Title: Malka
1Malka Oil - Ramping up production and sales
Malka Oil - Ramping up production and sales
2Management
Fredrik Svinhufvud CEO, Malka Oil AB (born 1955,
Swedish citizen)
- Appointed CEO of Malka Oil AB in March 2007
- Previously MD of Tetra Paks business in Ukraine.
Former employers include Schlumberger, Atlas
Copco, Geco Well Services and Trelleborg - Holds a master degree in mechanical engineering
from the Royal Institute of Technology in
Stockholm as well as a degree in business
administration from the University of Lund
Richard Tejme CFO, Malka Oil AB (born 1969,
Swedish citizen)
- Appointed CFO of Malka Oil AB in March 2007
- Previously MD of Orc ExNet, a company he
co-founded in 2001 which later became a
subsidiary of ORC Software AB. Significant
experience from the financial services industry
having worked for HQ in New York and ABG Sundal
Collier in Oslo - Holds a degree in business administration from
the University of Stockholm
Michail Malyarenko MD, Malca (born 1962, Russian
citizen)
- Has some 20 years of mineral exploration
experience including 11 years of EP experience
in Western Siberia - MD of the Russian oil company Vostochnaya
Transnatsionalnaya Kompaniya (VTK) between
1993-2002, now is a subsidiary of West Siberian
Resources - Qualified mining engineer-geophysicist from the
Polytechnic Institute in Tomsk
Sergey Sedunov MD, OOO STS-Service (born 1953,
Russian citizen)
- More than 30 years of oil gas experience having
worked at more than 40 different oil fields in
the Tomsk region - Previously worked as chief geologist for the
Soviet oil production company Luginetskneft at
the Luginetskoye oil field in Tomsk - Qualified geologist specializing in oil
technology from the Polytechnic Institute in Tomsk
Michail Dronov Chief Geologist, OOO
STS-Service (born 1963, Russian citizen)
- Some 20 years of oil gas experience having held
various geologist and engineering positions at
several oil companies in the Tomsk region - Deputy MD of the oil company Tomskaya
Neftegasovaya Kompaniya during 2003-2005 - Qualified mining engineer-geologist from the
Polytechnic Institute in Tomsk
Jevgenij Batura Drilling Manager, OOO
STS-Service (born 1963, Russian citizen)
- Some 25 years of experience from the oil gas
industry mainly from drilling and servicing
boreholes - Deputy drilling manager of VTK during 2003-2006
prior to joining OOO STS-Service - Qualified engineer from the Polytechnic Institute
in Tomsk
Operational manager of OOO STS-Service
3Malka in brief
Key facts
Introduction
- Malka Oil is a Swedish incorporated upstream oil
gas company situated in the Tomsk region
(Western Siberia) - The Companys main asset is license block 87,
located in the prolific oil producing Tomsk
region - Substantial continuous bankable reserve increases
since the acquisition of the licence in 2005
from 8 to 97 mmbbls, with significant additional
exploration potential
- Three established oil fields
- Production target of 12 000 bbls/day by 2009 and
a vision of 30 000 bbls/day by 2012 - 12 production wells, 13 under construction
- Production of 2 904 bbls/day peak production in
December, monthly average was 1 446 - 100 employees
4Vision of 30 000 bbls/day by YE2012
Production target
Vision
YE2012 30 000 bbls/day
YE2009 12 000 bbls/day
YE2007 3 000 bbls/day
Malka Oil ramping up production
5Location of Malkas licence block
- The Tomsk region is well-known for its rich oil
and gas reserves - Malkas licence block is surrounded by productive
oil and gas fields - Established blue chip oil producing neighbours
including - Rosneft
- Close to existing infrastructure access to
pipeline readily available - Only 20 of the regions total reserves believed
to be identified - Oil production in Tomsk amounted to 74 mmbbls in
2006 and currently 107 licences awarded for
exploration and production activities - Located 500 km west of Tomsk city
6Malka Oil a one block company
- 25 year exploration and production license
acquired at a public, open auction in April 2005
- Three established identified oil fields
- Zapadno-Luginetskoye, in production
- Lower Luginetskoye, in production
- Schinginskoye, drilling starting 2009
- Significant exploration potential
- Field extension
- At least 7 identified undrilled structures
- 1/3 of surface still not covered by seismic data
7Recoverable reserves summary
- Upside potential in estimates of established oil
fields (LL, ZL and SK) - Additional structures on licence block expected
to add further reserves
Significant reserve potential
8Oil field Zapadno-Luginetskoye
Location
Comments
- Current C1C2 recoverable reserves amount to 20
mmbbls (GKZ) up from 8 mmbbls in the 1990s - Reserves only assigned to the Ju 1.1 and Ju 1.2
horizons and GKZ has assumed average net pay of
only some 2 m, significantly below indications
from new drilled holes - Four new wells drilled in 2006 and 6 wells in
2007 all encountering hydrocarbons resulting in
significant reserve increase - Production ramp-up from August 2007 in total
currently 7 oil producing wells - Additional exploration potential
- Production from new oil bearing formations
including Ju 10 - Increased recovery rate
- Increased reservoir thickness
- Field extension potential link between ZL and LL
Reserves and wells
9Oil field Lower Luginetskoye
Location
Comments
- C1C2 recoverable reserves amount to 71 mmbbls
according to new NIPINEFT estimate - First well drilled in September 2006
- Initially tested up to 400 bbls/day under natural
flow with over 10 m net pay! - Production ramp-up in 2007 with 5 new production
wells completed - Currently 5 new wells drilled YTD all with
significant net pay - Additional exploration potential
- Production from new oil bearing formations
including Ju 10 - Increased reservoir thickness
- Field extension potential link between ZL and LL
Reserves and wells
10Updated seismics during autumn 2007 reveal
redefined structures
10
11Exploration well 580 opening new horizons
12Oil field Schinginskoye
Location
Comments
- C2 recoverable reserves amount to 6 mmbbls
according to GKZ - In 2006, Sibneft-Gazprom discovered a structure
extending into Malkas license block - In 2007, Sibneft-Gazprom assigned 6 mmbbls of
recoverable C2 reserves to Malka Oil (approx 1/6
of total estimated recoverable reserves of this
field) - First drilling is planned for 2009
- Additional exploration potential
- Field extension
- Reservoir thickness
Reserves
13Potential Undrilled structures
- Identified undrilled structures
- At least 7 undrilled structures on the licence
block - Structures identified through 2D seismic data
collected during the 1980s covering 2/3 of the
license block - Additional exploration potential
- Validate and explore additional oil bearing
structures - Average hit ratio in the Tomsk region appr. 72
- More structures to be found on new seismic data
- Shoot new seismic data and reinterpretation of
old seismic data
14Production ramp-up
Activities1 adding new wells...
...to continue production ramp-up
- Current status - Key facts
- Seven oil-producing wells on ZL
- Five oil-producing wells on LL
- 13 wells in test or drilling phase
- 2904 barrels per day reached in Dec 07
1 Activities as of Jan 31, 2008
15Pipelines and field facilities
Substantial infrastructure in place
- A main project has been the construction of a 14
km long pipeline between Lower Luginetskoye and
Zapadno-Luginetskoye - Successfully tested and currently in operation
- Capacity of 26 000 bbls/day
- In addition, significant investments in roads,
drill pads, tanks and accommodation have been
made - In 2008, Malka Oil will construct a pipeline for
direct connection to the Transneft system - Permit for construction was recently granted
- Work has commenced as ground conditions now are
suitable
16Plan 2008
Planned activities in 2008
- Hydrofracturing of 16 wells to significantly
raise level of production by Q1/Q2 - Drilling
- Drilling of 2-10 production wells
- Drilling of 1-2 exploration well
- Construction and infrastructure
- Connection to Transneft, including construction
of a 12-14 km pipeline and a complete oil
treatment station - Other infrastructure such as additional roads and
connecting pipelines - Geo exploration and reservoir engineering
- Includes shooting of 720 km of seismic data
- Investigating alternatives for constructing a gas
powered electricity generating station with
associated power distribution network. The
intention is to define as a separate project and
spin off
17Board of directors
18Shareholders and share price performance
Ownership structure
Share price performance since IPO
18
19On our way towards 12 000 bbls/day 2009
- Malka Oils main asset located within a proven
oil-bearing province - Sixteen test and production wells drilled, all
encountering hydrocarbons - At least seven undrilled structures identified
and large possibilities for new discoveries - Significant growth in reserves since start-up in
2005 - Current proven and probable reserves (C1 C2) of
97 mmbbls compared to 8 mmbbls in 2005 - The company estimates current reserves in the
three existing oil fields between 140-190 mmbbls - Experienced management with proven track-record
and extensive local knowledge - Russian co-founders also were engaged and
contributed to the formation of what has today
emerged as West Siberian Resources (1995 2003) - Swedish CEO, Russian speaking with experience
from oil industry and from conducting business in
Eastern Europe - Getting off the ground passed 3 000 bbls/day
level at the end of 2007 - Substantial investments in infrastructure already
made - Currently initiating hydrofracturing of up to 16
wells during Q1, 2008 - Concrete and focused plans for 2008
- Successful development of reserves, no dry holes
so far
19
20Financials
21Exploration well 580 - logs
22Company overview and structure
- Group structure
- Malka Oil AB (publ)
- Swedish parent company
- Group management and strategy
- Financing and investor relations
- Headquarters in Stockholm
- OOO STS-Service
- Russian subsidiary (99)
- Day-to-day field operations
- Domicile in Tomsk
- OOO Mars
- Russian associated company (50)
- Transport and logistics company
- Domicile in Tomsk
- Not consolidated by Malka group (consolidated by
Central Asia Gold)
23ESPO will benefit Siberian producers
- The transneft pipeline system
- Far-reaching pipeline system
- Expansion plans for transport to Pacific coast
- The East CoastPacific Ocean (ESPO) pipeline
- Represents Transnefts single largest capacity
expansion project - To be built in two stages, first stage to be
finalised in 2008 - Expected to increase Transneft export capacity
more than 50 on completion of the two stages
- Benefits for West Siberian producers
- Increased export capacity expected to reduce
domestic oversupply and harmonize domestic and
world oil prices - ESPO will distinguish between different qualities
of oil ? Increased relative compensation for
high-quality Siberian Light producers
23
24Russian fiscal terms
- Royalty per ton 419 RUB (P-9) Rt / 261
- P Average Urals price over the tax period
- Rt Average USD / RUB exchange rate over the tax
period
Royalty
Export Tax
- Exported volumes only
- Dependent on Urals price (P)
- None on prices below 109.5 USD/ton (14.6
USD/bbl) - 35 on prices between 109.5 and 146 USD/ton
(14.6 and 19.47 USD/bbl) - 45 on prices between 146 and 182.5 USD/ton
(19.47 and 24.33 USD/bbl) - 65 on prices above 182.5 USD/ton (24.33
USD/bbl)
Other
- Value added tax rate (VAT) 18 on net domestic
prices - Corporate tax rate 24
- Royalty, export tax, VAT and all costs are
deductible for corporate tax purposes