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TALIUS GROUP LIMITED Investor Presentation 2006
65893_rns_2006-11-07_1f374a99-2db2-43fc-bfdf-f1c25f3cd93e.pdf
Investor Presentation
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www.advanceenergyltd.com.au Suite 4, 16 Ord Street | tel: 08 9486 1122 West Perth, Australia | fax: 08 9486 1011 PO Box 1779, ACN 111 823 762 West Perth 6872
ASX Announcement 8 November 2006
Investor Presentation
Attached is the November 2006 investor presentation regarding the acquisition of PK1 in Palo Pinto County.
For further information contact: Mr Lance Camacho Company Secretary Telephone: 08 9486 1122 Facsimile: 08 9486 1011
Advance Energy Limited is focused on the acquisition and development of oil and gas producing assets in Texas USA. The company aims to acquire assets with a combination of debt and equity that have current production and cash flow and to enhance production and cash flow through the further development of these assets. Once a property has reached its full productive potential and/or has achieved economic payout to Advance Energy, the Company would look to on sell all or part of its interest. It is the aim of the Company to develop a portfolio of assets which will be developed and traded to maximize returns on funds invested.
Advance Energy Limited $(AVD)$
Investor Presentation
PK 1 acquisition
November 2006
Acquisition essentials
- Access to deal flow, identification and personnel
- Initial review to conform to strict acquisition criteria
- Detailed review and preliminary evaluation
- Letter of Intent to purchase
- Purchase and sale agreement, earnest money
- Final due diligence
- Closing
- ost closing and effective dates
Acquisition criteria
- Technical understanding and advantage
- Current proven production
- Value-add opportunities (workovers and new wells) - LOE reduction
- Payback periods proven reserves only
- Low operating / lifting costs / low well count
- Multiple assets
Development of exit strategies
Acquisition Funding
- US\$20m facility with Sterling Bank
- Mezzanine financing
- Convertible notes
- Equity
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PK 1
- Current production in excess of 2,300 Mcfe
- Current LOE per well \$1,250 per month
- 9 producing wells
- Total proven reserves exceed 4.7 net bcfe
- 90% working interest acquired
- Purchase price of approx US\$ 9.7million expected to payback between 36 and 42 months at \$6 gas price
AVD Assets Palo Pinto
advanĉe
energy™
PK1
PK 1 opportunities
- Minimum of four proved developed non-production (PDNP) candidates expected to increase daily production by 800 Mcfepd
- Two stimulation and one mechanical (PDP enhancement) candidates. Once completed expected to increase production by another 500 Mcfepd
- Three proved undeveloped (PUD) locations anticipated 1,050 Mcfepd
- 1,015 acres Barnett Shale
Economies of scale 20 miles from Lone Camp
Financial
advance
energy®
| Property | Resource | Current production |
Expected Production * |
US\$ Revenue per day |
|---|---|---|---|---|
| Martin | ||||
| County | Oil | 37 Bopd | 337 Bopd | 20,000 |
| Gas | 80 Mcfpd | 850 Mcfpd | 6,000 | |
| Lone Camp | Gas | 380 Mcfpd | 1,150 Mcfpd | 7,000 |
| PK 1 | Gas | 2,400 Mcfpd | 4,300 Mcfpd | 30,000 |
| US\$ | ||||
| Total | Per day | 63,000 | ||
| revenue: | Per Month | 1,916,000 | ||
| Assumptions: | * On completion of the work program Gas price @ \$7/Mcf Oil @ \$60/BbI Only includes existing wells |
Excludes possible pipeline revenue and Barnett shale opportunities |
Operational overview
Advance Exploration & Production, Inc. 2006/2007 Drilling Schedule
Martin County - North American Energy and Endeavor Energy Resources Joint Venture
| Well Name | Spud Date | Estimated DHC | Estimated CC WI | NRI | Comments | |||
|---|---|---|---|---|---|---|---|---|
| Strain 16-2 | Completed | 75,625 | 75,625 | 0.125 | 0.07875 | Strawn Test | Spraberry/Dean/Wolfcamp Development and | |
| Thomas 10-1 Completed | 75,625 | 75,625 | 0.125 | 0.0875 | Strawn Test | Spraberry/Dean/Wolfcamp Development and | ||
| Strain 16-3 | 20/10/2006 | 75,625 | 75,625 | 0.125 | 0.07875 | Strawn Test | Spraberry/Dean/Wolfcamp Development and | |
| Strain 16-4 | 26/02/2007 | 75,625 | 75,625 | 0.125 | 0.07875 | Strawn Test | Spraberry/Dean/Wolfcamp Development and | |
| $KE$ 5-1 | 4/03/2007 | 75,625 | 75,625 | 0.125 | 0.09875 | Strawn/Fusselman Test | Spraberry/Dean/Wolfcamp Development and | |
| Strain 16-5 | 1/06/2007 | 75,625 | 75,625 | 0.125 | 0.07875 | Strawn Test | Spraberry/Dean/Wolfcamp Development and | |
| Strain 16-6 | 1/07/2007 | 75,625 | 75,625 | 0.125 | 0.07875 | Strawn Test | Spraberry/Dean/Wolfcamp Development and | |
| Strain 16-7 | 1/08/2007 | 75,625 | 75,625 | 0.125 | 0.07875 | Strawn Test | Spraberry/Dean/Wolfcamp Development and | |
| a in 16-8 | 1/09/2007 | 75,625 | 75,625 | 0.125 | 0.07875 | Strawn Test | Spraberry/Dean/Wolfcamp Development and | |
| 聯 | County Totals | 680,625 | 680,625 |
Example offered to AELIAEPI on a well by well basis and is up to 8 wells
Operational overview (Cont)
Advance Exploration & Production, Inc. 2006/2007 Drilling Schedule Continued
This program will be offered to AEL/AEPI on a well by well basis and is up to 8 wells
Martin County - North American Energy and Huntington Energy Joint Venture
| Well Name | Spud Date | Estimated DHC Estimated CC WI | NRI | Comments | ||
|---|---|---|---|---|---|---|
| Graham 2 15/11/2006 150,000 | 150.000 | 0.225 | 0.17325 | Spraberry/Dean/Wolfcamp Development and Strawn Test |
||
| Graham 3 15/02/2007 150,000 | 150.000 | 0.225 | 0.17325 | Spraberry/Dean/Wolfcamp Development and Strawn Test |
Martin County Totals 300,000 300,000
Palo Pinto I North American Energy
| Well Name Spud Date Estimated DHC Estimated CC WI | NRI | Comments | |||
|---|---|---|---|---|---|
| Kramer 5 15/10/2006 180,000 | 180.000 | 0.9 | 0.702 | Conglomerate Development and Marble Falls Test |
|
| Kramer 6 1/11/2006 180,000 | 180.000 | 0.9 | 0.702 | Conglomerate Development and Marble Falls Test |
|
| ง Pinto I Totals | 360,000 | 360,000 |
Operational overview (Cont)
Advance Exploration & Production, Inc. 2006/2007 Drilling Schedule Continued
This program will be offered to AEL/AEPI on a well by well basis and is up to 8 wells
| PK1 Well Name Spud Date 3 wells second half |
WI Estimated CC 520,000 0.9 |
NRI 0.702 |
Comments Conglomerate Development and Marble Falls Test |
||
|---|---|---|---|---|---|
| PK 1 Totals | 520,000 | ||||
| Grand Total | 1,860,625 |
Position post acquisition
- Maximise production via development plan
- Control operating expenses
- Gas marketing agreement and hedges with Ballard Natural Gas
- Additional Acquisitions
- Palo Pinto County
- Martin County extension of JV with Endeavour
- Other deals
Gas Market
- Current prices \$7, modelling done on \$6 per Mcf. other running \$7.50
- Market expects between \$7.5 and \$9.50 during 2007
- Supply is expected to be outstripped by demand by approx 50%
- Normal winter = $$8.50$ in 2007
Gas Market
Natural Gas Price Forecast - 12 Month Futures Price
Advance Energy Limited $(AVD)$
Investor Presentation
PK 1 acquisition
November 2006