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IPO Presentation February 2012
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Strictly Confidential
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Disclaimer
The information in this presentation is an overview and does not contain all information necessary for investment decisions. In making
investment decisions, investors should rely on their own examination of Zeta Petroleum plc and consult with their own legal, tax, business and/or
financial advisors in connection with any acquisition of securities. The information contained in this presentation has been prepared in good faith
by Zeta Petroleum plc. However, no representation or warranty, expressed or implied, is made as to the accuracy, correctness, completeness or
adequacy of any statement, estimates, opinions or other information contained in this presentation. Given the highly speculative nature of
exploration for oil and gas, there are significant uncertainties associated with forecasting future revenue. Certain information in this presentation
refers to the intentions of Zeta Petroleum plc, but these are not intended to be forecasts, forward looking statements, or statements about future
matters for the purposes of the Corporations Act or any other applicable law. Information about potential cashflows are conceptual in nature and
will only occur upon successful outcome on future events, which cannot be guaranteed. The occurrence of events in the future are subject to
risks, uncertainties, and other factors that may cause Zeta Petroleum plc’s actual results, performance or achievements to differ from those
referred to in this presentation. Accordingly, Zeta Petroleum plc, its directors, officers, employees and agents do not give any assurance or
guarantee that the occurrence of events referred to in this presentation will occur as contemplated.
The information provided in this presentation that relates to Zeta Petroleum plc’s hydrocarbon resources is based on information complied by Mr
Philip Crookall who is a competent person as defined in Listing Rule 5.11. Mr Philip Crookall has consented in writing to the inclusion of the
information provided in this presentation that relates to Zeta Petroleum plc’s hydrocarbon resources in the form and context in which it appears
here. Mr Philip Crookall is Chief Operating Officer of Zeta Petroleum plc.
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Overview
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• Oil and gas company focused on exploration and
development in Romania
• Founded in 2005
• Strong Board with track record in oil & gas,
fundraisings, public markets and M&A
• Raised ~£11.5m private equity to date: secure
licences & mature to drill ready stage
• Existing major shareholders supportive of IPO
• Oil & gas assets with a significant near term
development potential
• Option to acquire a 50% interest in a producing
gas field in Romania with material upside
• Aggressive Eastern Europe growth strategy
• Experienced and incentivised management team
with in-country technical team
• Listing on ASX in March 2012 to raise $8m
Zeta Gas Resources Pmean
(Bcf)
Pmean
(MMboe)
Contingent
Resource
44.36 7.63
Prospective1
Resource
68.73 11.82
Zeta Oil Resources Pmean
(Mmbbl)
Prospective
Resource
1.72
ISIS Consultants Draft CPR (Jan 2012):
1includes 54.64Bcf outside licence boundary but under application
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ASX - IPO
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• Raise $8 million in new funds:
• Develop existing assets to production
• Complete acquisition of 50% interest in producing gas field
• Company confident of independently raising $3 million
• Patersons Securities appointed Lead Manager & Pursuit Capital appointed
Corporate Advisor for IPO on ASX:
• Issue Chess Depository Interests (CDI’s)
• Listing price of 20 cents per CDI (with attaching options)
• Pre-money valuation of ~$18 million – significant discount to Zeta’s internal valuation
• Target listing date – March 2012
• Excellent value proposition for new investors + downside risk protection from
share options
• 129 million shares on issue post listing + listed options
• Drill ready assets to provide news flow for 2012 and beyond
• Consider dual listing on AIM in 2013
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• Zeta is seeking to raise $8m at 20c per CDI to drill development wells, secure a
producing asset, provide exploration funds and working capital
• Company expects to independently introduce at least $3m of support towards the IPO
fundraising
• In view of the current markets, propose to attach share options to the issue:
• 1:1 short-dated option (20c, 14 months expiry, listed) issued with the IPO raising
• 1:4 loyalty option (30c, 3 years, listed) issued to all shareholders on the register 3 months after the date of
listing
• Expect at least 90% of existing shareholders to have shares escrowed for a minimum
of 12 months
Offer Summary
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IPO Highlights
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FOCUSED
Onshore assets located in Romania and targeted assets in Eastern Europe
Board and management team with clear development strategy
Strong in-country team with further step out opportunities to grow the business
DEVELOPMENT ASSETS
Bobocu gas field in Romania – Pmean contingent resource of 44Bcf recoverable gas (7.6 MMBoe) + Pmean
prospective resources of 69Bcf recoverable gas (11.8 MMboe) (100% Zeta)
Jimbolia oil field in Romania – Pmean contingent resources of 1.7 MMbbls + oil production in 2013 (100% Zeta) –
farm-in offer from major company
EXPERIENCED BOARD Strong Board with track record in oil & gas, fundraisings, public markets and M&A
Material “skin in the game”
GROWTH
Option over a producing asset with high prospectivity and unconventional potential
Conversion of Prospecting Permits into exploration licenses
Bidding in 2012 government licence round
Several other acquisition opportunities being assessed
REGULAR MATERIAL
NEWS FLOW
Anticipate monthly ASX releases for 2012 (post listing)
Promote demand and prevent stagnation of liquidity
“STICKY”
SHAREHOLDERS
Shareholders of Zeta representing circa 90% of Zeta’s issued capital will be locked in for at least 12 months
Highlights long term commitment to growing the company and promotes orderly market post listing
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Board of Directors
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Timothy Osborne
Non-Executive
Chairman
The Senior Partner at Wiggin Osborne Fullerlove solicitors, London
Director of GML Limited, a diversified financial holding company which, at one time owned strategic stakes in a
number of Russian companies, including a majority shareholding in Yukos Oil Company (previously Russia’s
largest oil company)
Stephen West
Managing Director
Co-founder of Zeta
Chartered Accountant with over 17 years’ financial and corporate experience ranging from public practice, investment banking, oil & gas and mining
Co-founder of Aspire Minerals Pty Ltd which vended assets into Glory Resources Ltd (ASX:GLY) and Apollo Consolidated Ltd (ASX:AOP)
Previous senior positions at Regal Petroleum plc, Barclays Capital and PricewaterhouseCoopers
Philip Crookall
Chief Operating
Officer
Petrophysicist with over 22 years industry experience with both independent international oil companies and
consultancy groups including Hamilton Brothers Oil and Gas Limited, Ultramar Limited, LASMO plc, Hardy Oil and
Gas plc, Scott Pickford Limited, Paradigm Geophysical Limited
Until July 2011, Technical Director at Valiant Petroleum plc (a company listed on AIM with a market capitalisation
of over £200 million and production of over 7,500bopd) for the last 5 years having joined the company when it was
a start up
Michael Scott
Non-Executive
Director
Reservoir engineer with over 25 years industry experience
Former Managing Director of Cooper Energy Limited (2004 to 2011) , a company listed on the ASX with a market
capitalisation of over $100 million and production of approximately 1,500bopd
Zeta has an experienced oil and gas Board capable of developing the asset portfolio:
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Why Romania?
• Proven hydrocarbon systems
• Favorable and stable fiscal regime
• Close to markets and strong internal demand
• Long established oil & gas industry: one of the oldest oil provinces in the world
• EU member country since January 2007
• Regulated markets moving towards being unregulated
• Relinquishment of assets previously held by state companies
• Dedicated and educated local work force
• Good base for further Eastern European expansion
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Romania Fiscal Terms
• Tax and royalty regime
• Corporate tax rate = 16%
• Sliding scale royalties applied on a field
basis:
• Gas: 3.5% to 13.0%
• Oil: 3.5% to 13.5%
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Zeta Gas Production Zeta Oil Production
Government share
Zeta share
76.5%
23.5%
79.0%
21.0%
• Production may be sold direct to
customers or to gas traders
• Producers have the right to export all
production or to sell to the domestic
market
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Two Year Value Creation Strategy
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Complete acquisition of 50% interest in producing field
Drill first Bobocu well Q2 2012
Farm-out 50% interest in Jimbolia
Drill Jimbolia well Q3 2012
Develop Bobocu P50 case
Develop and expand new venture assets
Commence production from Bobocu
Commence production from Jimbolia
Convert contingent resources into reserves
Generating annual cashflow > $30m
Asset Strategy
Corporate Strategy
2012 2013 - 2014
List on ASX
Raise $8m in new funds
Market cap of ~$26m
Current comparables trade at multiple of A$10-15 EV /
2P reserve boe
Implied target EV of circa. $150 - $225m
Grow EV in the short term by converting contingent resources into production and 2P reserves, and to
target assets in Eastern Europe leveraging experienced management and local technical knowledge
Target 15 MMboe 2P Reserves
Production of 2,100 boepd
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Anticipated News Flow
Mar 2012
•IPO
Apr 2012
•Complete new venture acq.
May 2012
•Farmout50% of Jimbolia
Jun 2012
•Spud Bobocuwell
Jul 2012
•Complete Bobocuwell
•Extension to Boboculicence area
Aug 2012
•Spud Jimboliawell
•New govt bidding round for licences
Sept 2012
•Complete Jimboliawell
•Acquire seismic over new venture asset
Oct 2012
•Reserve and resource upgrade on assets
Nov 2012
•Spud well on new venture asset
Dec 2012
•Complete well on new venture asset
2012
2013
• Bobocu commences production
• Jimbolia commences production
• Deregulation of domestic Romanian gas price
• Asset acquisitions
• Dual listing on AIM
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Valuation Potential
The 20 cent issue price represents a significant discount to the PMean development NPV. Significant
further upside from deregulation of the Romanian gas price, exploration success and unconventional
potential.
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Asset Overview
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Diverse portfolio of production, development and exploration projects:
Padureni
Type: Gas
ZETA Holding: 12.5%
Status: Exploration
Prospecting
Permits
Type: Gas
ZETA Holding: 100%
Status: Prospecting
Bobocu
Type: Gas
ZETA Holding: 100%
Status: Development
Jimbolia
Type: Oil
ZETA Holding: 100%
Status: Appraisal
New Venture
Type: Gas
ZETA Holding: 50.0% (upon
exercise of option)
Status: Producing with
conventional +
unconventional upside
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Bobocu Overview
• 100% Zeta
• Development asset with near term production
• Previously producing gas field with
redevelopment potential targeting
undeveloped reservoir sections
• Pmean contingent gas resources of 44.8Bcf
(7.71MMboe)
• Additional Pmean prospective gas resources
of 68.73Bcf (11.82MMboe)
• 76km2 of 3D seismic acquired in 2010
• Drill ready targets
• Close proximity to markets and infrastructure
• First gas targeted for 2013
• NEXT STEP: drill Bobocu #1 well Q2 2012
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3.7 Km
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Jimbolia Overview
• 100% Zeta - intend to farm-out 50% (letter of
intent received)
• Discovered field with historical gas production
that also produced oil in testing
• Oil tested at rates of 50-100bbls/day
• Appraisal asset with near term production
• Oil potential to be targeted through drilling
• Pmean prospective oil resources of 1.72MMbbls
• Close proximity to markets and infrastructure
• Oil priced at Urals crude price
• First oil is targeted for 2013
• NEXT STEPS: farm-out 50% + drill Jimbolia #1
well Q3 2012
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New Venture Acquisition
• 50% Zeta (non-operator)#
• Total acquisition cost of US$650k
• complete after IPO
• Contains producing gas field
• gas sold to Wintershall
• generates circa $25k net revenue per month (after
royalties & taxes) to 50% holder
• Shallow exploration potential: leads and
prospects of up to 100Bcf
• Unconventional potential from deeper Silurian
shales
• Work programme is to acquire 2D seismic
and drill a shallow well in 2012
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Producing
Shallow
Exploration
Upside
Unconventional
Potential
#upon exercise of option by Zeta
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Padureni Overview
• 12.5% (fully carried) Zeta
• Historical producer
• Pmean contingent gas resource of
0.52Bcf
• Structurally complex
• 87.5% interest farmed out to
Expert Petroleum Limited (backed
by Limerock Partners)
• Zeta is fully carried on all
expenditure to production
• NEXT STEP: finalise geological
model and identify drill targets
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1.3Km
615 m
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Prospecting Licences
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• Awarded three prospecting permits in the eastern
Moldavian area of Romania in December 2009
• Falticeni Prospecting Permit:
Covers an area of 653km2
• Faurei Prospecting Permit:
Covers an area of 2,439km2
• Vaslui Prospecting Permit:
Covers an area of 2,981km2
• Finalising an evaluation of these prospecting permits to determine prospectivity
• All areas are known hydrocarbon prone areas
• Request a new Government bidding round in 2012
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New Ventures Strategy
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• Onshore Eastern Europe focus
• Leverage off Romanian operations office
and connections
• Step out into neighbouring countries:
• Ukraine
• Bulgaria
• Serbia
• Hungary
• Seeking near term production
opportunities that offer:
• Proven hydrocarbon systems
• Political stability
• Favourable fiscal terms
• Established legal system
• Future opportunities to expand
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Conclusion
• Zeta offers investment at a compelling valuation into high impact assets in
Romania and potential of substantial growth through Eastern Europe
• Board members bring track record, energy, ideas and ambition to aggressively
grow Zeta and provide significant returns to investors within two years
• High impact, regular news flow post listing
• Strong international presence with offices in Perth, UK and Romania
• Acquisition opportunities being assessed to expand portfolio, increase production
targets and enhance shareholder returns
• Target proved oil & gas assets with near term production and low risk exploration
• Focused area of interest: onshore Eastern Europe
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31 January 2012 - prospectus finalised with CPR, legals and financials
1 February 2012 - commence investor roadshow
• Australia
• UK
28 February 2012 - book built
~20 March 2012 - shares commence trading on ASX
Anticipated Timeline to Listing
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Contacts
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Olly Cairns
Director
Pursuit Capital
T: +61 (0)8 6267 9031
Peter Evans
Director
Patersons Corporate Finance
T: +61 (0)8 9263 1106
For further information please contact:
Stephen West
Managing Director
Zeta Petroleum Limited
T: +61 (0)487 413 973
Philip Crookall
Chief Operating Officer
Zeta Petroleum Limited
T: +44 (0)7917 542 000
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Appendix
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Use of Funds
• Zeta intends to use the funds raised, along with existing cash facilities, to reach development sanction on the Bobocu field
• Zeta intends to farm-out the first well on the Jimbolia field – offer of interest received
• It is anticipated that debt finance can be secured for the capital spend to install the Bobocu production facilities required as part of
the field development
Timing $8m Raise
($’m)
Comments
Drill 1st Bobocu well Q2 2012 3.5
Drill Jimbolia well Q3 2012 - Farm-out well
Develop Bobocu P50 case Q4 2012 – Q3 2013 - Debt finance
New venture acquisition Q1 2012 0.5
New venture work programme Q3 2012 – Q4 2012 1.5
General & administration 1.5
Working capital 0.4
Issue costs Q1 2012 0.6
TOTAL FUNDRAISING 8.0
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Description Shares(m) Price % Short –
Dated
Options
(m)
Long-Dated
Loyalty
Options
(m)2
Existing
Unlisted
Options
(m)
Market Cap
at IPO
($m)
Existing shares on issue 89.0 $0.20 69 22.3 $17.8
CDI’s offered under IPO1 40.0 $0.20 31 40.0 10.0 $8.0
Director/Management options3 14.0
Corporate advisor options4 1.8
Total 129.0 40.0 32.3 15.8 $25.8
1Assumes $8m raised 2Assumes all loyalty options issued 320c, 7 years, 50% vest 12mths, 50% vest 18mths 420c, 5 years, escrowed 1 year
Listing Metrics
Final Capital Structure
At IPO (M)
Total Shares on issue 129
Market cap at issue $25.8
Net Cash $8.0
Enterprise Value $17.8
Current Resource position (Pmean MMboe) 21.25
EV / BOE ~ 84 cents
Valuation Metrics
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Existing Shareholders
Shareholder % owned
GM Investment & Co Limited 48.75
S W Pagel 10.22
Cresthaven Investments Pty Ltd 9.08
Banque Heritage 7.87
WCI Overseas Oil & Gas LLC 3.44
Others (49 shareholders) 20.64
100.00
Significant Shareholders
Director / Manager % owned
Timothy Osborne# 48.75
Stephen West 9.08
Philip Crookall 0.49
Michael Scott 0.84
Bogdan Popescu 0.37
Helen Prior 0.19
59.72
Director / Management Shareholdings
#Mr Osborne is a director of GM Investment &
Co Ltd’s ultimate holding company; however,
he holds no beneficial interest
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Management Structure
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Corporate Head Office
PERTH
• Stephen West (Managing Director)
• Michael Scott (Non-executive Director)
Operations Head Office
UK
• Philip Crookall (Chief Operating Officer)
• Helen Prior (Technical Manager)
• Ben Hodges (Financial Controller & Company Secretary)
Romania OperationsOffice
BUCHAREST
• Bogdan Popescu (Country Manager)
• Ilie Stefan (Reservoir Engineer)
• Jimmy Micu (Senior Geologist)
• Vali Enoiu (Finance Manager)
• Office support staff
ZETA PETROLEUM GROUP
Zeta has a strong international presence with offices in Perth, UK and Romania:
Manage Australian
corporate affairs
Manage Eastern Europe Operations and New Ventures
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Helen Prior
Technical Manager
Qualified Geologist with over 11 years experience
Previously worked for Troy-Ikoda on a range of international projects including geological and log
analysis and reserves audits, for Regal Petroleum plc as a Senior Geoscientist on their Romanian
assets and for Granby Oil & Gas covering both their North Sea assets and licencing asset reviews
Bogdan Popescu
Romania Country
Manager
Oil industry specialist and NAMR certified expert with extensive international experience
Former appointments include Executive Senior Vice President of The Rompetrol Group (2003-2006), Senior Vice President (Australia) and CEO (Switzerland) of Millennium Group of Companies (1999-2003), various positions at Petroconsultants SA/IHS Energy (1980-1999) and Earth Sciences Researcher at the Institute of Geology and Geophysics (1968-1979
President of the Petroleum Exploration & Production Managers Forum in Romania
Ilie Stefan
Senior Reservoir
Engineer
Qualified Reservoir Engineer and NAMR certified specialist with 20 years experience in conventional and
advanced reservoir engineering
Key experiences include a broad range of classical reservoir engineering, production history analysis,
field development planning, production monitoring and forecasting work as well as reservoir 3D
modelling and reservoir simulation
Previous appointments include positions at IAT Global, Schlumberger Logelco, Halliburton Energy
Services, ASCOM Group and SNP Petrom
Jimmy Micu
Senior Geologist
NAMR certified Geologist with over 40 years experience
Career mainly spent in Romania with the Geological Survey, Faculty of Geology and Geophysics and
with Prospectiuni SA
Experience is mainly in the domains of structural geology and stratigraphy of the Mesozoic and Tertiary
of the Carpathian foldbelt and foredeep
Management Short Biographies
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Comparable Company Rating
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Zeta ADX Energy Aurelian Oil and
Gas plc
Hawkley Oil and
Gas
Melrose
Resources
Transatlantic
Petroleum
Code ASX: ZTA* ASX:ADX AIM:AUL ASX:HOG AIM:MRS TSX:TNP
Status Explorer Explorer Explorer Producer Producer Producer
Market Cap ($m) 25.8 39.9 127.8 45.7 205.0 435.2
Cash ($m) 8.0 0.8 133.1 15.1 32.5 26.3
Debt ($m) - - 29.3 - 399.8 161.3
Enterprise Value ($m) 17.8 39.1 24.1 30.6 572.2 570.3
Locations Romania Romania
Italy
Tunisia
Romania
Poland
Slovakia
Ukraine Romania
Egypt
Bulgaria
US
France
Turkey
Romania
Turkey
Morocco
Bulgaria
2P Reserves (MMboe) - - - 8.31 45.9 29.0
EV/barrel ($/MMboe) - - - 3.68 12.47 19.66
Similar companies trade at approximately $12-20 per 2P MMboe. The strategy is for Zeta to convert
contingent resources and prospects into 2P reserves to gain a similar market rating for its assets.
Zeta 2P Conversion Value Matrix BCF MMboe Value at $12/MMboe Value at $20/MMboe
Low (75% of Contingent Resources) 33.23 5.98 71.8 119.6
Mid (100% of Contingent Resources) 44.30 7.97 95.6 159.4
High (100% of Contingent Resources + 50% of Prospective
Resources)
78.67 14.15 169.8 283.0