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Annual General Meeting  | Für deutsche Version der Vorträge der Jahreshauptversammlung
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Speeches at the AGM Heinz J. Scholz (Chairman) 
Investors, friends, ladies and gentlemen, I am delighted to open the second annual general meeting of Manas Petroleum. I would particularly like to welcome also our early investors who have been with us since the days of DWM Petroleum AG and Express Systems, our predecessors. Market Overview Although the history of the company is just five years, Manas has made an enormous development. I would like to highlight the most critical phase of Manas which was probably during the financial and petroleum market crisis in 2008. This historic turmoil was pushed the oil price from 30 US $ to 137 US $ per Barrel and right after that it decreased to 33 US $. This affected practically all oil and gas exploration companies, including Manas: Our share price sky-rocketed from 1 US $ to 6 US $ within just one year, and, when financing was nearly impossible and worldwide consumption of oil was plummeting, our share price decreased to just over 10 cents. Similar to the oil price, our share price has significantly recovered from the lows in January 2009. Financing Trends Let us have a look at the global merger and acquisition trend of the upstream industry. There was a sharp 30% decline of the transaction volume to a five year low in 2008. Albania However, it is interesting to note that in Europe, which covers our assets in Albania, the opposite trend has been taking place: Particularly European utility players such as Wintershall, GDF and NUON were acquiring assets from global players like Shell and Exxon. This is a clear sign that European utilities producers are obviously interested in producing locally. This is also reflected in a higher price for proven reserves. The weighted average value of proven reserves in Europe was at the end of 2008 around 25 US $ per Barrel. After Canada, this was actually the second highest value worldwide. Kyrgyzstan, Tajikistan, Mongolia In the Former Soviet Union countries, which cover our Kyrgyz, Tajik and Mongolian projects, the trend is similar to the global trend: A sharp decline of the transaction volume and a decline of the valuation of proven reserves from 8 US $ to around 2 US $ per Barrel. We have realized attractive farm outs to Santos during the peak in 2006. Erik Herlyn will give you a detailed report on where we stand regarding the projects in more detail. Erik Herlyn (CEO) 
Ladies and Gentlemen, As the Chairman has explained, 2008 and 2009 has been a difficult time for the oil and gas exploration markets. However, I am happy to report that we have been able to stick to our core strategy and we have actually managed to increase our portfolio. While doing so, we have been strengthening our financial position in the process. I will come back to these points later. Let me first summarize the three key decisions the board has taken and which were vital during the financial crisis in the past 18 month: 1. Our operations are primarily financed through carried farm outs from experienced operators. Therefore, about 80% of our exploration costs are funded by our farmees while we remain to participate in the upside potential of these projects. 2. Our Board of Directors initiated a cost cutting program which cut overhead by approximately 45% without adversely impacting our ability to perform the key technical work in our subsidiaries in Albania, Kyrgyzstan, Tajikistan, Chile and in the recently opened office in Mongolia. 3. We have renegotiated the production sharing contracts in Albania and Mongolia, which allowed us to release around 3.9 m US$ which is free to use now. Therefore, although we finance our operations through the sale of equity and debt securities, which was very difficult and later, during the financial crisis, impossible to realize, we were able to emerge well positioned as of today. Disclaimer: During this speech I will be making a few forward-looking statements. Forward-looking statements are projections rather than statements of historical fact and because they are only projections they are subject to risks and uncertainties. You can usually recognize a forward-looking statement because they include words such as "expects", "intends", "plans", "may", "could", "should", "anticipates", "likely", "believes" and words of similar import. Forward-looking statements are based on current facts and analysis and on forecasts of future results, estimates of amounts not yet determined and assumptions of management. Actual results may differ materially from these projections due to factors beyond our control. These risks and uncertainties include, among other things, competition for qualified personnel, access to capital and risks that are inherent in our business, including the risk that we may not find any oil or gas in commercially feasible quantity or raise funds sufficient to prosecute our exploration plans. These and other risks are described in our Annual Report on Form 10-K and other filings with the Securities and Exchange Commission. ACQUISITIONS Let me give you a short overview of the development of our portfolio before I talk about current status and future plans for our projects. When most of the early shareholders invested in the company in 2006 and 2007, our portfolio consisted of our blocks in Kyrgyzstan and Tajikistan. Shortly after acquiring the licenses, we completed a farm out and an option farm out to Santos both in early 2007. In fact, just about two years ago, we were a privately held company with two assets, Kyrgyzstan was farmed out. In April 2007 we acquired a listing on the U.S. OTC BB via a reverse takeover transaction. Later in 2007 we acquired 4 licenses in Albania, which were previously operated by Shell and Coparex. We commissioned Gustavson and associates in September 2007 to make an independent evaluation of the four blocks: It turned out that the resources in these blocks appear to be around 3 times bigger than our Kyrgyz and Tajik projects together. Also in late 2007, we jointly made a bidding with the American Petroleum producer IPR in Chile. The Chilean ministry assigned to us the largest of 9 blocks in the Chilean Magallanes basin. Before the ratification of the block had taken place, we had already farmed it out to local operators and we believe that this should carry us up to discovery. In 2008 we prepared the acquisition of two additional blocks in Albania. We also participated in a bidding for two large blocks in Mongolia which are adjacent to large producing fields operated by Sinopec. We won all of the blocks in Albania and Mongolia that we were bidding for. PROJECT DEVELOPMENTS 1. Albania: In Albania, we continue to own 100% of our projects, we have acquired last year 189 KM of 2-D seismic in Blocks A and B. This was performed by the Israeli company GII. GII was using 4 Vibrators each of them weighing 35 tons. The terrain was easy up to medium difficult to operate and there were no significant incidents to report. The processed seismic, which we received end of 2008 and early 2009 provided further evidence of the existence of the 8 prospects previously identified by Shell and by us. Ion addition to that, we identified one more, shallow prospect. Our team in Albania of 7 specialists integrated the seismic data into the existing database now covering around 3000 KM seismic and well data within our blocks. Blocks A, B, D and E are now drill -- ready. As mentioned before, we won the tender for two additional blocks, 2 and 3, which are adjacent to our existing ones. We are expecting ratification of the tender within the coming weeks. Key to these blocks is a well drilled in 2001 by Occidental Petroleum that proves the existence of an as yet undetermined quantity of oil in the deep under thrust structures in the Albanides. Occidental was not able to make a thorough testing of the well due to technical and financial issues they were having with their partner at that time, and they later abandoned their interest in Albania due to political unrest. In order to move fast in further exploring the six blocks in Albania we are currently evaluating farm out opportunities. However, twinning the Occidental well will be a technical and financially challenging project and we expect it to take around one year to prepare for it, which we expect to begin only after the ratification has taken place. 2. Kyrgyzstan We own 25% of South Petroleum Company (SPC), which holds and operates 5 licenses in Kyrgyzstan. This exploration project is carried up to 54 m US$ by Santos. This includes Seismic and Drilling of up to 6 wells. By the end of September 2009 we believe that SPC will have acquired 906 KM of seismic in Kyrgyzstan, which is actually far more than we have committed to the government and it exceeds the Santos commitment towards us. On basis of the seismic results, prospects were refined and SPC is currently drilling two shallow wells (2000 meters and 2400 meters) in our license area. The North Ayzar 1 well in the Tuzluk license area is just finalized drilling. The well is being logged, following which the rig will be moved to the Soh license area in order to drill a second well. In case of promising hydrocarbon shows during drilling SPC intends to test the wells using a work-over rig. We are expecting drill results in October 2009. In April 2010 the drilling of 4 deep wells with total depths ranging from 3500 to 5800 will commence SPC is currently preparing RFI documentation, budgets and technical specifications for this drilling campaign. So lets keep the fingers crossed that our first wells will be a success. 3. Tajikistan We own 90% of Somon Oil, which is currently operating 2 blocks in Tajikistan. Santos has signed an option to farm in. By committing to invest 74 m US$ Santos would get in return 70% of Somon Oil. So far, Santos has not signed the farm in agreement, but they have fulfilled all commitments in order to maintain the Somon Oil licenses. Santos has invested significant amounts in the Tajik license area up to now, including a seismic campaign in 2008. By the end of September 2009 we plan to move the field camp for the seismic crew which is currently operating in Kyrgyzstan to a new location in Tajikistan and shoot around 123 KM of 2-D seismic in the Western license area during 2009. This should be sufficient to maintain the licenses. 4. Mongolia We hold 84% of Manas Gobi to which two large blocks in Mongolia are assigned. Our 84% interest includes a 10% interest that we hold in trust for a local company. This local company can earn its 10% interest by performing operational support in Mongolia. In May, 2009 we opened an office in Ulan Batar, the capital of Mongolia. The office will serve both as office facility for the desk top work of our local geologists and geophysicists and as our base camp for expeditions of the field geologists operating in the remote areas of the Gobi desert. On July 2nd, we began a field survey under the lead of Alex Becker and our Chief Technology Officer Yaroslav Bandurak which is joined by a number of field geologists. We hope to realize geological mapping, structural sections and lithologic-stratigraphical sections in preparation for a seismic campaign planned for early 2010. The funding for our current operations in Mongolia is secured via a bank guarantee. 5. Chile We hold a 20% carried interest in the Tranquillo Block in Chile. The operator is Geopark, which is the only non-government producing oil and gas company in Chile. Geopark has started reprocessing existing seismic data and is examining well data from our block in order to decide upon a strategy for either seismic or drilling prior to acquiring seismic. FINANCIALS Our cash balance as of March 31, 2009 was $5.9 m US $, of which $1.9 m US$ has been restricted for a bank guarantee for the first phase of our work program in Albania and two escrow accounts for the first phase of our work program in Mongolia. This leaves us a balance of around 4.0 m US $ in unrestricted cash. Based on our expected monthly burn rate of 320.000 US $ per month, we estimate that we have sufficient working capital to fund operations for nine months. AGM Presentation
Letter from the chairman (invitation letter to the AGM) Site: http://www.manaspetroleum.com/s/Update.asp?ReportID=355067 Notice to the Stockholders: Additional Voting Information Site: http://www.manaspetroleum.com/s/Update.asp?ReportID=354655 Notice of Annual Meeting of Stockholders
Proxy Statement
Proxy Card
Annual report on Form 10-K for the year ended December 31, 2008
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