David Dix Executive Chairman 21 October 2010 ASX Small Mid Caps Conference Hong Kong
ASX Small Mid caps Conference October, 2010 DISCLAIMER 2 Although appropriate care has been taken in the preparation of this presentation, no representation or warranty is given as to the accuracy or completeness of the information contained herein. This presentation may contain forward looking statements that are subject to risk factors associated with oil and gas businesses. There is extensive interpretation and speculation in this presentation. It is believed that the expectations reflected in these statements are reasonable, but they may be affected by a variety of variables and changes in underlying assumptions which could cause actual results or trends to differ materially including, but not limited to, price fluctuations, actual demand, currency fluctuations, drilling and production results, reserve estimates, loss of market, industry competition, environmental risks, physical risks, legislative, fiscal and regulatory developments, economic and financial markets, project delay or advancement, approvals and cost estimates. All references to dollars, cents or $ in this presentation are to Australian currency, unless otherwise stated.
AED OVERVIEW Block L Brunei Effective interest: 50% Operator: AED Oil Lukut-1 Drilled, hydrocarbons identified Lempuyang-1 Drilled, hydrocarbons identified Jerudong, potential re-development Puffin & Talbot Fields Australia Effective interest: 40% Operator: Sinopec Current processing of new completed 3D seismic Proven oil reserves: 28MMbbls (P50) Corporate Current stock is 201,321,320 ord. shares Market cap (15 Oct, 2010) using a trading price of $0.48 is $96,634,234 9% SGX-listed convertible notes $US 21,217,500. Put date Feb 2011 at $0.61 6% private convertible notes $US20,000,000. Put date March 2013 at $0.67 Bank debt: Nil Cash on Hand: Approx. $50m 3 Rombebai PSC Indonesia Effective interest: 100% Operator: AED Oil Gross reserve potential: In excess of 7Tcf (P50) gas-in-place - Upside potential well in excess of current estimate - Potential for significant oil discovery 2D Seismic - Farm-out process continuing South Madura PSC Indonesia Effective interest: 60% Operator: SMEC (Cooper Energy) Gigir East-1 drilled Focus on deeper targets
4 Brunei, Block L World Class Oil and Gas province AED is the Operator Effective Interest - 50% Lukut-1 Exploration well - Complete Lempuyang-1 Exploration Well Complete, and ready for testing Jerudong Re-development potential JV partners: Kulczyk Oil Ventures (40%) and QAF Oilfield Services (10%) Onshore prospect
WHY BRUNEI? 5 Proven oil and gas province Brunei is currently Asia s third highest producer. Underexplored minimal on-shore exploration activity during the past 20 years. High drilling success rates historical rates in Brunei are very high relative to other regions. Low drilling costs due to largely on-shore acreage location of Block L and ready access to services and contractors. Excellent access to existing infrastructure means a timely and inexpensive path to commercialisation for any successful discoveries. Improved seismic and drilling technologies provide enhanced opportunities Block L covers approximately 1/3 of Brunei, approximately 2,200km².
LEMPUYANG PROSPECT 6 1. Identified multiple stacked reservoir 3. Future testing programme TARGET Top set deltaic packages sands identifying hydrocarbons 2. Interpreted as part of a larger complex of 5 fault blocks larger fault blocks with approx 240 bcf potential (P50) and, with possible condensate to confirm potential discovery 4. Additional well required to confirm potential of other fault blocks. TARGET FORMATION TARGET AGE TRAP RESERVOIR Lower/Upper Belait Formation Middle-Upper Miocene Amplitude supported, 3 way fault closure Coarsening upwards deltaic sandstones Structure Map Block Block L L Lempuyang-1 Fault Block-3 Fault Block-1 Fault Block-2 Fault Block-4 Fault Block-5
LEMPUYANG PROSPECT CROSS SECTION 7 Lempuyang-1 Red Sand Orange Sand Blue Sand Pink Sand Green Sand Faults Well Fault Block 1 Fault Block 2 Fault Block 3 Fault Block 4 Fault Block 5
LEMPUYANG-1 GR Res CNCF/ZDNC Mud Log 8 GR Depth Target Zone Hydrocarbons are interpreted in Blue, Pink and Green Gas Show The JV plans to test at least three of these intervals Significant gas kicks at 2867 mmd (Total Gas >35%) Gas and cuttings show throughout the drilled section X800 from 1430 mmd Gas Kick Gas Show Gas Show Gas Show DRILLING: Actual X000 Gas Show Spud date 15 Jul, 2010 Total depth 3220 mmd (2817mTVD) Gas Show Actual Days 88 days* Gas Show Drilling design Deviated well (Max inc 42 ) Cost Approx. US$12.8 million* Gas Kick X200 Gas Show
LUKUT PROSPECT 9 Block L Lukut-1 TARGET Near shore, deltaic packages TARGET FORMATION Lower/Upper Belait Formation TARGET AGE TRAP RESERVOIR Middle-Upper Miocene Up/Down thrown fault block Shallow water, coastal plain, lower plain to delta front sandstones 1. Identified multiple reservoir sands with some laminated sands 2. Future testing programme to confirm potential discovery
LUKUT-1 Proposed Test 2 10 Caliper GR Depth Res Porosity Gas Log C5 C3 C1 Ten intervals of interest defined The joint venture plans to test up to three intervals Fluorescence observed at 1687 and 2129 mmd Gas Show Gas shows from 1173 mmd to TD Gas Show DRILLING: Actual Spud date 2 May, 2010 Total depth 2366 mmd (2280 mtvd) Drilling time Approx. 50 days* Drilling design Deviated well (max inc 24 ) Dry hole cost Approx. US$9 million*
JERUDONG OIL FIELD 11 Near term production opportunity The Jerudong Field discovered oil in 1955/56 with Jerudong-2 (the first success in Brunei Darussalam outside the Seria field). 2D seismic Interpretation Jerudong-6 (1956) discovered gas Jerudong-9 (1957) - a twin hole slightly updip from Jerudong-2, discovered oil and Jerudong-3 gas Between 1956 and 1962, the field produced 628,000 bbls Jerudong-2 Jerudong-9 Jerudong-6 The field was shut-in in 1962 for political reasons Jerudong-11 (1987) - discovered a 12 m net gas sand in a very complex part of the structure
FUTURE EXPLORATION 12 High impact exploration and exciting long term growth potential Proven oil and gas province Brunei is currently Asia s third highest producer Multiple play types and numerous leads and prospects Modern 3D seismic available and addition new seismic Little recent exploration activity means significant advancements in exploration are yet to be utilised High drilling success rates (typically 1 in 3) Leads and prospects resources of 1.0tcf gas (P50) Drill two onshore exploration wells, each to a minimum depth of 2,000 metres. Phase 1 Exploration Programme Aerial gravity/magnetics survey Basin Study These studies will assist in directing future seismic acquisition and drilling programmes Phase 2 Exploration Programme Acquire and process at least: - 500 kilometres of onshore 2D seismic data - 500 kilometres of offshore 2D seismic data; Acquire and process at least: 150 square kilometres of offshore 3D seismic data (or dollar equivalent amount of 2D seismic data)
CONCEPTUAL DEVELOPMENT AREAS 13 Near-term development potential portfolio First gas planned for 2014 Close to BLNG, BMC and local power station markets Low cost drilling and development given Block L Central Development Area Offshore Development Area Northern Development Area onshore location Anticipated strong production of >70 mmcf/day generating significant cash flow Southern Development Area Access to high demand gas markets
BLOCK L Southern Conceptual Development Plan 14 Costs - USD Drilling: $10-14m (drilling & complete) Production of 70m scufs /day Processing: $130m (150tj/day) Pipeline: $60m Valve & Metering: $20m Operations: $46m (10 year production) Contingency: +- 25% Total: Approx. $300m Revenue: $150m per year* The price is based on 3 scenarios (BLNG, BMC, local power station)
GAS MARKET 15 Brunei LNG plant Potential Gas Export Pipeline (40km - Follows Existing Roads) BLNG Brunei Methanol Plant BMP Small facility (including separator and future compressor) located near Lempuyang-1 well site Proposed pipeline to Brunei LNG Plant 40 kms The price is based on 3 scenarios (BLNG, BMC, local power station)
16 Indonesia Rombebai PSC AED Interest 100% South Madura PSC AED Interest 60 %
ROMBEBAI PSC 17 Potential world class resource of 7 tcf+ of gas and/or equivalent oil. Additional potential reservoir level Large Contract Area of 5,795 sq kms. Frontier exploration, remote location with exciting potential. Numerous oil and gas seeps. 2D Seismic Coverage 5 exploration wells drilled in the past. Gas shows in 4 wells. Oil shows on Gesa-1, 2 wells tested (DST) and flowed gas 3 year license extension currently under negotiation with Indonesian Authorities First well on Gesa structure Kare-1 is planned to be drilled in 2011 Farm out in process to seek a Joint Venture Partner. Subsequent to license extension Macquarie Capital Advisors appointed. Data room opened in Jakarta, a number of major companies through the Data Room Very good relationship with MIGAS / BPMIGAS
SOUTH MADURA PSC 18 A number of near term shallow targets with low cost drilling and potential for rapid economic development South Madura Contract Area Power station on Madura Island Compliance well, Gigir East-1 completed in August 2010 2D Seismic Focus will be on additional deeper targets with higher resource potential South Madura PSC Oil Field Gas Field
19 Australia, Puffin & Talbot Joint venture between AED (40%) and Sinopec (60%) Sinopec is the Operator Located in the Timor Sea
PUFFIN AC/L6 & TALBOT FIELDS 20 Sinopec acquired 60% for $600m in July 2008 Reserves: 28 MMbbl on a P50, 100% basis. Production approximately 2mmbls ceased in May 2009 due to FPSO safety and environmental concerns 3D seismic re-processing on AC/L6 completed. Interpretation in progress. Leads and Prospects to be matured in parallel with Screening Development Studies.
PUFFIN - AC/P22 21 Joint Venture Sinopec 60%, AED 40% Great Auk-1 discovered gas/condensate (2009) Potential southern migration pathway Increase prospectivity in Prion area, big structure high quality sands Cartier 3D seismic survey acquired over AC/P22 has been completed and is currently being processed and data expected in late 2010 Interpretation due in early 2011 Undiscovered Resources* Prion Area Ashmore Platform Prion Structure Paqualin Graben Puffin Horst Swan Graben Location Unrisked OIIP Category SW Prion AC/P22 215 Lead NW Prion AC/P22 9 Lead N Prion AC/P22 11 Lead Montara Terrace NE Prion AC/P22 79 Lead Great Auk-1 Prion Structure AC/P22? Lead TOTAL 489 Woodbine Graben 3 * P10 estimates
CONCLUDING REMARKS 22 Drilling success and commitment to phase 2 in Brunei, proceeding to flow test Lempuyang and Lukut for 2014 production Exciting short term development potential with Jerudong 2012 and medium term potential with Southern Field Development (2014) A strong balance sheet Puffin and AC/P22 may produce significant opportunities post seismic shoot in a proven province with good sands, reinterpretation. Mature Leads and Prospects in parallel with Screening Development Studies. Continue our transformation and positioning of AED to become an important player in South East Asia zone for future but prudent growth and revenue generation.
Thank You 23