PowerPoint Presentationselenaoil.com/uploads/documents/Q3-2011-presentation-web-final.pdf · Title: PowerPoint Presentation Author: Elise Edlund Created Date: 11/16/2011 2:06:22 PM

Third Quarter and 9 Months 2011

Indrek Rahumaa, Chairman of the Board

Jurgen Lamp, Director and CEO

Baiba Gegere, CFO

17 November 2011

Overview of SOGH

16 November, 2011 2

Introduction to Selena (1/2)

• Selena Oil & Gas is an independent oil producing company based in Stockholm with production in the Ural region of Russia

• The company currently has 93 employees

• In May 2011 the company was listed on NASDAQ OMX First North with a current market cap of MSEK 378(1) (net debt of MSEK 19)(2)

• Sales in Jan-Jun 2011 amounted to MSEK 26.7 and EBITDA amounted to MSEK 0.7

OVERVIEW OF SOGH

16 November, 2011 3

Location of Selena’s assets

(1) As of November 3, 2011 (2) SOGH H1 2011 report, reviewed by PWC (

Introduction to Selena (2/2)

• The company has 4 fields and total 2P reserves amount to 22.6 Mmboe

• Selena has 19 wells, an oil transportation fleet, railroad, Transneft Access Point (TAP) and other infrastructure to secure a full logistics solution

• Production level in September 2011 was 355 bopd, an increase by 37% compared to the average production level in 2010

• Production is expected to continue to increase as a result of drilling of new wells and enhanced oil recovery methods and

• According to DeGolyer and MacNaughton (D&M) the production potential of current fields when fully developed (2014) could reach:

– 6,500 boepd (oil and gas)

OVERVIEW OF SOGH

16 November, 2011 4

Reserves, Mmboe

Category

Oil Mmbbl

Gas & Gas Liquid

Mmboe Total

Mmboe

1P reserves 2.8 8.3 11.1

2P reserves 8.4 14.2 22.6

3P reserves 12.4 19.4 31.8

Prospective Resources 18.4 71.9 90.3

Prospective Resources Pg-adjusted

5.2 17.6 22.8

Source: DeGolyer & MacNaughton

PERM

Selena today

OVERVIEW OF SOGH

16 November, 2011 5

UDMURTIA

Source: DeGolyer & MacNaughton and Company Management (1)

= Field – Oil and condensate

= Field – Gas

= Resources

0.7 Mmboe 2P

3 wells

3.3 Mmboe 2P

8 wells

16 Mmboe 2P

8 wells

2.6 Mmboe 2P

1 well (1)

55.1 Mmboe

9.4 Mmboe

25.8 Mmboe

ANELSKO-PATRAKOVSKI BLOCK

PATRAKOVSKO-TIMENSKI BLOCK

CHIKALINSKI BLOCK

KOMARIKHINSKOYE FIELD DUBROVINSKOYE FIELD

AZINSKOYE FIELD

Mmboe – Million barrels of oil equivalents TAP – Transneft Access Point

VISOKOVSKOYE FIELD

TAP Capacity

6,000 bopd

Invest to increase oil production from existing fields

Selena’s strategic objectives

OVERVIEW OF SOGH

16 November, 2011 6

1.

Continue process towards becoming a gas producer

3.

Acquire additional oil and gas assets and start production

2.

Key attraction points

OVERVIEW OF SOGH

16 November, 2011 7

• Large potential oil production from existing fields

• Positioned to benefit from the deregulation of the domestic Russian gas market

• Planning process of building a gas treatment plant and a Gazprom Access Point started

• Attractive exploration licences adjacent to producing assets

• Well developed infrastructure and low cost on-shore production

• Strategic Transneft Access Point allowing the group to sell oil directly to the pipeline and at a higher margin than when sold to local traders

• Strong management team and Board of Directors which bring together different complementary skills and competencies:

– Russian, strategic, production and administrative know-how

– Western transparency, governance and control

– Best practice strategy, finance and legal

• Several acquisition opportunities identified – allowing the company to grow its asset base and production

Key events 9M 2011

16 November, 2011 8

Key events 9M 2011

16 November, 2011 9

• Komarikhinskoye field acquisition completed

– 2P reserves 0.6 Mmbbl of oil, 2.0 Mmboe of gas

– Licence fee acquired for 1.32 MUSD

– No production as of now, however, easy to integrate with production and logistics of Visokovskoye field

• OOO Georesurs acquisition completed

– 3 blocks in Perm region with 90.3 Mmboe of resources

– Purchase price 0.5 MUSD

• Reverse acquisition of Emitor Holding completed

– Company description approved by the Stock Exchange

– SOGH listed on NADAQ OMX First North

• DeGolyer & MacNaughton report filed

– 2P reserves of 22.6 Mmbbl, 3P reserves 31.8 Mmbbl and prospective resources 90.3 Mmboe

– NPV of the company’s 3P reserves 82.4 – 114.6 MUSD

Key events 9M 2011

16 November, 2011 10

• Preliminary SPA for acquisition of asset in Perm signed

– 1.7 million tons of C1 and C2 reserves and 3.6 million tons of C3, D1 and D2 according to Russian classification

– Preliminary purchase price 10.8 MUSD

– Due diligence ongoing

– Signing of main purchase agreement scheduled for 19 December 2011

• New share issue completed in Q3 2011

– 8 MSEK raised via 1.6 million share issue

– Issue subscribed by Mr. Paul Waern, experiences oil engineer, and Mr. Jaan Vilval, private investor

• Tax audit of OOO Selena-Perm successfully completed

• VAT, corporate income tax and mineral extraction tax for years 2007 – 2009 fully covered by audit

• Insignificant amount of penalty calculated

• Period closed for further tax investigation

Key events 9M 2011


• Move to NASDAQ OMX First North Premier

– Full reporting compliance with IFRS

• Changes in the board

– From 19 September 2011 board consists of 5 members: Mr. Paul Waern, Mr Indrek Rahumaa, Mr Vyacheslav Pershukov, Mr Karl Bleschert and Mr Staffan Torstensson

Highlights Q3 and 9M 2011



• Q3 2011 production of 32.2 Mbbl up 45.1% as compared to Q3 2010 (Q3 2010: 22.6 Mbbl)

• 9M 2011 Sales 35.4 MSEK. Sales up due to increase in sales price and sales of 3rd party oil

• 9M 2011 EBITDA of 106 TSEK a decrease of 62.3% as compared to 9M 2010 (9M 2010: 281 TSEK)

• 9M 2011 operating result a loss of 4,331 TSEK (9M 2010: loss of 3,021 TSEK).

• Result in 9M 2011 heavily impacted by charges related to business combination completion, listing and set-up of functions required from a listed company


Financials Key Comments

9M 2011 9M 2010 Q3 2011 Q3 2010 Production, Mbbl 87.9 70.9 32.8 22.6

Production, bopd 322 259 357 246

Revenue TSEK 35,364 17,280 8,705 5,376

EBITDA TSEK 106 281 (563) 0

EBITDA margin (%) 0.3% 1.6% (6.5%) 0.0%

Operating loss TSEK (4,331) (3,021) (2,245) (1,179)

Net result TSED (5,635) (2,198) (4,558) (1,118)


• 9M 2011 investments into fixed assets amounted to 14,415 TSEK

• Largest investment made into licence for the Komarikhinskoye field for the total consideration of 8,571 TSEK

• In addition, investments related to OOO Georesurs acquisition amounted to 3,491 TSEK

• Operating cash flow was negative of 5,384 TSEK in 9M 2011, decrease due to charges related to charges related to business combination completion, listing and set-up of functions required from a listed company

• Total loans and borrowings amounted to 19,688 TSEK which is a slight decrease as compared to the balance as of 31 December 2010

• Net debt 18,570 TSEK as of 30 September 2011


Financial position and cash flow Key Comments

30-Sept-11 31-Dec-10

Non-current assets TSEK 47,680 38,416

Total assets TSEK 61,700 55,114

Net debt TSEK 18,570 6,151

9M 2011 9M 2010

Operating cash flow TSEK (5,384) 4,278

Investing cash flow TSEK (15,002) (1,448)



Production development Sales price Production development

• As the result of well renovation works initiated in the end of 2010 bopd amounted to 354 bopd in October 2011 as compared to average production per day of 260 bopd in 2010

Annex – Overview of assets


Visokovskoye Oil and Gas field

• Discovered: 1988

• Start of production: 2006

• 2P Oil: 3.9 Mmbbl

• 2P Gas: 12.1 Mmboe

• Depth of reservoirs: 1,600m

• Cost to drill per well, approx: MUSD 1.1

• Production in September 2011: 196 bopd

• Production capacity peak when fully developed: 1,519 bopd oil and 2,826 boepd gas

• Number of wells: 8

• Number of wells when fully developed: 27

APPENDICES


• Selena intends to build a Gazprom Access Point and a gas treatment plant to connect and integrate its operations more efficiently

Source: DeGolyer & MacNaughton and Company Management

Azinskoye field







• Production capacity peak when fully developed: 1,045 bopd



APPENDICES



Dubrovinskoye field

APPENDICES








• Production capacity peak when fully developed: 197 bopd




Komarikhinskoye Oil and Gas Field


• 2P Gas: 2.0 Mmboe


• Production in September 2011: none

• Combined production capacity peak when fully developed: 914 boepd


APPENDICES



• Selena won the license in a Government auction in February 2011, the license was issued on 25 March 2011

• The field has one available conserved well which should be activated and taken into production in 2012

• Located only 40 km from Visokovskoye it will be easily integrated to oil and gas production infrastructure

• Expected start of oil production in 2012; start of the gas production anticipated for 2014

Transneft Access Point and infrastructure

APPENDICES



• A 6,000 bopd capacity Transneft Access Point (TAP) gives direct access to the Transneft pipeline

• Allows Selena to sell oil at higher prices compared to other local companies

• Full logistical infrastructure (railway links, terminals, storage, trucks) built to efficiently transport and sell the produced oil

• TAP also to be used for oil trading operations with an expected 10–15% margin

• Oil trading option unused in 2008–2010. In Q2 2011 Selena sold 35.0 Mbbl of third party oil

Prospective resources

• Total 90.3 Mmboe of Mean Estimate Prospective Resources, 22.8 Mmboe Pg-Adjusted

APPENDICES



• In April 2011 Selena acquired OOO Georesurs in Perm which holds 3 new promising exploration licences issued in October 2010

• DeGolyer & MacNaughton has evaluated the licences and has estimated the following mean estimate prospective resources:

• Anelsko-Patrakovski

– Gas Mean Estimate – 55.1 Mmboe

– Gas Pg-Adjusted – 13.7 Mmboe

• Patrakovsko-Timenski

– Gas mean Estimate – 9.4 Mmboe


• Chikalinski

– Oil Mean Estimate – 18.4 Mmbbl

– Oil Pg-Adjusted – 5.2 Mmbbl

– Gas Mean estimate – 7.4 Mmboe


Documents

PowerPoint Presentationselenaoil.com/uploads/documents/Q3-2011-presentation-web-final.pdf · Title: PowerPoint Presentation Author: Elise Edlund Created Date: 11/16/2011 2:06:22 PM