Web Site : http://www.taghmenenergy.com/

Company Update Webcast Webcast, watch by clicking here

June 2006 Write Up June 06 Oil Barrel Link Here

May 2006 Write Up : http://www.proactiveinvestors.com/registered/articles/article.asp?TAG

May 2006 Research Report : http://www.objectivecapital.co.uk/taghmen.pdf

April 2006 Presentation : http://www.taghmenenergy.com/documents/taghmen_04_06.pps

Email : info@taghmenenergy.com

Company Profile

Taghmen Energy is an independent oil and gas exploration, development and production company which listed on Londons AIM market in January 2005. It is focused on Latin America and has assembled a group of assets in Central America.

Key Points:

Exploration focus is shifting to new hydrocarbon destinations.
Maturing fields in traditional oil producing regions such as the Persian Gulf and the North Sea have prompted companies to seek alternative destinations for hydrocarbon reserves. As a result, there has been a notable increase in exploration activity amongst the former Soviet Union, Latin/Central America and West Africa regions due to their under-exploited reserves. Much of future oil and gas production is expected to come from these emerging hydrocarbon regions.

... and to the development of smaller fields
With the notable exception of those in the former Soviet Union, new regions however offer relatively smaller fields. Their economics make them distinctly attractive for smaller companies but unattractive for the majors. This has prompted larger companies to focus on production, leaving exploration and development of hydrocarbon reserves with smaller companies. Taghmen characterises these emerging exploration trends in the oil and gas sector.

Corporate strategy entails both exploration and production
What is unique with Taghmen is its intent to be engaged in subsequent production as well. Most exploration companies seek to exit upon the prove-up of their reserves through an asset sale to a larger company. Taghmens intent to be a company maker makes it more selective in licence acquisition. It also offers more comfort regarding the reserve potential of its licence areas.

... and is en route to be implemented through an acquisition
Taghmen is in the process of finalizing the acquisition of Petroleos del Norte S.A. (PDN), a Colombian company that operates three fields close to Taghmens licence areas. The proposed acquisition would provide Taghmen with a larger exploration reserve base, a pipeline infrastructure and some producing assets. This reiterates Taghmens commitment to be a producing company rather than a pure exploration play.

High energy prices underpin the profitability of exploration
Rising demand for energy from fast growing economies such as China and the uncertainty in key oil producing regions are likely to keep world energy prices high. This has reduced the risk profile of exploration projects considerably. Current oil prices make even smaller fields financially viable.

Latin/Central American governments are keen to develop their reserves
As the energy needs of these countries mount, the need to develop their hydrocarbon resources has gained eloquence. Governments are keenly seeking foreign investment and have adopted several policy decisions to attract them to their respective countries. Colombia and Guatemala are no exceptions. Taghmen benefits from these developments
______________________________

Price guide for Mexican/Guatemalan Oil types (3X looks Olmeca type)
http://pemex.com/files/dcpe/epreciopromedio_ing.pdf


Las Casas Weather Link : http://www.fallingrain.com/world/GT/14/Las_Casas.html

Glossary of terms used in the oil business : Link Here



Las Casas Weather Link : http://www.fallingrain.com/world/GT/14/Las_Casas.html

Glossary of terms used in the oil business : Link Here

Details on what is an oil well : Link Here

Research links ;

http://www.taghmenenergy.com/documents/taghmen_float.pps

http://www.resourceinvestor.com/pebble.asp?relid=8052

http://www.taghmenenergy.com/documents/taghmen_aim_listing.pdf

http://www.findarticles.com/p/articles/mi_m3159/is_8_220/ai_55822340/pg_3

http://www.costaricabusinessclub.com/187/english/news.html

http://www.mbendi.co.za/a_sndmsg/news_view.asp?I=67434&PG=23

http://www.ihsenergy.com/company/pressroom/articles/files/07-05-worldwatch.pdf

http://www.ideasintl.com/news/Articles/TaghmenEnergy.htm

New September 2005 Investor Presentation (MS Powerpoint);
http://www.taghmenenergy.com/documents/taghmen_09_05.pps


Major Shareholders

Significant stakeholders now include Fidelity, Artemis, RAB, Metage and Millennium.

Major Shareholders : Shares in issue: 82.3m


Major Shareholders....................................Amount....................% Holding

Gregory Charles Smith (Dir)......................13,600,001................16.52
Millennium Global High Yield Fund Ltd........7,153,848..................8.69
Chasm Lake Management Services LLC......5,615,385..................6.82
OCH Ziff Capital Management.....................5,200,000..................6.32
Artemis Inv Mgmt Ltd.................................5,000,000..................6.07
Fidelity Management and Research.............4,745,755..................5.77
RAB Energy Fund Ltd................................4,480,770..................5.44
RAB Special Situations LP.........................3,713,077..................4.51
THIRD POINT LLC.....................................2,800,000..................3.40
Moore Capital Management Inc...................2,538,462..................3.08
Liberty Square Asset Management..............2,500,000..................3.04
Meridian Natural Resources High Yield.........2,423,078..................2.94
Metage Funds Ltd.......................................1,897,470..................2.30

Other directors
James De Vaux Guiang (Dir).......................1,000,000...................1.215
Nicholas Hugo Gay (Dir)............................750,000...................0.911
John McNeil Scott (Dir)............................750,000...................0.911

2006 Work Plan For Guatemala and Colombia

Guatemala (Active drilling 2006 to early 2007)



For Las Casas license

Ongoing = Long Term Production Testing - Las Casas 3X
May to July 2006 ***** Sidetrack of Las Casas 1X
July to August 2006 ***** New Well Huapec 2X

For A7-2005 license

June to July 2006 ***** Workover of Tortugas 4 (any order 4/5/2)
July to August 2006 ***** Workover of Tortugas 5
August to Sept 2006 ***** Workover of Atzam 2
May 2006 ***** 2D Seismic at Tortugas / Atzam
June to Sept 2006 ***** 3D Seismic at Tortugas / Atzam
October 2006 onwards ***** Drilling of 3 news wells at Tortugas/Atzam
___________________________________________________________________

Colombia (Process and Prepare ahead of 2007 drilling)



Midas License

May to June 2006 ***** Reprocess old seismic and Well Studies
June 2006 ***** Geochecmical Survey
August to November ***** New Seismic acquisition

La Poloma License

May to June 2006 ***** Reprocess seismic and well studies
July to August 2006 ***** Geochemical Survey
Nov to December 2006 ***** New Seismic acquisition

PDN Colombia

Details to be issued once acquired

IC Write Up : 21st Apr 2006 IC Write Up Link Here
_________________

Research report (12th May 2006) on TAG in the link below :

Here is the comment from Nick Gay -

"please find a research report prepared by objective capital on taghmen.This covers our existing asset base,but does not take into account any impact of the PDN acquisition.Objective capital has also applied its own conservative geological risk factors to the various prospects.Having done this,they calculate a value for the assets of $84.3 million,well in excess of the current stock market valuation.Removing their risk factors indicates a value of $746.7 million.We obviously have a lot to play for !"

http://www.objectivecapital.co.uk/taghmen.pdf

From the Sunday Telegraph (16th April 2006) :

TAGHMEN Energy.Aim listed oil and gas company focused in Latin America is in talks to buy a Columbian explorer , Petroles del Norte.

The acquisition - for an esimated 18.2 m will provide Taghmen with its first production. Petroleus operates three fields in Columbia that produce 1,000 boopd . The Columbian company has three further exploration licences and owns and operates a pipieline that generated $1m in tariff income last year.

Deal will be funded by a mixture of debt and equity.

Web Site : http://www.petronorte.com/PDN%20English/index_english.html

Some good research as i`ve come to expect from you Papal , it all looks very good on the news front even if the SP doesn`t reflect this at the moment.

DB66, I was lucky enough to read through all the Las Casas, Huapec, Tortugas and Atzam info over the weekend, and I mean everything ;) I am much more relaxed now going forward. I will copy over a couple of posts and put them on here.

PapalPower - 16 Apr'06 - 13:03 - 1411 of 1430

64bit, thanks and it does look good for Tortugas and Atzam I must say.

Las Casas is in the "not easy" class, and remains so (but that could change), but the difference now is there is recent and up to date informtion and this data is being added to all the time. I would guess giving the structure in place that at present with a sidetrack on 1X and a small workover on 3X they will leave Las Casas as is and drain the field from these 2 wells, leaving open the option of testing other area's later. This could be interesting if 3X has hit a new structure, only the new siesmic will confirm this, as if it has then its more proven and probable and potential figures for LC.

The "problems" as such have been from the low definition old seismic data. This is overcome by the new shoot just happened. Well 3X could have been a better well from the off if the new data was there, but as it is 3X has hit proven oil bearing structures and should be commercial at some decent rates (up to 20,000 BOPM) after some proposed small workover (big diameter and high penetration perforation and a new acid wash to reduce the high "skin" effect caused by the balance during drilling as the depths were different to what the low definition and old seismic said they would be).

I am very relaxed going forward, and in fact the simple fact that a debt and equity is possibly going to happen to buy out PDN in Colombia as per the Sunday Telegraph report today, shows that the banks and insti's also like the data that your link led me too 64bit :)


PapalPower - 16 Apr'06 - 15:14 - 1416 of 1430
pjackson64 issuing equity is bad only if the money raised is wasted. If the money is put to good use then there is no drop in the price, if the money is put to excellent use, as in high returns, the price will of course rise.

What we have here is the money being used to buy an asset, an asset which is generating profits, and so therefore the money is put to good use. Its not the reason for a fall coming, its more than likely for the recent past weakness if we have vender shares to be issued at 55p ??

I am glad is debt and equity, as this should mean the equity is actually issued direct to the owners on PDN, therefore they receive cash (from the debt) and shares in TAG for their company.

What it offers to TAG is firstly producing and profitable assets, but also importantly a complete corporate solution in Colombia.

Looking to the future, I think Argentina will be on the agenda some time ;)

All in my opinion of course :)




PapalPower - 17 Apr'06 - 09:19 - 1427 of 1430
James T, after reading all the information (and the link is now taken down so no further access) although the Las Casas structure is proven high quality oil and should be a commercial field in a few more months time, its very exciting over at the Tortugas field, the sooner this proven production field is back on line, the better.

It appears Hispanoil were active at Tortugas in the early 1980's after discovery work in the 1970's and then Basic Resources were active there in the early 1990's.

Whilst Las Casas has never naturally flowed during all tests over the years (however it can be commercial via pump), the Tortugas and Atzam fields have naturally flowed at the start, as per Rubelsanto.

So whilst Las Casas due to the high API of the oil is commercial but requires some hard work, Tortugas is slightly lower API but is much easier to get into commercial production state, therefore with the new seismic being done now at Tortugas and a proven production field in the past, we should be very positive that the 3 new drills at Tortugas later in the second half should all be "spotty dog" in terms of hitting the sweet spots, add on to this the three workovers there for T4, T5 and A2 and it all adds in to like I said earlier with the bits of the jigsaw fitting together.

Its been a very long read over the weekend, but its been well worth it in terms of understand the geology, reservoir flow and drainage characteristics and drill work in all things Guatemala.



PapalPower - 17 Apr'06 - 09:38 - 1428 of 1430
For those wondering why I say "jigsaw" I have followed TAG for a long long time, and now things for me are falling into place.

Just my opinions but it goes as follows :

Guatemala has a lot of oil, some in proven fields, some in proven and shut down fields, some in disputed license area's (suspended). You need to be a local player (operational in the country) in order to have the best chances of winning licensing rounds.

When TAG was set up, they took the only license available, Las Casas/Huapec 6-93. This field has oil, but its not that easy to extract and there was a lot of sceptics. Having this foot in the door via 6-93 allowed them to target one of their main early aims, which was Tortugas/Atzam A7-2005, which they duly won and which was approved and awarded rcently.
Now they have A7-2005 which will be relatively easy to get into production, the bonus on top is that the 6-93 field has also yielded high quality oil, and with some extra work should be commercial in decent quantaties. I did mention earlier that the ultimate goal, in my opinion, are the A6-98 and A7-98 licenses which are suspended, these are the ones that could yield that magical and in hiding 2 billion field. Now that TAG have 6-93 and A7-2005, they can bide their time until these licenses come available.
On top of this, as that is just Guatemela, they are expanding by gaining leads in 2 licenses in Colombia, and now the proposed buy out of PDN in Colombia, which will leave them with 5 exploration leads (2+3) and producing fields and ownership of a pipeline that generates a million a year in fee's.
They will then be, as a local company with the PDN takeover, in a much better leading position for future licenses in Colombia, and can go after the prized licenses as and when they come up in future.

So now, they are in a lead position for future potential in Guatemala and Colombia..........and I suggest possible further expansion in future will be Argentina, which could be something special.

We have been a long time getting where we are, but I think its coming together, and I start to see, rightly or wrongly, the unveiling of some strategic decisions in the past ;)

The next 12 to 18 month period for TAG could be a little bit magical in my opinion based just on what they have going on for now, and I shall happily follow it as a holder.

http://www.oilbarrel.com/email_index.html?page=/news/article.html?body=1&key=oilbarrel_en:1145325600&feed=oilbarrel_en


18.04.2006
Taghmen Energys Operations Update Augurs Well For Output In Guatemala As It Also Announces Confirmation Of New Licences In Colombia
Taghmen Energy, the AIM-listed junior focused on Central America, is active in the news flow business just now. It has announced a detailed operations update and provided details of a new addition to the portfolio.

Last December the company announced Well 3X was producing 40-degree oil at an estimated rate of 100 barrels of oil per day (bpd) under swabbing operations at the Las Casas field, which lies in licence 6-93 in Guatemala. This meant the company was off the starters blocks in terms of production.

Now it says output rose to around 150 barrels of oil per day during the swabbing operations. Then in January a downhole pump was installed and the well was tested at various production rates. The well was shut-in for a pressure build-up test in late February and the pressure recorders are due to be pulled soon. Under the planned test programme, the second of the three prospective zones in Well 3X will be perforated. The perforation will cover 44 feet of pay over a gross interval of 167 feet. Extended testing of each zone is necessary to allow for the collection of reservoir data and for the assessment of possible damage that may have been caused whilst drilling the well.

The story of the Las Casas field, as far as Taghmen is concerned, starts in the first half of 2005 when wel1s 1X and 2X were worked over. Well 2X proved to be non-commercial but 1X has been capable of producing 100 barrels of fluid per day, of which around 70 per cent is oil. The company plans to sidetrack Well 1X and this work is expected to start on May 1st following the interpretation of seismic data to determine the optimal bottom hole location. It is expected that drilling of the sidetrack will take approximately 40 days to complete. There should be a much clearer picture of the wells output potential once these operations are complete.

In the past Taghmen has said there are a further nine leads in the 6-93 licence area with potential unrisked reserves of 45 million barrels in addition to the originally identified Las Casas and Huapac prospects. The plan was to acquire 2D seismic to firm up and confirm these possible leads.

The planned acquisition of 2D seismic over Las Casas, Huapac and Yaxa areas of 6-93 is now proceeding on schedule with all lines covering the Las Casas field having already been recorded and sent for processing. Initial indications are that the data being collected is generally of very high quality. It is expected the seismic acquisition on 6-93 will be completed by mid April at which time the seismic crews will immediately move on to licence 7-2005 (Tortugas/Atzam) and commence both 2D and 3D seismic operations there.

Taghmen has also confirmed that the contract for the Midas licence in Colombia, foreshadowed in February, was finalised at the offices of the Colombian National Hydrocarbons Agency on Wednesday April 5. At the same time, the company has entered into an agreement to acquire an indirect 65 per cent interest in a second licence, also in Middle Magdalena Valley Basin, called La Paloma. Taghmen has identified several leads in La Paloma that could contain potential reserves of approximately 20 million barrels (13 million net to the company).

http://www.investegate.co.uk/article.aspx?id=200604180700485636B

The big news on the link above :)


Taghmen Energy PLC
18 April 2006
www.taghmenenergy.com

ACQUISITION OF PETROLEOS DEL NORTE

Thanks for the update, Papalpower.

Welcome. I cannot see too much happening now until the first payment is made for the PDN purchase in this quarter (April to June).

I think there will just be price manipulation by the MM's, just an opinion, therefore sit back and wait for the PDN deal to become in place and confirmed with first payment.

Looking cheap at the moment...i think it is a buying opportunity at 48p

If youve had a good day please consider giving a donation to the lads dressed as Elvis racing 350 miles to the North Pole on behalf of Great Ormond Street Hospital It makes the London Marathon seem like a stroll in the park!
To donate or view how theyre getting on visit
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thanks for your time

The article is under the "free content" so the link below :

http://www.investorschronicle.co.uk/content/free/2006/News/news_20060421_19.html

21 April 2006

Taghmen picks up PDN

Taghmen Energy has acquired Colombian oil and gas company PDN in a $32.3m (18.2m) deal. It will be funded from existing cash balances and through a placing and debt financing, the details of which have yet to be finalised. The deal brings production of 523 barrels per day net to Taghmen, but chief executive Nicholas Gay is confident that figure can be doubled or tripled within a couple of months.

Taghmen has a decent, albeit small, mix of production, infrastructure and exploration. So the shares are good value at 50p.

Good price to buy at 50p before production increases.

A copy of my post at AFN for info on my opinion :


PapalPower - 23 Apr'06 - 05:33 - 1575 of 1576 edit

ttnyrp, I have answered on here as its the right place...

Well 3X is on long term production testing. This covers a whole range of aspects, better known as "reservoir engineering". Without getting complicated and going into GOR, AOF and any other number of abbreviations lets me try to put it simply for you.

Reservoir engineering looks at a whole range of data, and among other things calculates proven oil and probable oil from the potential amount. Potential is the headline "up to" figure, meaning a structure based on seismic could have potential reserves of "X" million barrels taken from an OOIP figure (Original Oil in Place). Drilling and measurement of lots of data can tell you how much of that "potential" can be recovered. EG you have potential "x" million barrels, and from that they think they can recover lets say "y"%. Drilling data and flow rates and pressures says they can for sure recover "z"%.

Therefore, your potential reserves = X
Your probable reserves = Y
Your proven reserves = Z

Once you at at this stage you hope your Z value keeps going up over time and work to finally equal (in extracted oil and oil still in place) the value of Y over the life of the well. The difference between X and Y is what is left in the ground after the well is finished being economical after a period of time.

Back to where we are with 3X. Firstly the drill has proven there is oil there, and so has given an initial proven figure of oil in the 3X exploration area. Secondly it has flowed at 100bopd av. swabbing pre acid and 150bopd av. swabbing rate after acid.

The intitial studies point to the possiblity that the loss of fluids during drilling has damaged to a small extent (and recoverable level) the oil bearing structure, such that now there is the low rates of flow pre and post acid. This is known as a high skin factor (to explain simply lets say you have a clogged filter, the amount of clogging you have restricting flow is known as a "skin" factor, the higher the skin factor the more restricted the flow is.)

Now, in order to know the best plan of action (intervention, minor workover, whatever you want to call it), you need loads of data and also to now the reservoir pressures, bottom hole pressure etc.), and also its best to have new seismic (which is/has happening/happened) and then you need to formulate an action plan.

What else do we know about 3X apart from potential high skin factor ? Well we also know the water cut (the percentage of water in the fluids pulled up) is high. A high water cut is not a good thing, as you are wasting time and money pulling up water and oil, when its best to pull up more oil and less water.

What I would take from this information is that firstly the perforations may have additionally entered into the area above or below the pay zone, and are allowing a higher percentage of water into the well bore. Secondly from the high skin factor I would say the perforation has not been totally successful and nor has the acid job.

What would an action plan be, well I would suggest a small intervention, resulting in blocking, neutron log, lock off water zones, reperforate with big charges, new high acid concentration wash to get rid of any drill fluid damage and then the AOF (Absolute Open Flow) of the well would be greatly increased from what it is now, by a big reduction in the "skin" factor. This would lead a substantial increase in flow rates, and by locking off the water zones, the pump would also be pulling lots more oil and less water and so be more efficient.

As you see, once you drill the hole, it does not stop there, it goes on and on and on, lots of engineering work involved to maximise not only the flow rates, but also to enhance the recovery of oil, to improve the figures for probable reserves, to know the correct drainage rate so as not to damage the reservoir, to calculate the area (how many acres) you are draining from this well, and where any future well should be located etc. etc. etc.

So presently they are perforating and testing the three pay zones, gaining all the data they need, and they will probably then do a small intervention on 3X once all three zones are tested, and then put the well into commercial production. That is why I have recently suggested that no news on 3X until around July time (the July ops update), as there is a load of testing and data work still to be done there.

OK, so that all sounds a bit of a damp squid but not a major problem and its going to come good, so whats the immediate upside ???

Well, the immediate upside is :

1/ They now know what the correct balancing method is for drilling at Las Casas, means future wells will not suffer any drill fluid damage to any extent.

2/ The old seismic data is not good and not detailed, they needed new data done for high definition data, this has been done, so all future drills will be based on the very latest and high definition data.

3/ The new seismic data has allowed them to pinpoint the very best bottom hole point for the 1X sidetrack.

4/ The drilling at 3X has allowed the first real new drill data for Las Casas in 20 or 30 years, all valuable informaiton.

This means that for the 1X sidetrack commencing around the 1st of May there should be very high hopes that its going to be a cracker, as I have leaned to in the past, my expectation is for 1X to be far better than 3X (this being that 3X was an exploration discovery well and it was the first one to be drilled, if you like, the same way that EME discovered on the vertical they messed up the drill fluid balance at Eagle North-1, so on the next drill, horizontal, they can be far more accurate) TAG have also had a drill fluid balance problem, but all signs are they can easily recover this and have a commercial well in 3X, a small intervention rand the AOF figures look good leading to decent potential production output figures, but on their next drill, with 1X, things should go much quicker and better :)

Thats my opinions ;)

Good news, I have got some more data on the oil pipeline, and it is good news !

From this we can see the pipeline generated 1 million in tarif income from 2000 bopd through put in 2005. Currently its running at 3680bopd so that should mean it generates this year 1.84 million in tarifs and its full capacity is 25,000bopd so at present rates with full capacity it could generate for TAG income of 12.5 million a year, not that it will as TAG will be sending their oil from their Colombian fields down it, but it shows what the present oil boom in Colombia will now do for TAG in future in terms of tarif income on the pipeline using spare capacity that TAG does not require. These figures do not take into account present tarif increases or future ones. As more drills are done, and other companies discover oil, and transport it through TAG's pipleine, then in fact the pipeline tarif alone could be paying for all of TAG's corporate overhead in future (and all the oil is pure profit). I see why Nick is pointing to why the pipeline was such a good buy !! :) Still trying to find out what the potential b.o. are for the PDN licenses, we are only getting proven and probable, I would like the potential, but I suppose they will wait for new seismic which will be done in Colombia soon enough later this year.



http://www.mapsearch.com/news/news_display.cfm?Section=NEWS&ArticleID=252879

Taghmen Energy acquiring Colombian producer

Apr-18-2006

By OGJ editors

HOUSTON, Apr. 18 -- Taghmen Energy PLC, a London independent oil and gas company focused on Latin America, agreed to buy Petroleos del Norte SA (PDN) of Colombia for $32 million.

PDN operates three fields in the Middle Magdalena Valley, producing 977 b/d of oil (523 b/d net). It has a net 6.9 million bbl of proved and probable reserves.

The company owns and operates the 25,000 b/d, 180-km, 10-in. Rio Zulia-Ayacucho oil pipeline with current throughput of 3,680 b/d. It carried 2,000 b/d in 2005 from Ecopetrol-operated Rio Zulia and Tibu oil fields in the Catatumbo basin.

Taghmen holds interests in the Midas and La Paloma blocks near PDN's properties.

PP,

Looks like a very shrewd and long term generator. It get better all the time and thanks for info.

Yes, I see what you are getting at, Papalpower...Taghmen is due for a rise soon...and the seismic is on the way as well.

The prospects look great mid and long term, just the short term is boring in the eyes of many, so until July perhaps nothing is going to happen ???? Still, allows further adding to the holding at the 46p to 55p level in the months in ahead maybe :).................

Very good buying opportunity now

Just let VOG do something spectacular over the next month or two and I shall be having serious thoughts about jumping in on this one with a spot of top-slice. Exciting, innit??