1 / 7

Avalon Exploration, Inc.

Avalon Exploration, Inc. The Investment. Management John Wieczorek, Randy Sullivan and Bob Davis Headquarters Tulsa, Oklahoma Strategy Drilling and development of WEHLU and exploration in Oklahoma. Partner :

stormy
Télécharger la présentation

Avalon Exploration, Inc.

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Avalon Exploration, Inc. The Investment Management John Wieczorek, Randy Sullivan and Bob Davis Headquarters Tulsa, Oklahoma Strategy Drilling and development of WEHLU and exploration in Oklahoma • Partner: • Avalon Oil and Gas was formed in June, 2004 by ETP and three management principals, John Wieczorek, Randy Sullivan, and Bob Davis. • Strategy: • Avalon’s strategy centers on a dual platform of lower risk drilling and development in Central and Northwest Oklahoma, and a higher risk/reward exploration effort in south central and southwestern Oklahoma (mountain front area) • Investment: • Energy Trust Partners originally committed $10 million for a 77% ownership before Management incentives, and fully funded the capital commitment. • Cash flow from operations (and bank borrowings against existing reserves) has been reinvested in various projects. • As illustrated below, the Company has achieved rapid growth.

  2. Avalon Exploration, Inc. Chronology of Investment • ETP’s investment process for Avalon (evaluation, due diligence, and negotiations) exceeded 12 months from initial meeting in April, 2003 to closing. • Issues included uncertain production and upside in central Oklahoma, West Edmund Hunton Lime Unit (WEHLU) and a cumbersome joint development agreement (JDA) between Avalon and an industry partner. • By December, 2003 Management had successfully restructured and terminated the JDA, and improved central Oklahoma operations (WEHLU) with newly drilled wells and more consistent production. • By April, 2004 ETP was able to independently verify proved reserves and upside potential at WEHLU, and agree with Management on its exploration strategy.

  3. Avalon Exploration, Inc. Chronology of Investment • In June, 2004 Avalon closed with a $5 million cash investment from ETP and asset contributions from Management; in October, 2005 ETP funded the second $5 million commitment. • With improved production and higher confidence in the Unit’s reserve potential, Avalon successfully drilled the first horizontal well at WEHLU in December, 2005. • WEHLU net production reached the 1,000 bopd mark in May, 2006. • Sale process initiated in June, 2006. • WEHLU net production reached the 1,500 bopd mark in October, 2006. • Avalon completed sale of WEHLU effective February 1, 2007. • Rapid build up of reserves, production and cash flow at WEHLU led to a sale of Avalon I in April 2007 for ~$85MM in cash.

  4. Avalon Exploration, Inc. Chronology of Investment • Simultaneously, certain non-WEHLU assets, primarily in Woods County, were sold to Avalon II for $15MM. • Avalon II participated in the drilling of 16 new wells, installed a gas gathering system in the area, and increased net production more than fourfold from 200 BOEPD to 850 BOEPD at the time of an asset sale, closed in June 2008 for ~$100MM. • Total cash distributions from Avalon I and II amounted to ~ $200MM, representing an IRR in excess of 97% per annum and a ROI in excess of 7x to both Avalon and ETP. • In mid-2008, Energy Trust Partners and Avalon Exploration formed a third company, Avalon III, to continue to develop projects in Oklahoma. • Avalon III has been accumulating acreage in Oklahoma since mid-2008; first drilling began in October 2008.

  5. Avalon Exploration, Inc. Avalon I Investment Growth • ETP’s investment accelerated drilling at WEHLU, resulting in a rapid build up in company assets, production and cash flow.

  6. Jun 2006: Sale process begins Dec 2005: First horizontal well Feb 2000: WEHLU farm-out from Beta Mar 2007: Merger Agreement Executed Apr 2007: Sale closed, effective 2/1/07 Oct 2005: ETP invests additional $5 mm Jun 2004: ETP closes $5 mm investment Aug 2007: Rising Avalon II Production Apr 2003: ETP starts discussions Dec 2003:Avalon acquires JV interest from UK partner Oct 2001: Production begins at WEHLU for Avalon Oct 2008: First drilling In Avalon III Jun-08 Oct-08 Oct-07 Feb-08 Avalon Exploration, Inc.

More Related