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AUSTRALIAN OIL COMPANY
ASX: AOC
Fremantle, September 2014
AUSTRALIAN OIL COMPANY
2www.australianoilcompany.com
Positioned for Success:
1. Unparalleled Gas Market
2. Ground Floor position in onshore, conventional reservoir sub-basin under the established Sacramento Basin
3. Asset Depth: Multi-Tcf Drillable Prospects, with analogue prospects leased for follow-up drilling
A
O
C
Source: AOC - ASX Release – 2nd December 2013
AUSTRALIAN OIL COMPANY
Tightly held stock; management focused on leveraged exploration
• Shares on issue: 92.1 million
– Options: ~20 million unlisted options at 25 cents expiring end 2015 and 2016
• Annual G&A at an industry low of <A$300k per year; offset by A$100k per year revenue
• Market Cap: A$14 million
• AMI with AOC 70%; Xstate (ASX:XST) 30%
• Management Team of experienced industry
veterans with a proven record of exploration
success & gas monetization
• High Project Equities in
~ 28,000 leased acres
Funding Exploration
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AUSTRALIAN OIL COMPANY
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California Gas Markets: Shortfall of 6.5 BCF/d; LNG export options
NW pipeline3.9
MMMcf/d
Transwestern pipeline
2.4 MMMcf/d
Kern River1.8 MMcf/d
TransCanada GTN pipeline2.7 MMMcf/d
Paiute Pipeline
1.0 MMcf/d
Total Californian Gas Demand
Approx. 7.0 billion cubic feet a day.
Peak over 11.0 billion cubic feet a day
Californian production is about 410 million cubic feet per day. (< 5%)
Local gas price: Henry Hub + ~$0.60
Oregon LNGProposed
Jordan Cove LNGProposed
BC LNG PlantsProposed
GOM LNG PlantsProposed
Energia Costa Azul LNGImport
Source : Naturalgasintel.com
AUSTRALIAN OIL COMPANY
“Second generation exploration of the
established Sacramento Basin; targeting big,
conventional gas to feed strong domestic and
LNG demand”.
Ground Floor Prospecting for Hidden Value
Oil: Porters Ranch
Mankins Ranch
Gas: Sacramento
Assets
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Schematic Cross Section illustrating 7 Reservoir Targets
Dempsey Prospect- 1+ TCF gas exploration well
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Structure Map
Dempsey Prospect- 1+ TCF gas exploration well
Resource Estimate:
• Total (100%) unrisked recoverable prospectiveresource* on a best estimate deterministic basis:
> 1 Tcf ( > 167 million boe)
• Each target ranges from 1 Bcf to 350 Bcf ( 0.35Tcf)
• Probability of success estimates from 40% to 10%(weighted average ~20%)
• Individual reservoirs from 80 acres to 3900 acres
• Based on 3D and 2D seismic
• Leases:• Net revenue interest ~80%• AOC Working Interest 55% with option for +5%• AOC net interest in revenue before Opex ~48%
* Refer AOC ASX release 4 Sept 2014
AUSTRALIAN OIL COMPANY
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Alvares 1 Gas Discovery- Well Summary
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Wet sands outside of closure
Thick Seal
Interpreted Gas Column
with core and gas sample
15
00
+ metre
s gas sho
ws
17# Mud masks shows
• Alvares 1 gas discovery drilled in 1982 • 1,500 metres of gas shows• Pipeline quality gas to surface
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Alvares Appraisal-2+ Tcf gas
The Alvares Project is located close to large natural gas pipelines, and is on trend 30 miles from the geologically similar multi-Tcf Tulainyo Project (based on the James well drilled in 1947), mapped by Cirque Resources, and involving OXY, California's largest oil and gas company.
http://www.cirqueresources.com/
DempseyAlvares
Tulainyo
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Alvares Appraisal- 2+ Tcf gas
Alvares Appraisal Project- appraisal of a conventional sandstone reservoir gas discovery:
• Total (100%) unrisked recoverable prospective resource* on a best estimate deterministic basis:
~2.4 Tcf ( ~400 million boe)
• The Alvares 1 gas discovery was drilled within mapped closure over 30 years ago; intersected >1500 metres of high gas shows on mudlogs from 2500 metres depth; and flowed pipeline quality gas to surface
• The prospect is interpreted to have a high probability (>60%) of flowing commercial quantities of gas, with a 10% -15% chance of 1+ Tcf gas
Approximately 10,000 acres leased
AOC Working Interest is 40%:• with option, on terms to be defined to increase to 60%.• Net revenue interests are ~80%.• Resulting in AOC having ~50% net revenue interest
after option is exercised.
*Resource estimate basis in Appendix to this presentation
Alvares 1
AUSTRALIAN OIL COMPANY
This document contains forward looking statements that aresubject to risk factors associated with the oil and gasindustry. It is believed that the expectations reflected inthese statements are reasonable, but they may be affectedby a many variables which could cause actual results ortrends to differ materially. The technical informationprovided has been reviewed by Mr Gary Jeffery, ManagingDirector of Australian Oil Company Limited. He is a qualifiedgeophysicist with over 40 years technical, commercial andmanagement experience in exploration for, appraisal anddevelopment, and transportation of oil and gas. Mr Jefferyconsents to the inclusion of the information in the form andcontext in which it appears.
In accordance with ASX Listing Rules, any new hydrocarbonresource information in this document has been reviewed byAustralian Oil Company’s Technical Director, Mr KeithMartens, who has over 35 years of experience in the sector,with 15 years of experience in working in North America. MrMartens is a qualified resources evaluator and consents tothat information being included in the form and context inwhich it appears.
Before investing it is recommended that you conduct yourown due diligence and consult financial and technicaladvisors.
Cautionary Note
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AUSTRALIAN OIL COMPANYAdditional Explanatory Information
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1. Contact Information
2. AOC Exploration & Appraisal – Next Steps
3. Alvares Project Resource Basis
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Directors: Andrew Childs - ChairmanGary Jeffery - Managing DirectorKeith Martens -Technical Director
Company Secretary: David McArthur
For further information contact:
Gary Jeffery - Managing DirectorAustralian Oil Company Ltd Ph: +61 8 9226 0866Email: [email protected]
Management and Contact Information
AUSTRALIAN OIL COMPANY
Continue parallel execution of plans to capture significant value:
1. Permitting to drill Dempsey 1+ Tcf Conventional Gas Prospect
2. Define and acquire additional working interests
3. Permitting to drill 10+ million barrel Porter Ranch oil exploration well
4. Close funding alternatives
5. Refine Alvares 2+Tcf Gas Project plans, including drilling detail
6. Continue leasing of acreage over most attractive Analogue Prospects to crystallise ‘early mover’ advantage.
7. Drill Dempsey and Porters Ranch- late 2014 to early 2015
AOC can control timing- annual lease payments,
but there is no drilling work program or spend obligations
2. AOC Exploration & Appraisal – Next Steps
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3. Alvares Project Resource Basis
Alvares Appraisal Project:
• Total (100%) unrisked recoverable prospective resource on a best estimate deterministic basis:
~2.4 Tcf ( ~400 million boe* - using an industry standard energy based conversion factor of 6 mcf per boe).
The resource estimate is based on:
• Anticlinal structure covering >26 Sq Km (>6400 acres)• Broad 2D seismic control;• The key well drilled within mapped closure over 30 years ago• The key well was drilled for oil • The well intersected >1500 metres of high gas shows on mudlogs from 2500 metres depth• The well tested small quantity of pipeline quality gas from pre-flow to open hole DST, that then failed mechanically• The prospect is interpreted to have a high probability (>60%) of flowing
commercial quantities of gas, with a 10% -15% chance of 1+ Tcf gas• The Alvares Project is located close to large natural gas pipelines and a ready market
