Transcript Document

Taghmen Energy
Exploration and Production
in Latin America
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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 forwardlooking 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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Taghmen Energy - History
• Formed in July 2004
• Raised US $21.3 million (net of costs) in private
equity over the summer 2004
• Acquired Mexpetrol (Guatemala) Limited, the
owner of the Las Casas 6-93 licence for cash
consideration US $3.3 million in July – September
2004
• The Las Casas licence covers an area of 323,000
acres and contains proven oil and gas
• Appraisal and drilling expected to commence in
Guatemala early January 2005
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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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Management Team
• Executive Chairman - Greg Smith
• President and CEO – Nicholas Gay
(formerly Chief Financial Officer – Petrokazakhstan)
• Chief Operating Officer – Jay Scott
(Previously Chief Operating Officer, Bitech Petroleum)
• Chief Financial Officer – Geoff Killick
(Management and finance role: Bitech Petroleum,
Charterhouse Petroleum and Phillips Petroleum)
• President Mexpetrol – Michael Realini
• Geologist – Kevin Dean
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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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Why Latin America?
Country
Proven Reserves
Production
2,927 million bbls
826,600 bopd
81 million bbls
13,640 bopd
Colombia
1,800 million bbls
614,400 bopd
Ecuador
2,358 million bbls
421,200 bopd
263 million bbls
21,080 bopd
15,110 million bbls
3,590,000 bopd
614 million bbls
95,100 bopd
63,950 million bbls
3,080,000 bopd
Argentina
Chile
Guatemala
Mexico
Peru
Venezuela
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Guatemala - unexploited opportunity
• Under explored country 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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Geological Basins Overlap Between Guatemala and Mexico
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Key Geological Features
600 Km.
NW
Age
MEXICO (REFORMA)
SE
GUATEMALA (PETEN BASIN)
Pliocene
Miocene
Oligocene
Eocene
Paleocene
Upper
Cretaceous
Lower
Cretaceous
Jurassic
Peten Basin Stratigraphy through Mexico (Reforma) and Guatemala.
Sharing Similar Rocks and Leads.
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Key Geological Features
Map showing fields in southern Mexico and Guatemala. The blue lines indicate the major
structural “grain” indicating the fields in the south Peten basin are on the same trends as
those in Mexico.
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Key Geological Features
• Peten Basin is a large (23,000 sq m, 8,880 sq km)
underexplored basin (100 exploration wells, 40 of
which had indications of hydrocarbons)
• Proven hydrocarbon system
• Most wells to date have targeted the crests of the
mapped structures
• The precise structural history and facies
distribution is poorly constrained
• Potential for local good quality reservoirs in
“reefal” facies
• Potential for stratigraphic traps
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Guatemala Key Facts
• Democracy with President elected every 4 years
Oscar Berger elected President in 2003
• Has an established banking system, no exchange
controls, and has a stable currency
• Free movement of currency
• The country has a population approximately 14.3
million and GDP growth of 2.1% (2003 est.)
• Inflation 5.5% (2003 est.)
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Las Casas Licence
Licence 6-93
Las Casas
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Las Casas 6-93Licence
• Location – Peten Basin
• Area – 323,000 acres
• Term – 25 years from October 1993
• Three wells on the licence encountered
hydrocarbons
• On going work programme is to work over two
wells and drill two new wells at Las Casas during
2005
• Capital budget for work programme is US $6.35
million
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Production and Reserves
• Three wells drilled at Las Casas, all of which have
encountered hydrocarbons
• Las Casas 1x and 2x wells flowed oil in varying
quantities
• Potential Reserves at Las Casas are estimated at
26.3 million with a further 3.31 million at a
separate structure on the licence, Huapac.
• Las Casas Licence adjacent to Rubelsantos at
which approximately 30 million barrels have been
discovered.
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Licence Application Round
Area 9-2003
Rublesanto Area 6-2003
Tortugas
Area 7-2003
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Licence 6-93
Las Casas
Licence Application Round
• The licencing round is expected to take place
during the first quarter of 2005 and will cover
three areas.
• Area 9: extension of Sierra Lacandon trend
containing Nazareth and Lacandon fields.
• Tortugas: oil field on flanks of salt diapir. Proven
production from Coban C at shallow depths. Wells
should be limited to 200 – 250 bopd. Atzam is a
small field to south which produced at over 8000
bopd.
• Rubelsanto: current production c. 1,700 bopd from
Coban C. Additional un-drilled prospects have been
identified.
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2004 and 2005 Work Programme
*
* Assumes licence is awarded April 2005
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Marketing Options
XAN Field
Area 9-2003
Rublesanto Area 6-2003
Tortugas
Area 7-2003
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Licence 6-93
Las Casas
Piedras Negras
Marketing Options
• Entry into pipeline from XAN Field to Gulf
of Honduras, pipeline tie in point 35 kms
from field
• Trucking to Gulf of Honduras, a distance of
120 kms
• Refining crude at the newly constructed El
Rancho refinery. The refinery owners have
offered to buy the crude at the field
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Licence Fiscal Regime
• Production sharing agreement
• Royalty based on API of crude, with the better the
crude the higher the royalty rate
• Las Casas crude is expected to pay royalty at 27 to
28%
• Profit share depends on rate of production
• Maximum Company share = 60% for production
below 15,000 bopd and minimum Company share
is 25% for production over 75,000 bopd
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Licence 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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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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Environmental
• Key issues are
– Rain Forest
– Indigenous People
– Archaeological sites
• Taghmen does not currently operate in
archaeological or Indian sensitive areas
• Area around operations has suffered
extensive de-forestation in the past
• Well sites will be replanted
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Looking across from Las Casas well 2x to 1x
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Area around Tortugas
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Las Casas 3X well location before site preparation
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Financial Data
• Over the summer of 2004 US $21.3 million
was raised through private subscription
• The expected work over cost of a Las
Casas well is approximately US $150,000
having acquired the work-over rig.
• The expected cost of drilling a 2,500
metres new well is approximately US $2.5
million, using a contracted rig
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Financial Data cont.
• Capital and G&G budget for:
– 2004 = US $545,000
– 2005 = US $6,332,000
• Cash balance at 1st January 2005
approximately US $15 million
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Summary
• 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 Guatemala: underexplored but potentially prolific oil and gas region
• Sufficient funds raised to get through existing work
programme
• Operating in a highly prospective area
• Well positioned for future growth
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