Big picture - Why invest in Cabot Energy
Cabot Energy Snapshot
Cabot Energy is an oil and gas exploration and production company quoted on the Alternative Investment Market of the London Stock Exchange.
The Company has conventional, light oil production operations in north west Alberta, Canada, and exploration and appraisal opportunities in Italy, both on and offshore. The Company is pursuing a strategy of production led growth, primarily through its oil production in Canada, and the maturing of exploration and appraisal projects in Italy which can be farmed out and drilled to generate the possibility of high returns on investment.
The Company is seeking production growth in Canada and Italy both organically, through its existing asset position, and by acquisition. Due to the economic changes in the exploration and production industry, the Company has been able to acquire assets for minimal initial cash outlay and will continue to consider future acquisitions with the support of its shareholders and strategic partner.
The Company is incorporated in the United Kingdom and is subject to the City Code on Takeovers and Mergers.
The Company is redeveloping and expanding a light oil production play from Devonian carbonate reefs and developing these horizons in north west Alberta. The assets are located in Rainbow and Virgo and consist of mineral leases, production facilities, pipeline infrastructure and wells.
Approximately 40 wells are currently in production or expected to be returned to production in 2017 and a further 30 existing wells have the potential to be returned to production through intervention and work over operations.
Incremental production growth is planned through the drilling of side tracks and new wells into previously produced reefs where oil recovery to date has been low. Technical work on the project is focused on mapping the key reservoir horizons across the Company’s northern Virgo area with a view to understanding and then developing the potential across the acreage.
The Company has established a strategic position in north west Alberta along with a strong operations team, both in the field and in the Calgary office.
The Company is aiming to acquire 3D seismic over Cygnus and the 26 mmboe contingent resource Giove oil discovery.
Cabot has been active in the Italian oil and gas industry for over 10 years. The Company has drilled two exploration wells onshore and acquired a number of 2D and 3D seismic surveys over that time and has established ownership of high quality acreage, which has been validated by the farm in of two partners in the last two years. Shell Italia farmed into the Cascina Alberto permit onshore in the Po Valley region and High Power Petroleum, subject to regulatory approval, across all the southern Adriatic permits and applications. The Company also has offshore permits in the Sicily channel, close to the prolific Vega field operated by ENI.
Italy benefits from a well established oil and gas industry that is in a relatively early phase of the industry life cycle when compared to other European peers. The country also has a fiscal system that attracts investment and an extremely good hydrocarbon system that has been proven to work throughout the onshore and offshore. The pace of development for the industry in the country has proven to be slower than counterparts due to a lengthy environmental impact assessment process, however when work programmes are approved progress can be made executing the work in a reasonable time frame.
The Company will create three to five significant well events in Italy over the medium to long term to expose shareholders to the possibility of significant upside upon success of any one event.
Cabot has 100 per cent. of a large onshore exploration licence in the Otway Basin, South Australia, PEL 629. The licence area is approximately 1.4 million acres and was granted in September 2013 with a five year term. The licence has been suspended since June 2014 to allow the Company to develop the understanding of the area in order to farm out the licence.
The area contains both conventional and unconventional opportunities from the early Cretaceous Crayfish group to the late Jurassic Casterton formation. There are nearby discoveries within the Otway Basin which prove a working hydrocarbon system and recent wells drilled in the Penola trough by Beach Energy have identified new plays. The Otway basin also has pipeline infrastructure which would enable quicker development of any discovery.
The Company has completed a first year work programme that included reprocessing and interpretation of 1000 line km’s of existing seismic and extensive geochemical analyses and basin modelling work that supports the hydrocarbon potential in the Lower Sawpit Shale and Casterton formation.
A recent independent review of all the work on PEL 629 has concluded that a study programme is required to determine what work should be included in a formal year two work programme. The Company will now execute this study programme with a view to establishing what will create value within the licence. The South Australian government are holding a licence round that includes licences adjacent to PEL 629 this year and the results will be indicative of the future farmout potential in the area.
High Power Petroleum have farmed into the licence for a 25 per cent. interest, with the option to go to a 50 per cent, interest through paying for a $1 million seismic programme.
INDEPENDENT NON-EXECUTIVE CHAIRMAN
Jon was appointed Chairman in September 2013. Jon has a BSc. in Geology from the University of London and over 30 years’ experience in the mid-cap Exploration and Production industry.
After several years with operating oil and gas companies, Jon joined Venture Production in 1999 as Chief Operating Officer where he remained a board director until Venture’s sale in 2009.
Until recently Jon held two other non-executive positions, one with Trinity Exploration and Production Plc and the other with Metro Exploration Holding Corporation.
CHIEF EXECUTIVE OFFICER
Keith joined Northern Petroleum in May 2012 as Chief Operating Officer, was appointed to the Board in November the same year, and was made Chief Executive Officer in July 2013.
Keith gained a degree in physics and has over 25 years’ industry experience. Commencing his career with Western Atlas Logging Services, Keith progressed to hold managerial positions in Amerada Hess, Burlington Resources and was most recently employed as General Manager Operations for E.ON Ruhrgas in Norway.
Keith has extensive experience in the North Sea, North Africa and Norway.
Nick was appointed Finance Director in November 2012.
Before joining Northern Petroleum, Nick spent over 13 years in investment banking where he focused on advising the international E&P industry. He specialised in advising upon mergers and acquisitions and providing equity capital markets advice and services to a broad range of global oil and gas companies, both public and private. He was employed by Tristone Capital, the global energy investment bank, and latterly GMP Securities, for six years prior to joining Northern Petroleum.
Nick qualified as a chartered accountant at Price Waterhouse and is a member of the Institute of Chartered Accountants in England and Wales.
SENIOR INDEPENDENT NON-EXECUTIVE DIRECTOR
Iain Lanaghan joined as a Non-executive Director in February 2014.
He has specialised in growing and financing companies. In oil and gas his experience has included being Finance Director of Faroe Petroleum plc and of private equity backed Atlantic Power, which he led to a successful trade sale. His non-executive roles are as founder and chairman of Metropolitan European Transport, one of Germany’s largest private bus operators, and director of UK Government owned National Nuclear Laboratory, DE&S and Scottish Water. His Finance Director roles have included FirstGroup plc and PowerGen International.
He is a chartered accountant, having qualified with KPMG.
Cabot Energy Plc
Chester House, Unit 3.01
1-3 Brixton Road
London SW9 6DE
Email: [email protected]
Tel: +44 (0)20 7469 2900
Laurel Lane, Halesowen
West Midlands B63 3DA
London EC1A 4HD
TEL: +44 20 3727 1000