ATLANTIC DRILLING INTERNATIONAL
INVESTMENT $65,000,000
July 20, 2009
Prepared by Carl A. Davies
Professional Petroleum Engineer of Alberta, Canada
GLOBAL ENERGY PROJECTS
11934 Wink, Houston, TX. 77024
Tel: (713) 953-0179
Fax: (713) 953-0128
Email:
This document is the property of Global Energy Projects and all the information contained herein is of considerable value to the company and is deemed to be STRICTLY CONFIDENTIAL. No unauthorized copies of this document are to be made. Upon written request, all copies of this document are to be returned to the company. This document is for information purposes only and shall not be considered an offer for investment purposes under the laws of the State of Texas and shall not be in violation of any Federal Security laws.
TABLE OF CONTENTS
1.Executive Summary
2.Business Proposal
3.Discussion
a.Business opportunity
b.Description of drilling rigs
c.Workshop and warehouse in Tripoli, Libya
d.Oil company customers
e.Drilling company competition
f.The Libyan oil industry
g.Atlantic Drilling Company management
h.Atlantic Drilling Company financial projections
4.Exhibits
The following information will be forwarded by email for security purposes.
a.Management resumes
b.Rig photos
c.Atlantic Drilling Company financial projections
d.Articles on the web
1.Executive Summary
Now that the economic sanctions against Libya have been lifted, the Libyan government has decided to double Libyan oil production in the next 10 years from 1,500,000 BOPD to 3,000,000 BOPD. The oil produced from Libyan reservoirs is sweet, very high quality and finds a ready market, particularly in Europe. Many of the major oil companies have moved back to Libya and are committing significant investments to oil and gas drilling. The Libyan government is also encouraging the drilling of water wells to supply fresh water for all of the towns along the Mediterranean coast of Libya. Companies such as ENI have committed up to $28 billion in oil and gas drilling and production equipment to ensure adequate oil reserves for Italy. ExxonMobil, which had a very large presence before the economic sanctions were imposed, is now re-entering the market and will be particularly interested in producing gas for its gas plant at Marsa Brega. Other major oil and gas companies, such as Chevron, Occidental, Shell, Totale, and other international companies are rapidly gearing up to develop oil and gas production in Libya.
As such, the drilling activity will be significantly increased over the next few years as is evidenced by the fact that such companies as Challenger and KCA are ramping up to meet the drilling demand.
The Libyan government has recently announced that it would like to see at least 40 more drilling rigs active in the Sahara and therefore there is an opportunity for a new drilling company to set up operations in the area.
It is proposed that a new drilling company be created which will utilize new rigs employing the latest technologies. All of the rigs will be of a similar design such that the parts inventory can be minimized and workers can be moved from one rig to another without requiring re-training.
2.Business Proposal
A new company, Atlantic Drilling Company, is being created for the purpose of owning the drilling rigs which will be drilling oil and gas wells in Libya. Atlantic Drilling Company will be domiciled in the British Virgin Islands, and the management of the drilling company will be undertaken in both Tripoli, Libya and Le Locle, Switzerland. A decision has been made to purchase two new 2000HP AC rigs and two 1000HP workover rigs employing American equipment and technologies. Atlantic Drilling Company is seeking a total of $65,000,000 to purchase the four rigs, set up a workshop and warehouse in Tripoli, Libya. Atlantic Drilling Company is seeking an equity of $15,000,000 and a loan of $50,000,000.
These four rigs will be "state-of-the-art", but not fully automated, as they will be operating deep into the Sahara desert where maintenance of complex systems might well be a problem. On the other hand, the rigs have been designed for rapid location moves and quick rig up operations. These rigs will command a higher day rate as the number of days on each well will be less than with the older type rigs which are currently in operation in Libya. A decision has been made to employ a minimum of four rigs to start operations in order to create sufficient cash flow to justify the cost of management and personnel.
However, it is recommended that over the next two years the rig fleet be increased to six new 2000HP AC rigs, four new 1500HP AC rigs and four 1000HP workover rigs.
During the development of this program, management has identified sources of finance for the purchase and installation of the rigs in Libya, together with funds for a desert camp, a workshop and warehouse in Tripoli, and offices both in Tripoli and in the country where the drilling company has its head office.
Included in this Business Plan is a detailed financial analysis of this investment, and key personnel have been identified to ensure a successful start-up operation. Finally, the investment party can be assured that qualified and experienced drilling superintendents, tool pushers and workers can be provided to safely operate these rigs in the Sahara desert locations.
Atlantic Drilling Company has an understanding with a Swiss company, Fegawerk - - that has been operating in Tripoli, Libya, for over 20 years. Fegawerk will provide headquarters from which to initiate operations and arrange for all legal work associated with this investment, including obtaining work and residence visas. The company will also act as a center for negotiating drilling contracts with major oil companies operating in Libya. Fegawerk and its Libyan partner will own 50% of Atlantic Drilling Company.
3.Discussion
a.Business opportunity
Global Energy Projects (GEP) has organized the creation of Atlantic Drilling Company in the British Virgin Islands. This company will be managed by Fegawerk - a Swiss company with its head office in Le Locle, Switzerland and a field office in Tripoli, Libya. Fegawerk and its Libyan partner will own 50% of the stock of Atlantic Drilling Company. Details of Fegawerk can be reviewed by visiting the following web location
Global Energy Projects and partners will own 50% of the stock of Atlantic Drilling Company and the management of GEP will be responsible for organizing the building of rigs in the U.S., shipping them to Libya, and placing them in operation in the desert.
b.Description of drilling rigs
The management of Global Energy Projects has identified two new 2000HP AC drilling rigs and two 1000HP workover rigs which have been manufactured in Texas. Two of these rigs are readily available for shipment to Libya. A detailed description of the rigs will be made available to the funding party. These rigs are "state-of-the-art" and have many special features. For example, the top drive and travel block are anchored to the mast during transportation between well locations. This mast can be lowered onto a dolly for rapid transportation to the next drilling location.
c.Workshop and warehouse in Tripoli, Libya
Global Energy Projects management is in the process of organizing the building of a workshop and warehouse in Tripoli, Libya. This organization will service Atlantic Drilling Company operations in Libya, and will also be available to the oil and gas drilling industry at large.
d.Oil company customers
Atlantic Drilling Company will be one of the most sophisticated drilling operations in Libya, and as such will focus its marketing effort towards the major drilling companies. It is known that such companies as Exxon Mobil will favor the newer rigs, particularly electric rigs powered by AC power. All of these rigs will meet the particular specifications required by the major oil companies and will enjoy the best day rate in the industry.
e.Drilling company competition
At the present time, there are a few well-established drilling companies in Libya such as Challenger Limited and KCA. Challenger is currently expanding its drilling rig fleet and has recently signed a joint venture with Bronco Drilling of Oklahoma City. Challenger operates up to 25 rigs in Libya but many of these rigs have been in operation for decades. The new rigs proposed by Atlantic Drilling Company should be able to offer a superior service to the major oil companies.
f.The Libyan oil industry
Oil was first discovered in Libya in the early 1960s. In the late 1960s, Occidental Petroleum discovered the Intisar oilfield which was placed on production in record time, peaking at over 1 million BOPD. Exxon had a major operation in Zelten and in the early 1970s operated a major gas liquification plant at Marsa Brega. The Oasis Oil Company was a major oil producer with significant reserves in Gialo, Waha, Defa and Samahra. In the 1980s and 1990s, Libya suffered a serious setback in its oil production due to economic sanctions imposed by the U.N. and U.S. Now that these sanctions have been lifted, Libya is poised to become a significant, world-class, oil and gas producing country once again.
g.Atlantic Drilling Company management
Global Energy Projects has the appropriate contacts to successfully commence operations in Libya to assist a new drilling company by providing the initial management services, importation and transportation services, contract negotiations and rig operations in the Sahara. Resumes of GEP management will be emailed to the funding company upon request.
h.Atlantic Drilling Company financial projections
The management of Global Energy Projects has prepared a detailed financial projection for the new drilling company operations employing the first two new 2000HP AC rigs and two 1000HP workover rigs. A detailed breakdown of rig revenues for the first year has been prepared, together with the associated direct operating costs. A detailed Income Statement and Source & Application of Funds has been prepared which reflects the cost of financing this start-up operation. The management of GEP has identified long term financing in the U.S. One such case is a 10-year financing with interest only during the 10 years, and with a balloon payment at the end of the 10-year term. A yearly Sinking Fund was allocated to purchase a yearly annuity payment such that the lending company would be ensured of a final payment at the end of the 10th year.
Details of this financial projection will be emailed to the funding company. GEP will also consider alternative methods of funding Atlantic Drilling Company, such as a five to seven year commercial loan. Equity partners are also being considered.
The management of Global Energy Projects will be available for consultation.
4.Exhibits
a.Management resumes
For security and confidentiality purposes, the following management resumes will be forwarded by email.
Carl A. Davies
George McGuirt
Bernard Deschamps
Gary Thomas
Luc Tissot
b.Rig photos
At the request of the rig manufacturers, photos can only be emailed to potential buyers or users of the rigs.
c.Atlantic Drilling Company financial projections
This detailed financial projection will be emailed for consideration to the proposed funding company.
d.Articles on the web.
Research on the Libyan oil and gas industry can be readily obtained on the internet. The amount of information is so significant and is beyond the scope of this Business Proposal.