Corporate Update
Brisbane, April 19, 2013 AEST (ABN Newswire) - Talon Petroleum Limited (
ASX:TPD) is moving quickly to implement its Strategic Plan previously disclosed in its presentation of 4 February 2013 and the Demerger Scheme Booklet in connection with the Demerger meeting of 25 February 2013.
Board Renewal Process
Talon Petroleum has added new board members:
- Clifford S. Foss - Managing Director
- Angus Douglas - Non-Executive Director
- Jeff Forbes - Non-Executive Director
Other Key Positions
Talon Petroleum recently welcomed Anastasia Maynes as Company Secretary in the Brisbane, Australia office.
Key Personnel Data
Clifford S. Foss was appointed President, CEO and Managing Director of Talon Petroleum on 26 March 2013 after serving as President and CEO with Texon Petroleum Ltd until the company merged with Sundance Energy on 8 March 2013. Mr. Foss has had extensive technical and management experience with six different companies over almost 40 years exploring for oil and natural gas with primary emphasis in the Gulf Coast region of Texas. During Mr. Foss's career he has enjoyed exposure to both public and private organizational structures with emphasis on technical evaluation, acquisitions, expansions, reductions and their associated administrative activities. Mr. Foss' experience also means that he has a broad knowledge of companies and key personnel active in the Gulf Coast region.
Angus Douglas was appointed as a Director of the Company on 18 March 2013. Mr Douglas has been involved in the investment industry for over 45 years in Australia, Canada and the UK. During this time his focus has been on companies involved in mining and the oil and gas industry, where he has been actively involved in raising capital.
Jeff Forbes was appointed a Non-Executive Director of the Company on 4 April 2013. Jeff recently retired as an Executive Director, CFO and Company Secretary of Cardno Limited - an ASX200 listed global infrastructure services company, with a market capitalisation of around $1 billion. Jeff was heavily involved in the growth of Cardno and in particular its expansion into the USA, where it generates over 50% of its revenue.
Anastasia Maynes was appointed as Company Secretary of the Company on 4 April 2013. Ms Maynes has had 7 years experience as a corporate lawyer in one of the Australian top-tier law firms where she specialised in mergers and acquisitions and capital market transactions involving companies in resources and energy sector as well as general corporate advisory. Ms Maynes is an accredited Chartered Secretary and a member of Chartered Secretaries Australia, and has qualifications in law, accounting, finance and corporate governance.
Corporate Costs
Corporate costs and general overheads are under review and being restructured to meet Talon's requirements.
Talon Program Funding
Talon plans to leverage value from its high working interest acreage position in its prospects by selling down portions of each prospect to industry partners to pay for Talon's well cost to test each project. In some instances, the Company expects to receive cash for acreage and a carry on the first test well. Through this approach, the Company expects to drill 1-3 key value adding wells during the following 12-18 months.
Low Risk Oil Re-Development Strategy
Talon's Exploitation Strategy is to re-develop oil resources in mature infrastructure areas using horizontal drilling and multiple fracturing techniques that will allow oil resources to be recovered that were not produced in the original vertical wells in and surrounding old oil field areas. The Company has already developed three projects to test the low risk development strategy listed below.
MRW-Olmos Oil Sand Prospect - The map below illustrates the regional setting for the Olmos sand deposition, oil production from historical vertical wells, initial production tests from the recently drilled horizontal wells, Talon's group leasehold acreage position (3,823 acres) and proximity to Olmos production. Highlighted in red is Talon's proposed Olmos horizontal drilling program across the Mosman Rockingham Prospect in McMullen County, Texas which represents gross resources potential of 5.5-7mmboe assuming 20 wells at 275-350mboe/well. Assuming a most likely case of 325mboe/well at $6.2mm/well yields $3.1mm PV10/well. Talon has recently obtained production information from nearby horizontal Olmos wells that indicates that it may be more efficient to drill this prospect as a horizontal oil prospect with over 20 locations in the 3D high graded area using 80 acre spacing for horizontal wells. Currently the spacing rules for vertical wells are 40 acres per well and would need to be amended to allow drilling on 80 acre spacing. Talon plans to sell part of its high working interest position to fund its share of the cost of drilling the first test well in the MR prospect which is tentatively planned for later in 2013 pending the sell down effort. Additional reservoirs that are prospective on Talon's group MRW acreage are multiple Wilcox sands from 4,000-6,000' (3,823 acres) and the Austin Chalk (7,209 acres) which is located immediately above the Eagle Ford shale at approximately 10,800'. The Wilcox, the Olmos, and the Austin Chalk are distinctly different targets and may be sold separately or together as determined by the market.
Roundhouse-Cotton Valley Lime Oil Prospect - The montage below illustrates the regional setting of Roundhouse prospect in the East Texas basin in the upper left map. The upper right map illustrates that Roundhouse is located on strike at similar elevations as the Cheneyboro producing field. The detailed production data in the lower quadrant of the montage illustrates the type and proximity of the Roundhouse Prospect to the Cheneyboro Field production of 3.3mmbo+16 bcfg from vertical wells from the Cotton Valley Lime. Talon currently holds a lease position of 7,405 gross acres and 3,510 net acres with its partners. The Talon Exploitation Strategy is to extend the field to the north of the main body of the field and South of the lone producer located north of Talon's acreage. The resource potential model for Talon's 47.4% WI in the current acreage position is estimated to be 7.4mboe assuming 46 horizontal wells each yielding 221mbo+600mmcfg which generates $3mm/well at $6mm/well cost. Talon is currently attempting to form a drilling JV covering approximately 3,800 acres with the adjacent mineral lessee with each company providing 50% of the acreage to the JV. This would allow Talon and the adjacent lessee to drill a proof of concept test at a reduced cost to each company. Talon's cost basis for this JV would be approximately 25%, Tanos owners cost basis at 25% and the offset lessee at 50%. The JV acreage would be developed in the same shared manner as the test well while acreage outside of the JV would be developed on a non-JV basis where Talon WI would be 47.4% WI. Talon intends to cause this project to be drilled in the 3rd Quarter 2013 pending final outcome of the potential JV.
Rodessa Oil Prospects - Talon's Rodessa Oil project is a re-development drilling project to recover oil in reservoirs that were considered too poor to complete prior to horizontal drilling and fracing technology improvements in recent times. The target acreage will be in and surrounding historical vertical oil production wells at 9,000-10,000 depth. Talon group currently holds 2,917 net acres in three distinct prospects in the Rodessa producing trend in the East Texas Basin. Talon plans to commence the second phase of its East Texas lease program in the 3rd Quarter 2013 to increase the lease position toward a goal of 20,000 acres pending successful sell down efforts. The attached map below illustrates the location of Talon's Rodessa Prospects within the overall Rodessa producing Trend outline. Although the project is early stage, scoping data indicates that on 160 acre spacing, 325mboe/horizontal well at $6.2mm/well generates a PV10 of $3.1mm/well. A proof of concept well is projected to begin in early 2014 after leasing and sell down of working interest is completed.
Contact
Talon Petroleum Limited
T: +61-7-3211-1122
F: +61-7-3211-0133
E: talon.info@talonpetroleum.com.au
WWW: www.talonpetroleum.com.au
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