You are on page 1of 25

QGEP

Brazil’s independent oil & gas


producer positioned for growth
Disclaimer
This presentation contains some statements and information about the Company that
reflect the current views and/or expectations of the Company and its managers with
regard to its future activities. These include all statements containing forecasts and
projections or that indicate or imply future results. performance or achievements. which
may include such words as "believe". "predict". "expect". "contemplate". "will probably
result". or any other words or expressions of similar meaning. Such statements are
subject to a series of expressive risks. uncertainties and assumptions. Readers are
cautioned that several important factors may lead actual results to significantly diverge
from the plans. targets. expectations. estimates and intentions expressed herein. There
can be no assurance that the Company will achieve or is likely to achieve the future
results or projections contained herein. Under no circumstances shall the Company or its
directors. officers. representatives or employees be liable to any third parties (including
investors) should they make decisions. investments or business acts based on information
and statements presented herein. nor shall the Company be liable for any indirect
damages. loss of profit. or similar consequences thereof. The Company does not intend
to provide shareholders with any revised versions of the statements or analysis of
differences between the statements and actual results. This presentation does not
contain all the necessary information for a complete investment assessment on the
Company. Investors must produce their own assessments. including the associated risks.
before making an investment decision. do disclaimer

#1
QGEP
Portfolio High Expertise and Singular
continued operational credibility in technical
optimization efficiency Brazilian O&G capacity
industry
Solid financial Low-cost
position structure
and liquidity

+20 +50% 84
Years of EBITDAX MM boe
experience in Margin 2P reserves*
E&P Average
2015 – 3Q17

R$ 1.1bi 30% R$ 2.2bi 15 8


Net Cash Free float Market Cap Concessions Basins
3Q17

*Reserves estimated by Gaffney, Cline & Associates 2


History of
Steady Progress
Manati Field Manati QGEP Iis QGEP’sIPO Carcará Successful ANP’s 13th FPSO Petrojarl I
is discovered Field’s First created raised Discovery in drilling and Bidding Round Customized for the
Gas R$1.5 bi Block BM-S-8 completion (acquisition Atlanta Field
of two Atlanta of two
Sale to Statoil of interest
Field wells blocks in
in BM-S-8
Farm-ins Sergipe-
(BM-S-8 Alagoas ANP’s 14th Bidding Round
and BS-4) basin) (acquisition of two adjacent
ANP’s 11th blocks in Sergipe-Alagoas
Bidding Basin)
Round 70% Farm-outof Sergipe-
(acquisition of Alagoas Basin blocks,
8 blocks) acquired at ANP’s 13th
Bidding Round

3
QGEP: Positioned for
further growth in 2018
Manati Atlanta
Largest producing asset Oil producing asset,
expected to increase production to come on
production in 2018 line in 1Q18

Sergipe-Alagoas PAMA and Fo z


Seismic data acquisition do Amazonas
and analysis in
Additional farm-outs
partnership with
planned for 2018
ExxonMobil and Murphy
Oil

Cash payments from Increasing net cash position


BM-S-8 asset divestiture providing significant financial
and Sergipe-Alagoas flexibility for a more robust
farm-outs capital allocation program
4
New opportunities tied to
Brazil’s O&G industry recovery
Opening of pre-salt to international operators

Schedule of new annual bidding rounds, including pre -salt areas

Basic regulatory changes :


• flexible local content
• Repetro renewal has been discussed, including accelerated amortization of investments
• definition of unitization rules

New players in recent bidding rounds, indicating building interest by


bonuses offered and oil profit percentages in shared bids

Use of hydrocarbon reserves as collateral is also under


discussion

5
Leveraging our strengths:
Highly Qualified Technical Team

Vast experience Development 36% Total


In Brazilian of Fields are ex- headcount
and foreign Petrobras
with challenging 125
basins characteristics technical staff

Education Experience

33% 31% 38% 34%


MBA B.S over 30 years Up to 10years

28% 8% 20% 8%
M.S PhD 11to 20years 21to30years

6
Foz do Amazonas
Growth and
AP
diversification of
Pará-Maranhão
Ceará
QGEP’s asset base
MA
CE

Presence in the main Brazilian


PE Pernambuco-Paraíba
AL
producing basins from low to medium
SE
Sergipe-Alagoas risk and in frontier areas
BA

Manati
Camamu-Almada
ES
Espírito Santo
SP RJ

PR Santos
C

1 3* 13
Production Development Exploration
* Camarão Norte under evaluation
77
ES
Itapemirim

Atlanta Field
Santos Basin

RJ Macaé

SP

Niterói Cabo Frio

Rio deJaneiro

West of QGEP
Cabo Frio Operator with
30% interest
Atlanta
Oliva
147
Atlanta Heavy 1P
Oil 14o API 191
Libra Reserves Certified by 2P
Gaffney, Cline &
269
Franco Associates (MM bbl)
3P
8
Atlanta
First Oil from the Early Production System
(EPS) in 1Q18

3 horizontal Oil and gas


producing production through
wells FPSO
(2 already drilled With contracted
and completed) capacity of 30 kbpd

Agreement Improved oil


for Sale of prices
Production Heavy oil prices up due
Signed with to product shortages
Shell for EPS oil

9
Atlanta
On the road to
developing a permanent
system

2018 2019 2020 2021


EPS First Oil(1Q18) Decision on definitive Full development of Maximum
20-30 kbpd during 3 years system: the field production
Drilling potential Potentialfor near 75 kbpd
of a third well 9 additional wells
Total EPS CapEx Total of 12
U$780MM producing wells
EPS OpEx
First 18 months
U$410k/d
After
U$480k/d
10
S E RGIPE
S TATE Sergipe-Alagoas
Interest in high potential exploratory
Aracajú blocks

SEAL-M-351
50%
CUMBE
operator
BARRA

FARFAN
SEAL-M-428 30%
POÇO MURIÚ
VERDE
MOITA
BONITA SEAL-M-503 20%
SEAL-M-501
Discovery

Acquisition of 100% Acquisition


interest of 30%
in two blocks at ANP’s interest in two
13th Bidding Round in adjacent blocks at
2015, 70% farm-out in ANP’s 14th Bidding
2017 Round 11
Sergipe–Alagoas
High Medium
recoverable to low risk
potential prospect
volume

Logistics Light oil expectation


facilities 30-40˚API

Seismic Long duration test at


acquisition Farfan by Petrobras in
scheduled for 2018
2018

12
Foz do Amazonas

Other Exploratory
AP

Pará-Maranhão Assets
Pará-Maranhão and
Ceará
Foz do Amazonas
(PAMA-M-265, PAMA-M-337, FZA-M-90)

PA MA
100% interest
CE All seismic data already acquired,
RN
farm-out process is scheduled for
PB
2018
PE Pernambuco-Paraíba Camamu-Almada
(CAL-M-372)
AL

SE
Environmental license is pending
BA

Blocks of Espírito Santo and


Ceará Basins
Camamu-Almada
Evaluating potential

Espírito Santo
ES

13
Strategic Partnerships
with large operators

60%
Independent
40%
Integrated
Local expertise is
QGEP’s competitive
advantage
In developing new
partnerships
60%
Foreign
40%
Brazilian
Diversified partnerships
With global players
14
Gas Treatment
Station

Manati Field
Largest asset with
Salvador
significant production
Gas Compression
Station visibility

QGEP’s 2P Reserves
Manati interest 26.9
45% million boe *

Petrobras Owned production


infrastructure and
35% contractual price
(Operator)
increases sustain high
Geopark operating margins
10% *Corresponding to 2P reserves

Brasoil certified by Gaffney, Cline &


Associates at December 31, 2016
10% net for QGEP

15
Manati
Steady Cash Flow Generation
Total Daily Gas Production
(MMm³/day)

5.6
4.9 4.9 5.1

2015 2016 2017e 2018e

Manati Field EBITDA Margin


Average 2015 – 3Q17 +65%
Accounts for Agreement in place to Average
production of sell entire reserve production
nearly 30% of gas amounts capacity of
in the Northeast with a take-or-pay ~5.5 MMm³/day
region clause
16
QGEP: at an inflection point after 3
years of recession in Brazil

Average daily gas production Net Revenue


(MMm 3 / day) (R$ million)

5.6
4.9 496 477
4.6
357

2015 2016 9M17 2015 2016 9M17

EBITDAX Net Income


(R$ million) (R$ million)
273 164
153
188 94
168

2015 2016 9M17 2015 2016 9M17


17
QGEP
Financial Profile
Cash and Total Debt CAPEX
(R$ million) (R$ million)

1,459 449
1,280 1,338
100
287
173 183
161
369
349 33
360 335
128

2015 2016 9M17 2014 2015 2016 2017e 2018e


Cash Debt Capex Farm-in/bidding round

+ Asset sale receivable BM-S-8 + Farm-out Potential


reimbursement distribution of
US$379 MM receivable: special dividends

50% 12% 38% R$70 MM


ANP’s Production Sharing Unitization reimbursement
approval Agreement of the 2 nd agreement of signing bonus
bidding round 18
Capex
2017/2018
(US$ million)
2017 201 8 57
50
36

26
23
18

1 4

Development Exploration Others Total

57
50
36

26

13
9 10
3* 4 4
1

BS-4 Development 11tth B Round Blocks S E A L 13 th B round S E A L 14 th B round Others Total


*Out of this amount, US$1.5 million will be reimbursed per farm -out agreements for Blocks SEAL -M-351 and SEAL-M-428 blocks with
ExxonMobil and Murphy Oil.
19
Operational
Safety
Integrated Management System (SGI)
C o m m i t m e nt t o h e a l t h , s a fe t y a n d e nv i r o n m e n ta l i s s u e
m a n a ge m e nt i s ex p r e s s e d b y fo l l o w i n g c e r t i f i c at i o n s :

ISO 14001 O H SA S 18001


(Environmental Management (Occupational Health and Safety Management System )
System)

Management Plan
ICS Methodology (Incident Command System) for
coordinated responses to emergencies

Global SubseaWell Containment System


Operated by Wild Well Control – contingency plans in response to
possible submarine events

20
Corporate
Governance General
Meeting
Ethics, Governance
and Sustentability
Committee

Non-permanent
Board of Fiscal Council
Compensation
Directors
Committee

E xecutive
Board

They advise the Board of Directors through guidance and


Non-statutory
recommendations on issues to be detailed and developed.
Committees
All governance bodies’ requirements and duties are set forth in
the Company’s bylaws and respective charters.

21
QGEP’s Compliance Program consists of a set of
mechanisms which aim at preserving the ethical
conduct, fomenting a honest and transparent
workplace.

Our tools:

Code of Ethical Policies Training


Conduct Conflict of interests All board members, members of the
reinforces the ethical conduct and Anticorruption Executive Board, employees, advisors and
provides behavioral standards to our outsourced workers, trainees, eligible
employees suppliers and others defined as QGEP’s
employees, participate in training on the
Company’s Compliance Program make them
aware of Code of Ethical Conduct and
related Policies

Procedures Confidential
Aplication of Disciplinary Channel
Measures
0800 741 0022
Whistleblowing treatment www.canalconfidencial.com.br/qgep
Outsourcing

22
Our goal is to be
recognized as a
leading Brazilian
O&G producer in
deep waters

QGEP ’s experience as a deep water operator, the


relationships developed through partnerships
with global oil companies, the diversification
and quality of our asset portfolio combined with
our capital allocation discipline, position us to
benefit from the industry ’s future recovery.
23
Investor Relations
Thank you! Q G EP Participações S.A.

Av. Almirante Barroso I 52 I Sala 1301 Centro I


Rio de Janeiro, R J
C E P 20031-918

IR Phone +55 21 3509-5959


Fax +55 21 3509-5958
E-mail ri@qgep.com.br

www.qgep.com.br/ri