MYANMAR (BURMA) PRODUCTION ENHANCEMENT AND EXPLORATION OPPORTUNITY 1
MYANMAR OPPORTUNITY OVERVIEW (1/2) Five Star Petroleum Inc., a Texas, USA company is inviting investors to participate in the Mann-Minbu Oil Field production enhancement project ( Project ) in Magwe Division, Myanmar, capable of producing 1000 bbl/day at a shallow depth of 2000-5000 ft. There is a potential for increasing production from the Mann-Minbu oil field, up to bbl/ day. Initially discovered in 1970, & produced 24,000 bopd at its peak in 1979. From 1997 2013, MPRL E&P, a local company, operated the Project under a production enhancement contract ( PEC ). PEC has expired and Government has invited local landowners to participate in 2 blocks covering the project. One of the local landowner has invited Five Star to partner with them. Five Star will operate the field to earn % interest in the production from their land. Magwe Division Mann-Minbu oil field MYANMAR 2
MYANMAR OPPORTUNITY OVERVIEW (2/2) Five Star Petroleum Inc. and its local partner will have access to participate in following blocks covering Mann field, which will be subject to a new petroleum contract. Block: 19 P (covering 640 acres in Sagu, District Minbu) Block: 20 P (covering 501 acres in Sagu, District Minbu) Exploration opportunity: The deeper potential of the area also carries huge upside with conventional and unconventional targets within 2000 feet. Five Star plans to exploit the deeper exploration potential as well. Block 19P and 20P near town of Minbu 3
MYANMAR COUNTRY OVERVIEW Myanmar (formerly Burma), is a Southeast Asian nation of more than 100 ethnic groups, bordering India, Bangladesh, China, Laos and Thailand. Capital: Naypyidaw Largest City: Yangon (formerly Rangoon) Currency: Burmese Kyat Population: 53.26 million (2013) World Bank President: Thein Sein Trade organisations: WTO, ASEAN, BIMSTEC GDP (2013 est): US$112.972 billion, covering agriculture (43%), industry (20.5%), services (36.5%). Labour force (2011 est): 32.53 million, in agriculture (70%), industry (7%), services (23%). Main industries: agricultural processing; wood and wood products; copper, tin, tungsten, iron; cement, construction materials; pharmaceuticals; fertilizer; petroleum and natural gas; garments, jade and gems. Main export partners (2012): Thailand (40.5%), India (14.7%), China (14.2%), Japan (7.4% ). Main import partners (2012): China (37.0%), Thailand (20.2%), Singapore (8.7%), South Korea (8.7%), Japan (8.2%), Malaysia (4.6%) 4
MYANMAR OIL & GAS INDUSTRY OVERVIEW History of oil & gas industry: Burma is one of the world s oldest oil producers, having exported its first barrel more than 150 years ago. Scottish owned Burmah Oil Company (BOC) became the first foreign oil company to drill in Burma. BOC which in 2000 was acquired by BP discovered the Yenangyaung field in 1887 and the Chauk field in 1902 Recent bidding rounds: The last bidding for onshore blocks was opened on 17 January 2013, resulting in the award of 16 blocks to 10 contractors in October 2013. The last bidding for offshore blocks was opened on 11 April 2013, resulting in the award of 20 blocks to 13 contractors in March 2014. Reserves: Burma has estimated proven gas reserves of 10 trillion cubic feet and proven oil reserves of 50 million barrels, according to the US Energy Information Administration Current production: 7600 bbls of oil and 55MMCF of gas (as of January 2014) NATURAL GAS comprises 90 percent of total production and Burma is the 10th largest producer of natural gas globally the bulk of which is exported to China and Thailand. 5
MYANMAR OIL & GAS LEGAL FRAMEWORK Investors can enter into Production Sharing Contract (PSCs), Performance Compensation Contracts (PCCs), IPRs, Improvement of Marginal Recovery Agreements and Reactivation Agreements. Current legislation governing oil and gas in Myanmar includes 9 laws: The Oilfields Act 1918 The Oilfield Rules 1936 The Petroleum Act 1934 The Petroleum Rules 1937 The Essential Supplies and Services Act 1947 The Oilfields (Labour and Welfare) Act 1951 The Petroleum Resources (Development Regulation) Act 1957 The Law Amending the Petroleum Resources (Development Regulation) Act 1969 The Myanmar Petroleum Concession Rules 1962 A new petroleum law has been drafted and is under review by the Attorney General s office. Of equal importance in the O&G sector are: the State-Owned Economic Enterprises Law (under which MOGE is assigned responsibility for the E&P sector under PSCs with private companies). the Foreign Investment Law, Foreign Investments Rules, and Myanmar Investment Commission (MIC) Notification 1/2013 (under which Permits are granted by MIC to approve terms and conditions of draft PSCs) 6
MYANMAR OIL & GAS REGULATOR The Ministry of Energy is the primary government agency responsible for the oil and gas sector. Entities within the Ministry of Energy that are influential in energy projects are: the Energy Planning Department (EPD) (responsible for negotiating production sharing contracts with foreign oil companies), and MOGE, a state-owned enterprise responsible for exploration and production of petroleum within Myanmar and with exclusive rights to carry out all O&G operations with private contractors. 7
MANN - MINBU FIELD - OVERVIEW Location: Onshore (Central Myanmar Basin), located NW of Magwe, approximately 580 km. north of Yangon and is about 16 km long and 1,5 km wide; Structure: Northern plunging end of Mann-Minbu structure trend Latitude: N20 o 7 Longitude: E 94 o 50 (Approx.) Size: 30 miles long structure Producing area: 10 mile (length) 1 mile (Width) Play: Proven Supra-thrust Mio-Oligocene Sandstone reservoirs Discovered: April, 1970 by MOGE (Myanmar Oil & Gas Enterprise) Target Formation: Padaung (Oligocene) Initial Production rate: 280 BOPD, API: 36.5 As of 1 April, 2014: Total drilled wells: 667 Total production: 120 MMBO and 121 BCf gas Mann-Minbu Oil Field Estimated Remaining Recoverable Oil: ~25 MMBO 1 Current Production: 1450 BOPD from 351 wells Reference: http://www.mprlexp.com/index.php/home/assets/mann-field 8
MANN-MINBU FIELD - PHOTOS 9
MANN - MINBU FIELD PRODUCTION HISTORY (1997 2014) SHOWING PRODUCTION ENHANCEMENT POTENTIAL In Mann-Minbu Field the total field production is comprised of two key components: 1) Baseline Production 2)Incremental Production Baseline Production: ~ 18000 BOPM or 600 BOPD Baseline + Incremental Production: ~49000 BOPM or 1633 BOPD 10
MANN-MINBU FIELD (MYANMAR) OPPORTUNITY PROCESS AND TIMETABLE CONFIDENTIALITY AGREEMENT Confidential Information is available in a virtual data room set up for showing this opportunity. Qualified interested parties desiring access to Confidential Information are required to execute and deliver signed Confidentiality Agreement (CA) based on draft CA of AIPN. Upon request, actual presentations can take place. Draft CA may be requested via e-mail from Mr. Sohaib Qadar, Esq. at sohaib.qadar@canadarockiesenergy.com DATA ROOM ACCESS Five Star Petroleum Inc. has engaged Canadian Rockies Energy Inc. and Petro-Explorers Inc. for marketing this opportunity. Prospective investors will be provided access to the above mentioned virtual data room by Canadian Rockies Energy Inc., as soon as Confidentiality Agreement is signed. NON - BINDING PROPOSAL TO BE SUBMITTED IMMEDIATELY Proposal shall be submitted to Mr Waseem Rana, President & CEO, Five Star Petroleum Inc. via e- mail at waseem.rana@fivestarpetroleum.com, with a cc copy to Mr. Sohaib Qadar, Esq. Of Canadian Rockies Energy Inc. at sohaib.qadar@canadarockiesenergy.com. DEAL STRUCTURE Five Star Petroleum Inc. and its local partner will enter into a joint venture Agreement(s) with parties interested in participating in this project. DISCLAIMER This Release contains certain forward looking statements within the meaning of securities regulation laws. The Company has tried, whenever possible, to identify these forward looking statements using words such as anticipates, believes, estimates, expects, plans, intends, potential and similar expressions. These statements reflect the Company s current beliefs and are based upon information currently available to it. Accordingly, such forward looking statements involve known and unknown risks, uncertainties and other factors which could cause the Company s actual results, performance or achievements to differ materially from those expressed in or implied by such statements. The Company undertakes no obligation to update or advice in the event of any change, addition or alteration to the information catered in the Press Release including such forward looking statements. 11