MANAGEABLE RISKS

Geological risk (the risk relating to the uncertainty of exploration of fields)

is significantly reduced by implementation of company in-house Prospecting for Oil and Gas in the project A and duly mitigated in the project B, as the fields have already been explored and audited by the world’s leading audit companies, reserves base has been proved. Historically, the Company’s team has successfully explored more than 1 billion barrels of reserves (7 deposits have been discovered).

Financial risk (the risk relating to the inadequate funding for the implementation of the work program) 

is duly mitigated in A and B projects, because the projects belong to the highly attractive and competitive sector of the oil and gas industry – one of the priorities for the international investment community and thus the project team is in a position (with the consent of the token holders) to attract financing from the investment community. Historically, the Company’s team attracted more than $500 mln to oil & gas projects development.

Production risk (the risk relating to the implementation of the production program)

is extremely low, since the fields proposed for development are traditional for the regions and are not too complicated in terms of operation (depth from 1200 m to 2500 m, light hydrocarbons, accessible infrastructure).Historically, the Company’s team commissioned dozens of fields in different regions of the world (Middle East, North Africa and CIS countries).

Geopolitical risk (country risk) 

is manageable, since North Africa and the Middle East are listed among the priority regions for the development by global oil & gas companies. Such major oil & gas companies as TOTAL, CINOPEC, APACHI, OXI, MOBIL and others operate in adjacent areas to our projects. Local authorities and population are vitally interested in economic development of their regions and thus do their best to create favorable conditions.

Investment Highlights

• The underlying assets related to the premium segment of the traditional market, as well as the unique low acquisition costs of A and B projects, allowing a wide range of investors to obtain a ROI (return on investment) ratio of more than 150%, previously available only to the founders of oil&gas companies;
• Low projects’ risks:

1. Low geological risk – the reserves of projects A and B have already been audited by leading international companies;
2. Low production risk – deposits are traditional for the  regions and are not complicated in terms of operation (depth from 1200 m to 2500 m, light hydrocarbons, accessible infrastructure);
3. Low financial risk – projects belong to the highly attractive and competitive sector of the oil and gas industry (proven reserves in North Africa and the Middle East – one of the priority for traditional investors), priority for the international investors and our Company team has possibility (with the consent of the shareholders) to attract financing from the traditional investment community (banks, funds etc.);

• Large amount of accrued investments – more than $ 20 million of co-founders’ funds;
• Team of highly skilled specialists. More than ten successfully implemented projects. Thanks to the vast experience in the best oil and gas companies, the Team developed its own system of exploration of new deposits. The essence of the system lies in the correct combination of all known methods of exploration, including biological and chemical analyzes, which allows to determine with minimum costs the presence / absence of hydrocarbons in the area under investigation. The experience and the level of the Team’s training will undoubtedly allow the effective implementation of the declared strategy of the project development;

Based on reserves (147 million barrels 2P)* and anticipated production (40000 barrels per day) market value of the company might be over 1 billion CHF.

Company’s value estimation based on market multiples

* – including indicative assumption of Egypt opportunities

The low level of entry-multiple is justified, among other things, by founder’s contribution of its own holdings in the existing oil and gas project to Hydrocarbon8 without cash compensation.