Hello, and welcome to Virtual Investor Conferences. On behalf of OTC Markets, we are very pleased you have joined us for our Oil and Gas Conference. The first presentation of the day is from Sintana Energy. Please note, you may submit questions for the presenter at any time. You can also view a company's availability for one-on-one meetings by clicking Book a Meeting. At this point, I am very pleased to welcome Eytan Uliel, President and Executive Director of Sintana Energy, which trades on the OTCQX Best Market under the symbol SEUSF, and on TSXV and AIM under the symbol SEI. Welcome back, Eytan.
Thank you very much. Well, good day, everybody, and thank you for the time. Today, I am going to spend about 20 minutes taking you through our company, and hopefully leave a bit of time at the end for some Q&A. Jumping straight into it, for those who are new to Sintana Energy, we are an oil and gas exploration company. We focus on frontier exploration in high-impact locations. As you can see on that map, we have a portfolio that spans the Atlantic margin. Our portfolio is centered on some assets we hold in Namibia. We have some very exciting assets in Uruguay, and we have an initial asset in Angola as well. It is exposure to three active regions at complementary stages of progress.
A critical part of the Sintana business model is that we are capital efficient, and by that, what we mean is we try and set ourselves up in all of our assets that we have exposure to the upside, but we have minimal capital requirements. We achieve that by partnering with industry leaders and having them essentially pay the bills on our behalf, so carrying us through these projects. The portfolio is anchored by an interest we have in the Mopane complex. I will talk a little bit more about that later on, but Mopane is a project on PEL 83, which is being operated by TotalEnergies. It is a world-scale asset, and it is on track for development. So, unlike most exploration companies that have pure exploration portfolios, ours is anchored by this world-class project on its way to development.
I will explain to you the value implications for that, but essentially, it means that Mopane underwrites the entire value of our company at the moment, and if you want to think of it in that way, everything else I will talk about is essentially free upside. Finally, the other thing I would like everyone to take away from today is that where we are is at a little bit of an inflection point. There is a huge amount of activity coming up across our portfolio as we head into the end of this year and in 2027. As I mentioned, it is predominantly partner-funded drilling and other activities, and so, we are catalyst-rich in the coming six months or so. Right. Just before I continue, a little bit of market information for those who are not familiar.
As mentioned at the start, we are traded on three exchanges, OTC, AIM, and Toronto Venture Exchange. We have about 560 million shares out. Market cap at the moment is around CAD 200 million, $150 million. We have a healthy cash position, zero debt. Our cash position is more than enough to meet all of our financial obligations for the foreseeable future. As I mentioned already, much of our capital need is covered by partners. We are reasonably widely held, but there is a reasonable amount of insider and major shareholder participation. I, the CEO, we are major shareholders in the company in our own right. That is a sort of a canter, if you like, through the market side of things. Let us talk about the investment proposition here, before we go through the assets.
If you are interested in investing in high-quality frontier exploration production opportunities, the challenge most investors have is that these types of opportunities are typically only available to industry insiders, to the majors, the international oil companies, the national oil companies. Access for an ordinary, I say ordinary in inverted commas, public investor is reasonably limited, and that is because, first of all, you cannot just wade into these things. Regulators control them. They require you to be able to demonstrate capability. You then need large amounts of capital. This is not a business where you can do things on a shoestring. Large amounts of capital are needed, and you need to have a very long-term investment horizon because projects in this industry can take decades to return value, and you need to have a very high risk tolerance.
You will often hear in the oil and gas industry, people talk about chance of success, and even the best exploration prospects are one in three. You need to have the ability to withstand those risks. These are not things that most public investors can or are able to do. As a company, what we have tried to do is address this investment challenge. We exist to provide public investors with a unique, otherwise not accessible exposure to these sorts of high-impact assets, and we focus on the world's largest, most exciting frontier oil and gas locations. I will not read them out to you, but essentially, we are able to get assets because we do have the capability and the credibility to do so.
We have technical knowledge, we have commercial ability, we have people who have been at this for a long time, and so we can get a seat at the table. Once we are at the table, we have the capacity and the proven ability to form partnerships with the majors and the IOCs. Our shareholders get to benefit from all the expertise and resource, but as I have mentioned, the majors are paying most of the costs here, and that is what enables us to be capital efficient. Being capital efficient, in addition to meaning that you can punch well above your weight, also means you can hold things for the long term. If someone else is running the project and paying all the bills, you are not under time pressure. You cannot be cash called out of existence.
You then have a lot of flexibility as to how you approach monetization and generating investment return for your shareholders. The final thing is we have a portfolio, and as you will see on the immediately next slide, our portfolio is, we would say, unique. It is certainly a market-leading portfolio, and having a portfolio means that you are not exposed to single well or single project outcomes. A lot of our peers, if you follow the sector, might have an asset on which a well is going to be drilled, and everything lives or dies on the outcome of that single activity. We have a portfolio where we have multiple assets, multiple things going on at any given moment, and that means, as noted there, multiple shots on goal. We are not entirely dependent on single asset or single event outcomes.
In terms of our portfolio, just to have a quick canter through it, as I mentioned at the start, Namibia is where the portfolio is centered, and in Namibia, we have interests in seven assets, first being PEL 83, which I mentioned earlier, which is the home of the Mopane discovery, and then other assets spread across the Orange Basin and the Walvis Basin. We have one onshore asset in the Waterberg Basin. As you can see on that table, the assets have a mixture of operators. We have different-sized interests in each. In Namibia, all of our interests are what we would say are indirect interests, where we are partnered with other people and with a local operator. We then have two assets in Uruguay.
One is in a partnership with Chevron, the other we are still 100% direct in that asset, and we have a small foothold asset in Angola in a very, very exciting project called KON 16. So, that is our portfolio. It is broad, it is diversified across basins, across resource type, across operators. But each of the assets in their own right is interesting and has high potential.
If I try and pass this down, though, we could spend hours talking about each asset, but if you look across our portfolio and you are sort of looking at this as what are the key value drivers over the coming 12 months from an investor point of view, we would say right at the moment, there are three things that offer the best chance for material value creation over the coming 12 months, and I will talk about these in a little bit more detail. But in summary, PEL 83, Mopane, there is upcoming drilling and reserve enhancement as an outcome of that drilling. That is happening as we speak. There is PEL 90, where our partner there, or the operator there, Chevron, is planning a high-impact exploration well to commence before the end of the year. So, that is another one, near-term drilling activity going on.
Uruguay has emerged very rapidly as the next sort of high-impact, high-interest frontier destination in the Atlantic margin. Again, there is seismic, there is upcoming drilling, and there is corporate activity there. If you were trying to make sense of our portfolio and high-grade the things that right at the moment are where the real upside sits, it would be, in our view, those three key things. That is not to say the rest of the portfolio is not interesting. It is a bit like asking someone to pick their favorite child. We love them all equally. At the moment, these are the three that have the most high-impact near-term activity coming up. If I turn then to talk about PEL 83, which I have mentioned a few times already. PEL 83 is a license that sits right at the heart of the Orange Basin in Namibia.
It is a license that, until recently, was operated by Galp, but then they have farmed out 40% of that to TotalEnergies. TotalEnergies has taken over operatorship, and they have commenced an initial three-well appraisal and exploration program. They have been very bullish about what they see in this license and are targeting an FID by 2028. That is a final investment decision. That is on the basis of the prior exploration history here from Galp. Five exploration wells were drilled, 100% success rate on all five. At the moment, in Galp's published statements, they are saying they see a 1.3 billion barrel 3C resource on the block. That is material. That is world scale, out of a sort of an estimated oil in place at the moment of up to 10 billion barrels. One of the early test wells was flow tested, 14,000 barrels a day.
It really is a very material, very exciting project, and moving forward now under the stewardship of TotalEnergies, who are arguably one of the best deepwater operators in the world. We happen to have a 4.9% indirect interest in the project, and our 4.9% is 100% carried. What that means is we are not expecting to have any costs associated with activity upcoming on the block, but we do maintain full exposure to the upside that may come from that activity. This next slide is borrowed from some of TotalEnergies' published materials that they use in their various investor conferences. What they have said publicly is they are seeing the prospect of a development on this block, as I said, FID by 2028 and maybe first oil in the early 2030s.
They are saying they can see this block producing 200,000 bbl/day. Low-cost production under $20 / barrel, CapEx and OpEx. More importantly in the near term, they have been explaining that they will be doing a three-well campaign, one exploration well and two appraisal wells. The exploration well is targeting an expansion of the resource base at Mopane. Again, you can see on the slide where that exploration well is and what the potential upside to the resource base there may be. The rig for the drilling of that well is on site at the moment. Activities have commenced. The well is expected to intersect with the target reservoirs sometime around the middle of December. This is real near-term stuff, the impact of drilling on this project and therefore on us as a company.
It's actually really exciting to see this moving ahead at such pace and with such enthusiasm from the operator. The other asset that has near-term drilling coming up is PEL 90. PEL 90 is a license to the outboard of Mopane, as you can see on the map. It's also immediately north of the Venus discoveries, which is the other big discovery in Namibia, also operated by TotalEnergies. PEL 90 is operated by Chevron, and Chevron have been very public that they're planning an exploration well there called the Nabba 1X, and they'd like to see that get underway before the end of the year. That's not too long to go. Other partners on the well include QatarEnergy and Equinor, who just farmed in recently.
For those who follow the company, as part of our capital-efficient business model, we recently entered into an agreement with Chevron where they have taken back the percentage interest we had in the license and swapped that, if you like, for a series of long-term cash payments and what is effectively a royalty exposure. We've maintained a high degree of exposure to the upside that will come from this well, both from the immediate upcoming drilling and the longer-term potential of the block, but we have no more capital requirement at all. That's sort of emblematic of the business model, if you like, of Sintana and what we're trying to do. Moving then quickly to Uruguay. In Uruguay, we have two blocks, AREA OFF-1 and AREA OFF-3. They are as marked on the map.
We were the first people to enter Uruguay in 2020, predating the Orange Basin conjugate margin discoveries. Both blocks are really exciting blocks. AREA OFF-1, we did our first round of technical work. We established multi-billion barrel prospectivity. On the back of that work, we then ran a farm-out process. We brought Chevron in as the 60% partner and now the operator. As we speak, Chevron are gearing up for a second season of 3D seismic acquisition. Again, real fieldwork that delivers technical outcomes and has direct implications for value. OFF-3, we own 100% of that block. We're right in the middle of a farm-out process there. We're also doing some really interesting technical work on the block. But Uruguay as a whole is a really, really fascinating case study, if you like, of how the oil and gas industry works.
As I said, we were the first people in Uruguay in 2020. There were no other license holders. Uruguay, geologically, is the direct conjugate margin analog of the Orange Basin in Namibia. As soon as the big discoveries were made in Namibia, Uruguay became really interesting to all the majors, and obviously that's why Uruguay sits so nicely as part of the Sintana portfolio. What we've seen in the last several years is effectively a stampede of international majors into Uruguay. That began when Chevron farmed into our block. Shell have taken position in three blocks. Chevron has now farmed into another block. QatarEnergy then, APA, sorry, took positions in two blocks. They've farmed out one of their blocks to ENI, who've also gone into another block. QatarEnergy have entered Uruguay.
The upshot, as you can see on this map, is that Uruguay is now 100% licensed. It is licensed to only oil and gas majors and multinationals and IOCs. If you want to access Uruguay, the only company that offers investor access to Uruguay is us. That is a fairly unique proposition. All of these various companies are planning work. As I said, on our block OFF-1, 3D seismic acquisition commenced earlier this year. It has been on a break for various reasons to do with the Uruguayan fishing season, but second season of seismic is about to kick off. On the APA ENI block, there is an ultra-deepwater well which is planned for sometime towards the end of next year. That will be the first new drilling in Uruguay since 2016 and has the capacity to be really transformative.
Seismic and drilling activities are being planned on the other blocks as well. It is a very exciting place, lots of upcoming activity. If I turn very briefly, I guess, to the value proposition and the investor case for Sintana. We would say, as I mentioned at the start, that the value of the Mopane asset, as is, as it stands today, without any further exploration success, et cetera, as is, more or less covers the entirety of our current market cap. It is not just me saying that. We have four analysts who cover the stock. You can get their research. They have done all sorts of valuations and different ways of assessing it. That is the core value proposition, unlike many of our peers, is we have a tangible valued asset that underwrites everything. Then on top of that, we have all these other things coming.
Not everything is going to work as we plan. Not every exploration activity will succeed, but we have this portfolio of opportunities ahead of us. As each of them happens and as things get realized, we hope to see the value build up. There is a lot of opportunity there, sufficient to enable us to say quite credibly that over this coming years, we can see at least a pathway to a fivefold increase in our market cap, which ultimately is what we are in this for. I have spoken about this already, so I will not belabor it, but lots of key upcoming catalysts, drilling activities on several blocks, seismic happening in Uruguay, commercial activities across the board. Lots of catalysts, which is really what feeds market interest in a company like ours.
I will just close before I take some of the questions, because that is probably what is more interest to many people. Our investment case is quite simple. Unlike pure play exploration companies, we say that the downside of Sintana is not zero, because we have an interest in Mopane, which is a development project moving forward, so that gives a bit of a backstop. The other element there is we are not exposed to huge balance sheet requirements. We have partner capital funded arrangements in place. The upside is very large, driven by the strength of the portfolio and the asymmetry of the exposure. Again, limited capital gives large outcome potential. We have done this. This is what we do. We have successfully done this on several of the assets. We have done this in our prior lives before we came to Sintana.
We have a management team and a board, and shareholders are very supportive. We look forward to delivering on our objectives over the coming 12 months. That will do. I have still got eight minutes left, so I will try and cover up as many of the questions as I can. Question number one, Mopane is targeting FID in 2028. What has to happen between now and then to get there? Well, essentially that is TotalEnergies' decision. They are the operator of the project. As I say, they are looking at three new wells, one exploration and two appraisal, that will help them to define the scope of the project, to assess whether they feel it is economically viable. Although, given the metrics that they have been speaking about, hard to see how it would not be.
They then have to essentially design and cost it, and there is some negotiation that has to happen with the Namibian government, which is what they are currently going through in relation to their other project called Venus, where they have a target FID on that even sooner. Nothing is certain in this world, but we are fairly confident that they will get there. A lot of hard work and a lot of planning and a lot of design, et cetera. But the core discoveries have already been made, so hopefully the project grows a lot more beyond that. But core discoveries of the scale necessary for the FID already exist. The next question, "In Uruguay and OFF-3, are there any leads which appear to overlap with neighboring blocks? In the event of a discovery on a neighboring block close to the OFF-3 boundaries, what are the rules regarding unitization?
APA have indicated a plan to drill their first well." Okay, and do I know where that will be? We are in the middle of some technical work on OFF-3. There are these deep basin floor fans on block seven, which is the outboard block from area OFF-3, that appear to come up onto our block. That is super exciting because that is the sort of high impact, elephant hunting stuff that the majors are very interested in. Certainly what has driven the big discoveries in Namibia. So we are right in the middle of the technical work needed to properly delineate that so that we can throw that into our farm-out process, which, as I said, is ongoing. But in the event of a discovery, the rules in Uruguay are very simple. We can unitize with our neighbors.
I mean, you have got to go through a regulatory process, but there is nothing that prohibits it. There is nothing that stops you doing it. That would make a huge amount of sense given that the geological structures do not necessarily respect block or international boundaries. The well that APA are planning to drill is ultra-deep water. It is towards the most outboard section of the block, targeting the very deep basin floor fans. If you know anything about Uruguay's oil and gas, in 2016, TotalEnergies actually drilled a well called Raya-1 on that block at more or less at that location. The general prognosis is that Raya-1, which at the time was a world record for deepwater drilling, was not drilled deep enough. It did not reach the basin floor fan targets.
Fundamentally, what APA will be doing is re-drilling, drilling a lookalike of Raya, but just going a lot deeper. That is what they are targeting there. Next question. "Your presentation highlights a clear path to creating asset value, acknowledges the share price has lagged progress." That is very true. "As we approach potential monetization events, how will management translate asset value into shareholder returns? Specifically, would the board consider distributing a meaningful portion of proceeds through dividends or buybacks, rather than reinvesting in new exploration assets?" That one is very easy. The answer is absolutely yes. We are in this to make money for shareholders. How you make money for shareholders ultimately is you return capital to them, whether through a dividend, a buyback, et cetera. We need to keep the company going.
We do want to keep pushing into new areas, but only if those areas meet our technical standards, only if they offer the opportunity for the same capital-light, capital-efficient approach. With that in mind, if we hit the ball out of the park and we saw a massive monetization event, it would be the first thing we do, is to return those proceeds to our shareholders in some way. Next question, "Is there any chance of leapfrogging Venus in the development race?" Answer to that is I have no idea. Those are TotalEnergies'. TotalEnergies is the operator. At the moment, they have indicated the sequencing is Venus followed by Mopane. It is not out of the question, depending on how the drilling goes, potentially do the two at the same all of their emerging province, and they essentially have a foot on the two main for one or two more.
When should we expect the fast-track 3D seismic results from Uruguay OFF-1?" We are anxiously awaiting on that coming back from the seismic processors, and Chevron puts it through their machine, we hope before the end of the year. So near term. That is it. I think we are pretty much out of time. I see many, many more questions. I am told that we will receive these questions. We make a point of trying to respond to everything. We are a very open company in terms of how we talk about things and our attitude to our shareholders. We will endeavor to get back to everyone with written responses to the list of questions we have received. If I can thank everyone for your time. It is a very exciting upcoming time for Sintana Energy.
Certainly myself, Robert, the CEO, everyone who works in the company, we are super enthusiastic at the moment, super excited about the coming 6- 12 months, and hopefully we will have opportunity to return to forums like this and share good news as we go forward. Thank you very much.