View
387
Download
0
Embed Size (px)
Citation preview
PROPPANTS INVESTMENTPROPPANTS INVESTMENT FORUM
The next generation in proppantsSiegfried Koenig – Executive Chairman, LWP Technologies
GRANGE CITY HOTEL, CITY OF LONDON ● THURSDAY, 21 APR 2016www.ObjectiveCapitalConferences.com
LWP Technologies Limited (ASX:LWP) - Next-Generation Fly-Ash Based Proppants www.lwptech.com 1
MASTER'INVESTOR'PRESENTATION'''
22'APRIL'2016'
LWP Technologies Limited (ASX:LWP) - Next-Generation Fly-Ash Based Proppants www.lwptech.com 2
This%disclaimer%forms%part%of%and%is%incorporated%in%the%accompanying%material%%%The%informa4on%in%this%presenta4on%is%an%overview%and%does%not%include%all%informa4on%necessary%for%investment%decisions.%In%making%investment%decisions,%investors%should%rely%on%their%own%examina4on%of%LWP%Technologies%Limited,%(LWP)%or%consult%with%their%own%legal,%tax,%business%and/or%financial%advisors%in%connec4on%with%any%acquisi4on%of%securi4es.%%This%informa4on%has%been%prepared%in%good%faith%by%LWP.%However,%no%representa4on%or%warranty,%express%or%implied% is%made,% in% rela4on% to% the% accuracy%or% completeness%of% the% informa4on%provided% in% this% document%or% any%other% informa4on%by% LWP%otherwise%provided%to%the%recipients.%Whilst%every%care%has%been%taken%with%prepara4on%of%the%informa4on%contained%in%this%document,%no%responsibility%is%accepted%by%LWP% or% any% of% its% representa4ves,% directors,% partners,% employees% or% professional% advisers% for% any% informa4on% provided% in% this% document% or% otherwise%provided%to%the%recipients%or%for%any%ac4on%taken%by%the%recipients%on%the%basis%of%such%informa4on.%In%par4cular,%no%representa4on%or%warranty%is%given%as%to%the%accuracy,%likelihood%of%achievement%or%reasonableness%of%any%forecasts,%prospects%or%returns%contained%in%the%informa4on.%Such%forecasts,%prospects%or% returns%are%by% their%nature%subject% to%significant%uncertain4es%and%con4ngencies.%Each%recipient%of% the% informa4on%should%make% its%own% independent%assessment%of% the% informa4on%and%take% its%own% independent%professional%advice% in% rela4on%to% the% informa4on%and%any%ac4on%taken%on%the%basis%of% the%informa4on.%%%This%presenta4on%includes%forward%looking%statements%within%the%meaning%of%the%Corpora4ons%Act.%These%forward%looking%statements%may%be%iden4fied%by%words%such%as%�may,���will,%�expect,���intend,���an4cipate,���believe,���es4mate,���plan,���project,���could,���should,���would,���con4nue,���seek,���target,���guidance,���outlook,���forecast�%and%other%similar%words.%These%forward%looking%statements%are%based%on%LWP’s%current%objec4ves,%beliefs%and%expecta4ons,%and%they%are%subject%to%significant%risks%and%uncertain4es%that%may%cause%actual%results%and%financial%posi4on%and%4ming%of%certain%events%to%differ%materially%from%those%described%in%the%forward%looking%statements:%failure%of%a%proposed%transac4on%to%be%implemented;%the%challengers%of%cost%and%closing,%integra4ng,%restructuring%and%achieving%an4cipated%synergies;%the%ability%to%retain%key%employees;%and%other%economic,%business,%compe44ve,%and/or%regulatory%factors%affec4ng%the%business%of%LWP%generally,%including%those%set%forth%in%LWP’s%business%plan,%in%par4cular,%the%�Risk%Factors�%sec4on.%%Any%forward%looking%statements%speak%only%as%of%the%date%hereof%or%as%of%the%dates%indicated%in%the%statements.%LWP%assumes%no%obliga4on%to%publicly%update%or%supplement% any% forward% looking% statement% to% reflect% actual% results,% changes% in% assump4ons%or% changes% in%other% factors% affec4ng% these% forward% looking%statements%except%as%required%by%law.%
© LWP Technologies Limited
LWP Technologies Limited (ASX:LWP) - Next-Generation Fly-Ash Based Proppants www.lwptech.com 3
LWP Technologies (ASX: LWP) is an Australian oil & gas technology firm that has developed a next generation, flyash based, proppant for use in hydraulic fracturing of oil & gas wells globally.
KEY'FINANCIALS'ASX%TICKER:%%LWP%%HIGH%LIQUIDITY%
MARKET%CAPITALISATION:%$12%MILLION%CASH%:%$5%MILLION%
NO%DEBT%
$3.5%MILLION%BRISBANE%PLANT:%FULLY%PAID%FOR%R&D%TAX%GRANTS%DUE:%%$600,000%Q2%2016%$700,000%Q3%2016%$1%Million%Q4,%2016%
SHARES%ON%ISSUE:%3.92%Bn.%%
LWP Technologies Limited (ASX:LWP) - Next-Generation Fly-Ash Based Proppants www.lwptech.com 4
KEY MILESTONES MARCH 2015: Reverse merger completed MARCH: ' 'Acquired%100%%ownership%of%flyash%proppant%technology%%
MAY: % %Target%$400,000%capital%raising%and%SPP%raised%$4.0%million%
MAY: ' 'Pilot%plant%construc4on%completed%on%4me%and%on%budget%
JUNE: ' 'Engaged%EAS%Advisors%as%US%Corporate%advisor%
JULY: ' 'Target%raising%4%million,%raised%$6.6%million%@%1.0%to%1.1%cents/share%JULY: % %Entered%into%60/40%Hallmark%JV%to%acquire%12,000%tpa%factory%in%Pune,%India%
AUGUST:' 'Brisbane%pilot%plant%commissioned%
DECEMBER: 'Proppants%sent%to%US%Expert%laboratories%for%tes4ng%
JANUARY: %Outstanding%Expert%test%results%received%
JANUARY: %US%CEO%appointed%FEBRUARY: 'Interna4onal%promo4on%commenced'
ONGOING:' 'Discussions%with%several%par4es%for%addi4onal%commercializa4on%and% % % %%%%%%%%%%%%%%%%%% %mone4za4on%opportuni4es.%Produc4on%of%proppants%at%pilot%plant%tes4ng%flyash%proppants%% %from%various%sources.%
LWP Technologies Limited (ASX:LWP) - Next-Generation Fly-Ash Based Proppants www.lwptech.com 6
How%much%longer%will%countries%with%a%low%oil%produc4on%cost,%but%a%high%social%cost%con4nue%to%bear%the%pain%of%low%oil%prices?%
0
50
100
150
200
250
300
Tota
l C
ost P
er B
arre
l $U
SD
World'Oil'Producers'–'ProducHon'Costs'
Countries of Production Cost of Production $USD Social Cost of Oil $USD Current World Oil Price $USD
Sources:%Knoema%&%CNBC%
LWP Technologies Limited (ASX:LWP) - Next-Generation Fly-Ash Based Proppants www.lwptech.com 7
CERAMIC'PROPPANT'MARKET'OUTLOOK'• Will%Global%shale%oil%&%gas%be%an%integral%part%of%global%energy%needs%in%the%future?%
• Will%the%US%retain%its%energy%security%and%not%revert%to%being%%a%major%oil%importer?%
• Will%other%countries%con4nue%to%exploit%their%oil%and%gas%resources?%
• Will% the% oil% and% gas% industry% con4nue% to% seek% the% lowest% cost% /% highest% quality%proppants%to%maximize%yield?%
• Will%the%es4mated%5,000%US%wells%that%have%already%been%drilled,%but%not%completed%[so%the%E&P%companies%don’t%lose%their%land]%get%fracced%some4me%in%the%future?%
'
Conclusion:''Future%prospects%for%the%proppant%market%and%LWP’s%proppants%in%par4cular,%are%excellent.%
%
LWP Technologies Limited (ASX:LWP) - Next-Generation Fly-Ash Based Proppants www.lwptech.com 8
Source:%IEA%
RIG'COUNT'HAS'DECREASED,'HOWEVER'OUTPUT'PER'RIG'IS'UP'SIGNIFICANTLY,'AND'INCREASING'
LWP Technologies Limited (ASX:LWP) - Next-Generation Fly-Ash Based Proppants www.lwptech.com 10
HISTORICAL'PROPPANT'ANNUAL'MARKET
Total Proppant Market Ceramic Proppant Market
Courtesy,%Proptester%Kelrick%
LWP Technologies Limited (ASX:LWP) - Next-Generation Fly-Ash Based Proppants www.lwptech.com 11
Source: Marketresearchstore January 2016
LWP Technologies Limited (ASX:LWP) - Next-Generation Fly-Ash Based Proppants www.lwptech.com 12
LWP’s%Flyash%Proppants%will%become%the%dominant%Ceramic%Proppant%and%the%Standard%for%the%Industry.%
LWP’S'VISION'
LWP Technologies Limited (ASX:LWP) - Next-Generation Fly-Ash Based Proppants www.lwptech.com 12
LWP’s%Flyash%Proppants%will%become%the%dominant%Ceramic%Proppant%and%the%Standard%for%the%Industry.%
LWP’S'VISION'
LWP Technologies Limited (ASX:LWP) - Next-Generation Fly-Ash Based Proppants www.lwptech.com 13
CERAMIC'PROPPANTS'Current'Market'
Uses%bauxite%or%kaolin%clay%to%make%proppants%
LWP'recycles'fly'ash'
LWP%recycles%the%abundantly%available%byqproduct%of%coal%fired%power%plants,%oren%close%to%shale%oil%and%gas%reserves%
Benefits'of'using'flyash'to'make'proppants'
• % ≈%40%%stronger%than%kaolin%clay%%
• % ≈%40%%lighter%than%bauxite%
• % Reduced%deployment%costs%
• % Low%(or%no)%transporta4on%and%logis4cs%costs%
• % High%margin%poten4al%due%to%Low%manufacturing%costs%
LWP Technologies Limited (ASX:LWP) - Next-Generation Fly-Ash Based Proppants www.lwptech.com 14
ConducHvity'
14K%30/50%LWP%ceramic%proppants%crushed%at%15K%
Conduc4vity%con4nues%arer%crushing%at%high%pressure,%albeit%reduced%
LWP Technologies Limited (ASX:LWP) - Next-Generation Fly-Ash Based Proppants www.lwptech.com 15
ConducHvity'
6K%30/50%Northern%White%sand%crushed%at%7K%%
Conduc4vity%considerably%reduced%
LWP Technologies Limited (ASX:LWP) - Next-Generation Fly-Ash Based Proppants www.lwptech.com 16
COMPETING'AS'THE'LOWXCOST'PRODUCER'TransportaHon'and'LogisHcs'
%%%%%%%Transport%and%logis4cs%are%major%cost%factors%of%proppants%
%%%%%%Proppants%are%oren%transported%thousands%of%kilometers%from%factory%to%consumers%
Benefits'of'using'flyash'to'make'proppants'
%%%%%%%Fly%ash%is%abundantly%available%near%many%shale%oil%and%gas%resources%%
%%%%%%Factories%can%poten4ally%be%located%at%those%power%plants%
%%%%%%That%means%Low%(or%no)%transporta4on%and%logis4cs%costs%
%%%%%%Low%manufacturing%costs%contributed%by:%• Low%feedstock%costs%%• Low%feedstock%prepara4on%costs%
• Low%energy%costs%
OPPORTUNITY:%ability%to%compete%on%price%with%mined%frac%sand%
LWP Technologies Limited (ASX:LWP) - Next-Generation Fly-Ash Based Proppants www.lwptech.com 17
LWP’s disruptive technology challenges existing market dynamics THE' ABOVE' ESTIMATES' ARE' PRELIMINARY' AND' BASED' ON' CERTAIN' ASSUMPTIONS' AND' PROJECTIONS'MADE' ON' BEHALF' OF' THE' COMPANY' IN' GOOD' FAITH.' ' THEY' ARE' GIVEN' HERE' FOR'ILLUSTRATIVE'PURPOSES'AND'ARE'NOT'TO'BE'RELIED'UPON'FOR'ANY'PURPOSE.'WHILE' THE'COMPANY’S'MANAGEMENT'CONSIDERS'THEM'REASONABLE,' THESE' ESTIMATES'ARE' SUBJECT' TO'SIGNIFICANT'BUSINESS,'ECONOMIC'AND'COMPETITIVE'UNCERTAINTIES'AND'CONTINGENCIES.'ACCORDINGLY,'NO'ASSURANCE'CAN'BE'GIVEN'THAT'THESE'ESTIMATES'CAN'OR'WILL'BE'REALIZED,'AND'THE'COMPANY’S'ACTUAL'PERFORMANCE'MAY'VARY'FROM'THE'ESTIMATES'AND'SUCH'VARIATIONS'MAY'BE'MATERIAL.'NO'REPRESENTATION,'WARRANTY'OR'GUARANTEE'OF'ANY'NATURE'IS'BEING'GIVEN'BY'OR'ON'BEHALF'OF'THE'COMPANY'REGARDING'ITS'FUTURE'PERFORMANCE'OR'FINANCIAL'RESULTS.%
LWP Technologies Limited (ASX:LWP) - Next-Generation Fly-Ash Based Proppants www.lwptech.com 18
US$'1.59'million''''''''''''''''''''''''''''''''US$'1.16'million'
LWP Technologies Limited (ASX:LWP) - Next-Generation Fly-Ash Based Proppants www.lwptech.com 19
PROJECT'PORTFOLIO'Brisbane'Pilot'Plant'
• Located%in%Brisbane,%Eastern%Australia%
• Produc4on%capacity:%3,000%tons/year%
• Construc4on%completed%May%2015,%commissioning%completed%August%2015%
• Produc4on%of%fly%ash%proppants%commenced%scale%up%manufacture%Q3%2015%%
LWP Technologies Limited (ASX:LWP) - Next-Generation Fly-Ash Based Proppants www.lwptech.com 20
HALLMARK'JOINT'VENTURE'
Pune
• LWP%has%entered%into%a%jointqventure%(“JV”)%with%Hallmark%Minerals%Pvt%Ltd%to%produce%LWP%flyash%proppants.%
• Produc4on%facility%is%located%in%Pune,%Maharashtra,%India.%
• Capacity:%12,000%tons%per%annum.%
• LWP%holds%a%60%%stake%in%the%JV,%Hallmark%40%.%
• LWP%nego4ated%US$1%million%for%the%technology%license%for%the%State%of%Maharashtra%in%India,%plus%10%%of%gross%revenues%in%royal4es.%
LWP Technologies Limited (ASX:LWP) - Next-Generation Fly-Ash Based Proppants www.lwptech.com 21
BENEFITS'TO'LWP'OF'INDIAN'JOINT'VENTURE'
• Early%costqeffec4ve%entry%to%proppants%market.%
• LWP%proppant%produc4on%requires%15q30%minutes%sintering%4me%@%2300°F.%
• Hallmark%bauxite%proppants%required%2%hours%sintering%4me%@%3200°F.%
• Acquired%60%%interest%in%assets%with%replacement%value%of%US$15%million%for%US$2%million.%
• Commercial%produc4on%allows%showcasing%LWP%technology%to%poten4al%licensees.%
• Opportunity%to%automate%produc4on%to%24/7%opera4ons%to%produce%up%to%20,000%tons%annually.%
LWP Technologies Limited (ASX:LWP) - Next-Generation Fly-Ash Based Proppants www.lwptech.com 22
COMMERCIALISATION'AND'MONETISATION'OPPORTUNITIES'• Secure% owake% agreements% for% Indian% JV% plant.% On% 20,000% tons/year% produc4on,%%
indicated%revenues%US$5.28%million,%EBITDA%US$3%million.%
• License%LWP’s%technology%to%exis4ng%proppant%manufacturers%to%modify%exis4ng%plants.%Poten4al%prospects%in%USA%and%China.%
• One%off%License%fee%=%$2.5%to%$5%million%depending%on%geographical%area.%PLUS%ongoing%royal4es%of%10%%of%revenue.%Indicated%annual%royalty,%100,000%tons/year%plant%=%US4.4%million/year.%
• Partnerships% and/or% Joint% Venture% arrangements%with% interested% par4es% to% build% new%commercial% scale% plants% to% produce% LWP% proppants.% Poten4al% prospects% in% Australia,%Canada,%Middle%East,%US%and%Mexico.%
• LWP%are%also%examining%opportuni4es%that%will%u4lise%our%strong%shareholder%base%and%cash%posi4on.%
LWP Technologies Limited (ASX:LWP) - Next-Generation Fly-Ash Based Proppants www.lwptech.com 23
LWP MANAGEMENT TEAM MANAGEMENT'TEAM%SIEGFRIED'KONIG' DR.'DAVID'HENSON' SEAN'CORBIN'
Chairman% Execu4ve%Director% Execu4ve%Director%&%Company%Secretary%
Entrepreneur%and%Ecopropp%CoqFounder.%30qyears%experience%in%business%management,%Successful%lis4ng%of%3%startqup%companies%on%ASX.%Global%rela4onships%in%capital%markets%&%public%company%sector.%%
Ecopropp%CoqFounder%based%in%Houston%TX,%former%CEO%of%Siemens%conceptual%engineering%services%&%project%manager%at%$3.8%Bn.%Gas%to%liquids%export%facility.%PhD%in%Chemical%Engineering.%%%
Sean%has%worked%as%an%execu4ve%at%CEO%and%CFO%level%in%a%wide%range%of%industries%in%various%stages%of%each%business.%%
%
JIM IRVINE BILL SCHOCH DR. RALPH ENDERLE %%NonqExecu4ve%Director% %%Chief%Financial%Officer% Chief%Scien4st%
Founder%and%President%of%%%%%%Fly%Ash%Direct%based%in%Cincinna4,%OH.%%Director%of%subsidiaries%LWP%LLC%&%Epropp%LLC%
Extensive%experience%in%accoun4ng,%tax,%audit%and%in%CFO%roles%in%listed%and%unlisted%companies.%%%
Principal%of%Drend%Solu4ons%which%provides%conceptual%designs%for%thermal%processing%and%associated%equipment%&%materials%development.%%
LWP Technologies Limited (ASX:LWP) - Next-Generation Fly-Ash Based Proppants www.lwptech.com 24
CONTACT''%SIEGFRIED'KONIG'CHAIRMAN,%LWP%TECHNOLOGIES%LIMITED%%MOBILE: ''+61%411%111%193%or%+61%424%048%888%US'CELL:' '+1%201%238%9080%EMAIL:'' '[email protected]%%