rate 12.5%, Corporate tax rate 20%* – Value of 1 barrel in Turkey typically equivalent to > 5 barrels in Northern Iraq • Cost of operating in Turkey is very competitive – Low production rates from wells in mature basin require low cost services to be economical – Drilling of exploration wells in Turkey typically costs one third of a similar well in Northern Iraq • Existing infrastructure with immediate access to international market and prices – Infrastructure in place with export pipelines to the Mediterranean – Enables fast track development of new discoveries • New oil law from June 2014 provides new opportunities – New license applications accepted since June 2014 – Aims to attract international E&P companies to Turkey *OPC is a Norway incorporated limited liability company subject to 5% withholding tax 6 Core area infrastructure Exploration in proven oil province with well developed infrastructure Plains Raman OPC Licenses Prospects Oil Fields Domestic Oil Pipeline Gas Pipeline International Oil Pipeline Pumping station East Saddak – 40km from Cizre Bati Raman Road distance Cizre to Batman Refinery: 175 km Caliskan – 30km from Cizre Tawke – 50km from Cizre Camurlu 70km from Cizre Karatchok – 40km from Cizre Souedieh – 50km from Cizre Oudeh 75km from Cizre 7 The Opportunity • Opportunity to invest in a proven oil province – – – – – – – – • Good access to a low-cost and well established service industry A ready local market paying world market prices Oil source rock present in OPC's core area; high probability of commercial discoveries Low-cost development of discoveries; main cost is drilling of wells Robust investment case with prices below USD 50/bbl Money back if a 3 well program only yields one small discovery (<5 mill bbl) with oil prices down to USD 50/bbl 3x plus return on equity with one discovery of 10-20 million bbl Discoveries break even at below USD 30/bbl Elise-1 well site in Siraseki license Seismic acquisition on the Hakkari license Opportunity to position in a low price environment – Robust case at USD 50/bbl; opportunity to ride the oil curve going forward 8 Agenda Table of contents: 1. The opportunity 2. The team 3. Asset portfolio and strategy for growth Elise-1 well site in the Siraseki North license 9 OPC Team Svein Arild Killingland, CEO – 32 years experience • • • Business development and management experience from a 25 years career with Statoil, in Norway and internationally Since 2008 management positions in the E&P start-up Revus, Wintershall, as well as senior partner in private equity company HitecVision CEO of small-cap E&P company Noreco 2013-14 Peter Keller, Exploration Manager – 28 years experience • • • • Technical and managerial experience from Amerada Hess, PGS, Det Norske and DNO Responsible for two discoveries in MENA of 80 mmboe and 500 bcf / 60 mmboe Chief Geologist for field evaluations of the major Tawke field in Northern Iraq Mr. Keller holds a PhD in Geophysics. Educated at the ETH-ZH in Switzerland and the UC-Berkeley in USA. Tore Flikka, Senior Petroleum Engineer – 12 years experience • • • Heavy oil field optimization, offshore supervision as production engineer, well-test engineer for more than 30 DST operations, including onsite supervision, planning of drilling operations and business development Past experience from Chevron, Britannia Operator Limited and DNO International Mr. Flikka holds an MSc in Petroleum Engineering from the Norwegian University of Science and Technology 10 OPC Board of Directors Tore Nyhus, Chairman of the Board • • • Certified Auditor with 18 years experience as Managing Partner for various companies providing auditing and consulting services Chairman of the board or board member in several companies, including Visena and Compello Mr. Nyhus is a Certified Auditor from Norwegian Business School in 1987 Knut Åm, Board Member • • • 40 years of experience in the international oil and gas industry including senior managerial and executive positions with ConocoPhillips and Statoil. Chairman of the board or board member in several companies like Statoil, Revus, Hitec and NPC. Mr. Åm has an MSc in technical geology and geophysics from NTH in 1967. Atle Andresen, Board Member 30 years experience in Oil and Service companies in Norway and internationally, Currently CEO of AGR Energy AS Christian Thjømøe, Board Member 30 years experience from various leading managerial and board positions in international companies like PwC, Elkem, Jøtul, and Selvaag Gruppen. Jon Daniel Nesje, Board Member More than 20 years in managerial positions within the oil industry from companies such as Safetec, CorrOcean and AAK Group 11 Agenda Table of contents: 1. The opportunity 2. The team 3. Asset portfolio and strategy for growth Elise-1 well site in the Siraseki North license 12 Current portfolio and New license applications Building the portfolio to critical size Siirt Lead Potential of 20-60 million bbl North Cudi trend and Tuzcular lead Potential of >100 million bbl each Cizre/Cavushan Potential of >100 million bbl Tawke – Idil – Bakuk trend Potential of >300 million bbl OPC Licenses OPC Prospects OPC License Applications Fields and discoveries Leads Play Concept & Trends 13 License N48-b1, b4 - "Cizre" Highlights – Large surface structure equivalent to Caliskan discovery – Caliskan discovery in same geological setting – Part of same basin as Caliskan, Tawke and Peshkabir Exploration History – Good 2D seismic cover in the southern part of the block. Little 2D seismic in the northern block. – No wells have so far been drilled in the block. However, the block is surrounded by some exploration wells, several with oil and gas shows. – The Caliskan-1 discovery, approx. 30 km to the East, is promising for the play. It’s reservoir and structural setting is equivalent to the main prospect of the Cizre license. – Several major oil fields in adjacent areas of Syria and Northern Iraq Five year exploration phase* 1. 2. 3. 4. 5. 100km regional 2D seismic, 1 well 100km2 3D seismic One well to ~4000m Review all data, plan next well One appraisal/exploration well *The license is expected to be explored in conjunction with the adjacent Cavushan Volume Estimates Prospects mmboe P10, P50, P90 Cizre I. - Cretaceous – Mardin Fm. 64, 167, 437 Cizre I. - Jurassic/Triassic – Cudi Fm. 24, 76, 156 14 License N48-a2 - "Cavushan" Highlights – Cavushan-01 well (184) produced 38 API oil from Cretaceous – Part of same basin as Caliskan, Tawke and Peshkabir Exploration History – 2D seismic in the southern part of the area – Cavushan-1, was drilled in 1984 to a TD of 2800m MD in the Triassic Bedinan Formation, and tested some oil in the Late Cretaceous section – Several major oil fields in adjacent areas of Syria and Northern Iraq Five year exploration phase* 1. 2. 3. 4. 5. 60km regional 2D seismic One well to ~3500m 40km infill 2D seismic One well to ~4500m Review all data, plan further work * The license is expected to be explored in conjunction with the adjacent Cizre license Volume Estimates Prospects Cavusahan FW. – Mardin Fm. mmboe P10, P50, P90 20, 44, 82 Cavushan HW – Cret. – Mardin Fm. 4, 8, 16 Cizre I. - Cretaceous – Mardin Fm. 6, 16, 43 (on block*) Cizre I. - Jurassic/Triassic – Cudi Fm. 2, 7, 15 (on block*) 15 License N47-a3 ("Yazman") Dirsekli discovery Highlights Extension of Bakuk anticline, with Bakuk Gas field 2014 discovery Dirsekli about 6 km to the East On trend with major discoveries in Syria and Northern Iraq Block is part of strategy to position on Bakuk trend N47-a3 Bakuk trend N47-a3 – – – – A Bakuk field Exploration History – No seismic on the block – No wells drilled on the block – The area is surrounded by oil fields and exploration wells, several with oil and gas shows – Several large fields on the foreland to the South, both in Turkey and Syria Five year exploration phase 1. 2. 3. 4. 80 km 2D seismic Review all data, plan well One well to ~2500m (Mardin) 50 km2 3D seismic 5. One well to ~2500m (Mardin) Dincer field A’ Camurlu field A’ A Volume Estimate Lead Mmbo / BCF P10, P50, P90 Bakuk Trend – Mardin Fm. (Gas) 26, 58, 127 Bakuk Trend – Cudi Fm. (Oil) 18, 45, 107 Bakuk trend 16 Hakkari licenses Part of the Iraqi Zagros play Gross resources (mmboe) Prospect Turkey P90 P50 P10 PoS Hakkari A Jurassic 19 43 95 12% Hakkari B Cretaceous 27 62 138 16% Hakkari B Jurassic 7 Iran Iraq Hakkari B Hakkari A Shireen 22 65 12% Swara Tika Atrush Bakrman Bijeel Hakkari B Hakkari A Shireen Swara Tika Bakrman Atrush Bijeel 17 Farm-in and acquisition opportunities Building the portfolio to critical size Tavan structure (IPEK) Potential of >20 million bbl Birini and Botan structures (AME) Potential of >20 million bbl Cudi structures (Calik) Potential of >100 million bbl Keliktepe, Gercus and Softek structures (Perenco) Potential of >100 million bbl OPC Licenses OPC Prospects OPC License Applications Fields and discoveries Leads Play Concept & Trends 18 Investment highlights World class E&P opportunity profitable below USD 30/bbl Exploration on trend with Northern Iraq Strong team with proven track-record from Northern Iraq Turkey: Politically stable and set for low cost E&P • • • • • • Exploration acreage on trend with giant discoveries in Iraq and Syria Prospects mapped with resources up to 500 mmbbl Currently holding 6 licenses with ~475 mmboe net prospective resources Applied for several new licenses in core area, expected awards 3Q 2015 Exploration program with 3 high-impact wells during 2016-2018 Significant build opportunities by farm-ins and / or company / portfolio acquisitions • • • Experienced Board and Management with success from E&P industry and the region Technical team with proven track-record Instrumental in DNO’s success in Northern Iraq, where DNO has discovered ~1bn barrels, currently producing ~125,000 boepd gross Significant interest from international companies to partner up with OPC for exploring the Zagros trend in Turkey • • • • • Stable business environment; new oil law in full effect from June 2014 Very attractive fiscal terms for E&P: Value of 1 barrel in Turkey equivalent to more than 5 barrels in Northern Iraq Efficient and low cost oil service industry in place Access to local oil offtake market at international prices 19
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