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The Oldest Energy Property Clearinghouse and the First Website in the Petroleum Industry

Connecting projects with funding sources since 1983. The Oldest Energy Property Clearinghouse and the First Website in the Petroleum Industry. 1. 3Dec09. Energy Exchange Presents:. WINDOWS OF OPPORTUNITY IN ENERGY. Three Parts. What is the Energy Exchange? Opportunities in Energy

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The Oldest Energy Property Clearinghouse and the First Website in the Petroleum Industry

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  1. Connecting projects with funding sources since 1983 The Oldest Energy Property Clearinghouse and the First Website in the Petroleum Industry 1 3Dec09

  2. Energy Exchange Presents: WINDOWS OF OPPORTUNITY IN ENERGY

  3. Three Parts • What is the Energy Exchange? • Opportunities in Energy • Select Projects

  4. What is the Energy Exchange? • An energy consulting firm www.ERCO-EnergyResources.Com • An association of engineers, geologists, and financial professionals • Not a brokerage firm

  5. Our Purpose To connect energy projects with funding sources

  6. The Energy Exchange • Modeled after Real Estate’s MLS • Oldest energy clearing house (1983) • Petroleum industry's first website (1994)www.enex.com

  7. The Energy Exchange • Hundreds of projects available • From $10 thousand to $10 billion

  8. China Russia Japan Middle East Pipe Pumps Hardware Rigs Equipment Gold Silver Mining Coins Bullion Treasure Oil Gas Biofuels Nuclear Wind Solar Patents Processes Chemistry Technology

  9. The Energy Exchange • Technical Network • Financial Network The Energy Exchange is a bridge between the technical community and the financial community.

  10. The Energy Exchange $ Project A1 Agent. Oil Company Broker Dealer $ $ Project A2 Rep $ $ Energy Exchange Project B1 Rep. $ Geologist Venture Capital $ Project B2 Rep $ $ Project C1 Rep. $ Engineer Institutional Investor $ Project C2 Rep $

  11. Energy Store Analogy One Project Store Energy Exchange Store • Oil • Natural Gas • Geo-thermal • Wind • Solar • Coal • Nuclear • Bio-Fuels (Bio-diesel) • Bio-Mass Fuel Cells

  12. Who are we? Discovery of the East Texas Oil Field (7 Billion Barrels of Oil)

  13. Technical Associates David H. Mangum - Petroleum Engineer, Geologist, MBA Bill Olson - Geologist, Geophysicist, MBA, Attorney Cesar Abeigne, PhD – International Operations, Geoscientist Tyler C. Shantz – Petroleum Engineer Belkis Fernandez – Petroleum Engineer, Reservoir Modeling, Venezuela Vladimir Ingerman, Ph.D. – Geophysicist, Russia Charles Mangum, – Civil Engineer, Drilling Rig Designer - Houston Dennis McMurdie – M.S., Geologist, Salt Lake City Bob Oberndorf, Geologist, Denver Edwin Tillman – Computer Systems Engineer D. Grady Mangum – Information Systems Khalid Al-Ruwaili – Petroleum Engineer, Saudi Arabia Jim Evans – Geophysicist, Denver Many Others Nationwide & Worldwide

  14. Landman Services Richard Rosenberg – Senior Landman Daniel Mangum, Petroleum Landman D. B. Mangum – Landman

  15. David H. Mangum, President • Over 35 years petroleum experience with five Fortune-100 energy companies (Mobil, Shell, Schlumberger, Tenneco, XDS, and Coastal) • Geology, Mississippi State University • B.S. in Petroleum Engineering,University of Texas • M.B.A., Pepperdine University • Professional Engineering, Real Estate, Insurance, and Securities Licenses (All Expired)

  16. Technical Professionals (continued) Cesar Abeigne, Ph.D., Asst. V.P. International • Five Languages (French, Arabic, and Spanish) • Over 12 years experience with Elf Aquitaine, Shell Oil Company and Total.  • Ph.D. in Geosciences from Montpellier in France • One of the first geophysicists to explore deep water off coast of West Africa.

  17. Technical Professionals (continued) • Charles Mangum, P.E., V P - Engineering Registered Professional Engineer Over 35 years experience in Offshore Drilling Captain in the U.S. Army Corps of Engineers Army Ranger, Airborne B.S. in Civil Engineering -- Mississippi State University M.S. in Engineering -- University of Texas , Austin

  18. Technical Professionals (continued) • Vladimir Ingerman, PhD, Manager, Russia Operations Petrophysics software development, International Business Development. Twenty-years oil exploration experience in Russia VP of Tyumen (#2 geophysical company in Russia) Worked for Schlumberger in the U.S.A. PhD in Natural Resources Exploration and Development Authored 47 professional publications and one textbook

  19. Legal Professionals Bill Olson, Esq. – Attorney, Geologist, Geophysicist, MBA George Nama, Esq. – International Law Darin Mangum, Esq. – Securities, Former SEC Carlos Reyerson, Esq. – EB5 Immigration

  20. Legal Professionals (continued) Bill Olson, Esq., CEO of ERCO • Geologist • Geophysicist • Attorney • M.B.A. • Over 27 years petroleum experience • University of Southern California

  21. Legal Professionals (continued) Darin H. Mangum, Esq., Legal Counsel • Securities Attorney • Oil and Gas • SEC - Los Angeles and Salt Lake City • Syndication, partnership law, mergers, acquisitions, and compliance • EB5 Immigration • BYU

  22. Financial Associates Brent Harley Janson Durney, West Point Military Academy Alex Westwood, Finance Rick Veale, Petroleum Products Trading Alan Tomkow, Business Development Gerald Avery, Administration Hector Escamilla, Jr. Gwen O. Pearson, African Business Development Kate Nesselrode, Regional Advisor - Latin America Many More Nationwide & Worldwide

  23. Projects Funded *Wildcat wells

  24. Projects Funded (continued)

  25. Part II WHY INVEST IN ENERGY?

  26. WHY INVEST IN ENERGY? • Inflation Hedge • High Financial Rewards • Cash Flow (Mail Box Money) • Diversification • Tax Benefits • Competition • Lease Costs • Drilling Prospect Availability • Demand / Consumption • Oil Production Trend • Price Forecasts • Drilling Costs • Technology • Environment • Government Endorsement • Money Crunch

  27. The Sinking US Dollar

  28. Three Boogie Men • Inflation – (As the government spends its way out of the current economic downturn.) • Demand – rapidly increasing • Supply -- rapidly decreasing

  29. “If you think $140 oil was bad, wait until exploding Asian demand overwhelms global markets and America's suppliers cut us off.” Weiss Research, Inc.

  30. HIGH FINANCIAL REWARDS • Producing Wells – 10-20% Cash-on-Cash Return • Developmental Wells – Average 85% success 25% to 100% Annualized Return on Investment • Exploratory Wells (Wildcats =10% to 50% Success) 100 to one Return-on-Investment

  31. RISK • Drilling is becoming less risky. • Occasional projects have a probability of success better than 90%. • Many projects would be economically attractive even if oil or gas prices would fall 50%.

  32. COMPETITION The big money has gone offshore, because there are “too few easy-to-find big oil fields” remaining onshore in the USA. (To quote Mobil Oil Co.) • Over 10,000 small oil companies have left the arena since 1982.

  33. Average Oil Well Producing Rates Average Barrels of Oil Per Day Producing Oil Wells Iran 221 8,729 Saudi Arabia 592 8,339 528 United Kingdom 4,709 1,127 Nigeria 1,304 3,263 Mexico 766 5,729 Indonesia 243 Venezuela 9,971 180 31,875 China 82 36,955 Canada 40 14 635,015 United States

  34. QUALITY OF DRILLING PROSPECTS Because big oil companies are pulling out of the USA, the quality of small drilling prospects are getting better.

  35. Newsweek Magazine

  36. LEASE COSTS Oil companies are not as anxious to renew oil leases. (solease costs are low)

  37. Demand / Consumption • U.S. consumes 25% of world’s petroleum. • Asians are becoming like Americans, with an automobile or two in every household.

  38. U.S. Oil Production

  39. Natural Gas Production/Consumption - China

  40. China is buying up world oil reserves • South America (Venezuela) • Africa (Angola) • North America (USA, Canada)

  41. U.S. OIL PRODUCTION

  42. U.S. OIL PRODUCTION TREND • USA production began decline in 1973 • Over two-thirds of USA onshore oil wells are “marginal”. (Less than 10 barrels per day)

  43. Oil Price Chart

  44. U.S. Oil Production vrs. Imports

  45. U.S. Oil Imports • 1970 – 30% During OPEC Oil Embargo (Remember the gas lines?) • 2012 – 61.2% Imported (High was 66% in 2006) (What would happen if OPEC cut us off again?) • 2030 – possibly 73% Imported. U.S. Office of Technology Assessment says: “This will Bankrupt the U.S.A.”

  46. USA’s Dangerous Addiction to IMPORTED OIL Imports have exceeded 66% of U.S. consumption! (USA paid over $51 per barrel just to maintain a military presence in the Middle East)

  47. The days of cheap oil are over.

  48. TECHNOLOGY Recent advances in oil finding technology have reduced risk and improved recovery . Some companies report 85% success on wildcat wells.

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