Tethys Oil Interim report Q3 2013

1. Interim report Q3 2013
www.tethysoil.com

2. An oil company delivering solid growth
• Founded 2001
• MUSD 400 oil and gas company
• A share price rise of more than 600 percent since IPO
• Average daily production ~ 4,700 barrels of oil
• Interests in oil producing licenses onshore Oman and Lithuania
Market cap
“We combine growth with low risk by the
strategy to search for oil and gas in areas
where findings previously have been made,
but was never put into commercial
production. This means lower risk and higher
potential than in traditional exploration.”
www.tethysoil.com

3. Producing assets in Oman and Lithuania
Oman
Area
Blocks 3 & 4
34,610 km2
30%
Production
1,389 km2
40%
Exploration
Block 15
Lithuania
Area
Interest
Interest
Phase
Phase
Gargzdai
884 km2
25%
Production
Rietavas
1,594 km2
14%*
Exploration
Raseiniai
1,535 km2
26%*
Exploration
Licence
Area
France Attila
1,986 km2
France Alès
Sweden Gotland
Interest
Phase
40%
Exploration
215 km2
37.5%
Exploration
581 km2
100 %
Exploration
* For full diclosure, see the annual report 2012
www.tethysoil.com

4. Focus on appraisal projects
Operational targets:
•
•
•
•
Develop Tethys Oil’s business as an
attractive licence holder and partner
Focus on developing the assets in
Oman
Evaluation of both conventional and
unconventional assets in Lithuania
Actively evaluate new projects
www.tethysoil.com

5. Financial targets
$
Long term capital structure targets:
Target
Status Q3, 2013
Debt/equity ratio of 30-40%
37%
Net debt/EBITDA of up to 2x
0.43*
Strong cash position to have
the ability to grow
MSEK 246
*Last twelve months
www.tethysoil.com

6. Financials P&L Q3 2013
Q3 2013
Q3 2012
+/-
Revenue (MSEK)
142
116
22,4%
EBITDA (MSEK)
96
77
24,7%
Result for the period (MSEK)
52
46
13,0%
Operating cash flow (MSEK)
68
38
78,9%
EBITDA-margin (%)
67,6
66,4
EBIT-margin (%)
42,3
53,4
Earnings per share (SEK)
1,46
1,35
8,1%
Cash flow per share (SEK)
1,92
1,11
71,9%
www.tethysoil.com

7. Sales
Sales growth
Over/underlift
%
Bbl
MSEK
60,0
50,0
160
40,0
140
30,0
120
20,0
100
10,0
80
0,0
60
-10,0
40
-20,0
250 000
180
20
-30,0
200 000
150 000
100 000
50 000
0
Q3
Q4
2013 Q1
Sales Oil and gas, MSEK
0
Q2
Q3
Sales growth %
Q3
Sold volumes
Q4
2013 Q1
Q2
Q3
Produced volumes after government take
•
Underlift position per 30 Sept, 30 404 barrels
•
Underlift increase in Q3 of 10 600 barrels
7
www.tethysoil.com

8. Oil price development
Spot Brent and Omani Blend Futures
125,00
120,00
115,00
USD per Barrel
110,00
105,00
100,00
95,00
90,00
85,00
80,00
jul-12 aug-12 sep-12 okt-12 nov-12 dec-12 jan-13 feb-13 mar-13 apr-13 maj-13 jun-13 jul-13 aug-13 sep-13
BRENT SPOT
OMANI BLEND FUTURES
TETHYS OIL SALE PRICE
www.tethysoil.com

9. EBITDA
120,0
250
100,0
200
80,0
150
60,0
100
40,0
50
20,0
0
0,0
Q3
Q4
2013 Q1
EBITDA, MSEK
Q2
EBITDA-marg %
Q3
Q3
Q4
Operating expenses
2013 Q1
Q2
Administrative expenses
Q3
EBITDA
Q4 2012 and Q1 2013 EBITDA include revenues from associates (Lithuania) and the Mitsui bonus.
www.tethysoil.com

10. Result overview Q3
Revenues
Operating result
Administrative expenses MSEK 6
Depreciation of oil and gas
properties
MSEK 36
Operating expenses
MSEK 42
Net sales of oil and gas
MSEK 142
Operating result
MSEK 60
www.tethysoil.com
10

11. Financials BS Q3 2013
2013-09-30
2012-12-31
246
248
1047
860
Long term debts (MSEK)
420
417
Investments (MSEK)
208
875
29,49
24,23
6,93
6,99
Cash (MSEK)
Shareholders equity (MSEK)
Equity per share (SEK)
Cash per share (SEK)
www.tethysoil.com

12. Investments
Investments
MSEK
300
•
250
•
200
150
100
•
50
Majority of invesments were
made on Blocks 3 & 4
Investments focus on appraisal
drilling, seismic and water
injection programmes
About MSEK 15 spent on Block
15
0
Q3
Q4
2013 Q1
Q2
Q3
Investments
www.tethysoil.com
12

13. Blocks 3 & 4 JV:s investments
9 months 2013
12 months 2012
Drilling Exploration/Appraisal
Drilling - Development
Geology and seismic
Facilities/Pipeline
Other capex
www.tethysoil.com

14. Share price
# Shares
SEK
3 000 000
80
70
2 500 000
60
2 000 000
50
1 500 000
40
30
1 000 000
20
500 000
10
0
0
Total volume
Closing price
www.tethysoil.com

15. Oman – Block 3 & 4 update
•
•
•
•
Evaluating the seismic data to
plan for next years drilling
programme
Appraisal drilling on B4EW4
confirmed presence of oil and
in long term production test
Appraisal well B4EW4-5 in
progress
Exploration well in B4EW5 wet
and work to increase flow is
undertaken
www.tethysoil.com

16. Oman production
Oman - Daily production Tethys'
share (bo)
•
•
6 000
5 000
•
4 000
3 000
2 000
•
Average daily production 4,682 bbl
Production from: Farha South,
Saiwan East and test production
B4EW4
The JV’s share of production currently
52 percent
Selling price USD 102.1 (101.09)
1 000
0
Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec
2012
2013
www.tethysoil.com

17. Wells in Oman
12
40
35
Appraisal wells
10
30
8
4
25
20
6
37
15
10
2
2
26
22
1
4
8
2
4
1
1
1
Water source wells
Exploration wells
Water injection wells
1
4
5
1
6
4
Wells in previously
undrilled fault block
Production wells
4
0
0
2010
•
•
1
2011
2012
2013 9 m
Q3-2012 Q4-2012 Q1-2013 Q2-2013 Q3-2013
Focus on the water injection programme
Three rigs employed, actively sourcing a fourth
www.tethysoil.com

18. Water Injection Fault Block B
2000
Well Test
1800
Model
Model WI
1600
Bottom Hole
Pressure
Oil Production (b/d)
1400
1200
1000
800
Water injection started
June 19, 2012
600
400
200
0
8-Oct-10
5-Feb-11
5-Jun-11
3-Oct-11
31-Jan-12
30-May-12
27-Sep-12
25-Jan-13
25-May-13
22-Sep-13
www.tethysoil.com

19. Appraisal and exploration wells 2013
B4EW4
Well
Date
Type of well
Target reservoir Result
B4EW4
February
Exploration
Multiple
Oil
B4EW4-2
June
Appraisal
Middle Buah
No flows
B4EW4-3
June
Appraisal
Lower Al Bashir Oil
B4EW4-4
July
Appraisal
Lower Buah
Oil
B4EW4-5
November
Appraisal
Lower Buah
Oil
B4EW4-6
On-going
Appraisal
Lower Buah
On-going
Well
Date
Type of well
Target reservoir Result
B4EW5
Sept
Exploration
Buah
B4EW5
Oil
www.tethysoil.com

20. Oman - Block 15 update
•
•
JAS-1 in long term production
test - minor flows
Drilling of vertical sidetrack to the
JAS-2 completed – testing of
Natih C reservoir in progress
www.tethysoil.com

21. Lithuania - Gargzdai update
•
•
•
•
•
•
7 producing fields
Production declining according to
plan
Evaluation of enhanced recovery
techniques
2-3 undrilled conventional prospects
Exposure to thick shale sections
prospective for shale oil/shale gas
Cores and other data collected in
shale section for analysis
www.tethysoil.com
21

22. Lithuanian production
Lithuania - Daily production Tethys'
share (bo)
180
160
140
120
100
80
60
40
20
0
•
•
•
Average daily production 126 bbl
in Q3
Declining production - according
to plan
Evaluation of various production
enhancing techniques
Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec
2012
2013
www.tethysoil.com

23. Lithuania – Rietavas update
Conventional exploration and shale
exposure. Work programme fully funded
by Chevron*
•
•
•
•
Soviet era Silale discovery
successfully appraised
Silale-1 in intermittent production
Appraisal well Silale-5 (previously
Silale-2) encounters oil in the
Cambrian – testing pending
Exploration well Rietavas-1 in
progress
*Chevron has an option to acquire part of Tethys’ interest
www.tethysoil.com

24. Lithuania – Raseniai update
Exploration for conventional oil in Silurian
Reefs and other carbonites
• Twin of Soviet era stratigraphic well,
Lapgiriai-1 drilled during spring presence of oil confirmed.
• 3D seismic study, partly funded by EU
in progress. Data collection almost
completed. Processing will start
before year end.
www.tethysoil.com

25. Seismic Activities
Farha old: Reprocessing completed
Farha new: 510km2 3D completed
Processing completed
B4EW4: 470km2 3D completed
Processing completed
600km2 3D completed
Processing ongoing
850km2 2D completed 100% in 2013
www.tethysoil.com
Processing ongoing

26. Farha
Farha Old 3D
• Producing Barik FB: 16
• New FB drilled 2013: 1 (FS-68 in A
Farha New 3D
• Leads
www.tethysoil.com

27. B4EW4 and Buah
B4EW4
Several oil bearing layers- one in production
• Producing Buah: 1 field
• Lower Buah wells: 3,
• Middle Buah wells: 1,
• LAB wells: 1, LB-3 S/I
NOTE: these two in
Farha new 3D
www.tethysoil.com

28. B4EW4 Structure Seismic Interpretation
www.tethysoil.com

29. Lower Buah fields and prospects
B4EW4 area
North
B4EW5
B4EW6 prospect
www.tethysoil.com

30. Outlook
•
•
•
•
•
•
B4EW4 appraisal continues - well no
6 targeting Lower Buah in progress
In house estimate of B4EW4 structure
Lower Buah 2P reserves 2-4 million
barrrels of oil net Tethys
Several Lower Buah leads and
prospects to be drilled
Farha leads and prospects expected
to increase as seismic interpretations
continues
Following the 2013 seismic
programme, next years work
programme likely to be more focused
on exploration drilling
Appraisal / exploration in Lithuania
continues - costs covered
30
www.tethysoil.com

31. Outlook to increase Production and Reserves
•
Increased Production from Farha South
Water Injection Programme
•
Significant Appraisal Drilling on B4EW4
structure
•
Continue to explore the potential of the
Farha trend -seismic interpretation ongoing
•
Lower Buah opening up a completely new
play to increase reserves and production seismic interpretation ongoing
•
2D seismic study from the Eastern part of
Block 4 indicates chance to a “mirror” Farha
trend together with more Buah prospects
•
Lithuania drilling activity and pending new
seismic studies
www.tethysoil.com
31

32. www.tethysoil.com