Franklin Mining, Inc. · OTC:FMNJ
Franklin Mining — Investor Presentation (March 2006)
42 slides from Franklin Mining's investor presentation, Mar 11, 2006
Slide 1: The 10,000-BPD GTL plant in Bolivia
The 10,000-BPD GTL plant in Bolivia: Legal and Regulatory Changes Achieved for an Economic Operation Roberto Torrico Santa Cruz, 11 MAR, 2006 MPG UPSA ROBERTO TORRICO 1
Slide 2: Summary
SUMMARY 1- BACKGROUND 2- TECHNICAL 3- ECONOMICS 4- LEGAL 5- FINAL RESULTS MPG UPSA ROBERTO TORRICO 2 2
Slide 3: The New Energetic Strategy
La La New New Energetic Energetic Strategy Strategy •What What do do we we want? want? •For For what what benefit benefit do do we we look look for for the the Bolivians? Bolivians? •Do Do we we want want to to turn turn Bolivia Bolivia into into petroleum petroleum country? country? Thermal Thermal
Slide 4: Background: The Bolivian Gas Reserves
Reserves Gas Reserves Certify Certify at at 1/1/2000 1/1/2000 8.58 8.58 Certify Certify at at 1/1/2001 1/1/2001 32.20 32.20 Certify Certify at at 1/1/2002 1/1/2002 52.30 52.30 Bolivian Gas Certify Certify at at 1/1/2005 1/1/2005 48.7 48.7 The Bolivian TCF 48.7 BACKGROUND: The 54.9 52.3 1- BACKGROUND
Slide 5: Background: Gas Reserves Potential
1- BACKGROUND: Gas Reserves Potential 91% of the total Not Not Traditional Traditional Zone Zone area are not 489.492 489.492 km2 km2 explore Traditional Traditional Zone Zone 45.507 45.507 km2 km2 TOTAL TOTAL AREA AREA WITH WITH HIDROCARBON HIDROCARBON POTENTIAL POTENTIAL 535.Sq 535.Sq Km Km MPG UP
Slide 6: Market Analysis
Market Analysis •1.400.000 •1.200.000 •1.304.631 •1.000.000 •800.000 •BPD •Production •600.000 •Consumption •628.217 •Import •400.000 •97.907 •17.000 •56.400 •200.000 •0 •Bolivia •Chile •Brasil •Peru •California MPG UPSA •CountriesTORRICO ROBERTO 6 6
Slide 7: Market Analysis: Diesel Imports into Region
Market Analysis Diesel Imports in to region 140.000 125.643 BPD 120.000 97.847 BPD 100.000 80.000 Importación BPD 60.000 22.207 BPD 40.000 16712 BPD 5.000 BPD 20.000 0 Bolivia Chile Brasil Peru California Países MPG UPSA PROJECT TO ELIMINATE DIESEL IMPORTS ROBERTO TORRICO 7 7
Slide 8: Diesel Production in Bolivia
Diesel Production in Bolivia DIESEL PRODUCTION IN BOLIVIA 14000 12000 10000 8000 BPD 6000 4000 2000 0 2000 2001 2002 2003 2004 2004 2004 2004 MPG UPSA ROBERTO TORRICO 8 8
Slide 9: Market prices
Market prices IMPORT DIESEL IN $us/BBL 90 65 81 80 70 63 70 60 60 50 40 30 20 10 0 ru il ile ia a as ni l iv Pe Ch or Br Bo li f Ca MPG UPSA ROBERTO TORRICO 9 9
Slide 10: Background: Market
1- BACKGROUND: Market • The diesel is a product that can negotiate in sales spot. • For 2010 they will be 25 million barrels to be consuming every day in the whole world. • The markets are every time increasingly strict as for the quality of the product • Fewer emission (issues) of sulphur and less
Slide 11: Background: History of GTL in Bolivia
1- BACKGROUND: History The GTL in Bolivia: • 1985, YPFB study a requirement of a GTL technology to produce Gasoline in Bolivian Refineries • 2000, project law to impulse GTL Plants • 2003, Public Opinion, Political Parties: Intensive lobbying process launched in order to obtain the necessary law and
Slide 12: Background: The solution
1- BACKGROUND: The solution Gas without markets Over 60 TCF Convert gas to diesel Diesel shortage 25,000 20,000 Fischer Tropsch process 15,000 Importado Nacional 10,000 5,000 - 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Importado 1,160 2,593 1,730 2,452 2,46
Slide 13: What is GTL?
What is GTL? Technology that allows to obtain liquids (synthetic oil, diesel, petrol, etc) from the processing of natural gas Conversión de Syngas Producción de Syngas Refinación MPG UPSA ROBERTO TORRICO 13 13
Slide 14: Technical: Project concept
2- TECHNICAL: Project concept Project Size: 10.000 bbl/d 8500 bbl/d diesel oil - 1500 bbl/d naphtha - 70 MW electricity Marketing: – Diesel: Primary Market: Internal Bolivian market Developing market Alternative Market: exports Brazil, Chile, Paraguay – Naphtha: export to Brazil , petrochemical feed
Slide 15: Technical: Block diagram
2- TECHNICAL: Block diagram Air Steam Air Separation Power Plant Unit Gas O2 Energy 72 MW Syngas Syngas Natural Gas Generation Fischer Tropsch Synthesis 100 MMSCFD H2 Syncrude Naphtha Hydrogen 1500 BPD H2 Hidroprocessing Recovery Diesel 8,500 BPD MPG UPSA ROBERTO TORRICO 15 15
Slide 16: Technical: Technology selection
2- TECHNICAL: Technology selection MPG UPSA ROBERTO TORRICO 16 16
Slide 17: Technical: Technology selection
2- TECHNICAL: Technology selection MPG UPSA ROBERTO TORRICO 17 17
Slide 18: Technical: Technology selection
2- TECHNICAL: Technology selection MPG UPSA ROBERTO TORRICO 18 18
Slide 19: Technical: Technology selection
2- TECHNICAL: Technology selection MPG UPSA ROBERTO TORRICO 19 19
Slide 20: Technical: Technology selection
2- TECHNICAL: Technology selection MPG UPSA ROBERTO TORRICO 20 20
Slide 21: Technical: Technology selection
2- TECHNICAL: Technology selection MPG UPSA ROBERTO TORRICO 21 21
Slide 22: Technology selection for 10,000 BPD plant
2 - TECHNICAL: Technology selection FOR 10.000 BPD PLANT OPTION CAPITAL OPERATIONA THERMAL EFFICIENCY COSTS L COSTS EFFICIENCY CONVERTION ($US/BBL) ($US/BBL) (CF/BBL) SASOL 27.750 3,70 62,8 % 8.650 RENTECH 31.400 4,96 61,6 % 8.818 EXXON 32.600 ? 61,4 % 9.102 SHELL 35.400 ? 56,1 % 9.810 SYNTROLEUM 42
Slide 23: Capital Costs for an Integrated GTL Complex
Capital Costs for an Integrated GTL Complex ♦ Exxon LT ■. Sasol LT ▲Rentech LT ■. Shell LT ▲Syntroleum LT ●. Conoco LT ■ Sasol HT 30.000 $US/BD 20.000 $US/BD MPG UPSA ROBERTO TORRICO 23 23
Slide 24: Technical: Technology selection
2- TECHNICAL: Technology selection MPG UPSA ROBERTO TORRICO 24 24
Slide 25: Market Status
Market Status • Diesel is an spot sales product. • In to 2010 Market expect near to 25 millions of barrels to consumption around the world. • Markets are more controlled in to quality of product • Minus sulphur and nitrogen oxide emissions are accepted in to the produced diesel around the world. MPG
Slide 26: Technical: Site location
2- TECHNICAL: Site location BRAZIL Riberalta Cobija PERU Santa Ana Trinidad Lake Titicaca BOLIVIA LA PAZ VIBORA Guagui Cocha- CARRASCO bamba CARANDA Sica Sica Valle Buena San Jose de Chiquitos Hermoso Vista Santa Cruz Oruro Refinery Palmasola RÍO GRANDE Robore Lake Refinery Puerto oil pipeline Sucre
Slide 27: F-T Technology selection: Sasol selected as provider
2- TECHNICAL: F-T Technology selection SASOL SELECTED AS F-T TECHNOLOGY PROVIDER MPG UPSA ROBERTO TORRICO 27 27
Slide 28: Technical: Logistics
2- TECHNICAL: Logistics Export Options GTL Plant Site Options BRAZIL CHILE ARGENTINA MPG UPSA ROBERTO TORRICO 28 28
Slide 29: Economics: CAPEX Estimate
3 - ECONOMICS: CAPEX Estimate Front End 6 FT Synthesis 186 Product Upgrade 23 Sub-T otal Process Units 215 Steam and Power 48 Other utilities 23 Sub-T otal Utilities 71 Off Sites (storages, water, aux. Boiler, pretreatment…) 45 Infrastructures & off plot (Buildings & connections) 12 Sub-T otal Infra
Slide 30: Economics: OPEX Estimate
3- ECONOMICS: OPEX Estimate OPEX on a 8000h basis (100% of capacity) 137 persons staff 6 MM$/y FT catalyst (90kg/h) 8 MM$/y Other catalyst and Refinig 2 MM$/y Process Royalties 4 MM$/y Chemical products 3 MM$/y Maintenance 2 MM$/y Insurance 1 MM$/y Total 26 MM$/y MPG UPSA ROBERTO TORRICO 30 30
Slide 31: Economics: Distribution systems
3- ECONOMICS: Distribution systems Cochabamba system (39%) Cochabamba (15%) Oruro (4%) La Paz (16%) Beni (3%) Pando (1%) Santa Cruz system (55%) Santa Cruz (50%) Chuquisaca – Sucre excl.- (1%) Tarija (4%) Sucre system (6%) Sucre (3%) Potosí (3%) SANTA CRUZ : 75% OF DIESEL IMPORTS MPG UPSA ROBERTO TO
Slide 32: Economics: Bolivian Diesel Price Structure
3- ECONOMICS: Bolivian Diesel Price Structure Bolivian regular diesel price is composed of: •Reference price: Low sulfur N2 diesel oil USGC (LSN2), published by Platt´s •Margins for refiners, transporters, storage, wholesalers and retailers •Taxes: Value Added Tax, Excise Tax and others On a 65 $/bb
Slide 33: Economics: Sensibility
3- ECONOMICS: Sensibility Plant Base Cost (CAPEX) Technology WTI USGC Price Market Local Diesel Sales Government Refinery efinery margin Government Gas usage per barrel of liquids Technology O&M Technology Gas transport tariff Government Plant transport and instalation Technology Electricity price M
Slide 34: Legal: Risk coverage
4 - LEGAL: Risk coverage • New Hydrocarbon Law: It makes provision for Fiscal Stability Contract for 15 years on GTL project MIGA: insurance of political risk available – Currency inconvertibility and transfer restrictions – Civil war – Expropriation – Breach of HGA (Host Government Agreement) – Cou
Slide 35: Legal: Law and regulatory changes
4 - LEGAL: Law and regulatory changes MPG UPSA ROBERTO TORRICO 35 35
Slide 36: Final Results: Economic Indicators
5 - FINAL RESULTS: Economic Indicators Gas Diesel Naphtha Electricity Volume 100 MM scf/d 8500 bpd 1500 bpd 70 MW Hypotheses : Capex Opex Taxes Old Law Taxes New Law 23.3 MM$/y Import tax on Capital Import tax on Capital 465 MM$ w/o IVA (w/o transport) good: Yes good: No Gas Transport Stamp Gas Tran
Slide 37: Final Results: Upsides
5 - FINAL RESULTS: Upsides WTI Higher Price The economic evaluation has been performed at regulated diesel price in Bolivia. If performed at unregulated conditions or if diesel export is considered, better economics are obtained. Diesel Premium Price Higher quality may give an important premium Naph
Slide 38: Final Results: Project Schedule
5- FINAL RESULTS: Project Schedule Activity Time Project Study 8 mo Call tenders & contract sign 6 mo EPC Contract Execution 2 yr Commiscioning & Training 2 mo Performance Test Plant 1 mo Total 3 yr 8 mo MPG UPSA ROBERTO TORRICO 38 38
Slide 39: Final Results: Benefits for Bolivia
5- FINAL RESULTS: Benefits for Bolivia • Solves the issue of increasing shortage of diesel – 40% of diesel is currently imported • Adds value in Bolivia – 25$/bbl of added value in Bolivia • Monetizes gas reserves – GTL: 11.9$ of taxes / boe of gas produced – Sales to Brasil: 3.3$ of taxes / boe of
Slide 40: Final Results: Conclusions
5- FINAL RESULTS: Conclusions Bolivian set-up: Bolivia has considerable stranded gas reserves Bolivian imports diesel GTL: the main solution Economics: Law and regulatory changes already obtained Bolivian government supports GTL with incentives and other benefits 10,000 BPD plant: considerable benef
Slide 41: Interest Partners: Strategic & Financial Interests
5- FINAL RESULTS: Interest Partners Strategic & Financial Interests • YPFB – National Petroleum & Gas Bolivian Company • FRANKLIN OIL & GAS Private Company with Business interest in GTL with a good results for Financial & Technology Investments MPG UPSA ROBERTO TORRICO 41 41
Slide 42: Thanks
Thanks ROBERTO TORRICO MPG UPSA ROBERTO TORRICO 42 42