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Business for a Better Tomorrow. “A better environment is a better future.”. An Environmental Services Provider to the Oil & Gas Industry. National Investment Banking Association Conference - June 16, 2011 .
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Business for a Better Tomorrow “A better environment is a better future.” An Environmental Services Provider to the Oil & Gas Industry National Investment Banking Association Conference - June 16, 2011
Forward-Looking Statements Statements contained herein and the information incorporated by reference herein may be forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 as amended (the "Exchange Act"). Forward-looking statements can be identified by the use of forward-looking terminology such as, but not limited to, "may," "will," "expect," "anticipate," "estimate," "would be," "believe," or "continue" or the negative or other variations of comparable terminology. We intend such forward-looking statements to be covered by the safe harbor provisions applicable to forward-looking statements contained in Section 21E of the Exchange Act. Such statements (none of which are intended as a guarantee of performance) are subject to certain assumptions, risks and uncertainties, which could cause our actual future results, achievements or transactions to differ materially from those projected or anticipated. Such risks and uncertainties are set forth herein. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events, or performance and underlying assumptions and other statements, which are other than statements of historical facts. These statements are subject to uncertainties and risks including, but not limited to, product and service demands and acceptance, changes in technology, economic conditions, the impact of competition and pricing, and government regulation and approvals. TexCom cautions that assumptions, expectations, projections, intentions, or beliefs about future events may, and often do, vary from actual results and the differences can be material. Some of the key factors which could cause actual results to vary from those TexCom expects include changes in oil prices, soybean prices, soybean oil prices, the timing of planned capital expenditures, availability of acquisitions, uncertainties in estimating and forecasting production results, political conditions in Paraguay, the condition of the capital markets generally, as well as our ability to access them, and uncertainties regarding environmental regulations or litigation and other legal or regulatory developments affecting our business. Our expectations, beliefs and projections are expressed in good faith and are believed to have a reasonable basis, including without limitation, our examination of historical operating trends, data contained in our records and other data available from third parties. There can be no assurance, however, that our expectations, beliefs or projections will result, be achieved, or be accomplished. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. We undertake no duty to update any forward-looking statements. The information contained herein is offered for informational purposes only. None of this information is to be construed as an offer to buy or sell securities.
We Handle Environmental Issues for Exploration Industry • Traditional • Drilling Waste (NOW) • Produced Water • Tank and Truck Washouts • New • Frac Water (Shale Gas Production) • Naturally Occurring Radioactive Material (NORM)
Corporate Snapshot • Exchange/Ticker: OTC Markets: TEXC • Market Capitalization: $13.26 Million • Basic Shares Outstanding: 63.16 Million • Headquarters: Houston, Texas • Number of Employees: 22 • Websites: www.texcomresources.com • www.mbenvironmental.net
How we Make Money Disposes of Wastes from Oilfield Operations
What are the Growth Drivers for Our Business • Non-hazardous Oilfield Waste Disposal (NOW) • Increase in active drilling rigs in region • Increased number of producing oil and gas wells in region • Naturally Occurring Radioactive Material (NORM) • Increased regulatory enforcement • Billion dollar judgment against Exxon in 2004 • Growing NORM related Business-to-Business litigation associated with producing oilfield property transactions
How Much NORM Is Out There? • 10 million barrels of NORM in existence in 1995 • Cost to remediate and dispose estimated at $3.5 to $5.5 Billion and growing. At 1995 rates of oil and gas production, additional amounts of NORM being generated were estimated to be 140,000 to as much as 640,000 barrels per year. There are over 60% more producing wells now than in 1995. We estimate that only a small fraction of NORM in equipment has been removed. TexCom is one of only four companies permitted to dispose of NORM by underground injection. TexCom is one of only two public companies that dispose of NORM and could be considered a “Pure Play.”
How do We Get More of Their Business? Environmental Engineering Firms TexCom is working to position upstream in NORM Engineering and NORM Decontamination DISPOSAL DECON SITE Vertical
We Open New Locations in Their Hot New Plays Oil Production Gas Production Mixed Production Existing Sites Expansionpotential
Eagle Ford Shale is Exploding with new Drilling The Eagle Ford shale covers an area covers a 24-county area 50 miles wide and 400 miles long stretching from northeast of San Antonio to Maverick and Webb counties on the U.S.-Mexico border. Producing oil and gas from a new oil play follows a predictable pattern once initial wells have proven economic. Activity – January 21, 2010 Activity – November 8, 2010
A Supply/Demand Imbalance Exists in the Eagle Ford Permits will become drilled wells within 24 months. * Each rig can drill about 16 wells year. Leasing - rights to underground minerals are leased from their owners in blocks. Permitting – oil and gas companies obtain permits to drill wells from governing agencies. Drilling – rigs are brought in from other regions to begin drilling programs. Large modern rigs are expensive to move, taking a great many trucks to transport each drilling rig. Result: Too much drilling waste and not enough disposal capacity.
Drill Permit No.’s are 3.3 x Permits Near our Current Site 3,034 Wells have been permitted in Railroad Commission Districts 1 through 4 over the twelve months ending 4/1/2011. Our immediate market counties: Atascosa – 72, Karnes – 290, LaSalle – 358, McMullen – 344 received 1,064 permits During that same time period the counties surrounding MB Energy: Liberty, Chambers, Jefferson and Hardin had 60, 86, 72 and 99 permits respectively. We generated approximately $7 Million in revenue from drilling and production waste disposal during that period.
Why NOT TEXC Now at 8.18 x Trailing Earnings? Q-1 2011 vs Q-1 2010
Business for a Better Tomorrow “A better environment is a better future.” Questions?
What is NORM? • Radioactive Radium is present everywhere in Earth’s crust • Dissolves in underground saltwater • Deposits along with other minerals as scale • In oil and gas production, scale precipitates from saltwater brought to surface due to decrease in temperature and pressure • In the oilfield, scale builds up on well tubing and in surface gathering equipment (pipelines, pumps and storage tanks)
WHERE ELSE DOES NORM ACCUMULATE? Where Else Does NORM Accumulate? In Wellheads On Smart Pigs that Clean Pipelines In Storage Tanks
Threat to Public Safety Radium/NORM poses little human health risk when held in place in pipe, tankage, etc. It does, however, pose a threat when particles become airborne and/or are leached into the groundwater.
Our Operating Advantages • Differentiated from Competition • Most Class II wells inject into depleted oil and gas formations; only accept produced water • Our wells are drilled into fractured Caprock on flank of salt dome • Can accept mixtures of solids slurried in water • That allows us to inject NORM scale and sludge underground • One of four companies permitted to dispose of NORM by underground injection
