APRIL 2012 TASE: IPC OGIS New York Conference - IPC Oil & Gas ...


APRIL 2012 TASE: IPC OGIS New York Conference - IPC Oil & Gas ...

TASE: IPCOGIS New York ConferenceAPRIL 2012www.ipcoilandgas.com

Forward Looking InformationThis presentation includes forward looking information, as defined in the Israeli SecuritiesLaw – 1968. Such information includes, inter alia, forecasts, goals, estimations andevaluations, including information delivered through sketches, graphs, reviews and anyother information of the Company, presented in any way and relating to future eventsand/or issues whose materialization is not certain and is not within the Company’s control.Forward looking information does not constitute an evidenced fact and is based solely onthe subjective estimation of the company’s management which is based, inter alia, on theanalysis of general information, known to the Company's management at the time ofpreparing this presentation, including statistic data published by various entities andauthorities, professional publications, general publications, researches and surveys whichdo not include a commitment as to the correctness or wholeness of the informationprovided therein, and the correctness of the information was not reviewed independently bythe Company. Forward looking information is naturally subject to significant risks of notmaterializing and such information is uncertain, impossible to predict and mostly is notwithin the Company’s control. Whether it is materialized or not will be influenced, inter alia,by risk factors which characterize the company’s activity as well as by developments in thegeneral environment and external factors which influence the Company’s activity which cannot be pre-evaluated and are not within the Company's control.22

Stock Data – Tel Aviv ExchangeStock Price: 42.5 agorat (.425 shekels) / $0.13 (USD)Market Cap: 77.9M (shekels) / $23.8 Million (USD)Average Daily Trading Volume: 237,846Freely Trading Shares Outstanding: 33,743,091Management and Consulting Shares Outstanding*: 149,648,851Total Shares Outstanding: 183,391,942Additional Notes to Financial Data:*Management shares (144,821,469) are restricted until 11/2013. Consultant shares outstanding (currently totaling 4,827,382) are restricteduntil 5/2012 and face additional volume restrictions for six consecutive quarters. Warrants and options total 50,349,447 (proceeds of $8.5million if exercised), yielding fully diluted shares of 233,741,389.Source: Bloomberg April 10, 2012As of April 10, 2012, the Shekel currently trades at 3.75x to the U.S. Dollar according to XE.com3

About IPC• The Company is traded on the Tel Aviv Stock Exchange under the symbol“IPC”• IPC was the first, amongst the current partners, to acquire rights to deepwater “Myra” and “Sarah” licenses in October of 2009 25 miles off the coastof Israel. At that time, IPC initiated the 3D survey• Holding approximately 6.8% interest in the “Myra” and “Sarah” licenses (twodeep water drilling licenses) through the IPC Israel partnership (50%)• The partners in “Myra” and “Sarah” licenses are preparing to commencedrilling in the second quarter of 2012• The Company’s share in both drillings will be financed by Ofer Investments,up to USD 14 million, in accordance with the agreement between OferInvestments and IPC dated October 2010• Management with vast knowledge and long term international experience ininitiating, operating, financing, managing and producing of oil and gasprojects, including deep water drilling44

Natural Gas Transmission System• Sarah and Myra arealternative gasresources for theIsraeli economy• Within the economicalwaters of Israel5

“Myra” and “Sarah” Licenses• The maritime deep-water licenses“Myra” and “Sarah” are situatedsome 40 KM west of Hadera,south of the Gas discoveries Dalitand Tamar• The scope of each of the licensesis about 400 square km (156 sqmiles)• Both drillings are in deep water• The spud date for “Myra” drilling isscheduled for the second quarterof 2012 and is expected to last 80days• “Sarah” drilling is scheduled tobegin upon the completion of“Myra” drilling and is expected tolast 66 days66

IPC Licenses and Existing DiscoveriesNoble – LeviathanDiscovery, the largestdeep water discovery ofthe last decadeNoble –Tamar Discovery“Myra” and “Sarah” LicensesNoble – Dalit DiscoveryNoble – Noa and Mari-B –Tethys Sea77

Seismic SurveyAnticlines on theIPC licenses areanalogous to theTamar and DalitstructuresTamar (Noble)Leviathan(Noble)Dalit (Noble)Myra License347 (IPC)Sarah License348 (IPC)Source: TGS8

Holdings StructureOferInvestmentsGroupIPC Oil & GasHoldings, LTD.The Issuer50 % 50 %*IPC Israel Partnership –13.609%In “Myra” and “Sarah”LicensesDrilling expenses up to USD 28 MWill be covered by Ofer Investments Group*Transference processes to the Ofer group are not yet finalized9

Owners of Licenses in “Myra” and “Sarah”Modiin-Energy and IDBIsrael LandDevelopment-Energy* Not including the GGR option. On Dec 6 2011 the company together with the otherlicense holders had notified GGR that the option had expired** 50:50 partnership with Ofer Investments10

Planned Budget for “Myra” and “Sarah” DrillingsExpected Drillings schedules•“Myra-1” – second quarter of 2012, expected to last 80 days•“Sarah-1” – upon completion of “Myra-1”, expected to last 66 daysDrillings’ Budget schedules•“Myra-1” – approved budget of about USD 80 M•“Sarah-1” – approved budget of about USD 66 M•Additional equipment budget of about USD 11 M•Production testing cost of about USD 20M for “Myra-1” and about USD 20M for“Sarah-1”.•Existence of natural gas and/or oil in the target horizon might lead to furtherdrillings on the premises of the licenses.Drilling’s Operator•GGR-Geo Global Resources Inc – a Canadian company experienced indrillings•EXCEED – engineering company with expertise in deep-water drillings11

Warning and Clarification Regarding the Data fromNSAI ReportThe data that is presented in the following slides were taken from the resource assessment report regarding the prospective resources inthe licenses, which was prepared by the Netherland, Sewell & Associates, Inc., an authorized and independent resource evaluationspecialist ("NSAI" and "NSAI Report"). The NSAI report was prepared for the partners in the licenses in accordance with to the PetroleumResources Management System (SPE-PRMS), and was reported by the company in an immediate report as was amended on July 6,2011. In addition, on July 4, 2011, the company also published a report clarifying the meaning of the data, which were included in theNSAI report, whose main points will be specified below; it is recommended to review the full reports to understand the complete picture. · The “Mean” parameter or "Gross Mean Resources"The SPE-PRMS* system classifies evaluations into 3 categories: · Low Estimate (P90) – The most conservative (and smallest) estimate for which there is a 90% probability that the volumes that willbe discovered will be equal to or higher than. This is the volume for which there is "reasonable certainty". · Best Estimate (P50) – The middle estimate. This is the volume for which there is a 50% probability that the actual volumes that willbe discovered will be equal or higher. · High Estimate (P10) – The most optimistic estimate. This is the volume for which there is a 10% probability that the actual volumesthat will be discovered will be equal or higher.The meaning of the “Mean” parameter or “Gross Mean Resources” (gross mean resource of oil and gas, as the case may be)(“Mean”), which is used in the resources assessment report is the arithmetic average of all the above mentioned possible outcomes, as itis defined in the NSAI report by NSAI: "the arithmetic average of all the possible outcomes". It is clarified that Mean is not a categoryby the definition of SPE-PRMS and is not based on a geological model.The calculation of Mean is done by carrying out X observations of the probabilistic model and the division of their total sum by the numberof observations (X). This model is based on the same important parameters specified below on which the SPE-PRMS is based and onwhich the two extreme points, Low Estimate (P90) and High Estimate (P10), were appraised.*(Petroleum Resources Management System (SPE-PRMS) 2007, as was published by the Petroleum Engineers System (SPE), theAmerican Association of Petroleum Geologists (AAPG), World Petroleum Council (WPC), Society of Petroleum Evaluation Engineers(SPEE).12 12

NSAI Summarized Prospective Resources Gas in TCFP90 P50 P10 Mean *Myra .168 1.42 12.09 4.56Sarah .505 1.49 4.08 1.94Total .673 2.91 16.17 6.50Netherland, Sewell & Associates, Inc. prepared an independent resource report in June, 2011* Mean is not considered a category within the definitions of the SPE-PRMS and is notcalculated according to geological model13

NSAI Prospective Resources by Block and TargetHorizon Gas in TCFP90 P50 P10 Mean *Probability of**Geological SuccessMyraMiocene 0.051 0.19 0.62 0.28 16%Oligo/Miocene 0.092 1.10 10.87 4.05 63%Tortonian 0.025 0.13 0.60 0.23 22%TOTAL 0.168 1.42 12.09 4.56SarahCretaceous Fan 0.242 0.58 1.28 0.67 32%Oligo/Miocene 0.232 0.79 2.41 1.10 54%Lower Cretaceous 0.030 0.12 0.40 0.18 21%TOTAL 0.505 1.49 4.08 1.94GRAND TOTAL 0.673 2.91 16.17 6.50* Mean is not considered a category within the definitions of the SPE-PRMS and is not calculatedaccording to geological model**NSAI report includes the risk elements of the petroleum system used to calculate the probability ineach prospect, it is highly recommended to review the report for the complete data14

NSAI Prospective Resources by Block and TargetHorizon – Oil in Millions of Barrels (MMBL)P90 P50 P10 Mean *Probability of**Geological SuccessMyraUpper Jurassic 13,100 63,841 278,125 113,422 16%SarahUpper Jurassic 4,636 21,295 89,411 37,323 23%* Mean is not considered a category within the definitions of the SPE-PRMS and is not calculatedaccording to geological model**NASI report includes the risk elements of the petroleum system used to calculate the probability ineach prospect, it is highly recommended to review the report for the complete data15

Howard CooperPresident and Chairman of the Board of Directors• Over 25 years of international experience in the oil and gasindustry, including experience in financing, exploration, businessdevelopment and production in North America, the Caspian area,and oil exploration and production in three Western Siberia fieldswith estimated reserves of 107 million barrels.• Oil and gas exploration and production in North America:Colorado, Montana and North Dakota.• Further experience:• AIG – the division for locating oil projects in Russia• CAP – developing Karakuduk field in Kazakhstan, 315 millionbarrels16

Muli RavinaCEO• 25 years of experience in senior management positions including,business development in Israel and overseas, investments, capitalraising, M&As• Strong acquaintance with the financial and governmental sectors• Previous positions include:• CEO of Credit Suisse Israel• CEO of ERICOM Software• CEO of ASTRA Investments Fund• Assistant to the Director General at the Ministry of Finance• Past and present Boards of Directors: Ayalon Insurance, CAL, DSSecurities, Agricultural Bank, Bagir, Yozma – Venture capital, theNational Coal Company and others17

Igor EffimoffGeologist and member of the Board of Directors• PhD in Geology• 40 years of experience in the field of oil and gas• International onshore and offshore experience• Extensive and diverse international experience in the areas of the Gulf ofMexico, the Caspian Sea, FSU, the Middle East, Africa, Malaysia andAustralia• Experience with deep water drilling, including a 5,000 meter drilling• (Sarah and Myra about 4,000-5,200 meters)• Previous positions include:• President of Pennzoil Caspian Corp• Senior Vice President of Ashland Exploration Inc.• District Geologist for the Middle East – Shell Oil18

Summary• The Company holds “Myra” and “Sarah” – deep waters drilling licenseslocated in the vicinity of Noble Energy’s proven discoveries (Tamar, Dalit,Leviathan)• The partners in the licenses are preparing for the drilling of two explorationwells during the second quarter of 2012 (main targets: “Tamar” sands)• The Company’s portion in both drillings will be financed by OferInvestments, up to an amount of USD 14 million, as part of an agreementbetween the companies• IPC was the first, amongst the current partners, to acquire rights to “Myra”and “Sarah” in October of 2009. At that time IPC initiated the 3D survey• The Company’s Management has vast knowledge and long terminternational experience in operating, managing and producing deepwater oil and gas projects, management and financing1919

CONTACT INFORMATIONIPC Oil & Gas Holdings, Ltd.Gillian MorrisPhone: (970)846-1953Email: gmorris@ipcoilandgas.comKCSA Strategic CommunicationsPhil Carlson / Brad NelsonPhone: (212)896-1233 / 1217Email: pcarlson@kcsa.com / bnelson@kcsa.comIsraeli Investor Relations ContactMoran MeirPhone: 03-5167620Email: moran@km-ir.il20

IPC Oil and Gas Holdings, Ltd.TASE: IPCwww.ipcoilandgas.com

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