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Dejour Enterprises is in the stage of having taken on their first
very large oil and gas project in the Piceane-Uinta basin of western Colorado, which gives
Dejour exposure in the number-one exploration basin for uranium and the number-one
exploitation basin for gas
Oil and Gas Exploration
Dejour Enterprises Ltd.
Suite 1100, 808 West Hastings Street
Vancouver, BC Canada V6C 2X4
Robert L. Hodgkinson
Chairman and CEO
Interview conducted by:
Lynn Fosse, Senior Editor
June 15, 2006
Robert L. Hodgkinson, Chairman & CEO
30 years relevant experience in public and venture capital markets.
Previous founder of several successful petroleum exploration companies including: Optima
Energy (Petroquest Energy) and Equatorial Energy Inc. (Resolute Energy)
Dejour Enterprises Ltd. is a micro-cap Canadian energy company developing high impact
exploration opportunities in the current energy super cycle. The Company's focus is
uranium and oil & gas.
CEOCFO: Mr. Hodgkinson, we spoke last year as things were
starting to get exciting on the uranium front, will you bring us up-to-date?
Mr. Hodgkinson: Dejour has a market cap of about $100
million and about 50 million shares outstanding and about $23 million in cash. We trade on
the TSX Venture Exchange, OTC in New York, and on six exchanges overseas. We are
developing a good following of investors and I think that is a result of our particular
focus, which is on North American energy resources, primarily uranium, oil and gas. Since
I spoke to you last, we have had a very successful season in the Saskatchewan Athabasca
Basin; since the beginning of 2005, we spent about $2.2 million there, and I expect to
spend about $5 million dollars there this year. We drove 15 drill holes; the results are
pending. We did find radio activity in 6 of them and 3 of them seem to be exactly the kind
of cores that we would want to follow to make a discovery. Therefore, things are beginning
to get interesting there. I think as much a compliment to us is that the feedback I get
from the industry there is that our team is doing an excellent prospecting job and the
focus of the technology and some of the innovations we brought to the area, are putting us
in very good stead.
CEOCFO: Will you tell us
about the innovations; what you are doing that others are not?
Mr. Hodgkinson: There is very little drilling going on
at this particular time and that is because access is traditionally been in the winter
season. We brought a new series of drill rigs, which can be transported by helicopter;
these are the kind of drill rigs that are used extensively on the west coast and this has
made drilling a 12-month a year operation there and very economically from an access and
egress point of view. This has never been done before in the basin. As a result of what we
are doing there now, the company is getting significant calls from others in the industry
that would like to explore using this kind of equipment that actually drills deeper and
faster and with the advanced access in egress allows you to be more economic in your
drilling programs. That is the first thing we are doing there. The second thing we are
doing is that we have 15 separate prospects; we focused on three of the larger ones and we
have been extending unconformities that have been expressed on adjacent properties by
Cameco Corporation (TSX: CCO) and COGEMA Resources Inc. now AREVA Resources Canada Inc.,
and track those onto our properties, and are using the same kind of advanced ground
geophysics to set up our drilling programs. For instance, we have completed 15 holes, we
are out of the field, we are going to go back in two weeks and drill five more holes and
then we have a million-dollar multi-stage ground geophysical program going on between July
and the end of August (2006), and the combination from the current data and drill holes
and that new data married on top of the previous exploration date that we have, will help
us advanced a very significant fall program. We have taken weather conditions out of the
game, so we are enabling ourselves to use economics in that particular fashion. As a
result, we can keep our crews busier, our markets better informed and move our programs
along a lot faster.
CEOCFO: How did decide
to think out of the box?
Mr. Hodgkinson: I think it is because my background is
from a financing point-of-view, so I am looking for the best way to get results the
fastest. Of course being on the west coast and used to denouncing mineral exploration
programs in the mountain regions where this kind of equipment is used, it was easy for me
to think why not take it to Athabasca. The exploration program in Athabasca has been 2 or
3 groups and they have been doing things the same way for years. They are very technically
advanced, but when it comes to drilling this is how they have gone about it; they have
their own equipment, and there is no reason to change. For us, it is a question of being
innovative and faster.
CEOCFO: Is the
investment community paying attention?
Mr. Hodgkinson: The investment community is paying
excellent attention these past six weeks. The markets have been a bit quiet, but I am not
unhappy with the response at all. We are now also in the stage of having taken on our
first very large oil and gas project, which in the Piceane-Uinta - Uinta basin of western
Colorado in eastern Utah. Not unlike the Athabasca region, which is the largest uranium
production region in North America, the Piceane-Uinta and Uinta Basins are the largest gas
resource area in North America. We have established a presence there with a purchase of
over 260,000 acres of highly prospective resource properties; these are not wildcats like
the traditional wildcats of the oil and gas business. There is over 500 trillion cubic
feet of gas in-place in this basin. It is where all the majors are drilling thousands of
wells every year. We have managed to move into a very significant land package there and
our co-venture in the development of that with the original property owner that purchased
these particular leases from the Federal government. This gives Dejours exposure in
the number-one exploration basin for uranium and the number-one exploitation basin for
gas. To me, those are the two integral commodities of the energy cycle in North American
and I think we have an excellent presence.
CEOCFO: How were you
able to get into the area?
Mr. Hodgkinson: I have been financing oil and gas
ventures for years. I have had several public companies previously, so my contacts
introduced me to a group that had these lands and they decided they would care for a
partner and we had the cash, time and interest. We had a common eye on where we wanted to
CEOCFO: It is unusual
for a company to have as much cash as Dejour; how have you managed to be in this enviable
Mr. Hodgkinson: If you are going to develop in the
resource business and you are going to do it by the drill, you have to have a significant
amount of cash, so we put together the package on Dejour and we have been able to convince
the investment industry to provide us with a certain amount of cash. I think we can raise
a lot more cash on developments of success in either the Piceane-Uinta basin or Athabasca.
It is all about exposure and being dedicated to finding what you are searching for.
CEOCFO: You mentioned
you are on a number of foreign exchanges. Do you have many foreign investors, and is that
an area where you are focusing?
Mr. Hodgkinson: We have put some focus on it. I would
say that about 15 to 18% percent of our investment base is overseas, and probably it is
going to get much larger.
CEOCFO: What should we
look for going forward; are there any new projects?Mr. Hodgkinson:
Yes, we are going to be very active drilling in the Piceane-Uinta Basins. I think
through the duration of 2006, you will probably see half a dozen wells there, but by 2007,
we will probably be drilling 25 to 30 wells annually. We have room there for thousands of
wells; with 260,000 acres, you can drill 64 wells per sections in some places, so it is up
in the twenties of thousands. We think that as this area expands, we are going to get all
kinds of offers in the industry. Regarding the Saskatchewan Athabasca Basin, I think the
fall drilling program is going to be extremely exciting now that we have first-hand
knowledge and we have some safe significant leads established with the drill and drill
bit. I think that in the fall, we are going to see the next round of marketing exposure
upside in the energy cycle. I think Dejours time is rapidly approaching.
CEOCFO: What are the
challenges you face?
Mr. Hodgkinson: Operations and people are very delicate
in todays world. The oil business is going full speed; to get competent operating
teams is always a challenge. To keep the people motivated is also a challenge. The same
things go to the exploration business. That is what we are really doing. It is about
building a cohesive company that is well-balanced people wise as well as capital
CEOCFO: Why should
potential investors be interested and is there anything that people miss about Dejour?
Mr. Hodgkinson: Dejour has only been in existence in
its current form for under 18 months. I think we have performed exceedingly well; our
stock is up 5 or 6 times since that point in time. That is just the beginning; the area of
the business that we are exposing ourselves to in the way we are exposing ourselves, could
give us multiples of growth between now and the time we finish our exploration.
Particularly on the oil and gas side, it is easy to postulate and count for that growth,
but one cannot discount the possibilities of a major exploration find in the Saskatchewan
Athabasca Basin either. We are well positioned to handle fiscally, a significant drilling
success in either the oil and gas regime or in the uranium exploration mode and that is
exactly what we plan to do. I think either one has an explosive upside to this particular
CEOCFO: Any final
Mr. Hodgkinson: I look forward to giving another update
possible before Christmas; it should be a very interesting time and a reflective
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