International is a Houston-based exploration and production company
with operations in the Frio Trend of Texas and an onshore concession
block in Senegal, Africa. We decided to take a booth at the 2002 APPEX
Property and Prospect Expo in Houston with the hope that it would be
an effective venue for us to promote an interest in our Senegal opportunity.
With the London APPEX event fast approaching, this article is intended not only as a
recap of our experience, but also to provide our impression of how effective
APPEX is from a small company's point of view.
Our concession in Senegal is quite large (4,041 square
kilometers) and contains a gas discovery that was drilled by the national
oil company (Petrosen) in 1997. Fortesa took the license in 1999 to
develop the gas discovery and evaluate the additional exploration potential
on the block.
During the past three years we have conducted various
studies to identify and delineate play trends in addition to the one
containing the gas discovery. Fortesa finalized a Production Sharing
Agreement with the government of Senegal in May 2001.
Development of the gas discovery is ongoing. Earlier
this year we began installation of a pipeline to connect the gas discovery
to existing infrastructure that will deliver gas to the local utility.
At APPEX our objective was to find a partner with sufficient
financing to fund our remaining seismic and drilling obligations for
Our expectation was that a booth at this Expo would be
an effective method to expose our deal to a large number of potential
partner companies in a relatively short time and with relatively low
We were gratified to see that in only its second year
APPEX attracted several hundred exhibitors and thousands of attendees.
Foot traffic in front of our booth was steady and at a high level.
We were very pleased, too, to see that there seemed to
be as many buyers as there were sellers in attendance.
During the three days of actual exhibition we enjoyed
quite a few visitors to our booth. Discounting the "old friends" and
the idly curious, we had a total of 15 companies stop by and express
some degree of interest.
It was educational to note the type of company that stopped
to look at our deal. We divided the companies into the following categories:
- Super major — 2.
- Large oil and gas company — 3.
- Independent company — 5.
- Small investors — 5.
After the initial presentation of our opportunity at
the booth, seven of the 15 companies expressed continued interest. Post-meeting
follow-up with these seven companies resulted in three companies signing
a Confidentiality Agreement and receiving a much more detailed technical
The three companies most interested in our project were
from either the large oil and gas company or the independent categories.
Since the detailed technical presentations, one of the
three companies has completed its evaluation of our deal and declined
to participate. The two remaining companies continue to evaluate our
Our primary objective in participating at APPEX was to
find a partner, but it turns out there were additional benefits as well.
Helpful information was freely exchanged.
Some of the companies that visited our booth and looked
at our deal were able to give us valuable information, such as analogs
for our play types or references to technical information, which enhanced
our understanding of the identified play types.
Several contractors and vendors stopped by our booth.
Some offered unique expertise or services that might
be employed to improve or clarify our interpretation of the identified
Although we were busy at our own booth, we did find some time to visit
the nearby booths.
Seeing how other companies present their ideas using
varied display types was especially informative. We saw ways that we
could better present our own data and be more effective or dramatic
in delivering important information.
We have since incorporated some of these techniques into
our presentation material.
Since the August APPEX meeting, we have put the discovery
well on production and are generating cash flow. The remaining interested
companies are finalizing their evaluations of our deal. We are confident
that our APPEX participation will soon yield the quality partner we
set out to attract.
We are now planning to return to APPEX next year. Who
knows, by that time rather than looking for a deal to sell, we may be
looking for one to buy.