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1 Private & Confidential Creating Value Through Our Knowledge And Experience
Hibiscus Petroleum Berhad Building Greater Value Company Presentation 5 September 2012
2 Private & Confidential Creating Value Through Our Knowledge And Experience
Market Data Summary
US$ 218 mil
Market: Main Market of Bursa Malaysia Securities Sector Category: Industrial Products Stock Code: 5199 HIBISCS Market Capitalization (5 September 2012) Shares: 438 248 422 units x RM 1.66 = RM 718.7 mil Warrants – A (Traded): 314 236 022 units x RM 1.08 = RM 339.4 mil Warrants – B (Untraded) 83 611 200 units x RM 1.08 = RM 90.3 mil
Website: www.hibiscuspetroleum.com
Hibiscus Petroleum is South-East Asia’s 1st SPAC and Malaysia’s 1st listed, independent oil and gas exploration and production (E & P) player.
3 Private & Confidential Creating Value Through Our Knowledge And Experience
Agenda
A. COMPANY GROWTH AND STRATEGY GOING FORWARD
1. Business Approach
B. GENERAL PRESENTATION ON HIBISCUS PETROLEUM GROUP - CURRENT
1. Introduction to Hibiscus Petroleum Berhad
2. Qualifying Acquisition Transaction
3. 3D Oil Transaction
4 Private & Confidential Creating Value Through Our Knowledge And Experience
Agenda
A. COMPANY GROWTH AND STRATEGY GOING FORWARD
1. Business Approach
B. GENERAL PRESENTATION ON HIBISCUS PETROLEUM GROUP - CURRENT
1. Introduction to Hibiscus Petroleum Berhad
2. Qualifying Acquisition Transaction
3. 3D Oil Transaction
5 Private & Confidential Creating Value Through Our Knowledge And Experience
Business Approach & Investment Focus Going Forward
LicenseAward
Seismic + other surveys
Drilling
Prospective resources
Discovery
Dry well
POD
Contingentresources
Cost overrundelays?
Firstoil
Increased recovery?
Overstated reserves?
Production
Reserves$/boe, risked
Time
Exploration Appraisal and define development
ProductionDevelopment Decommissioning
Prospective
Resources Contingent
Resources
Reserves
Discovery
Seismic and
Other Surveys
Dry Well
Drilling Plan of Development License
Award
Production First
Oil
Cost
overrun
delays
Overstated
reserves
Increased recovery
Time
$/ boe, Risked
Qualifying Acquisition • High Impact Advanced
Exploration to Build Value
Lime Transaction
Ris
k P
rofi
le
Time
IP
O -
SPA
C
High
Low
July 2011 Oct 2011 April 2012 Q2 / 2013
Development Assets • Proven Resources to
Build Balance Sheet Resilience and Mitigate Risk Production Assets
• Cashflow for Profitability and Sustainability
Plan for Success Strategy for Exploration Assets
6 Private & Confidential Creating Value Through Our Knowledge And Experience
Hibiscus Petroleum: Company & Strategy Evolution
Development / Production Focus
• Portfolio Balancing
Opportunistic Exploration • Based on Rex Technologies • Packaged with Development
or Production
Orient Hibiscus / Oceania Hibiscus
• Asia Pacific / Oceania
Hibiscus Oilfield
Services
Project Manager
Early Production A Key Driver
Hibiscus Petroleum Berhad
Exploration Focus • Based on Rex Technologies
Lime Petroleum • Middle East / North
Africa / Europe
Qualifying Acquisition
7 Private & Confidential Creating Value Through Our Knowledge And Experience
Agenda
A. COMPANY GROWTH AND STRATEGY GOING FORWARD
1. Business Approach
B. GENERAL PRESENTATION ON HIBISCUS PETROLEUM GROUP - CURRENT
1. Introduction to Hibiscus Petroleum Berhad
2. Qualifying Acquisition Transaction
3. 3D Oil Transaction
8 Private & Confidential Creating Value Through Our Knowledge And Experience
Hibiscus Petroleum: Our First 14 Months
Date Major Events
25 July 2011
Listed on the Main Market of the Malaysian Stock Exchange under Special Purpose Acquisition Company (SPAC) listing rules - South-East Asia’s 1st SPAC and Malaysia’s 1st listed, independent oil and gas exploration and production (E & P) player.
25 Oct 2011
Lime QA signed.
12 Apr 2012
Lime awarded onshore block in RAK.
18 Apr 2012
Lime QA completed.
4 May 2012
Norwegian blocks added to Lime portfolio
14 Aug 2012
3D Oil transaction announced
Value creation based on exploration-based opportunities
Mkt Cap: US$ 218 mil 5 Sept 2012
Additional Concessions in Norway and RAK
Shareholders Approve Lime
Deal
SC Approve
Lime Deal
Lime Transaction
3D Oil and VIC/P57
Transaction
-100%
-50%
0%
50%
100%
150%
200%
250%
300%
350%
400%
Brent (%) KLSE (%) Mother Share + Warrant (%) Mother Share (%)
9 Private & Confidential Creating Value Through Our Knowledge And Experience
Hibiscus’ Promise
Creating Value Through Our Knowledge And Experience
10 Private & Confidential Creating Value Through Our Knowledge And Experience
Capital Structure & Shareholder Profile
Total shares :
418,047,922
Total warrants :
418,047,722*
Exercise price of warrants of 50 sen Expiry date : July 2014
• Non-Independent Directors and Management hold largest block (20%)
• Diversified shareholder base: largest shareholders holds less than 10%
• Most large shareholders are involved in or familiar with the oil and gas industry.
• Several substantial IPO shareholders have increased equity position.
Sources of Funds at IPO: July 2011
Shareholder % Shares IPO / Current
Shareholder Profile
1 20.00% / 19.08%
Management Team
2 9.57% / 9.13% Shareholder in public listed oilfield services provider
3 0.48% / 8.88%
Investor in technology companies
4 6.46% / 6.08% Shareholder in public listed oilfield services provider
5 6.38% / 6.38% Shareholder in privately owned oilfield services provider
6 0.00% / 4.35% Shareholder in privately owned oilfield services provider
7 4.78% / 4.56% Shareholder in privately owned oilfield services provider
Shareholding Structure: Aug 2012
11 Private & Confidential Creating Value Through Our Knowledge And Experience
Current Capital Structure On 5 Sept 2012
Total Number of Warrants
Funds Received / To Be Received From The
Exercise of Warrants RM’000
Total Warrants – A exercised as at 29 May 2012 20,200,500 10,100
Balance of Warrants-A yet to be exercised 314,236,022 157,118
Warrants – B yet to be exercised 83,611,200 8,361
Total 418,047,722 175,579
As of 5 Sept 2012 Total number of shares in issue: 438,248,422
12 Private & Confidential Creating Value Through Our Knowledge And Experience
Board Members …. 1
Zainul Rahim bin Mohd Zain (Malaysian) Qualifications:: B.Sc. in Engineering (Mechanical), University of Western Australia. Experience: More than 30 years’ experience in the oil and gas exploration and production industry. Currently: Board member of Petronas Carigali Sdn Bhd and Petronas Carigali Overseas Sdn Bhd. Previously: Deputy Chairman of Shell Malaysia and Chairman and Managing Director of Shell Companies in Egypt.
Dr. Kenneth Pereira (Malaysian) Qualifications: B.Sc. (Hons) in Engineering, Bath University, United Kingdom, Masters in Business Administration, Cranfield University, United Kingdom and Doctorate in Business Administration, University of South Australia. Experience: 22 years’ experience in the oil and gas industry (both services and exploration and production). Worked for Schlumberger (9 years as a Field Engineer in North Africa and Europe), SapuraCrest Petroleum Berhad (from founding of the company as Sapura Energy in 1997 until 2008) as Chief Operating Officer. In 2009, became Managing Director of Interlink Petroleum Ltd, an oil and gas exploration & production company listed on the Mumbai Stock Exchange (2009 to 2011)
Zainol Izzet bin Mohamed Ishak (Malaysian) Qualifications: B.A. in Actuarial Studies, Macquarie University, Sydney, Australia and Masters in Business Administration, Cranfield University, United Kingdom. Experience: Previously: Sapura Holdings in various position, Sapura Digital Sdn Bhd and SapuraCrest Petroleum Berhad (from founding of the company as Sapura Energy in 1997 to 2010) as Chief Executive Officer. Currently: Managing Director of Perisai Petroleum Teknologi Behad (oil & gas services company quoted on Bursa Malaysia).
Chairman
(Non-Executive)
Managing Director
Independent
(Non-Executive)
Director
13 Private & Confidential Creating Value Through Our Knowledge And Experience
Board Members …. 2
Independent
(Non-Executive)
Director
Roushan Arumugam (Malaysian) Qualifications: M.A. in English Language and Literature, St. Catherine’s College, Oxford University, Masters in Business Administration from Imperial College Business School and M.A. in Legal Studies, University of Bristol, (all in the United Kingdom). Experience: Previously: Consultant at Price Waterhouse, London, Analyst with Caspian Securities Ltd, Investment Banker at Deutsche Bank, London and Nomura Advisory Services, Malaysia. Currently: Director of various companies, notably, Sri Inderajaya Holdings Sdn Bhd, Makhota Technologies Sdn Bhd, Pneumacare Ltd and South Pickenham Estate Company Ltd.
Independent
(Non-Executive)
Director &
Audit Committee
Chairperson
Datin Sunita Rajakumar (Malaysian) Qualifications: LLB (Hons), University of Bristol, United Kingdom, Chartered Accountant (Institute of Chartered Accountants, England & Wales) Experience: Previously: Ernst & Young and RHB Sakura Merchant Bankers Berhad, Currently: Independent Director and Audit Committee Chairman of Hai-O Enterprise and Director of Artisan Encipta Ltd (Venture Manager and Consultant on national innovation ecosystems).
Non-Executive
Director
Dr. Rabi Bastia Padmashree (Indian) Qualifications: D.Sc. in Petroleum Geology (joint award by ISM Dhanbad (India), Alberta University (Canada) & Oklahoma University (USA)), Ph.D. in Petroleum / Structural Geology (joint award by Indian Institute of Technology and the Royal Geological Society (U.K.)), B.Sc. in Petroleum Exploration and Reservoir Management (NTU, Norway) and Bachelor of Science in Applied Geology (Indian Institute of Technology). Experience: 32 years oil and gas Exploration & Production experience. Previously: With Oil and Natural Gas Corporation of India in various positions and one of the founders of the Reliance oil and gas E & P business. Currently: Head of Exploration Management of Reliance Industries Ltd, the largest Indian Independent Oil Company.
14 Private & Confidential Creating Value Through Our Knowledge And Experience
Board Members …. 3
Independent
(Non-Executive)
Director
Tay Chin Kwang (Singaporean) Qualifications: Bachelor of Accountancy from the National University of Singapore. Certified Public Accountant and fellow member of the Institute of Certified Public Accountants of Singapore. Experience: Over 22 years of experience in various accounting, finance management and business advisory functions across a broad spectrum of industries. Previously: Ernst & Young in Singapore. Currently: Finance Director of Ezra Holdings Limited, and serves as director of various companies in countries such as Singapore, Thailand, Norway and Nigeria.
15 Private & Confidential Creating Value Through Our Knowledge And Experience
Key Management …. 1
Chief Financial
Officer
Joyce Vasudevan (Malaysian) Qualifications: B. Economics . (La Trobe University, Australia) and Certified Practicing Accountant (Australia). Experience: More than 20 years finance and operations experience. Previously: Ernst & Young, RHB Sakura Merchant Bankers Berhad, Carlsberg Brewery Malaysia (Head of Business Analysis and Planning) and SapuraCrest Petroleum Berhad (Head of Strategic & Operations Planning) . Expertise: Corporate finance, audit, controls, business and operations planning, strategy development and implementation.
Head of Petroleum
Engineering
Dr. Pascal Hos (Dutch) Qualifications: Ph.D. in Mechanical Engineering and B.Sc. in Mechanical Engineering (both from Rice University, Houston, USA). Experience: Previous positions at Schlumberger (USA), NASA (Johnson Space Center, USA), Shell International (Netherlands) and Sarawak Shell (Malaysia). Expertise: Reservoir engineering and secondary recovery techniques.
Head of New
Ventures
Ir. Mohd Iwan Jefry Abdul Majid (Malaysian) Qualifications: B.Sc. in Petroleum Engineering, Pennsylvania State University, USA, M.Sc. in Petroleum Engineering (imperial College, London, United Kingdom). Experience: 19 years’ experience in the oil and gas industry (both services and Exploration & Production) Previously: With Petronas Carigali and Talisman (1992 – 2002), with Petroleum Development Oman (Shell JV : 2002 – 2005) and Schlumberger (2005 – 2009). Expertise: Petroleum sub-surface geology, petroleum economics and reservoir engineering .
16 Private & Confidential Creating Value Through Our Knowledge And Experience
Key Management …. 2
Head
Geoscientist
David Richards (Malaysian) Qualifications: B.Sc. (Hons) in Earth Science (UKM, Malaysia). Experience: 22 years of subsurface E & P experience. Previously: Geologist with Sun Oil, ExxonMobil, Carigali-Hess Operating Company and Newfield Malaysia. Expertise: Exploration, development and operations geology, planning, budget and economics co-ordination, mature field assessment and geo-modeling.
Head of
Projects
Christopher Dyas (British) Qualifications: M.Sc. in Thermal Power and M.B.A. (both from Cranfield University, United Kingdom). Experience: 28 years oil and gas experience in E&P engineering and projects. Previous employers include Marathon Oil , Cooper Energy Services , Atlantic Power and Gas and Wood Group (all in the UK) followed by Wood Group and SapuraCrest Petroleum Berhad (based in Malaysia) Expertise: Contracting, international projects management and business development.
Drilling
Operations
Manager
Elike Mawuli (Australian) Qualifications: B.Eng. and Masters in Engineering Management (both from Queensland University of Technology, Australia). Experience: 10 years oil and gas well drilling field experience with Santos Oil , Interoil Corporation, OilSearch Ltd, Eni Australia and Talisman Energy. Expertise: Onshore and offshore well planning, well drilling, contracting and cost management
17 Private & Confidential Creating Value Through Our Knowledge And Experience
Key Management …. 3
General Manager,
Corporate Finance
Azleen Rosemy Ahmad (Malaysian) Qualifications: B.Sc. in Actuarial Science and Finance (Wharton Business School, University of Pennsylvania, USA) and Masters in Business Administration (University of Nottingham, United Kingdom). Experience: 20 years experience in financial consulting, corporate finance, finance and operations. Previously : Price WaterhouseCoopers, RHB Sakura Merchant Bankers Berhad, SapuraCrest Petroleum Berhad Expertise: Corporate finance, merger & acquisition, reorganisation, monitoring & evaluation
18 Private & Confidential Creating Value Through Our Knowledge And Experience
Agenda
A. COMPANY GROWTH AND STRATEGY GOING FORWARD
1. Business Approach
B. GENERAL PRESENTATION ON HIBISCUS PETROLEUM GROUP - CURRENT
1. Introduction to Hibiscus Petroleum Berhad
2. Qualifying Acquisition Transaction
3. 3D Oil Transaction
19 Private & Confidential Creating Value Through Our Knowledge And Experience
Qualifying Acquisition Transaction
• On 25 October 2011, Hibiscus Petroleum Berhad announced that its wholly owned subsidiaries Gulf Hibiscus Ltd and Hibiscus Oilfield Services Ltd had signed several agreements on 24 October with the shareholders of Lime Petroleum PLC.
• These transactions constituted a Qualifying Acquisition (QA) for the company.
• Completion of a QA converts Hibiscus Petroleum from a SPAC to an operating, main market PLC. Completion took place on 18 April 2012.
20 Private & Confidential Creating Value Through Our Knowledge And Experience
• Investment is for:
a 35 % equity stake in Lime Petroleum (IoM) Ltd. • Assets are in Oman, RAK,
Sharjah and (prior to completion) Fujairah or equivalent
• Assets selection are based on Rex technology and are in an exploration stage
• Comes with a management contract to run the activities
• License enabling access to certain proprietary technologies for 5 years in the Middle East area
• Additional assets secured by Rex in Middle East area to be injected into Lime Petroleum at no additional costs
Initial Concessions
Ras Al-Khaimah
Oman
Sharjah
Technology License
Rex Gravity©
Rex Seepage©
Rex Virtual Drilling©
Funds
US$ 30 (+7) mil in various companies within the group
Additional Concessions
Deal At The Time Of Signing
21 Private & Confidential Creating Value Through Our Knowledge And Experience
Deal Evolution
Signing Deal Package
Lime QA Transaction
Announcement
25 October 2011
• 3 Concessions in Middle East • Oman Block 50 (74 -> 35 %) • RAK North Offshore (59 %) • Sharjah (100 %)
• Rex Technology for 15 Countries in Middle East • Project Management Contract to Hibiscus • Total Consideration: US$ 55 mil for 35 % • US$ 5 mil Discovery Bonus
Approvals & Conditions Precedent
Fulfillment
Securities Commission
Approval 16 February
2012
Shareholders EGM
Approval 21 March
2012
Completion Deal Package
• Additional Concession in Middle East • RAK Onshore (100 %)
• Letter of Intent for 4 Additional Concessions in Norway
• PL 503 (12.5 %) • PL 518 (15 %) • PL 526 (20 %) • PL 530 (10 %)
• Use of Rex Technology for Norway Concessions • No Change in Purchase Consideration
Deal Closing
18 April
2012
On 2 May 2012, Norway LOI translated to Definitive Agreements. On 28 May 2012, Lime’s stake in Masirah Oil was finalized at 64 %.
22 Private & Confidential Creating Value Through Our Knowledge And Experience
Lime: Legal Structure
100.0 %
59 % Rex Oil & Gas Ltd
Schroder & Co
Banque S.A.
Gulf Hibiscus
Ltd
Lime Petroleum Ltd
Dahan Petroleum
Ltd
Masirah Oil Ltd
Zubara Petroleum
Ltd 56.40 % 35.0 %
100 %
64 %
100.0 %
Lime Petroleum PLC
8.60 %
RAK
Offshore
Sharjah
Offshore
Oman
Block 50
Hibiscus Oilfield Services
Ltd
Hibiscus Petroleum Berhad
Lime Norway Ltd * 12.5% 15 % 20 % 10 %
PL 503
PL 526
PL 530
PL 518 * Currently being established
Exposure to 8 concessions in the Middle East and Europe
Baqal Petroleum
Ltd
100 % RAK
Onshore
Lime Group:
Listable as
Pure Exploration
Company
100 %
Subject to completion
23 Private & Confidential Creating Value Through Our Knowledge And Experience
Lime: Middle East Exploration Portfolio
RAK OFFSHORE RAK
ONSHORE
SHARJAH OFFSHORE
OMAN BLOCK - 50 RAK OFFSHORE
Dahan Petroleum Right Ally – 16 % Schroder – 25 % Lime – 59 %
SHARJAH OFFSHORE Zubara Petroleum Lime – 100 %
OMAN BLOCK 50 Masirah Oil Lime – 64 % Petroci – 26 %
RAK ONSHORE Baqal Petroleum Lime – 100 %
24 Private & Confidential Creating Value Through Our Knowledge And Experience
PL 526 Vågar/Karl
PL 503 Valberget
PL 518 Zapffe
PL 530 Heilo
PL 518 Dong – 40% (OP) North Energy – 15% Sagex – 10% Discover -20 % Lime – 15 %
PL 503 Lotos EP – 25% (OP) Edison -25% North Energy – 12% Skagen – 25% Lime – 13 %
PL 530 GDF – 40% (OP) North Energy – 10% Discover -20% Rocksource – 20% Lime – 10 %
PL 526 North Energy – 20% (OP) Noreco – 20% Dana -20% E.ON Ruhrgas – 20% Lime – 20 %
Lime: Norway Exploration Portfolio
25 Private & Confidential Creating Value Through Our Knowledge And Experience
Lime Group: Estimated Resources
Net Unrisked Best Estimate Recoverable Resources
(mmboe)
Net Risked Best Estimate Recoverable Resources
(mmboe)
RAK North Concession 60.9 13.4
Sharjah Concession 426.0 55.0
Block 50 Concession 1,420.0 248.0
RAK Onshore Concession TBA TBA Total (Excludes RAK Onshore) 1,907.8 315.6
Net Unrisked Best Estimate Recoverable Resources
(mmboe)
Net Risked Best Estimate Recoverable Resources
(mmboe)
PL 503 123 16.5 – 58.9 PL 518 17.6 1.2 – 4.3
PL 526 75.4 7.1 – 27.7 PL 530 10.1 3.2 – 7.1
Total 226.1 28.0 – 98.0
Middle East Source: Aker Geo
Norway Source: Company Internal Estimates
Note: Middle East estimates are post 28 May 2012 Masirah Oil Revised Agreements. Previous Agreements reduce Block 50 Net Risked Best Estimate Recoverable Resources to 156 mmboe.
26 Private & Confidential Creating Value Through Our Knowledge And Experience
Rex Proprietary Technologies
Rex Oil & Gas, major shareholders of Lime Petroleum PLC, has developed three new unique technologies which seeks to reduce the: early risks associated with discovery of oil and gas (and its commercial impact) time to commercialize viable fields The technologies are: Rex Gravity© - to detect possible hydrocarbon accumulations through use of satellite
information. Rex Seepage© - to verify hydrocarbon presence through the use of satellite information. Rex Virtual Drilling© - to verify content of accumulation (fluid identification) through a
complex seismic evaluation scheme based on resonance. This tool reduces the chance of commercial failure when drilling a well.
Lime Petroleum has 3 years exclusive access to these proprietary state-of the art technologies for the assessment and selection of oil and gas blocks located in the Middle East region Other areas are on a project basis
27 Private & Confidential Creating Value Through Our Knowledge And Experience
Technology License: Geographical Coverage
• 15 countries covering the most prolific petroleum basins which contain more than half of global proven oil reserves for a minimum of 3 years:
+ Bahrain + Egypt + Iran + Iraq + Jordan + Kuwait + Lebanon + Oman + Palestine (Gaza Strip and West Bank) + Qatar + Saudi Arabia + Syria + Turkey + United Arab Emirates + Yemen
• Offshore areas associated with above countries • Norway on a project basis
28 Private & Confidential Creating Value Through Our Knowledge And Experience
Benefits of Rex Technologies
Relative Cost
Activity Time (mths)
Low Secure Concession 12 – 18
Moderate High
Exploration Commitment • 2D / 3D Seismic • Drilling
36 – 60
Moderate High
Optional Appraisal • 2D / 3D Seismic • Drilling
24 – 36
Relinquish or Final Investment Decision
High Develop & Produce
Relative Cost
Activity Time (mths)
Rex Technology
Low Secure Concession 9-12 • Gravity • Seepage
Low Moderate
Exploration Commitment • 2D Seismic • 3D Seismic (optional)
12-24 • Virtual Drilling
Drill or Relinquish Decision
Moderate High
Appraisal & Early Production • 3D Seismic • Drilling
24 • Virtual Drilling
Relinquish or Final Investment Decision
High Develop & Produce
Conventional Work Program Rex / Lime Work Program
Rex proprietary technologies allow an early, informed decision to be made when investment levels are still moderate
Hibiscus Entry
29 Private & Confidential Creating Value Through Our Knowledge And Experience
Merits Of The Lime Transaction…..1
Large acreage position in known petroleum provinces which are diversified from geopolitical and geophysical standpoints. Middle East Norway
Large position of net resources with more upside.
US$ 50 mil of the purchase consideration will be infused into Lime for the conduct of
operations. Targeting mega findings in Oman and Sharjah, medium-sized discoveries in Norway and
low risk exploration targets in Ras Al – Khaimah (offshore). No drilling commitment under any of the EPSAs. Access to Rex technology for Middle East region and Norway on a project basis. Lime Group has no debt and approximately US$ 80 mil in cash for execution of work
program.
30 Private & Confidential Creating Value Through Our Knowledge And Experience
Merits Of The Lime Transaction …..2
Opportunity to learn and work with established operators. North Energy (Norwegian), Dong (Denmark), Gaz de France (France), Lotos(Polish)
Due to the Norwegian tax regime Lime`s exploration expenses will be competitive going
forward as 78% of the costs are reimbursed by the Norwegian State.
Possibility to participate in several high-impact wells at low comparable cost. Effectively operator in all concessions in the Middle East – opportunity to build Hibiscus
Probability of more concessions to be included.
Opportunity to list Lime independently so future fund raising will not dilute Hibiscus
shareholders.
Geographical focus with opportunity diversity reduces risk of failure.
Rex technology applied on all concessions with positive results.
31 Private & Confidential Creating Value Through Our Knowledge And Experience
Lime Group: Fully Funded Work Program
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Seismic
Acquisition
Reprocessing of existing data
Processing, Interpretation & VD
Drilling
Well Engineering
Drilling & Testing 3 wells Opt Well
Seismic
Acquisition
Processing, Interpretation & VD
Drilling
Well Engineering
Drilling & Testing 1 well
Seismic
Acquisition
Processing, Interpretation & VD Drill or Drop
Drilling
Well Engineering
Drilling & Testing 1 well
Seismic
Acquisition
Processing, Interpretation & VDPL 526 Drill or Drop Well
PL 503 Drill or Drop Well
PL 518 Drill or Drop Well
Pl 530 Drill or Drop Well
Well
2012 2013
Well Well
No
rwa
yO
ma
n B
lock
50
RA
K O
ffsh
ore
Sh
arj
ah
Ea
st C
oa
st
Off
sho
re
RA
K
On
sho
re
VD
VD
VD
VD
Seismic
Acquisition
Reprocessing of existing data
Processing, Interpretation & VD
Drilling
Well Engineering
Drilling & Testing 3 wells
Seismic
Acquisition
Processing, Interpretation & VD
Drilling
Well Engineering
Drilling & Testing 1 well
Seismic
Acquisition
Processing, Interpretation & VD
Drilling
Well Engineering
Drilling & Testing 1 well
Seismic
Acquisition
Processing, Interpretation & VD
PL 526
PL 503
PL 518
PL 530
32 Private & Confidential Creating Value Through Our Knowledge And Experience
Agenda
A. COMPANY GROWTH AND STRATEGY GOING FORWARD
1. Business Approach
B. GENERAL PRESENTATION ON HIBISCUS PETROLEUM GROUP - CURRENT
1. Introduction to Hibiscus Petroleum Berhad
2. Qualifying Acquisition Transaction
3. 3D Oil Transaction
33 Private & Confidential Creating Value Through Our Knowledge And Experience
3D Oil Transaction
On 14 August 2012, Hibiscus Petroleum and 3D Oil , an ASX Independent E&P company, entered into a conditional Subscription Agreement for 30,963,000 new, fully paid ordinary shares in the capital of 3D Oil representing approximately 13.04% of the enlarged total issued share capital of 3D Oil for a subscription amount of AUD2,043,558. On the same day, Hibiscus Petroleum (through wholly – owned subsidiaries Oceania Hibiscus Sdn Bhd and Carnarvon Hibiscus Pty Ltd) and 3D Oil, also entered into a conditional farm-in agreement for the acquisition of a 50.1% interest in VIC/P57 (a permit located in the Gippsland Basin of Australia’s Bass Strait) for a purchase consideration of AUD13,473,000 and a contribution of AUD13,527,000 towards the joint operating activities .
34 Private & Confidential Creating Value Through Our Knowledge And Experience
Summary of the Proposed Transaction
Hibiscus Petroleum Berhad (Hibiscus)
Oceania Hibiscus Sdn Bhd (OHSB)
Carnarvon Hibiscus Pty Ltd (Operator) 3D Oil Ltd (ASX Listed)
Direct Investment in VIC/P57
[Unincorporated JV]
AUD 27 MM – Farm-in Agreement for a 50.1 % stake in
VIC/P57
AUD 2 MM – Subscription Agreement for placement of
new shares in PLC
100%
13% 100%
49.9% 50.1%
Regulated by a Joint Operating Agreement to be entered into by both parties
Malaysia Australia
• As part of its portfolio balancing strategy, Hibiscus Petroleum, through Oceania Hibiscus and Carnarvon Hibiscus is proposing to: o subscribe 14.99% of the current share capital i.e. 30,963,000 shares at approximately AUD0.065 per share (based on 30-day
VWAMP from the date of the Subscription Agreement). This will result in an equity interest of 13% of the enlarged share capital, for approximately AUD2 million o acquire a 50.1% farm-in interest in VIC/P57 for AUD13.5 million and an additional contribution to project expenditure of AUD 13.5
MM (collectively referred to as the “Proposed Transaction”).
o Total Hibiscus Petroleum commitment is AUD 29 MM
35 Private & Confidential Creating Value Through Our Knowledge And Experience
Introduction to 3D Oil Limited
• Incorporated in July 2003 in Australia. Listed on the ASX on 22 May 2007 (raised AUD 44 million).
• Principal continuing activities : Exploration and development of upstream oil and gas assets.
• Owns an undeveloped proven oil field and exploration interests in the Gippsland Basin, South East Australia. Acquired 100% interest in VIC/P57 in 2004.
o VIC/P57 covers a 483 km2 located on the Northern Margin of the Gippsland Basin. o Granted renewal of VIC/-57 for a 5-year term in August 2011. o Tested by four wells, one of which resulted in the West Seahorse oil discovery. o Only one of these wells has been drilled within the last 25 years.
• Capital Structure (as at 30 September 2011): Issued shares: 206,560,000 Current share price: AUD0.065 Current Market Cap is AUD13 mm (RM43 mm) as of 8 August 2012.
36 Private & Confidential Creating Value Through Our Knowledge And Experience
• Australia’s most prolific oil & gas basin, close to major existing infrastructure, including established oil & gas refineries
• Operations are made up of 18 platforms and several subsea tiebacks
• Over 30 fields including 3D Oil’s West Seahorse field make up the Bass Strait grouping
• Oil production peaked in 1985 from initial production in 1970 and has been in decline since
• Gas production increases in importance
Australia : Gippsland Basin Background
VIC/P57
VIC/P57
37 Private & Confidential Creating Value Through Our Knowledge And Experience
Background Information on VIC/P57
• The VIC/P57 Exploration License is located in the northwest of the Gippsland Basin with the northern boundary some 10 kms offshore of the south-east Victorian coast and infrastructure.
• The key assets within the permit are the (proven) West Seahorse Field, and two Exploration Prospects, Sea Lion and Felix .
• West Seahorse is a small offshore oilfield estimated at 7.3 MMbbls EUR (GCA 9.2 MMbbls EUR) of light oil. It was discovered in 1981 and lies approximately 10-14 km from the coast and in 35m of water.
• Sea Lion is a robust Exploration Prospect on trend with similar reservoir and depths, close to West Seahorse and some 4 km from shore.
• Felix is a less robust Exploration Prospect. The reservoirs are deeper (at some 2500mss), the structure is more subtle.
• Additional Exploration Leads have also been identified within the acreage and may mature into drill targets with additional work
– Salsa, Kangafish, Dexter, Lucifer, Flinders
West Seahorse Field • Estimate of 7.3 MMbbls was done by Hibiscus • Certification of 9.2 MMbbls was
done by Gaffney Cline and Associates (engaged by 3D Oil)
38 Private & Confidential Creating Value Through Our Knowledge And Experience
Merits of the Proposed Transaction … 1
Proposed Subscription Favourable terms as Hibiscus Petroleum was able to negotiate a payment in exchange for 3D Oil Shares, instead of the generally accepted practice of a deposit upon execution of an acquisition agreement as a commitment fee
Capitalise on the potential upside of shares in 3D Oil which are currently undervalued (AUD 0.066), being
significantly lower than its latest net asset per share of AUD 0.14 as at 30 June 2011.
Proposed Farm-In In line with the portfolio balancing strategy of Hibiscus Petroleum Group of investing in development and / or
producing assets P50 Resources of 7.3 MMbbls (P50 Contingent 5.5 MMbbls) with significant exploration upside especially for the Sea Lion Prospect Acquisition of a controlling interest in the VIC/P57 (50.1%) with role of Operator (subject to approval of relevant authorities)
Access to subsurface staff with expert knowledge on the Gippsland Basin
39 Private & Confidential Creating Value Through Our Knowledge And Experience
Utilisation of Farm-In Sum (AUD 27 MM) for initial work programme including drilling of up to 2 production
wells within the West Seahorse Prospect. As the West Seahorse prospect is a discovered asset with proven reserves, drilling activities under the initial work programme may be partially funded by bank borrowings.
Favourable terms for recovery of Farm-In Consideration i.e. Hibiscus Petroleum is to receive 74.9% of petroleum produced until the Farm-In Consideration is fully settled. After full settlement, distribution of petroleum produced in proportion to the parties’ participating interest (Hibiscus Petroleum (through CHPL) : 50.1%, 3D Oil : 49.9%). Such preferential recovery terms not only accelerates the repayment of the Group’s Farm-In Investment, but this also means that such investment is essentially an advance to the project as it is to be repaid in preference, and over and above CHPL’s participating share of 50.1%.
Further geopolitical diversification of assets.
Merits of the Proposed Transaction … 2
40 Private & Confidential Creating Value Through Our Knowledge And Experience
S
Qualifying Acquisition • High Impact Advanced
Exploration to Build Value
Lime Transaction
Ris
k P
rofi
le
Time
IP
O -
SPA
C
High
Low
July 2011 Oct 2011 April 2012 Q2 / 2013
Development Assets • Proven Resources to
Build Balance Sheet Resilience and Mitigate Risk
Production Assets • Cashflow for
Profitability and Sustainability
Plan for Success Strategy for Exploration Assets
Lime Assets VIC/P57
Merits of the Proposed Transaction … 3
Strategy fit
41 Private & Confidential Creating Value Through Our Knowledge And Experience
Thank You