Transcript Document

TransMeridian Exploration, Inc.
IPAA OGIS Small Cap Conference
February 8, 2005
Forward Looking Statements
This presentation contains “forward-looking statements” within the meaning
of the “safe-harbor” provisions of the Private Securities Litigation Reform Act
of 1995. Such statements involve known and unknown risks, uncertainties
and other factors that could cause the actual results of the Company to differ
materially from the results expressed or implied by such statements,
including changes from anticipated levels of sales, future national or regional
economic and competitive conditions, changes in relationships with
customers, access to capital, difficulties in developing and marketing
reserves and other factors disclosed in the Company’s Annual Report on
Form 10-K for the year ended Dec. 31, 2003 and the Company’s subsequent
Quarterly Reports on Form 10-Q, especially in the risk factors sections of
these SEC reports. Although the Company believes that the expectations
reflected in such forward-looking statements are reasonable, there can be no
assurance that such expectations will prove to be correct. The Company
does not undertake any obligation to update the forward-looking information
contained in this presentation.
Corporate Profile

OTC:BB TMXN
 52 week high/low: $2.20 / $0.79
 Shares outstanding: 80 million shares
 Market cap/Enterprise value: $140 mil./$178 mil.
 FMV of reserves: $295 million
 Average trading volume: 197,200 per day
Business Strategy

Acquire and develop
overlooked/underdeveloped reserves
 Current focus -- Caspian Sea Region of FSU
 Target medium sized fields with –

Low initial entry costs
 Identified reserves
 Significant upside reserve potential
 Quick payback period (two to three years)
 Likelihood of lower than average international
findings cost
Why the Caspian Region?

4% - 5% of the world’s total reserves
- Largely undeveloped or underdeveloped

Very favorable economics relative to global peers
- Full cycle costs average less than $5.00/bbl

Favorable tax and regulatory environment

Transportation bottlenecks set to be removed
- Existing and proposed pipelines continue to expand
Expanding Regional Pipeline System
First Asset: South Alibek Field

Kazakhstan government actively
encouraging foreign investment –
Goal of increasing production from 1
to 3 mm bopd over the next decade

Good infrastructure
- all-weather roads
- electric power
- rail and pipeline facilities
Aktobe
Emba
South Alibek
Field
Atyrau


Service company support
- Improving capability of local
service companies
- Improving presences of Western
service companies – access to
Western technology and
methods
Existing and proposed pipelines
continue to be expanded
Pipeline
Rail line
Kashagan
7 BBO++
Tengiz
9 BBO
South Alibek Field - Detail Map

Adjacent to the Alibekmola Field
- under active development
- currently producing 23,600 bopd

South Alibek is on the down-thrown
side of a large North / South
trending fault which separates the
two fields.

License acquired by TMEI covers
14,000 acres.

Drillied five wells to date
- all commercial
- various stages of completion

Per Ryder Scott evaluation (Feb. ’04)
- 65 million bbls “proved”
- 193 million bbls “proved” and
“probable”
Proved Area
Alibekmola Field
Completed wells
Currently completing
2005 planned wells
Proved Area
Reinterpretation of seismic
improved mapping of the SA
Field and increased areal
extent of field in 2004,
Currently completing
Proved – 1,600 acres
+ Probable – 6,500 acres
Probable Area
Approx. Possible Area
South Alibek Field
KT2 Top Depth Structure Map
+ Possible – 13,000 acres
Multiple Reservoirs – Good Seals
South Alibek and Alibekmola Fields
Combination Porosity and Fractures
South Alibek and Alibekmola Fields
West
SA -1
East

Post depositional faulting
- deeper oil water contact
in South Alibek Field

Limestone and dolomitic
reservoirs with
combination porosity and
fractures

Seals provided by interbedded shales

Vertical and lateral
migration pathways

Combined up to 500 net
feet of pay
Jurassic
Triassic
4o dip
Prospective basal conglomerates
8-10o
dip
U. Perm
Kungarian Salt
Kungarian Salt
L. Perm shale
KT-I
KT-II
Zone 2
Zone 4
Visean Clastics
Prospective Devonian Carb?
Accomplishments

Accomplishments
Exploration contract covering 14,000 acres –
recently extended through April 2007
 Drilled five wells – currently in various stages of
completion. Sixth well drilling -- near TD.
 Completed permanent production facilities –
capacity to process up to 30,000 bopd
 Executed transportation agreement with KazTrans
Oil – allow access to pipelines/export market

Near Term Objectives

Near Term Objectives

Complete/stimulate new wells
- Increase production
 Continue to improve pricing
 Install de-mercaptane unit
 Complete connection to pipeline (1.5 km)
 Finalize production contract
 Re-finance field development loans – lower cost
Other Opportunities in the Region
Future Projects -- Azerbaijan
Future Projects – Saizan Area
Financial Overview
Summary Balance Sheet
(In thousands)
December 31,
September 30, 2004
2003
Historical Pro Forma (a)
Current assets
Property and equipment, net
Other assets
$ 2,068
54,560
471
$ 57,099
$ 2,087
71,830
279
$ 74,196
$ 26,087
71,830
279
$ 98,196
A/P and accrued liabilities
Total debt and interest
Minority interest
Stockholders’ equity
$ 3,778
52,815
-506
$ 57,099
$ 12,614
43,914
8,256
9,412
$ 74,196
$ 2,614
43,914
18,756
32,912
$ 98,196
(a) Reflects net proceeds from issuance of $25 million of Cumulative Convertible Preferred
Stock and $10.5 million capital contribution to Caspi Neft by Bramex
Results of Operations
(In thousands)
Revenue
Costs and expenses
Nine Months Ended
September 30,
2004
2003
$ 3,049
5,569
Operating loss
$
159
3,530
(2,520)
(3,371)
(849)
492
--
(599)
-(20)
Net loss
$ (2,877)
$ (3,990)
Net loss per share
$
$ (0.06)
Other income (expense)
Minority interest
Preferred dividends
Wt. average shares outstanding
(0.04)
78,227
62,958
Private Placement
Closing Date:
November 12, 2004
Securities:
Series A Cumulative Convertible Preferred Stock
Issuance Amount:
$25,000,000 USD
Yield:
4.50%
Conversion Price:
$1.40 per share
Warrants:
25% warrant coverage – five year term; strike price
equal to $1.55 per share
Registration:
Form S-3 covering underlying shares filed in
December 2004
Use of Proceeds:
Working capital
Fund development drilling program
Complete treatment facilities and pipeline connection
Seed capital – new projects
Target Well Economics
Cost per well:
$5.5 million
Target production rate:
1,000 Bopd
Current price:
$20.00 / bbl
Expected future price:
N. Sea Brent, less approx. $7.00
(trans. cost)
Royalty rate:
6.0%
Operating costs:
< $2.00 / bbl
Income tax rate:
35.0% (all inclusive)
Cash payback :
8 – 12 months
Working interest
50% (subject to 10% net profits
interest after payout)
Investment Considerations

People, property and prospects

Transitioning from development stage to
operating company

Value has not been reflected in stock price

Multiple new projects in region that fit
business plan