FY2018 Annual Results （ for 12 months ended March 31 st 2019 ） IDG Energy Investment Limited （ Stock code ： 650.HK ） June 2019
Contents About IDG Energy Investment 1 FY2018 Business Development 2 FY2018 Financial Highlights 3 Investment Strategy 4
IDG Energy Investment – A global energy assets investment and management expert An SEHK Mainboard listed company (650.HK) focusing on energy assets investment and management • Diversified investment: Direct investment + energy fund management • Business model: 1 Best-in-class energy assets manager Value chain synergy + proactive investment • Research-oriented: First class energy sector research • Sector focus: Oil and gas industry / LNG value chain • Regional focus: Inbound and cross-border opportunities in Quality energy assets portfolio 2 China and North America • Investment Deep dive into LNG value chain, discover new strategy: areas of high-growth energy sub-sectors • Energy sector veterans with substantial experience and track record Industry leading investment team 3 • Sophisticated and unparalleled deal execution capability • IDG Capital* : First-in-class investment performance and strong Strong shareholders’ endorsements 4 fundraising capability and financing capability • Foxconn*: Extensive business resources and global network *Including affiliated companies 3
Business Model – Focus on energy sector private equity investment Synergy / Financing and Fundraising Diversified Cross-border Investment Management Efficiency Economy of scale Industry financing Global perspective Value discovery Direct Investment in Energy Fund Energy Sector Management Equity Investment : Management Fee Value chain synergy Investment return M&A: Superior Returns Asset management Cost reduction Current Portfolio Cross-border investments in Upstream oil and gas assets LNG value chain 4
Milestones – From transition completion to rapid business development Renamed as “IDG Invested in JOVO, China’s first private Issued new shares to Foxconn and Formed a joint venture to provide LNG Energy Investment” LNG receiving terminal operator, marking raised HK$1.49 billion. Foxconn supply chain solutions, specializing in became the 2 nd largest shareholder the Company’s entrance into the natural LNG ISO container logistic services gas value chain 2017.01 2017.07 2018.01 2018.12 2016.07 2017.09 2018.02 2018.06 2018.11 • Reverse takeover offering of “Shun Cheong” Invested in a shale oil block Invested in one of the Invested in one of the most Entered into a Framework (650.HK), predecessor of the Company, raised in Eagle Ford in the US largest LNG export viable LNG export terminals Agreement with Jereh for the establishment of an HK$2.94 billion and spun off the hotel business terminals under in the US, deepening • Acquired an Inner Mongolia oil field asset development in Canada penetration into LNG value energy fund chain 5
Contents About IDG Energy Investment 1 FY2018 Business Development 2 FY2018 Financial Highlights 3 Investment Strategy 4
FY2018 Business Development Overview Fund raising Established an energy investment fund • In Nov 2018, entered into a Framework Agreement to establish an energy fund which the Company acts as the fund manager • Target AUM of RMB 3-5 billion, with Jereh as a cornerstone investor with commitment of RMB 1 billion Investment Strategized investments along natural gas and LNG value chains • In Jun 2018, invested AUD28.2 million in LNG Limited – an LNG export terminal project in the US • In Jul 2018, invested an addition of US$1 million in GNL Quebec – a Canadian LNG export terminal project • In Dec 2018, invested RMB39 million to establish JUSDA Energy – a JV focusing on LNG ISO container logistics solutions Portfolio mgmt Increased reserves in upstream assets, implemented cost control and enhanced portfolio value • Domestic oilfield grew in production and reserves while managed to reduce cost and revenue significantly raised • US shale oil asset in stable operation with cost control measures effectively in place • JOVO experienced a strong momentum in operations with a rising LNG import volume Portfolio exit Exit planning for quality portfolio • Monitoring the upstream cycle closely and seeking multifold exit plans for the US shale oil asset • In Sep 2018, JOVO filed for IPO in PRC, expected to generate attractive return for shareholders and the Company upon a successful exit 7
Diversified Business — Raising an energy fund and developing fund management business Industry angle Extensive LP base Energy Investment Fund Financial return Leverage effect Combined industry expertise to source investment targets with promising return 8
Portfolio – Upstream oil and gas assets & LNG value chain projects LNG Export Upstream oil Terminal in asset in China Canada LNG Export Terminal in the US LNG Receiving Terminal in China Shale oil assets in LNG ISO Container Eagle Ford Logistics 9
Portfolio – LNG Limited (LNG export terminal in the US) Magnolia LNG – One of the most viable LNG export terminal projects in the US The project's base capacity of 8 million ton per annum has received all approvals from the US regulators, including the final decision and commencement permit by the Federal Energy Regulatory Commission (FERC), and FTA and Non-FTA export permit by the United Government States Department of Energy (DOE) approval complete The project capacity has been expanded to 8.8 million ton per annum – DOE's FTA export (8.8 MTPA) permit has been obtained, and FERC has officially authorized and commenced the approval process for the expansion works The project is connected to the Louisiana Gas Transmission Line (KMLP) of Kinder Morgan, Pipeline the largest natural gas pipeline operator in the US. The pipeline is well connected to the secured and shale gas core basins such as Marcellus, Utica and Haynesville through multiple major abundant gas pipelines sources The project's general contractor, KSJV, is a JV formed by KBR, a world's leading contractor and SK E&C. KSJV will provide all procurement, manufacturing, shipping, installation, EPC contractor construction, commissioning and initial commencement services. The turn-key EPC secured contract guarantees the project's successful construction and the cap of maximum cost The project adopts LNGL’s OSMR patented liquefaction technology which significantly OSMR reduces feedstock gas loss and CO 2 emissions, improves liquefaction efficiency, and patented reduces production costs technology Stonepeak Partners, a well-known US infrastructure fund, has promised a US$1.5 billion Financing equity investment in the Magnolia LNG project to guarantee the financing for the guarantee LNG Limited – Magnolia LNG Export Terminal project's final investment decision (FID) 10
Portfolio – GNL Quebec (LNG export terminal in Canada) One of the largest LNG export projects under development in Canada Connecting to the low-cost gas sources in NA with distance advantage to the end markets Project Overview Project Highlights Significant Progress in Social and Environmental Impact Assessment (SEIA) has been Planned Annual Capacity 11 mmtpa Project Approval submitted to Canadian Environmental Assessment Agency (CEAA) Terminal Location Quebec, Canada and will be approved soon 750km, connecting Quebec export terminal and The project has received export permit issued by Canada National Pipeline Construction TransCanada pipeline (TCPL) Energy Board (NEB) Low Cost Gas Source The existing pipeline, TCPL, and a proposed pipeline of the project Pre-FEED: Entrusted to Bechtel, Completed connected to low cost gas source in AECO. Gas price in AECO is 40%- Early stage of EPC FEED: Assessing LOI submitted by each 50% lower than Henry Hub companies for screening Low Cost Agreement signed with Hydro-Quebec for hydroelectricity Planned FID period 2021 Hydroelectric Supply Using hydroelectricity to reduce operating cost and greenhouse gas (GHG) emissions to avoid potential carbon taxes of $40-80/ton GNL Quebec – Energie Saguenay LNG export terminal Easy accessibility to The project is 5,000-6,000km away from the major European European and Asian market, 3,500km closer than that from the Gulf of Mexico markets Continuous Progress Demand from potential buyers in Europe and Asia to cover 100% in Marketing liquefaction capacity Round D Financing The D round financing quota of the project has been confirmed to Proceed Smoothly be funded by the investors and the local government 11
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