PetroLatina Energy Exploration and Production in Latin America October 2006

Transcription

1 1 PetroLatina Energy Exploration and Production in Latin America October 2006

2 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. 2

3 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 3

4 Achievements Company Listed on London Stock Exchange on 14th January Operations established in Guatemala. Completed two work-overs on the Las Casas structure, one of which confirmed producible oil. Drilled and tested Las Casas 3X, confirmed presence of oil. Acquired Licence in recent Guatemalan licencing round. Obtained two exploration licences in Colombia. Raised 15 million ($26.25 million) to fund 2006 work programme in January Acquired Petroleos del Norte ( PDN ), a Colombian producing oil and gas company. Raised 5.17 million ($9.8 million) in August / September 2006 to replace internal funds used to acquire PDN. 4

5 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 90 million barrels of potential. Current production of 500 barrels a day ( bopd ), which could rise to 1,500 bopd with secondary development of Colombian Fields Ownership of the Rio Zulia Ayucucho Pipeline, that currently generates $1 million in pipeline revenue. Potential fast cash generator in Serafin Gas Project in Colombia. 5

6 6 Corporate

7 Shares & Shareholding Ordinary Shares $ ,757,122 Diluted 150,148,601 Options - 1,322,000 Warrants - 39,069,479 Major Shareholders: Millenium Global Investments 16.49% Directors & Senior Management 14.98% Och Ziff Capital Management 10.10% Artemis Investment Management 8.60% Fidelity International / FMR Corp 4.23% 7

8 Management Team Chairman - Greg Smith President and CEO Nicholas Gay (Formerly Chief Financial Officer Petrokazakhstan and CEO, Bitech Petroleum) Chief Operating Officer 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) Geologist Kevin Dean (Previously Chief Geologist Arawak Energy & Bitech Petroleum, Geologist at Mobil) 8

9 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 9

10 10 Colombia

11 11 Location Map

12 Rio Zulia Ayacucho Pipeline 183Km long, 10 dia. Two pumping stations 25,000bopd capacity Currently transporting 3,500bopd 12

13 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 13

14 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 Santa Lucia Dona Maria Total Table does not include Serafin gas reserves 14

15 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 (Post acquisition) Turnover US $ 3.8 million Earnings US $ 1.2 million Operating Cash flow US $ 2.1 million 15

16 Crude Quality and Pricing Santa Lucia crude is: 18 API Priced against WTI Pricing formula = (WTI*0.95)-$6.85 Los Angeles crude is: 13 API Priced against fuel oil 1 Pricing formula = (Fuel Oil 1*0.84)-$1.30 December 2005 discount to WTI-$18 September 2006 discount to WTI-$29 16

17 17 Los Angeles Field

18 18 Los Angeles Tank Farm

19 19 Santa Lucia Field

20 Serafina Gas Well & Pipeline Tie-in Plans to work-over gas well on Tisquirama licence. High gas demand in Colombia ($2.50 mcf) 3.5km tie-in to nearby gas pipeline. Potential production 5-8 mmscf /day clean dry gas. Investment $0.6 million (net to interest). Potential payback 2.5 months. Fast cash generator. 20

21 PetroLatina 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 La Paloma 65% interest Non - Operator 4 year work programme First year new and reprocessing of 2D seismic ($1.0 million) Potential based on leads 20 million barrels 21

22 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% 22

23 23 Guatemala

24 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 24

25 PetroLatina s Guatemalan Licences Tortugas Area Licence 6-93 Las Casas 25

26 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 26

27 Licence 6-93 Leads & Prospects HUAPAC Area Size (acres) Potential recoverable reserves (mmbbls) Las Casas 6, Huapac 4, Leads & Prospects Drilled / Encountered Hydrocarbons 7 Areas 2 Areas Average of 4,900 each 13,000 & 26, each 3-10 each Drilled / P&A LAS CASAS Leads / Prospects 27

28 28 Refurbished Service Rig

29 29 3X Drilling Rig

30 30 Drilling at 3X

31 Tortugas Licence Location Peten Basin Area 77,718 acres Term 25 years from September wells drilled on the licence of which 8 encountered hydrocarbons Two main areas of interest Tortugas salt dome and Atzam 31

32 Guatemalan Reseves Millions of stock tank barrels Proved Proved & Probable Proved, Probable & Possible Las Casas Huapac Tortugas * Total * This does not include Atzam which is estimated to be between 5 and 16 million barrels of potential reserves 32

33 Fiscal regime Guatemala Royalty based on API of crude Profit share, sliding scale linked to production Cost recovery = 100% Corporate Income tax at 31% 33

34 Marketing Options XAN Field Rublesanto Tortugas Lincence Licence 6-93 Las Casas Piedras Negras 34

35 35 Financial

36 Colombian Work Programme Oct Nov Dec Q PDN Assets Serafin Development Tisquirama Licence Extension TEA s Seismic re-processing Midas & La Paloma Reprocess Seismic Seismic Acquisition Well Studies Geochemical Survey 36

37 Guatemalan Work Programme Oct Nov Dec Well 1x Completion & Testing A Facilities Atzam / Tortugas Atzam 2 Work-over Tortugas Well Work-over Tortugas 2 nd Well Work-over 2D Seismic New Wells 37

38 Likely Guatemalan Well Flow Rates Las Casas 250 bopd per well Atzam 200 bopd per well Tortugas (2) 200 bopd per well 2006 /2007 Work programme equals 850 bopd 38

39 Illustrative Cash Flow From Guatemala WTI= US $60 Production Price (net of discount) Royalty Opex (including transportation) G&A EBITDA Per Barrel US $ (15.39) (4.50) Annual US $ 000s 17,442 (4,709) (1,377) (2,000) 9,356 39

40 Group Cash Forecast Q PetroLatina Energy PLC Cash Forecast 9th October 2006 US$ Month October November December Cash Balance b/fwd 7,858,616 5,441,001 4,642,951 INCOME Oil sales proceeds 139, ,865 1,550,596 Other Income 182, , ,626 Total Income 321, ,991 2,000,222 EXPENDITURE Expenses 937, , ,220 Total Expenses 937, , ,220 CAPEX Guatemala 1,539, , ,096 Colombia 261, , ,757 Other - Repayment of Convertible Loan ,000 Total CAPEX 1,801, , ,853 Cash Balance c/fwd 5,441,001 4,642,951 4,935,100 Note: Cash forecast does not include potential oil production / revenues from the Guatemalan work programme 40

41 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 Colombia & Guatemala is an under-explored but potentially prolific oil and gas region. Have current production which can be rapidly increased through secondary development in Colombia and drilling success in Guatemala. Total 3P and potential reserves are approximately 130 million barrels. Well positioned for future growth, both organically and through acquisitions. 41

42 42 Additional Information

43 Guatemalan Fiscal Regime Licence Royalty Estimated royalty Rate Minimum Government take % for 30 API +/- 1% per degree API change 29 to 30% <15,000 bopd = 40% % for 30 API +/- 1% per degree API change <20,000 bopd = 30.07% Maximum Government Take >75,000 bopd = 75% >90,000 bopd = 72% 43

44 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 44

45 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% 45