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Paradigm Oil & Gas’
diverse
portfolio allows exploitation of proven
reserves and exploration of high impact, high return opportunities
Energy
oil and Gas Exploration
(POGI.OTC: BB)
Paradigm Oil and Gas, Inc.
12880 Railway Avenue
Richmond, B.C. V7E 6G4
Phone: 403-827-1208
Robert L. Pek
President
Interview conducted by:
Lynn Fosse, Senior Editor
CEOCFOinterviews.com
June 2, 2005
BIO:
Robert L. Pek, President
Mr. Pek has over 15 years of executive management experience, in both domestic and
international arenas. He is the founder of Qeva and has primary responsibilities for
product development, marketing, and capital acquisition.
Mr. Dhanani is a highly skilled and knowledgeable geoscientist with wide ranging
geophysical and project management skills acquired over 25 years working for super-majors
in five continents. His technical skills range from seismic data acquisition, seismic data
processing to interpretation and prospect generation. He has held exploration positions in
Canada, Libya, North Sea, and South America. His field development assignments include the
North Sea, South America and the Middle East. He has held various senior management and
technical positions with BP and ExxonMobil and has been responsible for the management of
very large exploration projects.
Company Profile:
Paradigm Oil & Gas, Inc. participates in oil and gas development and exploration
projects with major potential. Currently Paradigm has acquired an interest in a highly
prospective heavy oil project with 820 million barrels in place and a southern Alberta
natural gas project. Paradigm has also secured an interest in two highly prospective gas
projects in Southern Alberta, within close proximity of a gas export pipeline to the U.S.
We are actively seeking investments in offshore projects in the North Sea. Paradigm's
business model is to seek high return investments as a participant in larger projects
while avoiding major operating expense commitments, thereby creating substantial operating
leverage.
CEOCFOinterviews: Mr. Pek, Paradigm is a relatively new
entity, what is the focus? Mr. Pek: “In short, the focus
with Paradigm is to hold a small interest in the high impact, high return oil and gas
price across North America and international. This is our focus for two simple reasons.
Number one being that the demand for oil and gas does not seem to be declining. There
seems to be a very strong future for the oil and gas product. Secondly, it is the
strategy regarding small interest in high impact plays. It takes the risk out of the
picture rather sending 100% of the money in one or two plays and having them fail. It is a
higher percentage of survival for our shareholders managing the risk over several
projects.”
CEOCFOinterviews: Will
you tell us about your properties?
Mr. Pek: “The basis of one property, Sawn Lake property,
is a heavy oil project in Northern Alberta. The project itself has a Ryder Scott Report on
the project, which you can find on our website. It describes the properties in more
detail, but the Ryder Scott Report itself, has put 820,000,000 barrels in place. Even at
the 10% recovery rate for heavy oil, it still leaves 82,000,000 million barrels
recoverable. Our ten percent of that play is very significant. The advantage of that
project is that it is not an exploration project; it is more of an exploitation project.
The oil is there and in place. It is a matter of whether we can recover it economically.
The second project is with a company by the name of WIN Energy, which is a privately owned
gas company here in Calgary. They have a portfolio base of roughly $25 million of land
down in southern Alberta. We have acquired a 10% interest in two separate plays, with some
of the major companies like Talisman Energy, which will be operating on the property. Our
focus is not to become a big operator but to entrust our dollar in the hands of seasoned
veterans like Talisman. Having ability to acquire small interest in a proven management
team, as well as proven projects like the Hillsprings as well the Todd Creek project,
lowers our risk. The strategy behind what we will do with Paradigm, is not to go do any
wild cat exploration. It will be just small interest in these proven commodity projects
and investing in proven management teams.”
CEOCFOinterviews: What
is it about the management of Paradigm and your background that will enable you to choose
successfully?
Mr. Pek: “My background in business was as facilitator.
Where I come into play is I have a very good network of oil and gas expertise across Canada
as well as into U.K., where we will be expanding internationally once we get these two
projects kicked off. The management team we bring together for instance in U.K., is a
combination of 200 years of combined international experience from petrol chemists to
petrol physicist, engineers, geophysicists, geologists and every aspect of the tactical
evaluations we will need going forward, as well as access to operations if we decide to go
in that direction.”
CEOCFOinterviews: Will
you tell us about your funding and how many projects you are able to pursue?
Mr. Pek: “Right now, we are quoted on the OTC.BB, and
having access to a vehicle, the sky is the limit. If projects are solid enough, financing
is more easily acceptable to do the demand for the oil and gas industry. What our growth
rate will be will depend on what projects we will bring to the table. The first two
projects will not take more than about a million dollars U.S. to kick off. Moving forward
into the international arena in places like the North Sea, the cost of entry is
substantially higher and we will probably be more in the $5 million to $10 million range
to participate there.”
CEOCFOinterviews: Is
there a particular mix that you would like to have geographically?
Mr. Pek: “Right now the focus is more North America and
the U.K. simply because of the strength of the fiscal regimes, the lack of language
barriers and the ease of entry into places like the North Sea. I would say our biggest
focus is going to end up about a 75% portfolio base in the North Sea and a 25% portfolio
here in the western Canadian sedimentary basin.”
CEOCFOinterviews: Will
you express you thoughts on the energy situation in general?
Mr. Pek: “What I like about our entry into the energy
sector is simply that no matter what expert you talk to, there does not seem to be one
opinion on where we are going to be in the future because there are some uncontrollable
situations out there. If you take places like India and China, how fast will they grow
compared to what is predicted and what will their energy needs be over the next 10, 20,
30, and 50 years? I have traveled to many of the third world countries and spent extensive
time in those countries. I have seen the transition from when I went into Beijing five
years ago, to when I went back a year ago. I saw how far and fast it has come in that
period. It was full of wagons and oxen and now it is cluttered with Mercedes, kids on cell
phones and people with electricity for the first time ever. Once somebody has something,
everybody else wants it. If you are tucked away in the jungle and you do not know there is
anything outside of you because there is no access to public media, you are going to live
in the jungle forever and be happy. Once you have access and see how the rest of the world
is living, everyone wants to advance that much faster. I see a demand and desire for
everyday common practices that we enjoy here in the western world, increasing at
exponential rates in places like India and China. From an energy standpoint, the demands
are going to continue. At what point there is a shift in regards to fuels, that is a long
way off because the cost of changing the infrastructure to accept the alternative fuels in
the western world is just not something you can do overnight; it is something that will
take decades to do. I strongly believe that we are going to see a fifty-dollar oil price
for many more years and feel comfortable that it is going to be north of fifty.”
CEOCFOinterviews: What
is on the horizon for Paradigm?
Mr. Pek: “Where we would like to take the focus is
investing these long pieces in these large impact plays, gives the company so much story
to share by increasing shareholder value, and be able to hook us into these major
projects. One of the projects we are looking at in the North Sea has potential of a
TCF-and-a-half of gas and one project from an oil standpoint, 50 million to 75 million
barrels of oil. To get five or ten percent of those projects on a continual basis is very
exciting for Paradigm. I think we have done a nice job of creating a pipeline of projects
and as long as the money is there and the apatite continues to be as strong as it is, I
think we will continue to roll in five or ten percent of these hundred million dollar
properties every six months over the next three to five years.”
CEOCFOinterviews: Is
your strategy a very unusual strategy for the industry?
Mr. Pek: “It is a safer and more conservative approach
than most would take, especially with a public company. The equity markets were set up for
access of speculative dollars, which traditionally goes into exploration. We are going to
play the exploration route to a point but I have been involved personally from a vested
standpoint of many companies, where they have drawn all the rates into one basket.
Most of them have hit the stocks from twenty cents to twenty dollars in a
twelve-month period. For the ones that do not, their seven to ten million dollars goes
into a dry hole and they are back at the market begging for money. They are begging for
money just to cover G & A let alone try to raise eight or ten million dollars to
participate in another exploration well. Here, if we can take that eight to ten million
dollars and average that over eight to ten holes, there is a better chance that we are
going to hit on a percentage of those holes, which continues to give us some success to
sell back to our shareholders.”
CEOCFOinterviews: What
challenges do you see in carrying through your plan and how are you ready?
Mr. Pek: “The biggest challenge that we are going to
have to overcome, which I believe we are already starting to overcome, is establishing
credibility in the investment world. At present, we are a brand new entity, a start up.
The way we believe we can overcome that is with the strength of the management team. To be
able to bring in 200 years of combined oil and gas international experience out of the U.K.,
and our strategy entering the U.K., I think that at least gives the investment world an
update. They are not a new company as far as expertise. The company is jammed full of
successful individuals that have been down this road before as well as successful
individuals from the BP Amoco’s and the major oil and gas companies across the
country.”
CEOCFOinterviews: How
important is timing for entering the market?
Mr. Pek: “Timing is everything. There has never been a
time in the oil and gas industry where there was such access to capital, comfort levels
investing in the energy sector, to comfort levels in where the energy sector is going. It
is a good time to find investment dollars. You see many fund managers that would
conservatively look into real estate or other ventures, diversifying into the energy
sector. There are billions of dollars out of these institutions, starting to become more
divested in the oil sector. Just the fact that the institutional money is starting to flow
in more in places like Europe and Asia, where we have never seen before, I think creates
more confidence in the market.”
CEOCFOinterviews: In
closing, what would you like people to remember about Paradigm?
Mr. Pek: “Well, the strategy from Paradigm is a very
conservative approach. The idea of investing in small interest, high impact, proven
management teams, proven fields, I think is a very safe auction to investors to put some
of their lower risk monies.”
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