AWE Limited Asian Roadshow Presentation June 2012
Disclaimer This presentation may contain forward looking statements that are subject to risk factors associated with the oil and gas businesses. 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 market conditions in various countries and regions, political risks, project delay or advancement, approvals and cost estimates. All references to dollars, cents or $ in this presentation are to Australian currency, unless otherwise stated. The reserve and resource information contained in this report is based on information compiled by David Gaudoin (General Manager, Exploration and Geoscience) and Ian Palmer (General Manager Development). Mr Gaudoin is a petroleum geologist, holds a Masters Degree in Petroleum Geology, and has 22 years experience in petroleum exploration. Mr Palmer holds a Bachelor Degree in Engineering and has 31 years experience in the practice of petroleum engineering. Both have consented in writing to the inclusion of this information in the format and context in which it appears. Slide 2
For personal use only Agenda Introduction AWE snapshot AWE assets Reserves and Resources Progress on key assets Shale gas opportunities Exploration objectives Ande Ande Lumut and Anambas projects in Indonesia Growth options and strategy Slide 3
Australian based, Asia and US focused AWE well placed to grow in key energy markets Slide 4
AWE has approximately 174 million BOE of reserves plus resources (2P + 2C) 57 million BOE 2P oil and gas reserves, including 21 million barrels of 2P liquid reserves An additional 43 million barrels net contingent resources from AAL acquisition Total 87 million barrels of liquid reserves and resources that will benefit from strong world oil prices Strong gas reserve and resource position in Australia; rising gas prices will add considerable value over longer term Note: Does not include potential resources from Perth Basin shale gas AWE is well positioned to benefit from anticipated gas and liquids price growth Slide 5
BassGas MLE Progress AWE holds 46.25% of BassGas after sale of an 11.25% interest to Toyota Tsusho MLE Project progressing, with successful installation of accommodation module Development drilling phase planned for summer 2013/14, with 2 firm wells Plans advanced for shallow reservoir oil well, unlocking resources (8-15 million barrels of oil in place) to add potential value Further exploration activity planned with Chappell 3D seismic survey interpretation nearing completion BassGas remains a key production asset in portfolio, with long life reserves and gas pricing upside beyond current gas contract Focus remains on completion of MLE project for long term production Slide 6
Tui and Cliff Head Profitable oil projects Tui oil project (AWE 42.5%) Tui oil project continues strong production performance, averaging 5,700 bopd in March quarter Joint venture reviewing options for in-fill and nearfield exploration activity after seismic reprocessing Skills gained at Tui being applied in new Indonesian oil development Cliff Head oil project (AWE 57.5%) Cliff Head producing at above-budget rates, following successful CH-12 workover CH-12 workover has provided confidence to pursue further opportunities to improve production performance and increase reserves Tui and Cliff Head projects have benefitted from extended high oil prices Slide 7
Accelerated development drilling at Sugarloaf AWE holds 10% (pre-royalty) share of Sugarloaf AMI, prime Eagle Ford acreage Operator plans 65 wells in Sugarloaf AMI in 2012, as part of major regional drilling campaign 35 wells on line at end of May, with further 5 drilled, awaiting completion Strong commercial driver for development with >90% revenue from condensate and liquids Operator drilling tighter well spacing (reserve additions) and different completion techniques (improve rates) in current pilot program Recent Sugarloaf deals demonstrating added value The accelerated drilling is yielding positive results AWE Net Production (million BOE) 0.4 0.3 0.2 0.1 0.0 Monthly Oil + Condensate, MMBoe Monthly Sales Gas, MMBoe Wells On Line - Month January-2010 July-2010 January-2011 July-2011 January-2012 40 35 30 25 20 15 10 5 0 WELLS ON LINE Slide 8
AWE s Shale Gas opportunities Perth Basin Exploration Project (WA) Large acreage under lease, with three prospective Shale units (Kockatea, Carynginia and Irwin River) 13-20 Trillion cubic feet of gas in place estimated within Middle Carynginia zone Large seismic database and extensive wells drilled through conventional oil and gas exploration over 30+ years Core analysis undertaken with positive results to date Stronger gas prices supportive of economics Pipeline and gas plant infrastructure in place to assist in early commercialization Arrowsmith-2 operations Stimulation activity is set to start in July, 2012 Slide 9
Onshore Perth Basin (AWE 33-100%) Conventional gas Material onshore existing gas reserves and further opportunities Beharra Springs/Redback area; targeting further drilling to extend gas play Tight gas Corybas-1 successful flow tests 3D seismic survey recently acquired in key areas Senecio-2 stimulation planned as part of upcoming shale gas program Shale gas Large acreage holding with focus on stimulations at Woodada Deep-1 and Arrowsmith-2 Targeting large gas volumes in multiple candidate shale sequences Stimulation program set to commence in July, 2012 Slide 10
Senecio Operations (AWE 50%) Significant identified prospective tight gas opportunities up to 200 Bcf recoverable sales gas Original Senecio discovery well flowed at >1 million cubic feet per day New 3D seismic acquired to improve resource definition Stimulation program designed to investigate commercial viability of reservoir potential Successful outcome will be quickly converted to reserves and production (1-2 years) Hydraulic stimulations planned for July/August Offers significant reserves potential and near term production Slide 11
Woodada and Arrowsmith operations Woodada Deep (AWE 100%) 3 separate zones planned to be stimulated and flow tested Two Carynginia Shale and Siltstone targets, plus Beekeeper Limestone target above Carynginia Arrowsmith-2 (AWE 44.25%) Five separate zones planned at Arrowsmith-2 Basal zone is a tight gas opportunity in High Cliff Sandstone Upper zones include Irwin River Coal Measures, Carynginia and potentially higher liquids yielding Kockatea Shale (source rock for Perth Basin oil accumulations) Total Gas in Place under investigation exceeds 50 Tcf Slide 12
Shale gas fracture stimulations 13 AWE shale targets below 2,500 metres Fresh water aquifers present at shallow depths Multiple cemented steel casings to provide barriers to shallow aquifers Fracture stimulations comprised mainly of water and sand with minor additives Fracture stimulation program and Environmental Management Plan approved by WA Regulator AWE is focussed on high quality Environmental Management Slide 13
Shale gas development options 14 Deep Horizontal wells, up to 1.5km long. A number of wells drilled from each pad. Pads located kilometres apart. Surface footprint will be minimised through the use of multi-well pads Slide 14
AWE Exploration objectives AWE targeting conventional and unconventional oil and gas within Australia, New Zealand, Asia and US Committed program aimed at expenditures of up to $50 million per annum, which will provide multiple value adding opportunities Australian and New Zealand opportunities will look to leverage off existing infrastructure Within Asia, the primary focus will be capturing and commercialising stranded and prospective resources close to existing projects. The expanded Indonesian-based team will provide key input to this emerging opportunity Unconventional projects in Australia and Indonesia will continue to utilise skills gained by Sugarloaf investment. The US focus will be maintained on wet gas and liquid opportunities A high degree of technical rigour and commercial discipline is applied to all exploration activities Slide 15
AWE resource base is a key focus for AWE AAL deal and commercialisation is expected to unlock considerable value in 2013 Focus on Trefoil gas/liquids field in light of stronger east coast gas prices and high liquids yield Testing of tight gas prospects in Perth Basin Lengo stand-alone development options under review and appraisal well planned for FY13 Ongoing upside from accelerated Sugarloaf drilling and infill campaign Key Focus Note: Does not include potential resources from Perth Basin shale gas Management focus is to unlock higher value from this strong resource base Slide 16
AAL development (AWE 100%) Upside potential of AAL project under assessment AWE review of subsurface geology and geophysics will assist in defining optimal reservoir development reduced number of wells longer reach horizontal sections with ESP s improved completion design Well head platform optimisation Work designed to improve oil recovery and optimise economics Assessment of near field exploration opportunities also being undertaken Work expected to be completed by year end to enable FID and potential sell down early in 2013 This acquisition provides an exciting platform for growth in Asia Slide 17
Ande Ande Lumut update (AWE 100%) Subsurface Characteristics Estimated 76 million barrels recoverable oil (26% recovery factor) Oil column: up to 36 metres Oil characteristics 14.2 O API gravity; and 30 centipoise viscosity Approved Plan of Development FPSO bridge linked to a Well Head Platform 43 horizontal development wells Average horizontal section 700m Electric submersible pumps Field Area: 21 square kilometres Reservoir depth 1100 metres subsea Water depth 73 metres New core project adding 43 million barrels (net) oil reserves at final investment decision Slide 18
Anambas gas discovery (AWE 100%) Anambas PSC acquired as part of the AAL purchase from Genting Located in Natuna Sea, Indonesia, close to existing gas infrastructure Anambas discovery estimated to contain 60 Bcf gas and 12 million barrels of liquids Further 100 Bcf of prospective gas resources plus associated liquids identified on structure, but as yet not intersected by wells Discovery well flowed at 15.5 million cubic feet of gas per day and 300 barrels of condensate per day (from 2 zones). Next Steps: Plan to farm down ahead of possible appraisal well in 2013 in support of Plan of Development to be submitted in 2014 Pursuing value addition from further exploration and acquisitions Slide 19
For personal use only AWE Growth Options and Strategy Strong core business performance for 2011-12 4.7 million BOE target (including 6+ months shut-down at BassGas) $270 - $300 million revenue guidance $300 million debt refinancing demonstrates cash flow strength Conventional oil and gas growth AAL development Trefoil gas discovery Lengo gas appraisal Unconventional gas (and liquids) growth Sugarloaf drilling Perth Basin testing in July and August - tight gas and shale gas Indonesian joint study areas for shale gas AWE is delivering growth opportunities for shareholders Slide 20