OTCQX:BWEFF | OTCQX:BWERY | Oslo Bors:BWE
Brian Lantier: What’s your key over the next two to four years? What am I looking for to say that you’re on track to hit your long-term goals? What development milestones should I be looking at?
Ali Athar: I think it’s the Maromba project, the Maromba project that I talked about in Brazil. It’s a green field project and we’re already on the way there. But again, it’s a project. It’s $1.2 billion of investment. So hopefully that’ll get us to the $90,000 barrels per day. This is all organic growth. The target does not include any M&A activity. We’re always looking. We’re currently looking at an opportunity in Angola. That’d be a new region for us to enter. So, we’re looking forward to that.
Brian Lantier: What are you finding in the marketplace right now? Oil prices are relatively depressed, are sort of mid-range. Are you finding opportunities to be opportunistic in the market?
Ali Athar: Yeah, absolutely. Not so much linked with the price of oil. I mean, 60s, mid-60s, Brent is not bad. It could be better. But it’s, we are in a place strategically where a lot of majors are exiting mature fields, they’re exiting regions, and we’re perfectly situated to take advantage of those opportunities. For example, the Angola opportunity that I mentioned. You know, majors are leaving, they’re leaving it behind. It’s not worth it for them. But for us, if we dedicate our resources and some investment, we can make those very profitable.
Brian Lantier: Excuse me if you’ve covered this, but in the Namibia project, is that just a gas field, or do you think there’s oil there as well?
Ali Athar: So, we currently sit on gas discovery. That’s what Kudu has always been. But being in the neighborhood where everyone is finding good quality and a lot of oil, the well that we’re drilling right now covers three to four stacks. What that means is, we’re trying to look for oil and gas. I mean, either one is great, but of course, we like liquids better.
Brian Lantier: Right. That’s good. And what are sort of the downside risks? What can go wrong? Working in finance, what keeps you up at night?
Ali Athar: Well, it’s an expensive well for a company our size. It’s about $90 million per well. And if you don’t file in anything, that’s $90 million at risk. But that’s the appetite. We feel very confident. And hence, it’s 100% BW Energy today with 5% NAMCOR, the national oil company. So, we feel very confident and we’re looking forward to some good news. We’ll see towards the end of the year, it will go one way or the other.
Brian Lantier: Yeah. And I guess sort of piggybacking on an earlier question, with your capital structure sort of with a concentrated holding, is that something that you’ll look to address at some point?
Ali Athar: I think our chairman, he has ownership in all these different entities at different levels. If I’m not mistaken, this may be his biggest shareholding, but it wasn’t the case a few months ago. It was being listed on the Oslo Stock Exchange, and some regulations, I can’t remember the term right now, but it required him to increase it. You’ll have to ask him to see if he wants to maintain that or reduce it. He’s very bullish about BW Energy. He loves this story. He’s super keen and excited about Namibia.
Brian Lantier: Great. Great. Any questions from the audience?
Audience Member: Your reserves and production, what percentage is natural gas and what percentage is oil?
Ali Athar: Production is all oil.
Audience Member: All oil?
Ali Athar: Yes, on the reserves, the 2P reserves are primarily oil. On the resources, I’ll have to get back to you. I’ll have to ask someone from subsurface.
Audience Member: I thought I saw on here that Namibia is natural gas.
Ali Athar: Namibia’s current reserves are gas; what we’re targeting and looking for is both oil and gas.
Audience Member: Are your ships under, well, you own several of them, but once they’re under lease, are they on long-term charter or are they on day rates?
Ali Athar: Very good question. It’s a mix of both. It’s a mix of both. Like Adolo lease is, we don’t own it. It’s a bareboat charter. Plus, it used to be O&M, Operations and Maintenance, by BW Offshore. We took over the O&M this year. The wellhead platform, the Valaris one that I mentioned, is going to be a lease from Minsheng. So, we’re working on that. The one in Golfinho, in Brazil, we own straight out. It’s a good mix.
Audience Member: So, what’s your favorite source to developing? You talked about the Angola field, that you’re much more efficient compared to the previous, like Chevrons, etc.
Ali Athar: It’s a combination. A lot of super majors, they look for big, big, big developments. And it’s like… they go, they develop something new, something big. Once they’re done with it, they have a different appetite than us. They leave, someone else comes in, and continues to get the juice out of those fields. Low cost, of course, these are huge companies that have a lot of overhead. Their way of doing things is very different.
Audience Member: I noticed in Gabon that the Gabonese or Gabon Oil Company owns 17.5%. The politics in Gabon have been fairly precarious recently. So, do you have anything that you want to assuage people’s concerns about your ability to continue in Gabon, and also the potential for a takeout?
Ali Athar: Sure, Gabon Oil Company in the Dussafu license has 9% working interest as a partner. And we have had no issues while working in Gabon. We’ve been there since 2017. Even with the recent change in the political arena, no change, no hiccups, no issues. So, we have nothing but positive things to say about Gabon. I’ve personally lived there, and I enjoy going there, enjoy working with the government, and they’re very supportive.
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