Thu, 11 Dec 2008|
Automatically Generated Transcript (may not be 100% accurate)
Good evening everybody. -- your energy level tonight. OK so the obligatory. Disclosure statement while we believe everything. That we talked about here to be true. We seek safe harbor and I encourage you always to do your own due diligence. I look after investor relations forty sure. As Travis said my name is -- to -- in with company for almost two years. And the reason that I came to this company and the reason I think it's worth considering is the reason that I invested in it personally before it came on board. And that's that this is a high growth company. With some tremendous assets in some of the premier North American energy regimes. So we have -- position. Encompassing 350000. Gross acres 150000. Net. In. -- include the we also have sizable land position in the appearance and you into basins of Colorado and Utah. And we also have a portfolio of energy assets. That are passively helped -- company called titan uranium. They -- obtained in a share for land swap that were done a couple of years ago. -- obtained. Some property in the -- bask -- -- -- basins. And turn those over to a company called titan uranium and we retain those today. And that these are there are no risk. Low cost at this point. Assets that. If something becomes of them which is a very a possibility that there will be something come of them -- of course would benefit because of that. The company's Vancouver based we do have an office in Denver Colorado. And we have an office in Calgary's of course and I'm talking -- those analysts that won't talk to anybody from Vancouver coastal we have an office in Calgary that's always good. -- listed on the Amex and today were listed on the TSX venture but tomorrow and happy to tell you has of the news today we will be listed on the TSX. Our daily trading volume has been about 250000. Shares. Most of those shares are traded in the US so this is becoming a US traded stock. Most of our owners are now in the United States as well. We have 73 million shares outstanding approximately 76 million on a fully diluted basis. There are more but they're not -- not to worry about those because most of my options are out of -- money at this point as well as you -- -- -- has been a tough market. Our market cap. At fifty cents was about 35 million I think today we close at 39 cents so I'm not a mathematician -- that -- probably around a thirty million dollar market cap. The good news about that is that. You know our market cap today represents. Just over one times what we expect or are or what are targeted net revenue is for next year -- -- -- -- the value proposition in a few minutes. We have a credit facility of which to vote 3.2 five -- left and 3.5 million is left and used. As we increase our production will have access to more credit. Cash on hand right now spent one point two million dollars. Our revenue on a monthly basis exceeds our our monthly not so we're -- burn rate right now is 400000 months. And I expect that we should you bring in plus or minus a million a month as soon as another well is tied in which again I'll talk about a minute. We have approximately 121000 shareholders. Which 55%. Plus or minus or in the United States about 7% Europe. We estimate it the insider ownership in the companies about 18%. Most of us have been buying and during this downturn. The major shareholders -- our chairman and CEO Bob hodgkin's and who owns five point nine million shares. Brownstone ventures switches are operating partner in the -- -- to basins. They -- -- five point eight million shares and then our are there JV partner in the piceance. Which is -- -- Owns -- two five point five million. The value proposition for the company is as follows. We're very well positioned and -- in terms our land. Based targeting. We have multi TCF -- natural gas resource development potential. And we have multi hundred million dollar -- discovery potential. This is in the US. We have prudent risk mitigation we're focused on motivated -- we're focused through motivated professionals. We have equity driven management team of very seasoned people which we'll talk about a minute. We have a diversified premium massive base in two key North American -- gas production areas. We have a rapidly rising production base on the Canadian side currently we're at 630 BO we. I expect -- within ten to fifteen days will be up to a thousand -- And that mix currently has about seven. And are targeted production. After that winter season should be around 15100 to 2000 BO -- And at that point mix will be 6040. Well versus gas. We have sustainable net asset value growth. Currently we're we feel that fair market for the not fair market but we -- feel the breakup value for stock right now is dramatically higher this is this for many companies. Than it is. We're currently trading at roughly -- 2.5 percent or less. Then what are break -- value is. Good as they said we we feel that we can grow our are -- based set quite substantially over the next two to three years. Travesty here -- is. I don't know welcome it's time -- -- -- to -- time and so here -- clock or anything or not. I've got to -- than me when I -- five minutes -- panic about taking too much time here in the -- Okay. I guess the driver of everything here and one of the reasons that I came to the company. Remember him above Hutchinson. Thirty years in the oil and gas business he really lives and breathes willing gas. It's a driving force behind the company he started his life with blue chip. Securities firm in Toronto called -- and co in the early seventies. And then he became a senior partner with a company that -- today would all know is Canaccord Adams. Financing oil and gas deals and then in the late eighties he became involved in a company called optimum energy. Which was later sold to a company probably -- called petroquest. And today petroquest extra few months ago petroquest -- market cap of about a 1000000005. Today that market cap of courses suffered cuts -- bit less than billion dollars that's still a very successful company generating a lot of cash flow. We have that we -- the two people that are really the production brains in the company. Our two people by the name of Harrison or -- blacker. And Charles -- is our president. This relocated to Colorado. Who was formerly from who formally held a position as senior position actually is general manager with. -- in Venezuela. And laterally he was with China or man. It trying to -- -- oil in the in the Middle East looking after their LNG operations over there. And he's relocated with our company because he feels very positive that the future is very strong for -- gas and oil. And he's particularly -- happy to be back in the United States. Charles dove is a senior. Geo physicist thirty years in the business. Highly respected looking after -- Calgary operations. So project -- -- peace river arch northeastern British Columbia and northwestern Alberta. We have. Five and conventional discovery sorry five conventional discoveries there. Comprising of ten wells. Which eighty we have an 80% working interest. These wells have been revenue producing since April of this year. And we are as I said before we're 4060 currently. -- versus gas. And we expect to be 6040 by early spring. And this is said this covers 22000 net acres. Which. It's 52%. On average of about 40000 gross acres. We also recently acquired a position in the hottest gas shale play in Canada called the money. As you may know -- -- -- -- -- above 55000 dollars an Acre for this property in them on me. We've acquired it very reasonable cost. Something there. With an abandoned well -- that we expect will be able to test some time in February or march. So we're not saying this is a wild card at this point we're not -- a lot about it but it does hold some potential. In the piceance -- basins. In the Rocky Mountains of Colorado and you talked. The in place resource estimate in the region is about 300 -- cubic feet of gas plus some more oil. We expect that nearly 40000 new wells in the next five years over -- -- depending on what happens you know in the foreseeable future is the downturn that takes effect. But that was you know that's what we've expected -- up until now. How we -- 128000. Net acres there which is 45%. Of 289000. Acres. But we operate and control 128000. Sorry a 120000. Net acres. The cost to us at very reasonable 235. Dollars an Acre. Which is worth about 32 million dollars we we think that very reasonably that's worth well over fifty million today even and -- and -- state. Backed peace river -- for a couple of minutes. The focus there is on. Really these days some British Columbia as the Alberta regime has -- Instituted some royalties that driven out a little bit of the business there. But we have we have currently six wells tight end at 630 -- we. We're gonna tie and another well -- ten to fourteen days from bring us up to a thousand. And we have eight PV ten or two. 77 million. And we expect that. We're going to spend somewhere in the order of three to five million dollars over the winter season. And -- another three to five development wells off the pads -- in existence there's no further. I infrastructure required to do this -- extremely low risk drills and this will bring our production as they said before to between 15102000. Believed by the early spring. Development program for. -- as they said as -- three to five wells. Weeks we're targeting 28 million plus in revenue. Will be at least 22 week we expect from at least eleven wells. And are. Average working interest because 200%. Okay back to the appearance. The stars that you see with the -- around them are areas that we've packaged up to sell. Or monetize or securitize. And essentially what we have here are five business units in twenty different areas. And those include. 80000 acres that can't read it. Ninety sorry 30000 acres and -- -- base and you know you're getting old and can't read anything anymore. And the north strangely resource play we have 22000 acres with 70% working interest in -- -- -- shale play there. Green town cane creek where we've -- that you JV with fidelity resources. -- -- -- 141000 acres and we're targeting about six BCF plus. Their per well. And we have a sub thrust -- stand. Wildcat oil -- of 74000. Acres of which we have a 72% working interest. And it's -- set before them and package. The independent engineers. Target the gross resource potential. For us with this area of about three point -- TCF and 600 million barrels of oil. And we opener Denver office with help -- in April of this year. And -- helped I was very key in helping. To sure close a transaction with -- working partner at the time. To take on an additional 64000. Net acres which is part of that 120000. We just talked about. We've also and I'm gonna talk about this -- a minute as well as of five Monday we've signed another -- with -- with Laramie. Which is. You know germane to what it is we plan on doing here has as you know this is a difficult time for -- junior. -- gas exploration and production companies. So we're we're happy to tell you that we're in a very good position we don't. Not have a lot of debt. We do you have cash flow from operations which is exceeds our. Expenses on a monthly basis. We have access to working capital through a very reasonable bank financing. And other financing weather's not necessarily a -- to pay it back it's reasonable. And we can find their -- accept program for the winter season on the Canadian side with to. You know going out for more money now on the we really do you have to focus on keeping costs down and doing things as much as we can with other people's money and be. The deals that we've done with both fidelity in Laramie are examples of the types of things that we hope to do the game there. I don't know if any -- they have presentation earlier today by -- ultra. But the gentleman there highlight at the expense of doing business in the piceance. And it's really true. It's it's expensive to drill there and you know it's expensive. Resource to extract. So we can find. Companies that have. You know that have deep pockets and have the expertise. And I don't mind spending the money -- -- good -- pretty sure that's what we wanna do. So the key again is to -- up. So what our program is for this year is to attract key land in geology personnel. To finance. Things and to. Target the gross resource potential. And we also want two finalizing -- -- assessment to. Permanent. For seven drill pads that the roan creek project. We expect there that will ultimately drill somewhere between fifty and eighty wells which is targeting -- greater than one BCF per well. And we expect to continue next QGV farm outs with multiple established -- -- Establishing. And they forget the letter of intent that -- -- -- on the slide that's that's a done deal that's -- feel like I referred to earlier. And we expect that we will get an independent. -- out sorry we'll get independent terrorism -- engineers to but probable and proven reserves. Sort probable and potential reserves. At the Gibson gulch which is -- -- forecasts. We expect there that we establish eventually 200 real sites with at least one -- -- quarter. BCF gas per site 2009. The initial development program is to -- -- finance and execute an 810 well. Drill program in appearance -- room creaking Gibson gulch. I would say at this point that it. You know. I doubt that it will be ten I think it was some be somewhere between two and ten here realistic expectation for the year. -- drill an initial test it to -- town cane creek with fidelity. And we'll commence the additional real production program at north strangely. And -- will rationalize noncore properties. 37500. Net acres that we -- with our former partners are -- And -- we expect to. Capitalism. Now the investment highlights for the year. -- by the way the take away from from this financial -- -- here. Is it. Yes our market cap of about 39. Represents less than 25%. Rate for the company is and it represents just over -- -- targeted -- annualized revenues for next year's. You figure this is -- high value. You know high growth story here. So the key investment highlights just two. Review here. It's not three times estimated 2009 cash flows less than now. It's 2.5 percent or more -- 2008 exit anything that is valuable land holdings 150000 net acres. Which -- and piceance and you went to basins and peace river -- region. Burnett and British Columbia. And this provides large discovery potential for well known reserves gas resources. Resource accumulations in the Williams -- cane creek -- smart shale place. There's no cost exposures 25 million dollars worth explorations taking place right now on the Iranian side with can be called titan uranium. And we have cash flow base which is well established for 2008. Which exceeds -- our monthly not. And where our development plan is -- for structuring Capital One place for peace river arch properties to increase production base. Somewhere between fifteen -- 2000 the only. There's low risk leverage in place right now with two G Davies -- -- completed and more on the way. And we have a revolving bank facility that we feel that we can increase as. Revolving credit facility that we feel we can increase as -- production increases. On the Canadian side. -- experienced management team which we talked about earlier people that are dedicated to making this work. And thank you very much free time I understand have a break room in the cottonwood -- -- -- -- -- talked. And.