INVESTORS

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 ,B and C projects, allowing a wide range of investors to obtain a ROI (return on investment) ratio of more than 1 000%, previously available only to the founders of oil&gas companies;
  • Low projects’ risks:
  1. Low geological risk – the reserves of projects A , B and C 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 (217 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

Commercial production Current market multiplies
Reserves (Proved and possible) 217* mln. BOE $9 (per BOE 2P)
Production 40 000 BOE per day $42 (per flowing bbl)
EBITDA (weighted average, commercial production stage), CHF mln. 491.1 5.2 times
Value estimation, CHF mln. (Multiplies weighted average discounted by 30%) 1 342

* – 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.

Project Location Reserves base (SPE-PRMS) BOE mln Acquisition and CAPEX costs
A Middle East Mean  recoverable prospective resources 800 CHF 20mln – acquisition cost;

CHF 21mln to CHF 40mln in CAPEX (depending on a number and wells location);

CHF 32mln invested up-to-date.

P-90 (Estimated  recoverable prospective resources) 200
B North Africa 1P (proved) 56 Up to CHF 15mln – acquisition costs;

CHF 20-50 mln- Company’s share in CAPEX program. Oil output start planned for 2019. Return of the full amount of investment expected at the end of the second year of production.

2P (proved and possible) 129
3P (probable) 380
C CIS Reserves and resource base 42 Minimum consolidation costs – not more than CHF 5 mln.  CHF 8-10 млн. –  CAPEX program. Oil output is expected in 2018. Return of the full amount of investment expected at the end of the first year of oil output. Founders’ investments made by the moment – about CHF 20 mln.
1P (proved) (DeGolyer report)               26
2P (proved and possible) (DeGolyer report) 40
Total 2P (reserves)

3P (reserves)

                   169    

                   380

  Recoverable prospective resources                    800