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n tho se h o urs t ha t c
ed – ex cept s o n tho d erso n L e e p r e fers e
s
EMPIRE OIL & GAS NL
13 October 2015 The Manager Company Announcements Office Australian Securities Exchange 20 Bridge Street SYDNEY NSW 2000
SHAREHOLDER UPDATE Empire Oil & Gas NL (“Empire”, ASX:EGO) is a gas and condensate producer based in Western Australia. Empire has sales agreements with Alcoa and BP for gas and condensate respectively. Empire is also engaged in petroleum and gas exploration in the onshore Perth basin. Empire is currently focused on the prospective Red Gully, Lockyer Deep and Raven exploration assets.
A new presentation is attached to this announcement which outlines a compelling investment case and Empire’s near term milestones.
INVESTMENT HIGHLIGHTS
Substantial high margin, low risk production and revenue stream through secure Sales Agreements with Alcoa and BP Ownership of significant infrastructure assets with book value of over A$28m as of 30 June 2015 High quality exploration portfolio with the largest acreage position in the Perth Basin Strong competitive position with sufficient reserves to meet incremental demand Growth opportunities through increasing contracted volumes at Red Gully production facility Negligible value appears to be currently ascribed by the market to Empire’s exploration portfolio
NEAR TERM MILESTONES/CATALYSTS
Red Gully North-1 well exploration drilling Tranche 2 Gas sales underway with cashflow impact from FY16 Discussions with potential buyers of surplus gas Corporate actions including the proposed share consolidation and an ERM debt-refinancing Secure Farm-out partner to fund 2016/17 exploration News relating to potential future supply contracts
Chief Executive Officer Ken Aitken said: “The next 12 months represent an exciting period for Empire as we begin to realise the benefits of tranche 2 of our sales agreement with Alcoa. Production at our Red Gully facility is well supported by current reserves and an exciting exploration portfolio in Red Gully North, Lockyer Deep and Raven. We expect to commence drilling at Red Gully North this quarter, with success to have a significant impact on project reserves”
For further information, please contact:
Ken Aitken Rachel Rees Chief Executive Officer CFO & Company Secretary Empire Oil & Gas NL Empire Oil & Gas NL Telephone: +61 8 9286 4600 Telephone: +61 8 9286 4600
A B N 5 5 0 6 3 6 1 3 7 3 0 A S X C o d e E G O G r o u n d F l o o r 2 2 9 S t i r l i n g H i g h w a y C L A R E M O N T 6 0 1 0 W E S T E R N A U S T R A L I A T e l : + 6 1 8 9 2 8 6 4 6 0 0 F a x : + 6 1 8 9 2 8 4 6 5 8 8 E m a i l : a d m i n @ e m p i r e o i l . c o m . a u W e b : w w w . e m p i r e o i l . c o m . a u
ASX RELEASE F
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COMPANY UPDATE
ASX: EGO OCTOBER 2015
AN ASPIRING MULTI-HUB MIDCAP E&P COMPANY
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Company snapshot
Financial information Share price (5-Oct-15) A$0.004
Number of shares1 10.2bn
Market capitalisation A$40.8m
Cash (30-Jun-15) A$11.5m
Debt (30-Jun-15)2 A$15.1m
Enterprise Value A$44.4m
Source: IRESS Notes: 1 Excludes 785m listed options (exercise price A$0.009, expiry date Apr-18) and 172m
unlisted employee share options on issue 2 Loan from major shareholder ERM
Top shareholders ERM Power 19.4%
Phillip Garratt 6.2%
Robert Hutchfield 1.2%
Top 20 shareholders 36.7%
Company overview High quality exploration portfolio with the largest acreage
position in the Perth Basin
Secure revenue stream through secure Sales Agreements with Alcoa and BP
100% owner of significant infrastructure assets
Competitive position as an established domestic gas producer ready to meet supply shortfalls
Proposed share consolidation attractive to investors
-
35
70
105
140
175
-
0.001
0.002
0.003
0.004
0.005
0.006
0.007
0.008
0.009
0.010
Oct-14 Jan-15 Apr-15 Jul-15 Oct-15
Volume S&P/ASX 300 Energy Index (rebased) EGO share price at close
Share price (A$) Volume (m)
DOMESTIC GAS PRODUCER POSITIONED FOR GROWTH
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Build reserves around Red Gully hub to
expand or extend existing production
facility
─ Drill Red Gully North in Q4 2015
─ Success will add significant reserve
upgrade
Develop another hub from drilling
multiple material high impact
exploration targets
VISION - FROM A SMALL CAP TO MIDCAP IN 5 YEARS
Strategy and vision F
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Board and management
EXPERIENCED AND DIVERSE BOARD WITH A STRONG TRACK RECORD
Antonino (Tony) Ianello – Chairman 30+ years of experience in banking and energy Previously managing director of Western Power Corporation Current Director of ERM Power (ASX: EPW)
Stuart Brown - Non-Executive Director 30+ years experience at the technical, managerial and board levels Previous Vice-President Strategic Planning at Woodside (ASX:WPL) Current Director of Cue Energy (ASX: CUE), WHL Energy (ASX: WHN)
Phillip Garratt - Non-Executive Director 30+ years of senior management experience in the oil and gas industry Previous Chief Executive Officer of IDM International (ASX: IDM)
Thomas Vincent - Non-Executive Director Highly experienced lawyer and investment banker with experience in
Australia and the UK Previously worked for Deutsche Bank as Vice President of Credit Trading
Empire has assembled a highly experienced Board and management team with specific experience in unlocking shareholder value from the Perth Basin
Significant operational knowledge of the Perth Basin will allow Empire to optimise the performance of the Red Gully project and also new discoveries over our 10,311km2 Perth Basin tenement holding
Management Board
Ken Aitken– CEO 30+ years E&P technical and executive experience- Petroleum
Engineering background Extensive knowledge of WA’s energy industry – 7yrs as Manager of
Origin’s Perth Basin Assets-discovered/developed Redback field Senior roles with Origin, Mitsui, Apache. International experience
Milton Schmedje- Exploration Manager 30+ years experience with Australian listed E&P Companies including
Ampolex, Origin, AWE & Tap Includes 15 years operating experience in Australian onshore Permian-
Jurassic petroleum basins
John Mastrocinque- Operations and Engineering Manager 25+ years engineering and operations management experience with
Australian and international operators and FPSO provider Significant engineering and operations experience with Woodside
Rachel Rees - Chief Financial Officer and Company secretary 20+ years of senior financial experience across multiple sectors Chartered Accountant with commercial, strategic and risk management,
corporate governance and financial management experience
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Gas contracts Counterparty Terms
Tranche 1 gas (completed)
─ 5PJ for a total of A$25m in revenue (pre-paid)
─ Price increase reflecting removal of pre-payment risk
Tranche 2 gas ─ Up to 8TJ/d of gas at undisclosed price for a total of 10 PJ
─ Commenced production in 3Q15
Uncontracted gas ─ Seeking counterparty for long term contracts
─ 2PJ of gas available at 2-3 TJ/day
Condensate ─ Provider of c.300 bpd of condensate
─ Condensate is processed and trucked to the Kwinana BP refinery
Secure revenue stream
De-risked revenue stream through fixed price Gas Sales Agreements (“GSA”)
Fixed price agreements, with any changes linked to CPI
Certainty of bringing product to market
─ 20 year agreement to use Dampier-Bunbury pipeline
─ Owner of processing infrastructure (plant and spur pipeline)
Customers are large listed multinational companies with investment grade ratings and low credit risk
EMPIRE HAS A SECURE GAS SALES AGREEMENT WITH ALCOA AND A CONDENSATE AGREEMENT WITH BP
Current contracts
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Ownership of infrastructure
100% ownership of Red Gully gas and condensate processing plant located 150km north of Perth which is close to end-users and exploration assets
─ Plant is currently capable of processing 10TJ/d of gas and 400bbl/d of condensate
─ Book value of A$28m for the Red Gully downstream assets as of 30 June 2015
100% ownership of the pipeline infrastructure connecting Red Gully and the major Dampier-Bunbury pipeline
─ Spur pipeline runs for 2.8km from Red Gully to connect to the Dampier-Bunbury pipeline
Long term 20 year agreement to use Dampier-Bunbury pipeline to bring gas to market
Room for plant expansion/LPG opportunity
EMPIRE OWNS ITS OWN PROCESSING INFRASTRUCTURE Infrastructure overview Infrastructure and processing facilities
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Unrivalled exploration portfolio
Fully funded drilling campaign in Red Gully North to commence in late 2015
Empire estimates that a successful discovery could result in 5TJ/d being added to production with capacity expansion
Significant contingent and prospective Resources, which are all located within 4km of the Red Gully Processing Plant
Location of Perth basin
Perth basin acreage holders ( gross km2)
Empire has a dominant position in the Perth basin, with over 45% of exploration acreage
THE PERTH BASIN IS BEGINNING A RENAISSANCE. EMPIRE HOLDS THE LARGEST ACREAGE POSITION IN THE UNDER-EXPLORED BASIN
Exploration overview
10,311
2,405
2,371
1,598 1420
1,129 1,012
1,335
Empire AWE Transerv Key Whicher Dynasty Origin Other
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High quality acreage
Lockyer Deep prospect strengthened by recent AWE discovery of 2C Resources of 290 bcf in adjacent field
Waitsia (adjacent to Lockyer Deep):“Has the potential to be the largest onshore conventional gas discovery in Western Australia in the last 50 years” — AWE
Location of prospects
Prospect Location Commentary
Red Gully North
EP 389 Situated only 4kms from Red Gully Processing Facility Independent consultants estimate 2C Resources of 7.9PJ
Lockyer Deep
EP 368 Major gas discovery adjacent to Lockyer Deep by AWE Could be drilled in second half 2016
Raven EP 432 New oil play down dip of the Cataby-1 oil discovery Recently matured to prospect status
Portfolio overview
EMPIRE HAS A PORTFOLIO OF HIGH QUALITY EXPLORATION PROSPECTS
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Four high quality exploration prospects
3D seismic coverage
Close proximity to existing facilities
Low cost development potential
Red Gully North (Previously Gingin Updip)
Updip of existing Gingin-1 discovery
Empire’s preferred prospect
Exploration well planned Q4 2015
Contingent (2C) resources* – 7.9PJ
Prospective resource* (P50) - 4.9PJ
Gingin East
Gas encountered in Gingin-2
Contingent (2C) resources* – 5.5PJ
Prospective resource* (P50) – 24.4PJ
Bootine Deep and Wannamal prospects provide further exploration upside
Red Gully
* RISC Independent Resource Evaluation Report January 2015
Red Gully overview Location
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RG-D 2P: 2P - 0.1 PJ
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2
4
6
8
10
12
14
16
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
Gas
Rat
e (T
J/d)
Gingin East
Red Gully North
Gingin West 1
Red Gully 1 (D-sand)
Red Gully 1 (B-sand)
RGN-1 Exploration Success*: 2C - 7.9 PJ
50% Risked Prospective = 2.45 PJ
Total - 10.35 PJ
GGW 2P:
2P - 0.2 PJ
Red Gully B-Sand 2P: 2P - 20.341 PJ
(17.48PJ Remaining from 01Jul15)
(current production profile)
Jan27: Abandonment at 2MMscf/d (~2.3TJ/d)
Jun17: Potential Plant
upgrade to 15TJ/d and GG
East tie-in in case of success
Jun16: Possible
RGN-1 tie-in in case
of success
GG East Exploration Success*: 2C - 5.5 PJ
50% Risked Prospective = 12.2 PJ
Total - 17.7 PJ
RG-D 2P: 2P - 0.1 PJ
Plant Expansion could double current $ revenue
* Contingent on success and determination of discovered volumes
Red Gully production
Red Gully production hub potential F
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Targets 25-134, mid/best case 58 BCF
Medium risk high impact well
Targeting the Kingia/High Cliff play confirmed
by AWE’s Waitsia discovery
Immediate follow-up potential at North
Erregulla
This exciting play remains untested East of the
AWE wells (Waitsia/Irwin)
Attractive secondary oil target appraising
discovered oil in Dongara sandstone at
Lockyer-1
Drilling mid 2016 subject to funding
Contingent rig slot secured
Lockyer Deep overview Location
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Targeting Jurassic sands down-dip of known oil
(Cataby-1)
Will test a large fault block adjacent to Jurassic
source kitchen
Medium risk high impact well
Targeting 12 million barrels (mid/best case)
Success will open up a new Jurassic oil play
Planning to drill in late 2016/2017 subject to
funding
Contingent rig slot secured
Raven overview Location
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LNG producers are averse to supplying additional volumes to the domgas market since the LNG export price is often higher
Domgas suppliers have the advantage of lower costs of extraction and therefore higher margins, which leaves them in a strong long term position to supply the gas demand in WA
Supply dynamics Off-shore supply to WA domgas market uncertain
WA DOMGAS PRODUCERS WILL BENEFIT FROM SUPPLY SOURCE TRANSITION
WA domgas market forecast is for sufficient supply to meet demand beyond 2020
Nearly 60% of forecast domgas supply capacity from facilities that have the discretion to produce domgas or export LNG.
Additional LNG exports are expected to balance the WA domgas market (historical reality)
Demand dynamics
WA domgas market is well diversified with strong demand; this provides Empire with the opportunity to market uncontracted gas
Strong competitive position
WA domgas supply (TJ/day)
Source: Independent Market Operator of Western Australia (Dec-14)
0
200
400
600
800
1,000
1,200
1,400
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
NWS (Domgas) Varanus Island ReindeerMacedon Gorgon (Domgas) Pluto (Domgas)Wheatstone (Domgas) Perth Basin Excess demand
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WA domgas market is transitioning to new supply sources and opportunities are arising for Empire
New WA domgas supply is priced significantly higher than historical supply, due to cost base
WA domgas supply capacity, at high prices, remains uncommitted.
Strong competitive position
Long term WA domgas supply transition
EMPIRE’S STRONG COMPETITIVE POSITION IS SUPPORTED BY FAVOURABLE LONG TERM WA DOMGAS MARKET
Empire’s WA domgas price expectations
WA domgas market experiencing short term volatility
Long term demand fundamentals of WA domgas market remain largely unchanged
IMOWA forecast ‘new domgas contract prices (ex-plant)’ are matching Empire’s expectations
WA domgas demand (TJ/day) WA domgas forward curve (A$/GJ)1
-
2
4
6
8
10
2015 2016 2017 2018 2019Fwd Curve Range (Min) Fwd Curve Range (Max)Price Forecast (IMOWA)
Source: Independent Market Operator of Western Australia (Dec-14) Note 1. New term gas contracts ex-plant)
200
400
600
800
1,000
1,200
1,400
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
High demand Base demand Contracted demand
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Perth basin location diversity of supply
DBNGP connection
Shorter haulage distance & lower cost part haul
Proven reliability (weather & environment)
Access to support services
Gas storage
Strong competitive position
EMPIRE HAS A STRONG COMPETITIVE POSITION IN WA DOMGAS MARKET
Upstream (potential domgas off-set)
Aggregators / power generation
Direct to commercial & industrial customers
Traded gas markets
Strong interest from major new potential gas customers
Firm interest in Empire’s uncontracted reserves and new potential gas customers short listed
Offers received for short term supply
Gas marketing for long term commenced
Positive strategic relationship with key customer
Gas supply agreement to underpin future revenue and earnings
Future opportunities for additional gas sales
Uncontracted reserves WA domgas market
Existing customer in Alcoa Initial market sounding and feedback
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Reserves 1P 2P 3P
Gas PJ 12.3 17.8 21.5
Condensate MSTB 379.6 554.5 676.1
Gas mmboe 2.1 3.1 3.7
Condensate mmboe 0.3 0.5 0.6
Total mmboe 2.4 3.6 4.3
Resources 1C 2C 3C
Gas PJ 11.1 18.6 29.0
Condensate MSTB 290.1 475.0 763.9
Gas mmboe 1.9 3.2 5.0
Condensate mmboe 0.3 0.4 0.7
Total mmboe 2.2 3.6 5.7
Reserves to support production growth
Empire has 1P reserves that exceed current contract requirements
Empire currently has c.12PJ of 1P Reserves and c.18PJ of 2P Reserves
Reservoir life of approximately 8 years based on 2P Reserves
Reserves and Resources1,2,3
Notes 1. Red Gully and Gingin West Reserves at 1st July 2015 2. PJ to mmboe converted at 0.17194,MSTB to mmboe converted at 0.0009 3. See disclaimer for full notes
Current supply arrangements
RESERVES AND RESOURCES UNDERWRITE CURRENT CONTRACTS, AS WELL AS PROVIDING A STRONG PLATFORM FOR GROWTH
Gas and Condensate Reserves Growth July 2015 compared with Oct 2014 Risc Reports (Red Gully B)
17%
32%
64%
78%
2P condensate reserves
1P condenstate reserves
2P gas reserves
1P gas reserves
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Growth opportunities: expansion
Sell uncontracted gas volume of
2TJ/d
Increase throughput at
Red Gully
Drill material oil & gas
exploration prospects Current
contracted volume
Revenue
Time
Contracted GSA with Alcoa for up to 8TJ/d
Increase gas marketing to reach processing capacity of 10TJ/d
Increase plant processing capacity to 15TJ/d (subject to RGN-1 economics )
Company changing. Discovery achieves second production hub within 2-3 years.
1
2
3
4
THERE ARE IMMEDIATE CAPITAL-LITE OPPORTUNITIES FOR EMPIRE TO MATERIALLY INCREASE REVENUE
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Key Financials (A$) FY2014 FY2015 Change (yoy)
Revenue $12.4m $19.1m +54%
Gross profit $4.0m $6.9m +73%
EBITDAX $2.7m $10.0m +270%
NPAT ($2.3m) $7.6 nm
EPS (cps) (0.036) 0.108 nm
Net Assets $36.6 $63.1 +72%
Cash balance $1.9m $11.5m +505%
EMPIRE RETURNED A STRONG FY15 RESULT
Strong financial performance F
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Observations Red Gully generates a material amount of EBITDA at a high margin The $13.8m does not include corporate costs (Empire achieved a total of A$10.0m EBITDAX for FY15) Opportunity to increase profit margin for FY2016 Full financial year of operating cost savings which were reduced by 30% in 2nd half FY 2015 Increase in gas production in 2nd half of FY when uncontracted gas sold
Red Gully: a high profit margin field
13.8 12.2
6.9
2.3
1.5 0.5 0.5 0.4 0.2 -
Gas revenue Condensaterevenue
O&M General & Admin Maintenance Services Condensatehaulage
Chemicals EBITDA
Red Gully FY15 Revenue to EBITDA bridge (A$m)
RED GULLY IS A HIGH MARGIN OPERATION. REVENUE FROM CONDENSATE COVERS THE OPERATING COSTS
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40.8 3.6
28.0
(5.5)
Market value @A$0.004
Net debt (30-Jun-15) Red Gully Developmentproperty
Implied explorationvalue
Implied upstream valuation
Negligible value for Empire’s upstream portfolio in current share price
Over 7.8PJ of Perth Basin uncontracted upstream 2P reserves yet to be commercialised
Substantial exploration upside with recent discoveries in adjacent Perth Basin acreage containing over 290 bcf in contingent resources
Empire’s implied core asset valuation (A$m)1,2,3
Source: IRESS Notes: 1. Market cap based on market close as at 5 October 2015 2. Capitalised costs taken from Empire’s 2015 Annual Report 3. Book value of Red Gully production facility and development property as at 30 June 15
NEGLIGIBLE VALUE CURRENTLY ASCRIBED BY THE MARKET TO EMPIRE’S UPSTREAM PORTFOLIO
21.9
Market disconnect
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Positioned well relative to peers
Company1 Market cap
(A$m)2 Production
(x) EBITDA
(x) Operating cashflow
(x) 2P Reserves
(x) 2C Resources
(x) Beach 625
AWE 363
Drillsearch 247
Senex 167
Horizon 130
Tap Oil 55
Cooper Energy 55
Cue 49
Empire 41
Central Petroleum 39
Carnarvon Petroleum 104
Maverick 43
Austex Oil 36
Oilex 34
Blue Energy 31
Comet Ridge 51
Byron 29
Transerv 46
Icon Energy 20
Rey 54 Petrel Energy 19
Source: IRESS, ASX announcements Notes: 1. Ranked by number of ticks and then descending order of market capitalisation 2. Market caps as at 5-Oct-15
EMPIRE HAS STRONG FOUNDATIONS WITH PRODUCTION, RESERVES AND MATERIAL PROFIT SUPPORTING GROWTH AS AN E&P COMPANY
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Upcoming share price catalysts
GSA In discussions – Discussions continue with other potential buyers of surplus gas
TRANCHE 2 Gas sales underway – Tranche 2 sales from GSA with Alcoa underway
– Currently generating revenue with P&L impact in FY16
– Drilling of the Red Gully North exploration prospect – Successful results could have a significant impact on project reserves
RED GULLY Exploration in 4Q 2015
– Further news relating to potential supply constraints post 2020 DOMGAS PRICES Ongoing
NEAR TERM OPERATIONAL, CORPORATE AND MACRO NEWS FLOWS WILL PROVIDE A NUMBER OF SHARE PRICE CATALYSTS
– Proposed share consolidation attractive to investors – ERM debt re-financing
CORPORATE
FARM-OUT TO FUND 2016/17 EXPLORATION
– Lockyer Deep high impact large volume discovery – Raven with large oil potential F
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Investment highlights
1 Substantial high margin, low risk production and revenue stream through secure Sales Agreements with Alcoa and BP
3 Unrivalled, high quality exploration portfolio with the largest acreage position in the Perth Basin
2 Ownership of significant infrastructure assets with book value of over A$28m as of 30 June 2015
4 Strong competitive position with sufficient reserves to meet any incremental demand
5 Growth opportunities through increasing contracted volumes or adding a stripping facility to Red Gully
7 Negligible value currently ascribed by the market to Empire’s exploration portfolio
8 Upcoming share price catalysts include 4Q15 drilling at Red Gully and securing uncontracted gas sales
6 Empire has strong foundations to grow the business and is good value when compared to domestic gas producing energy companies listed on the ASX
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Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
RED
GU
LLY
DEFI
NIN
G EX
PLO
RATI
ON
TA
RGET
S
DRIL
LIN
G
Gas & Condensate Production Reserves Review
Tranche 2 Starts
Reserves Review
Gas Marketing
RGN-1 Gas Marketing** RGN-1 Tie In**
Airborne Gravity Survey
Gravity Interpretation
Seismic Re-processing & Interpretation
RGN-1
RGN-1 Complete & Test**
Lockyer Deep* Raven/Gingin East*
*Lockyer Deep , Raven and Gingin East subject to funding and regulatory approvals ** Subject to successful results of RGN-1 and reserves determination
2D Seismic
2015/2016 timetable F
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Disclaimer
This presentation has been prepared by Empire Oil and Gas NL (“EGO”) for general information purposes only. This presentation may contain certain forward-looking statements which have not been based solely on historical facts but rather on EGO’s current expectations about future events and a number of assumptions which are subject to significant uncertainties and contingencies, many of which are outside the control of EGO and its Directors, Officers and Advisers. Due care and attention has been taken in the preparation of this presentation.
However, the information contained in this presentation (other than as specifically stated) has not been independently verified for EGO or its Directors and Officers, nor has it been audited. Accordingly, the Company does not warrant or represent that the information contained in this presentation is accurate or complete. To the fullest extent permitted by law, no liability, however arising, will be accepted by EGO or its Directors, Officers or Advisers, for the fairness, accuracy or completeness of the information contained in the presentation.
Information on the Reserves and Resources in this release relating to the L18, L19 and EP389 assets is based on an independent review and audit conducted by RISC Operations Pty Ltd (RISC), a leading oil and gas industry advisory firm. RISC is independent with respect to Empire Oil & Gas NL in accordance with the Valmin Code, ASX listing rules and ASIC requirements. The review and audit was carried out in accordance with the SPE Reserves Auditing Standards and the SPE-PRMS guidelines under the supervision of Mr. Geoffrey J Barker, a Partner of RISC. Mr. Barker is a member of the SPE and his qualifications include a Master of Engineering Science (Petroleum Engineering) from Sydney University and more than 30 years of relevant experience. Mr. Barker meets the requirements of qualified petroleum reserve and resource evaluator in accordance with ASX listing rules and consents to the inclusion of this information in this report which fairly represents the information and supporting documentation reviewed.
Notes to Reserve and Resource table on page 16 Ref RISC July 2015 Independent Reserve Evaluation report Red Gully and Gingin West Reserves at 1st July 2015 Red Gully comprises the B and D sand reserves discovered by the Red Gully-1 well. Gingin West comprises the D sand reserves discovered by
Gingin West-1well. Red Gully ,Gingin West, Gingin(re-named Red Gully North) and Gingin East contingent resources at 1st July 2015 Red Gully comprises the B and D sand resources discovered by the Red gully-1 Well. Gingin West comprises the D sand resources discovered
by the Gingin West-1 well. Gingin and Gingin East comprise the resources discovered by Gingin-1 and Gingin-2 wells Additions beyond the field level have all been made arithmetically, as a result RISC cautions that 1P and 1C aggregate quantities may be very
conservative and the 3P and 3C aggregate quantities may be very optimistic due to portfolio affects. Probabilistic and deterministic evaluation methods have been used (in accordance with ASX listing rule 5.28)
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