GROWTH IN THE PIPELINE - presidentenergyplc.com · This Presentation may contain forward-looking statements that involve substantial risks and uncertainties, and actual results and

24 June 2020 | Investor Presentation

GROWTH IN THE PIPELINE


DISCLAIMERThe information contained in this confidential document (“Presentation”) has been prepared by President Energy Plc (the “Company”). While the information contained herein has been prepared in good faith, neither the Company nor any of its shareholders, directors, officers, agents, employees or advisers give, have given or have authority to give, any representations or warranties (express or implied) as to, or in relation to, the accuracy, reliability or completeness of the information in this Presentation, or any revision thereof, or of any other written or oral information made or to be made available to any interested party or its advisers (all such information being referred to as “Information”) and liability therefore is expressly disclaimed. Accordingly, neither the Company nor any of its shareholders, directors, officers, agents, employees or advisers take any responsibility for, or will accept any liability whether direct or indirect, express or implied, contractual, tortious, statutory or otherwise, in respect of, the accuracy or completeness of the Information or for any of the opinions contained herein or for any errors, omissions or misstatements or for any loss, howsoever arising, from the use of this Presentation.

This Presentation may contain forward-looking statements that involve substantial risks and uncertainties, and actual results and developments may differ materially from those expressed or implied by these statements. These forward-looking statements are statements regarding the Company's intentions, beliefs or current expectations concerning, among other things, the Company's results of operations, financial condition, prospects, growth, strategies and the industry in which the Company operates. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. These forward-looking statements speak only as of the date of this Presentation and the Company does not undertake any obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of this Presentation.

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Slide 2


WHY INVEST IN PRESIDENT?

• We are demonstrably undervalued versus our peer set of Latin American focused producers(1)

‒ EV/2P boe 1.5 versus peer average 4.9 (and max 10.7)‒ EV/boepd US$13,000 versus peer average US$22,000 (and max US$74,000)

• This is notwithstanding:‒ Clear focus on cost control delivering low operating costs ($13.8 / boe in Rio Negro) and low G&A ($4.8 / boe,

25% down year on year) enabling unaudited net cash profit in Argentina in H1 2020 approximately $4.5m USD, showing great strength in face of lowest oil prices in decades.

‒ Third party debt(2) to 2019 Adjusted EBITDA 0.3x‒ Unrivalled management equity alignment with shareholders (ca. 30% equity acquired)‒ Recent entry of Trafigura, leading oil and gas trader, as material (ca. 16%) shareholder‒ Clear focus on Environmental, Social and Governance standards (World Bank shareholder, robust Board, quality

advisors)

• President has:‒ Demonstrably robust existing portfolio of assets‒ Significant organic growth potential‒ The appetite and means to pursue material inorganic growth opportunities

REAL PROFITABLE ASSETS – NO DEBT BURDENS – SERIOUS MANAGEMENT –STRONG SHAREHOLDERS

IN A NUTSHELL

Slide 3

(1) See Slide 10 – based on broker estimates, Company information(2) $3.7mln in third party debt, in addition we have debt of $10.9mln with an affiliate of Peter Levine, our Chairman and largest shareholder


WHERE WE OPERATE

America

Paraguay

Hernandarias (Earn In)Exploration (Operator) 40% & 80%

PirityExploration (Operator) 100%

1

2

Argentina

East Lake VerretProduction (Operator)

1

Lake PeigneurProduction (Operator)

2

12

1

2

AMERICA

ARGENTINA

PARAGUAY

Argentina

Puesto Guardian(Five Oil Fields)Production(Operator) 100%

MatorrasExploration(Operator) 100%

Puesto Flores/Estancia Vieja (Two Fields) Production(Operator) 90%

OcultarExploration (Operator) 100%

1

2

3

4/5

6/7Puesto Prado/Los Bases(Two Fields) Production(Operator) 90%

1

2 3

4/5

6/7

AngosturaExploration & Production(Operator) 100%

8

8

Slide 4


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WHO WE AREPRESIDENT BOARD OF DIRECTORS

Peter Levine

Executive Chairman

Ex Imperial Energy30 years industry

Rob Shepherd

Finance Director Ex Shell, ABN

AMRO28 years industry

Jorge Bongiovanni

Non-Executive Director

Ex IFC40+ years industry

Alex Moody-Stuart

Non-Executive Director

Ex Schlumberger30 years industry

OPERATIONAL MANAGEMENT

AMERICA

MartinGee

Chief Geologist

35+ years industry

Claudia Perez

FinanceDirector

25+ years industry

Lucia D’Agostino

Legal and Administrative

Director

10 years industry

Jordan Coleman

HeadOperations

12 years industry5 years LatAm

Scott Daspit

HeadOperations

35+ years industry

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LATIN AMERICA(as 15 June 2020)

29.5%

16%8.9%

7.9%

23.3%

Peter Levine (PLLG Investments)

Trafigura (via Urion Holdings)

Schroders Investment Management

IFC (World Bank Group)

Michinoko Ltd

Other

FIRST CLASSSHAREHOLDER STRUCTURE

14.1%

Martin Urdapilleta

Trafigura Board Representative

Slide 5


RESERVES AND RESOURCES

(1) Source: Argentina numbers based on Independent Reserves Report, Louisiana based on Management estimates (2) Prospective median risked

15.6 MMBOE1P

NET EXPLORATION RESOURCES(2)

ARGENTINAover150MMBBLS

GROUP NET RESERVES(1)As at 31 December 2019

26.4 MMBOE2P

43.5 MMBOE3P

PARAGUAY

LOUISIANA

OVER

500MMBOE

OVER

20BCF

Slide 6


YEAR AHEAD TO DELIVER ORGANIC GROWTH

FIELD INDICATIVE ACTIVITY H2 2020 FY 2021

PUESTO FLORES

Drilling - Development

Drilling - Exploration

Workover

ESTANCIA VIEJA

Drilling

Drilling - Exploration

New gas compressor

LAS BASES Drilling – Development

ANGOSTURA Workover &

PUESTO GUARDIAN

Drilling - Development

PARAGUAY Drilling - Exploration

Slide 7


SOLID FOUNDATIONS OF 2019 HAVE SET US UP WELL TO FACE THE CHALLENGES OF 2020

US$12MILLION

ADJUSTED (1)

EBITDA

2,400BOEPD

AVERAGEPRODUCTION

US$41MILLION

GROUP TURNOVER

(1) Earnings before interest, tax, depreciation, amortisation and impairment and adjusted to exclude non-recurring items(2) Unaudited - after all G&A, foreign exchange, and finance charges but before depreciation

FY audited 2019 financials

Slide 8

US$ 3.5MILLION

Q1

Unaudited 2020 net cash profit in Argentina(2)

US$ 1MILLION

Q2

US$ 4.5MILLION

H1

Making cash in the darkest of times

-

10

20

30

40

50

60

70

80

02/01/2020 02/02/2020 02/03/2020 02/04/2020 02/05/2020 02/06/2020

Dated Brent US$/bblsource: FactSet


UNDERLYING VALUE CREATION IN RECENT YEARS NOT RECOGNISED

Slide 9

533

1,121

2,279 2,414

- 500

1,000 1,500 2,000 2,500

3,000 3,500 4,000 4,500

2016 2017 2018 2019

Average production boepd

20.3

27.1 25.4 26.4

-

5.0

10.0

15.0

20.0

25.0

30.0

2016 2017 2018 2019

2P reserves

(4,880) (4,257)

15,961

9,670

(10,000)

(5,000)

0

5,000

10,000

15,000

20,000

2016 2017 2018 2019

Operating profit / (loss) before depreciation

117,118

144,250

69,068

27,389

-

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

2016 2017 2018 2019

EV (US$)/boepd

3.1

6.0 6.2

2.5

-

1.0

2.0

3.0

4.0

5.0

6.0

7.0

2016 2017 2018 2019

EV (US$)/2P reserves

Source: Company published information


LEAVING THE COMPANY SIGNIFICANTLY UNDERVALUED VERSUS PEERS

Slide 10

-

2.0

4.0

6.0

8.0

10.0

12.0

PGR CNE

PARXF TXP

GBX GPR

K CTA FE

C PTA

L TR

IN PPC CER

P

AVERAGE

EV/2P $/boe

-

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

TXP

PGR CNE

GBX GPR

K GPR

K PARXF CTA PPC

TRIN FE

C PTA

L

AVERAGE

EV/boepd

(1) Based on broker estimates, Company information


ARGENTINA

Slide 11


ARGENTINA MACRO ENVIRONMENT

SIGNIFICANT MAJOR OIL AND GAS INDUSTRY PLAYERS IN ARGENTINA

• Continued energy deficit notwithstanding domestic reserves(1)

• Expected gas deficit of some 20-40 mm m3 / day in 2020 carrying on to 2021

• New plan to encourage development of conventional gas being discussed by government with a base of US$ 3.5 per MMBtu

• Consequently, the domestic energy sector is a key focus for investment given the continued energy imbalance

• The Government is ‘preparing proposals’ to stimulate investment, particularly in conventional production

• In the meantime, domestic oil price set at US$45

(1) According to BP, oil production of 27 mln tonnes in 2018 amounted to 75% of consumption and gas production of 39.4 bcm 80% of consumptionSlide 12


Currently69

31 Dec ‘1837.7

1 Jan ‘1818.6

Source: xe.com

PPC LARGELY UNAFFECTED BY FX VOLATILITY

• Dollar based business

• Sales revenues are denominated in US$ (but paid in AR$) with true up / down mechanism to account for volatility between date of billing and payment

• Consequently in 2018 and 2019, combined with proactive treasury management, we suffered minimal cash FX losses ca. 1% of revenues

• We do experience material non-cash ‘distortions’ in Financial Statements as a result of tax accounting in AR$ and reporting in US$ although cash flow is unaffected

Slide 13


• PARTNERED WITH PROVINCIAL OIL COMPANY EDHIPSA (10%)

• FOUR FIELDS WITH SIGNIFICANT DEVELOPMENT AND EXPLORATION UPSIDE

• OIL SALES VIA PIPELINE TO REGIONAL HUB

• OWNERSHIP OF 60Km STRATEGIC GAS PIPELINE AND INFRASTRUCTURE

Rio Negro Province, Argentina

NEUQUEN BASIN ASSETS

Puesto Guardian(Five Oil Fields)Production(Operator) 100%

MatorrasExploration(Operator) 100%

Puesto Flores/Estancia Vieja (Two Fields) Production(Operator) 90%

OcultarExploration (Operator) 100%

Puesto Prado/Los Bases(Two Fields) Production(Operator) 90%

1

2

3

4/5

6/7

1P: 7.6

2P: 13.8

Reserves(MMboe)

Slide 14


Neuquen Basin – Concession Licence to 2027 (with extension rights of further 10 years now applied for). Operator, WI 90%

PUESTO FLORES FIELD

HIGH QUALITY FIELD, CASH GENERATIVE, SIGNIFICANT REACTIVATIONS, DRILLING AND EXPLORATION POTENTIAL

• Targeting material increase in both production and reserves• Drilling new wells in H1 2020 with more later in the year

CURRENT STATUS

• Oil and gas production from 14 wells

PLANS FOR 2020

• Commencing to drill new wells in H2 2020/H1 2021• Exploration licence to 2037

Slide 15


Neuquen Basin – Concession Licence to 2027 (with extension rights of further 10 years applied for). Operator, WI 90%

ESTANCIA VIEJA FIELD


CURRENT STATUS• Oil production from 5 re-worked existing wells• Producing gas from 3 wells for sale and internal power requirements• Built and commissioned a new 16Km pipeline section

PLANS FOR 2020• Targeting material increase in both production and reserves• Drilling new oil & gas wells, including exploration wells in 2020/2021• Extension of licence to 2037

HISTORICALLY LARGE OIL PRODUCING FIELD. PREVIOUSLY SHUT-IN. NOW PRODUCING OIL AND GAS WITH SIGNIFICANT UPSIDE POTENTIAL

Slide 16


Neuquen Basin – Concession Licence to 2028 (with extension rights). Operator, WI 90%

PUESTO PRADO FIELD


CURRENT STATUS

• 5 wells re-activated• Field being powered by Estancia Vieja gas through the newly acquired

pipeline

MATURE FIELD REACTIVATION – SYNERGIES WITH ESTANCIA VIEJA AND PUESTO FLORES UPSIDE ATTRACTION

Slide 17


Neuquen Basin – Concession Licence to 2028 (with extension rights). Operator, WI 90%

LAS BASES FIELD


CURRENT STATUS

• Gas plant reactivated

PLANS FOR 2020

• Drilling a development well

MAJOR GAS PRODUCTION POTENTIAL WITH PROCESSING PLANT OWNERSHIP OF MAJOR PAN-REGIONAL GAS PIPELINE

Slide 18


Neuquen Basin – Initial contract to 2023 (with extension rights). Operator, WI 100%

ANGOSTURA CONCESSION


CURRENT STATUS

• Gas currently being produced from four wells and oil from two wells • Gas treated within the concession and transported via pipeline to Las

Bases where it joins President’s regional pipeline direct to off takers• Oil production shipped via truck to President’s own Puesto Prado

treatment plant for processing

PLANS FOR 2020/2021

• Workovers and possible drilling

OPERATIONAL SYNERGIES WITH RIO NEGRO OPERATIONS UTILIZING CRITICAL MASS TO OPTIMISE COSTS AND SIGNIFICATLY REDUCE FIELD OPEX

Slide 19


ArgentinaPuesto Guardian(Five Oil Fields)Production(Operator) 100%

MatorrasExploration(Operator) 100%OcultarExploration (Operator) 100%

1

2

3

1

2 3

4/5

6/7

8


CURRENT STATUS

• Current production approaching 300-400 boepd• Identification of drilling locations for next programme taking place

FUTURE PLANS• Drilling 2/3 development wells in late 2021/2022

PUESTO GUARDIAN CONCESSION Noroeste Basin, Salta Province – Concession License to 2050 (with extension rights). Operator, WI 100%

30 YEAR OLD FIELD THAT WAS POORLY RUN, NOW STABILIZED AND PRIMED FOR FUTURE DEVELOPMENT

OPERATIONALLY PROFITABLE GENERATING POSITIVE FREE CASH FLOW

Slide 20


LOUISIANAStable cash flow from reliable operation

Slide 21


LOUISIANA ASSETS

USA

East Lake VerretProduction (Operated) 50%

1 East Lake Verret - Two producing wellsTriche (69.5% WI / 43.5% NRI) and Simmons (43.9% WI / 33.3% NRI)

Currently producing, generating some US$100k per month in free cash flow after all opex, G&A and taxes

All fields in Louisiana generated positive operating profits in 2019 despite operational challenges

Benefit from accrued tax losses which are being utilised giving potential for further accretive acquisitions of operated assets

1

Slide 22


PARAGUAYA compelling opportunity to change a country’s history

Slide 23


FUTURE

PRESENTPAST

Exploration assets with the potential to transform the Company

PARAGUAY EXPLORATION

EXTENSIVE KNOWLEDGE OF AREA WITH LESSONS LEARNED FROM 2014 DRILLING CAMPAIGN WHEN PRESIDENT SUCESSFULLY IDENTIFIED A PETROLEUM SYSTEM

• Extensive 2D and 3D seismic surveys together with sub-surface work acquired and analysed by President

• Ongoing farm-out process with active parties with signed NDA’s working in data room

• Terms of concession extends to Q1 2022

• Delray Cretaceous prospect targeted for drilling• The first prospect to be drilled is on trend with prolific oil

fields on Argentine side of border

• Over 500 Mmboe of mid-case prospective median risked resources in first two drillable prospects with many more leads identified

• Stable democratic country with no current oil production and 10% corporate tax rate

Slide 24


PARAGUAY EXPLORATIONDrilling to target proven cretaceous fairway

Imperial complex(Mean 193 MMboe Cret.

Resources)

Delray Complex (Mean 394 MMboe Cret. Resources)Palmar Largo

Complex

Spectral Geochemical Anomalies

Slide 25


SUMMARY

Slide 26


SUMMARY

Clear strategy to deliver sustainable value growth

Strong and supportive shareholder base

Strong Environmental, Social and Governance principles

Alignment to stratagy between Executive Chairman, Trafigura, a major strategic shareholder, and all shareholders

Significant organic and inorganic growth opportunities

Relative immunity to Argentinian macro environment misunderstood by market

Demonstrably undervalued compared to peers

Slide 27


Office HeadquartersCarrwood Park, Selby Road, LeedsLS15 4LG. United Kingdom

Argentine OfficeJuana Manso 1750, Complejo ZencityEdificio Esmarelda, 3er Piso Norte, C1107CHJ. Buenos Aires, Argentina

Tel: +54 (11) 4317 0400

Paraguay OfficeAsuncion, Paraguay

USA Office2020 W Pinhook, Ste 201LafayetteLA70508USA

Thank you

© 2020 President Energy PLC

Company Registered OfficeCarrwood Park, Selby RoadLeeds, LS15 4LG, United Kingdom

Tel: +44 (0) 20 7016 7950

Slide 28

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GROWTH IN THE PIPELINE - presidentenergyplc.com · This Presentation may contain forward-looking statements that involve substantial risks and uncertainties, and actual results and