Transcript Document

PetroLatina Energy
Exploration and Production
in Latin America
Oil Barrel 22nd February 2007
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Forward Looking Statement
Certain statements contained in this document constitute “forward-looking statements”.
Such forward-looking statements involve risks, uncertainties and other factors which may
cause the actual results, performance or achievements of the relevant entities, or the
results, to be materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. These forward-looking
statements are based on numerous assumptions regarding the Company’s present and
future business strategy and the environment in which the Company will operate in the
future. There can be no assurance that the results and events contemplated by the
forward-looking statements in this document, will, in fact, occur. The Company undertakes
no obligation publicly to release the result of any revisions to any forward-looking
statements in this presentation that may occur due to any change in the Company’s
expectations or to reflect events or circumstances after the date of this presentation. All
subsequent written or oral forward-looking statements attributable to the Company, or
persons acting on behalf of the Company, are expressly qualified in their entirety by the
cautionary statements contained throughout this presentation. As a result of these risks,
uncertainties and assumptions, a prospective investor should not place undue reliance on
these forward-looking statements.
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Aims and Goals
• To build an independent oil and gas company in
Latin America
• Provide strong growth returns to shareholders
• To do so in a socially aware fashion ensuring:
– Protection of the environment
– Development of the local employees
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Highlights
• Company Listed on London Stock Exchange on 14th
January 2005.
• Operations established in Guatemala on 6-93 licence.
• Completed one well and two work-overs on the Las
Casas structure, two of which confirmed producible oil.
• Acquired Licence 7-2005 (Tortugas/Atzam) in 2005
Guatemalan licencing round.
• Obtained significant interests in two exploration licences
in Colombia.
• Acquired Petroleos del Norte (“PDN”), a Colombian
producing oil and gas company.
• Tested Serafin Gas well at 14 million cubic feet per day
in February 2007.
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Where we are today
• Two producing licences and five exploration licences in
Colombia and two licences in Guatemala
• Proved, probable and possible reserves of approx. 40
million barrels, with a further 120 million barrels of
potential.
• Current production of approximately 500 barrels a day
(“bopd”), which could rise to 1,500 bopd with secondary
development of Colombian Fields
• Serafin well #1 tests at 14 million cubic feet a day.
Commercial gas sales at end 2nd Quarter 2007.
• Ownership of the strategic Rio Zulia – Ayucucho
Pipeline:
– 2006 Revenue $1.6 million.
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Corporate
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Shares & Shareholding
• Ordinary Shares $0.10
• Diluted
Options
Warrants
– 114,007,122
– 150,648,601
- 1,322,000
- 35,319,479
• Major Shareholders:
–
–
–
–
–
–
–
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Directors & Senior Management
Rab Capital
Artemis Investment Management
Continental Capital
Chasm Lake Management
Millenium Global Natural Resources
Fidelity International / FMR Corp
17.76%
14.34%
7.89%
5.20%
4.93%
4.63%
3.99%
Management Team
• Chairman and CEO - Greg Smith
• President and COO – Jay Scott
– (Previously Chief Operating Officer, Arawak Energy & Bitech
Petroleum)
• Chief Financial Officer – Ian Refault
– (Formerly Commercial Director, PetroKazakhstan (Downstream
Marketing) & VP Finance / CFO, Bitech Petroleum)
• Chief Geologist – Kevin Dean
– (Previously Chief Geologist Arawak Energy & Bitech Petroleum,
Geologist at Mobil)
• Executive Director – Mark Patterson
– (Managing Partner of Calypso Energy & formerly CEO Compania
General de Combustibles Argentina)
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Management track record
• Key members of the Team have:
– Worked together
– A history of generating strong returns to shareholders
(PetroKazakhstan, Arawak and Bitech)
• Successful record in:
– Running international E&P companies
– Public companies listed on the London, New York and
Toronto stock exchanges
– Discovering oil fields
– Developing oil and gas fields
• The team also has extensive experience in debt
and equity fund raising
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Colombia
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Location Map
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Rio Zulia – Ayacucho Pipeline
•183Km long, 10” dia.
•Two pumping stations
•25,000bopd capacity
•2006 average 3,176 bopd
throughput
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PDN Assets
• Tisquirama Licence
– Los Angeles field – 50% interest
– Santa Lucia field – 25% interest
• Lebrija Licence
– Dona Maria field – 100% interest
• Three technical evaluation licences
• 100% ownership of the Rio Zulia – Ayacucho
pipeline with 25,000 bopd capacity
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Colombian Producing Reserves
Millions of
stock tank
barrels
Gross
P1
Gross
P1+P2
Gross
P1+P2+
P3
Net P1
Net
P1+P2
Net
P1+P2
+P3
Los
Angeles
3.678
4.665
6.640
1.839
2.332
3.320
Santa
Lucia
2.593
17.363
39.514
0.648
4.341
9.878
Dona
Maria
0.266
0.266
0.266
0.266
0.266
0.266
Total
6.537
22.294
46.420
2.753
6.939
13.464
Table does not include Serafin gas reserves
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Crude Quality and Pricing
• Santa Lucia crude is:
– 18° API
– Priced against WTI
– Pricing formula = (WTI*0.95)-$6.85
• Los Angeles crude is:
–
–
–
–
15
13° API
Priced against fuel oil 1
Pricing formula = (Fuel Oil 1*0.84)-$1.30
December 2006 discount to WTI-$30
Los Angeles Field
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Los Angeles Tank Farm
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Santa Lucia Field
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Serafina Gas Well & Pipeline Tie-in
• Completed work-over gas well on Tisquirama
licence.
• Initial test flow at 14 mmcf / day
• High gas demand in Colombia ($2.50 - $3.0 mcf)
• 3.5km tie-in to nearby gas pipeline.
• Investment $0.6 million (net to interest).
• Potential payback – 2 - 3 months.
• Fast cash generator.
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Colombian Exploration Licences
• Midas
–
–
–
–
–
70% interest
Operator
6 year work programme
First year new and reprocessing of 2D seismic ($1.5 million)
Potential based on leads – 90 million barrels (net 63 million)
• La Paloma
–
–
–
–
–
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65% interest
Non - Operator
4 year work programme
First year new and reprocessing of 2D seismic ($1.0 million)
Potential based on reprocessed seismic – 90 million barrels (net
58.5 million)
Colombian Fiscal Position
• PDN
– Royalty 20%
– Ecopetrol back in right
• Exploration licences
– Sliding scale of royalty 5 to 25%
– No EcoPetrol back in right
• Corporate Tax – 35%
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Guatemala
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Guatemala - unexploited opportunity
• Under explored region with high potential
• Proximity and similarity in the geology to Mexico
• Trends in which major Mexican discoveries (e.g.
Nazareth Field) have been found extend into
Guatemala
• Positive and encouraging political and economic
environment
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PetroLatina’s Guatemalan Licences
Tortugas
Area 7-2005
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Licence 6-93
Las Casas
6-93 Licence
• Location – Peten Basin
• Area – 323,000 acres
• Term – 25 years from October 1993
• Reconfirmed production at Las Casas.
• Las Casas 1x - produced at 80 bopd
• Las Casas 3x - encountered oil. Swab test
produced oil.
• Still to test Huapac potential and additional nine
leads
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Licence 6-93 Leads & Prospects
HUAPAC
Area
Size
(acres)
Potential recoverable
reserves (mmbbls)
Las Casas
6,500
17.57
Huapac
4,900
3.1
7 Areas
Average of
4,900 each
2-5 each
2 Areas
13,000 &
26,000
3-10 each
Leads &
Prospects
Drilled /
Encountered
Hydrocarbons
Drilled / P&A
LAS CASAS
Leads /
Prospects
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Refurbished Service Rig
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3X Drilling Rig
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Drilling at 3X
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Tortugas – Licence 7 -2005
• Location – Peten Basin
• Area – 77,718 acres
• Term – 25 years from September 2005
• 13 wells drilled on the licence of which 8
encountered hydrocarbons
• Two main areas of interest Tortugas salt dome and
Atzam
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Guatemalan Reseves
Millions of stock tank
barrels
Las Casas
Proved
Proved &
Probable
Proved,
Probable &
Possible
0.096
1.156
17.657
Huapac
3.310
Tortugas *
0.309
0.596
3.872
Total
0.405
1.752
24.839
* This does not include Atzam which is estimated to be between 5 and 16
million barrels of potential reserves
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Fiscal regime
• Guatemala
–
–
–
–
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Royalty based on API of crude
Profit share, sliding scale linked to production
Cost recovery = 100%
Corporate Income tax at 31%
Marketing Options
XAN Field
Rublesanto
Tortugas
Licence 6-93
Lincence 7-2005
Las Casas
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Piedras Negras
Work Programme & Financial
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Colombian Work Programme
Q1 2007
PDN Assets
Serafin Development
Tisquirama Licence Extension
TEA’s – Review of TEA Potential
Acquire new seismic on retained
TEA’s
Tisquirama Secondary Development
Midas & La Paloma
Seismic Acquisition
Well Studies
Geochemical Survey
Prospect evaluation
Acquire new 3D seismic – La
Paloma
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Q2 2007
Q3 2007
Q4 2007
Guatemalan Work Programme & Review
Q1 2007
Q2 2007
Q3 2007
Q4 2007
6-93
Geological/Geophysical/Engineering
Review
A7-2005
Atzam 2 remedial work plan
1. Licence 6-93 requires an ongoing detailed technical review to better
understand sub-surface geology.
2. Atzam 2 well – strong reservoir pressure but damage to well casing and
cement require further work plan & engineering analysis.
3. Force majeure filed on Tortugas area of A7-2007 licence pending MEM
resolving land access issues with Municipality of Coban.
4. Office and field costs reduced to absolute minimum.
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PDN 2005 Financial Results
• Turnover – US $7.2 million
• Earnings – US $0.9 million
• Operating Cash flow – US $3.2 million
PDN 2006 Financial Forecast
• Turnover – US $ 4.3 million
• Earnings – US $ 1.3 million
• Operating Cash flow – US $ 1.9 million
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(Post acquisition)
Market Data
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•
Listing
AIM
•
EPIC
PELE
•
Nomad
Seymour Pierce
•
Public Relations
Pelham PR
•
Current share price
28.5 pence (16/02/07)
PetroLatina Energy Plc
• New E& P Company with Latin American focus.
• Strong management team with extensive oil & gas and
international experience, together with track record of running
public companies.
• Acquired strong position in Colombia & Guatemala is an
under-explored but potentially prolific oil and gas region.
• Have current oil production which can be rapidly increased
through secondary development in Colombia.
• Colombian gas commercial production at end 2nd Quarter
2007
• Total 3P and potential reserves are approximately 160 million
barrels.
• Well positioned for future growth, both organically and
through acquisitions.
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Additional Information
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Guatemalan Fiscal Regime
Licence
Royalty
6-93
20% for 30° API +/1% per degree API
change
7-2005
20% for 30° API +/1% per degree API
change
Estimated royalty 29 to 30%
Rate
Minimum
Government take
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<15,000 bopd =
40%
<20,000 bopd =
30.07%
Maximum
>75,000 bopd =
Government Take 75%
>90,000 bopd =
72%
Guatemalan Fiscal Regime
Cost Recovery
• Cost recovery statements required to be approved
• Only costs related to the defined zone of
commercial production are allowed
• Once allowed, approved cost recovery is fully
deductible in period approved
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Guatemalan - Corporate Income Tax
• Levied against a company’s profits
• Capital expenditure is 100% allowable in year that
it is incurred
• One third of profit share is deductible
• Tax rate is 31%
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