Clean Energy For the MENA Region s Tomorrow

Transcription

1 Clean Energy For the MENA Region s Tomorrow Dana Gas Investors Presentation September 215 1

2 Forward Looking Statement This presentation contains forward-looking statements which may be identified by their use of words like plans, expects, will, anticipates, believes, intends, projects, estimates or other words of similar meaning. All statements that address expectations or projections about the future, including, but not limited to, statements about the strategy for growth, product development, market position, expenditures, and financial results, are forward looking statements. Forward-looking statements are based on certain assumptions and expectations of future events. The Company, its subsidiaries and its affiliates (the Companies ) referred to in this presentation cannot guarantee that these assumptions and expectations are accurate or will be realised. The actual results, performance or achievements of the Companies, could thus differ materially from those projected in any such forwardlooking statements. The Companies assume no responsibility to publicly amend, modify or revise any forward looking statements, on the basis of any subsequent developments, information or events, or otherwise. 2

3 Presentation Outline Increasing role of gas in MENA Dana Gas Business Profile Country Operations Egypt, KRI and UAE Valuation and Credit Metrics Summary 3

4 Carbon Intensity (tco2 per MWh) Full Life Cycle Cost (USD / boe) Gas is the growth fuel of the 21 st Century. It has strong environmental credentials, is cost competitive, is accessible and available in abundance Current full lifecycle costs for new-build power generation including externalities (USD per boe) c. 1% utilisation of capacity c. 2% utilisation of capacity Solar PV Solar PV (Germany) (South USA) Huge global conventional and unconventional gas resources 25+ years of gas resources at 212 global demand levels Europe 5% Asia Pacific 18% Former Soviet Union 26% Latin America 8% North America 16% c. 825 tcm Middle East + Africa 27%? Not yet working at scale CCS Coal OECD 36% c. 35% utilisation of capacity Offshore wind Other 15% Subject to supply price uncertainty Biomass Inciner. Qatar 5% Nigeria 1% Other FSU 3% LatAm Left China, other ME 13% Algeria Iran 2% 5% Turkmen. 2% Russia 18%?? No full cycle cost audit Nuclear (EPR) Openness of gas industry % of 213 gas production Fall in oil price has brought its price below renewables and more into line with gas prices c. 25% utilisation of capacity Onshore wind (UK) New Hard coal New LEA price range Oil in Jul 214 Oil in Dec 214 CO2 emissions of various fuels in power generation or save extra 3% in uncertain future at very high cost Nuclear Biomass Offshore Wind Save 6% today at low cost Gas Coal / Coal CCS Gas Coal CCS 4

5 Primary Energy Demand, bcme pa Total Gas Demand Growth since 23 Middle East gas demand is poised for continued growth as the region s population and economy grows in coming decades GDP, USD bn 3,5 3, 2,5 2, 1,5 1, GDP Growth of Middle East 1 CAGR: 8.2% Primary Energy Demand of Middle East 1 Gas Other Gas CAGR: 4.5% Regional Gas Demand Growth in Last Decade 5% 45% 4% 35% 3% 25% 2% 15% 1% 162 Gas is 5% of regions Energy Mix in Gas Demand (bcm pa) % 5% 49% 5% 53% Middle East comprises: Bahrain, Iran, Iraq, Jordan, Kuwait, Lebanon, Oman, Qatar, Saudi Arabia, Syria, UAE, Yemen Source: IEA, IMF, BP Statistical Review % % China Middle East India Japan US EU

6 Reserves, bln boe Recent political developments may lead to improved access in future MENA region holds ca. 5% of global oil & gas reserves but with limited access. Dana Gas has established presence in both large resource plays and growth market with open access 4 Oil & Gas Proved Reserves (Source: BP Statistical Review 214) MENA Reserve Ranking 1% 9% 8% 7% 6% 5% 4% 3% 2% 1% % 1688 bln bbl Oil MENA 6558 Tcf RoW 54% 49% Gas Gas 46% 51% Open access (incl. licensing round) Oil Partially open Restricted access (no open/direct access for independent oil companies) or geopolitical concerns 5 1. KRI reserves as estimated by Ministry of Natural Resources of KRG: Oil at 45bln bbls & Gas at 1tcf 6

7 213 Gas Demand, bcm pa Proved Gas Reserves, tcm Dana gas as regional gas integrated player focused on matching resource with markets Iran Qatar Iraq (Incl. KRI) Gas Resource Holders in Middle East (incl. Egypt) (Total Reserves: c. 82 Tcm) Incl. KRI resource estimates Saudi Arabia United Arab Emirates Based on IHS estimates approx. 6% of ME resources are associated gas Access to Private Capital Open Potentially Open Closed/inaccessible Egypt Kuwait Oman Yemen Syria Gas Demand in Middle East (incl. Egypt) (Total Demand: c. 473 bcm pa) Iran Saudi Arabia United Arab Emirates Egypt Qatar Kuwait Bahrain Oman Yemen Syria Iraq (Incl. KRI) Source: BP Statistical Review 214, EIA 7

8 Dana Gas Business Profile 8

9 Dana Gas: Independent E&P company listed on the ADX Dana Gas is a MENASA focused gas independent headquartered in the UAE Dana Gas is operating at the heart of the World s Largest Hydrocarbon region Dana Gas is quoted in the Abu Dhabi Securities Exchange. Bloomberg: DANA:UH Shares outstanding: c million Market capitalisation: approx. $ 95 million Enterprise value: $ 1.6 billion Average Daily Traded Volume: 15% of ADX Net Debt/(Cash) 1 : $ 595 million (215 H1) Current Production: 67,2 boepd (215 H1) 2P Reserves 2 : 145 mmboe Strong Corporate Governance structure and a unique pan-mena Board of Directors access to business opportunities in the world s largest hydrocarbon region 1.Total interest bearing debt less cash ( Borrowing less cash less MOL shares) 2.Includes Egypt & UAE reserves only at end of 214 9

10 2P reserves (mmboe) Dana Gas works across the gas value chain addressing both domestic and export market needs in MENA region Dana Gas is operating at the heart of the world s largest hydrocarbon bearing region Production Profile CAGR 11% Reserve & Resources (YE 214) Mid Stream and Downstream assets in MENA Business Model across the gas value chain Meeting energy needs of domestic and export markets Egypt 32 UAE EBGDCo Liquid Extraction plant (LPG) UGTC & SajGas - Gas Transportation and Processing 35% in Crescent Natural Gas Corporation Limited (CNGCL) Gas marketing 1

11 Consistent growth, delivery and financial performance since 27 Production Revenue USD Million H1 215 EBITDAX Profit After Tax 11

12 Dana Gas: Country Business Highlights 12

13 E Gas, bcm pa Population, mln Despite a challenging business environment; Egypt gas fundamentals are robust. Dana Gas to play a key role in increasing gas production in the core Nile Delta region GDP, US$ Current Prices Egypt GDP (USD bln) Primary Energy Demand (mln toe pa) Egypt Primary Energy Demand (mln toe pa) Other Renewables Coal Hydro electric Oil Natural Gas Gas consumption in Egypt in 215 expected to exceed production (LNG imports expected to fill the gap) Onshore Nile Delta steady and critical gas supply source Population (RHS) Production Consumption EGPC official (April 215): Egypt will import around $3.55 billion worth of liquefied natural gas (LNG) in the financial year Source: BP Statistical Review 214, IMF, Morgan Stanley 13

14 Gas Reserves, bcf 215 WI Production, mmcfpd Dana Gas is the 6 th largest operator and 4 th largest onshore producer in Egypt 1, e Gas Production Ranking in Egypt (* denotes company is an operator) Dana Gas Egypt Credentials: 8 th largest producer 6 th largest operator 4 th largest onshore producer Gas Reserve Ranking of Independents in Egypt EBGDCO LPG Plant (Dana Gas holds 26.4% of the project) 1.Edison holds 1% operating interest in Abu Qir, but the development is operated by a 5:5 JV with EGPC Edison not designated as operator Source: Wood Mackenzie 14

15 Egypt: Nile Delta Operations El Wastani Development Leases: Onshore acreage consisting of 14 Development Leases in the prolific Nile Delta region. Begonia, the most recently awarded lease, was approved in Jan-15 Production: 2Q 215 average of 35.1 kboe/d currently on a decline due to natural field decline. Trend to be reversed once tie-ins involving the laying of pipelines & well hook-ups associated with GPEA project are completed Operations: Begonia DL Drilling of Balsam-2 and Balsam-3 wells are in progress with results due in 4Q 15 South El Manzala Pilot hole completed on Balsam-2. Onprognosis results: 78 m of net pay in excellent quality reservoir in the primary Qawasim (QP2) objective; and 1.5 m net pay in the secondary QP1 objective * Excluding EBGDCO share of Production 15

16 Gas Production Enhancement Agreement (GPEA) helps Egypt increase production while delivering long term value to Dana Gas Gas Enhancement Project Execution Progress 3 drilling and workover rigs secured with spud dates during May/June 65 HP workover 14 activities planned, expected start date Sept / Oct HP rig - Balsam-2 15 HP rig - Balsam-3 13 km pipeline to tie new wells into DGE infrastructure Upgrade to DGE processing and export capacity from 2 to 25 MMscf/d to accommodate increased production from GPEA project in

17 Block 6 North El Arish Offshore Opportunity Integration of regional 2D multi- client seismic data into evaluation Environmental Impact Assessment completed Military approval in progress DGE ~175 sqkm of 3D seismic acquisition planned before end 215, located over the deep-water portion of the block Block 6 17

18 Newly awarded exploration blocks in Nile Delta enables Dana Gas to build on its core area production and utilising existing infrastructure Blocks 1 & 3 located adjacent to Dana Gas prolific Nile Delta development leases North El Salhiya (Block-1) and El Matariya (Block-3) onshore concessions ratified in January 215 Block-1 (1% WI) Targets prolific Abu Madi play Bids for 45-1 sqkm of 3D seismic received and under evaluation. Block-3 (5% WI) BP to operate as 5:5 JV partner Targeting the deeper, high-potential Oligocene play (proven and tested in offshore Nile Delta by BP and BG) First exploration well in Block 3 scheduled to commence drilling in 1H

19 Operations in Kurdistan Region of Iraq Gross production averaged 75,54 boepd during 1H 215 including: Gas: 317 MMSCFD Condensates: 1462 boepd LPG: 737 MTD Dana Gas has a 4% WI Dana gas saw a 6% increase over 1H 214 as a result of increased LPG production. All liquids continue to be sold in the domestic market since September 214, resulting in cash flow 19

20 4Q8 1Q9 2Q9 3Q9 4Q9 1Q1 2Q1 3Q1 4Q H1 15 Production (kboed) Rich gas and condensate producer with strong growth track record Khor Mor Field Production, Dana Gas net share (4%) 35 3 Gas Liquids(Condensate + LPG) Current Condensate Gas Ratio (CGR) on Khor Mor is c. 45 bbl/mmscf comparable to Qatar North Field CGR of 47~5 2

21 Khor Mor and Chemchemal are world class assets: potentially largest gas fields in the KRI and comparable to some of the largest gas field developments in the region Gas in Place * (in TCF) 6 Some Large Gas Developments in MENA under development 3 KhorMor + Chemchemal Miran Bina Bawi Bab Leviathan + Arabiyah (UAE Tamar -Hisbah sour) (E. Med) (Isreal) (KSA) Al Hosn (UAE sour) KRI gas fields Key MENA gas fields under development * Excludes associated liquid and oil upsides Source: Company / public disclosure 21

22 UAE: Zora Project Update Project plan for first gas in 215 with a capacity of 4 mmscfd (6,65 boepd) Offshore Pipeline precommissioning complete Offshore Platform jacket installed Drilling complete and Well stimulation ongoing Topsides pre-commissioned Onshore plant pre-commissioning ongoing Project safety performance: Zero lost time incident 22

23 UAE: Zora Project Update Offshore Trenching for the Zora Gas Pipeline 23

24 UAE: Zora Project Update Onshore Gas Plant Construction Slug Catcher Being Positioned 24

25 Dana Gas: Relative Valuations 25

26 Enterprise Value ($ bn) WI Production (kboepd) EV and Production valuation relative to peers Enterprise Value vs. Production (215E) 1 EV ($bn) 215E Production (kboepd) Source: Company Data, Bloomberg 26

27 Price/CPS (216E) Price/BPS (216E) Significantly undervalued relative to peers EV/EBITDA (216E) EV/EBITDA Mean* ~ Price/EPS (216E) P/E Mean * ~ Tullow Lundin Premier Genel P/CF 2.6 Tullow Lundin Premier Genel Dana Gas Mean* ~ Dana Gas DNO 1. DNO Lundin Tullow Genel Premier Dana Gas P/B DNO Mean* ~ Lundin DNO Tullow Premier Genel Dana Gas * European Peers mean ratio Source: Bloomberg Consensus as of 24/8/215 27

28 Relative performance (%) Relative performance (%) Dana Gas has mostly outperformed International and Middle Eastern (ME) peers since Jan 213 International Peers ME Peers 15% 2% 1% Dana Gas -2% 15% Dana Gas -2% 5% Lundin Petroleum -47% 1% DNO International -48% 5% Genel Energy -65% - Premier Oil -74% - Petroceltic -75% (5%) Tullow -86% (5%) Gulf Keystone -88% (1%) Jan 13 Jul 13 Jan 14 Jul 14 Jan 15 Jul 15 (1%) Jan 13 Jul 13 Jan 14 Jul 14 Jan 15 Jul 15 Source: Bloomberg, market data as of 24/8/215 28

29 DanaGas Africa Oil Cairn Energy Det Norske Lundin Petroleum Faroe Petroleum Cobalt Lekoil Green Dragon Soco Intl. Ithaca Kosmos Bowleven EnQuest Karoon Gas Brent Shamaran Indus gas TransGlobe Premier Oil Rockhopper DNO Tullow Oil Maurel & Prom Ophir Energy Genel Gulf Keystone Bankers Petroleum Vaalco Circle oil Seplat Kris Energy Inter oil Petroceltic Western Zagros Sterling Resources Oryx Petroleum Relative Performance Strong performance even in the shorter term (since April 215) 2% 1% Relative market performance since Q2 215 (1 st April) % -1% -2% -3% -4% -5% -6% -7% -8% -9% Source: Bloomberg, performance as of 24/8/215 29

30 Dana Gas: Credit Metrics 3

31 Additional Financial Information Dana Gas Additional Financial Metrics EBITDA (LTM) $mln 252 EBIT (LTM) $mln 149 Net Debt $ mln 595 Net Debt/EBITDA x 2.4 Interest Cover Ratio (LTM) x 2.2 Book Leverage (Net debt/total assets) x 16% Weighted Avg Years to Maturity Years 2.2 *LTM as of 2H

32 Convertible Mid Yield to Maturity Dana Gas Sukuk Instruments Dana Gas Convertible Trading Value Convertible Bond Performance Convertible Price Share Price Dana Gas Share Price, AED Convertible Sukuk: Principal amount: $352 mln Coupon: 7% (payable quarterly) Maturity: 31/1/217 Conversion price:.75 AED/sh Convertible Sukuk Yield to Maturity Conversion ratio: Ordinary Sukuk: Principal amount: $425 mln Coupon: 9% (payable quarterly) Maturity: 31/1/217 - Source: Bloomberg, market data as of 24/8/215 32

33 EBIT/Interest Expense Leverage and interest coverage ratio in line with peers 5 3 Net Debt / EBITDA Net Debt /EBITDA (LTM*) (Source: Bloomberg) DNO Dana Gas Premier Petroceltic Genel Tullow Lundin Market data as of 24/8/215 EBIT / Interest Expense (LTM*) (Source: Bloomberg) Dana Gas Premier DNO Genel Lundin Tullow Petroceltic 33

34 Debt/Common Equity Book gearing and Leverage comparable to industry peers 6 Debt/Total Assets Debt to Book value of Assets (Source: Bloomberg) Lundin Premier Petroceltic Tullow Dana Gas DNO Genel Debt to Book value of Equity (Source: Bloomberg) Lundin Premier Tullow Petroceltic DNO Dana Gas Genel 34

35 Reserve Life, Years Reserve life c. 2 x average year to maturity of Debt 8 Werighted Avg Years to Maturity Debt : Average year to maturity (Source: Bloomberg) Tullow DNO Premier Genel Dana Gas Reserve Life (214 YE*) (Source: Company Data) Petroceltic Lundin Genel DNO Tullow Premier Dana Gas Source: Bloomberg, market data as of 24/8/215 Note: Dana Gas Reserve life excludes KRI production & reserves 35

36 Summary 36

37 Summary Marginal reduction in production resulting from natural field decline in Egypt despite the steep fall in oil prices Further upside potential in 215 with enhanced production following planned commencement of GPEA (Egypt) and Zora gas field (UAE) 1% production upside from Zora field development with first gas in 2H 215 Ongoing focus on collections and further lowering of G&A and other operating costs Capital expenditure remains focused on quick wins (Zora Project UAE) and strategic growth (GPEA Egypt) Under the GPEA, drilling work on the Balsam-2 development well and Balsam-3 appraisal well in Egypt have commenced and the results from both wells are due in 4Q 215 Operations in Kurdistan Region of Iraq (KRI) continue uninterrupted despite security situation with minor increases in production through process optimization Kurdistan Arbitrations Update: The Tribunal delivered a partial ruling on the 3 th June 215 that confirmed Pearl consortium s (DG 4% shareholder) exclusive, long-term rights to develop and produce gas and petroleum from both Khor Mor and Chemchamal fields for the duration of the contract, being not less than 25 years, as well as the KRG s contractual obligation to pay the consortium for the produced condensate and LPG at international prices including the pricing methodology for each. 37

38 Reach Us: Dana Gas PJSC P. O. Box 211, Sharjah, UAE rsingh@danagas.com Direct : Fax :