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PetroLatina Energy Exploration and Production in Latin America. October 2006. Forward Looking Statement.

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forward looking statement
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.

aims and goals
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
achievements
Achievements
  • Company Listed on London Stock Exchange on 14th January 2005.
  • 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 7-2005 in recent Guatemalan licencing round.
  • Obtained two exploration licences in Colombia.
  • Raised £15 million ($26.25 million) to fund 2006 work programme in January 2006.
  • 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.
where we are today
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.
shares shareholding
Shares & Shareholding
  • Ordinary Shares $0.10 – 109,757,122
  • 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%
management team
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)
management track record
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
rio zulia ayacucho pipeline
Rio Zulia – Ayacucho Pipeline
  • 183Km long, 10” dia.
  • Two pumping stations
  • 25,000bopd capacity
  • Currently transporting 1-2000bopd
pdn assets
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
colombian producing reserves
Colombian Producing Reserves

Table does not include Serafin gas reserves

pdn 2005 financial results
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
crude quality and pricing
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
serafina gas well pipeline tie in
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.
petrolatina exploration licences
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
colombian fiscal position
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%
guatemala unexploited opportunity
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
slide25

PetroLatina’s Guatemalan Licences

Licence 6-93

Las Casas

Tortugas

Area 7-2005

6 93 licence
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
slide27

Licence 6-93 Leads & Prospects

HUAPAC

Drilled / Encountered Hydrocarbons

Drilled / P&A

LAS CASAS

Leads / Prospects

tortugas licence 7 2005
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
guatemalan reseves
Guatemalan Reseves

* This does not include Atzam which is estimated to be between 5 and 16 million barrels of potential reserves

fiscal regime
Fiscal regime
  • Guatemala
    • Royalty based on API of crude
    • Profit share, sliding scale linked to production
    • Cost recovery = 100%
    • Corporate Income tax at 31%
slide34

Marketing Options

XAN Field

Rublesanto

Tortugas

Lincence 7-2005

Licence 6-93

Las Casas

Piedras Negras

likely guatemalan well flow rates
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
group cash forecast q4 2006
Group Cash Forecast Q4 2006

Note: Cash forecast does not include potential oil production / revenues from the Guatemalan work programme

summary
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.
guatemalan fiscal regime cost recovery
Guatemalan Fiscal RegimeCost 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
guatemalan corporate income tax
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%