Corporate Presentation May 2012
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The Kuwait Energy Story
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Kuwait Energy – The Background Facts The Middle East has remaining proved oil reserves of more than 750 billion
barrels¹ Most of the large fields are mature and in the phase of decline management
Most of that resource is managed by National Oil Companies (NOCs) that have
monopoly over the resources (the US in the mid 1900’s) There is no established independent oil and gas sector in this part of the world
Note: Map sourced from Wood Mackenzie data ¹ Source: BP Statistical Review June 2011
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Oil fields
Gas fields
Overview An indigenous company, established in 2005 and headquartered in Kuwait One of the fastest growing, independent, oil and gas exploration & production companies in the Middle East Assets in 8 countries; Egypt, Iraq, Yemen, Oman, Ukraine, Latvia, Russia and Pakistan
In the past five years, the Company has: Demonstrated its ability to grow production year-on-year. Been profitable since inception. Increased its operatorship of assets and demonstrated operator capability. Established a qualified and experienced management team. Developed an extensive contact network within regional governments and industry.
Developed and implemented a Health, Safety, Environment and Social Responsibility (HSESR) policy and processes to meet industry/regulatory requirements as an international operator of oil & gas fields. 3
Kuwait Energy Strategic Priorities Kuwait Energy is targeting significant growth and has identified key strategic priorities by end 2015:
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Achieve 400 million boe of reserves and 75,000 boepd of production
Pursue business development opportunities (capturing new MENA focused projects leveraged of good relationships)
Promote excellent health, safety and environment performance and culture
Deliver efficient and cost effective operations with a high level of technical competence
Corporate Targets Our vision for growth will transform Kuwait Energy’s 2015 profile 500 Kuwait Energy 2015 Targets
400
300
Kuwait Energy YE11
Tullow Oil
Premier Oil
75,000 boepd
WI Reserves (mmboe)
400 mmboe
1
200
SOCO International 100
Heritage Oil
0
Kuwait Energy YE10 Gulfsands Petroleum
Dana Gas Melrose Resources
TransGlobe Energy 25
50
75
WI Production (kboepd)
5
Source: Company 2010 Annual Reports & published information NB: All companies are Kuwait Energy peers
100
125
Kuwait Energy Team
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Board of Directors
Dr. Manssour Aboukhamseen Chairman & Managing Director
Rachel English Independent Director
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Sara Akbar Chief Executive Officer
Dr. Youssef Al Awadi Independent Director
Roger Phillips Chief Financial Officer
Mohammed Yousof Rafie Independent Director
Executive Management Team
Sara Akbar CEO
Mohammad Al Howqal COO
BS in Chemical Eng. Kuwait University, Kuwait
BS in Petroleum Eng. Univ. of W.Virginia, USA
Over 30 years in oil and gas industry
Over 31 years in oil and gas industry
Roger Phillips CFO
Michael Andersen Sr. VP Strategic Planning
Mohammad Aboush Sr. VP Iraq
Chartered Accountant England & Wales
Bachelor in Geology Univ. of Macquarie, Australia
BS in Mechanical Eng. Univ. College of Swansea, UK
Over 28 years in oil and gas industry
Over 35 years in oil and gas industry
Over 27 years in Petroleum Eng.
Ibrahim Abdelgawad Country President - Egypt
Abdulsalam Al Kabab Country President - Yemen
German Leppke General Manager - Russia
BS in Petroleum Eng. Suez Canal University, Egypt
BS in Petroleum Eng. Baghdad University, Iraq
Ph.D in Economics University of Oil & Gas, Russia
Over 27 years in oil and gas industry
Over 20 years in oil and gas industry
Over 18 years in oil and gas industry
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Sergiy Burov General Manager - Ukraine
Ahmed Haidar General Manager – Iraq
BS in Economics BS in Mechanical Eng. Kiev State Economic Univ, Ukraine California State Univ, USA Over 15 years in oil and gas industry
Over 12 years in oil and gas industry
Performance & Achievements
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Assets Kuwait Energy Worldwide Concessions Russia:
Latvia:
Producing
Exploration
Luskoye, 100%* Chikshina, 100%*
License 1, 45%* North Block , 45%*
Ukraine:
Iraq:
Producing
Development
BC, 100%*
Mansuriya, 22.5% Siba, 45%*
Non-Producing NY, 100%*
Pakistan: Exploration
Egypt: Producing Burg El Arab, 75%* Area A, 70%* East Ras Qattara, 49.5%
Yemen: Producing Block 43, 28.33%
Exploration Non-Producing Abu Sennan, 50%*
* Denotes Kuwait Energy operated Block
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Exploration Block 6 (Mesaha), 15%
Block 15, 41.56%* Block 35, 83.82%* Block 49, 64%* Block 74, 32%* Blocks 82 & 83, 21.25%
Oman: Producing Karim Small Fields, 15%
Kunri 40% Jherruck 40%
Kuwait Energy’s hands-on approach in practice Target undervalued regional opportunities Thorough seismic and technical
reinterpretation Operating expertise Rapid turnaround in production/conversion
of resource to reserves Low risk and cost efficient appraisal and
development Prudent capital management
Turn
around underperforming assets
Area A (Egypt)
development
BEA (Burg
El Arab, Egypt) and Abu Sennan (Egypt)
Luzskoye Re-aligned
(Russia) operatorships
BEA (Egypt),
Block 49 (Yemen)
Regional
relationships providing advantaged access
Proven MENA management team Iraq, Egypt
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&Yemen
Production Growth Current production 27% above 2011 annual average 20,000
Daily Average WI Production (boepd)
18,000 16,000
13,258
14,000
17,260
YTD April 2012 Country
13,624
Asset
(boepd)
Area A
4,649
ERQ
6,972
Burg El Arab
901
Oman
KSF
3,048
Yemen Ukraine
Block 43
513
Rudis BC
308
Russia
Luzskoye
869
Total
17,260
11,499
12,000
Egypt
10,000
8,160
8,000 6,000 4,000
3,215
2,000 2007
2008
2009
2010
2011
2012 YTD
Drilling activities in the 2H 2011 have led to increase in production from Area A and ERQ fields, Egypt Current Production by Country Yemen 3% Russia 5%
Current Production by Product Gas
Oman 18%
Egypt 72% Ukraine 2%
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Oil
Condensate
Financial Highlights US$ Million
2006
2007
2008
2009
2010
2011
Sales Revenue
2.4
25.9
90.8
88.3
141.8
178.9
Operating Cash Flow
1.4
17.9
50.8
51.1
85.6
111.9
Net Profit
1.0
20.6
29.9
5.6
21.9
34.8
Capital Expenditure*
10.8
45.7
381.0
174.7
110.0
141.3
Total Assets
87.3
239.6
577.7
680.9
771.5
884.1
-
-
-
28.0
53.0
53.0
84.9
193.7
525.7
580.1
631.3
734.3
Debt Shareholder Equity
* Includes acquisition costs
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2011 Exploration Success rate of 63%
5 discoveries from 8 exploration wells Booked 9.3mmboe 2P reserves and 2.9mmboe 2C* Spent US$36.3million, 2P Finding cost of US$3.9/boe All 2011 Exploration drilling took place in Egypt Field
Operator
Karma-1
ERQ
SiPetrol
Oil
O
Dry Hole
Saady-1
ERQ
SiPetrol
Oil
O
Dry Hole
Shebyl East-1
ERQ
SiPetrol
Oil
P
Oil
P
Oil Producer, tested at 1,500 bopd gross Gas & Cond. discovery, Initial flow rates of 800 bopd cond. and13mmscfd gas gross Oil Producer, Initial flow rates of 900 bopd gross
Al Ahmadi-1
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Abu Sennan Kuwait Energy
Target Result
Ahmad-1
Area A
Kuwait Energy
Oil
P
Fatema-1
Area A
Kuwait Energy
Oil
O
El Salmiya-1
Abu Sennan Kuwait Energy
Oil
P
Al Jahraa-1
Abu Sennan Kuwait Energy
Oil
P
Comments
Dry Hole Gas & Cond. discovery, Initial flow rates of 2555 bopd cond. &16.6mmscfd gas gross Oil Producer, Initial flow rate of 835 bopd gross
* Need to submit field development plan for Abu Sennan gas to move to 2P
Future Outlook
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Yemen Gas Project Yemen gas development for power generation
Current Project status:
1. The Yemen Gas Master Plan (YGMP) study was completed in April 2011 as per an MOU with the Yemen Government. 2. PEPA*, Yemen has granted approval to Kuwait Energy to implement stage 1 of the YGMP by executing a small scale LNG project utilizing flared gas
The Natural Gas in place as estimated by the PEPA, Yemen is 18.2tcf
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* Petroleum Exploration and Production Authority
Key Focus Area for Inorganic Growth Expansion Core areas of focus for future upside in the Middle East
Iraq Kuwait Energy has interests in two twenty year gas development contracts in
Iraq. Currently preparing to bid in the Iraq 4th Bid round in May 2012 Kuwait Energy has a MOU with the Oil Ministry in Iraq that is an umbrella
agreement under which KEC or Iraq can propose projects World’s fourth largest proven oil reserves
Egypt
Libya Kuwait Energy is seeking
opportunities to develop fields under service agreements, utilizing its operational experience based on the model it has deployed in Iraq post war
— 115bn barrels
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Kuwait
Kuwait Energy is seeking to expand
its asset base in Egypt capitalizing on its operational capability in Egypt since 2007
New opportunities to introduce international investment
and technology to Kuwait Global scale resource opportunity
Yemen Kuwait Energy has excellent relationships with various high-level decision
makers Undeveloped reserves of natural gas and oil (onshore and offshore) Intensified exploration efforts to compensate natural depletion of older oil
and gas fields
Also pursuing opportunities with exploration potential in Lebanon & Somalia 17
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BP Statistical Review June 2011
Target Countries
Existing Presence
Appendix 1 – Assets Summary
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Appendix 1: Overview of Assets As of March 2012 Region
Licence
Iraq
Egypt
Yemen
Oman Pakistan
Ukraine
EA
Exploration Asset
PAEP Producing Assets with Exploration Potential
Russia
ADEP Awaiting Development with Exploration Potential
Latvia
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Interest
Operator
Status
Siba
45.00%
KEC
ADEP
Mansuriya
22.50%
TPAO
ADEP
Area A (5 Blocks)
70.00%
KEC
PAEP
Mesaha
15.00%
Melrose
EA
Abu Sennan
50.00%
KEC
ADEP
BEA
75.00%
KEC
PAEP
ERQ
49.50%
Sipetrol
PAEP
Block 15
41.56%
KEC
EA
Block 35
88.24%
KEC
EA
Block 43
28.33%
DNO
PAEP
Block 49
64.00%
KEC
EA
Block 74
34.00%
KEC
EA
Block 82
21.25%
Medco
EA
Block 83
21.25%
Medco
EA
KSF
15.00%
Medco
PAEP
Jherruck
40.00%
NHEPL
EA
Kunri
40.00%
NHEPL
EA
BC
100.00%
KEC
PAEP
NY
100.00%
KEC
ADEP
Chikshina
100.00%
KEC
EA
Luzskoye
100.00%
KEC
PAEP
License 1 - 2004
45.00%
KEC
EA
License 1 - 2009
45.00%
KEC
EA
Iraq Siba & Mansuriya Two 20 year gas development contracts signed 05 June 2011, added 140mmboe in 2P WI reserves Siba Field Overview: Location: Type: Operator: KE Interest: Other Parties:
Contract Date: Contract Type: Remuneration Fee: Plateau Rate:
Basra Governorate Onshore Kuwait Energy 45% TPAO (30%), South Oil Company (25%) June 2011 Service Agreement US$7.5/boe 100 mmscfd
Mansuriya Field Overview: Location: Diyala Province Type: Onshore Operator: TPAO (37.50%) KE Interest: 22.50% Other Parties: KOGAS (15%), Midland Oil Company (25%) Contract Date: June 2011 Contract Type: Service Agreement Remuneration Fee: US$7.0/boe Plateau Rate: 320 mmscfd
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Egypt Location of KEC Egyptian Blocks
KEC Blocks and Working Interests Producing Burg El Arab, 75% * Area A, 70% * East Ras Qattara, 49.5% Non-Producing Abu Sennan, 50% *
Exploration Mesaha (Block 6), 15% * Denotes KEC Operated Blocks
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Egypt Area A
Field Overview: Location: Area: Type: Blocks:
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Operator: KEC Interest: Other Participants:
Eastern Desert 350 km2 Onshore 4 Development + 2 Exploration Areas KEC 70% Petrogas (30%)
Acquisition Date :
Aug 2008
Contract Type:
Exploration Service Agreement (ESA) & Production Service Agreement (PSA)
Egypt Mesaha (Block 6) 200 000 E
400 000 E
600 000 E
800 000 E
M E D I T E R R A N EA N
1000000 E
1200000 E
S E A
1000000 N
32° N
000 000 E
El salum 31 ° N
Mersa Matruh
N
Alexandria
Marina
Tanta
Sinai N
Cairo Suez
Kareem
Kheir
Ras Shukeir
Abu Sennan
Shukheir
EAST ERN DESERT
28 ° N
0
5
10
15 Km.
W. DARA
27 ° N
LIBYA
Area “A” Asyut
600 000 N
Ras Dib
Minya
Hurgada
Farafra Oasis 400 000 N
26 ° N
Sohag
Qena
25 ° N
Western Desert
Luxor
Idfo
24 ° N
200 000 N
Mesaha
Eastern Desert
23 ° N
Aswan
22 ° N
000 000 N
0 25 ° E
100 Km. 26 ° E
S UD AN
S UD AN 27 ° E
28 ° E
29 ° E
30 ° E
31 ° E
Field Overview:
Ayun
East Ras Qattara
Siwa Oasis
29 ° N
E. UM EL YUSR
800 000 N
30 ° N
Burg El Arab
32 ° E
33 ° E
34 ° E
35 ° E
36 ° E
Location: Area: Type: Operator: KEC Interest: Other Partners:
37 ° E
Acquisition Date: Contract Type:
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Western Desert 42,697 km2 Onshore Melrose Resources (40%) 15% Hellenic Petroleum (30%) Beach Energy (15%) Aug 2008 PSA
Egypt Abu Sennan Field Overview: Location: Area: Type: Blocks: Operator: KEC Interest: Partners:
Western Desert 1,589 km2 Onshore Development/Exploration KEC 50% Dover (28%) Beach Energy (22%) Acquisition Date: Jun 2007 Contract Type: Concession
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Egypt Burg El Arab (BEA)
60
Field Overview: -76
-7720
-766 0
74 0
-7700
Depth Structure Map (Upper Bahariya Top) 412000
414000
416000
418000
420000
422000 894000
894000
-766
-7660
890000
-76 890000
60
-7800
-77
60
892000
892000
-7660
-76
-7700
BEA-N1X
1
416000
2
-76
00
3km
-77
418000
40
420000
-762
0 Depth Structure Map (Upper Bahariya Top)-7600 0 72
422000
80
-7
416000
00 416500 -77
417000
889500
-76
80
60
BEA-N1X
-7640
-7640
-7620
-7
888500 888000 887500 887000
-76
80
-760 -76 0 20 -76 4 -76 0 60
886500 886000
0 70 -7 -7720 -7740
-7760
-7940 416000
416500
417000
417500
418000
418500
419000
419500
80
BEA-2
0.75km
40
0.5
-77
0.25
886000
0
BEA-1
0
-7860
-77
-7560
-7780
-7660 -7680
886500
0
-7700
BEA-1ST 58 -7
BEA-8
-780
-7640
-7540
0
0
0
62
-7
BEA-3
82
-7720
BEA-5
-7 -776
-7600
-7620
-7680
887000
20
-7580
-76
887500
-7600
BEA-7
BEA-6
Depth
-7560
60 40 -78 -78
888000
00
-7640
BEA-4
-7620
-76
0
0
62
80
0
66 -7
-7
-75
70
888500
-7640
-7660
0
889000
889000
64
-
-7620
-76 60
-7
419500
889500
0
8 -76
419000
0
-766 0
-7700
418500
75
-756
-7740 -772 0
41800080
417500
-76
-7760
80
-7780
886000 884000
-77
414000
884000
0
412000
0 64
0
6 77
-7660
-7
886000
BEA-1ST BEA-1 BEA-8 BEA-2
-7680
80
-7 6
888000
-7640 -7620
888000
-7780 BEA-5 BEA-6 BEA-7 BEA-3
25
-7680
0
BEA Concession Boundary
BEA-4
Western Desert 72 km2 Onshore 2 Development + Exploration Areas KEC 55% Gharib Oil Fields (25%), East West Petroleum (20%) Acquisition Date: Jun 2006 Contract Type: PSA
-7700
20
-7
0
-7 8
Location: Area: Type: Blocks: Operator: KEC Interest: Partners:
-7680
60
-77 60
-7700
00
-76
40
0 -772
-77
-76
0 -780
8 -77
-7 68 0
80 -77
-7760
Egypt East Ras Qattara (ERQ) Field Overview: Location: Area: Type: Blocks: Operator: KEC Interest: Acquisition Date: Contract Type:
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Western Desert 4,326 km2 Onshore 3 Development + Exploration Areas Sipetrol (50.5%) 49.5% Aug 2008 PSA
Yemen Location of KEC Yemen Blocks
Block 35 Block 83 Block 82 Block 49
Block 43
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Block 74
Block 15
Yemen Block 15
Block Overview: Location: Area: Type: Operator : KEC Interest: Other Partners: Block 15: Acquisition Date: Contract Type:
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Mukalla-Saylut Basin 10,043 km2 Offshore KEC 41.56% KUFPEC (53.44%) TYC (5%) Leads and Prospects Aug 2008 PSA
Yemen Block 35
Block Overview:
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Location: Area: Type: Operator: KEC Interest : Other Partners:
Jeza Basin 5,533 km2 Onshore KEC 88.24% Dragon Oil (11.76%), TYC (5% carry)
Acquisition Date: Contract Type:
Aug 2008 PSA
Yemen Block 43
Field Overview: Location: Area: Type: Block:
Operator: KEC Interest: Other Partner: Acquisition Date: Contract Type:
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Sayun-Masila Basin 933 km2 Onshore Exploration & Development License containing the Nabrajah Oil Field DNO International (56.67%) 28.33% TYC (15%) Aug 2008 PSA
Yemen Block 49
Block Overview: Location: Area: Type: Operator: KEC Interest: Other Partners:
Acquisition Date: Contract Type:
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Shabwa Basin 2,088 km2 Onshore KEC 64% CCC (21%) TYC (15%) Aug 2008 PSA
Yemen Block 74 Block Overview: Location: Area: Type: Operator: KEC Interest: Other Parties:
Acquisition Date: Contract Type:
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Sayun-Masila Basin 1,203 km2 Onshore KEC 34% KUFPEC (20.25%) Arc (19.25%) Adelphi (8.5%) Dhakwan (5%) TYC (15%) Aug 2008 PSA
Yemen Block 82 & 83
Blocks Overview: Location:
15
Block 82
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Block 83
Area: Type: Operator: KEC Interest: Other Parties:
Acquisition Date: Contract Type:
Block 82: Shabwa Basin Block 83: Sayun Masila Basin 2,217 km2 Onshore Medco Energi (38.25%) 21.25% Indian Oil Corp. (12.75%) Oil India Ltd (12.75%) TYC (15%) Dec 2006 PSA
Oman Karim Small Fields Field Overview:
Location: Type: Operator: KEC Interest: Other Partners:
Acquisition Date: Contract Type:
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Southern Oman Onshore (cluster of 18 small fields) Medco LLC 15% Oman Oil Company (25%), Medco (51%), Petrovest General Trading (5%) Vision Oil and Gas (4%) Mar 2006 Technical Services
Pakistan Jherruck & Kunri Fields
Jherruck Field Overview:
Kunri Field Overview:
Location: Area : Type: Operator:
Location: Area: Type: Operator:
Sindh Province 733.8 km2 Onshore New Horizon E.&P. Ltd (60%) KEC Interest: 40% Acquisition Date: Jan 2008 Contract Type: PSA
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Sindh Province 2,486 km2 Onshore New Horizon E.& P. Ltd (60%) KEC Interest: 40% Acquisition Date: Jun 2007 Contract Type: PSA
Ukraine Rudis License Group & JAA 429 Blocks: - Rudis License Group: Bilousivska-Chernuki (BC) Field North Yablonivka (NY) Field Dubrivska (DB) Field - JAA 429 Area: BC: 109 km2 NY: 76 km2 DB: 31 km2 JAA 429: Bilske :17.8 km2 Kulichikhi: 9.8 km2
Operator:
KEC: BC, NY, DB. Ukrbud (25%) : JAA 429
KEC Interest:
BELARUS RUSSIA
Kiev
POLAND
BC, NY, DB (100%) JAA 429 (25%) Other Partners: JAA 429: Ukragaz (50%), Ukrbud (25%) Acquisition Date: Dec 2007
Capartian Basin SLOVAKIA
Ukraine
Dnieper-Donets Basin
HUNGARY
MOLDAVIA ROMANIA
BLACK SEA
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Contract Type:
Production License
Russia Location of KEC Russian Fields: Luzskoye & Chikshina
Fields Overview: Location: Area: Type: Blocks: Operator: KEC Interest: Acquisition Date: Contract Type: 37
Timan Pechora Luzskoye: 69 km2 Chikshina : 8.5 km2 Onshore Development KEC 100% Apr 2007 Production License
Latvia License 1 – 2004 & License 1 – 2009 (North Block) License 1-2004 Overview: Type: Area: Operator: Other Partners:
Acquisition Date: Contract Type: License 12004 & North Block
Offshore 765 km2 KEC (45%) PKN Orlen (45%) Latvian State Entity (10%) Apr 2008 Exploration/Production Agreement
License 1- 2009 Overview: Type: Area: Operator : Other Partners:
Acquisition Date: Contract Type:
38
Offshore 899 km2 KEC (45%) PKN Orlen (45%) Latvian State Entity (10%) Jun 2009 Exploration/Production Agreement
Disclaimer Forward looking statements This document includes statements that contain words or phrases such as “will”, “aim”, “will likely result”, “believe”, “expect”, “will continue”, “anticipate”, “estimate”, “intend”, “plan”, “contemplate”, “seek to”, “future”, “objective”, “goal”, “project”, “should”, “will pursue”, and similar expressions or variations of such expressions which are “forward looking statements”. Such forward looking statements are by their nature speculative and based on various assumptions. Any such statements are hypothetical with respect to prospective events and should not be construed as being indicative of the actual events which will occur or a guarantee of future performance. All forward-looking statements are subject to risks, uncertainties and assumptions that could cause actual results to differ materially from those contemplated by the relevant forward looking statements. Important factors that could cause results to differ materially from the Company’s expectations include, among others: •General economic and business conditions in Kuwait and other countries; •The Company’s ability to successfully implement its strategy, growth and expansion plans and technological changes; •Changes in the value of the Kuwaiti Dinar and other currency changes; •Changes in Kuwaiti or international interest rates; •Changes in laws and regulations that apply to investment companies in Kuwait; •Changes in political conditions in Kuwait and other countries; and •Changes in the foreign exchange control regulations in Kuwait. Disclaimer: All information provided in this document is for information purposes only. All financial information is unaudited and is subject to an annual financial audit.
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