37th Indonesia

I d
i Petroleum
P t l
Association
A
i ti
Convention & Exhibition
May 15, 2013
Jakarta Convention Center

Strictly Private & Confidential. For Discussion Purposes Only

Presentation
1. Company Profile
2 2012-2013
2.
2012 2013 Highlights
3. Portfolio of Assets
4. Oil and Gas Services: RMI
5. Summaryy

Public Expose
COMPANY PROFILE
Strictly Private & Confidential. For Discussion Purposes Only

About Sugih Energy

PT Sugih Energy Tbk. (Sugih) is an integrated energy services company with
over 20 years of experience in the Indonesian market. Sugih was listed on the
Indonesia Stock Exchange (IDX) in 2002, trading under SUGI.
SUGI.
In 2010, Sugih changed its corporate strategy to become an energy producer
for Indonesia. Sugih now has two core areas of focus, oil and gas exploration
and oil and gas services.
services Through its subsidiaries,
subsidiaries Sugih holds participating
interest in two exploration blocks in Sumatra, Indonesia 49% participating
interest in the Lemang PSC block (non-operator) and 100% percent ownership
((operator)
p
) in the Kalyani
y
PSC block. Additionally,
y, the company
p y is in the p
process
of acquiring a 55% participating interest (operator) in the SelatPanjang PSC,
also located in Sumatra.
Sugih s oil and gas servicing operations are carried out by its subsidiary,
Sugihs
subsidiary PT
Resources Jaya Tehnik Management Indonesia (RMI). RMI provides
integrated drilling services, equipment procurement and rental, rig
mobilization, well work-over and enhancement services, as well as drilling
consulting throughout Indonesia.
3

Energy for Indonesia

Sugihs vision is to become a strong domestic energy

producer, producing energy for Indonesia

Aim is to create value for Indonesian stakeholders from

Sugihs portfolio of exploration assets and oil and gas services

subsidiary
Utilize Indonesias vast natural resources for the benefit of our

shareholders and stakeholders across Indonesia

Contribute to Indonesias domestic energy production needs
Provide
P id energy for
f the
th future
f t
off the
th country
t

Corporate Structure
Sugih Energy

Exploration &
Production

Oil & Gas

Services

100%
51%
---------------------- ---------------------Eastwin Global
Eurorich
Investments Ltd
GroupLtd

PT Resources Jaya Technik

Management Indonesia (RMI)

49%
100%
---------------------- ---------------------Lemang PSC
Kalyani PSC

Note: This graphic is not reflective of the proposed

acquisition of the SelatPanjang PSC, which pending
approval will change Sugihs corporate structure and
asset portfolio.
5

Corporate Leadership
Board of Directors:
Andhika Anindyaguna (Bagoes),
(Bagoes) President Director
Fachmi Zarkasi, Director of Corporate Affairs and Corporate

Secretaryy
Christopher Gani, Finance Director

Board of Comissioners:
Erros Djarot, President Commissioner
Wally A. Saleh, Commissioner
Zaenal Askin, Independent Commissioner
6

2012-2013
HIGHLIGHTS
Strictly Private & Confidential. For Discussion Purposes Only

2012 Highlights
In 2012, Sugih began a new corporate strategy to become a

domestic energy producer

May 2012: Sugih raised Rp 2.4 trillionthrough May 2012 rights

issue; proceeds used for exploration assets

June 2012: Sugih completed acquisition of Lemang PSC block
September 2012: Sugih acquired Kalyani PSC block
December 2012: Sugih announced oil and gas discovery at

the Lemang block, the companys first discovery

Sugih recorded FY 2012 revenue of US$7.56 million; profit of

US$2.89 million

2012 Highlights
Total assets increased to US$388.43 (FY 2012)
Sugih delivered profit to shareholders in 2012,
2012 largely due to

success of subsidiary RMI

Sugihs
g
share p
price increased byy approximately
pp
y 217% since

shares resumed trading on IDX in June 2012 (April 2013)

Market capitalization grew to US$813.45 million (April 2013)
Total equity reached US$267.74 at the end of FY 2012,

providing Sugih with the necessary capital structure for further

growth
th
Sugih delivered value to its shareholders and stakeholders in

FY 2012
9

2013 Highlights
Sugih is continuing to reach milestones in 2013
February: Sugih announced the commencement of drilling at

the Akatara-1 well, the second exploration well to be drilled at

the Lemang block
March Sugih announced that the operator reached total depth

of 6,400 feet at the Akatara-1 well

April: Sugih announced the signature of a conditional share

purchase agreement to acquire 55% stake in SelatPanjang

PSC, a producing asset located in Sumatra, Indonesia
May: Sugih announced the successful discovery at the

Akatara-1 well, encountering 274 feet of gross pay

10

PORTFOLIO OF
ASSETS
Strictly Private & Confidential. For Discussion Purposes Only

Oil and Gas Work Program

Sugih is a participating interest holder in two oil and gas

exploration assets; additionally, Sugih is currently in the

process off obtaining
bt i i participating
ti i ti interest
i t
t in
i a producing
d i asset,
t
SelatPanjang PSC
Lemang PSC block and Kalyani PSC block both hold

enormous potential for Sugih

Both assets are located in prolific South Sumatra basin, a

proven area for oil and gas discovery

Sugihs blocks are in proximity to already-producing assets

12

Oil and Gas Work Program

Sugihs strategy is to explore, develop and produce from

lower-cost, lower-risk assets

Spent 2012 acquiring interest in these assets, and is working

throughout 2013 to strengthen its asset portfolio

Sugih is working to develop all assets for further exploration,

development and production

Sugih will continue to consider acquiring additional oil and gas

blocks to add value to its portfolio

13

Where We Operate
Assets are located in proven basins in Sumatra.

SelatPanjangPSC

Kalyani PSC
Lemang PSC

14

Introduction to Production Sharing Contract (PSC)

PSC is the most common type of joint cooperation contract
used in Indonesias upstream oil and gas sector
Government of Indonesia and the contractor agree to a split of
the production measured in revenue
The contractor has the right to take and separately dispose of
its share of oil and gas
The contractor bears all risks and costs for exploration until
commencement of commercial production
Following production, the contractor is able to begin to recover
initial costs under the Cost Recovery System

15

Introduction to Lemang Block

16

Introduction to Lemang PSC

The PSC is valid for 30 years from 2007 to 2037
First Tranche Petroleum is applied at a rate of 10%
10%.
Cost Recovery Cap of 90%
60-month
60
th holiday
h lid for
f domestic
d
ti market
k t obligation
bli ti
Of the crude oil remaining after deducting operating costs, GoI
shall be entitled to 64.3%
64 3% while the contractors shall be entitled to
35.7%
Of the gas remaining after deducting operating costs, GoI shall be
entitled to 28.6% while the contractors shall be entitled to 71.4%
A tax rate of 44% applies
17

Contractors for the Lemang PSC

The current participating interests of the Lemang PSC are held by the following parties:
Ramba Energy
Limited
100%

Ramba Energy
Lemang Limited
80.4%

PT Tridatu Energy

19.6%

100%

PT Hexindo
Gemilang Jaya

Eastwin Global
Investments Limited

Participating interest: 51%

Deemed Participating interest: 41%

PT Sugih
Energy Tbk

Participating interest: 49%

Lemang PSC

(1) PT Hexindo Gemilang Jaya is the Operator of the Lemang PSC

18

Highlights of Lemang PSC Block

Lemang Block is located in the prolific South Sumatra basin, a

proven basin with significant oil and gas discoveries and

existing
i ti production
d ti
The

region already has necessary infrastructure

production refining and transport of oil and gas
production,

for

Trans Sumatra Pipeline is in proximity to the Lemang block

Lemang block is adjacent to Jabung Block operated by

PetroChina with daily production of approximately 58,000

boepd (Jakarta Post, 2010)

19

Independent Valuation of the Lemang Block

Independent valuation of the Lemang block was conducted in

July 2011 by international petroleum consultancy DeGolyer &

M N
MacNaughton
ht (D&M)
D&M values the Lemang block as holding:
511 million barrels of oil*
468 billion cubic feet of gas*
Akatara prospect, the focus of current exploration drilling

operations, is valued as holding 147.2 million barrels of oil

( i k d)
(unrisked)

* = gross recoverable prospective resources

20

Exploration Drilling: Selong-1 Well

In October 2012, the operator successfully began exploration

drilling at the Lemang block, drilling the Selong-1 well to a total

d th off 6,430
depth
6 430 feet
f t
In December 2012, Sugih announced the successful oil and

gas discovery at the Lemang block as the operator

encountered approximately 222 feet of gross oil and natural
gas pay
Testing incidacted flow rates of approximately 790 barrels of

oil per day (BOPD) and 16.8 million standard cubic feet per
day ((MMSCFD)
MMSCFD ) of gas
The successful discovery was the first in Sugihs exploration

program
p
g
21

Exploration Drilling: Akatara-1 Well

In February 2013, Sugih announced the commencement of

drilling of the second exploration well at the Lemang block, the

Ak t
Akatara-1
1 well,
ll drilling
d illi to
t a total
t t l depth
d th off 6,400
6 400 feet
f t
In May 2013, Sugih announced the successful discovery at the

Akatara-1
Akatara
1 well with the operator encountering 274 gross feet
of pay and 15 potential resevoir layers
Testing indicated flow rates of approximately 11.0 MMSCFD

and 380 barrels of condensate per day (BCPD)

The Akatara-1 well has since been suspended pending further

testing of the prospect

22

Lemang Block Future Plans

The operator has suspended the Selong-1 and Akatara-1 wells

to conduct further study of each prospect

In May 2013, Sugih announced that the operator plans to drill

the Akatara-2 appraisal well to further study the prospect

Drilling operations will commence shortly and are expected to

take approximately 26 days with an additional 28 days for

analysis
Combined testing results from the Selong-1 and Akatara-1

wells indicate approximately 6,235 barrels of oil equivalent per

day (BOEPD)
Production is expected to commence in Q1 2014pending

regulatory
l t
approvall and
d other
th commercial
i l factors
f t
23

Introduction to Kalyani PSC

24

Introduction to Kalyani PSC

Kalyani is Sugihs second exploration asset
Current PSC contract for Kalyani block was awarded in

December 2011
Sugih
g acquired
q
participating
p
p
g interest the Kalynai
y
block on

September 18, 2012 following its acquisition of Eurorich Group

Limited
Sugih has partial operating rights to the Kalyani block
Kalyani is located in the prolific South Sumatra basin, a region

f
favorable
bl for
f oilil and
d gas exploration
l ti and
d production
d ti
Block is part of Sugihs strategy to acquire lower-risk, lower-

cost assets in Sumatra

25

Introduction to Kalyani PSC

Kalyani PSC remains valid until 2041
Kalyani consists of 6 areas totaling 605 sq km
In 1975, the previous operator, Redco Indonesia Ltd.,

encountered fractured g
gas reserves at the block
Tempino-X1 (Tempino-176) well encountered gas in the Talang

Akar formation at depths of 2,535-2,590 meters and 2,6602,735

Sugih is in the process of submitting a work program to GoI for

f th exploration
further
l ti off the
th assett

26

Key Terms of the Kalyani PSC

The PSC is valid for until 2041
First Tranche Petroleum is applied at a rate of 20%
20%.
Cost Recovery Cap of 80%
Oil pre-tax
t profit
fit split
lit is
i 50
50:50
50 b
between
t
th
the contractor
t t and
dG
GoII
Gas pre-tax profit is 42:58 in the governments favor
A tax rate of 44% applies
60-month holiday for domestic market obligation
DMO reimbursement is given at a rate of 25%

27

Introduction to SelatPanjang PSC

28

Introduction to the SelatPanjang PSC

The Selat Panjang PSC is located in the eastern region of Riau
province, Sumatra, and comprises an area of 1,311 sq km
The block is currently producing approximately 300 BOPD and is
expected to produce 5 MMSCFD of gas starting in Q2 2013
Two major zones, Sihapas and Pemetang
Sihapas holds an estimated 7.28 MMBO in reserves (2P)
Pematang zone holds an estimated 32.7 MMBO and 245 BCF in
recoverable reserves (2P)
The block has 7 known prospects and holds estimated total
resources of 323 MMBO and 1,455 BCF

29

Key Terms of the SelatPanjang PSC

In April 2013, Sugih announced the signing of a conditional share
purchase agreement with Petronusa Bumibakti and International
Mineral Resources
Resources, Inc.
Inc
Completion of agreement will give Sugih 55% participating interest
and operating rights to the Selat Panjang PSC
Selat Panjang PSC is an already-producing asset with additional
exploration potential
The agreement is expected to be complete in Q4 2013
The remaining 45% participating interest is held by PetroChina
International Limited

30

OIL & GAS

SERVICES
Strictly Private & Confidential. For Discussion Purposes Only

Oil and Gas Services: RMI

Sugihs oil and gas services operations are carried out by

subsidiary company PT Resources Jaya Technik Management

I d
Indonesia
i (RMI)
RMI was established in 1970 with a focus on developing both

conventional and renewable sources of energy

RMI has a history of projects in oil and natural gas, geothermal

drilling, geothermal power plant and carbon dioxide (CO2)

purification
RMI

provides integrated drilling services, equipment

procurement and rental, rig mobilization, well work-over and
enhancement services, as well as consulting

32

Oil and Gas Services: RMI

RMI is an integral part of Sugihs vision to create a fully-

integrated energy company

RMI was the main contributor to Sugihs overall revenue and

profitability in FY 2012
Among other projects, RMI handled a geothermal drilling

project to support the Wayang Windu geothermal plant, the

largest in Indonesia and one of the largest in the world
RMI is currently engaged in an oil and gas servicing project in

Jambi province, Sumatra

RMI is expected to further contribute to Sugihs bottom line in

the future through additional geothermal and drilling projects

33

SUMMARY
Strictly Private & Confidential. For Discussion Purposes Only

Summary
Sugih is a young, ambitious company with a vision to become

a fully integrated
I d
Indonesia
i

energy

company

growing

alongside

With an increasing portfolio of oil and gas assets, and a stable

oil and gas services subsidiary,

subsidiary we are closer to realizing our
vision
Financial and operational success in FY 2012 make us

optimistic for the remainder of 2013 and beyond

We will work to continue to create value for our shareholders

who have put their faith in our company

Our ultimate goal is to become an energy producer to provide

energy to
t Indonesia
I d
i
35

THANK YOU

Strictly Private & Confidential. For Discussion Purposes Only

DISCLAIMER
All information contained in this document is confidential (the Confidential Information) and is received by the holder of
this document under a duty of confidentiality to PT Sugih Energy Tbk. (Sugih). Accordingly, the holder will not,
save as required by law or with the permission of Sugih, disclose, or make, or permit to make available to any
other person any of the Confidential Information and will not use it for any other purpose other than the purpose
described to the holder by Sugih. The holder of this document will use a reasonable degree of care to protect the
Confidential Information to prevent the unauthorized use, dissemination or publication of the Confidential
Information.
Information
Sugih has not independently verified any of the information contained herein and makes no warranty or representation,
express or implied, as to the accuracy and completeness of either the information contained herein or any other
oral, written or other communication transmitted or made available to the holder in the course of its evaluation of
the herein proposed transaction (the Transaction)
Transaction ). Nothing contained herein is a promise or forecast and thus
should not be relied upon as such. Sugih shall not be held liable for any representations (express or implied)
contained within this document, nor for any omissions or any other written or oral communication transmitted or
made available to the holder in the course of its evaluation of the Transaction.
This document will not form the basis of any offer or legal agreement. The holder must rely solely on its own judgment,
review and business analysis in evaluating the Transaction and must not rely on any statement contained in, or
any omission from, this document. Any such liability in relation to any reliance by the holder is expressly
disclaimed.

37