David - TM - Haz / Gulfstream Resources
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QATAR FISCAL REGIME
In Qatar, the contractor (consortum) initially receives 52% of gross revenue, comprised of a cost recovery and profit component. This percentage declines to approximately 25% once capital costs have been recovered.
OTHER ASSETS
Gulfstream holds a 25% interest in the Margham field in Bubai. This is a gas condensate field that has been producing for 15 years. Approximately 9,500 bpd (gross) of condensate is produced through a gas cycling scheme. The gas is principally reinjected and periodically used within Dubai. Proven and risked probable reserves are believed to be sufficient to keep the field procucing for anpother 10 years.
In Indonesia, Gulfstream, with a 40% interest, is reworking three onshore fields (two oil and one gas). In terms of oil, plans for a 20 well developement program over the next year, which would of yielded approximately 5,000 bpd (gross) is now expected by the end of 1997. The oil fields (Senabing and Remok) are on the island of Sumatra. Gas production of 8 mmcf/d (gross) is also expected by year-end 1997 from the redevelopement of an existing field (Sukatani in West Java.
Gulfstream is involved in a joint venture with the Government of Madagascar covering two huge exploration areas, one onshore and one offshore Madagascar. Gulfstream has a 82% interest in the onshore block and a 80% interest in the offshore block. These are gas prone areas, with reserve potential that may range as high as 50 trillion cubic feet. In the past several wells have been drilled on these blocks and tested gas, with gas in place estimated up to three trillion cubic feet. The lack of gas haandling infrastructure and domestic commercial or consumer markets obviously will pose a developement constraint, unless export markets for gas or gas products are found. Gulfstrream is expected to drill its first well (a re-entry well) on the onshore block by mid-1998 after a seismic program has been completed.
Gulstream has a 20% interest in block 2 in Yemen. This block has been drilled before by another consortum, with oil shows, but not in commercial quantities. There are other prospects on the block still to be drilled, in addition to the possibility that a significant pay zone was missed in the wells that were previously drilled.
FINANCIAL POSITION
At present, Gulfstream has over $40 Million in cash and short term investments, and has no debt. Their shareholders equity line on the balance sheet exceeds $90 Million. With cash flow generation expected to exceed $100 Million during in 1998 Fiscal Year, Gulfstream has the financial flexibility to handle all forecast exploration and developement expenditures associated with the Al Rayyan field and other oil prospects on the offshore Qatar concession without raising equity or incurring debt. The company also has a substantial unused credit line with a Canadian chartered bank. If the North Field gas project comes to fruition, Gulfstream's share would exceed US$275 Million, and it would require additional financing. |
