Cygnus Oil And Gas · OTC:CYNS
Cygnus Oil And Gas — Touchstone Resources USA — Investor Presentation (March 2006)
27 slides from Cygnus Oil And Gas's investor presentation, Mar 22, 2006
Slide 1: Management Presentation March 2006
Management Presentation March 2006 TOUCHSTONE RESOURCES USA (Ticker: TSNU)
Slide 2: Disclaimer
Disclaimer This presentation material contains forward-looking statements within the meaning of Section 27a of the Securities Act of 1933, as amended, and Section 21e of the Securities Exchange Act of 1934, as amended. The opinions, forecasts, projections or other statements, other than statements o
Slide 3: Key Statistics
Key Statistics Touchstone Resources USA Touchstone Resources USA Headquarters: Houston, TX Ticker: TSNU (OTC BB) Stock Price (3/14/06): $0.92 Basic Shares Outstanding: 78 million Market Capitalization: $71.7 million Book Capitalization: $13.5 million Debt/Book Cap.: 39.9% 3-Month Avg. Trading Volume
Slide 4: Touchstone Transition
Touchstone Transition Limited operating staff Geographically diverse prospects Non-operated interests High quality management team beginning with CEO Roger Abel (hired 8/2005) CFO Steve Haynes hired to oversee financial controls, reporting and capital markets COO Patrick Oenbring hired to establish
Slide 5: Management Team
Management Team Roger Abel, Chairman & CEO 35 years of oil and gas experience Former President & COO of Occidental Oil & Gas Former Chairman of Conoco E&P, Europe; responsible for all of upstream activities in Europe and Russia Awarded Bronze Star Medal for service in Vietnam Stephen C. Haynes, Chie
Slide 6: Board of Directors
Board of Directors R. Gerald Bennett, Director Former President, CEO and Chairman of Total Safety Inc., a safety service provider in the Energy industry Former Senior Vice President of Equitable Resources and President & CEO of its ERI Supply Logistics Served as Director of El Paso Corporation Rober
Slide 7: Management Platform
Management Platform Public Entity Management weighed options with private equity firms but chose public vehicle to maximize value: Provides liquidity for investors Ability to use stock as currency for future acquisitions Benefit of full public valuation metrics as company grows Ability to attract an
Slide 8: Legacy Assets & Zapata
Legacy Assets & Zapata Legacy Assets Overview Interests in 15 oil and gas projects with ~536,000 gross acres in Texas, Louisiana, Mississippi and New Zealand Several wells currently on production in Starr, Hidalgo, and Zapata Counties in South Texas One well drilled and shut-in in coastal offshore L
Slide 9: Recent Focus on Gas Shales
SABINE UPLIFT LLANO UPLIFT Recent Focus on Gas Shales 4 active NFX rigs LOUISIANA ARKANSAS OKLAHOMA TEXAS BARNETT SHALE WOODFORD/CANEY SHALE FAYETTEVILLE SHALE OUACHITA MOUNTAINS ARBUCKLE MOUNTAINS FRONTAL BELT
Slide 10: Unconventional Play Characteristics
Unconventional Play Characteristics Long-lived reserves Repeatable, statistical prospects Low-risk drilling opportunities Abundant gas in place Thick intervals Layered reservoirs Low matrix gas porosity and permeability Utilization of advanced technologies including: Horizontal drilling Advanced com
Slide 11: Caney/Woodford Shale Play
Caney/Woodford Shale Play Overview of the Caney / Woodford Shale Play Located in Pittsburg, Hughes, McIntosh and Coal Counties, Oklahoma Overlies Deeper Hunton and Simpson 100+ Wells Drilled Thru Woodford 100+ Producing Vertical WACCAWH Wells Shallow Cromwell, Wapanucka & Hartshorne Production Thick
Slide 12: Woodford vs. Barnett
Woodford vs. Barnett Reservoir Property Woodford Shale Barnett Shale Depth (ft): 6,000 - 12,000 6,500 - 8,500 Thickness (ft): 120 - 200 200 - 300 Source: Newfield Exploration Company Presentation. Reserves and Production Woodford Shale Barnett Shale Resource Potential 30 - 100+ Bcf/section Range of
Slide 13: Touchstone's Checotah Prospect
Touchstone's Checotah Prospect
Slide 14: Growth Areas - Caney/Woodford Shale
Growth Areas - Caney/Woodford Shale Entrance into the Play Post-retirement from Occidental, Mr. Abel focused on the area as an independent Touchstone entered the play in August, 2005 through a farm-out agreement with Checotah Exploration Touchstone operates the properties First well spudded on March
Slide 15: Touchstone's Checotah Prospect
Touchstone's Checotah Prospect Multiple Stacked Pay Opportunities in McIntosh County, Oklahoma Large contiguous acreage position in McIntosh County Touchstone earns a 50% operated interest in JV's 10,600 mineral acres for 5,300 acres net to TSNU Heart of the Caney shale play Excellent opportunity in
Slide 16: Checotah - Economics
Checotah - Economics Typical Gross Development Well Days to Drill 15 Days to Complete 5 Total Development Costs $1.0 million Finding & Dev. Costs/Mcf $1.00 Typical Gross Production Per Well Est. Ultimate Recovery (Bcf) 1.0 IP Rate (MMcf/d) 1.5 Decline Rate (1st year) 50% Development Project Economic
Slide 17: Arkansas - Fayetteville Shale
Arkansas - Fayetteville Shale
Slide 18: Fayetteville vs. Barnett
Fayetteville vs. Barnett Reservoir Property Fayetteville Shale Barnett Shale Depth (ft): 1,500 - 6,500 6,500 - 8,500 Gross Thickness (ft): 50 - 325 200 - 500 Net Thickness (ft): 20 - 300 150 - 300 TOC: 2.0 - 9.5% 4.5% Thermal Maturity (Ro): 1.5 - 4.0% 1.0 - 2.1% Total Porosity: 2.0 - 8.0% 4.0 - 5.0%
Slide 19: Illustrative Fayetteville Reserves
Illustrative Fayetteville Reserves (a) Bank of America Equity Research Report dated 12/15/05. Note: Analogue to Southwestern based only on potential in the Fayetteville shale, excluding potential of the Chattanooga and Moorefield.
Slide 20: Growth Areas - Fayetteville Shale
Growth Areas - Fayetteville Shale Entrance into the Play TSNU formed an AMI with Maverick Oil and Gas in September, 2005 to acquire acreage in the Fayetteville Shale The parties built a substantial acreage position through concentrated leasing efforts "Grass-roots" leasing strategy allowed Maverick
Slide 21: Large Acreage Position in Fayetteville Shale Play
Large Acreage Position in Fayetteville Shale Play Started leasing program in September, 2005 in Woodruff County TSNU has 45% W.I. in a 160,000 acres leased and committed position 72,000 net acres to TSNU Net acreage implies up to 2.7 Tcf of recoverable reserves to TSNU (a) Maverick Oil and Gas to op
Slide 22: Fayetteville - Target Well Profile
Fayetteville - Target Well Profile Typical Gross Development Well Days to Drill 20 Days to Complete 5 Total Development Costs $1.5 million Finding & Dev. Costs/Mcf $1.00 Typical Gross Production Per Well Est. Ultimate Recovery (Bcf) 1.5 IP Rate (MMcf/d) 2.0 Decline Rate (1st year) 50% Development Pr
Slide 23: Conventional Play Characteristics
Conventional Play Characteristics Onshore focused Long-lived reserves Low-risk drilling opportunities Reliance on use of 3-D seismic Complementary to past technical expertise Farm-in technical expertise and prospect evaluation Black Warrior Basin Gulf Coast onshore Permian Basin Mid-Continent Key Ch
Slide 24: Current Capitalization (Sept. 30, 2005)
Current Capitalization (Dollars in Thousands) Sept. 30, 2005 Cash $4,756 Minority Interest 2,955 Convertible Debentures(a) 3,050 Notes Payable to 3rd Parties 2,366 Stockholder's Equity: Preferred Stock 1 Common Stock 66 Additional Paid-In Capital 32,609 Accumulated Deficit (27,501) Total Stockholder
Slide 25: Current Capitalization (January 31, 2006)
Current Capitalization As of January 31, 2006 Shares Common stock issued and outstanding 78.0 million Convertible Notes and Warrants 31.6 million Options 5.4 million Fully diluted 115.0 million Common stock authorized 150.0 million Preferred stock authorized 5.0 million shares Preferred stock issued
Slide 26: 2006 Capital Plan
2006 Capital Plan (Dollars in Thousands)
Slide 27: Near-Term Priorities
Near-Term Priorities Near-Term Priorities Securing adequate funding for 2006 capital budget Evaluating science on first wells in Arkoma and Fayetteville plays Listing on the American Exchange Adding independent board members Integrating full management team and establishing new control systems
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