Fergana_Basin_Farmout_Commercial_0510.ppt

Click to edit Master text styles,Second level,Third level,Fourth level,Fifth level,Click to edit Master title style,*,Fergana Basin,Farmout,-Commercial,May 2009,1,Statistics,First discovery 1901;53 Fields to 1987,7 new fields in Uzbekistan since 1987,no data,Cumulative EUR:1.2 BBO,1.8 TCF(Free)Gas,Modest Field Sizes(MFS:26 MMBOE),Creaming Curve immature significant upside in YTF,USGS TPE:4 BBO,6TCF;STO YTF:1.1 BBO,6 TCF,60%Oil,40%Gas,P90:1 MMBOE,P50:10 MMBOE,P10:70 MMBOE.Swansons Mean:26 MMBOE,Introduction,Santos is major shareholder in two companies in the Kyrgyz Republic,South Petroleum Company(SPC-STO net 70%),and KNG Hydrocarbons(KNG HC-STO Net 54%),SPC and KNG HC are the operators of oil and gas prospecting licenses,Santos acts as the,defacto,operator for SPC and KNG HC(,eg,contracting and operating processes are all compliant with Santos EHSMS,in addition to being local law compliant),Santos also holds a call option to farm-in to a 70%shareholding in,Somon,Oil,the operator of oil and gas exploration licenses in Tajikistan,adjacent to the Kyrgyz acreage position of SPC,Santos again acts as,defacto,operator for,Somon,Oil,Santos is offering equity in either or both of its active shareholdings in the Kyrgyz Republic and its option position in Tajikistan ideally a position in all three!,Permit Map,Map,Santos holds majority shareholdings in two,Kyrgz,Closed Joint Stock Company(CJSC)operating entities:,CJSC South Petroleum Company(STO 70%),CJSC KNG Hydrocarbons(STO 54%),Santos also holds a Call Option to Farm-in to 70%shareholding in the Tajikistan operating entity CJSC,Somon,Oil,Santos International Holdings Pty Ltd,DWM Petroleum AG,(,Manas,Petroleum),Kyrgyzneftegaz,CJSC South Petroleum Co.,70%,25%,5%,Tuzluk,Soh,West Soh,Nanai,Nuashkent,Licences(Kyrgyz),100%,(a)Signed 4th,October,2006,(b)Save for Certain Unanimous Approval Matters(License Term Variations,Relinquishments,License Surrender,License Renewal,Drilling Operations beyond agreed Minimum Program,Amendments to or Termination of Shareholders Agreement),Minimum Percentage Vote of 65%required for Approval of Action by Operating Committee,CJSC South Petroleum Company,CJSC KNG Hydrocarbons,Prospecting Licence(,Kyrg,),(,Tashkumyr,PL),100%,Santos holds net 54%interest in KNG HC through 75%shareholding in,Zhibek,resources,66%Majority Vote,Xtract,International Ltd(UK),Zhibek,Resources,Ltd(UK,),25%,Kyrgyzneftegaz,72%,28%,Santos Int.Holdings Pty.Ltd,75%,CJSC KNG Hydrocarbons,Permit Commitments Kyrgyz Republic,All licenses compliant to end 2009,As at 1,st,March,2010(Textonic Withdrawal 28,th,February,2010),Assumes 40som=US$1,Assumes 0.75USD=1 AUD 2009,2011-12 and 0.85 USD=1 AUD 2010,DWM Petroleum AG,(,ManasPetroleum),Anawak,LLC,CJSC,Somon,Oil,90%,10%,Novobod,Obchai,Kalachi,Northwest Licences(Tajikistan),100%,(a)No Cost Option Agreement Santos/DWM(10/12/07)Call Option to Farm-in to 70%of,DWMs,90%in CJSC,Somon,Oil,Operator of,PLs,in Tajikistan,Conditions Precedent:,PSA negotiated to cover licenses,Santos Board Approval to Exercise Option,(20%),(70%),SANTOS International Ventures Pty.Ltd,CJSC,Somon,Oil,Permit Commitments Tajikistan Option,Operator is CJSC,Somon,Oil,Santos holds Call Option to Farm-in to 70%shareholding in,Somon,Oil,South License Ratified September,2007,Northwest License ratified in December,2009,All permit commitments to end current year anniversary will be met by end May,2010(Dank Geophysical currently acquiring data,320 km in Tajikistan(30+180),20 km in Kyrgyz Rep,Licensing Regimes and Fiscal Frameworks,Kyrgyz Republic:,5 year Prospecting License,renewable annually,annual WP and Financial commitment schedule.New Law Commitment will revert to annual expenditure(no work program commitments),Operator has Exclusive Rights to discovery-25 year Extraction License(approved POD),No restrictions on Expatriation of Profits,Tax Royalty Regime,Parameter,Current Model,New Laws(2010 prop),Royalty,3%,US$0.145/mcf;US$1.06/Bbl,Excise(Exchange Rate Dependent),US$1.90/BBL,US$4.94/BBL,Bonus,No Bonus,0.05%of Reserve Value(US$350k for 10 MMBO,at US$70/BBL),VAT,None,None,Local Taxes,3%Gross Revenue,3%Gross Revenue,Income(Profit)Tax,10%,10%,Assumptions:39,Som,/US$;7.27 BBL/,Tonne,Licensing Regimes and Fiscal Frameworks,Tajikistan:,5-7 Year Exploration License,annual WP&Financial Commitment,Operator has Exclusive Rights to Discovery,25 Year Production License(two 5 Year extensions),Recent,PSAs,negotiated by,IOCs,include 5-7 year exploration period,25 year production period,Cost recovery from 70%Revenue,Profit Oil/Gas Split:50 60%to Contractor,Tax:,Corporate Income Tax:15%,Branch Profits Tax:8%,Road Tax:2%,No Restrictions on Expatriation of Funds,Reserve and Production Booking,Santos will bring share of Operator profits into Profit and Loss Statement via equity accounting,Santos deems it appropriate to report our indirect beneficial interest in subsidiaries with reserves and production.For Reporting purposes:,Santos separately identifies the indirect beneficial interest,Includes such reserves/production in total reserves and production reporting,Currently,as example,Santos has KNG HC:Net 24%),Forward Contribution:,Drill+Seismic+GG&A funding),Capped 2:1 promote on equity position going forward(2*equity funding),go forward 2 well program gross Kyrgyz exploration expenditure cap US$35 MM for promote,thereafter,reverts to equity contribution to funding,Tajikistan Option Acreage:,Available Option Equity:,Somon,Oil 20%,Share Back Costs partial(50%Share Back Costs),Back Cost contribution is Cost of entry to Option,Forward Contribution:,Drill+Seismic+GG&A,Capped Funding of 40%contribution for 20%equity,Go forward Gross Tajik exploration expenditure cap US$70 MM for promoted contributions,thereafter,reverts to 20%equity contribution to funding,Intent is to Exercise Option upon negotiation of a mutually agreeable PSC,Note:Additional equity may be available from junior shareholders,Oil Market,Export options are dependent on Discovered Volumes,Small volume sales(3000 BOPD):,Fergana or Tashkent Refinery,Increases in global parity prices rail to China,Iran(US$500/t),Acreage well situated,wrt,export railheads,Export required to achieve global parity prices,and multiple disposal options exist.,Jalalabad,66,10,240,FERGANA BASIN,US$35,US$49,US$60,US$60,Rail To China:US$9-15/Bbl,Tarrif,Gas Markets,Kyrgyz,Tajik gas markets reliant on Uzbek export(US$8.40-US$8.90/MCF),Uzbek ann.gas,prodn,60 BCM,ann,exports 17 BCM(Russia 13,Kyrgyz 0.8,Tajik 0.7,Kaz,2.8),2010 plan:increase,prodn,to 65 BCM,gas exports to 25 BCM,European markets,Coal replaces domestic energy demand,New Kyrgyz/Tajik Fergana gas:,Frees Uzbek exports to Kyrgyz,N Tajik(28 BCF/Yr),Frees Uzbek Fergana,consumpn,for export(350 BCF/Yr),Competes against Uzbek Russian export gas price(US$8.50/PJ),Local markets are hostage to European demand-paradoxically,a significant domestic gas market opportunity exists in the Fergana.,GAS(BCM),KYRGYZSTAN,TAJIKISTAN(N),TAJIKISTAN(S),UZBEKISTAN,TURKMENISTAN,Reserves,5.7,7,14,1798,2670,Ann.,Prodn,0.03,0.1,0.2,65.3,50,Consumption,0.8,0.2,0.8,53,16,Jalalabad,66,10,240,FERGANA BASIN,US$8.40,Compression,Sources:BP Statistical Review 2007,BMI,CIA,Factbook,Central Asian Gas Prices,Gas prices have surged in last few years,primarily under influence of Russian sales to Europe.,Sources:BP Statistical Review 2007,BMI,CIA,Factbook,Annual Volume(BCF),US$/PJ,1H 2008,Current Price(US$/PJ)2009,Forward Contract Price(US$/PJ,Yr),Russia to Europe,4200,9.90,11.80,Russia to Ukraine,1418,7,11.80,2011,Turkmen to China,1057,5.50,5.50,Turkmen to,Gazprom,1025,3.68,8.35,Turkmen to Iran,322,2.12,9.90,Uzbek Export,220,8.40,8.40,