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Selan Exploration Technology Limited
Corporate Presentation
Page 1
Selan Exploration Technology Limited
COMPANY OVERVIEWSELAN CORPORATE PRESENTATION
Page 2
Selan Exploration Technology Limited
Company Overview Founded in 1985, Selan is an established hydrocarbon
producing company operating 5 oil & gas fields in prolific
Cambay Basin in Gujarat, India
Publicly listed and traded on NSE & BSE
100% Ownership of all assets ~170 MM BOE Oil in place
Cumulatively produced 2.9 MM BOE over 20 years.
Expected to produce 5.3 MMBOE more of oil & gas with
significant unproved upside
Debt-free company. Steady cash flow & strong balance sheet
Significant opportunity to scale up and grow business with
remaining recoverable resourcesSource
CB-ONN-2009/8
Karjisan
IndroraLohar
OgnajBakrol
Cambay
GandharSelan’s Fields
Major Fields
AnkaleshwarRecentDiscoveries
Page 3
Selan Exploration Technology Limited
Corporate Highlights
Proven capability to maximize potential of marginal fieldsImpressive Track Record
• Cumulative production of 3 major fields prior to Selan – 125 K BOE (in approximately 25 years)• Cumulative production from 3 major fields under Selan – 2.9 MM BOE (in approximately 20 years)
Operating in well explored basin & mature marketLow Risk Operating
Environment
• Fields within 60 Km of Ahmedabad city in prolific & well defined Cambay basin• Close proximity to customer leading to low supply costs• Gujarat offers excellent infrastructure, geo-political & economic stability
Low risk strategy focused on maximizing recovery from under-exploited resourcesSignificant Opportunities
• Significant recoverable reserves offer multi-fold upside to oil production• Internationally experienced new management team with proven track record at Chevron, Cairn, Halliburton, Baker Hughes and
Petronas in place to develop and execute growth plans.
Consistently delivered high profitability across industry cyclesStrong Financial Position
• INR 1.1 Billion $ 17.5 MM cash reserves. ZERO Debt• Fully capable of funding organic as well as inorganic growth opportunities with internal accruals/generation
Page 4
Selan Exploration Technology Limited
Impressive Profit Margin
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CUMULATIVE REVENUE, CAPEX, LIFTING COST, PROFIT PETROLEUM $ MILLION
Cumulative Capex Cumulative Lifting Cost Cumulative Profits Petroleum Cumulative Revenue
CAPEX $70 MM
REV. $180 MM
LIFT $19 MM
GOVT $11 MM
For Indrora, Bakrol and Lohar fields only
Page 5
Selan Exploration Technology Limited
Impressive Profit Margin (Per BOE)
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CUMULATIVE REVENUE, LIFTING COST, PROFIT PETROLEUM, CAPEX $ PER BOE
Capex Lifting Cost Profits Petroleum Revenue
For Indrora, Bakrol and Lohar fields only
Selan Exploration Technology Limited
Board of Directors ChairmanRohit Kapur
Mr. Kapur is a graduate of Columbia Business School (MBA) and is a former General Manager of American Cyanamid Inc., a Fortune 100 Company for one of its international subsidiaries. A seasoned entrepreneur with international experience, he has played a pivotal role in the growth and evolution of SELAN since its inception.
DirectorDr. Derek CorbishleyDr. Corbishley is a graduate of the University of London and received a Doctorate in Geophysics from the University of Durham. He has had a distinguished career at Shell for over three decades after his first few years at the UK Department of Defense. He worked for Shell in Africa, South America, Brunei, UK and The Hague, Netherlands. He also served as the MD of Shell India for five years.
DirectorTarik CurrimboyA leading architect and non-resident Indian, living and practicing in New York. Mr. Currimbhoy did his post graduate studies from Cornell University. He is well known to the Indian community in the US and the Middle East ; and member of Board of Directors of SELAN.
DirectorS. Bhagwati DalalMs. Bhagwati Dalal is an Architect with 30 years of domestic and international experience, having earned the prestigious L’ Institute Francaise D’ Architecture scholarship to study and work in France. She is actively engaged with an array of NGOs and social organizations aimed at improving the overall quality of life of the citizens of our Country.
DirectorManjit SinghMr. Singh is a graduate from University of Delhi and seasoned TATA executive where he has had a 34 year long and illustrious career from the time he joined TATA Finlay in 1978 and retired in 2014 as CM of TATA’ Anamalai Tea Division. Having led various Strategic Business Units during his career, Mr. Singh has a wealth of management experience
DirectorRaman SidhuMr Sidhu is a qualified chartered accountant from the Institute of Chartered Accounts in England and Wales. He has served as a Senior Director and Board Director – HSBC Securities & Capital Markets (India) and as Director Fidelity Fund Management & Barclays Plc. He has also served as an independent director on several Boards, including BHEL, NHPC & IIFCL.
Page 7
Selan Exploration Technology Limited
Management Team & Key Advisors
President & CEONeeraj Sethi
Neeraj Sethi, a graduate of IIT Mumbai, is an internationally accomplished business leader with extensive leadership experience in general management, P&L and business development in the upstream Oil and Gas industry. He has a proven track record of building and running businesses at a country and regional level. He has held senior leadership positions with leading multinational companies such as Baker Hughes, Halliburton and been the COO of a publicly listed company (Asian Oilfield Services). He has been awarded 4 patents and authored 4 SPE papers.
Subsurface ManagerManabesh ChowdhuryManabesh is an alumni of IIT Mumbai where he completed his Masters in Geo-exploration & Applied geology. He is an experienced technical professional with extensive experience technical interpretation & integration and in leading integrated sub-surface and field development teams at leading E & P companies, including Reliance, Cairn and Petronas. He has 7 international and 3 national publications to his name and is an active member of SPE, and AAPG.
Principal Drilling EngineerBiswajit Ghosh
Biswajit is a post-graduate in Petroleum Engineering from Louisiana State University and has over 3 decades of international experience in drilling operations and engineering in E&P and oilfield service companies including, Aramco, KOC, Halliburton, Addax, Perenco, Frontera, PTTP, Oxy and ONGC. He is a recognized expert in drilling and project management, well-engineering and design, risk assessments and performance drilling.
Sr. Technical Advisor to BoDDeepak Agarwal
Deepak is a post-graduate from University of California, Berkeley and the former Director, Technical and Executive Committee member at Cairn India Limited. He has held senior management positions in major E&P companies globally, including BP and Chevron. He is a recognized expert in reservoir description and management, asset development and mega-projects management.
Sr. Financial Advisor to BoDShiv
KapoorShiv is a Fellow of the Institute of Chartered Accountants of England and Wales and has twenty years of experience in a various financial disciplines including strategic planning, international tax and compliance. His career spans four continents where he has worked in Dubai, London, Baku, Jakarta, Aberdeen and Houston for leading oil and gas companies including Schlumberger and Tansocean.
Sr. Completions AdvisorR. N. Mitra
RN Mitra is a Petroleum Engineering graduate from Indian School of Mines and has over 3 decades of experience in operations-completions and engineering in E&P companies including, ZADCO, Geo-Enpro, Canoro and ONGC. He is a recognized expert in completions, well-engineering and design and operational planning and execution.
Page 8
Selan Exploration Technology Limited
ASSET OVERVIEWSELAN CORPORATE PRESENTATION
Page 9
Selan Exploration Technology Limited
Cambay Basin Overview Basin area 59,000 sq. km
Discovered resources of over 15 Bn. Barrels
Balance proven reserves of over 750 MMBOE
178 discrete fields with median size 18 sq. km
Multi-Stack Reservoirs - Several producing &
prospective layers
Major Producing Fields
• Mehasana, Kalol, Ankaleshwar, Gandhar, Sabarmati, Wavel,
Gamij, Nawagam, Viraj, Sanand, Jhalora
Recent Discoveries
• Multiple Fields in CB-ONN (RIL, Jay, Sun Petro)
Selan Operated Fields
• Bakrol, Indrora, Lohar, Ognaj & Karjisan Source
Karjisan
IndroraLohar
OgnajBakrol
Cambay
GandharSelan’s Fields
Major Fields
AnkaleshwarRecentDiscoveries
Page 10
Selan Exploration Technology Limited
Cambay Basin Stratigraphy
Kalol – Prolific Conventional Oil formation
• Lohar – Producing from K-III• Karjisan - Producing from K-IV & K-III• Bakrol - Producing from K-IX & K-VIII• Indrora - Producing from K-X• Ognaj – Tested in K-IX & K-X
Cambay Shale – Producing formation with significant upside potential
• Indrora – Main producing Interval• Bakrol – Deeper prospective interval
Olpad – Prospective Zone
• Indrora – Well intersections have flowed oil to surface. New technology could unlock the potential
Page 11
Selan Exploration Technology Limited
Asset Summary
Shallow reservoirs Low cost drilling & completions
Multiple horizons with a range of reservoir characteristics• Reservoir Permeability – High perm sands to low perm silty reservoirs
• Oil characteristics - Light to heavy oil with varying viscosities
Productivity managed via fit-for-purpose approach for each field
Key Facts Bakrol Lohar Indrora Karjisan Ognaj Total
Block Area (sq. km) 36 5 130 5 13.65 190
Reservoir Kalol Kalol YCS Kalol Kalol
Major Reservoir Depth 1500 1350 1400 1350 1500
API Gravity (-) 35-41 20 35 16 15
Formation Permeability (mD) 30 ~1000 0.1 to 2 ~1000 2 – 10
Dead oil viscosity @ 50° C (cP) 20 300 9 600 250
Drilled Wells/Producing Wells 29/23 13/6 16/6 4/1 3/Nil 65/39
Current Production (BOE/day) 400 130 70 - - 600
Page 12
Selan Exploration Technology Limited
Typical Field Facilities
Page 13
Selan Exploration Technology Limited
Bakrol – Location & Field Overview
36 sq. Km. block.
Discovered O&G Inplace: 79.8 MMBOil + 20.6 MMBOE Gas
ONGC discovery 1968 in BK-2 (Kalol)
Selan awarded Field in 1995 under pre-NELP PSC
ONGC Cum. Prodn. 35 K BOE from 7 wells.
Selan Cum Prodn. 2.07 MMBOE from 29 wells
Currently 25 of 29 wells producing.
Facilities: 2 Early Production Systems (EPS)
Delivery: Oil trucked to ONGC’s Navagam Terminal for
onward sales to IOCL
Gas sold to local customers via in-field transmission
Page 14
Selan Exploration Technology Limited
Lohar – Location & Field Overview
5 sq. Km Block.
Discovered O&G Inplace : 3.8 MMBOil + 0.05 MMBOE Gas
ONGC discovery in 1981 LH-1 (Kalol)
Selan awarded field in 1995 under pre-NELP PSC
ONGC drilled 3 wells Cum prodn. 10.8 K BOE
Selan Cum Production 0.7 MMBOE from 13 wells
Currently 6 out of 13 wells are producing.
Facilities: 1 Early Production System with heater/de-
emulsifier, Effluent treatment system and water injection
Delivery: Oil trucked to ONGC’s Navagam Terminal for
onward sales to IOCL
Gas used as fuel for internal use
Page 15
Selan Exploration Technology Limited
Indrora – Location & Field Overview
130 sq km block.
Discovered O&G Inplace : 51.7 MMBOil + 5.9 MMBOE Gas
ONGC discovery in 1971 IND-1 (Younger Cambay Shale)
Selan was awarded the Indrora Field on 13th March 1995
under a PSC signed with MoPNG
ONGC drilled 12 wells. Cum Production 76 K BOE
Selan drilled 6 wells (IND-11 to 16). Selan Cum Production
0.125 MMBOE
Currently 10 out of 16 wells are producing.
Facilities: 1 Early Production System
Delivery: Oil trucked to ONGC’s Navagam Terminal for
onward sales to IOCL
Page 16
Selan Exploration Technology Limited
Karjisan – Location & Field Overview
5 sq km block.
Discovered O&G Inplace : 6.8 MMBOil + 0.5 MMBOE Gas
ONGC discovered the Karjisan Field in 1985 by drilling the KJ-
1 well which produced gas from Kalol-III formation of Middle
Eocene Age
Selan was awarded the Karjisan Field on 16th Feb 2004
under a PSC signed with MoPNG
ONGC drilled only KJ-1 well.
Selan drilled KJ-2, 3, & 4 wells making an oil discovery in
Kalol-IV formation in KJ-3 well in 2014
Selan has submitted a DoC for the oil discovery, FDP is
planned later in 2017 with production starting 2018
There is 1 Early Production System in Karjisan Field
Page 17
Selan Exploration Technology Limited
Ognaj – Location & Field Overview
The Block covers an area of 13.65 Sq Km adjacent to
urbanized region of Ahmedabad city
Discovered O&G Inplace : 0.8 MMB Oil + 0.02 MMBOE
Gas
ONGC discovered the Ognaj field in 1982 and drilled two
wells (Ognaj-1 &2), Selan drilled the Ognaj-3 well in 2011
Selan was awarded the Ognaj Field on 16th Feb 2004
under a PSC signed with MoPNG
Ognaj block is in appraisal phase
Selan is maturing the technical understanding of Ognaj
field prior to initiating development activities
Page 18
Selan Exploration Technology Limited
Phased Production Enhancement Plan
Unit
Ba
kro
l
Lo
ha
r
Ind
rora
Ka
rjis
an
Og
na
j
To
tal
MMBOE 60.2 2.5 20.2 3.2 0.3 86.4
MMBOE 2.10 0.70 0.21 0.00 0.00 2.90
Oil MMBOE 0.55 0.18 0.11 0.84
Gas MMBOE 0.21 0.36 0.57
Oil MMBOE 0.79 0.27 0.26 1.32
Gas MMBOE 0.32 0.32
Oil MMBOE 1.80 0.23 2.03
Gas MMBOE 0.22 0.22
OILMMBOE 3.14 0.41 0.38 0.26 0.00 4.19GAS MMBOE 0.75 0.00 0.00 0.36 0.00 1.11
ADDITIONAL MMBOE (OIL + GAS) 3.89 0.41 0.38 0.62 0.00 5.30
Phase-II Bakrol Drilling + Lohar Waterflood
2P Oil In Place
Cum. Oil Production
Baseline Decline
Phase-I Enhance Existing Wells
PHASED DEVELOPMENT
Page 19
Selan Exploration Technology Limited
Asset Status and Prospects
Low geological riskOil in Place
• Fields extensively mapped with 3D Seismic and infill drilling
• Integrated static & dynamic modeling being implemented on all the fields
Significant oil remainingBalance
Reserves
• Current recoveries well below industry norm• Phased target to extract additional 4.2 MM BOE
oil + 1.1 MMBOE gas• Proven feasibility of production enhancement
Viable un-risked prospects with low entry barrier
Potential Upside
• Upside on existing zones & new targets in Olpad, Kalol & YCS.
• Oil flowed to surface• Discoveries in neighboring fields • Low capex with using existing wells for appraisal
Selan Fields
Lohar(28%)
Bakrol (3.4%)
Indrora(0.5%)
Resources Unit
Ba
kro
l
Lo
ha
r
Ind
rora
Ka
rjis
an
Og
na
j
To
tal
2P Oil In Place MMBOE 60.2 2.5 20.2 3.2 0.3 86.4
Cum. HC Production MMBOE 2.1 0.7 0.2 - - 2.9
Cum. Recovery to date % 3.5 28.0 1.0 - - 3.4
IEA Report 1997Jean L.
Page 20
Selan Exploration Technology Limited
Bakrol – Basis of Development Plan
Field producing from 23 of 29 wells
Range of productivities
Majority of wells need artificial lift to produce
Bakrol wells need production enhancement via hydraulic fracking
Results from recent stimulation campaign increase confidence in increasing production from improved well productivity
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WELL DISTRIBUTION BASELINE DECLINE (BOE)
WELL DIST WELL COUNT
Page 21
Selan Exploration Technology Limited
Bakrol – Strategy in Action
Pilot hydraulic fracturing campaign resulted in multi-fold
production enhancement
4 shut-in wells put on production
Net gain projected ~300K BOE over baseline projection
Full field implementation planned to enhance production to
extract ~800K BOE above baseline projection
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WELL DISTRIBUTION BASELINE DECLINE (BOE)
WELL DIST WELL COUNT
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WELL DIST WELL COUNT
Page 22
Selan Exploration Technology Limited
Indrora – Justification for Future Profile
Eagle Ford Indrora (YCS)
Reservoir Depth (m) 3500 1500
Reservoir Characteristics
Clay (5-45%) with carbonate
Clay (5-45%) with quartz & carbonate
Porosity 8-18 20-30
Permeability (mD) 0.007-0.03 0.0004-5.0
Well Type Vertical to Horizontal Vertical
Avg. Per Well Production (bbls)
115 30
Younger Cambay Shale reservoir
Similar to prolific American Shale
reservoirs (Eagle Ford)
Hydraulic Fracturing & Horizontal drilling
allow economic recovery
3 Well Pilot project underway to
establish Frac. effectiveness
Plays
Page 23
Selan Exploration Technology Limited
LOHAR – Analogous Fields & Successful Execution
Lohar water-cut is currently 65-75%
Worldwide analogous reservoirs generally recover over half of ultimate recoverable oil recovery after reaching
90% water cut
Recent pilot for artificial lift enhancement delivered significant incremental production
Field-wise implementation in progress along with pilot waterflood
Battrum East Roseray, Canada
SPE 113132 2009, Denis B.
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357
404
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570
597
%w
ate
r cu
t
oIl
pro
dn r
ate
, bo
pd
Cum Oil Produced, Mbbl
Lohar Field Performance
Oil Rate bopd %wc
Page 24
Selan Exploration Technology Limited
KARJISAN HIGHLIGHTS
KARJISAN OIL UPDATE
• Established Sustained production on KJ-4
• Oil delivery started May-2017
• Field development plan in progress
READY TO DELIVER GAS
• Well deliverability established
• Buyer & sales agreement in place.
• Delivery expected Oct-2017
Selan’s Oil Characteristics
Lohar, Ognaj,
Karjisan
Bakrol, Indrora
Page 25
Selan Exploration Technology Limited
UPSIDE POTENTIALSELAN CORPORATE PRESENTATION
Page 26
Selan Exploration Technology Limited
Upside Potential Large area of Bakrol and Indrora fields are undeveloped
Historical Chance of Success (CoS) in Bakrol is very high
In addition to YCS reservoir in Indrora upside in Olpad, YCS-II & Kalol
Bakrol Indrora
Undeveloped
Undeveloped
Page 27
Selan Exploration Technology Limited
Fiscal Terms
Page 28
Selan Exploration Technology Limited
Favorable Fiscal Regime
100% Working Interest in all fields + operator Stable PSC regime 25 Year Contract, 10 Year Extension Provision 100% Cost Recovery Allowed Profit Petroleum 100% to Selan Up to IM of 3.5, 50%
thereafter Economic Stabilization, In-Country Arbitration Low Royalty, Cess (~$3/bbl) Crude Sold to IOC at ~ Brent minus 3% pricing
Page 29
Selan Exploration Technology Limited
Valuation
Page 30
Selan Exploration Technology Limited
Future – Low Investments, High Return
Page 31
Selan Exploration Technology Limited
Future Margins – Expected to grow
Page 32
Selan Exploration Technology Limited
Cash – Massive Cash Generation
Page 33
0
20
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60
80
100
120
140
160
$M
ILL
ION
Cumulative Cash(Cash Generation In $ Until 2030)
Base Phase 1 Phase 2
Selan Exploration Technology Limited
Key Risks
Long term Outlook on Oil Prices
Extension of PSCs for Bakrol, Indrora and Lohar
📍 Risks " not present in Selan " ...• Lack of significant oil in place or hypothecation of reserves
• Manpower availability
• Pending / un-met work commitments
• Debt & Lack of any funds requirement
• Partners and associated disputes
• Challenges to create additional infrastructure
• Any downside from litigation
• Income Tax claims. All assessments current thru 14-15
Page 34
Selan Exploration Technology Limited
Selan Valuation – Value of Reserves
Market Cap INR 398 crs
Less: Cash on hand INR 111 crs
Enterprises Value (EV) INR 287 crs
EV in USD USD 44 mill
Proved Reserves 5.33 MMBOE
EV per BOE proved reserves USD 8.26 PER BOE
Equivalent International Benchmark EV/BOE USD 20.0 PER BOE
As on 04.11.2017 Board Meeting Date
Page 35
Selan Exploration Technology Limited
Disclaimer
This material contains forward-looking statements regarding Selan Exploration Technology Ltd, its corporateand business strategies and plans, future financial condition and results of operations. All such forward-looking statements are based on the management's assumptions and beliefs in the light of informationavailable to them at this time. These forward-looking statements are by their nature subject to significantrisks and uncertainties; and actual results, performance and achievements may be materially different fromthose expressed in such statements. Factors that may cause actual results, performance or achievements todiffer from expectations include, but are not limited to, regulatory changes, future levels of industry productsupply, demand and pricing, weather and weather related impacts, wars and acts of terrorism, developmentand use of technology, acts of competitors and other changes to business conditions. Selan ExplorationTechnology Ltd undertakes no obligation to revise any such forward-looking statements to reflect anychanges in Selan Exploration Technology Ltd’s expectations with regard thereto or any change incircumstances or events after the date hereof. Unless otherwise stated, the reserves and resource numberswithin this document represent the views of Selan Exploration Technology Ltd and do not represent the viewsof any other party, including the Government of India, the Directorate General of Hydrocarbons.
Page 36