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

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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??

Yes, it is exciting and very profitable atm, I opened my holding of TAG yesterday @ sub 49p,a bit peeved that shortly after I could have got them a couple of pence cheaper, but hey these are going to go far higher imo. I am a value investor by nature but I am turning into an oily what with goo,chp, and a 2 year holder of pet and now tag, oh and ser, although just a smallish punt on them.
2517

Well timed entry 2517George, to think people like Artmis put up 55p a share a few weeks ago, the short term money leaving is certainly allowing those buying now a very good entry point.

I would say, based on recent news and events, to now not expect anything major before say July, but the next couple of months is, in my opinon, a great time to add more, or open a holding.

Anything below 55p is, I think, a real bargain !

Some smallish buys pushing the sp nicely upwards.
2517

Web Site has been updated under the "Operations" section, with lots more information there now.

Just in case anyone thought things had changed, there is an error on the updated web site and the text referring to 1XA sidetrack is wrong, the timescale chart is correct, this being commencing in May.

strow has confirmed this as below :


strow - 6 May'06 - 06:03 - 1795 of 1797
hassy i agree
IMPORTANT-for anyone looking on the updated website,the text states that 1x sidetrack will now begin after 3x completion in late august,although the workplan barchart shows it as previously beginning in may
i e-mailed nick gay last night and got a prompt reply to say that there has been some confusion here in the website text-IT IS WRONG AND 1X SIDETRACK IS AS PREVIOUSLY STATED IN MAY WITH HUAPAC DRILL TIMETABLED FOR JULY
hope this helps if anyone was panicking last night like i was-i have asked him and im sure it will be done anyway if it can be corrected asap to avoid further worry and confusion

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 June 2006 ***** Sidetrack of Las Casas 1X
July to August 2006 ***** New Well Huapec 2X

For A7-2005 license

May to June 2006 ***** Workover of Tortugas 4 (any order 4/5/2)
June 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 June2006 ***** 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

One Bull point TAG has got is the existing commercial production facilities. With many other junior oils with only oil/gas in the ground (or even only potential oil/gas in the ground), it is easy to forget that these companies most likely will have to issue a lot of equity to raise funds to ever put production facilities in, this equates to a fair amount of dilution by increase of the shares in issue, which is easy to forget and a necessary dilution to take into account.

TAG has production facilities at Las Casas, Tortugas/Atzam and PDN Colombia (including the pipeline). Funding is already done for Huapec facilities and upgrades to Tortugas/Atzam. With the issue of the PDN purchase complete, and with sales of oil on line and increased through to end of 2007, there is no further need to issue equity unless further acquisitions are done, which do not dilute as such.

Therefore, when looking at the in-situ production facilities (in place and allocated already), TAG when it comes to abilty to produce, is fully there already.

This is why the underlying business and position of TAG is good I think, when compared to others where they must potentially raise lots of money through placings to put production facilities in (placings which presently are not taken into account in the prices and the dilution it will bring)

To go with the post above, the other advantage of production quickly is that you get your cap ex money back quickly. If you go around only drilling holes, sooner or later you have to raise money and dilute to put those facilities in, and you are at the mercy of the money holders, however, when you are producing under the kind of licenses TAG have, you can claim your exploration expenditure back when are you producing (in the way of reduced royalties). TAG has this facility in their licenses. This means that while the cap-ex will have been high on the interims and coming prelims, once TAG start producing oil, they can then claim this money back, so thats the big upside of producing quick on these licenses, cash back. So not only are their produciton facilities in place now or accounted for, but that expenditure on drilling and facilities, can soon be claimed back during production, eg, money spent already, is coming back in the months and years ahead.

Conservative and achievable targets. As I have said, TAG is not about finding big reservoirs, its very much about the underlying business and generating money. They do not put out hope and hype, they do put out conservative targets for the business to achieve. For all the ramp of other companies with Gold in the ground or Oil in the ground, what matters most is getting it out and making money from it. In many cases like China the whole political scene could change in 24 months, so the more you get now and make money from it, the better. TAG is actively going about this, and the conservative 3500 bopd output by end of 2007 will be hit I think, with at least 100% potential upside to that figure. Set targets, and then be able to deliver upside !

The 250bopd output from Las Casas is based upon 3X, and to be safe applied to 1XA ahead of drilling, so we might see the first bit of upside creep in after results from 1XA drill.

With the stategic Colombian pipeline throwing in money at will this year and ramping up in the years to come, looks fine. It is known and documented that ECOPetrol will be opening up fields short term that require the use of the pipeline, so tariff's there can easily soon reach approx 5 million dollar revenue levels by 2008.

Colombia will be at 1000bopd minimum nett to TAG I think by end of 2007, this will be moved up from the around about 500bopd from when they take over.

I will keep buying the business plan,if it takes 12 more months before people catch on that making money from oil is what matters most, then fine :)

Direct Link to the April 06 Presentation is below :

http://www.taghmenenergy.com/documents/taghmen_04_06.pps

Papal,

Your commitment here and advfn is unbelievable.