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
___________________________________________________________________

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

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.

kiwi, I like the company, the management and the story, and will follow it through to when TAG is a much bigger company. They say never fall in love with a company, but sometimes its good to, to understand them, and the processes, which can also give an insight into things wider than just the company :)

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

Thanks for that PP, it's been a wee bit dis-heartening watching the sp weaken recently and any positive info is much appreciated.
2517

2517, wait until the 2nd half of June, things should be picking up then :)

What a an awful chart.

Hi Papal.

I admire your absolute conviction in TAG in view of a disnal, virtually unstoppable downtrend, comparable with the Titanic. I also cant understand why the drastic price move, but somewhere along the line, the market must evaluate it at its present price.Would it perhaps have anything to do with the unease of a Hugo Chaves led, anti-American sentiment building up in southern America. I should have bailed out long ago, but like you, I will wait for better days with June 2006 just around the corner.

Regards
PB

Haystack, after having to read/moderate and ban your ample and everygrowing user name list on AFN, you finally use your real user name on here to post your charts :) LOL

paperbag, the stock is weak in the market, small PI's are selling out and thats it. The company has now released a report which says real value now is 57p, and if things were to go 100% ok then it would be over 400p. The PDN deal is not in the report, but is a booster for the SP believe me.

This will remain week until mid June, but after that this is going upwards, and then Haystack will disappear with his charts, as they will be going upwards in H2, and Hay only likes the ones going down.

The good sign is that capitulation occured this week, when the price crashes it means the majority of small PI's are now out, and then its time to build up again, but this time things are different with the PDN deal and a fully funded drilling programme.

Watch the equity raising price, I will ram this down Haystacks neck when its released :) maybe....... ;) LOL

Operations update today on the link below :

http://www.investegate.co.uk/article.aspx?id=200605170700320901D


As I expected after reading through all the 3X data, a workover is required to maximise the flow rates, although the present 170bopd under swabbing shows its potential, will be a commercial well I do think :) and if the workover is done the target output rates will increase, some upside to that 3500bopd end of 2007 figure already coming I feel.

Seismic is done, enviromentalists will be happy the footprints will disapperar in 6 months, keeps them quiet.

As I said, PDN first closing put back to 16th of June (at PDN's request).

Research report shows that present value us 57p, and potential for over 400p per share (excluding the upside from the PDN deal which I think is worth 60m $ on top after any dilution).

All very good, a new level of better communications being shown. 57p on sale at 39p at the moment.

Excellently timed Operations Update!

PP do you have any views on the 3X Well water and wax content??

silvermede, said before that 3X will require a workover (small one) to reduce the water cut and also increase the flow rates. Perforations appear too high, meaning water coming in as well.

Small workover being new pipe, cement and perforate, new acid job and 3X goes into production at a decent rate I think, maybe some upside coming on that 3500bopd by 07 year end with a good workover on 3X :)

PP, Many thanks, prospects look good