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Eaglewood Energy Inc. (EWD-TSXV) |
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March 19, 2010 Issue |
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The Most Powerful Name In Corporate News and Information |
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With Papua New Guinea Being Underexplored And Full Of Hydrocarbons, Eaglewood Energy Inc. Is In The Right Place At The Right Time With Their Four Exploration Licenses |
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Company Profile:
Eaglewood Energy Inc. is an energy company engaged in the exploration of its
Papua New Guinea licenses. The Company acquired a 100% interest in four
petroleum exploration licenses granted by the government of PNG. It has
farmed out two of its licenses and is negotiating on its third license.
Eaglewood will be drilling two exploration wells in 2010. BComm from Haskayne School of Business in Calgary, MBA from the Schulich School of Business, Chartered Financial Analyst 1991.
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Interview conducted by: Lynn Fosse, Senior Editor, CEOCFOinterviews.com, Published – March 19, 2010
Mr. Hurtubise: Eaglewood is a pure play Papua New Guinea oil and gas exploration company and we currently have four exploration licenses in that country. Our four licenses are all independent plays; we have done farm-out transactions on two of them, and we are negotiating on the third. We have a commercialization scheme for each, but the vision is to first find hydrocarbons in commercial quantities. There is a concept for small scale LNG that we are working on which could let us deliver the first LNG (Liquefied Natural Gas) out of New Guinea ahead of the larger companies.
CEOCFO: What do you know that the larger companies do not know? Mr. Hurtubise: It’s not a question of knowledge, but size of resource. Our resource is smaller and therefore the project is much smaller and easier to manage and quicker to implement. Our LNG scheme is not as grand so that allows us to do things on a much smaller scale and faster.
CEOCFO: Why is Papua New Guinea the right place to be? Mr. Hurtubise: Papua New Guinea is definitely the right place to be exploring now because it is full of hydrocarbons, it is relatively unexplored as it is gas prone and nobody cared about gas until commercialization of stranded gas through Liquid Natural Gas. The Exxon/Oilsearch project has brought worldwide attention to the size of the gas resources in PNG and the geographic proximity to the best LNG markets in the world. It is exciting when you combine that prospectivity and availability with a parliamentary democracy in a common wealth country. A stable government, an English common law system and in addition, it is probably one of the top ten fiscal regimes in the world. Papua New Guinea is a developing country with a relatively low population base, the government recognizes the only way they can develop the country is with the help of the extraction industries, mining and oil and gas and the revenues they bring. They keep the fiscal regime attractive to the miners and the oil and gas companies. Also, from a company like Eaglewood’s perspective, the Exxon/ Oilsearch, PNG LNG project announced in May of 2008 brings enormous credibility to the country. In addition, with Talisman’s entry into the country in the last year adds to the credibility and Interoil announcing the kind of discoveries that they are making also brings sensational attention to the size of the resource that is here. That allows a little junior Eaglewood Energy to coattail along on that news nicely.
CEOCFO: How were you able to get the land with so many good players around? Mr. Hurtubise: The magic of Eaglewood is these licenses is that we acquired them from a company who got them in 2005 and 2006, when nobody had heard about PNG and if you had heard about it, you certainly wouldn’t be interested in gas. We acquired large tracts of land, 28,000 square kilometers of exploration land, most of which is right next door or surrounding existing gas discoveries that until recently has not been commercial. It is not like the Western Canadian Sedimentary Basin, where you are always fighting for land. We have the land and it is ours as long as we meet our work commitments.
CEOCFO: What is happening on the properties today? Mr. Hurtubise: We are about to drill our first well. It is on one of our licenses which is in the highlands of the Papuan Fold Belt that we farmed out to a company called Oil Search (PNG) Limited, which is a large Australian company. They have the most experience drilling wells in the rugged highlands area so we farmed out to them and we will be drilling a well with them. We hope to see that well spudding in April of this year (2010). We are targeting a resource that is probably a trillion cubic feet of gas and hopefully bigger. Nippon Oil is also a partner in that license. We are looking for gas that will ultimately add to a third or a fourth LNG train in the PNG LNG project. We will be drilling our second well in a license we have in the in the Forelands area of PNG. We will be drilling that I expect in July. That is a totally separate play and so we have two wells going down this year on our four licenses. We have shot offshore seismic in one of our licenses, which is the Cape Vogel Basin, where there is some very large structures. The new seismic seems to confirm what the old seismic showed which indicates a very large resource there in fifty meters of water just off the coast. So it is a very benign environment to operate in. I expect sometime this year to have that farmed out to some large company with the timeframe, wallet and the appetite for a multi-TCF kind of exploration play. So 2010 is going to be a very active and interesting year for Eaglewood Energy. We recently announced an equity financing where we are raising $23 million, and that financing went very well. We have the right farmout partners, we have the balance sheet, and we have the land in the right place. 2010 is looking good.
CEOCFO: Are there any challenges you see ahead? Mr. Hurtubise: We are operating in a remote country. This is a country where it gets thirty feet of rain annually. Its jungle and because it is so underdeveloped and under-explored, there is relatively little equipment in the country. The scarcity of supply and a logistical difficulty of operating in a remote area translate into slippages in the timetable. The timetable slips and things just get more expensive. That is the biggest challenge verses operating in some place like Canada or any of the more mature basins around the world.
CEOCFO: What is your two-minute take on
the energy situation and the world economy?
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Eaglewood is a pure play Papua New Guinea oil and gas exploration company and we currently have four exploration licenses in that country. Our four licenses are all independent plays; we have done farm-out transactions on two of them, and we are negotiating on the third. We have a commercialization scheme for each, but the vision is to first find hydrocarbons in commercial quantities. - R. Bradley Hurtubise |
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