ZaZa Energy , ZAZA, Profile, Summary
ZaZa Energy Overview
CONSOLIDATING A DOMINANT POSITION IN THE EAGLEBINE
>High concentration of liquid rich assets in the Eaglebine and Eagle Ford trends
> ~110,000 acre presence within the Eaglebine and Lower Cretaceous window
> 7,600 acres surrounded by Devon’s recently acquired $6 billion GeoSouthern Eagle Ford assets
> Completed amendment to Eaglebine/Eagle Ford East joint venture agreement with large independent operator
> Accelerated timing
> Contiguous JV acreage footprint
> Immediate liquidity (~$17.8MM net cash) and production (~$17MM in PDP value)
> 6 well carry program
> Proven management team
> Significant experience with majors and large independents
> Collectively participated in the drilling and completion of over 5,500 wells
UNCONVENTIONAL ASSETS – POST CONVENTIONAL THINKING
> Technical evaluation of the juncture between the organic and carbonaterich Eagle Ford group and the silica rich Woodbine plays provided an operational thesis to make the Eaglebine an area of primary focus
> Analogous to mature Eagle Ford area
> Large potential resource play with stacked pay
> Oil/liquids rich in multiple zones
> Multiple zones act as an acreage multiplier
> Significant successful offset activity
MILESTONES - POSITIONED FOR RAPID VALUE CREATION-
> Secured a first mover advantage in the Eaglebine/Eagle Ford East play
> Consummated joint venture agreement with a large independent operator to develop Eaglebine/Eagle Ford East acreage
> Accelerated original joint venture agreement through an amendment to acquire additional production and further develop our acreage block
> Entered joint venture agreement with Sabine Oil & Gas LLC, a First Reserve portfolio company, to develop Sweet Home Eagle Ford acreage
> Strategically completed sale of non core Moulton Eagle Ford assets for approximately $38 million
> Reduced senior secured notes to $26.8 million from $100 million
> Drilled and completed 4 proof?of?concept wells during 2013
EAGLE FORD SHALE PROPERTIES
JOIN VENTURE
Sabine Oil & Gas LLC (“Sabine”) and ZaZa entered into a 75/25 joint venture for the development of ZaZa’s Sweet Home prospect in the Eagle Ford trend located in the liquids window of De Witt and Lavaca Counties, Texas
> Sabine carries ZaZa for two commitment wells and up to $750,000 of construction costs related to gathering and infrastructure in exchange for a 75% interest in 7,600 net acres and the Boening well. Sabine also carries up to
$300,000 of ZaZa’s expenses related to the extension and renewal of certain leases
>> If Sabine completes the first commitment well by February 15, 2014, ZaZa will transfer to Sabine a 75% interest in approximately 3,200 net acres and the Boening well
>> If Sabine completes the second commitment well by April 15, 2014, ZaZa will transfer to Sabine a 75% interest in the remaining net acres (4,400)
• Assuming the initial two commitment wells are successful in achieving production, participating interests in any additional wells drilled or lease
acreage acquired in the Sweet Home prospect will be shared 75% by Sabine and 25% by ZaZa under an Area of Mutual Interest (“AMI”) that will expire
on September 15, 2015
SWEET HOMEPROSPECT
> +200’ thick Eagle Ford pay section with >8% porosity in
thickest portion of organic shale
> Adjacent to and surrounded by Devon’s recently acquired $6 billion GeoSouthern Eagle Ford assets
>> Visible oil growth in low?risk, repeatable play
> ZaZa’s Boening well began with an initial production rate of 669 Boe/d
PROVEN BUSINESS MODEL
Initial Appraisal
• Regional geologic evaluation
• Depositional model, subsurface analysis, 3D seismic
• Hydrocarbon system, maturity, geochemistry
• Begin building subsurface model
• In?depth data analysis
• Analyze all area logs and rasters
• Analyze all nearby core data if available
• Maturity/TOC/XRD, mineral composition, fracability
• Detailed log correlations and custom petrophysics
Proof of Concept
• Drill pilot well, take full suite of logs and core
• Mud logging, ISO analysis, in?situ fluid composition
• Open?hole logging (rock properties, matrix mineralogy, clay
type, hydrocarbon saturation, stress analysis, rock mechanics)
• Core analysis
• Maturity/TOC/XRD, mineral composition, fracability
• Core calibrated to petrophysics
• Integration
• Detailed pilot to lateral rock properties calibration
• Custom frac design and execution
• Microseismic monitoring and tracer analysis
Capital Markets Access
• Strengthening balance sheet
• Optimizing capital structure for growth
• Transact to accelerate cash flow
Proven Management Team
Todd Brooks (Founder, Executive Director, President &
CEO)
> Founded ZaZa Energy, LLC in 2009. Led company into multiple scaled drilling and development JVs in the Eagle Ford and Eaglebine. Took ZaZa public via reverse merger in early 2012
> Principal of Neuhaus Brooks Investments of Texas, LLC, a company making strategic energy investments across multiple geographic regions
> Experienced land man, E&P investor and entrepreneur
> B.A. in Economics from Vanderbilt University; J.D. from South Texas College of Law
Ian Fay (CFO)
> Founding Partner at Odin Advisors LLC
> Served as Head of the Energy & Natural Resources Group | Americas at BNP Paribas
> Worked as Managing Director for RBC Capital Markets and Director of M&A for UBS Investment Bank
> B.A. in English from the University of North Carolina at Chapel Hill and Morehead Cain scholar
Kevin Schepel (EVP Exploration and Production)
> Executive Vice President of Exploration and Production since June 2010
> Served as Vice President of Worldwide Exploitation for Pioneer Natural Resources, Chief Petrophysicist for BHP Petroleum and 15 years as an advanced Geoscientist at Exxon
> B.S. from Michigan State University; Licensed by the Texas Board of Professional Geoscientists
Thomas Bowman (EVP Evaluation, Geology and Geophysics)
> Served in various roles such as Evaluation Manager and Exploration Advisor at Aspect Abundant Shale, Bass Enterprises, Fina Oil and Chemical and Tenneco Oil Co.
> Industry recognized specialist in identification of resource plays and the utilization of geophysical advancements; involved in the completion of over 1,000 horizontal resource wells across a majority of US shale plays
> B.S. from Montana College of Mineral Science and Technology; Licensed by the Texas Board of Professional Geoscientists
The Advantage
> Light Louisiana Sweet crude pricing offers premium relative to
WTI (~$4.50 per Bbl)
> Gas prices benefit from favorable BTU/GPM content and proximity to Houston area markets
> Quality infrastructure in place with available takeaway capacity
Approach
• Identify trends early / first mover
• Low entry cost
• Large contiguous acreage blocks
• Concentrated area focus
• High?value partnerships
• Oil?weighted properties
• Latest technology
Results
2014 Catalysts
• Viable exploration wells
• Eaglebine development moving forward
• Secure “regularway” financings
Sources: The Company, OxBridge Research, OTCKING, DailyStockDeals, OTCstockIQ
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