Chairman's Update
CHAIRMAN NEWS
From: John W. Adair
To: ADAIR SHAREHOLDERS
Date: June 20, 2000
Subject: Company Update.
Dear Shareholders,
Pursuant to the subject of this letter, I respectfully submit to you the following:
1. ADAIR recently concluded a development agreement with another industry giant; ADAIR is participating with CALPINE in developing a power plant project on the Torres Martinez Indian Reservation in Southern California. CALPINE is an independent power producer based in San Jose, California. Currently active in 21 states and Alberta, Canada, the company has one of the leading project development portfolios in the American energy industry. Among CALPINE's projects is the South Point Energy Center, a 500-megawatt natural gas-fire power plant being constructed on the Fort Mojave Indian Reservation in Mojave County, Arizona. The company is also one of the nation's leading producers of electricity generated from renewable resources. ADAIR/CALPINE's site is located in Imperial and Riverside counties, California. The proposed facility will be capable of generating approximately 600-megawatts and represents a private investment of $275 million in the Coachella Valley. By constructing a merchant power generating facility on tribal lands, the Torres Martinez feel that they have taken an important step in attracting industry to the area. Such a project will add to the local economy through the creation of skilled jobs and increased tax revenue while complementing existing agricultural, resort, and gaming activities. Additionally, as the valley is a net importer of electricity, the addition of significant generating capacity at the source of demand reduces local dependence on power generated elsewhere. "We believe CALPINE to be a company with a proven record of environmental and community responsiveness. Moreover, as a leader in their field, CALPINE brings credibility and accountability to any project they undertake", stated John W. ADAIR, Chairman, and CEO. The fact that the location is already zoned for industry and that there are already high-capacity power lines in place to handle the electricity produced were all factors in the decision to locate on the reservation as stated in a local news article.
2. ADAIR and OCCIDENTAL YEMEN (a subsidiary of Occidental) have been preparing for the exploration operations in Yemen that are expected to begin in the 3rd quarter of this year. ADAIR/OCCIDENTAL are awaiting ratification from the Yemen Parliament of their Production Sharing Agreement that was recently signed with the Ministry of Oil. The Production Sharing Agreement is expected to be ratified within the next few days according to our representative in Yemen. ADAIR opened its office in Yemen and has been preparing for all aspects of the exploration phase. ADAIR will be the operator for Occidental and SABA during the Exploration phase.
YEMEN EXPLORATION SUMMARY:
Pipelines and export facilities are already in place that makes it very affordable to get newly discovered product to market quickly and easily. Experienced in this block of reserves, ADAIR believes that the block could contain up to 340 million barrels of recoverable reserves. ADAIR will operate the project during the exploration phase due to its acknowledged expertise in the region. Mr. Richard (Dick) Boyce, President of ADAIR Exploration, ADAIR's wholly owned subsidiary located in Dallas, Texas was formally Exploration Manager for Yemen Hunt and has extensive experience in Yemen. Yemen Hunt currently produces approximately 160,000 barrels of oil per day from their Marib Field, which offsets the ADAIR/OCCIDENTAL 500,000 acre concession. Oxy with its mammoth know-how in production and development will operate the project after discovery of commercial recoverable reserves has occurred.
COLOMBIA:
3. ADAIR has completed it's engineering and feasibility for a 20MW electrical power generating facility in Colombia utilizing natural gas from ADAIR's Chimichanga Exploration Concession, where it has wells already drilled with approximately 30 BCF of Proven reserves. Mr. Fernando Infante, ADAIR's Colombian engineer who is the project manager will be in Houston this month to brief the company on the current project status and he is very positive with the progress of the plant development.
4. We are currently developing and evaluating producing oil and gas properties from major and independent firms in the US Market. This will enable ADAIR to enhance its value and cash flow, and to exploit "behind the pipe" reserves through workovers and developmental drilling. We have engaged a major investment house to bring capital for the acquisition of cash producing oil & gas properties with infield drilling potential. ADAIR has no bank debt and has positioned itself with strategic partners that give ADAIR tremendous upside potential with limited financial exposure.
Shareholders, your interest in ADAIR is greatly appreciated and you can rest assured the ADAIR team is working very diligently to develop this company into a major energy company while using very prudent risk management as we lay the foundation for this planned expansion.
Respectfully,
John W. Adair
--------------------------------------------------------------------------------
|
