STRATEGY

Low-risk Projects

These are basically power generation projects located in host countries which have passed legislation for the development of marginal gas fields through electrical power generation (maximum 40 megawatts per field). The terms for the production of electricity are very attractive and are negotiated in advance with the petroleum granting authority. In turn a take-or-pay agreement is negotiated with the national electrical company. Therefore the only risk involved is during the actual negotiations phase. Once the contracts have been finalized, a Marex affiliate functions as the provider of a "pass-through" system utilizing aero-derivatives for power generation.

Medium-risk Projects

These projects reside essentially in the exploration of the Aquitaine basin of France.

Regardless of temporary political tendencies, France is a most stable country and member of the European Union. The French petroleum legislation is most generous and provides for the granting of a concession subject to a maximum royalty of 12% (by steps) and a 32% corporate tax after cost recovery. Most importantly the reserves are the property of the company and can be booked as assets.

The Aquitaine basin has produced to date over 2.1 billion BOE (barrels of oil equivalent) and is the site of some of the larger gas fields and oilfields in France. The Aquitaine region, although one of pristine beauty in view of its proximity to the Pyrenees and better known for its famous Bordeaux wines and Cognac, is never the less the "energy center" of France through its oil and gas production but also through hydroelectric dams in the Pyrenees, and solar and nuclear power.

The Parentis sub-basin has an estimated 260 million barrels of ultimate recoverable reserves in the deeper part of the basin and an estimated 110 million barrels (not counting the potential discoveries) along the rim where the Marex concession is located. To date about 4/5 of these reserves have been produced.

Higher-risk / Higher-reward Projects

East Africa offshore is one of the last, little explored, passive margins. Within the oil industry it has been subjected to negative clichés and dogma ranging from thin continental crust and high volcanic activity to being gas prone. Based on personal experience it is at the stage where West Africa was ten years ago. Through the work of RBA (Rusk, Bertagne & Associates) it has been convincingly established that the area has a thick sedimentary section, in part evaporitic, several valid petroleum systems and the presence of numerous mega-anticlinal stuctures, each with potential reserves in the multi billion barrels range and within commercial drilling depth, using the presently available offshore drilling and production technologies.

The area is beginning to attract the interest of several multi-nationals, national oil companies plus that of dynamic independents and promoters. Independently from the RBA report (which is available for purchase), Marex has prepared over 30 maps and charts delineating the major prospects mentioned above. As a consequence, it is initiating a program of block acquisition based on the upgrading of the blocks covering the most attractive structures mapped by the study. In an effort to utilize its in-house information and establish maximum market share in the area, Marex is positioned to spread the risk with other dynamically inclined partners wanting to establish an acreage position early in the game prior to large-scale investments by the super-majors, the mega-independents and the national oil companies of various host countries. Now is an ideal time in view of the large amount of acreage available, the attractive contract terms offered by the host governments (including limited work programs) and the forthcoming acquisition of spec surveys by affiliate geophysical companies.