Sea Dragon Energy
CEO: Said Arrata
Juan Costello: Good day form Wall Street, This is Juan Costello with the Wall Street Analyst and joining us today is, Said Arrata, the CEO and chair of Sea Dragon Energy. The company trades on a TSX Venture and their ticker symbol is SDX. How are you today, Said?
Said Arrata: Thank you, Juan. I’m Okay and thank you for having me in your show.
Juan Costello: Anytime, and so starting off, give us a history and overview of Sea Dragon for some of our listeners here that are new to your story.
Said Arrata: Well, just to backtrack a little bit, I was running Centurion Energy as you recall and sold it back in 2007, from a market cap of 30 million, we sold it at – I sold at 1.2 billion dollars to Dana Gas. Following this, I took some time off and then went – and they ask me to come and run Sea Dragon. Sea Dragon had a concession in Egypt back in 2008, and they [built the well] and it did not pan out. In 2009, the board came and asked me whether I would actually pick up the management – executive management of Sea Dragon, so I felt it was a good opportunity to build another company and right after that, we picked up couple of assets, one in onshore Gulf of Suez in Egypt and a working interest of 10%. The asset had lessened and then a thousand barrel a day of production now. About three years later, we’re producing 9500 barrels a day from it so, that’s one asset. The other asset is the Kom Ombo asset, which is a concession I acquired when I was with Centurion and I felt it was a good resource play, bought 50% of that and we’re still working on it I am developing the [concession]. We just made a discovery recently, West Al Baraka and it’s going to develop into a nice development plan.
The third concession, which we just acquired recently, is the Shukheir Marine. That’s an old concession, which was discovered in 1998 and then was producing and we took it over because we felt we could do – we could optimize the production and at the same time, we saw a good upside in the concession, so we went to start working on at this year building a well or two and going back into existing wells and we’re [growing] them and this way we could increase the production and at the same time, hopefully have a discovery. We see a prospect of 5 to 6 million barrels of preserves, a nice add-on to what we’ve got right now.
The North West Gemsa, we had a gas development plan. We were flaring gas and we decided to just capture all this gas and get some liquids from the gas and then market the gas and that also will bring an additional a thousand-barrel of oil equivalent with the gross production. So this concession, the North West Gemsa has done a has add on a good asset to our portfolio.
Juan Costello: Right…Can you talk about the recent increase in production? As you said, you had the acquisition of the Shukheir Marine and also the start of the sales of – and North West Gemsa, can you talk about the property there in Egypt?
Said Arrata: Yeah. Well, right now from these three properties, we have a net production of about 1800 barrels a day. When we – when we started, we were just about 100 barrels a day or so and then so we’re adding on to our production and there will be another announcement coming soon in here for a well which we built in the North West Gemsa and we just tested it recently. Unfortunately, I can’t give you the results now, but it will appear in a press release very soon. So I think we’re really starting to see some results in from our assets in Egypt and we plan to develop them more.
Juan Costello: Well and so what are some of the trends that you are seeing right now in your sector, and how are you positioning the company in a unique way to capitalize on them?
Said Arrata: Well, we feel we have a strength of ourselves in MENA, in the Middle East and North Africa, and also we have some very good contacts in Sub-Saharan Africa. We really would like to add on a geographical location one or two in either the Middle East/North Africa or in Sub-Saharan Africa. We’re working diligently on doing just that to add a quite an opportunity and an asset to the existing portfolio of the company. So the trend is Sub-Saharan Africa, everybody is excited about that. The exploration side from the East and the production development side from the West and we’re very well positioned to have one or two of those opportunities land in our lap I hope soon in here. We’re working diligently on them, so that is the trend we see in the – in our business.
Juan Costello: Good and perhaps you could walk us through a little bit more of your background and experience and some of the management there at Sea Dragon?
Said Arrata: Well, my background, I’m a petroleum engineer by education. I worked mainly in the oil and gas industry at first when I started. I worked with major oil and gas companies. I worked overseas, North America, and about 1978 or so, I started my own businesses. The Sea Dragon is my 7th company, which I like to start up companies, build them up, and then hopefully when we do a good job, somebody would look at you and say I want to buy, and that’s really how we add value to the shareholder. Our technical team is right now with Sea Dragon is the ex-team of Centurion. We have a team, a technical team in Calgary and we have an operation team in Cairo, very strong individuals with good background in the oil and gas industry. We have a very small office in Paris and this is where the CFO and I spend some time in here also because I feel that it is closer to the deal flow in either in the MENA region or to London or to Paris and also closer to the operation, so I don’t have to travel all the way from North America to the operating areas which is very taxing on the body, so the – our CFO is the next BNP Paribas has been with us for a couple of years. He was the head of the M&A – Merger and Acquisition in BNP Paribas in the oil and gas sector, so he brings with him a lot of good experience and contacts. So, I think we have gathered a very small team of technical, financial and operation individuals.
Juan Costello: Certainly and what are some of the goals and milestones there that you and the team are hoping to accomplish over the course of the next year?
Said Arrata: Oh, the course of the next year. Well, we feel we can in our production; this is really where we’re focusing right now. We’re focusing into parallel activities and one is identifying new opportunities. The next activity is to focus on developing our existing properties, and from the existing properties, we feel we could achieve around probably 25 to 2700 barrels a day or so in this coming year like 2013. At the same time, try and identify and learn hopefully one or two projects, additional projects, which we’re eyeing at this stage, so that’s the short-term goal we have for this year.
Juan Costello: And as you continue to speak with investors in the financial committee, Said, do you believe that the Sea Dragon Energy story and your message and company’s upside are completely understood and appreciated by them and it is not what you wish investors better understood about the company?
Said Arrata: Yeah. We have not gone out in full force and really expose the story to the investors, and the reason is very simple as we were trying to position ourselves first to get some production, to get some – some actually momentum going with the company and their activities so they could really go on and turn a nicer bigger story to the investors and I think the time is here, I think this year, you will see more, just show and tell with the financial investor and we are going to just put our foot on the pedal and moving much faster.
Juan Costello: Great and certainly and so once again joining us today is Said Arrata, the CEO and chair of Sea Dragon Energy. The company trades on the TSX Venture, ticker symbol is SDX. Currently trading at the 6 cents a share, market cap north of 22 million and before we conclude here, Said, to briefly recap some of your key points. Why do you believe investors should consider the company as a good investment opportunity today?
Said Arrata: Well, my belief is that investors look at two things in the company. One is the fact good management and two is the quality of the projects they bring in to the fore front. I believe we have both of those. The markets these days are slow, they’re nervous. Needless to say, I guess it’s a known fact, so I think it will take some patience and perseverance to get some of these stories in full development mode and I think we have all of these ingredients, good management, good projects, patience and perseverance to make it worthwhile for the investors to look at Sea Dragon.
Juan Costello: We certainly look forward to continuing your tracker company’s growth and report on your upcoming progress and we like to thank you for taking the time to join us today, Said, and update our investor audience on Sea Dragon.
Said Arrata: Thank you very much Juan for having me.