Strat Petroleum, Ltd. ( Pink Sheets: SPRL ): Strat’s mission is to build a strong integrated petroleum company based on opportunities available in the Russian Federation and neighbouring countries. This will be accomplished through development of crude oil sites with proven reserves and through the sale of refined products secured from a number of refineries with which the Company has very strong contact. .....Strat Petroleum Website: stratpetroleum.com
STRAT PETROLEUM, LTD.
(SPRL: OTC. BB) www.stratpetroleum.com
Strat Petroleum, Ltd. (the "Company") was the result of a reverse takeover of F2 Broadcast Network, Inc. which was organized under the laws of the State of Nevada, to acquire licenses to develop oil and gas properties in the Russian Federation. The Company redomesticated to Wyoming on July 9,2004 Management intends, during the next six to twelve month period, to acquire interests in licenses for oil and gas properties that have proven reserves and where possible capped or producing wells.
Proposed Business
The Company has entered into a Memorandum of
Understanding to acquire 49% of a license in a property in the Region of Orenburg called the Rozhdestvenskoe Oil Site.
Company Direction & Vision
Strat Petroleum's envisions building a strong vertically integrated petroleum company based on opportunities available in the Russian Federation and neighboring countries. This will be accomplished through acquisitions of interests in licenses to develop crude oil sites with proven reserves, an equity investment in one or more refineries, and through the sale of refined products secured from a number of refineries with which the
Company has very strong contact.
The Opportunity
The Company stands to acquire interests in licenses to explore and develop oil and gas properties in the Russian Federation. The Company's management and advisory team have developed a very strong network of contacts within the various levels of government, banks and independent associations in the local oil and gas industry, which we believe will provide access to many opportunities to bring value to shareholders.
The Company has currently signed a memorandum of understanding to secure a 49.0 percent interest in a field in the Orenburg Region with proven reserves of at least 70 million barrels of oil, based upon reserve reports filed with Gazprom.
The Company initially will be targeting acquisition of interests in licenses to properties with proven reserves and where possible with commercially producing or capped wells, i.e. focusing on development and not exploration.
The Company has also established contacts with a number of refineries that will allow it to have access to refined products for sale into international markets. All product sales will be in U.S. dollars and may be sold to both international and local customers.
The Region of Orenburg
The initial opportunity is the right to acquire a working interest in one or more oil and gas fields in the Region of Orenburg, Russia, which is located in the Urals of Western Siberia.
The Urals and Western Siberia are home to Russia's leading producers of oil and gas. This region represents a major potential market for U.S. companies interested in sales and medium to long-term investment in the petroleum industry. The oil and gas sector in the Urals and western Siberia possesses major advantages, which include not only its enormous prospected oil and gas resources, but the proximity of deposits to oil
extraction equipment suppliers, and to the European market.
Orenburg Oblast (Province) is also a leading oil and gas producer. Exploration has revealed over 140 oil and gas deposits. Proven reserves of oil exceed 127.4 million
metric tons, while gas estimates are 821.1 billion cubic meters. The region has an estimated 40 to 50 years of commercially exploitable natural gas reserves. Orenburg
currently produces between 8.4 and 8.5 million metric tons of oil. [Barrels is the commonly understood measure.] However, substantial investment is required in order to further develop the region's oil and gas extraction industries.
Only about 1% of proven reserves have been extracted which not only leaves significant quantities yet to be extracted but large tracts of land still untested.
Russia's Oil Industry
New Russia has had two major and paradoxical effects on the oil industry: production has dropped sharply but the industry's importance in terms of the foreign currency it earns has risen dramatically.
At its peak, the Soviet oil industry produced over 11 million barrels of crude oil per day (mbd) in 1987 - that was more than Saudi Arabia, more than every other country in the world in fact except the United States and over a sixth of total world production.
In 1995, production was about 6 mbd - a reduction of almost half from the 12.5 mbd achieved in 1988. The reduction in production has several reasons; most significantly is the decline in the massive infrastructure needed to keep the oil fields operational. Many
Soviet oil fields were thousands of kilometers away from their markets and thousands of kilometers inland, in Siberia or Central Asia. The industry needed massive maintenance for pipeline systems and machinery.
Partly it was an effect of political chaos. In Soviet days, the strong machinery of the state had ensured that an industry like oil, vital for the whole economy, was kept running no matter what. Once central control was weakened, Russia's captains of industry started competing among themselves for resources, and oil could not be guaranteed primacy.
That Russia has substantial reserves of oil is old news. What is new is the dramatically enhanced role in Russian politics, oil technology, and energy markets have given to its petroleum sector. Throughout the 1990's, privatization in Russia and innovations in exploration and drilling technologies brought into production oil fields that had until then been underperforming or completely off-limits, has resulted in increased production to
8.2 mbd in 2003.
To energy companies worried about growing domestic instability among the major oil exporters of the Middle East, Russia has become an even more attractive hedge. Regardless of its political turmoil, Russia will continue to appeal to oil companies, which know how to operate profitably in countries with weak property rights and unstable politics.
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