MOG Investor Presentation

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Transcript of MOG Investor Presentation

Page 1: MOG Investor Presentation

dgscdgvhf May 2014 Investor Presentation

Page 2: MOG Investor Presentation

The contents of these presentation materials and the accompanying verbal presentation (“Presentation Materials”) has not been approved by an authorised person within the meaning of the United Kingdom Financial Services and Markets Act 2000 (“FSMA”). Reliance on the Presentation Materials for the purpose of engaging in any investment activity may expose an individual to a significant risk of losing all of the property or other assets invested. Any person who is in any doubt about the investment to which this presentation relates should consult a person duly authorised for the purposes of FSMA who specialises in the acquisition of shares and other securities.

These Presentation Materials may contain information that is confidential, legally privileged or otherwise protected by law. Unauthorized use, copying, disclosure, dissemination or distribution of any information contained in these Presentation Materials may be unlawful. These Presentation Materials do not comprise an admission document, listing particulars or a prospectus relating to Mediterranean Oil & Gas Plc (“Company”) or any of its subsidiary undertakings (as defined in the Companies Act 2006) (together, the “Group”).

The Presentation Materials do not constitute or form part of any invitation, offer for sale or subscription or any solicitation for any offer to buy or subscribe for any securities in the Company (“Company Securities”) nor shall they or any part of them form the basis of, or be relied upon in connection therewith or act as any inducement to enter into, any contract or commitment with respect to Company Securities.

These Presentation Materials do not constitute a recommendation regarding any decision to sell, hold or purchase Company Securities. These Presentation Materials are for informational purposes only and must not be used or relied upon for the purpose of making any investment decision or engaging in any investment activity. Neither the Company, nor any other member of the Group, nor any of their respective directors, employees, agents or advisers makes any representation or warranty in respect of the contents of the Presentation Materials or otherwise in relation to the Group or any of its businesses. In particular, no representation or warranty, express or implied, is made as to the fairness, accuracy or completeness of the information or opinions contained herein, which have not been independently verified. The information contained in these Presentation Materials is provided as at the date of this presentation and is subject to amendment, revision and updating in any way without notice or liability to any party.

These Presentation Materials contain forward-looking statements, including in relation to the Company proposed strategy, plans and objectives. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the control of the Group that could cause the actual performance or achievements of the Group to be materially different from such forward-looking statements. Accordingly, you should not rely on any forward-looking statements and the Company accepts no obligation to disseminate any updates or revisions to such forward-looking statements.

These Presentation Materials do not constitute an offer of transferable securities to the public for the purposes of section 85 FSMA. These Presentation Materials are exempt from the general restriction set out in section 21 FSMA on the communication of financial promotions on the grounds that they are directed only at: (i) persons whose ordinary activities involve them in acquiring, holding, managing and disposing of investments (as principal or agent) for the purposes of their business and who have professional experience in matters relating to investments or otherwise are “investment professionals” for the purposes of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”); (ii) are persons who fall within Article 49(2)(a) to (d) of the Order; or (iii) otherwise fall within an applicable exemption within the Order (all such persons together being

referred to as “Relevant Persons”). Persons of any other description, including those that do not have professional experience in matters relating to investment, should not rely or act upon the Presentation Materials. Any investment, investment activity or controlled activity to which the Presentation Materials may ultimately relate is available only to Relevant Persons and will be engaged in only with such Relevant Persons.

The Presentation Materials are confidential and being supplied to you solely for your own information and may not be reproduced or distributed to any other person or published, in whole or in part, for any purpose whatsoever. No reliance may be placed for any purpose whatsoever on the information contained in these Presentation Materials or the completeness or accuracy of such information. In particular, these Presentation Materials do not constitute an offer of securities for sale in the United States, Australia, Japan, the Republic of South Africa, the Republic of Ireland or Canada or in any other country outside the United Kingdom where such distribution may lead to a breach of any legal or regulatory requirement, nor must they be distributed to persons with addresses in the United States, Australia, Japan or the Republic of South Africa, the Republic of Ireland or Canada. It is the responsibility of each recipient outside the United Kingdom to ensure compliance with the laws of and regulations of any relevant jurisdiction. The Company Securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "Securities Act"), or the securities laws of any state or other jurisdiction of the United States and may not be offered and sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.

The figures and projections included in these Presentation Materials are based on internal assumptions made by the directors of the Company and have not been reviewed or verified as to their accuracy by a third party or independent accountant. The information contained within is subject to updating, completion, revision, verification and further amendment. While the information contained herein has been prepared in good faith, the Company’s directors cannot give any representations, or warranties (express or implied) as to, or in relation to, the accuracy, reliability or completeness of the information in this presentation, or any revision thereof, or of any other written or oral information made available to any interested party or its advisers and liability therefore is expressly disclaimed. Accordingly, neither the Company nor any of its shareholders, directors, officers, agents, employees or advisers take any responsibility for, or will accept any liability whether direct or indirect, express or implied, contractual, tortuous, statutory or otherwise, in respect of the accuracy or completeness of the information or for any of the opinions contained herein or for any errors, omissions or misstatements or for any loss, howsoever arising from the use of these Presentation Materials. In furnishing these Presentation Materials, the Company does not undertake or agree to any obligation to provide the recipient with access to any additional information or to update these Presentation Materials or to correct any inaccuracies in, or omissions from these Presentation Materials which may become apparent.

Reliance on the communication set out in these Presentation Materials for the purposes of engaging in any investment activity may expose an individual to a significant risk of losing all of their investment or of incurring additional liability. Any individual who is in any doubt as to the investment to which these Presentation Materials relate should consult an authorised person specialising in advising on investments of the kind referred to in these Presentation Materials.


Important Notice

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Mediterranean Oil & Gas Value Proposition


Opportunity for value creation from potential

game changing


Portfolio of production,

development and

exploration projects

Management with extensive

E&P and operational experience

Supportive investor base

Production revenues

Value Creation


Opportunity Portfolio Management Investor Base Cash Flow

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Results Delivering on Our Promises


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Oct 2011 First gas at Guendalina field

Aug 2012 Law approved resulting in exemption for Ombrina Mare from offshore ban

Feb 2013 Completion of sale of 75% of offshore Malta Area 4 PSC to Genel Energy plc and established an AMI for offshore Malta, Libya and Tunisia

Recent Track Record


Unlocking the Potential of Mediterranean Oil & Gas

June 2013 Entry into exploration study agreement with Cairn Energy PLC to explore offshore Malta Area 3 Blocks 1, 2 & 3

Jan 2013 EIA Commission ruled positively in favour of our submission on the Ombrina Mare oil and gas field development EIA

Apr 2014 Preparing to spud exploration well in offshore Malta Area 4 – well Hagar Qim 1 targeting 27MMboe most likely unrisked resources net MOG

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Gas production


Profit or Loss from Operations

Net operating cash flow

Average gas price

Working Capital

> 1.0 Bcf compared to 1.7 Bcf in 2012

> €8.4 million down from €16.3 million in 2012

> €4.4 million loss down from €4.1 million profit in 2012

> €1.2 million reduction compared to €6.5 million increase in 2012

> $11.2/Mscf ($12.0/Mscf in 2012)

> Zero debt and cash of €12.4 million (YE 2012 cash €8.7 million)

2013 Financial Highlights

2013 Financial Performance negatively impacted by production challenges at Guendalina Field


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Our team Capable From Start to Finish


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Board of Directors

Over 35 years experience in the energy, power and service industries. Former CEO of National Power plc, Brown & Root Ltd, and Kvaerner Engineering & Construction Ltd. Currently chairman of Regal Petroleum plc, senior independent director of Sterling Energy plc. Formerly held a number of non-executive roles both inside and outside the oil and gas sector.

Keith Henry Chairman

Over 24 years of global exploration, development, operations and business management experience with Chevron Corporation, including Senior Vice President of Operations for Saudi Arabian Chevron, Chief Strategist for Chevron Corporation, and management and technical assignments in Angola, Australia, Kazakhstan, UK and USA.

Bill Higgs Chief Executive

Over 32 years of experience in oil & gas geophysics, exploration, development, production, operations and business management. Formerly at ENI, Coparex, ELF, Enterprise Oil, Shell and professor of Applied Seismology at Basillicata University in Italy. He is a board member of the Associazione Mineraria Italiana.

Sergio Morandi Chief Operating Officer

A small team of big operators


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Board of Directors

Over 30 years industry experience in many key hydrocarbon basins. Currently Vice President Upstream Research at IHS CERA. Involved in international exploration and production with Britoil plc and Enterprise Oil plc, including VP of Exploration & Production, President Enterprise Oil USA, Chief Geologist and Italy Exploration Manager.

Peter Jackson Non–Executive Director

Over 18 years experience in the energy sector, including Chairman of Enel SpA. Currently Chairman of Assoelettrica and Telit Communications plc; Vice-Chairman of Idea Capital Fund SGR; and Non-Executive Director of Cadogan Petroleum plc. Formerly elected to the Italian Parliament Chamber of Deputies.

Enrico Testa Non–Executive Director

A small team of big operators


Over 18 years experience in international investment banking and corporate finance. Most recently as a Director, Global Banking at Deutsche Bank, Hong Kong. Previously at the ABN AMRO Rothschild global equity capital markets joint venture, in London and Sydney.

Chris Kelsall Finance Director

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Regional Operator

Experienced team


Shareholder support

Debt Free

Capacity to invest in:

Asset maturation Small capital programmes

Balanced Portfolio

Grow production

Move resources to reserves


Frontier exploration Asset maturation Good reservoir management

Growth Opportunity

~500 million boe (likely unrisked)

Ability to de-risk opportunities


Our key strengths for growth Capable and Credible from Start to Finish

Competitive Advantage

Financial Strength

Resources Factory

Attractive Prospective Resources

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Intentionally left blank

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Our Assets Reliably Delivering


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Our Assets

Gas exploration, development & production:

Non-operated gas production Asset delivers positive cash flow for the Company Non-operated gas discoveries with upside potential Goal is to increase the priority of these developments in the overall portfolio of ENI

1 Northern Adriatic

Gas exploration, development & production:

Geographically spread low risk production and exploration opportunities Goal is to increase returns on assets to cover operating costs for the Group

2 Onshore Italy

Oil & gas exploration & development:

100% operated oil discovery with upside potential Goal is to achieve production concession award from Ministry of Economic Development

3 Ombrina Mare

Oil and gas exploration:

Exploration prospect on trend with Val D’Agri and Tempa Rossa fields Technically challenging exploration well that is waiting for EIA approval of the well proposal

4 Southern Apennines

Oil and gas exploration:

Southern margin of proven hydrocarbon province Modern seismic data required to unlock the exploration potential

5 Offshore Malta Area 3

Oil and gas exploration:

Unproven frontier exploration Presence of reservoir and hydrocarbons source are key risks Planning to drill 1st exploration well in 2nd Quarter of 2014.

6 Offshore Malta Area 4


Oil & gas exploration, development & production

Principles are on a first right and 20% (MOG) to 80% (Genel) split

8 Genel AMI

Gas exploration:

Triassic Bunter Sandstone play similar to North Sea southern gas basin. Structural geometry and hydrocarbon charge are the key risks.

7 Onshore France

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* Net Mediterranean


Guendalina field provides ~75% of revenues

Delivered over 2.5 Bcf net production since start-up

Delivers net cash flow for small capital projects

Additional gas discoveries (~22 Bcf) with upside potential

Goal: Work with ENI to increase priority of development for these assets

Exploration, development and production

AC 35 AG with 20% WI

Guendalina: 3.7* Bcf 2P

AC 19 PI with 15% WI

Aida: ~12* Bcf 2C

Attila & Dorotea: ~9* Bcf 2C

Dorella: ~16* Bcf 2E

AR 81FR with 15% WI

Isabella: ~1* Bcf 2C

Production Concessions & Exploration Permits


Northern Adriatic Gas Play Production and Development Assets

0 10 20 km

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Onshore Italy Foredeep Gas Play Production and Development Assets


Low risk production and exploration opportunities

Sold13 non-core exploration and production concessions

Next Steps: Explore ~1.6 Bcf of best estimate unrisked prospects

Place ~1 Bcf 2P reserves on production

Goal: Maximise net revenue from these assets Faseto exploration expected to be drilled in H2 2015

Exploration, development and production


5 Concessions

1 Permit


2 Concessions

1 Permit

Net Production:

~400,000 scf/d

Production Concessions & Exploration Permits

0 100 200 km

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Faseto exploration prospect Proposed exploration well – H2 2015

Target: Middle Miocene gas play

Trap: Fault bounded structural trap

Reservoir: Marnoso-Arenacea Fm sandstones

Expected hydrocarbons: Gas & Condensate (CGR ~40)

Areal extent: ~1.13 km2

Vertical closure: ~30 metres

Total Depth: 1,800 m TVD

Prospective Resources:

~1.7 Bcf mean unrisked


* Net Mediterranean


Torrente Baganza Field Faseto Prospect


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OBM 1 OBM 2 &


Oligo-Miocene Carbonate Reservoir Depth Map

Field Development Plan

5 to 9 wells, 1 platform, 1 FPSO

Expected production:

~5,000 bo/d rising to ~10,000 bo/d

Ombrina Mare Oil & Gas Play Production and Development Assets


100% operated oil and gas discovery with upside potential

Next steps: Approval of AIA and EIA

Award of Production Concession

Drill pilot well to validate reserves, prove upside and complete as new deviated producer

Exploration & development

BR 269 GC with 100% WI

25.4* MMbo 2C oil resources

17-19° API

8.0* Bcf 2C gas resources

99% methane

Production Test:

Stabilised flow after light acidification:

900 to 1,000 bo/d

Exploration Permit

* Net Mediterranean

0 5 10 km

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‘AIA’ Procedure: Base Case Time Line




Ministry of Environment

3rd Parties (citizens, associations, groups)

• AIA required ahead of finalising decree for EIA • Technical work and AIA documentation completed • Submitted in May to Ministry of Environment • Process is similar to EIA procedure • After technical approval a ministerial decree is signed • Award of AIA and EIA can be achieved by end-2014





Publication of AIA

Deadline for submission

of observations

Analysis and Response to Observations

Submission of AIA



Start of AIA Procedure

Decision on AIA

Mid-May 2014

End-June 2014

End-July 2014

Mid-Nov 2014

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Ombrina Mare Strategy


Secondary Reservoir (Cretaceous)

Top Seal

Main Reservoir (Oligo/Miocene)



ODT @ 2133m

Cretaceous OWC @ 2223 m



Conduct production test in Cretaceous (currently 1 to 17 MMbo Contingent Resources)

Drill a second production well in Oligo-Miocene towards the north and with toe below current Oil Down To (ODT) to test Oil Water Contact (OWC) in Oligo-Miocene and assess oil potential away from the crest of the structure.

Appraisal Strategy

Drill appraisal well to increase reserves

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Exploration Assets

* Net Mediterranean


Monte Grosso exploration prospect on trend with proven fields

Technically challenging well - 6,800 m and over 400 days

Renewed support from our partners to progress

Seeking local government approval of EIA


Spud well in 2H 2015


Serra San Bernardo with 23% WI (Operator); ENI 63% & Total 14%

Apulian Platform sub-thrust play

Prospective resources:

~49* million boe mean unrisked

Exploration Permits

Southern Apennines Oil & Gas Play

0 10 20 km

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Offshore Malta Area 3 Blocks 1, 2, & 3

40% Working Interest with Cairn Energy Plc (60% ,Operator)

Over 6,400 km2 on the southern margin of a proven hydrocarbon province

Exploration Study Agreement (ESA) started in December 2012 for 2 years

Undertaking reprocessing of existing 2D seismic data

Completed acquisition of the modern 2D seismic data required to unlock the exploration potential

Option for 1 year extension to ESA and negotiation of Production Sharing Contract

Exploration Licences

Exploration Assets Offshore Malta Area 3 Oil & Gas Play

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ESA Seismic Programme Completed 2D Seismic Acquisition – 2Q 2014

1715 km of modern 2D Seismic acquired

Processing of 2D seismic with modern broadband techniques

Survey acquisition was completed on time and under budget in early April 2014

Evaluation of reprocessed and new data is focused on definition platform margin and basin geometry

Forecast completion:

Seismic acquisition: April 2014

Processing: August 2014

Interpretation: December 2014

Area 3 Blocks 1, 2 & 3

2 1


New 2D lines

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Offshore Malta Area 4

25% Working Interest with Genel Energy plc (75%)

Over 5,700 km2

Exploration Study Agreement started in 2005

Production Sharing Contract signed July 2008

First exploration period ends July 2014

Prospective resources:

~428* million boe mean unrisked

Exploration Licences

Exploration Assets Offshore Malta Area 4 Oil & Gas Play

* Net Mediterranean

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Experienced Joint Venture Partnership:


2 Exploration Wells Fully Funded

Frontier exploration play similar to Libya and Tunisia

CPR completed in October 2012

Maltese Government approved extension of first exploration period to July 2014

Sale of 75% interest in Area 4 PSC for consideration of:

$10 million cash

100% carry of 1st exploration well

100% carry of 2nd exploration well to cap of $30 million

Optional loan facility


Offshore Malta Exploration Sale agreed with Genel Energy Plc

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Water Depth: ~ 450 m

Hagar Qim exploration prospect Proposed 1st Exploration Well – 2Q 2014

Target: Lower Eocene/Paleocene carbonates

Trap: 4-way dip closure with a stratigraphic component

Reservoir: Carbonate ramp high-energy deposits

Expected hydrocarbons: Oil

Areal extent: ~25 km2

Vertical closure: ~155 metres

Total depth: 2,800 metres TVDss

Drill time: ~ 2-3 months

Certified Prospective Resources:

~27* million boe mean unrisked

12% chance of success

Operator Prospective Resources:

~40* million boe mean unrisked

20% chance of success

Hagar Qim

* Net Mediterranean

Resources and Risks

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Area of Mutual Interest with Genel Energy Plc




Area of Mutual Interest (AMI)

Agreement to cooperate in acquiring exploration and production assets in the offshore basins of Libya, Malta and Tunisia

Minimum period of 3 years

Equity in any asset acquired within the AMI will be shared on the basis of 20% to MOG and 80% to Genel

Our combined technical expertise gives plenty of scope to unlock additional value in the region


Production Concessions & Exploration Licences

Offshore Basins of Malta, Libya and Tunisia

0 100 200 km

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Exploration assets France gas play


Frontier exploration play similar to North Sea southern gas basin

Structural geometry and hydrocarbon charge are the key risks.

Exploration permit expired 3Q 2013 – seeking extension

Goal: Negotiate Exploration Permit extension Alignment of JV Partners on forward work programme


St. Laurent Permit MOG (11.2%) with Sterling

Resources Ltd (33.4 %), Cairn Energy Plc (22.0%), Aquitaine Exploration Ltd (18.2%) and Egdon Resources Ltd (15.2%) Donzacq Permit Application

MOG (11.2%) with Egdon Resources Ltd. (33.4%), Sterling Resources Ltd (33.4%) and Cairn Energy Plc (22.0%)

Prospective Resources:

48* Bcf likely unrisked

Exploration Licences


* Net Mediterranean

0 25 50 km

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Value Creation Delivering Results


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Access to resources will become more challenging with time

Regulatory oversight, constraint and risk continue to increase

Impact of Eurozone economic uncertainty on financial markets affects access to external funds for E&P industry

European natural gas prices remain de-linked from lower North American prices short-term

Italy remains an advantaged market for domestic energy production

Crude oil markets remain volatile, but crude oil prices to trend upwards long-term

The marginal producer of the marginal barrel will be exposed to price volatility

Market Outlook


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Proved P1

Probable P2

Possible P3


C1 C2 C3


E1 E2 E3


Reserves (P) Assets near-to or on production. Reservoir Performance and Operational Reliability are key.

Contingent Resources (C) Drilled Prospects with proven hydrocarbons. Proving commerciality via appraisal and concept economics is key.

Prospective Resources (E) Undrilled prospects and leads. De-Risking via technical studies and commercial negotiations is key.







Resources Factory

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Millions of barrels of oil equivalent


P1 0.6

P2 0.4

P3 0.4


C1 12.7

C2 19.1

C3 47.2


E1 49

E2 400

E3 800


2013 Production =

1.0 Bcf

175,420 boe

Equivalent to 480 boe/d

2P + 2C = 32.8 million boe

Total Resources Factory Potential over 1.2 billion boe unrisked





















Proved & Probable: (i) ERC Equipoise Independent assessment Contingent & Prospective: (i) Company assessment (ii) ERC Equipoise Independent assessment

Resources Factory Inventory Know where you stand

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ASSETS* 2014 2015 2016

1H 2H 1H 2H 1H Northern Adriatic Production

Onshore Italy Foredeep Production

Faseto Exploration

Aglavizza Development

Ombrina Mare Development

Southern Apennines Exploration

Malta Exploration

France Exploration


> Drill exploration prospect Onshore Italy Foredeep (~1.6 Bcf best unrisked)

> Deliver ~1 Bcf 2P reserves to production Onshore Italy Foredeep

> Appraise and develop Ombrina Mare field

> Approval of Monte Grosso exploration prospect EIA

> Drill two exploration wells offshore Malta

> Negotiate Exploration Permit extension in France








* Management forecast based on current information and is subject to change

Asset Development Plans 2014-2016

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Expanding our Resources Factory


Add high quality acreage to diversify portfolio

Short-term focus on ‘greater’ Mediterranean rim countries

Cash position allows small asset farm-in opportunities

Larger growth prospects becoming available


Regional expertise, global experience

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Corporate Office: 68 King William St



Operations Office: Via Cornelia 498 Roma 00166 Italy

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