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Presentation held at Oil Museum in Stavanger in May 22, 2014 by Rovik Energy Partner. The presentation discusses strategy, business development and portfolio management within oil and gas
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NPF
Introductory presentation of Business Development (BD)
in Oil & Gas
Stavanger
22nd May 2014
Note:
This document was prepared for the sole purpose of being presentation aid rather than being a standalone document. The material in this presentation should therefore be viewed in context of the actual presentation given at the event.
Rovik Energy Partner AS
• Company started in 2012
• Realizing potential and generating value in the energy industry
• Providing commercial, strategy, and business development services
• Based in Stavanger – working in Norway and internationally
• Shall be your partner of choice for your company development
• Founded on the values of:
Integrity - always maintain the integrity of the client
Value contribution - always leave the company more valuable
Professionalism - always apply best practices
Long term - always think value development
Qualified by Achilles for their network of suppliers
Oil & Gas value chain
Exploration Development Production Transport Refining Product sale
Focus today
Examples of companies` participation through the Oil & Gas value chain
Exploration Development Production Transport Refining Product sale
Source: Publicly available information
Identify growth areasAlign and Define Opportunity
identification Execute
Identify growth areasAlign and Define Opportunity
identification Execute
Identify growth areasAlign and Define Opportunity
identification Execute
How to deliver on objectives?
0
20
40
60
80
100
120
140
160
Production profile - kboe/d
Probable development
Sanctioned development
Production base
Production target
Gap
Objectives - examples • Production • RRR (Reserves Replacements)
• IRR (Internal Rate of Return) • NPV (Net Present Value) • Share price • Profitability
Means to achieve objectives • Exploration
• Business development
• Increased oil recovery
• Cost cut & efficiency measures
• Other Acqusitions & Divestments
Identify growth areas Align and Define Opportunity
identification Execute
Context
Strategic beliefs
Constraints
Ambitions
Selection criteria
Areas and scenarios for
growth
Portfolio analysis
Concrete business
development
Screening for
opportunities
Development of
opportunity portfolio
Evaluations
Engagement planning
Dataroom & DD
Bids & Negotiations
Alignment of context,
objectives and
constraints
Alignment on growth
steps
Alignment on business
development plan
Strategy achievements
and deals secured
Phased Business Development process – high level
-200
-150
-100
-50
0
50
100
150
M U
SD
Cash flow after tax
CF after tax
Cumulative CF aftertax
BD tools
Identify growth areasAlign and Define Opportunity
identification Execute
Context
Strategic beliefs
Constraints
Ambitions
Selection criteria
Areas and scenarios for
growth
Portfolio analysis
Concrete business
development
Screening for
opportunities
Development of
opportunity portfolio
Evaluations
Engagement planning
Dataroom & DD
Bids & Negotiations
Alignment of context,
objectives and
constraints
Alignment on growth
steps
Alignment on business
development plan
Strategy achievements
and deals secured
Phased Business Development process
Process
Evaluation tools
Templates
Data
Networking
Identify growth areasAlign and Define Opportunity
identification Execute
Key BD terms – Process terms
Due diligence Screening
CA
(Confidentiality
Agreement)
Dataroom
SPA
(Sales Purchase Agreement)
Identify growth areasAlign and Define Opportunity
identification Execute
Key BD terms
Carry
2:1
Swap
Identify growth areasAlign and Define Opportunity
identification Execute
Farm-in/out
Ground
floor
Identify growth areas Align and Define Opportunity
identification Execute
Context
Strategic beliefs
Constraints
Ambitions
Selection criteria
Areas and scenarios for
growth
Portfolio analysis
Concrete business
development
Screening for
opportunities
Development of
opportunity portfolio
Evaluations
Engagement planning
Dataroom & DD
Bids & Negotiations
Alignment of context,
objectives and
constraints
Alignment on growth
steps
Alignment on business
development plan
Strategy achievements
and deals secured
Phased Business Development process – high level
Valuation of assets and portfolio
Inputs
Costs
0
20
40
60
80
100
120
140
160
Production profile - kboe/d
Probable development
Sanctioned development
Production base
Production profiles
Tax balances
Assumptions
• Discount rate
• Tax
• Prices
• Inflation
• FOREX
• Other
Output
• NPV
• IRR
• Payback period
-200
-150
-100
-50
0
50
100
150
M U
SD
Cash flow after tax
CF after tax
Cumulative CF aftertax
Cash flow after tax
Identify growth areasAlign and Define Opportunity
identification Execute
Source: RovikEP portfolio model, example data
Execution – example (buy side)
Interim period
Signing of
SPA Completion
Authority approval
CP closeout
Negotiations
Due diligence
Dataroom
Financial evaluation
Signing of
CA Initial bid
Preparation Transaction
Peer review
Technical (G&G, engineering…) evaluation
Setup of BD team
Approval to
pursue
opportunity
BD plan/strategy
Deal structuring & Bid
Identify growth areasAlign and Define Opportunity
identification Execute
Recent transactions on NCS - examples
Major asset deal
Lotos buy Heimdal assets
Norske AEDC KUFPEC acquires AEDC
Tullow acquires Spring Energy
Shell acquires 18.36% in Draugen
Swap of assets
2013
2013
2013
2012
2012
2012
2012
Major asset deal
2011 Major asset deal
Source: Publicly available information
Examples of recent BD activity throughout the value chain
Rig consortiums
Rig Management Norway
Q35 development
options
Exploration
Development
Transport
Gassled transactions
Quadrant 35
New Gassled owners
Source: Publicly available information
Kenneth Fossøy
Partner
Rovik Energy Partner AS
Sjøveien 34
4316 Sandnes
Phone: +47 993 82 845
Thor Magnus Rovik
Managing Partner
Rovik Energy Partner AS
Sjøveien 34
4316 Sandnes
Phone: +47 975 63 588
www.rovikep.no
