Growth through the Drill Bit

Transcription

1 Growth through the Drill Bit Holdings Limited 2009 Annual General Meeting 23 November 2009 Samuel Snyder Chairman Stephen Lyons Managing Director Disclaimer This presentation is being provided for the sole purpose of providing the recipients with background information about Sino Gas & Energy Holdings Limited (SEH). No representation, express or implied, is made as to the fairness, accuracy, completeness or correctness of information contained in this presentation, including the accuracy, likelihood of achievement or reasonableness of any forecasts, prospects, returns or statements in relation to future matters contained in the presentation ( forward-looking statements ). Such forward-looking statements are by their nature subject to significant uncertainties and contingencies and are based on a number of estimates and assumptions that are subject to change (and in many cases are outside the control of SEH, its Directors and Officers) which may cause the actual results or performance of SEH to be materially different from any future results or performance expressed or implied by such forward-looking statements. This presentation provides information in summary form only and is not intended to be complete. It is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any particular investor. Due care and consideration should be undertaken when considering and analysing SEH s financial performance. All references to dollars are to Australian Dollars unless otherwise stated. To the maximum extent permitted by law, neither SEH nor its related corporations, Directors, employees or agents, nor any other person, accepts any liability, including, without limitation, any liability arising from fault or negligence, for any loss arising from the use of this presentation or its contents or otherwise arising in connection with it. This presentation should be read in conjunction with other publicly available material. Further information including historical results and a description of the activities of SEH is available on our website The statements of resources in this presentation are based on estimates in the Technical Report prepared by RISC Pty Ltd and included in full in the Company's Prospectus dated 29 July The Report was prepared by RISC Pty Ltd, in accordance with the Society of Petroleum Engineers (SPE) Petroleum Resource Management Systems standard.

2 11/23/09 Highlights of a successful year Successfully listed on the ASX raising $7.9m Significant resource & value growth from our work programs Moved to a 100% interest on the Linxing ProducHon Sharing Contract (PSC) 3 Driving strategic growth through the drill bit Moving to prepare the ODP1 on Tuban prospect Commencement of the 2009/2010 work program (1)ODP refers to the Overall Development Plan required in China to take a project through to development 4 2

3 Growth through the Drill Bit Highlights China s Outlook Strategic Growth Successfully listed on the Australian Stock Exchange (ASX) Successfully listed on the ASX - 15 Sep 09 Raised $7.9m gross: rights and ophons issue Strong support from exishng & new shareholders PosiHons company for future growth

4 Acreage located in the 2 nd largest basin in China Basin - 30% of China s oil & gas produchon Sino Gas 100% 1 in 2 PSC s > 3,700 km 2 Partner with CUCBM & Petrochina CBM (1) Gross Working Interest during exploration phase. Government partners have right to back in to between 30% to 50% in development and production Acreage close to exishng gas fields and markets

5 Driving substanhal increases in resources TUBAN TGS Discovered Area 900 BCF (P50, 100%) TB-06 TB-05 Extensive appraisal: 11 wells, 414km seismic, core evaluahon, frac & tests, subsurface studies TB- 05 & TB- 06 conceived to drive resource posihon Work was well executed and delivered on plans RISC 1 confirmed conhngent resources increase to 900Bcf in Discovered Area (1) Source: RISC Technical Report July 2009, included in the company s Prospectus dated 29 July 2009 Established large gas resources Independently Verified TGS Resource (100%) 1,2 ExploraHon success has established substanhal independently verified conhngent and prospechve resources 2.7Tcf (100%) at P50 (mid) Progressively upgrading ConHngent Resources to Reserves Expected monetary value (independently verified) of A$512m 1,2 TGS Resources - Bcf P90(low) P50(mid) P10(high) Contingent Resources Prospective Resources (1) Source: RISC Technical Report July 2009, included in the company s Prospectus dated 29 July 2009, Resources classification as per Society of Petroleum Engineers (SPE) guidelines, P90 - low case, P50 - mid case, P10 - high case. (2) SGE has 100% of the gross working interest in the Linxing PSC and is formalising the take-up Chevrons 50% interest in the Sanjiaobei PSC. Figures represent SEH s share of recoverable resources (C + P) after completion of take-up.

6 11/23/09 Delivered on a 2- year extension on the Linxing PSC 2 year extension of explorahon period on the Linxing PSC Approved by the Ministry of Finance & Commerce Approval is a testament to the strength of the relahonship with our government partner Formalises 100% increase in Linxing PSC asset posihon 11 China s economy conhnues to grow China s 2009 GDP target of 8% is on track Infrastructure spend should benefit our projects Gas prices of around US$5.46/Mscf and expected to rise further support our economics & industry growth 12 6

7 The gas sector in China is evolving China s focus is on clean energy natural gas is a key component Government incenhves are provided for CBM development M&A achvity increasing in China Resources to Reserves Upgrade Program in Place TB Mscf/d TB Mscf/d 50 km 2 Sweet Spot TB-07 Similar sand intervals as CNPC s Mizhi field which produces average flow rates between 350-1MMscf/day IdenHfy a 50 km 2 area sweet spot within Tuban Discovered Area to take through to commercial development and reserves cerhficahon TB Mscf/day, TB Mscf/day TB- 07 now drilled Provides foundahon for mulhple well produchon pilot program at commencement of field development

8 Reserves upgrade program has commenced TB- 07 inihal results are encouraging TB- 07 reached TD on 21 Nov 09 Logs confirmed gas hydrocarbon shows in key He8 and Taiyuan sand stones Reserves upgrade program conhnues

9 Booking reserves is a key value driver Market Capitalisation V s Underlying Asset Value 1,2 TargeHng Bcf 2P reserves by late 2010 Reserves submission is part of the Chinese ODP Working the strategy outlined in Prospectus Unwinds risking factors which should drive shareholder value AUD $ Millions Market 20 Nov 09 EMV (risked value) (1) Source: RISC Technical Report July 2009, included in the company s Prospectus dated 29 July Figures represent SEH s Expected Monetary Value (EMV) - a risked discounted cashflow after completion of take-up. (2) SGE has 100% of the gross working interest in the Linxing PSC and is formalising the take-up Chevrons 50% interest in the Sanjiaobei PSC. Growth through the Drill Bit Any questions? Samuel Snyder Chairman Stephen Lyons Managing Director

10 Appendix: - snap shot Australian gas explorahon company Pormolio of gas assets in China Extensive explorahon and appraisal achvity undertaken on gas assets over the past four years CompleHng appraisal program with the aim of moving to development Responding to the growth opportunihes and structural changes in China as the country focuses on clean energy ASX listing Sep 09 ASX code SEH Price on 20 Nov 09 $0.19 Market capitalisation $28.4m Shares on issue 149.2m Options on issue 86.5m Cash at 31 Oct 09 $6.9m Debt at 31 Oct 09 $14.1m Glossary Bcf - Billion (10 9 ) cubic feet/ Tcf - Trillion (10 12 ) cubic feet CBM/CSG Coal Bed Methane, Coal Seam Gas Mscf Thousands of standard cubic feet of gas Mscf / day Thousands of standard cubic feet of gas per day a measure of the rate of flow GJ gigajoule / PJ petajoule P90, P50, P10 90%, 50% & 10% probabilihes respechvely that the stated quanhhes will be equalled or exceeded Reserves Reserves are those quanhhes of petroleum anhcipated to be commercially recoverable by applicahon of development projects to known accumulahons from a given date forward under defined condihons. Reserves must further sahsfy four criteria: they must be discovered, recoverable, commercial, and remaining (as of a given date) based on the development project(s) applied as defined in the SPE- PRMS. Prospec=ve Resources Those quanhhes of petroleum that are eshmated, as of a given date, to be potenhally recoverable from undiscovered accumulahons as defined in the SPE- PRMS POS Probability of Success SPE- PRMS Society of Petroleum Engineers, American AssociaHon of Petroleum Geologists, World Petroleum Council and Society of Petroleum EvaluaHon Engineers Petroleum Resources Management System TGS Tight Gas Sandstone (typically permeability less than 1 md) Conversion factors: Coal seam gas - 1 Bcf = 1.045PJ; 1TCF = 10,450PJ, 1m 3 of gas = 35.3 scf of gas

11 For further informahon please contact Stephen Lyons Managing Director P: M: E: gas- energy.cn Investor RelaHons Ronn Bechler Market Eye P: M: eye.com.au