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
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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
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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

25K T trade buy and then a 24K buy at 61p (a penny over the offer).

I think news, when it comes (and yes it may be a few more weeks yet) but when it comes, it will not be disappointing, I think so ;)

Some people have been asking what price the oil will be worth, so this will help explain :


The type of oil we are looking at for 3X will be API40 and sulfur above 0.5 so this will be similar to Mexican "OLMECA".

This is the good news !!!!

Once its goes above API 38 its called Lighter Oil (or Superlight), which is better than Light oil.

Maya is heavy, Istmo is light and Olmeca is extra light, and in this case 3X looks like it will produce high quality Olmeca.

So what price is that ? Well here is last years average price, and its rising even more now :)

"From January-November 2005 Maya crude oil registered an average price of US$40.35/b, Istmo crude oil averaged US53.07/b and Olmeca crude averaged US$53.72/b."

So now you see why Nick Gay said it can command "highest prices" as its Olmeca.

To add some more speculative but effective reasoning into this ;

1/ API 40 crude is superlight, and not viscose, so where a well that has API 20 or API 25 could well have low flow rates, a well with super light API 40 would have high flow rates.

To explain this for a pumped well : a well has pay zones, and in the pay zone are perforations which the oil flows through into the well shaft, to then be pumped to the surface. As with any liquid, the more viscose (lower API) the slower it will penetrate through the perforations, and the slower it will fill the well shaft, meaning that it has to be pumped at slow rates, like 100 bopd, 250 bopd.
Now, with a very easy flowing high API oil, it will flow easily through the perforations into the shaft, and allow high pumping rates = high flow rates.


2/ Acidisation has been performed on the well, and we take it that this was a success, this means the perforations are now larger, and combined with a low viscosity API 40 oil this will give high flow rates (this is why even at just swabbing there was 100 bopd).


3/ 500 bopd is a target rate, but without being over indulgent, this well could really flow anywhere between 500 and 2500 bopd, if we get 500 bopd its a job well done, over that and its all positive stuff.

500 bopd of "Olemca" would be fine and job done, but think of the real upside of anything over 500 bopd.

Owing to the proximities of Mexico and Guatemala, and that the reef formation is one and the same then you can look at Pemex and Mexican crude types as guides to Guatemala.

Crude Varieties

Most of Mexico's crude oil production consists of heavy crude varieties. During 2004, 73 percent of the country's crude oil production was of Maya, with 22 API and 3.5-4.0 percent sulfur content. The country also produces two lighter crude streams, Isthmus (34 API) and Olmeca (39 API). In general, Mexico retains most lighter crude streams for domestic consumption: during the first nine months of 2005, Mexico only exported 29 percent of non-Maya crude oil production, versus exporting 63 percent of Maya production.


The crude oil recovered can be light or heavy as follows:

Heavy crude oil. Crude oil with API density less or equal than 27.

Light crude oil. Crude oil with API density range from 27 to 38.

Lighter crude oil. C rude oil with API density higher than 38.

Regarding crude oil marketing, Mexico exports three varieties with the following typical characteristics:

MAYA Heavy crude oil, 22API density and 3.3 weight % sulfur.

ISTMO Light crude oil, 33.6API density and 1.3 weight % sulfur.

OLMECA Very light crude oil, 39.3API density and 0.8 weight % sulfur.

As sulfur content is above 0.5% you can see Mexico and this region produces "sour" oil.
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The following link will show what prices were available for Olmeca type and how its rising up very nicely just as 3X is starting to be pumped out of 40 API low sulfur Olemca type :)

http://pemex.com/files/dcpe/epreciopromedio_ing.pdf

TAG on a tick up. Pump is in the hole and flow tests being done now.

Good news is coming, just be patient, better in than out.

I nearly posted last night Papal just to say i couldn`t believe how quiet this thread and trades in this share are .
Good news like you say is surely just around the corner and some shares in the oil and gas sector seem to be going ballistic!

Yes DB66.

We have with TAG, 1 drill, 1 hit on oil. Oil is API40 and high quality and high value. Acid work is done, pump in the well, flow rates being tested.

They are also doing another 10 drills/workovers this year.

Yet, they are under the radar and everyone is mad for O+G who are doing surveys or might drill 1 hole this year...................do not worry DB66, on the best shares the clever people arrive before the crowd, just like VOG in the 30p range (provided the plan goes well of course)

On the chart the gap is full, its ready for a breakout when we get the flow rate news on 3X...........

Even at 500 bopd it would generate cash sales of near 9m US$ a year, now if its 1000bopd it will generate double that. 500 bopd is the target, but on API40 oil there is plenty of chance for upside in the flow rate. Better to be in than out waiting for this news, even if we have to wait 2, 4 or 6 more weeks.

There are a few buys starting to come in at last.

Probably some recent VOG profits finding a home in TAG ahead of news. I am sure some will have taken profits and will now spread over the likes of TAG, EME, CHP etc.....

Another small tick up,i`m sure people will soon notice this one.
Hasn`t Evil got a few of these?

Yes, EK is long on TAG, and also very impressed with the set up and management I hear. TAG is another one like VOG, one to buy in and hold, the year end price of both will be much higher than it is now.

Nice move up today so far, lets hope we build up a head of steam now into that news flow.

A buy at 65p towards to the end, should be opening strong on Monday then.

With a large buy at above the offer in the afternoon, should be strong next week. Amazing thing with TAG is that any buying volume, given the very small free float, will make it move upwards fast, Friday was only 70K buys and it gave an 8% rise. When the news comes on 3X flow rates, if its good (and I do not see any reason why not), you can imagine what will happen, but also it does not end there, including the sidetrack due on 1X starting Feb, another 9 drills/workovers in 2006. Plenty of news and a growing oil production levels will be TAG in 2006, not just speculative, producing, and what should be, large amounts. Firmly beleive TAG is one to be in, and hold for the duration of 2006 (and 2007).

Fridays action below :

If you take the 2006 workplan above and put some figures into it, not pie in the sky ones, just normal ones given the low risk involved, and the price currently is showing nothing, not even 3X pending flow news. I have put some figures of where I think flow rates will be for the 2006 workplan as below

For Las Casas license
Into production Las Casas 3X (1000 to 1500 bopd)
Sidetrack of Las Casas 1X (1000 to 1500 bopd)
Drill of Las Casas 4X (1000 to 1500 bopd)
Drill of Huapec 2X (1000 to 1500 bopd)

For A7-2005 license
Workover of Atzam 2 (0 to 500 bopd)
Workover of Tortugas 4 (0 to 500 bopd)
Workover of Tortugas 5 (0 to 500 bopd)
New well 05-1 (1000 to 1500 bopd)
New well 05-2 (1000 to 1500 bopd)
New well 05-3 (1000 t0 1500 bopd)
New well 05-4 (1000 to 1500 bopd)


So my expectation is around 8,000 bopd output by mid 2007

Interesting set of figures Papal but i`m setting my expectations a bit lower than the 8,000 bopd you suggest possible.
I do wonder with such a busy work plan for 2006 if delays won`t be inevitable.

Having said all that i`m really looking forward to this share really taking off now ,it really has been overlooked ! Just looking at the number of posters on this thread compared to other oil and gas threads proves that.

Squidd are you still in these?
Haven`t heard from you for a while.

DB66 I hope my figure is low compared to actual :) I am basing some of this on old reports on the A7-2005 license, which TAG has now officially been awarded. I have discounted the workovers down to 0-500 due to ageing.

Old info is :

"The A7-2005 has 84,778 acres and two anticlinal structures where 10 wells had been drilled in the Tortugas structure. The first producing well, Tortugas 63-4 yielded in an initial test 1200 BOPD of 34 API crude. Two wells were also drilled in the Atzam structure and the well Atzam-2 produced in an initial test 1200 BOPD of 38 API. The total estimated remaining proven reserves for the entire era is in excess of sixty million barrels."

I topped up in the dark days during the Autumn and so am sitting on a goodly pile of TAG in anticipation. Have since continued bottom fishing, focussing on sickly looking stocks such as APA & PMK. Will comment further later in week, but meanwhile am grateful to PpP for keeping the faith and the excellent newsflow.

squidd
what I like about PP is that he actually seems to understand the companies he writes about.