RATIO OIL
EXPLORATION
(1992)
Limited Partnership
Partnership Presentation
August 2013
[1]
Disclaimer
This presentation was prepared by Ratio Oil Exploration (1992) – Limited Partnership
(the “Partnership” or “Ratio”) . It is not an offer to buy or sell securities of the
Partnership, nor an invitation to receive such offers, and is designed, as aforesaid, for the
provision of information only. The information used to make the presentation (the
“Information”) is given for convenience purposes only and is neither a basis for the
making of any investment decision, nor a recommendation nor an opinion, and is no
substitute for the investor’s discretion.\
Everything stated in this presentation with respect to an analysis of the Partnership’s
business is merely a summary. To obtain a full picture of the Partnership’s business and
the risks facing the Partnership, review the Partnership’s Periodical Reports and
Immediate Reports ,as filed with the Israeli Securities Authority through the Magna
website. The Partnership does not warrant that the Information is either complete or
accurate, nor will bear any liability for any damage and/or losses which may result from
the use of the Information.
Various issues addressed in this presentation, which include forecasts, goals, estimates,
assessments and other information pertaining to future events and/or matters, whose
materialization is neither certain nor within the Partnership’s control, including in
connection with data, income forecasts, the value of the Partnership, costs of projects,
development plans and concepts and construction thereof etc. are forward-looking
information, as defined in the Securities Law. Such Information is based solely on the
Partnership’s subjective assessment, based on facts and figures concerning the current
state of the Partnership’s business, and macro-economic facts and figures, all as are
known to the Partnership on the date of preparation of this presentation. The Partnership
does not undertake to update and/or change any such forecast and/or estimate to reflect
events and/ or circumstances occurring after the date of preparation of this presentation.
The materialization or non-materialization of the forward-looking information will be
affected, inter alia, by risk factors characterizing the Partnership’s business, as well as by
developments in the general environment and outside factors affecting the Partnership’s
business, third-party representations not materializing, delays in the receipt of permits,
etc., which cannot be estimated in advance and are beyond the Partnership’s control.
The Partnership’s results of operations may differ materially from the results estimated or
implied from the aforesaid, inter alia due to a change in any one of the foregoing factors.
[2]
THE LEVANT
BASIN
Ratio is focused
on hydrocarbon
exploration and
production in
the Eastern
Mediterranean
Sea
[3]
THE LEVANT
BASIN
Potential
~ 122 Tcf*
Discovered
~ 38 Tcf**
* Source: US Geological Survey (USGS) Fact
sheet 2010-3014 , March 2010
** Reserves and Contingent Resources (Best
Estimate Category)
[4]
RATIO ASSETS
Ratio Yam
Licenses
15% interest
(Operator: Noble Energy)
Rachel
Amit
Hanna
Eran
Gal Licenses
70% interest
(Operator: Edison SpA)
Neta
Royee
[5]
RATIO YAM
LICENSES
Eitan Aizenberg, one of Ratio's founders, is the prospect
generator of the Leviathan and Dolphin discoveries
Ratio held 100% interest in the Ratio Yam exploration areas
and in 2007 invited its current partners to farm-in
Leviathan
Discovery
World-class
asset in terms of
quantity and quality
The Leviathan field was discovered in late 2010
Located in the Rachel & Amit Licenses, approx. 135km west of
Haifa, Israel in water depths of approx. 1,630 meter, and covers
approx. 325 km2
Drill stem test confirms high quality reservoir with a single well
capable of producing 250 mmcf/d
Completed two appraisal wells which validated the quality,
quantity, continuity and extent of the field
The most
significant gas
field in the Basin
Contingent Resources, NSAI estimation (as of March 31, 2013)
[6]
Low (1C)
Best (2C)
High (3C)
Natural Gas
(Tcf)
14.89
18.91
24.14
Condensate
(MMBBL)
26.9
34.1
43.4
LEVIATHAN
DISCOVERY
Scale and
location allow
for multiple
possibilities
Potential supply
to Jordan and
Palestinian
Authority via
onshore pipeline
[7]
LEVIATHAN
DISCOVERY
First phase:
Sanction expected in 2013
capacity 1,600 mmcf/d (*) (**)
Anticipated
development
phases
Domestic Market (750 mmcf/d)
Pre-investment in upstream for export project
(850 mmcf/d)
Second phase:
capacity 1,600 mmcf/d (*) (**)
Operator targets
initial sales to
domestic market
by end 2016
Export Market
Domestic Market
[8]
* Source : Noble Energy Analyst Conference – December 2012
** Source: Noble Energy UBS Global Oil & Gas Conference – May 2013
DOMESTIC
MARKET
Power generation
New Capacity - 4,000 - 5,000 MW gas fired plants are
expected to commence operations by 2017- 2018
Conversion of IEC’s coal fired plants to utilize gas 1,400 MW by 2017
Strong and
growing
demand
Industrial uses
Conversion of heavy industries’ production facilities
burners to utilize gas
Development of new industries which heavily utilize gas
Forecasted
supply in 2013
is 5.6 BCM (**)
Long term natural gas demand for power generation
and industrial uses (*)
Forecasted
demand in 2015
is 10 BCM (***)
Approx. 13 BCM in the year 2020 and 15 BCM in
the year 2025
Approx. 430 BCM during years 2016-2040
[9]
(*) Ministry of Energy & Water forecast, April 2012.
(**) Delek Group, 2012 Annual Report
(***) Tzemach Governmental Committee, Final Report, September 2012
EXPORT
PROJECTS
Growing Demand
2012 demand ~ 46 BCM ; 2020 forecast ~ 60 BCM
Gas supply diversification
In 2012, 75% of Turkey's gas was imported from Russia and Iran
Turkey is a
significant
potential market
for piped gas
Potential Transit Hub from East to West
Several regional transmission lines are planned (TAP, TANAP)
Pipeline length
~ 400-450 kilometer from Israeli EEZ to south-east Turkey
Existing import gas pipelines and LNG Terminals
[10]
EXPORT
PROJECTS
Egypt
Natural gas is required to feed-in two existing LNG facilities:
Damietta plant (5 mtpa) is idled due to lack of gas supply
Idku plant (7.2 mtpa) is operated in limited capacity due to
reservoir performance
Egypt, Jordan
and the
Palestinian
Authority are
also potential
markets for
piped gas
Jordan
Natural gas is required to mainly generate electricity
Gas supply from Egypt for power generation has been
decreased from 3.1 BCM in 2009 to 0.8 BCM in 2011
Jordan has issued RFP for purchase of LNG in mid 2014
at Aqaba
Palestinian Authority
Palestinians seek electrical independence;
Currently, private company develops a 200 MW gas fired
power plant to be located in West Bank
[11]
EXPORT
PROJECTS
Global LNG Forecasted Demand & Supply
Remaining market opportunity ~ 58 MMt/y by 2022
Worldwide
LNG projects
compete to
secure market
and reach FID
by 2018
[12]
Poten & Partners 2013
* Oceania = Ausralia and PNG
Woodside
Transaction
Australia based Woodside has been selected as a strategic
partner bringing-in LNG expertise
Ratio will sell 5% of
the interest in the
Rachel and Amit
Licenses
Woodside brings Leviathan added values:
Woodside proposed to pay approx. $2.5 billion in return for
acquiring 30% of the interests in the Rachel and Amit licenses
Experience in design, construction and operation of onshore
LNG plants
Skills in shipment, trading, marketing and financing of LNG plants
Expected Ratio's
revenues from the
sale ~$420M
(Less overriding
royalties)
Strong relations with Asian markets for the past 28 year
Extensive FPSO and LNG experience with capabilities in
project integration
[13]
Woodside's Pluto LNG Plant Australia
EXPORT
POLICY
Governmental Export Decision
(June 2013)
Initial allocation of reserves for domestic use – 540 BCM
from all reservoirs
Export of up to 50% from each reservoir exceeding 200
BCM plus up to an additional 25% is permitted following
swap transactions
Onshore LNG facility / FLNG will be built in territories
controlled by the State of Israel, unless agreed in a
bilateral agreement between countries
Regulation sets
the foundations
for export
Leviathan has a potential
to export up to 400 BCM (~14 Tcf)
[14]
Ratio Yam
Licenses
Operator expects drilling rig to arrive late 2013 and
forecasts 25% geologic chance of success
Mesozoic rocks produce hydrocarbons throughout the
Middle East and northern Africa
Enormous regional implications, especially on
neighboring structures, if hydrocarbons are found
Leviathan
Deep Mesozoic
Prospect
Prospective Resources, NSAI pre-drill estimation
Geologic Success: Middle Cretaceous
A play with
step-change
potential
Attwood Advantage drilling Rig
[15]
15%
Lower Cretaceous 21%
Gal
Licenses
In 2010 Ratio obtained the Gal preliminary permit and in
2012 completed the acquisition and processing of 3D
seismic survey in the Neta and Royee licenses
In November 2012 Edison International joined Ratio to
operate and further explore the assets. Edison holds
20% of the interest in the licenses
Ratio initiated
the exploration
activities in
2010
In April 2013 the Oil Commissioner granted the licenses
within the preliminary permit area
Located
south-west of
the Leviathan
Discovery
According to the Licenses terms:
• Drilling prospect with resource estimate to be submitted
to the Ministry by June 2014
• First exploration well to be spud by April 2015
[16]
Financial
& Stock
Exchange
Data
Fund raising
Since its inception in 1992, Ratio has raised
$170M, including approx. $38M in 2013
Potential fund raising through warrants exercise up
to $108M
Tradability on the TASE
One of the most ten traded in 2011-2012
Immediate
access to
capital markets
Market Capitalization
$720M, Unit Price 33.4 As of June 30, 2013
Unit Target Price
UBS - 49, Barclays - 44
Listed in Tel Aviv
75 Index
[17]
Contact
Details
Ratio Oil
Exploration
85 Yehuda Halevy St.
Tel Aviv 6579614
Israel
Tel: +972-3-5661338
Fax: +972-3-5661280
office@ratioil.com
[18]