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dgscdgvhf May 2014 Investor Presentation
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Important Notice
Mediterranean Oil & Gas Value Proposition
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Opportunity for value creation from potential
game changing
assets
Portfolio of production,
development and
exploration projects
Management with extensive
E&P and operational experience
Supportive investor base
Production revenues
Value Creation
Management
Opportunity Portfolio Management Investor Base Cash Flow
Results Delivering on Our Promises
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Oct 2011 First gas at Guendalina field
Aug 2012 Law approved resulting in exemption for Ombrina Mare from offshore ban
Feb 2013 Completion of sale of 75% of offshore Malta Area 4 PSC to Genel Energy plc and established an AMI for offshore Malta, Libya and Tunisia
Recent Track Record
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Unlocking the Potential of Mediterranean Oil & Gas
June 2013 Entry into exploration study agreement with Cairn Energy PLC to explore offshore Malta Area 3 Blocks 1, 2 & 3
Jan 2013 EIA Commission ruled positively in favour of our submission on the Ombrina Mare oil and gas field development EIA
Apr 2014 Preparing to spud exploration well in offshore Malta Area 4 – well Hagar Qim 1 targeting 27MMboe most likely unrisked resources net MOG
Gas production
Revenues
Profit or Loss from Operations
Net operating cash flow
Average gas price
Working Capital
> 1.0 Bcf compared to 1.7 Bcf in 2012
> €8.4 million down from €16.3 million in 2012
> €4.4 million loss down from €4.1 million profit in 2012
> €1.2 million reduction compared to €6.5 million increase in 2012
> $11.2/Mscf ($12.0/Mscf in 2012)
> Zero debt and cash of €12.4 million (YE 2012 cash €8.7 million)
2013 Financial Highlights
2013 Financial Performance negatively impacted by production challenges at Guendalina Field
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Our team Capable From Start to Finish
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Board of Directors
Over 35 years experience in the energy, power and service industries. Former CEO of National Power plc, Brown & Root Ltd, and Kvaerner Engineering & Construction Ltd. Currently chairman of Regal Petroleum plc, senior independent director of Sterling Energy plc. Formerly held a number of non-executive roles both inside and outside the oil and gas sector.
Keith Henry Chairman
Over 24 years of global exploration, development, operations and business management experience with Chevron Corporation, including Senior Vice President of Operations for Saudi Arabian Chevron, Chief Strategist for Chevron Corporation, and management and technical assignments in Angola, Australia, Kazakhstan, UK and USA.
Bill Higgs Chief Executive
Over 32 years of experience in oil & gas geophysics, exploration, development, production, operations and business management. Formerly at ENI, Coparex, ELF, Enterprise Oil, Shell and professor of Applied Seismology at Basillicata University in Italy. He is a board member of the Associazione Mineraria Italiana.
Sergio Morandi Chief Operating Officer
A small team of big operators
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Board of Directors
Over 30 years industry experience in many key hydrocarbon basins. Currently Vice President Upstream Research at IHS CERA. Involved in international exploration and production with Britoil plc and Enterprise Oil plc, including VP of Exploration & Production, President Enterprise Oil USA, Chief Geologist and Italy Exploration Manager.
Peter Jackson Non–Executive Director
Over 18 years experience in the energy sector, including Chairman of Enel SpA. Currently Chairman of Assoelettrica and Telit Communications plc; Vice-Chairman of Idea Capital Fund SGR; and Non-Executive Director of Cadogan Petroleum plc. Formerly elected to the Italian Parliament Chamber of Deputies.
Enrico Testa Non–Executive Director
A small team of big operators
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Over 18 years experience in international investment banking and corporate finance. Most recently as a Director, Global Banking at Deutsche Bank, Hong Kong. Previously at the ABN AMRO Rothschild global equity capital markets joint venture, in London and Sydney.
Chris Kelsall Finance Director
Regional Operator
Experienced team
AIM-listing
Shareholder support
Debt Free
Capacity to invest in:
Asset maturation Small capital programmes
Balanced Portfolio
Grow production
Move resources to reserves
Balance:
Frontier exploration Asset maturation Good reservoir management
Growth Opportunity
~500 million boe (likely unrisked)
Ability to de-risk opportunities
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Our key strengths for growth Capable and Credible from Start to Finish
Competitive Advantage
Financial Strength
Resources Factory
Attractive Prospective Resources
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Intentionally left blank
Our Assets Reliably Delivering
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Our Assets
Gas exploration, development & production:
Non-operated gas production Asset delivers positive cash flow for the Company Non-operated gas discoveries with upside potential Goal is to increase the priority of these developments in the overall portfolio of ENI
1 Northern Adriatic
Gas exploration, development & production:
Geographically spread low risk production and exploration opportunities Goal is to increase returns on assets to cover operating costs for the Group
2 Onshore Italy
Oil & gas exploration & development:
100% operated oil discovery with upside potential Goal is to achieve production concession award from Ministry of Economic Development
3 Ombrina Mare
Oil and gas exploration:
Exploration prospect on trend with Val D’Agri and Tempa Rossa fields Technically challenging exploration well that is waiting for EIA approval of the well proposal
4 Southern Apennines
Oil and gas exploration:
Southern margin of proven hydrocarbon province Modern seismic data required to unlock the exploration potential
5 Offshore Malta Area 3
Oil and gas exploration:
Unproven frontier exploration Presence of reservoir and hydrocarbons source are key risks Planning to drill 1st exploration well in 2nd Quarter of 2014.
6 Offshore Malta Area 4
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Oil & gas exploration, development & production
Principles are on a first right and 20% (MOG) to 80% (Genel) split
8 Genel AMI
Gas exploration:
Triassic Bunter Sandstone play similar to North Sea southern gas basin. Structural geometry and hydrocarbon charge are the key risks.
7 Onshore France
* Net Mediterranean
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Guendalina field provides ~75% of revenues
Delivered over 2.5 Bcf net production since start-up
Delivers net cash flow for small capital projects
Additional gas discoveries (~22 Bcf) with upside potential
Goal: Work with ENI to increase priority of development for these assets
Exploration, development and production
AC 35 AG with 20% WI
Guendalina: 3.7* Bcf 2P
AC 19 PI with 15% WI
Aida: ~12* Bcf 2C
Attila & Dorotea: ~9* Bcf 2C
Dorella: ~16* Bcf 2E
AR 81FR with 15% WI
Isabella: ~1* Bcf 2C
Production Concessions & Exploration Permits
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Northern Adriatic Gas Play Production and Development Assets
0 10 20 km
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Onshore Italy Foredeep Gas Play Production and Development Assets
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Low risk production and exploration opportunities
Sold13 non-core exploration and production concessions
Next Steps: Explore ~1.6 Bcf of best estimate unrisked prospects
Place ~1 Bcf 2P reserves on production
Goal: Maximise net revenue from these assets Faseto exploration expected to be drilled in H2 2015
Exploration, development and production
Operated:
5 Concessions
1 Permit
Non-Operated:
2 Concessions
1 Permit
Net Production:
~400,000 scf/d
Production Concessions & Exploration Permits
0 100 200 km
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Faseto exploration prospect Proposed exploration well – H2 2015
Target: Middle Miocene gas play
Trap: Fault bounded structural trap
Reservoir: Marnoso-Arenacea Fm sandstones
Expected hydrocarbons: Gas & Condensate (CGR ~40)
Areal extent: ~1.13 km2
Vertical closure: ~30 metres
Total Depth: 1,800 m TVD
Prospective Resources:
~1.7 Bcf mean unrisked
Faseto
* Net Mediterranean
FASETO PROSPECT REFERENCE SEISMIC LINE
Torrente Baganza Field Faseto Prospect
FASETO
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OBM 1 OBM 2 &
OBM 2DIR
Oligo-Miocene Carbonate Reservoir Depth Map
Field Development Plan
5 to 9 wells, 1 platform, 1 FPSO
Expected production:
~5,000 bo/d rising to ~10,000 bo/d
Ombrina Mare Oil & Gas Play Production and Development Assets
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100% operated oil and gas discovery with upside potential
Next steps: Approval of AIA and EIA
Award of Production Concession
Drill pilot well to validate reserves, prove upside and complete as new deviated producer
Exploration & development
BR 269 GC with 100% WI
25.4* MMbo 2C oil resources
17-19° API
8.0* Bcf 2C gas resources
99% methane
Production Test:
Stabilised flow after light acidification:
900 to 1,000 bo/d
Exploration Permit
* Net Mediterranean
0 5 10 km
‘AIA’ Procedure: Base Case Time Line
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WHO DOES WHAT
MOG
Ministry of Environment
3rd Parties (citizens, associations, groups)
• AIA required ahead of finalising decree for EIA • Technical work and AIA documentation completed • Submitted in May to Ministry of Environment • Process is similar to EIA procedure • After technical approval a ministerial decree is signed • Award of AIA and EIA can be achieved by end-2014
T0
T30
T45
T+180
Publication of AIA
Deadline for submission
of observations
Analysis and Response to Observations
Submission of AIA
Application
T75
Start of AIA Procedure
Decision on AIA
Mid-May 2014
End-June 2014
End-July 2014
Mid-Nov 2014
Ombrina Mare Strategy
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Secondary Reservoir (Cretaceous)
Top Seal
Main Reservoir (Oligo/Miocene)
OBM1 OBM2
OBM2DIR
ODT @ 2133m
Cretaceous OWC @ 2223 m
OBM1 OBM2 & 2DIR OBM3DIR
OBM3DIR
Conduct production test in Cretaceous (currently 1 to 17 MMbo Contingent Resources)
Drill a second production well in Oligo-Miocene towards the north and with toe below current Oil Down To (ODT) to test Oil Water Contact (OWC) in Oligo-Miocene and assess oil potential away from the crest of the structure.
Appraisal Strategy
Drill appraisal well to increase reserves
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Exploration Assets
* Net Mediterranean
1
Monte Grosso exploration prospect on trend with proven fields
Technically challenging well - 6,800 m and over 400 days
Renewed support from our partners to progress
Seeking local government approval of EIA
Goal:
Spud well in 2H 2015
Exploration
Serra San Bernardo with 23% WI (Operator); ENI 63% & Total 14%
Apulian Platform sub-thrust play
Prospective resources:
~49* million boe mean unrisked
Exploration Permits
Southern Apennines Oil & Gas Play
0 10 20 km
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Offshore Malta Area 3 Blocks 1, 2, & 3
40% Working Interest with Cairn Energy Plc (60% ,Operator)
Over 6,400 km2 on the southern margin of a proven hydrocarbon province
Exploration Study Agreement (ESA) started in December 2012 for 2 years
Undertaking reprocessing of existing 2D seismic data
Completed acquisition of the modern 2D seismic data required to unlock the exploration potential
Option for 1 year extension to ESA and negotiation of Production Sharing Contract
Exploration Licences
Exploration Assets Offshore Malta Area 3 Oil & Gas Play
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ESA Seismic Programme Completed 2D Seismic Acquisition – 2Q 2014
1715 km of modern 2D Seismic acquired
Processing of 2D seismic with modern broadband techniques
Survey acquisition was completed on time and under budget in early April 2014
Evaluation of reprocessed and new data is focused on definition platform margin and basin geometry
Forecast completion:
Seismic acquisition: April 2014
Processing: August 2014
Interpretation: December 2014
Area 3 Blocks 1, 2 & 3
2 1
3
New 2D lines
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Offshore Malta Area 4
25% Working Interest with Genel Energy plc (75%)
Over 5,700 km2
Exploration Study Agreement started in 2005
Production Sharing Contract signed July 2008
First exploration period ends July 2014
Prospective resources:
~428* million boe mean unrisked
Exploration Licences
Exploration Assets Offshore Malta Area 4 Oil & Gas Play
* Net Mediterranean
Experienced Joint Venture Partnership:
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2 Exploration Wells Fully Funded
Frontier exploration play similar to Libya and Tunisia
CPR completed in October 2012
Maltese Government approved extension of first exploration period to July 2014
Sale of 75% interest in Area 4 PSC for consideration of:
$10 million cash
100% carry of 1st exploration well
100% carry of 2nd exploration well to cap of $30 million
Optional loan facility
Agreement
Offshore Malta Exploration Sale agreed with Genel Energy Plc
Inline
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HAGAR QIM
Water Depth: ~ 450 m
Hagar Qim exploration prospect Proposed 1st Exploration Well – 2Q 2014
Target: Lower Eocene/Paleocene carbonates
Trap: 4-way dip closure with a stratigraphic component
Reservoir: Carbonate ramp high-energy deposits
Expected hydrocarbons: Oil
Areal extent: ~25 km2
Vertical closure: ~155 metres
Total depth: 2,800 metres TVDss
Drill time: ~ 2-3 months
Certified Prospective Resources:
~27* million boe mean unrisked
12% chance of success
Operator Prospective Resources:
~40* million boe mean unrisked
20% chance of success
Hagar Qim
* Net Mediterranean
Resources and Risks
Area of Mutual Interest with Genel Energy Plc
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Libya
Tunisia
Area of Mutual Interest (AMI)
Agreement to cooperate in acquiring exploration and production assets in the offshore basins of Libya, Malta and Tunisia
Minimum period of 3 years
Equity in any asset acquired within the AMI will be shared on the basis of 20% to MOG and 80% to Genel
Our combined technical expertise gives plenty of scope to unlock additional value in the region
Malta
Production Concessions & Exploration Licences
Offshore Basins of Malta, Libya and Tunisia
0 100 200 km
Exploration assets France gas play
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Frontier exploration play similar to North Sea southern gas basin
Structural geometry and hydrocarbon charge are the key risks.
Exploration permit expired 3Q 2013 – seeking extension
Goal: Negotiate Exploration Permit extension Alignment of JV Partners on forward work programme
Exploration
St. Laurent Permit MOG (11.2%) with Sterling
Resources Ltd (33.4 %), Cairn Energy Plc (22.0%), Aquitaine Exploration Ltd (18.2%) and Egdon Resources Ltd (15.2%) Donzacq Permit Application
MOG (11.2%) with Egdon Resources Ltd. (33.4%), Sterling Resources Ltd (33.4%) and Cairn Energy Plc (22.0%)
Prospective Resources:
48* Bcf likely unrisked
Exploration Licences
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* Net Mediterranean
0 25 50 km
Value Creation Delivering Results
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Access to resources will become more challenging with time
Regulatory oversight, constraint and risk continue to increase
Impact of Eurozone economic uncertainty on financial markets affects access to external funds for E&P industry
European natural gas prices remain de-linked from lower North American prices short-term
Italy remains an advantaged market for domestic energy production
Crude oil markets remain volatile, but crude oil prices to trend upwards long-term
The marginal producer of the marginal barrel will be exposed to price volatility
Market Outlook
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PRODUCE
Proved P1
Probable P2
Possible P3
REACH INVESTMENT DECISIONS
C1 C2 C3
DRILL EXPLORATION WELLS
E1 E2 E3
ACQUIRE EXPLORATION ACREAGE
Reserves (P) Assets near-to or on production. Reservoir Performance and Operational Reliability are key.
Contingent Resources (C) Drilled Prospects with proven hydrocarbons. Proving commerciality via appraisal and concept economics is key.
Prospective Resources (E) Undrilled prospects and leads. De-Risking via technical studies and commercial negotiations is key.
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MA
TUR
ATI
ON
DE-RISKING
Resources Factory
Millions of barrels of oil equivalent
PRODUCE
P1 0.6
P2 0.4
P3 0.4
REACH INVESTMENT DECISIONS
C1 12.7
C2 19.1
C3 47.2
DRILL EXPLORATION WELLS
E1 49
E2 400
E3 800
ACQUIRE EXPLORATION ACREAGE
2013 Production =
1.0 Bcf
175,420 boe
Equivalent to 480 boe/d
2P + 2C = 32.8 million boe
Total Resources Factory Potential over 1.2 billion boe unrisked
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PR
OSP
ECTI
VE
RES
OU
RC
ES
CO
NTI
NG
ENT
RES
OU
RC
ES
RES
ERV
ES
Proved & Probable: (i) ERC Equipoise Independent assessment Contingent & Prospective: (i) Company assessment (ii) ERC Equipoise Independent assessment
Resources Factory Inventory Know where you stand
ASSETS* 2014 2015 2016
1H 2H 1H 2H 1H Northern Adriatic Production
Onshore Italy Foredeep Production
Faseto Exploration
Aglavizza Development
Ombrina Mare Development
Southern Apennines Exploration
Malta Exploration
France Exploration
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> Drill exploration prospect Onshore Italy Foredeep (~1.6 Bcf best unrisked)
> Deliver ~1 Bcf 2P reserves to production Onshore Italy Foredeep
> Appraise and develop Ombrina Mare field
> Approval of Monte Grosso exploration prospect EIA
> Drill two exploration wells offshore Malta
> Negotiate Exploration Permit extension in France
EXPLORATION STUDIES & PERMITTING
DRILLING EVALUATION
DEVELOPMENT
PROJECT EXECUTION
PRODUCTION
FIRST GAS / OIL
DRILLING
* Management forecast based on current information and is subject to change
Asset Development Plans 2014-2016
Expanding our Resources Factory
Objectives:
Add high quality acreage to diversify portfolio
Short-term focus on ‘greater’ Mediterranean rim countries
Cash position allows small asset farm-in opportunities
Larger growth prospects becoming available
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Regional expertise, global experience
T: +44 20 7959 2322 E: [email protected] W: www.medoilgas.com
Corporate Office: 68 King William St
London
EC4N 7DZ UK
Operations Office: Via Cornelia 498 Roma 00166 Italy
Contact us
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