Upload
others
View
0
Download
0
Embed Size (px)
Citation preview
23 January 2008
The Manager, Companies Australian Stock Exchange
Investor Briefing 23 January 2008
Further to this mornings announcement please find attached an investor briefing. By way of clarification the announcement earlier today stated that an AZA shareholder using the cash and share alternative would receive $0.71 in cash plus Nexus shares equal to $1.04 calculated on the basis of the Nexus share price per AZA share. It also stated that assuming a Nexus share price of $1.72, an AZA shareholder who chooses this alternative will receive $0.71 plus approximately 0.58 Nexus shares per AZA share held. The more accurate calculation of Nexus shares per AZA share held is 0.60 rather than 0.58. Further details of the ratio calculation are included on page 16 of the attached investor briefing. Yours sincerely Susan Robutti Company Secretary
Nexus Energy Limited ABN 64 058 818 278 ● 134-140 Little Lonsdale Street Melbourne Victoria 3000 Phone: +613 9660 2500 Fax: +613 9654 9303
Website: www.nexusenergy.com.au
For
per
sona
l use
onl
y
Nexus EnergyNexus Energy
Merger with Anzon Australia and Anzon Energy….creating a leader in the Australian oil and gas sector with significant growth potential
23 January 2008For
per
sona
l use
onl
y
Slide 2 2
Important noticeThis presentation contains certain statements which may constitute "forward-looking statements". Such statements are only predictions and are subject to inherent risks and uncertainties which could cause actual values, results, performance or achievements to differ materially from those expressed, implied or projected in any forward-looking statements.
No representation or warranty, express or implied, is made by Nexus that the material contained in this presentation will be achieved or prove to be correct. Except for statutory liability which cannot be excluded, each of Nexus, its officers, employees and advisers expressly disclaims any responsibility for the accuracy or completeness of the material contained in this presentation and excludes all liability whatsoever (including in negligence) for any loss or damage which may be suffered by any person as a consequence of any information in this presentation or any error or omission there from. Nexus accepts no responsibility to update any person regarding any inaccuracy, omission or change in information in this presentation or any other information made available to a person nor any obligation to furnish the person with any further information. F
or p
erso
nal u
se o
nly
Slide 3 3
HighlightsHighlights
Agreed merger with Anzon Australia Limited (“AZA”) and Anzon Energy Limited (“AEL”)
Unique opportunity to create a leading $1.5bn(a) ASX listed mid-cap energy company with significant re-rating potential and emerging international relevance
Highly complementary operations – significant operational synergies in the Gippslandbasin
Excellent mix of production growth and substantial reserves base
Offer is unanimously recommended by the Boards of AZA and AEL which have withdrawn support for the competing ARC Energy Limited (“ARQ”) proposal
Delivers substantial certain value to AZA, AEL and Nexus shareholders
Proposal to be implemented via schemes of arrangement(a) Enterprise valuation
For
per
sona
l use
onl
y
Slide 4 4
Key synergiesKey synergies
Shared infrastructure in the Gippsland BasinSignificant cost savings from combined operatorship of BMG and LongtomReduction of commercial risk in the event of successful exploration of prospects around BMGCombined entity to utilise Nexus’ extensive experience in operating offshore projects
For
per
sona
l use
onl
y
Section 1Section 1
Profile of the merged entity
For
per
sona
l use
onl
y
Slide 6 6
Exceptional portfolio of high quality assetsExceptional portfolio of high quality assets
Basker-Manta 5 kbd(net) oil
Current production
Near term development
Longtom gas and condensate projectBMG expanded gas, condensate and LPG projectCrux Liquids Project
Medium term development Exploration
Echuca Shoals prospect off North West AustraliaChimaera and Gummy in the GippslandBasin
Crux near field potentialBMG and Longtom near field explorationVlaming Sub BasinGippslandBasinCanterbury BasinF
or p
erso
nal u
se o
nly
Slide 7 7
The expanded NexusThe expanded Nexus
A leading $1.5bn(a) ASX listed mid-cap energy company with significant re-rating potentialCombined 2P reserves and contingent resources of 169 mmboe place it ahead of all mid-cap oil & gas producersUnique profile of immediate production and substantial longer term growth projectsWell placed for subsequent consolidationSynergistic asset positions in the Gippsland Basin – shared infrastructureLarge potential for further upside particularly in Browse LNG and Vic/P49 exploration and fast development of discoveriesA commercially and technically capable team ready to progress outside AustraliaImproved stock liquidity with greater institutional investor interest and wider top-tier analyst coverageGreater financial flexibility
(a) Enterprise valuation
For
per
sona
l use
onl
y
Slide 8 8
5 kbd
17 kbd
39 kbd
57 kbd 56 kbd
50 kbd
45 kbd
-
5
10
15
20
25
30
35
40
45
50
55
60
65
2008 2009 2010 2011 2012 2013 2014
Dai
ly p
rodu
ctio
n (k
bd)
NXS Gas NXS Condensate AZA Oil AZA Gas AZA Condensate
Unique growth production profileUnique growth production profile
Forecast daily production (kbd)(a)(b)
(a) Average daily production per calendar year(b) 2008 production pro-forma for the full calendar yearSource: Nexus forecasts
2P Reserves + cont resources (mmboe)
Total: 169 mmboe
Basker
Longtom
CruxLongtom
72 mmboe
Crux56
mmboe
BMG40
mmboe
For
per
sona
l use
onl
y
Slide 9 9
A highly complementary suite of assetsA highly complementary suite of assets
NexusMelbourne
Office
NexusDarwinOffice
Nexus Perth Office
LongtomPermit: VIC/L29Interest: 100%Reserves and resourcesGas: 450bcfCondensate: 5.2mmbbl
Permit: NT/P66Interest: 100%Unrisked resourcesGas: 1,000bcfCondensate: n/a
Permit: VIC/P49Interest: Nexus 80%
Anzon 20%Unrisked resources Oil: 22mmbblGas: n/aCondensate: n/a
Permit: VIC/P56Interest: Nexus 80%
Anzon 20%Unrisked resources Oil: 18mmbblGas: n/aCondensate: n/a
Permit: VIC/P54Interest: 37.5%Unrisked resources Gas: 180bcfCondensate: n/a
MantaPermit: VIC/L26Interest: 40%Reserves and resourcesOil: 3.9mmbblGas: 112.4bcfCondensate: 3.3mmbbl
GummyPermit: VIC/RL9Interest: 40%Reserves and resourcesOil: n/aGas: 67.6bcfCondensate: 2.1mmbbl
BaskerPermit: VIC/RL10Interest: 40%Reserves and resourcesOil: 35.3mmbblGas: 138.7bcfCondensate: 3.5mmbbl
NexusAZAShared
AnzonSydneyOffice
Permit: AC/P41Interest: 50%Unrisked resourcesGas: 500bcfCondensate: 19mmbbl
CruxPermit: AC/P23Interest: 85%ReservesGas: n/aCondensate: 66.3 mmbbl
Echuca ShoalsPermit: WA-377-PInterest: 66%Unrisked resources Gas: 4,000bcfCondensate: ?
Permit: WA-368-PInterest: 50%Unrisked resourcesOil: 90mmbblGas: n/aCondensate: n/a
NexusMelbourne
Office
NexusDarwinOffice
Nexus Perth Office
LongtomPermit: VIC/L29Interest: 100%Reserves and resourcesGas: 450bcfCondensate: 5.2mmbbl
Permit: NT/P66Interest: 100%Unrisked resourcesGas: 1,000bcfCondensate: n/a
Permit: VIC/P49Interest: Nexus 80%
Anzon 20%Unrisked resources Oil: 22mmbblGas: n/aCondensate: n/a
Permit: VIC/P56Interest: Nexus 80%
Anzon 20%Unrisked resources Oil: 18mmbblGas: n/aCondensate: n/a
Permit: VIC/P54Interest: 37.5%Unrisked resources Gas: 180bcfCondensate: n/a
MantaPermit: VIC/L26Interest: 40%Reserves and resourcesOil: 3.9mmbblGas: 112.4bcfCondensate: 3.3mmbbl
GummyPermit: VIC/RL9Interest: 40%Reserves and resourcesOil: n/aGas: 67.6bcfCondensate: 2.1mmbbl
BaskerPermit: VIC/RL10Interest: 40%Reserves and resourcesOil: 35.3mmbblGas: 138.7bcfCondensate: 3.5mmbbl
NexusAZAShared
NexusAZAShared
AnzonSydneyOffice
Permit: AC/P41Interest: 50%Unrisked resourcesGas: 500bcfCondensate: 19mmbbl
CruxPermit: AC/P23Interest: 85%ReservesGas: n/aCondensate: 66.3 mmbbl
Echuca ShoalsPermit: WA-377-PInterest: 66%Unrisked resources Gas: 4,000bcfCondensate: ?
Permit: WA-368-PInterest: 50%Unrisked resourcesOil: 90mmbblGas: n/aCondensate: n/a
For
per
sona
l use
onl
y
Slide 10 10
Significant operational synergiesSignificant operational synergies
Nexus estimates that $100m+ (NPV) of operational synergies may be realisedPotential synergies include:
Shared infrastructure
■ Longtom infrastructure used to process BMG gas■ Expected to accelerate BMG production and lower processing costs
Operator synergies
■ The merged entity will be the operator for both BMG and Longtom■ Significant cost synergies are expected through combining these roles
Gas portfolio
■ Combined assets will represent a gas portfolio of in excess of 0.8tcf in a well developed gas market where many recognise the potential for significant gas price increases
Exploration■ Significant acreage positions in Gippsland, Browse, Bonaparte, Perth and Canterbury Basins■ Merger reduces commercial risk in the event of successful exploration of prospects around BMG
– accelerates and de-risks key developments
Greater access to offshore
skills, experience and relationships
■ Nexus will become a significant offshore operator■ Nexus has already built up the skill base required to develop and operate offshore projects■ The merged entity will have greater scale in this area to further attract key skills and
relationships
For
per
sona
l use
onl
y
Slide 11 11
Leading industry positionLeading industry position
Enterprise Value (A$b)(a)
(a) Based on 20 trading day VWAPs as at 22 January 2008Source: Bloomberg, broker research
10.3
4.6
1.6 1.5 1.51.0 1.0 0.7 0.6 0.4 0.3 0.2 0.2 0.2 0.1
0
1
2
3
4
5
6
7
8
9
10
11
12
40
Woo
dside
Santos
Oil Sea
rch
AWE
Nexus
/ AZA
Beach
Roc O
il
Nexus
AED
Anzon
ARC
Horizo
n
TAPAmad
eus
Petsec
Mosaic
Ent
erpr
ise
Val
ue (A
$b)
35.0
For
per
sona
l use
onl
y
Slide 12 12
Significant reserves position for combined entitySignificant reserves position for combined entity
(a) Based on 20 trading day VWAP to 22 January 2008(b) Nexus / AZA EV shown prior to potential re-rate(c) BMG uncontracted reserves included in 2P reservesSource: IRESS, company filings
EV against EV / 2P (a)(b)
MergeCo
AED
Anzon(c)
ARC Energy AWE
Beach(c)
Horizon
Mosaic
Nexus
Oil Search
Roc Oil
TAP
Amadeus
Petsec
0x
5x
10x
15x
20x
25x
30x
35x
40x
60x
0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000
EV (A$m)
EV
/ 2P
(A$
/ boe
)
MergeCo at 15x
MergeCo at 22x
For
per
sona
l use
onl
y
Slide 13 13
29.428.2
23.2
18.316.9
12.7 12.5
7.3
4.4 4.2 3.9n/a
0
5
10
15
20
25
30
35
Beach OilSearch
AED AWE Nexus /AZA
Nexus Roc Oil ARC Petsec AZA TAP Amadeus
Pro
duct
ion
(kbo
epd)
Increase in production shows potential for re-ratingIncrease in production shows potential for re-rating
(a) Calendar year ending 31 December 2009
Source: Nexus internal forecasts., AZA internal forecasts, broker forecasts
2009 production rates vs peers (kboepd)(a)
Combined entity 2011 production increases to 57 kboepd
For
per
sona
l use
onl
y
Section 2Section 2
Summary of merger terms
For
per
sona
l use
onl
y
Slide 15 15
Nexus’ offer for AZANexus’ offer for AZA
Merger values AZA at $1.75(a) per share 36% premium to ARQ’s implied offer price (based on last closing price(b)) of $1.2929% premium to AZA’s last closing price(b) of $1.36
In addition AZA shareholders to receive a special dividend of $0.07 per AZA shareSignificant cash component to offer, providing value certainty to AZA and high leverage to growth for Nexus shareholders
Cash of $0.71 per AZA shareNexus shares to the value of $1.04 per AZA share
AZA shareholders will be able to select, as alternatives to the cash and scrip offerAll shares option - receive no cash and Nexus shares to the value of $1.75 per AZA shareMaximum cash option – potential to further increase the cash component of the offer, subject to a maximum cash pool of $75m available to the 27% minority shareholders
(a) Assuming a 20 trading day VWAP of between $1.50 and $2.05 (subject to rounding). The number of Nexus shares to be issued will not be fewer than 0.51 or more than 0.69 per AZA share
(b) As at 22 January 2008
For
per
sona
l use
onl
y
Slide 16 16
Greater certainty and upside via cap and collarGreater certainty and upside via cap and collar
AZA shareholders to receive $1.04 per AZA share in Nexus scrip if Nexus’ 20 trading day VWAP is between $1.50 and $2.05 immediately prior to Scheme meetingFixed ratio below $1.50 and above $2.05
160.7
160.7
191.5
219.6
219.6
Nexus shares to be issued
(m)
Illustrative cap and floor offer consideration mechanism
$1.88=$0.71+$1.17=0.51X$2.30
$1.75=$0.71+$1.04=0.51X$2.05
$1.75=$0.71+$1.04=0.60X$1.72
$1.75=$0.71+$1.04=0.69X$1.50
$1.61=$0.71+$0.90=0.69X$1.30
NXS shares per AZA share(a)(b)
Value of Nexus’ offer(b)
Cash component
Share component
NXS share price
(a) The number of shares to be issued will be calculated as $1.04 divided by the Volume Weighted Average Price (“VWAP”) of Nexus shares in the 20 trading days immediately prior to the Scheme Meeting as long as the Nexus VWAP is between $1.50 and $2.05
(b) Subject to rounding
For
per
sona
l use
onl
y
Slide 17 17
Nexus’ offer for AELNexus’ offer for AEL
As AEL’s only material asset is its 53% holding in AZA, the offer price for AEL will be determined by reference to the implied value of the AZA stake adjusted for net cash on AEL’s balance sheet Merger values AEL at $2.84(a) per shareAEL shareholders also receive significant cash under the Nexus offer
Cash of $1.16 per AEL shareNexus shares to the value of $1.68 per AEL share
The same elections are available to AEL shareholders for all-scrip / maximum cash subject to a maximum cash pool of $150m(b)
(a) Assuming a Nexus 20 trading day VWAP of between $1.50 and $2.05 (subject to rounding), the number of Nexus shares to be issued will not be fewer than 0.51 or more than 0.69 per AZA share. Assumes that the RAK unsecured note is repaid from AEL’s cash resources and that RAK and Kings Road elect to convert their respective convertible notes into AEL shares
(b) The maximum cash pool will be reduced if redemption of the convertible notes is required
i.e. same cash and scrip mix as per AZA offer
For
per
sona
l use
onl
y
Slide 18 18
Indicative timetableIndicative timetable
January February March April May
23 JanSign Merger
Implementation Deeds
Early MarFirst Court Hearing to approve
scheme documentation & convene Scheme meeting
Early MarScheme
documentation sent to shareholders
Late AprScheme meetings to
consider and approve scheme
Late AprSecond Court Hearing
Court approves Scheme & ASX announcement
Early MayAZA dividend paid to AZA minorities
Mar / AprVWAP period to determine number of Nexus shares
issued under scrip component
Early MayConsideration
to target shareholders
Shareholders are expected to receive consideration for their shares by early May
For
per
sona
l use
onl
y
Section 3Section 3
Transaction structure
For
per
sona
l use
onl
y
Slide 20 20
Transaction structureTransaction structure
Nexus acquires 100% of the shares in AZAAZA shareholders vote to approve – requires 75% of votes cast and 50% of shareholders votingAEL can vote 53% may be sufficient to determine outcome as Nexus will not be able to vote its 19% holding
Nexus acquires AZA via Scheme of Arrangement and issue of Nexus shares and cash
1
Nexus acquires 100% of the shares in AELAEL shareholders vote to approve – requires 75% of votes cast and 50% of shareholders votingThe AEL Board has unanimously recommended acceptance of the AEL Scheme in the absence of a superior proposal and the Independent Expert concluding that the AEL Scheme is in the best interests of AEL shareholdersAEL scheme not conditional upon AZA scheme
Nexus acquires AEL via Scheme of Arrangement and issue of Nexus shares and cash
2
Nexus will hold shares in itself this position must be unwound within 12 months by lawThe current intention is that the shares will be cancelled
Nexus cancels cross shareholdings3
Nexus
Public 27.7%
AEL 53.1%
Nexus 19.2%
Scheme ofArrangement
Nexus AEL
Nexus shares
Scheme ofArrangement
AZA
100%
Nexus
AEL
Nexus shares
AZA
100% 100%
XNexus shares
Nexus sharesX
For
per
sona
l use
onl
y
Section 4Section 4
Summary
For
per
sona
l use
onl
y
Slide 22 22
SummarySummary
Nexus / AZA / AEL merger is a uniquely compelling opportunity
Synergistic merger will lead to substantial value to be realisedfor all shareholders
Very attractive portfolio of assets
For
per
sona
l use
onl
y
AppendixAppendix
Business profiles
For
per
sona
l use
onl
y
Slide 24 24
NexusNexus
ASX 200 oil & gas exploration and development company with a market capitalisation of $730mGained its first exploration permit in the offshore Gippsland Basin in 2003 and has since accumulated nine permits in four Australian basins (Browse, Gippsland, Perth and Bonaparte)Extensive 2P reserves of 114 mmboe (60 mmstb and 350 PJ) and contingent resources of 14 mmboe (1 mmstband 85 PJ) have already been identified which complement an exciting exploration pipelineThree key projects are in appraisal and development phases: Crux, Longtom and Echuca ShoalsThe 100% owned Longtom gas project is expected to generate significant cash flows
Longtom has declared reserves of 350 PJ gas and 4 mmbbl condensateSignificant value of Crux liquids project
Current P50 Crux reserves of 66.3 mmbbl have significant upside potentialSuccessful appraisal drilling campaignFID expected mid 2008Significant near field potential
Appraisal of Echuca Shoals gas discovery is continuing with a $60m farm-in agreed with ShellRecently awarded a joint exploration permit with Shell surrounding the Crux gas field
For
per
sona
l use
onl
y
Slide 25 25
AZAAZA
ASX listed oil & gas producer with a market capitalisation of approximately $500mEstablished in December 2003 and has assets in the Gippsland and Canterbury BasinsKey interest is a stake in the BMG Joint Venture (Anzon 40%, Beach 40%, Itochu 20%) with current oil production of around 12,500 bopd and planned gas developmentBMG JV uses subsea wells tied back to the Crystal Ocean FPSO and shuttle tanker Basker SpiritBMG JV sold 1.4m barrels of crude oil in 1H07, generating A$120m in gross sales revenueTotal 2P resources for the BMG project of 39.2 mmstb and contingent resources of 8.9 mmstb and 379.2 PJ sales gas as at 30 June 2006AZA share of remaining BMG 2P reserves is 14.9 mmstb and contingent resources of 4.3 mmstband 152 PJ sales gasIn October 2007, AZA sold a 10% interest in BMG JV to Itochu for A$123mAZA also holds interests in the VIC/P56 (20%) and VIC/P49 (20%) permits located in the Gippsland Basin and operated by NexusF
or p
erso
nal u
se o
nly
Slide 26 26
AELAEL
AIM listed oil & gas producer with a market capitalisation of approximately £100mEstablished in August 2001 for the purpose of developing oil and gas opportunitiesAEL’s only material asset is its 53% shareholding in AZA
For
per
sona
l use
onl
y