Big picture - Why invest in Highlands Natural Resources PLC
Highlands Natural Resources PLC Snapshot
The Company was established to take advantage of volatile conditions in the current oil and gas market.
The Board believes that, in particular, the current price weakness in oil and oil and gas company shares will present the Company with pursuable value opportunities, the likes of which have not been obtainable for some time.
Primarily utilising its extensive network, the Board aims to identify oil and gas assets which it believes fit its investment criteria. These targets will then be evaluated by the Advisory Board who will provide a further recommendation on suitability. Each member of the Advisory Board brings expertise in fields relevant to the Company’s aims, offering in particular, knowledge of acquisitions, divestments, petroleum engineering, geology, and oil drilling technologies.
The assets being sought will primarily be in production although some exploration projects will also be targeted. The aim is to establish a substantial oil and gas company with a portfolio blend that allows for the careful management of risk while providing significant upside to investors.
Highlands Natural Resources is developing the Helios 2 Project, which comprises 105,485 acres in Custer, Carter and Fallon Counties, Montana. Highlands has drilled two wells on the project to date.
Numerous gas shows have been observed throughout the region where historic gas analysis indicates high biogenic methane (natural gas) concentrations and 0.36% helium content (similar to world-class Hugoton field in Kansas). An Independent Report by RPS Knowledge Reservoir indicates a “best estimate” indicative success case NPV10 of US$341 million for the natural gas development project on a 69,120 acre area. This success case valuation does not include specific economics for the Helium and RPS’ best estimate of 2.1 Bcf of net attributable helium for a 69,120-acre area would be incremental to natural gas development economics.
Highlands is conducting a pilot programme to demonstrate the technical and economic viability of dewatering; validate the engineering and economics outlined in the RPS Competent Person’s Report and; affirm RPS’ projections of the long-term economic potential of the Helios Two prospect. Significantly, Highlands has confirmed through multiple gas analyses the presence of 90% methane and 0.31% to 0.33% helium in gas produced from Highlands’ first well in the project.
Helium, which is auctioned by the U.S. BLM for more than $100/mcf, is an essential feedstock for numerous industrial, medical, scientific and commercial applications including nuclear power generation, magnetic resonance imaging (‘MRI’), industrial fabrication and welding, fundamental sciences and research, fiber optics, space and defence applications, semiconductor manufacturing, and many other applications. Significantly, helium currently has no substitute in cryogenic applications requiring temperatures below -220 degrees Celsius. Highlands believes that helium’s role as a critical and irreplaceable component of numerous modern industries will underpin future global demand.
East Denver Niobrara
Highlands has farm-in agreements in Arapahoe County, Colorado with Renegade Oil & Gas Company, LLC (‘Renegade’) and a major international oil and gas producer, which collectively allow Highlands to drill up to 24 9,000 ft horizontal wells in acreage highly prospective for the Niobrara shale formation.
As depicted in the map above, Highlands’ land position is located in close proximity to numerous wells that have produced in excess of 100,000 barrels of oil in their first six months of production. An independent evaluation by third party engineering firm RPS indicates gross 1P Proved Reserves of 10.1 MMBoe and 2P Proved plus Probable Reserves of 12.9 MMBoe, indicating that 78% of the anticipated P50 type curve is considered Proved. As a result, Highlands views the East Denver Niobrara asset as a considerably de-risked project from a geologic and reservoir perspective.
Robert B Price
Robert B. Price is a successful oil and gas executive who has worked on oil & gas projects in North America and Eastern Europe. Mr. Price’s joint venture relationships with oil and gas service companies and exploration companies will establish the Company with a broad range of contacts including: experts; managers; entrepreneurs; and opinion-formers in the natural resources sector. Mr. Price will also liaise with members of the United Kingdom investment banking community, upon whom he can call to achieve the Company’s aims in securing farm-outs from independent and major oil & gas companies to establish holdings of significant acreage on behalf of Highland.
Mr. Price, originally from Colorado, immersed himself in Oklahoma’s dynamic energy sector after receiving his Juris Doctorate Degree from the University of Tulsa. Immediately after law school he was named Vice President, Trust Officer and Oil and Gas Trust Energy Department Manager of the First National Bank and Trust Company, now JP Morgan Chase Bank. He later formed Brooks Energy Company, which was active in both oil and natural gas exploration and production in the Mid-Continent and Rocky Mountain regions. He also purchased a distributed electric generation business from Tulsa-based Williams Companies, and owned S&R Equipment, a natural gas compressor manufacturing company and rental business. A founder and Chairman of Zeledyne, Mr. Price purchased Ford Motor Company’s Glass division with plants in Tulsa, Nashville and Juarez, Mexico employing more than 1,200 people. Recently, President and Chairman, Mr. Price led Palomar Natural Resources’ (Palomar) rapid growth in developing oil fields in the US Denver-Julesburg Basin and its drilling program in the US San Juan Basin. With over 1,000,000 acres in Poland, Palomar is currently drilling natural gas prospects in the Permian Basin. During his period in office, Mr. Price was instrumental in raising US$50,000,000 on behalf of Palomar. Mr. Price has also served on the advisory board of San Leon Energy plc, based in London, United Kingdom.
Board: FD & Company Secretary
Melvyn Davies has over 30 years’ experience advising and assisting both large and small businesses across a wide range of industry sectors. Mr Davies founded his own Chartered Accountancy practice, Melvyn Davies & Co., specialising in audit, primarily of regulated entities, and advice to owner managed businesses.
Mr Davies was Finance Director and Company Secretary of the Silence Therapeutics group (formerly Stanford Rook) from 1996 to 2010. He played a critical role in all aspects of the Group’s acquisitions policy along with day to day operational and financial issues. Mr. Davies was influential in listing the Group on AIM and later on the main board of the London Stock Exchange. During that time he was also instrumental in the group’s expansion into Germany and the USA.
Mr. Davies is a Fellow of the Institute of Chartered Accountants in England and Wales, has an Honours degree in Mathematics and Management Studies.
Leadership Team: Vice President of Engineering
Domingo Mata started his career with Schlumberger. He worked on numerous projects worldwide and most unconventional basins in the continental US. He held operational, technical, consulting and business development roles. As Stimulation Domain Manager, Mr. Mata led a multi-disciplinary team integrated by Geologists, Petrophysicists, Geomechanics and Reservoir Engineers. His team impacted $75-400 million in operations per year. The unit focused on maximizing well productivity and delineating asset development strategies. His experience encompasses 200+ completion procedures (for both oil/gas, vertical/horizontal wells) for 30+ operators across different basins. He completed 6+ field development plans to determine optimum number of wells per drilling unit. In some cases, results increased reserves up to 15 % and reduced completion costs up to $300k per well. He has peer reviewed 30+ domestic and international projects, designed and taught 20+ workshops and courses for engineering staff, and mentored 30+ engineers. Besides technical competence, Mr. Mata has a strong operations background, his field assignment can be summarized in no less than 300 fractured wells, 5,000 completed stages and 1 billion pounds of sand safely placed across the continental US. Mr. Mata has a strong commitment with the Oil and Gas industry, participating in several Production Symposiums, publishing dozens of papers, reviewing publications for Oil and Gas Journals and authoring a book chapter on completion optimization for Unconventional Resources (Chapter 8 – Hydraulic Fracturing treatment Optimization, and Production Modeling. Unconventional Oil and Gas Resources Handbook. Y. Zee Ma and Stephen Holditch. 2015). He holds a B.S. in Mechanical Engineering from Universidad Metropolitana (Caracas, Venezuela) and a M.S. in Petroleum and Natural Gas Engineering from West Virginia University.
Leadership Team: Vice President of Operations
Stephen Miller has over 9 years of experience in the oil and gas industry, specializing in hydraulic fracturing, completions techniques, and production and treatment analysis. Prior to joining Highlands, Mr. Miller worked for 5 years for Integrated Petroleum Technologies (IPT), an industry recognized independent consulting firm focusing on hydraulic fracturing, completions, and stimulation design. Before joining IPT, Mr. Miller was a Technical Professional at Halliburton Energy Services where he was involved in hydraulic fracturing in West Texas. Mr. Miller has designed and treated fracture stimulation treatments in almost every major basin across the United States and Canada, as such, he brings a broad and unique combination of experiences to Highlands Natural Resources. Mr. Miller is also a co-inventor on several of Highlands Natural Resource’s pending patents and holds a BS in Petroleum Engineering from Texas A&M
Leadership Team: Vice President of Land
A third generation Landman, Eric continues the legacy of his father and his grandfather who began his career in the Williston Basin in the 1950’s. For several years, Eric worked in the field as an independent Landman, negotiating oil & gas contracts in many of the ground breaking exploration and development plays in the Rocky Mountain Region. In 2011 he became a member of the Executive Management Team for a major oil & gas land company to lead new business development, foster client relationships, and manage the company’s leasing projects and field crews. In 2015 Eric began consulting on land projects with Highlands Natural Resources, and later that year joined the Company as Vice President of Land. At Highlands Eric oversees all matters relating to land including negotiations, contracts, title, leasing and GIS work.
Paul is an oil and gas producer and co-founder of an AIM listed iodine producer, Iofina. Paul owns interests in over one hundred producing oil and gas wells which he has developed or from properties he acquired and were subsequently acquired by larger firms including Andarko, EnCana, Noble, Bill Barrett Corporation and others. This production is in Colorado, North Dakota and Oklahoma. Paul has made three new discoveries which were acquired by large companies including Enron and others. He is a self-educated geologist and is a well-respected developer of new concepts in exploration for oil, gas, iodine and other commodities. Paul works for Mendell Energy; a Denver based independent oil and gas producer.
Leadership Team: Geologist
Mr. Childs is a petroleum geologist with over 5 years of experience in the oil and gas business. His first experience in the industry began tending wells in Pennsylvania during college. Mr. Childs Graduated from Colorado College with a Bachelor of Science (BS) degree in geology. After school Whit spent three years working for Recovery Energy, a small exploration company studying and working assets throughout the DJ basin. After Recovery, he joined Mendell Energy and helped analyze and evaluate assets for acquisition. Mr. Childs began working with Highlands in the fall of 2015.
Randy Natvig has 24 years’ experience of creating value in the oil and gas business at the forefront of changing innovations; most recently with Laramie Energy. He has expertise in acquisition evaluation and asset development. Mr Natvig has managed multi-rig drilling programs in major Rockies basins and improved Estimated Ultimate Recoveries (EURs) and Internal Rates of Return (IRRs) through optimising completions and infrastructure. He previously spent 14 years with Halliburton managing and designing hydraulic fracturing (fracking) techniques and improving drilling practices.
Mr. Mullen is President and founder Stimulation Petrophysics Consulting, an Independent consultant performing petrophysical evaluations in United States, Australia, United Kingdom, and South America. He spent 25 years at Halliburton developing analytical tools for conventional and unconventional reservoir treatments. He developed software models for Halliburton to evaluate Tide Sands, Shale Oil/Gas and Coalbed Methane. Mr. Mullenled a team of geoscientists to explore for shale gas/oil in France, Germany, Poland, and Spain. He has 38 years of wireline logging and formation evaluation experience and has worked extensively with government officials while CEO at Realm International, now part of San Leon Energy plc.
Mr. Reinoehl brings 40 years of experience from Air Products & Chemicals, Inc., where he was responsible for the worldwide helium and hydrogen product lines and the development of new sources of these gasses. Specifically, Mr. Reinoehl negotiated all crude and refined helium supply contracts for Air Products and also developed the first liquid helium supply in Algeria from LNG tail gasses. Mr. Reinoehl is also the Owner and Principal of RMW Solutions, a consulting firm serving industrial gas companies, governments and research users of industrial gasses. Mr. Reinoehloffers to Highlands an extensive knowledge of helium gas markets and contract negotiation as well as an extensive network of helium industry participants.
Robert B. Price 12,000,000 (10.3%)
Renegade 3,500,000 (3.0%)
The Company is registered in England & Wales. Registered Number: 09309241
UK Address: 9 Limes Road, Beckenham, Kent, BR3 6NS
US Address: 220 Josephine St., Suite 200, Denver, CO 80206
For emergencies please call:
Financial Adviser and Broker:
Cenkos Securities plc, 6-8 Tokenhouse Yard, London, EC2R 7AS
Auditor and Reporting Accountants:
Saffery Champness, 71 Queen Victoria Street, London EC4V 4BE
Solicitors to the Company:
DAC Beachcroft LLP, 100 Fetter Lane, London, EC4A 1BN
St Brides Partners Limited, 3 St Michael’s Alley, London, EC3V 9DS