Fergana-Basin-Farmout-Commercial-0510.ppt

1、1Fergana Basin Farmout-Commercial May 20092StatisticsFirst discovery 1901;53 Fields to 19877 new fields in Uzbekistan since 1987,no dataCumulative EUR:1.2 BBO,1.8 TCF(Free)GasModest Field Sizes(MFS:26 MMBOE)Creaming Curve immature significant upside in YTFUSGS TPE:4 BBO,6TCF;STO YTF:1.1 BBO,6 TCF60%

2、Oil,40%GasP90:1 MMBOE,P50:10 MMBOE,P10:70 MMBOE.Swansons Mean:26 MMBOE3IntroductionSantos is major shareholder in two companies in the Kyrgyz Republic,South Petroleum Company(SPC-STO net 70%),and KNG Hydrocarbons(KNG HC-STO Net 54%)SPC and KNG HC are the operators of oil and gas prospecting licenses

3、Santos acts as the defacto operator for SPC and KNG HC(eg contracting and operating processes are all compliant with Santos EHSMS,in addition to being local law compliant)Santos also holds a call option to farm-in to a 70%shareholding in Somon Oil,the operator of oil and gas exploration licenses in

4、Tajikistan,adjacent to the Kyrgyz acreage position of SPCSantos again acts as defacto operator for Somon OilSantos is offering equity in either or both of its active shareholdings in the Kyrgyz Republic and its option position in Tajikistan ideally a position in all three!4Permit MapMapSantos holds

5、majority shareholdings in two Kyrgz Closed Joint Stock Company(CJSC)operating entities:CJSC South Petroleum Company(STO 70%)CJSC KNG Hydrocarbons(STO 54%)Santos also holds a Call Option to Farm-in to 70%shareholding in the Tajikistan operating entity CJSC Somon Oil5Santos International Holdings Pty

6、LtdDWM Petroleum AG(Manas Petroleum)KyrgyzneftegazCJSC South Petroleum Co.70%25%5%Tuzluk,Soh,West Soh,Nanai,Nuashkent Licences(Kyrgyz)100%(a)Signed 4th October,2006(b)Save for Certain Unanimous Approval Matters(License Term Variations,Relinquishments,License Surrender,License Renewal,Drilling Operat

7、ions beyond agreed Minimum Program,Amendments to or Termination of Shareholders Agreement),Minimum Percentage Vote of 65%required for Approval of Action by Operating CommitteeCJSC South Petroleum Company6CJSC KNG HydrocarbonsProspecting Licence(Kyrg)(Tashkumyr PL)100%(a)Santos holds net 54%interest

8、in KNG HC through 75%shareholding in Zhibek resources(b)66%Majority VoteXtract International Ltd(UK)Zhibek Resources Ltd(UK)25%Kyrgyzneftegaz72%28%Santos Int.Holdings Pty.Ltd75%CJSC KNG Hydrocarbons7Permit Commitments Kyrgyz RepublicAll licenses compliant to end 2009As at 1st March,2010(Textonic Wit

9、hdrawal 28th February,2010)Assumes 40som=US$1Assumes 0.75USD=1 AUD 2009,2011-12 and 0.85 USD=1 AUD 20108DWM Petroleum AG(Manas Petroleum)Anawak LLCCJSC Somon Oil90%10%Novobod Obchai Kalachi,Northwest Licences(Tajikistan)100%(a)No Cost Option Agreement Santos/DWM(10/12/07)Call Option to Farm-in to 70

10、%of DWMs 90%in CJSC Somon Oil,Operator of PLs in Tajikistan(b)Conditions Precedent:(a)PSA negotiated to cover licenses(b)Santos Board Approval to Exercise Option(20%)(70%)SANTOS International Ventures Pty.LtdCJSC Somon Oil9Permit Commitments Tajikistan OptionOperator is CJSC Somon OilSantos holds Ca

11、ll Option to Farm-in to 70%shareholding in Somon OilSouth License Ratified September,2007Northwest License ratified in December,2009All permit commitments to end current year anniversary will be met by end May,2010(Dank Geophysical currently acquiring data,320 km in Tajikistan(30+180),20 km in Kyrgy

12、z Rep 10Licensing Regimes and Fiscal FrameworksKyrgyz Republic:-5 year Prospecting License,renewable annually,annual WP and Financial commitment schedule.New Law Commitment will revert to annual expenditure(no work program commitments)-Operator has Exclusive Rights to discovery-25 year Extraction Li

13、cense(approved POD)-No restrictions on Expatriation of Profits-Tax Royalty RegimeParameterCurrent Model New Laws(2010 prop)Royalty3%US$0.145/mcf;US$1.06/BblExcise(Exchange Rate Dependent)US$1.90/BBLUS$4.94/BBLBonusNo Bonus0.05%of Reserve Value(US$350k for 10 MMBO,at US$70/BBL)VATNoneNoneLocal Taxes3

14、%Gross Revenue3%Gross RevenueIncome(Profit)Tax10%10%Assumptions:39 Som/US$;7.27 BBL/Tonne11Licensing Regimes and Fiscal FrameworksTajikistan:-5-7 Year Exploration License,annual WP&Financial Commitment-Operator has Exclusive Rights to Discovery-25 Year Production License(two 5 Year extensions)-Recen

15、t PSAs negotiated by IOCs include 5-7 year exploration period,25 year production period-Cost recovery from 70%Revenue-Profit Oil/Gas Split:50 60%to Contractor-Tax:-Corporate Income Tax:15%-Branch Profits Tax:8%-Road Tax:2%-No Restrictions on Expatriation of Funds12Reserve and Production BookingSanto

16、s will bring share of Operator profits into Profit and Loss Statement via equity accounting Santos deems it appropriate to report our indirect beneficial interest in subsidiaries with reserves and production.For Reporting purposes:-Santos separately identifies the indirect beneficial interest-Includ

17、es such reserves/production in total reserves and production reportingCurrently,as example,Santos has KNG HC:Net 24%)-Forward Contribution:-Drill+Seismic+GG&A funding)-Capped 2:1 promote on equity position going forward(2*equity funding)-go forward 2 well program gross Kyrgyz exploration expenditure

18、 cap US$35 MM for promote-thereafter,reverts to equity contribution to fundingTajikistan Option Acreage:-Available Option Equity:Somon Oil 20%-Share Back Costs partial(50%Share Back Costs)-Back Cost contribution is Cost of entry to Option-Forward Contribution:-Drill+Seismic+GG&A-Capped Funding of 40

19、%contribution for 20%equity-Go forward Gross Tajik exploration expenditure cap US$70 MM for promoted contributions-thereafter,reverts to 20%equity contribution to funding-Intent is to Exercise Option upon negotiation of a mutually agreeable PSC-Note:Additional equity may be available from junior sha

20、reholders22Oil MarketExport options are dependent on Discovered VolumesSmall volume sales(3000 BOPD):-Fergana or Tashkent Refinery-Increases in global parity prices rail to China,Iran(US$500/t)Acreage well situated wrt export railheadsExport required to achieve global parity pricesand multiple dispo

21、sal options exist.Jalalabad6610240FERGANA BASINUS$35US$49US$60US$60Rail To China:US$9-15/Bbl Tarrif23Gas MarketsKyrgyz,Tajik gas markets reliant on Uzbek export(US$8.40-US$8.90/MCF)Uzbek ann.gas prodn 60 BCM,ann exports 17 BCM(Russia 13,Kyrgyz 0.8,Tajik 0.7,Kaz 2.8)-2010 plan:increase prodn to 65 BC

22、M,gas exports to 25 BCM-European markets-Coal replaces domestic energy demandNew Kyrgyz/Tajik Fergana gas:-Frees Uzbek exports to Kyrgyz,N Tajik(28 BCF/Yr)-Frees Uzbek Fergana consumpn for export(350 BCF/Yr)-Competes against Uzbek Russian export gas price(US$8.50/PJ)Local markets are hostage to Euro

23、pean demand-paradoxically a significant domestic gas market opportunity exists in the Fergana.GAS(BCM)KYRGYZSTANTAJIKISTAN(N)TAJIKISTAN(S)UZBEKISTANTURKMENISTANReserves5.771417982670Ann.Prodn0.030.1 0.265.3 50Consumption0.80.20.85316Jalalabad6610240FERGANA BASINUS$8.40CompressionSources:BP Statistic

24、al Review 2007,BMI,CIA Factbook24Central Asian Gas PricesGas prices have surged in last few yearsprimarily under influence of Russian sales to Europe.Sources:BP Statistical Review 2007,BMI,CIA FactbookAnnual Volume(BCF)US$/PJ1H 2008Current Price(US$/PJ)2009Forward Contract Price(US$/PJ,Yr)Russia to Europe42009.9011.80Russia to Ukraine1418711.80,2011Turkmen to China10575.505.50Turkmen to Gazprom10253.688.35Turkmen to Iran3222.129.90Uzbek Export2208.408.40