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Developing Nigeria’s Gas Reserves to Empower Domestic Growth


)² Gas consumption CAGR ’09–14³ Nigeria South Africa Algeria Egypt Libya 5. August 2010 forecast for Turkey.5 4. ² United Nations estimates (2007). IHS Global Insight. Egypt and Russia 2 .7% 3.538 Nigeria Brazil Libya Turkey Egypt South Africa Russia Algeria Source: United Nations.4 3. ³ BMI Nigeria Oil & Gas report Q2 2010 (publication March 2010).596 2.4 4.1 Libya South Africa Algeria Egypt Nigeria 136 1.000MW less than 50% utilised due to gas supply constraints 2007 2008 2009 2010F 2011F 2012F 2013F 2014F 351 368 376 Oil consumption in Nigeria Oil demand (Mbopd) Lack of domestic infrastructure has led to diesel/fuel oil being the main source of fuel supply for electricity generation in Nigeria 387 406 426 458 493 §  §  Source: UN.6 4. BMI ¹ Top 5 countries chosen by total consumption of oil and gas in Africa for 2009.9 4. South Africa and Algeria.4 3. Libya. May 2010 forecast for Nigeria.072 926 2.2% 4.Why Nigeria? – The macroeconomic investment opportunity Nigeria: Attractive and Growing Economy §  §  §  Nigeria is the 8th largest country in the world with a population of over 155 million and an economy underpinned by hydrocarbon resources Predicted to be one of the fastest growing emerging economies with an expanding middle class and expected growth in the energy and power sectors Existing energy supply and demand imbalance widening as a lack of past investment in infrastructure has hindered development of Nigeria’s natural gas resources Government objective to increase power generation capacity to 10.1 4.3% 24. Brazil.1% 19.1% 6.000MW by 2011 Current installed capacity of 6. African Development bank Group: Nigeria Economic and Power Sector Reform Program report Source: BMI Nigeria Oil and Gas Report Q2 2010 (publication March 2010) Forecast average annual real GDP growth for 2010-2020 (%) Energy demand of top 5 African countries¹ Energy consumption per capita (kg of oil eq. Source: IHS Global Insight.

It is subjective and therefore susceptible to periodic revaluation based on actual experience and business. Company information ¹ Natural gas produced from a reservoir that does not contain significant quantities of crude oil.Why Nigeria? – Large reserves and underdeveloped domestic market §  §  Nigeria 4th largest exporter of crude to US. Management projections based on numerous assumptions. 3 2020 . Wood Mackenzie.000 25. but 2nd largest importer of refined products Domestic gas supply / demand imbalance presents an enormous challenge for Nigeria –  –  Limited distribution infrastructure in place Federal Government Gas Master Plan to unlock Nigeria’s natural gas potential and meet growing energy demand R us s ia Ira n Proven natural gas reserves (2009) (Tcf) 1.50/mcf Supply at $4. ² Internal management model estimates and forecasts.000 15. The eventual plan may differ from the information set forth above and any such differences may be material.000 0 2006 2007 Demand Supply at $2.000 §  Gas “netbacks” comparable with oil given field sizes and fiscal term incentives MMcfpd 30. 280 S a udi A ra bia 245 US 227 A ra b E mira tes 200 V enez uela 185 Nig eria 159 A lg eria §  Over 180 Tcf of Nigerian gas resources available for exploration and production –  –  35% in Non-Associated Gas fields¹ with resource potential believed to exceed 500 Bcf / field Numerous undeveloped gas discoveries Source: BP Statistical Review (2010) Growing Nigerian natural gas demand/constrained supply² 35. BP Statistical Review.000 20.000 10.046 896 286 Q a ta r T urkmen.000 5. market and industry conditions.567 1.80/mcf –  §  $2/Mcf is equivalent to $60/bbl Seven to initially build a local presence by bridging the gap in the market for a domestic gas producer and supplier 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Source: EIA.

50/mcf Supply at $4.000 5.000 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Demand Supply at $2.000 10.Seven has a unique insight into Nigerian gas market §  Seven’s proprietary model provides a unique insight into gas supply and demand dynamics in Nigeria –  industrial usage and power demand –  supply potential from undeveloped gas fields §  Domestic gas demand is forecast to increase fivefold in c.80/mcf 4 .000 15.000 20.000 30. 10 years driven by industrial demand §  meeting projected domestic demand will require a significantly higher gas price 35.000 MMcfpd 25.

Filling a gap in the market for a domestic gas player §  Niger Delta is a mature basin dominated by the Super Majors –  Migrating to Offshore and Deepwater prizes –  Gas strategy almost exclusively LNG focused Seven Energy ConOil Amni ConocoPhillips Eni Total Shell SAPETRO Petrobras CNOOC Ltd Addax Chevron Gas % §  One of the few regions in the world where junior E&P companies can access world class onshore fields and prospects Afren Nexen StatoilHydro ExxonMobil Reserves –  High barriers to entry provide opportunities to purchase assets at a discount to historical metrics Soco Melrose Roc Oil Premier Addax §  Seven is bridging the gap in the market for a domestic gas producer and supplier Tullow Niko Heritage Production Seven Afren Salamander JKX Oil Coastal Scale: Comparative valuation 5 .

Company s estimates 6 . 38 & 41 §  Strategic Alliance with Petrofac for engineering and project management services and co-investment 2011 §  First gas and oil from Uquo field scheduled for Q4 2011 §  First oil from Stubb Creek field scheduled for Q4 2011 §  Expansion of NNPC Strategic Alliance §  Monetisation of OMLs 4.2009 Company achievements §  Acquisition of assets from Weatherford and merger of Seven and Exoro §  Seven s Nigerian gas supply and demand model developed and presented to Nigerian Government §  $120mn acquisition of GOGE §  MOU with Ministry of Petroleum Resources on Accelerated Gas Plan 2010 §  Acquisition of 62% interest in Universal Energy (Stubb Creek) §  Commenced US$350mn development of Uquo field §  Strategic Alliance with NNPC for development of OMLs 4. 38 & 41 gas reserves 2P Reserves (MMboe .2011 2007 .Seven Energy Corporate History: 2007 .net) 1 Reserves §  Nigerian founders investment Financing §  US$119mn raised from private equity in 2008 §  US$68mn raised in December 2009 §  US$104mn raised from institutional investors §  US$110mn raised from strategic partners including Petrofac §  US$60mn project finance facility completed §  $150mn senior debt facility arranged in Q2 2011 §  $100mn raised from strategic partners in Q2 2011 §  IPO ready by Q4 2011 1 Source: Competent Person s Report.

7 .Seven Energy’s Nigerian footprint Note: Map not drawn to scale – this summary of Seven Energy's assets does not include any additional interests to be obtained in the Company's Alliance Agreement with NPDC.

market and industry conditions. It is subjective. The eventual plan may differ from the above and such difference may be material. and therefore susceptible to periodic revaluation based on actual experience and business. .Mboepd) Gross Production (Mboepd) Seven Energy Phase 1a Pipeline Seven Energy Phase 1b Pipeline Phase 2 Pipeline Phase 3 Pipeline 3rd Party Pipeline Seven Energy gas field Seven Energy oil and gas field 3rd party gas field 100 75 50 25 0 2011 2012 2013 T otal  O il T otal  G as Demand Centres 2014 2015 2016 2017 2018 2019 2020 Source: Competent Person s Report Note: Liquids to Bcfe conversion ratio of 6Bcfe:1MMboe OKIIP Mill Port Harcourt Aba Geometrix IPP 12 km Uyo Unicem Cement NIPP Alaoji 30 km 15 km Ukana South NIPP Calabar OML 13 (SPDC) 55 km 60 km Uquo 37km Eleme Petrochemical Stubb Creek Ikot Abassi Ibom Power Alscon 23 km Qua Ibo Oil Terminal Cross River (Monipulo) Oron (Addax) Bonny Island 8 Note: Based on Seven Energy s management projections. The expansion plan is a management projection based on numerous assumptions.Empowering the power plant and industrial market in SE Nigeria Current 2P + 2C production profile (Gross .

000 bo/d Early Production Facility in logistics base Subsurface: §  §  In-house team with additional team seconded to the Uquo JV Capacity for 2 field developments per annum Gas Marketing M&A: §  §  Corporate finance team to execute 1 $250+ million or two $100+ million per annum Deal screening & evaluation: capability to screen 10-15 deals and evaluate 5 deals per annum 9 .Established operating and execution QHSSE & Community: §  §  International standard systems and management in place IFC Performance Standard by end of 2010 Drilling/Workover: §  §  A full operations team to support year-round drilling Two onshore drilling rigs on contract with best contractor in Nigeria Pipeline: in-house pipeline team: §  §  Recruited from Shell Capability to lay >100km 18” gas pipelines per annum Facilities: EPC expertise in-house: §  §  To develop 200 MMcf/d processing capacity every 12-18 months 5.

10 .EmPowering Nigeria’s Communities §  §  Working in partnership with Federal and State governments Contributing to structural economic growth of Nigeria’s gas industry Contributing to sustainable development of local communities Pro-active Community Relations programmes –  In-house Community Relations Team –  Long term job creation –  Investing in local infrastructure and educational projects §  §  §  $1mn + per annum pre-production investment.

Developing Nigeria’s Gas Reserves to Empower Domestic Growth Thank you .