Attached files
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| 8-K - BLAST ENERGY SERVICES, INC. 8-K FILED 1.6.11 - PEDEVCO CORP | form8k.htm |
Guijarral Hills Field
Exploitation Project
Safe Harbor Disclosure
An investment in Blast Energy Services, Inc. (the “Company”) involves a
high degree of risk and is suitable only for investors with substantial
means who have no need for liquidity in their investments. No one
should invest in the Company’s securities who cannot afford to lose their
entire investment.
high degree of risk and is suitable only for investors with substantial
means who have no need for liquidity in their investments. No one
should invest in the Company’s securities who cannot afford to lose their
entire investment.
In making any investment decision in the Company, investors must rely
on their examination of the Company and the terms of any offering,
including the merits and risks involved. This presentation contains
forward-looking statements. Actual results, events or conditions could
differ materially from those projected by the Company due to a variety of
factors, some of which are beyond the control of the Company.
on their examination of the Company and the terms of any offering,
including the merits and risks involved. This presentation contains
forward-looking statements. Actual results, events or conditions could
differ materially from those projected by the Company due to a variety of
factors, some of which are beyond the control of the Company.
Neither the United States Securities and Exchange Commission (the
“SEC”) nor any state securities administrator has approved or
disapproved any securities of the Company nor has the SEC or any
state securities administrator passed upon the adequacy or accuracy of
the disclosures contained herein or the merits of an investment in the
Company. Any representation to the contrary is a criminal offense.
“SEC”) nor any state securities administrator has approved or
disapproved any securities of the Company nor has the SEC or any
state securities administrator passed upon the adequacy or accuracy of
the disclosures contained herein or the merits of an investment in the
Company. Any representation to the contrary is a criminal offense.
Guijarral Hills Field Exploitation Project
ü Blast is seeking an initial $3M investment in the form
of debt financing to “farmin” or invest in drilling one
well on the initial prospect in the Guijarral Hills in
Central California
of debt financing to “farmin” or invest in drilling one
well on the initial prospect in the Guijarral Hills in
Central California
ü By participating in the initial well, Blast expects to
realize a 34.5% interest in the program’s entire 2,543
acre position where four target zones are known to
produce - the initial well is planned to penetrate all
four zones to obtain rights
realize a 34.5% interest in the program’s entire 2,543
acre position where four target zones are known to
produce - the initial well is planned to penetrate all
four zones to obtain rights
ü Most promising initial well site has been identified and
permitted through extensive geological evaluation and
study of adjacent wells drilled by Chevron & Union Oil
amongst others in over 100 wells drilled in the area
permitted through extensive geological evaluation and
study of adjacent wells drilled by Chevron & Union Oil
amongst others in over 100 wells drilled in the area
Guijarral Hills Field Exploitation Project
ü Unique opportunity to invest in California “in-field”
drilling project
drilling project
ü Adjacent fields exploited by Chevron and Union Oil in
1940s and 1950s
1940s and 1950s
ü Leases originally held by Chevron and Cal Minerals -
never exploited
never exploited
ü Project lies between two fields that produced over
50M barrels of oil
50M barrels of oil
ü Along this trend over 2Bn barrels of oil produced from
four major fields
four major fields
ü Every one of the four target zones has produced oil in
adjacent wells
adjacent wells
ü First well in this Project is permitted and ready to drill
Bakersfield
Guijarral Hills Field
Project Area
Project Area
From: DOGGR Oil and Gas Fields of California
Guijarral Hills Field Exploitation Project
Project Highlights
Project Highlights
ü Up to 25 Million barrel reserve potential.
ü Within 1000 feet of production from a 50 Million barrel
oil field.
oil field.
ü Potential production from four reservoirs proven
productive within the field.
productive within the field.
ü Multiple targets can be tested with one well.
ü On the nose of a Guijarral Hills/Coalinga anticline.
ü Oil is migrating in the present day.
ü 25 - 40 API gravity oil
Guijarral Hills Field Exploitation Project
Objective Drilling Zones
Objective Drilling Zones
ü Temblor: Up to 10 million barrels of oil in place
– Smith sand:
» Porosity: 15 - 23%
» Permeability 50 - 100 md
– Allison sand:
» Porosity 20%
» Permeability 100 - 200 md
– Leda sand:
» Porosity 15 - 20%
» Permeability 50 - 400 md
ü Avenal/Gatchell: Up to 20 million barrels of oil in place
– Porosity: 10 - 15
– Permeability: 10 - 300 md
ü All these zones were proven to be productive at the nearby
Guijarral Hills Field
Guijarral Hills Field
Guijarral Hills Field Exploitation Project
Economic Assumptions
Economic Assumptions
ü Assumes $80/bbl oil price with an initial flow rate of
435 equivalent bbls/day.
435 equivalent bbls/day.
ü Expenses assume that wells flow for two years before
requiring pumps to be installed.
requiring pumps to be installed.
ü Under the terms of the proposed farmin, Blast will
have a 67% working interest in the costs to bring the
initial well on to production - which then drops to 50%
on future wells and capital costs in the project.
have a 67% working interest in the costs to bring the
initial well on to production - which then drops to 50%
on future wells and capital costs in the project.
ü Assumes first revenue in June 2011.
Guijarral Hills Field Exploitation Project
Economic Impact
Economic Impact
ü Successful outcome in the first well has an estimated
Net Present Value at 10% to Blast of $17,604 MM.
Net Present Value at 10% to Blast of $17,604 MM.
ü A successful initial well is projected to generate six
times more revenue annually than our current base
business.
times more revenue annually than our current base
business.
ü Projected initial investment payout reached within one
year.
year.
ü Assumes completion in only the Leda sand, one of
four potential zones in the well.
four potential zones in the well.
ü Does not include any economic benefit from
additional development wells that may be drilled on
this section or the acreage sections earned in the
Project by participating in the initial well.
additional development wells that may be drilled on
this section or the acreage sections earned in the
Project by participating in the initial well.
Guijarral Hills Exploitation Project
Use Of Proceeds and Collateral Available
Use Of Proceeds and Collateral Available
Gross Proceeds $3,000,000
Cost to Drill Initial Well $1,540,000
Cost to Complete Well 600,000
Repayment of Sun Resources Note 270,000
Escrow of 1st Year Interest 240,000
Commission, Fees and Attorneys 350,000
Total Uses $3,000,000
Security for Senior Loan
1. Lawsuit settlement due September 2011 for $1,440,000
2. Sugar Valley Field valued at PV10 of $1.2M, cash flowing
approx. $50,000 per quarter
approx. $50,000 per quarter
Guijarral Hills Field Exploitation Project
Upside Potential
Upside Potential
Twelve Well Case:
ü Development drilling following a successful initial well
could support up to eleven additional wells being
drilled to exploit all four zones on this one tract.
could support up to eleven additional wells being
drilled to exploit all four zones on this one tract.
ü In this case, Blast may need to seek additional funds
of up to $24 MM over the next two years.
of up to $24 MM over the next two years.
Thirty Well Case:
ü Development and exploratory drilling on the other
tracts in the Project could result in an additional 18
wells being drilled.
tracts in the Project could result in an additional 18
wells being drilled.
ü In this case, Blast may need to seek additional funds
of up to $60 MM over the next three to four years.
of up to $60 MM over the next three to four years.
Blast Energy Services, Inc.
Capitalization Table
Capitalization Table
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Preferred
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Common
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Authorized
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20,000,000
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180,000,000
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Issued and Outstanding*
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6,000,000
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**66,759,238
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Reserved for Unexercised Warrants
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***11,495,089
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Reserved for Unexercised Options
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2,593,959
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Total Outstanding and Reserved
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6,000,000
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80,848,286
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* Includes 6,000,000 preferred shares and 14,481,534 common shares owned by Clyde Berg, Eric McAfee and their
affiliates |
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** Excludes 1,150,000 shares approved but not yet issued under the terms of the 2005 class action settlement
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*** Includes warrants to purchase 6,090,000 @ $1.44 per share and 1,555,089 @ $0.01 per share owned by Laurus
Master Fund and warrants to purchase 2,000,000 shares owned by Berg McAfee affiliates. |
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Guijarral Hills Field
Exploitation Project