HOUSTON, TX--(NewMediaWire - Jan 13, 2016)
- Propell Technologies Group, Inc. (OTCQB: PROP)
(the "Company"), the U.S. provider of a plasma pulse based enhanced
oil recovery technology, today issued the following letter to
shareholders.
Dear Shareholders,
I am very pleased to take the opportunity in this letter to
introduce myself as your new CEO, to discuss recent developments at
Propell and communicate our strategy to grow shareholder value
going forward.
This year we expect will bring transformative changes to our
Company, both on the corporate and strategic front.
The most significant is our plan to enter the exploration and
production (E&P) business, acquire producing assets and
leverage Propell's patented plasma pulse technology to improve
production.
The board of directors and I believe the current transitional
period in petroleum E&P provides exceptional opportunities to
apply our M&A and operational expertise to acquire and operate
quality assets at low prices. We expect to
1. acquire and grow distressed, producing assets through
superior operational capabilities and efficiencies, and
2. once oil prices strengthen, focus on reserve value creation and
asset divestiture to other entities who will pay premiums for
reliable and optimized production, such as Master Limited
Partnerships (MLPs).
The purpose of this letter is to shed light on how we intend to
achieve these strategic objectives, our near term milestones and
what we believe to be our unique ability to execute on this
plan.
This is the first of a number of periodic updates on our
progress and strategy we expect to release over the coming year so
that you can be more connected and informed as a valued
shareholder.
I also want to recognize and applaud the efforts of my
predecessor, John Huemoeller II who oversaw the commercial
introduction of Plasma Pulse to the U.S. oil industry, the granting
of a U.S. patent to the Company and the achievement of a valuable
strategic partnership with Ervington Investments.
Relevant Background
I am a third generation oil and gas professional. The early
stages of my own career were technical, underpinned by geology
and geophysics. This progressed into several senior management
positions spanning more than 37 years of international and domestic
E&P, business development and M&A.
Strategic Transition
Now, after a good two years of operational experience with
Plasma Pulse, we have a better understanding of its capabilities
and through the Novas Energy North America (NENA) joint venture
have accelerated the growth of infrastructure required to expand
its commercialization and apply it to proprietary assets acquired
on favorable terms.
So a logical evolution of the strategy, especially during the
current buyers' market, which has been discussed in our prior
corporate communications, would be to acquire distressed
conventional assets.
Our plan is to optimize our assets and achieve superior
shareholder value through increased production and proved reserve
volumes from operational efficiencies, plasma pulse applications,
drilling/workover programs, prudent capital allocation and general
cost cutting.
Our Advantage
Over the years I've learned the key to E&P M&A success
is a combination of consistent and reliable capital, rigorous due
diligence, expeditious closing ability and superior execution.
Our largest shareholder provides us with capital access, rare
for many independent oil companies of our current stage and
size. Such reliability of capital should allow us to secure
assets at more favorable terms and achieve greater margins,
especially important in the current low oil price environment.
We believe the advantage of savvy in originating and performing
due diligence required to close an acquisition expeditiously
translates directly into greater value assets for lower
costs. The team we intend to create has an unsurpassed track
record in closing transactions speedily and on the best possible
terms.
In addition, by using this technical and operational advantage
to also drive our execution ability to optimize and improve
our assets, we expect to achieve higher profits and a greater
return on capital.
Initial Strategy in Low Oil Environment: Acquire and Grow
Production
In the current low oil price environment, we will seek to
acquire distressed untapped inventory in proven hydrocarbon
producing areas, balanced against contract/execution risk, reducing
cost and mitigating risk through internal financing and possibly
further strategic partnering. We intend to leverage our strong
balance sheet to establish superior technical and operational
capabilities with key E&P hires and organization building.
End of Second Quarter Objectives
We plan to move swiftly to achieve these new objectives
- Reshape the Company into an E&P focused entity by
initiating a near term acquisition with production.
Use plasma pulse technology as a significant strategic edge over
competitors to enhance production as applicable.
Expand and reshape our plasma pulse technology licensing
domestically and internationally.
Build our E&P Company bench strength, by adding experienced key
operational and financial management.
Unify company affiliates into one headquarter office location in
Houston.
Release a new corporate presentation and investor awareness program
that dynamically updates stakeholders about progress on our
plan.
-
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Secondary Phase in Higher Oil: Resource Conversion
Oil production and use will eventually reestablish global
supply/demand equilibrium.
When it does, and the commodity can regain its footing with
higher prices, our strategy will transition to an emphasis on
bookable reserve growth and resource conversion driven by
acquisition of large, repeatable drilling programs in known
hydrocarbon bearing areas and further operational
streamlining.
The board of directors and I are enthusiastic about the
transformation occurring with Propell should provide significant
added shareholder value. In the coming months, I look forward
to meeting with shareholders and continuing to provide regular
updates.
Sincerely,
C. Brian Boutte
SAFE HARBOR
This investor update includes forward-looking statements of our
current expectations and projections about future events. In some
cases forward-looking statements can be identified by terminology
such as "may," "should," "potential," "continue," "expects,"
"anticipates," "intends," "plans," "believes," and similar
expressions. These statements are based upon current beliefs,
expectations and assumptions and are subject to a number of risks
and uncertainties, many of which are difficult to predict and
include statements regarding the transformative changes we expect
this year, the opportunities available to acquire and operate
quality undervalued assets at low prices, our ability to optimize
our assets value through increased production and proved reserve
volumes from operational efficiencies, plasma pulse applications,
drilling/workover programs, prudent capital allocation and general
cost cutting, our ability to close an acquisition
expeditiously with greater value for lower costs, and our ability
to use our technical and operational skills to achieve higher
profits and a greater return on capital, leverage our balance sheet
to establish superior technical and operational capabilities and
otherwise achieve our second quarter objectives. These
forward-looking statements are subject to various risks and
uncertainties that could cause actual results to differ materially
from those set forth or implied by any forward-looking statements.
Important factors that could cause actual results to differ
materially from those reflected in our forward-looking statements
include, among others, our ability to effect the transformative
changes we expect this year, find suitable acquisitions, optimize
our assets through increased production and proved reserve volumes
from operational efficiencies, plasma pulse applications,
drilling/workover programs, prudent capital allocation and general
cost cutting, use our technical and operational skills to
achieve higher profits, leverage our balance sheet to
establish superior technical and operational capabilities and the
other factors described in our Form 10-K for the year ended
December 31, 2014, and our other filings we have made or may make
with the SEC. The information in this press release is provided
only as of the date written, and we undertake no obligation to
update any forward-looking statements contained in this press
release on account of new information, future events, or otherwise,
except as required by law.