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PetroLatina Energy Exploration and Production in Latin America

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Presentation on theme: "PetroLatina Energy Exploration and Production in Latin America"— Presentation transcript:

1 PetroLatina Energy Exploration and Production in Latin America
Oil Barrel 22nd February 2007

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 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.

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

4 Highlights Company Listed on London Stock Exchange on 14th January 2005. Operations established in Guatemala on 6-93 licence. Completed one well and two work-overs on the Las Casas structure, two of which confirmed producible oil. Acquired Licence (Tortugas/Atzam) in 2005 Guatemalan licencing round. Obtained significant interests in two exploration licences in Colombia. Acquired Petroleos del Norte (“PDN”), a Colombian producing oil and gas company. Tested Serafin Gas well at 14 million cubic feet per day in February 2007.

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 120 million barrels of potential. Current production of approximately 500 barrels a day (“bopd”), which could rise to 1,500 bopd with secondary development of Colombian Fields Serafin well #1 tests at 14 million cubic feet a day. Commercial gas sales at end 2nd Quarter 2007. Ownership of the strategic Rio Zulia – Ayucucho Pipeline: 2006 Revenue $1.6 million.

6 Corporate

7 Shares & Shareholding Ordinary Shares $0.10 – 114,007,122
Diluted – 150,648,601 Options - 1,322,000 Warrants - 35,319,479 Major Shareholders: Directors & Senior Management % Rab Capital % Artemis Investment Management % Continental Capital % Chasm Lake Management % Millenium Global Natural Resources % Fidelity International / FMR Corp %

8 Management Team Chairman and CEO - Greg Smith
President and COO – 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) Chief Geologist – Kevin Dean (Previously Chief Geologist Arawak Energy & Bitech Petroleum, Geologist at Mobil) Executive Director – Mark Patterson (Managing Partner of Calypso Energy & formerly CEO Compania General de Combustibles Argentina)

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

10 Colombia

11 Location Map

12 Rio Zulia – Ayacucho Pipeline
183Km long, 10” dia. Two pumping stations 25,000bopd capacity 2006 average 3,176 bopd throughput

13 PDN Assets Tisquirama Licence Lebrija 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

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 3.678 4.665 6.640 1.839 2.332 3.320 Santa Lucia 2.593 17.363 39.514 0.648 4.341 9.878 Dona Maria 0.266 Total 6.537 22.294 46.420 2.753 6.939 13.464 Table does not include Serafin gas reserves

15 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 2006 discount to WTI-$30

16 Los Angeles Field

17 Los Angeles Tank Farm

18 Santa Lucia Field

19 Serafina Gas Well & Pipeline Tie-in
Completed work-over gas well on Tisquirama licence. Initial test flow at 14 mmcf / day High gas demand in Colombia ($ $3.0 mcf) 3.5km tie-in to nearby gas pipeline. Investment $0.6 million (net to interest). Potential payback – months. Fast cash generator.

20 Colombian 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 (net 63 million) La Paloma 65% interest Non - Operator 4 year work programme First year new and reprocessing of 2D seismic ($1.0 million) Potential based on reprocessed seismic – 90 million barrels (net 58.5 million)

21 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 Guatemala

23 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 PetroLatina’s Guatemalan Licences
Las Casas Tortugas Area

25 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 Licence 6-93 Leads & Prospects Potential recoverable reserves (mmbbls)
HUAPAC Area Size (acres) Potential recoverable reserves (mmbbls) Las Casas 6,500 17.57 Huapac 4,900 3.1 Leads & Prospects 7 Areas Average of 4,900 each 2-5 each 2 Areas 13,000 & 26,000 3-10 each Drilled / Encountered Hydrocarbons Drilled / P&A LAS CASAS Leads / Prospects

27 Refurbished Service Rig

28 3X Drilling Rig

29 Drilling at 3X

30 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

31 Proved, Probable & Possible
Guatemalan Reseves Millions of stock tank barrels Proved Proved & Probable Proved, Probable & Possible Las Casas 0.096 1.156 17.657 Huapac 3.310 Tortugas * 0.309 0.596 3.872 Total 0.405 1.752 24.839 * This does not include Atzam which is estimated to be between 5 and 16 million barrels of potential reserves

32 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 Marketing Options XAN Field Rublesanto Tortugas Lincence 7-2005
Licence 6-93 Las Casas Piedras Negras

34 Work Programme & Financial

35 Colombian Work Programme
Q1 2007 Q2 2007 Q3 2007 Q4 2007 PDN Assets Serafin Development Tisquirama Licence Extension TEA’s – Review of TEA Potential Acquire new seismic on retained TEA’s Tisquirama Secondary Development Midas & La Paloma Seismic Acquisition Well Studies Geochemical Survey Prospect evaluation Acquire new 3D seismic – La Paloma

36 Guatemalan Work Programme & Review
Q1 2007 Q2 2007 Q3 2007 Q4 2007 6-93 Geological/Geophysical/Engineering Review A7-2005 Atzam 2 remedial work plan 1. Licence 6-93 requires an ongoing detailed technical review to better understand sub-surface geology. 2. Atzam 2 well – strong reservoir pressure but damage to well casing and cement require further work plan & engineering analysis Force majeure filed on Tortugas area of A licence pending MEM resolving land access issues with Municipality of Coban. 4. Office and field costs reduced to absolute minimum.

37 PDN 2006 Financial Forecast (Post acquisition)
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 $ 4.3 million Earnings – US $ 1.3 million Operating Cash flow – US $ 1.9 million

38 Market Data Listing AIM EPIC PELE Nomad Seymour Pierce
Public Relations Pelham PR Current share price pence (16/02/07)

39 PetroLatina Energy Plc
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 oil production which can be rapidly increased through secondary development in Colombia. Colombian gas commercial production at end 2nd Quarter 2007 Total 3P and potential reserves are approximately 160 million barrels. Well positioned for future growth, both organically and through acquisitions.

40 Additional Information

41 Guatemalan Fiscal Regime
Licence 6-93 7-2005 Royalty 20% for 30° API +/- 1% per degree API change Estimated royalty Rate 29 to 30% Minimum Government take <15,000 bopd = 40% <20,000 bopd = 30.07% Maximum Government Take >75,000 bopd = 75% >90,000 bopd = 72%

42 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

43 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%


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