Business Plan

Business Plan
Of
Updated March 2009
Table of Contents
Company Overview ..................................................................................................................................................1 Introduction .......................................................................................................................................................2 Vision ..................................................................................................................................................................2 Strategic Outlook...............................................................................................................................................2 Objectives ...........................................................................................................................................................2 NHEPL Approach.............................................................................................................................................2 NHEPLs Targets...............................................................................................................................................3 Peer Recognition................................................................................................................................................3 Our Strength ......................................................................................................................................................3 Our Performance...............................................................................................................................................4 Capital Structure ...............................................................................................................................................5 Company Founders ..........................................................................................................................................5 KASB Capital and KASB Securities ................................................................................................................5 Board of Directors .............................................................................................................................................7 Strategic Partnerships.......................................................................................................................................8 Financial Summary ...........................................................................................................................................8 Exploration and Production Sector in Pakistan...................................................................................................10 Pakistans Energy Sector ................................................................................................................................11 E&P Sector Overview .....................................................................................................................................12 Oil & Gas Supply and Demand.....................................................................................................................13 Industry Participants ......................................................................................................................................16 Reserves and Production ...............................................................................................................................18 Oil & Gas Exploration Activity in Pakistan.................................................................................................18 Technical Description of Current Assets ..............................................................................................................20 Block No. 2468-7 Kunri (NHEPL - 60%, Operator; KEC 40%. Granted on 5 June, 2007 for 5 years) 21 Introduction .....................................................................................................................................................21 Stratigraphy .....................................................................................................................................................23 Structural Style ................................................................................................................................................26 Petroleum System ...........................................................................................................................................26 Block No. 2468-9 Jherruck (NHEPL - 60%, Operator; KEC 40%. Granted on 31 January, 2008 for 5 years) ........................................................................................................................................................35 Introduction .....................................................................................................................................................35 Stratigraphy .....................................................................................................................................................36 Structural Style ................................................................................................................................................38 Petroleum System ...........................................................................................................................................39 Technical Description of Proposed Assets ...........................................................................................................50 New Applications ...........................................................................................................................................51 Hisal Block Potwar Zone I .............................................................................................................................51
Introduction .....................................................................................................................................................51 Geological and Tectonic Setting ....................................................................................................................52 Petroleum Setting............................................................................................................................................53 Conclusion .......................................................................................................................................................53 Makhad Block Potwar Zone I ........................................................................................................................54 Introduction .....................................................................................................................................................54 Geological and Tectonic Setting ....................................................................................................................54 Petroleum System ...........................................................................................................................................54 Sanghar South Block Lower Indus III .........................................................................................................55 Gambat South Block Lower Indus III ...........................................................................................................55 Introduction .....................................................................................................................................................55 Prospectivity ....................................................................................................................................................55 Operational Plan for Current Assets.....................................................................................................................61 Overview ..........................................................................................................................................................62 Kunri: Strategic Objective ..............................................................................................................................63 Kunri Expenditures.........................................................................................................................................64 Activities:..........................................................................................................................................................64 Progress check: ................................................................................................................................................64 Key Metric Targets..........................................................................................................................................65 Timeline............................................................................................................................................................65 Jherruck: Strategic Objective..........................................................................................................................66 Jherruck Expenditures....................................................................................................................................67 Activities:..........................................................................................................................................................67 Progress check: ................................................................................................................................................68 Key Metric Targets..........................................................................................................................................68 Timeline............................................................................................................................................................68 Operational Plan for Proposed Assets ..................................................................................................................69 New Applications: Strategic Objectives .......................................................................................................70 Activities:..........................................................................................................................................................70 Progress check: ................................................................................................................................................70 New Applications Expenditures...................................................................................................................70 Financial Plan ...........................................................................................................................................................71 Funding Requirements...................................................................................................................................72 Economics ........................................................................................................................................................72 Cash Flow Analysis.........................................................................................................................................73 Product Pricing................................................................................................................................................74 Payments to Government ..............................................................................................................................75 Other Assumptions.........................................................................................................................................76 Tax Benefit to E&P Companies in case of Dry Hole...................................................................................76 Risks and Mitigants .................................................................................................................................................77
Political Uncertainty .......................................................................................................................................78 Exploration Risk ..............................................................................................................................................78 Change in Regulatory Regime.......................................................................................................................78 Macroeconomic viability and Foreign Exchange Rate Risk ......................................................................78 Appendix A Summary Historical Financial Statements of NHEPL ..............................................................80 Appendix B ISO Certificate .................................................................................................................................82 Appendix C Organizational Chart (Current and Prospective) ......................................................................84 Appendix D Brief Profiles of Core Management Team...................................................................................87
CONFIDENTIAL
SECTION 1.
Company Overview
Business Plan
Company Overview
Introduction
New Horizon Exploration & Production Limited (NHEPL or the Company), a petroleum exploration and production (E&P) company, is incorporated in Pakistan. The Company is registered in Sindh, with its head office in Karachi.
Vision
NHEPL will create value for its stakeholders through the acquisition, exploration, development and production of Oil and Gas properties, deploying a strong technical and efficient management team, while maintaining the highest Health, Safety, Environmental and Quality standards.
Strategic Outlook
NHEPL aims to get to the production stage through accelerated exploration activities. Pakistan offers a unique environment to satisfy NHEPLs objectives as it has a high established exploration success rate that ranges from 28% in the south to 33% in the north of the country over the past many years. However, the size of these discoveries is small to medium, which makes it less attractive to majors and creates an opportunity for companies like NHEPL. Pakistan has a severe energy shortage with growing industrial and consumer demand. The Government is eager to work with E&P companies to bring discoveries rapidly to production. NHEPL employs highly qualified professionals, several with multinational experience and western education while being based entirely in Pakistan. Hence, the Company enjoys a competitive advantage of being a high quality low cost operator.
Objectives
The following are NHEPLs key objectives: Implement strong management systems that are based on global best practices in the upstream petroleum industry. Maintain a team that comprises of highly skilled petroleum managers and professionals with international experience. Form strategic partnerships with companies that share similar values, to work and coinvest in high quality assets. Initially acquire high probability low risk oil and gas exploration assets in Pakistan. Drill at least nine exploration wells in low risk areas in existing and future blocks before 2012 to ensure success. Expand to other countries.
NHEPL Approach
NHEPL considers the following key elements before acquiring an asset: Proximity to discovered fields. High regional success ratio. Well developed infrastructure. Proximity to fully developed markets. Stable political environment. Low security risks.
Business Plan
Company Overview
NHEPLs Targets
Initial Targets (by 2011) NHEPL has already demonstrated its ability to acquire exploration licenses as an operator. The Company continues to fulfill its commitments ahead of schedule. NHEPL has signed agreements with the Government of Pakistan to accelerate its work programs on both of its blocks. All work has been delivered so far on the accelerated schedule while keeping to highest quality standards and managing costs. Short/Medium Term Targets (4 years) are listed below: Acquire four operating blocks by end 2010; Drill five exploration wells by end 2010; Make two discoveries by 2010; Add 35.4 MMBOE (NHEPL share) net reserves by 2010; Attain first production by 2011; Drill four additional exploration wells by end 2012; Net production of 8.6 MBOED (NHEPL share) by end 2012; Target finding cost is USD 0.67 per BOE (NHEPL share); and Target finding and development cost is USD 4.57 per BOE (NHEPL share).
Long Term Targets (10 Years) Discover or acquire net reserves of 68 MMBOE; and Attain net production of 15 MBOED.
Peer Recognition
NHEPLs peers in Pakistans E&P industry have recognized its strong performance by electing and placing our Company and our people at strategic positions: The Company was elected on the Board of Pakistan Petroleum Exploration and Production Companies Association (PPEPCA) a platform used by the E&P Companies to interact with the Government of Pakistan on policy issues; Our Chairman is the Chairman of the local chapter of the American Association of Petroleum Geologists (AAPG); and Our Chairman is also a Director of the Society for Petroleum Engineers (SPE) Pakistan Chapter.
Our Strength
Our strength is: Our team; and Our systems. Our Team: NHEPL is staffed by a highly skilled technical team of professionals that has many years of industry experience in all key disciplines. A comprehensive organization chart (current and prospective) is
Business Plan
Company Overview
attached as Appendix C. A snapshot of the profile of the core management team members is attached as Appendix - D. Our Systems: NHEPL has in place management systems based on best practices in international upstream petroleum industry. All management systems reflect the international expertise of our management team. Some of the key management systems are listed below: Health, Safety, Environment & Quality (HSEQ) System Risk Management System Technical Management System Financial Management System HR Management System Contracts & Procurement Management System IT Management System Data Management System Community Management System Security Management System
NHEPL has attained ISO 9001:2000 certification (Appendix - B).
Our Performance
The Company was able to establish a team, sign key partnerships and bid on four blocks within the first six months of its operations. NHEPL was amongst the most successful bidders and was awarded licenses of two blocks against some of the major veterans of the sector including several multinationals and large local companies. NHEPLs wins were within a close margin. On June 05, 2007, the Kunri Block in Sindh province was awarded to NHEPL as an operator with 60% equity and to Kuwait Energy Company (KEC) as a JV partner with 40% equity. Minimum commitment on the block is to spend USD 16.05 million over 3 years to acquire 800 km 2D seismic and drill 3 exploration wells. The block has been awarded for a 5 year term and can be extended for up to two further 2-year terms. However, the partners have the right to exit the exploration plan after only 3 years. On January 31, 2008, the Jherruck Block in Sindh province was awarded to NHEPL as an operator with 60% equity and to KEC as a JV partner with 40% equity. Minimum commitment on the block is to spend USD 8.95 million over 3 years to acquire 350 km 2D seismic and drill 2 exploration wells. The block has been awarded for a 5 year term and can be extended for up to two further 2-year terms. Exit rules are the same as those for Kunri (after 3 years). Currently NHEPL has 4 outstanding applications for additional exploration licenses with the Government of Pakistan. The Company is the first applicant in the Hisal and Makhad blocks which are located in Zone-I, where the Company has a right to match the highest bid as per the Pakistan Petroleum Policy 2007. In addition to looking and placing applications for open areas, the Company is also looking to acquire high value production assets. The technical descriptions and estimated exploration expenditures for these new, proposed blocks are shown separately from those for the Kunri and Jherruck blocks. NHEPL has been awarded ISO 9001:2000 certification by Bureau Veritas, which included the field processes involving 700 people, most of whom were contracted employees.
Business Plan
Company Overview
Capital Structure
The authorized Capital of the Company is PKR 2,000 million (USD 25 million), out of which PKR 525 million (USD 6.562 million) has been issued and paid up. The shareholding structure of NHEPL is given below:
1. Nasir Ali Shah Bukhari 2. KASB Securities Limited 3. KASB Capital Limited 4. Syed Wamiq Bokhari 5. Others
15.33% 13.33%
26.67%
21.33% 23.34%
Company Founders
NHEPL was founded by Nasir Ali Shah Bukhari and Syed Wamiq Abrar Bokhari, two professionals who bring strong expertise from the financial and petroleum sector, respectively. Nasir Ali Shah Bukhari is the Founding Investor of NHEPL. He is a very successful and well respected entrepreneur in Pakistan who has successfully launched many companies at national and international levels. Mr. Bukhari is the Group Chairman of the KASB (Khadim Ali Shah Bukhari) Group that was founded in 1955 and has grown substantially under his leadership to become one of the largest financial services group in Pakistan. Mr. Bukhari is actively involved in various initiatives at the government level. He is a member of the Government of Pakistans Board of Investment and is a key player in an initiative being conducted on Carbon Finance based on the Kyoto Protocol. He has also served as Chairman of the Sindh Privatization Commission for the Government of Sindh. In addition to his position at KASB, he holds directorships with NorthTec Corporation, a computer manufacturing concern, Evolvence Capital, a UAE based financial services company, and with Apectec Inc, an oil and gas business partnering concern. Syed Wamiq Abrar Bokharis background is mentioned in the section on the Board of Directors.
KASB Capital and KASB Securities

KASB Group was a pioneer in the development of Pakistans financial services industry and has a current asset base of over USD 900 mn. KASB Group initially started out as a cotton trading firm in 1955 and quickly evolved into a security trading, investment consultancy, research and investment banking firm in 1958, when KASB Securities was set up to provide independent advice and innovative securities brokerage products and services for an expanding client base.
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Company Overview
In recognition of the Groups prominence and standing in the domestic financial markets, Merrill Lynch entered into a technical affiliation with KASB Group in 1993 in the areas of research and investment banking. The relationship with Merrill Lynch gives the Group the ability to leverage over 56,000 professionals worldwide as well as access through one of the largest international distribution networks to corporations with an appetite for emerging markets. KASB Group and Merrill Lynch have worked together seamlessly to attract international capital to Pakistan through strategic investment, portfolio investment as well as international debt and equity capital issuances. Currently, Merrill Lynch works closely with the Group to publish research, arrange international roadshows, hold international investor conferences and execute international corporate finance transactions for Pakistani corporates as well as for the Government of Pakistan. KASB Capital Limited: KASB Capital is the investment banking and strategic investment arm of KASB Group. In 2007 KASB Capital was granted a license by SECP to perform Investment Finance Services and thus, the investment banking services were transferred to KASB Capital from KASB Securities. Today, KASB Capital is the leading investment banking firm in Pakistan with one of the largest and most active teams in the industry. With knowledge of domestic markets and industries, a well-established relationship with local and international investors and a global affiliation with Merrill Lynch and investors such as GLG Partners, Liberty Harbor (Goldman Sachs Asset Management) and Tikehau Capital having an equity stake of 35% in the company. KASB Capital facilitates governments, local and multinational companies with independent, objective advice on privatizations, mergers and acquisitions, and the issuance of debt and equity capital. As the leading advisor in Pakistan, KASB Capital helped bring in over USD 1.5 billion of Pakistan's foreign direct investment (approximate 30% of total FDI) for the fiscal year 2006-07 and USD 1.2 billion in 2007-08 and continues to highlight Pakistan investment opportunities to international corporations and global private equity/hedge funds. KASB Capital has also launched a Principal Investments division which allows it to use its own capital to invest in businesses. The division will focus on providing growth capital to companies by taking a significant minority or majority stake, creating value by bringing in strategic and operational expertise, and providing an exit through an IPO, offer for sale or trade sale. KASB Securities Limited: KASB Securities Limited is the trading and research business of the group and is one of the oldest and largest in Pakistan. It provides a full spectrum of products and services including equity, fixed income, and forex sales and trading as well as securities and economic research. Its latest innovation, KASB Direct, an online trading platform, continues to keep KASB Securities at the forefront in technological advances. KASB Securities was one of first brokerage houses to acquire the status of primary dealer with the State Bank of Pakistan. KASB Securities (brokerage and equity research 76% owned subsidiary of KASB Capital), spearheads the foreign inflow of portfolio investment in the country. KASB Securities was listed on the Karachi Stock Exchange in June 2008.
Business Plan
Company Overview
Board of Directors
The Board of Directors currently consists of two non-executive and one executive director: i. ii. iii. Syed Wamiq Abrar Bokhari (CEO) Petroleum Engineer Sheikh Muhammad Moeen Chartered Accountant Farid Arshad Masood Business Executive
Brief profiles of the Directors are given below: i. Syed Wamiq Abrar Bokhari Chairman & Chief Executive Officer Syed Wamiq Abrar Bokhari is a senior international petroleum executive who has worked on various projects in five continents. He attained his Bachelors and Masters degrees in Petroleum Engineering from the University of Texas. He has attended several technical and management courses, including an advanced management course in Oxford. Wamiq started his career with US based ARCO (Atlantic Richfield Company) in US, working with them in the Gulf of Mexico, Permian Basin, Alaska, South America, Yemen, North Sea and Far East. He later joined LASMO (later acquired by Eni) and served as the Operations Manager in Pakistan, and was involved extensively with the green field developments of Bhit, Zamzama, Miano and Sawan fields. He later moved to Nigeria to head Enis Partner Operated Business unit that was responsible for an annual net budget of USD 250 million and net production of around 100,000 BOEPD. In Nigeria, he was involved with the worlds largest FPSO (Floating Production, Storage & Offloading facility) development that was located in deepwater. Lately, he was assisting the Kuwait Foreign Petroleum Company (KUFPEC) in managing its Exploration & Production activities in the Far East & Australia Region that is almost entirely offshore. Wamiq has acquired broad based industry knowledge (technical & managerial) through a life time of Exploration & Production work. In addition, he has established credibility with several multinationals and has a vast professional network in the international as well as regional petroleum sector. Wamiq has also been very active in the Society of Petroleum Engineers and has authored several technical papers. As the conference Chairman, he organized the first ever Oil & Gas show in Pakistan in 2002 which was very successful in attracting several international companies despite the environment generated by the events of 11th September, 2001. He is also serving as the President Expert Committee of PPEPCA (Pakistan Petroleum E&P Companies Association); he is on the Board of PPEPCA and the Society for Petroleum Engineers (Pakistan); and he is the Chairman of the Pakistan Chapter of the American Association of Petroleum Geologists. ii. Sheikh Muhammed Moeen Non-Executive Director Mr. Sheikh Muhammad Moeen is representing KASB Group on the Board of Directors of New Horizon Exploration and Production Limited. Moeen joined KASB Group in 2004 as Risk Manager and Company Secretary of KASB Securities Limited. He headed risk and compliance functions and was responsible for managing corporate and legal affairs of the company. In 2005, he was elevated to head KASB Securities finance and accounting divisions as Chief Financial Officer and Company Secretary. During his tenure at KASB Group he played key role in developing the corporate structures of the various KASB Group entities, which include KASB Funds, KASB Group, KASB Resources and KASB Capital Limited. Since 2007, he has been working as a Chief Financial Officer and Company Secretary of KASB Capital Limited.
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Company Overview
Prior to joining KASB Securities, Moeen was associated with JCR-VIS Credit Rating Company (local affiliate of Japan Credit Rating Agency) as Senior Financial Analyst, where he played a key role in devising the first ever corporate governance rating benchmark and implemented these ratings for the first time in Pakistan. He has also been associated with A.F. Ferguson & Co. Chartered Accountants, Karachi (member firm of PricewaterhouseCoopers). He is an associate member of the Institute of Chartered Accountants of Pakistan and holds certificate level qualifications in Management Accounting and Islamic Finance. iii. Farid Arshad Masood Non-Executive Director Mr. Farid Arshad Masood has been a part of KASB Group since July 2004 and brings with him 11 years of professional experience. Since 2001 he has been advising leading companies in Pakistan on diversification, financial restructuring, privatization, mergers, and acquisitions. He has been deeply involved in the Pakistan oil and gas sector as an advisor to the Government of Pakistan in its privatization of Pakistans two largest energy assets: Pakistan Petroleum Limited and the Oil & Gas Development Company Limited. Prior to 2000, he worked as a principal consultant for PricewaterhouseCoopers in the USA, advising energy and telecom companies on new venture development and cross border Mergers and Acquisition. Mr. Masood has a Bachelors and Masters Degree in Systems Engineering from the University of Virginia (USA) and a Masters degree in Finance and International Business from Cambridge University (UK).
Strategic Partnerships
In February 2007, Kuwait Energy Company (KEC) joined NHEPL in the joint bidding of the four blocks, which was held by the Government of Pakistan in March 2007. KEC took a non-operator position with 40% equity for each block. KEC is the largest non governmental E&P company in Kuwait that was established in July 2005, and has interests in Egypt, Syria, Yemen, Oman, Indonesia, Iraq, Ukraine and Cambodia. This is KECs first investment in Pakistan. In addition, NHEPL is also working with some other multinational and large local companies to bid jointly in the upcoming bid rounds. Discussions are also underway with large multinationals to farm out some of our interest in Kunri and Jherruck Blocks as part of our risk mitigation strategy.
Financial Summary
The Company assumes two discoveries in a five well program from the Kunri and Jherruck fields. Net present values for these two discoveries are calculated using crude oil reference prices ranging from USD 50 per barrel to USD 70 per barrel and discount rates ranging from 18% to 26%. The resulting net present values range from USD 55 million to USD 114 million (please refer to the chart on the next page).
Business Plan
Company Overview
Assuming NHEPL's existing 60% ownership in each of the Kunri and Jherruck fields, the cumulative finding cost is estimated to be approximately USD 24 million for exploring five wells. The Company requires approximately USD 18 million after accounting for actual expenditures to date. The Company intends to procure these funds through equity financings. Further, development and facility costs of such wells would be met through project financing. The overall funding requirements for the exploration blocks are shown below:
The cumulative finding costs for the proposed, new blocks, where the Company assumes an ownership interest of 25%, is estimated to be USD 12 million.
Business Plan
CONFIDENTIAL
SECTION 2.
Exploration and Production Sector in Pakistan
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E&P Sector in Pakistan

Pakistans Energy Sector
Pakistan is reliant on oil and gas for the majority of its energy needs with both constituting almost 80% of the total energy supplies. While the countrys gas reserves are sufficient to cater to current domestic demand, Pakistan has been meeting majority of its oil requirements through imports. The huge resultant burden on the balance of payments has compelled the government to pursue a reform program in the energy sector, focusing on development of indigenous resources. A Segmented Industry Pakistans oil and gas industry is highly segmented, with each sector performing a specific task in the chain, with no integrated setups. Exploration and Production (E&P) is a separate sector, with all E&P companies only involved in that area. From there the product is branched out into two separate streams. Refineries buy the oil produced in the country as well as import crude, refine it and sell it to the Oil and Gas Marketing Companies, which then sell it to retailers. Pakistan has two integrated gas transmission and distribution companies, which buy gas from the E&P companies, and then sell it to retailers. The two gas utilities have distinct franchise areas, with Sui Southern Gas Company Limited supplying gas to consumers in the Balochistan and Sindh provinces of Pakistan, while Sui Northern Gas Pipeline Company Limited supplies gas to the provinces of Punjab and NWFP. Table 2.1: Energy Business Model Segmented Business Model
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Table 2.2: Industry Participants
Sector/Company Exploration & Production Pakistan Petroleum Limited Oil and Gas Development Company Limited Pakistan Oilfields Limited Mari Gas Company Limited Oil Refining Pakistan Refinery Limited National Refinery Limited Attock Refinery Limited Pak-Arab Refining Company Dhodhak Refinery Gas Transmission & Distribution Sui Northern Gas Pipelines Ltimited Sui Southern Gas Company Limited Oil Marketing Companies Chevron Pakistan Limited Pakistan State Oil Company Limited Shell Pakistan Limited Total-PARCO
Source: Karachi Stock Exchange data as of November 10, 2008 (PKR/US$ = 80)
Status
Market Capitalization (USD mn)
Listed Listed Listed Listed
2,008 5,076 561 62
Listed Listed Listed Not Listed Not Listed
45 176 118 -
Listed Listed
192 180
Not Listed Listed Listed Not Listed
573 266 -
E&P Sector Overview

Pakistans exploration and production (E&P) industry has developed significantly over past years. Pakistan has been experiencing significant growth in energy consumption. Growth in natural gas supply is struggling to meet growth in demand. Despite significant domestic natural gas production (48% of primary energy supplies) Pakistans economy is still very much dependant on imported crude oil (30% of primary energy supplies). Due to high reliance on imported crude oil, the GoP has introduced reforms to accelerate the substitution of imported crude oil with local resources. The goal of the reform process is to enhance local crude oil production and increase the share of natural gas in the energy supply. Reforms are designed to achieve these goals by:
Encouraging private sector participation; Enhancing market liberalization; Attracting foreign investment; and Expanding the natural gas transmission and distribution (T&D) system.
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Fig 2.3: Primary Energy Supplies
Hydro & Nuclear Electricity 14% Coal 7% LPG 1% Imported Electricity 0% Oil 30%
70 Production 60 50 40 30 20 10 Consumption
Fig 2.4: Energy Production Vs. Consumption
Gas 48%
M illio n s T O E
2003 2004 2005 2006 2007
Source: Pakistan Energy Yearbook 2007
Governmental support and rising energy consumption has encouraged an increase in participation of foreign and local E&P players in Pakistan. Total energy consumption in the country registered a 7% YoY increase in 2007. As energy consumption increases, exploratory activity in the country is also on the rise. In 2007, 36 exploratory wells were spudded, as compared to 33 in 2006 and 41 development wells drilled as compared to 31 in 2006.
Oil & Gas Supply and Demand

Overview Over the last five years Pakistans energy consumption has grown at a CAGR of 7%. Pakistans natural gas consumption is primarily a function of supply. There are ready buyers for natural gas from new discoveries and increased production from existing fields. In Pakistan, the major consumption of natural gas is in the power, fertilizer and household sectors, whereas that of oil is in the power and transport sectors. The power sector is the primary consumer of natural gas, accounting for almost 36% of natural gas consumption. It is expected to be a major source of future natural gas demand growth. This is due partly to the conversion of crude oil based plants to natural gas and in part to the construction of new IPPs. Fig 2.5: Natural Gas Consumption (mmtoe)
30 25 20 15 10 5 0 2003
Power
Fig 2.6: Crude Oil Consumption (mmtoe)

20 18 16 14 12 10 8 6 4 2
Gas Consumption (mmtoe)
Oil Consumption (mmtoe)
2004
Fertilizer
2005
Industrial Domestic
2006
Others
2007
0 2003 Power
2004 Transport
2005 Industrial Domestic
2006 Agriculture
2007 Others
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Major Drivers of Oil & Gas Consumption In the last 25 years, Pakistans energy consumption has more than tripled. Overall energy consumption in Pakistan in 2007 was 36 mmtoe, an increase of 5.8% from 2006 (34 mmtoe). The main sectors driving energy demand are as follows: Power Sector: The power industry is the countrys key energy demand driver. This sector consumes 40% of petroleum products (6.5 mmtoe) and 35 % of natural gas (433 billion Cu. Ft.) in Pakistan. The large dependence of the power sector on petroleum products is to fuel existing oilbased Independent Power Plants (IPPs). Efforts are being made to convert oil-based electricity generation to gas. These efforts have been driven by an unprecedented rise in oil prices which have prompted the GoP to increase energy supplies from domestic sources which are heavily skewed towards gas. Furthermore, WAPDA (Water and Power Development Authority), the countrys biggest buyer of power prefers to purchase from gas-based power plants because of their lower costs of production. Gas is already the fuel of choice for new power projects in the country. Fertilizer Industry: Fertilizer is an integral input in Pakistans agri-based economy. With continued governmental support to increase fertilizer use, the domestic fertilizer production is continually on the rise, and is still unable to meet local demand. The fertilizer industry consumes natural gas not only as a fuel but as a raw material itself. With large scale investments in new fertilizer plants and existing plants operating at more than 100% capacity, the fertilizer industry will continue to drive energy demand upwards. Domestic Use: Pakistan is a densely populated country with a population of approximately 160 million that is growing at an average rate of 2% per annum. With economic development in the country increasing, as reflected by the increasing per capita income, per capita energy consumption is also bound to increase. Transport Sector: The transport sector is amongst the largest consumers of petroleum products (48%) in the country. The increasing use of Compressed Natural Gas (CNG) has significantly reduced petroleum demand by the transport sector. Easier availability of car loans in Pakistan has increased the number of vehicles leased and bought manifold, thereby continuously putting pressure on energy demand. Fig 2.8: POL Consumption by Sector Total : 16.85 million tones
Agriculture 1% Industrial 10% Other Government 2%
Fig 2.7: Natural Gas Consumption by Sector Total : 1,222 billion Cu. Ft.
General Industries 25% Domestic 16% Commercial 3% Pakistan Steel Mills 1% Cement 1% Transport 5% Fertilizer 13%
Transport 47%
Pow er 40%
Pow er 36%
Source: Pakistan Energy Yearbook 2007
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A number of studies have been conducted by independent consultants on behalf of the GoP that analyze various natural gas supply and demand scenarios, factoring in production from existing fields, recent discoveries and potential future discoveries. These studies estimate average natural gas demand growth of 7% to 9% per annum over the next 20 years and indicate that Pakistan is likely to experience a natural gas shortfall of 1.4bcf/day in 2012. Consumption Pattern: Shift from Oil to Gas Worldwide there have been fewer new oil discoveries as compared to gas, while oil production has been steadily increasing. The increasing energy demand and limited crude oil availability has resulted in a shift in both production and exploration activities towards gas. Since 2001, a structural change is taking place in the energy consumption pattern in Pakistan, with consumption of petroleum products declining and other components of energy rising. Natural gas has become the fuel of first choice for both the GoP and consumers for the following reasons: Most discoveries made in Pakistan are gas. Gas prices are lower than fuel prices. Gas is an environment-friendly fuel.
Infrastructure costs are lower for gas. Pakistan has the additional advantage of an extensive network of gas transmission and distribution systems which supports the shift towards consumption of gas in the country. By 2010, the pipeline transmission networks will be increased from 8,606 km to 9,700 km and distribution network from 62,623 km to 94,000 km. Sources of Supply for Oil & Gas Indigenous crude oil production in Pakistan has not shown a marked increase over the past three years. In 2004, 3 mmtoe of oil (61,817 barrels per day) was locally produced and this marginally increased to 3.3 mmtoe (67,438 barrels per day) in 2007. As the preference for consumption of gas instead of oil increases, the imports of POL products fell marginally from 8.557 mmtoe in 2005 to 8.5 mmtoe in 2007. The main producers of crude oil in Pakistan are OGDCL, POL, BP and PPL, which together produce 90% of local crude oil. Natural gas production in the country has considerably increased over the past three years from 19 mmtoe in 2003 to 28 mmtoe in 2006. However, future availability of gas in the country is on the decline as domestic production accelerates and the focus is now on the increase of exploration activity in order to cater to the increasing demand. The main producers of natural gas in the country are PPL, OGDC, MGCL and BP.
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Industry Participants
Pakistans oil & gas sector has active participation from several multinational companies. Currently, there are 25 companies operating in the sector and a further 26 are working as non operators. Table 2.9: Selected Industry Participants- Foreign Foreign Companies
Eni Pakistan Limited Petronas Caigali (Pakistan) Limited BP Pakistan Exploration & Production Inc. (BP) Nativus Nativus Resources Limited OMV (Pakistan) Exploration GmbH MOL Pakistan Oil & Gas Company GmbH Tullow Pakistan (Developments) Limited Shell Development & Offshore Pakistan B.V. Premier Oil Zhen Hua RDC RDC MND Bow Energy KEC
Source: Pakistan Petroleum Information Services
Exploration Licenses
8 3 3 3 3 3 3 1 Working interest 1 1 Working interest Working interest Working interest
D&P Leases
3 1 42 2 1 3 -
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Table 2.10: Selected Industry Participants- Local Local Companies
Oil and Gas Development Corporation Petroleum Exploration Limited Pakistan Petroleum Limited Mari Gas Company Limited Orient Petroleum International Inc. Paige Paige Limited Pakistan Oil Fields Limited Dewan Petroleum Limited Hycarbex Hycarbex New Horizon Exploration and Production Limited Saif Energy Techno Techno Petroleum Zaver
Source: Pakistan Petroleum Information Services
Exploration Licenses
43 12 8 6 5 2 2 1 1 2 2 1 Working interest
D&P Leases
40 5 7 2 9 9 1
The GoP has ensured that the regulatory regime facilitates entry and exit of E&P companies. A large number of industry players have made successful investments in Pakistan.
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Reserves and Production
Pakistans total gas reserves were 32.376 tcf as of June 30, 2007. Pakistans crude oil reserves were 353.407 MMbbl as of June 30, 2007. OGDCL accounts for the largest portion of the oil & gas reserves. Fig 2.11: Crude Oil Reserves by Company Total : 353.407 million barrels
180 160 140 120 100 80 60 40 20 0 BG BHP MOL OGDC OPI POL PPL BP
2 6 10 12
Fig 2.12: Gas Reserves by Company Total : 32.376 TCF
0 BP Petronas BHP ENI MGCL MOL OGDC OMV PEPL PPL Others
Source: Pakistan Energy Book 2007
Oil & Gas Exploration Activity in Pakistan

Pakistan is a country of numerous contours with a variety of landscapes from mountain ranges and desolate plateaus to sandy deserts and fertile plains. The country is covered with large areas of sedimentary rocks which may have petroliferous members and the search is for stratigraphic and structural traps where oil could accumulate. The history of oil exploration in Pakistan dates back to 1866 (pre-independence) when seven or eight wells were dug near Fatehjhang, 25 miles west of Islamabad. The first oil discovery was made in Khaur, nearly fifty years later in 1914, and this field is now almost exhausted. While drilling for oil, Pakistans first gas field was discovered at Sui in 1952. To date, 720 exploratory wells have been drilled in the country. As evidenced by the extremely low exploration density (1.99 wells/1000km2; global average: 10 wells) and the significantly higher success ratio (30%; global average: 10%), Pakistans exploration potential is far from achieved. As per estimates by Asian Development Bank (ADB), Pakistans total hydrocarbon potential stands at about 27 billion barrels of oil and 282 trillion cubic feet of gas.1 Out of this, only 3% of oil and 19% of gas reserves have been tapped so far. This has encouraged local and foreign companies to increase exploration activity in Pakistan. Attractive government policies in the sector have supported the increase of activity in the sector. This environment has drawn major foreign players into the industry, including BP, OMV and Eni. Confidence among E&P companies has increased and they have acquired licenses in areas with no prior recorded exploration potential. In Pakistan, the area under exploration has increased 23% over the past two years and the area under application for licenses has increased 41% in the same time period.
Energy Year Book, PPIS, Vision 2030, Planning Commission of Pakistan
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Table 2.13: Pakistan Upstream Oil & Gas Statistics
Exploration wells (as of October 31, 2008) Appraisal/development wells (as of October 31, 2008) Total Sedimentary area (km2) Drilling density (no. of wells/1000 km2) Total Discoveries Oil Oil & gas/gas/gas condensate Overall success ratio Area under exploration (km2)
Source: Pakistan Petroleum Information Service
720 948 1,668 827,268 sq. km 1.99 219 54 165 1:3.31 251,825.60 sq. km
The number of oil and gas wells drilled is expected to increase from 188 wells during 2004-2007 to 359 wells during the period 2008-2010. Details are as below: Table 2.14 Number of wells drilled
Description Total Wells Exploratory Appraisal/Development Total
Source: Pakistan Energy Year Book 2007
2005-06
2006-07
2008-10P
20102020P
20202030P
33 31 64
36 41 77
231 128 359
1080 720 1800
1800 1200 3000
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CONFIDENTIAL
SECTION 3.
Technical Description of Current Assets
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On March 3, 2007, NHEPL participated in collaboration with KEC in the bidding round and submitted bids on four blocks. NHEPL/KECs bids were technically and financially most attractive for two of these four blocks. On June 5, 2007, the Government awarded the first Exploration License of Kunri Block where NHEPL is designated as the operator and KEC is the working interest owner. On January 31, 2008, the Government awarded the second Exploration License of Jherruck Block, where NHEPL is designated as the operator and KEC is the working interest owner. The technical discussions on the blocks are given below:
Block No. 2468-7 Kunri

(NHEPL - 60%, Operator; KEC 40%. Granted on 5 June, 2007 for 5 years)
Introduction
Kunri Block (2468-7) lies in Zone III, and covers an area of 2485.93 sq km. It is located in the Southern Indus Basin in Sindh province. From north to south, several D&P Leases namely Tando Ghulam Ali, Muban, Paniro, Matli, Laghari etc of Union Texas (now BP) are present to the west of the block, as shown in Figure-3.1. Minimal exploration work has been done on the areas east of BP blocks. NHEPL is trying to test the eastern boundary of the so called Oil Corridor. Eni has acquired four blocks to further east of NHEPL, while PEL won the Kaloi Block over NHEPL to the south.
Figure 3.1. Location of Kunri EL and the surrounding concessions.
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Kunri block falls at the eastern side of a dominantly extensional regime, the intensity of which diminishes as one move to the eastern half of the block; the number of faults, and also their throw decreases towards east. Hence, in west of the block fault bounded structures dominate and have been mapped on seismic. The Cretaceous depositional basin covered by the block was dipping to the west over which the sediments from the Indian shield, located in east of the block, were deposited. This setup provides a classic environment for the development of clinoforms and other types of stratigraphic traps in the eastern half of the block.
The interpretation of recently acquired 2D seismic (972 km) combined with the vintage data (1100 km) have resulted in the mapping of about 22 possibilities seen at different horizons. These possibilities are both structural and stratigraphic, and have been marked on the Top Chiltan (Jurassic) map Figure-3.2, which could be further explored. It may be noted that Chiltan is not the target in the area but has been used as it is a prominent seismic marker and controls the structuration in the overlying potential reservoirs. Out of the 22 possibilities this note discusses only four structural i.e. Possibility 1, 2, 4 and 8, and one stratigraphic (clinoforms) i.e. Possibility 16; the location of these is shown in Figure- 3.3.
TWT STRUCTURE MAP
TOP CHILTAN Fm.

(JURASSIC ) C .I. = 10 msec Datum = MSL
Structural Stratigraphic Creta ceous Stratigraphic Paleozoic

P10 P1 1 P22
P 20 P12 P9 P13 P6 P2 1 P3 P1 P4 P2 P 17 P7 P18 P15

&
P5
P19
P14
P8
P16
Figure 3.2. Top Chiltan map showing location of 22 Possibilities
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TWT STRUCTURE MAP
TOP SEMBAR Fm.

(CRETACE OUS) C.I. = 10 msec Da tum = MSL Structural Stratigraphic Cretaceo us
P1 P2
P4
P8
P16
DIGH X -1
Figure 3.3. Top Sembar map showing location of structural and stratigraphic Possibilities
Stratigraphy
The oldest formation penetrated in the vicinity of the block is Jurassic Chiltan limestone [Digh X 1 (Stanvac, 1957)] and Badin X 1 (Stanvac, 1961)]. It is overlain successively by Sembar and Goru formations of Cretaceous age. The Lower Goru represents inter bedded sand and shale sequences, and the sand beds are broadly designated as Upper, Middle and Basal sands - the proven reservoirs beyond the western boundary of the block Figure-3.4.
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Figure 3.4 Generalized stratigraphic column in Lower Indus Basin.

The top of Goru Formation is marked by the Cretaceous/Tertiary (K/T) Boundary and is unconformably overlain by Khadro member of Ranikot Formation (Paleocene). The post Cretaceous erosion of the Goru has resulted in its successive truncation towards east of the block. Khadro sands are inter bedded with basalt, the so called Deccan Traps. However, Digh X 1 well report does not mention the presence of basalt, but the seismic character indicates its presence throughout the block. Ghazij shales of Eocene age overlie Ranikot Formation. The younger Eocene succession was probably eroded and the fluvial sediments were deposited directly over the Gazij shales during the Miocene/Pliocene time. Towards west of the block the primary objectives are inter bedded sands (Middle and Basal) of Lower Goru formation, and possible Sembar sands. While towards east the stratigraphic traps have been encountered in both Lower Goru and Sembar formations. A. Current objectives a. Middle and Basal sands of Lower Goru (Upper sand is truncated close to the western boundary of the block). b. Sembar (sands are expected within Sembar). B. Future objectives pre-Chiltan, mainly Cambrian and pre-Paleozoic (Neoproterozoic)
Depositional environment and reservoir characteristics of Goru and Sembar formations

Goru Formation (Cretaceous) The Goru Formation can be subdivided broadly into a clastic dominated Lower Goru unit with a carbonate dominated Upper Goru section. From a reservoir point of view, the Upper Goru section has
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little or no potential; as a whole, this section is characterized by mudstones and calcareous mudstones (marls) in its lower parts, progressively passing upward into less argillaceous limestones toward the top. Upper Goru, however, provides the regional seal for the Lower Goru that contains inter-bedded proven sand reservoirs. Lower Goru, hence, will be discussed in detail. LowerGoru Lower Goru sand beds are the main producing units further west of the block. Kunri Block is located relatively closer to the source of sediments, and hence, the reservoir quality is expected to be better. Facies and depositional model The Goru Formation can be subdivided broadly into a clastic dominated Lower Goru unit with a carbonate dominated Upper Goru section (wells Rip-1 and Digh X-1). The Lower Goru interval is characterized by an overall retrogradational (backstepping) package of marginal marine/coastal plain to open marine shelf sediments. These are sand prone in the basal parts of the interval but become increasingly mud prone towards the top. Facies within this Lower Goru Interval are characterized by a suite of coastal plain to nearshore to upper shoreface facies associations (marginal marine and shoreline) in basal parts, which pass upward into shoreline to open marine shelf deposits towards the top of the interval. It should be noted that this interval was probably deposited on a flat coastal plain to shelf platform, with very limited topographic/bathymetric relief. Reservoir architecture The key reservoir targets in the Lower Goru Formation are represented by coastal and marginal marine deposits, with the best reservoir potential likely to occur within fluvio tidal channel/estuarine deposits, and adjacent mouthbar and upper shoreface deposits. Shoreface sediments in this section are best modeled as broadly linear features running along depositional strike, which was probably North South. Tidal inlet and estuarine channel systems run broadly perpendicular to the shoreline with a broad East West orientation. Reservoir properties The best reservoir potential, as stated above, occurs within fluvio tidal channel/estuarine deposits and adjacent mouthbar and upper shoreface sediments. In terms of primary depositional character, these sediments typically comprise the cleanest and coarsest sandstones in the Lower Goru section and hence have the potential to incorporate high degrees of primary inter granular porosity. However, there is also a key secondary/diagenetic control on reservoir potential that is also closely associated with these facies. Primary depositional porosity loss in sandstones in the Lower Indus basin is controlled primarily by two key factors, namely compaction and quartz overgrowth cementation, both of which increase markedly with depth of burial. However, the development of early grain coating chlorite clay has locally inhibited quartz overgrowth cementation, thereby preserving primary inter-granular porosity and consequently enhancing reservoir quality at depth. There is common evidence from various studies around the world that early chloritic grain coatings are commonly associated with ironrich pore fluids introduced by fresh water systems in the marginal marine to coastal realm. Therefore, the development of this clay is often concentrated within fluviotidal channels and closely associated mouthbar and shoreface deposits adjacent to these sources of fresh water input, further enhancing their overall reservoir potential. Based on the available log suites and the well reports the porosity in Lower Goru sands ranges from ~15% to ~25%. Sembar Formation (Cretaceous) Depositional/primary characteristics appear favorable for the development of sand bodies with good reservoir potential. The proximity to the source of sediments i.e. Indian shield, also supports the likelihood of increased/cleaner sand deposition within this formation, compared to the areas further west.
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Facies and depositional model Based on the available wireline log and seismic data for the Sembar interval, it is interpreted to represent a package of marine shelf to coastal/deltaic sediments, which are mud prone with some sandstone intercalations. Biostratigraphic data indicates that these sediments are characterised by shallow marine shelf mudstones, coarsening upward into more sand prone coastal/deltaic deposits. On this basis, the Sembar section is interpreted to represent a package of rapidly prograding riverdominated delta deposits, with clinoform bottomsets representing the proximal shelf to pro-delta foresets. This package represents the advancing deltafront. The topsets represents the delta top coastal plain deposits. Based on seismic evidence, Sembar shelf clastics (clinoforms interpreted as deltafront sediments) onlap Chiltan platform limestones, and pinch out/are not preserved to the west of the study area, probably based on a transition from deltaic to shallow marine environment. Upper shoreface/proximal mouthbar and fluvio tidal channel facies within the Sembar section are likely to have moderate to good reservoir potential, particularly in terms of their primary depositional character. Reservoir architecture On the basis of wireline log data some units are present within the Sembar Formation interval that appears to have some reservoir potential. These are concentrated towards the top of coarsening upward intervals (typically best developed toward the top of the section) and are interpreted to comprise sandrich coarsening/cleaning upward shoreline and mouthbar complex deposits with local fluvio-tidal channels. The upper part of the Sembar interval does have a highly complex internal architecture, with the coastline characterized by a strongly constructive lobate character coupled with rapid progradation and equally rapid switch/abandonment of individual distributary channels/delta lobes. This complex architecture means that on a regional scale it is difficult to map the reservoir variability within this unit, and this is beyond the scope of this present study. Reservoir properties Upper shoreface/proximal mouthbar and fluvio-tidal channel facies within the Sembar section are likely to have moderate to good reservoir potential, particularly in terms of their primary depositional character. However, no core descriptions are available; therefore, core based sedimentological and petrographic analysis to quantify the reservoir potential of this interval could be undertaken for the Kunri Block. Though, the depositional/primary characteristics appear favorable for the development of sand bodies with good reservoir potential.
Structural Style
The structural style of the area consists of semi-parallel normal faults oriented generally north-northwest to south-southeast, defining a series of horsts and grabens. The fault bounded structures present in the east show larger throw compared to those located in the west, based on seismic mapping of different horizons.
Petroleum System
The entire Lower Goru comprises three main reservoir bodies namely Upper sand, Middlesand and Basal sand, separated by shales that provide top seal. The Cretaceous active petroleum system is prolific producer in the region since the discovery of Khaskeli field in 1981 by Union Texas Pakistan (now BP). The nearest producing oil field Paniro is located about 8 km west of the block and produces from Upper sand. However, towards the western margin of Kunri block where western possibilities exist, Upper sand is truncated at the K/T boundary. Hence, only Middle and Basal sands could be the primary targets in
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these possibilities. Similarly in the eastern half of the block only Basal sand could be explored due to the truncation of Middle sand by the K/T boundary. Wells in Paniro oil field produce from Upper sand, and show porosity range from 12-27%. Kunri is located further east of Paniro nearer to the source of sediments; hence the quality of sand reservoirs is expected to be even better with higher poro-perm characteristics than Paniro. Sembar formation is widely distributed in the area and is considered the source rock. It is composed of shales that were deposited in shallow marine environments on a broad shelf that was gently sloping west ward of the Indian shield. The shales contain mixed type II & III kerogen with total organic carbon (TOC) content that ranges from 0.5% to more than 3.5%. The average TOC in Sembar is 1.4% and vitrinite reflectance values range from immature (<0.6 %) to mature (0.93%). Oil is expected to be found in the block. Pre-Chiltan potential Kunri block also offers the possibility to explore pre Chiltan potential targets like Triassic, and particularly the Cambrian and Neoproterozoic rocks. The basin configuration is such that the Paleozoic rocks, in the eastern half of the block, are at drillable depth and a well of 4000 4500m depth would test these horizons. Cambrian is productive in Pakistan (Adhi field, Potwar) and the Neoproterozoic in Baghewala field in India. Neoproterozoic rocks are a combination of reservoir and shale beds. Within Neoproterozoic the source potential has been established in India, and the samples from Karampur 1 well on Punjab platform also support the source rock potential of these units.
Possibilities 1,2,4 and 8 (P 1, 2, 4 and P 8) Lower Goru - Badin Type structural play
Possibilities 1, 2, 4 and 8 are located in the western part of the Kunri Block Figure-3.5, east of Badin oil fields. All possibilities are threeway dip closures and fault bounded to the east structures- Figure3.6, while dominant hydrocarbon migration is from west. Their area ranges from ~1 9 sq km on Basal sand level.
TW T S T RU CTU RE M A P
T O P S EM BA R F m .
( CR ET ACE O U S) C .I. = 1 0 m s ec Da tum = MSL S tr uc tur a l S tr a tig ra phic Cr e ta c eo us
Paniro Oil
P1 P2 P4
P8
P1 6
D IG H X -1
Figure 3.5. Top Sembar map showing the location of 5 possibilities discussed in the note
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P1
Figure 3.6 Possibility 1 on seismic dip line NK07-12
Possibility 8 : The Possibility-8 (DIGH X-1 structure) is a promising possibility. DIGH X-1 well as drilled by Stanvac in 1957 with a primary target of Chiltan (Jurassic). The well penetrated the desired objective and the lower part of Sembar in the up thrown fault block, while Lower Goru was drilled in the down thrown fault block - Figure-3.7 Five DSTs were conducted in the well, one was in Sembar and four were against Chiltan limestone; Sembar test and one Chiltan test lowed water, and the well was abandoned. Test in Sembar flowed 100 bbl/hour water and the reservoir potential of Sembar was thus established (Sembar is not an objective at Possibility 8).
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Figure 3.7. Key 2D seismic line NK07-02 showing Digh X-1 location drilled in down thrown side at Lower Goru section
Lower Goru sands were discovered much later in 1981 in Khaskeli-1 well of Union Texas Pakistan in the up thrown fault block. The Digh X-1 was drilled in Lower Goru on ownthrown of the fault. Possibility-8 (P8) represents a typical fault bounded structure; such structures are productive further west. The fault analysis indicates juxtaposition of shales to the east against sands at different levels within Lower Goru sequence in the up thrown block. P8 is now to be tested, unlike Digh X-1, with an objective of penetrating Lower Goru formation at a suitable position in the up thrown fault block to test Middle and Basal sands Figure-3.8 and also Sembar Figure-3.9. The structure covers an area of around 9 sq km at Basal sand level. A well to a depth of 2400m will test Goru sands in P-8.
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F ig u re 3 .8 . D ep th S tru c tu re m ap o n B a sa l san d (L o w er G o ru ) w ith P o ss ib ility 8
F ig u re 3 .9 . D e p th S tr u c tu re m a p o n S e m b a r (L o w e r C re ta c e o u s ) w ith P o s s ib ility 8
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Possibilities 1, 2 & 4: The possibilities 1, 2 & 4 represent same type of fault bounded structure as P8 above, and other Badin area fields to the west, with the same reservoir objectives. The fault analysis over these possibilities indicates juxtaposition of shales against sands at different levels within Lower Goru sequence. The aerial extent of these possibilities ranges from ~1 3.8 sq km at Basal sand level simultaneously Figure-3.10 & 3.11. A well to a depth of 2400 m would test both Lower Goru and Sembar sands in P1, P2 and P4.
TWT
DEPTH
FIGURE 3.10 TWT & DEPTH MAPS ON BASAL SAND (LOWER GORU) SHOWING POSSIBILITIES1& 2
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FIGURE 3.11 TWT & DEPTH MAPS ON BASAL SAND (LOWER GORU) SHOWING POSSIBILITY-4
Possibility 16 - Cretaceous stratigraphic play Possibility-16 is located in the southeastern part of Kunri block - inset, Figure-3.12. Because of the west dipping Cretaceous basin configuration, good channel deposits in Cretaceous are expected due to the source of sediments from the east. In order to establish the Cretaceous sequence stratigraphic model, marking of the base sequence boundary along with the transgressive surface followed by maximum flooding surfaces for the different system tracks within the sequences have been established. This play type has already been tested and produces gas in fields like Miano and Sawan (OMV) further north. The rocks in the block and surrounding area have a regional northern dip; hence southern pinch outs are critical for the hydrocarbon entrapment in the mapped clinoforms. Figure-3.13 & 3.14 are interpretation of seismic strike and dip lines NK07-15 & NK07-02 by Fugro Robertson of UK. It shows such southern pinch out in Sembar, and same are expected in the different sand bodies of Lower Goru.
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P16:STRATIGR APHIC TRAP (NK07 15 Strike Line)
Khadro
Up-dip stratigraphic trap sealed by transgressive marine shale
B asal Sa nd (Lower Goru)
MFS ?
S em ba r Fm.
C hiltan
P D N
Figure 3.12. Key 2D seismic line NK07-15 showing P-16 location with up-dip southern pinch-out in Sembar section. (Pa-Paniro oil field, D-Digh X-1, N-Nabisar-1)
F ig u re 3 .1 3 . K e y 2 D s e is m ic lin e N K 0 7 -0 2 sh o w in g P -1 6 lo c a tio n w ith u p -d ip e a s te rn p in c h -o u t in C re ta c e o u s s e c tio n .
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Figu re 3 .14 K ey 2 D seism ic lin e N K 0 7 -30 sh ow in g In tra P aleozoic
For reserves estimates an area of 40 sq km has been tentatively taken to run the economics at P 16 where the clinoform is identified in Sembar. Several analogues of P16 could be seen in the block, and are being reviewed to establish their prospectivity. A well to a depth of 1400 m would test both Lower Goru sand and Sembar clinoforms in the eastern part of the block. The detailed mapping to establish a higher level of confidence on the prospectivity of the identified 22 possibilities, including the 5 discussed above, is continuing both inhouse and at Fugro, UK. The possibilities that would emerge as prospects would be prioritized for further exploration. Intra Paleozoic Possibilities (stratigraphic play) The Intra Paleozoic stratigraphic possibilities can be explored in the eastern half of Kunri block where they could be encountered at drillable depth. These have the same west dipping configuration as of the shallower Cretaceous stratigraphic section that also pinch out astwards. This play type could be another frontier yet to be explored. An interpretation of seismic dip line NK07-30 by Fugro Robertson of UK highlighting such a possibility is shown in Figure-3.14. A well to a depth of >4000 m would test this play type.
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Block No. 2468-9 Jherruck
(NHEPL - 60%, Operator; KEC 40%. Granted on 31 January, 2008 for 5 years)
Introduction
Jherruck block falls in the western side of a dominantly extensional regime Figure-3.15. Significant faulting with throw ranges from 100 200 ms is present in the block area. The Cretaceous depositional basin was dipping towards west over which the sediments supply from the Indian shield, located in east of the block, were deposited.
F IG U R E- 3.15 LO C AT IO N O F JH ER R U C K E L AN D T H E SU R R O U N D IN G F IELD S
The interpretation of recently acquired 2D data (523 km) along with vintage data (~800 km) have resulted in identification of seven structural possibilities in the block marked on Top Basal sand (Cretaceous) map Figure-3.16. The interpretation is in progress. Final delineation of possibilities will be based on completion of interpretation. Initial mapping was carried out on vintage data. The regional prominent reflector of Chiltan (Jurassic) despite not being a potential reservoir was selected to understand the younger structural configuration and overlying potential reservoirs are being mapped. Mapping on seismic data suggests that the Jherruck block contains the same fault bounded structures of similar intensity as in adjacent eastern area of Badin proven extensional regime. The NW-SE orientation of extensional faults matches with the Badin area faults. This note discusses only the possibilities identified on preliminary mapping carried out on vintage and new data set. The block is surrounded by several producing fields. Daru, Kato, Bukhari, Turk, Fateh Shah North, Makhdumpur, Khore Wah and Zaur of BP which are present immediately to the east of the block as shown in Figure- 3.16. Charo gas discovery by Tullow from Ranikot is present to the west of the block.
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FIG 3.16 TWT STRUCTURE MAP ON BASAL SAND (CRETACEOUS) WITH SEVEN POSSIBILITIES
Stratigraphy
The oldest formation penetrated in the vicinity of the block is the Jurassic Chiltan limestone which is overlain by Cretaceous Sembar shales followed by thick sands of Lower Goru formation. The Cretaceous marine shale sequence of Upper Goru Formation overlies the Lower Goru - Figure-3.17.
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JHERRUCK BLOCK
GENERALIZED STRATIGRAPHIC COLUMN
FIGURE-3.17 STRATIGRAPHIC COLUMN SHOWING OBJECTIVE SANDS AS INSET
The Lower Goru consists of mainly inter-bedded sand and shale sequences and the sand beds are broadly designated as Upper, Middle and Basal sands which are the proven reservoirs in the vicinity of eastern block boundary.. The Upper sand of Lower Goru is further divided into A, B & C sands, separated by Turk shale and Badin shale respectively; A-sand being the youngest The upper Cretaceous Parh Limestone overlies the Upper Goru formation and consists of marine shelf limestone and shale sequence with some sandstone inter-beds. Parh limestone is unconformably overlain by Maastrichtian Pab Sandstone as Moghalkot section is missing. The top of Pab Formation is marked by the Cretaceous/Tertiary (K/T) Boundary and is un-conformably overlain by Khadro formation which consists of inter-bedded sands and Deccan volcanics of Paleocene age and is overlain by Ranikot Formation. Laki limestone of Eocene age overlies the Ranikot. During Oligocene the Petro-Indus River began to deposit the Nari / Gaj sediments from the north to shallow embayment in the present day Karachi area. The depositional environment changed from Pleistocene onwards and fluvial sediments were and are being deposited over the Nari and Gaj formations. Current objectives
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a. Basal sands of Lower Goru b. Upper Sands of Lower Goru (A,B & C sand units) c. Middle sand of Lower Goru (detoriated reservoir quality)
DEPOSITIONAL ENVIRONMENT AND RESERVOIR CHARACTERISTICS OF GORU FORMATION

Goru Formation (Cretaceous) The Goru Formation can be subdivided broadly into a clastic dominated Lower Goru unit and a carbonate dominated Upper Goru section. The Upper Goru section has little or no reservoir potential; this section is characterized by shales and calcareous mudstones (marls) in its lower parts, progressively passing upward into less argillaceous limestones towards the top. Upper Goru, however, provides the regional seal for the Lower Goru that contains inter-bedded proven sand reservoirs. Facies and depositional model of Lower Goru The Lower Goru inter-bedded sand sequence is mainly characterized by progradational package of shore face shallow marine to marginal marine and deltaic setting with offshore marine shelf deposits of shale. The inter-bedded sands/depositional environments have been further categorized as follows: Upper-Sand - shore face shallow marine prograding upward sequence Middle Sand - shallow marine to marginal marine setting Basal Sand shallow marine shore face/deltaic setting Reservoir architecture and lithological description In Jherruck block, the primary reservoir targets are inter-bedded sands of Lower Goru (Upper and Basal sands) whereas secondary target is Middle sand though the reservoir quality is expected to be low moderate. On the basis of wells drilled within the vicinity of the area, the lithological description of each unit in terms of reservoir and seal is as under: "A" Sand - Medium to fine grained sandstone with good visible porosity overlain by thick shales of Upper Goru Formation which is a well-known seal for Lower Goru. It is a proven reservoir in surrounding fields. "B" Sand - Medium to fine grained sandstone with fair visible porosity overlying a thick shale namely Badin shale. "C" Sand or Sand Below Badin Shale (SBBS) - Argillaceous sandstone with fair visible porosity having all characteristics of a good potential reservoir. It is overlain by Badin Shale which is predominantly a clay stone grading to shale in parts which may act as a good seal for C Sand/SBBS. Upper Shale unit - Mainly siltstone with very fine shale and could be considered as a good seal for Middle Sand. Middle Sand - Medium to coarse grained muddy sandstone and mudstone with moderate porosity. Lower Shale unit - Consists of siltstone and very fine shales having good characteristics of seal for Basal Sand. Basal Sand - Medium grained clean sandstone having good porosity and permeability to act as a good quality reservoir rock. The overlying shale unit (Lower Shale) provides seal for this unit. Based on the available log suites and the well reports the porosity in Lower Goru sands ranges from ~ 8 14% which is sufficient to be acting as a good reservoir.
Structural Style
During Cretaceous time, the extensional tectonic was prevailing that resulted in generation of semiparallel normal faults oriented north-northwest to south-southeast, defining a series of horsts and grabens/step faulting.
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Petroleum System
Hydrocarbon play systems are defined here by combining the stratigraphic elements of a play system with the dynamic aspects of source rock maturation, hydrocarbon charge systems and timing of trap development. These play elements are drawn from both the depositional and post-depositional process/product systems to create a concept or model of the circumstances that could potentially lead to hydrocarbon accumulations at a specified reservoir horizon or horizons. The entire Lower Goru comprises three main reservoir bodies namely Upper, Middle and Basal sands, separated by shales that provide top seal. The Cretaceous active petroleum system is prolific producer in the region since the discovery of Khaskeli field in 1981 by Union Texas Pakistan (now BP). The closest producing field of the block is Turk having reserves of 2.54 MMbbls of condensate and 286 Bcf gas. The fault pattern prevailing in the Turk Lease area extends into Jherruck block and may result in creation of similar closure and petroleum play as proven in Turk discovery - location is shown in Figure-3.17.
FIGURE 3.17: LOCATION OF TURK LEASE AND JHERRUCK EL
Sembar formation is widely distributed in the area and is considered to be a source rock. It is composed of shales that were deposited in shallow marine environments on a broad shelf that was gently sloping west ward of the Indian shield. Based on published data and scouting information the shales contain mixed type II & III kerogen with total organic carbon (TOC) content that ranges from 0.5% to more than
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3.5%. The average TOC in Sembar is 1.4% and vitrinite reflectance values range from immature (<0.6 %) to mature (0.93%).
POSSIBILITIES
The identified possibilities on the basis of ongoing mapping are seven at Basal sand (Lower Cretaceous) level with an area ranging from ~ 1 7.5 sq km Figure3.18. These possibilities are one way fault bounded as well as crotch type structures. Possibilities 3 &4 are of same type The faults are westward dipping with a significant throw (100 200 msec). The fault orientation is matchable with the adjacent eastern and southeastern discoveries in Badin area.
FIG 3.18 TWT STRUCTURE MAP ON BASAL SAND (CRETACEOUS) WITH SEVEN POSSIBILITIES
POSSIBILITY 1 LOWER GORU PLAY 3 WAY DIP ONE WAY FAULT BOUNDED STRUCTURE Possibility - 1 is located in the northwestern part across river Indus. in the Jherruck Block as shown in Figure-3.19 west of Badin major producing fields. This possibility is a typical Badin
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style three-way dip one way fault bounded structure on upthrown block. The area is around 5.5 sq km on Basal sand level. Bounding fault of Possibility 1 is an extension of southern Turk discovery fault, just beside the Jherruck block, having reserves of 2.54 MMbbls of condensate and 286 Bcf gas. Seismic dip lines NJ08-28, 30 & 32 Figure-3.20 with strike line NJ08-07 Figure-3.21 are passing through the structure showing a very prominent fault.
FIGURE 3.19 TWT STRUCTURE MAP ON BASAL SAND (CRETACEOUS) WITH POSSIBILITY-1
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FIGURE- 3.20 SEISMIC DIP LINE PASSING OVER POSSIBILITY - 1
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FIGURE- 3.21 SEISMIC STRIKE LINE PASSING OVER POSSIBILITY - 1

POSSIBILITY 2 LOWER GORU PLAY CROTCH TYPE STRUCTURE Possibility 2 is located in the southeast of Possibility1 on the same fault and bounded by second fault from east which closes in south on the main western fault.. This crotch type structure is present on Basal sand level with an area > 2 sq km Figure3.22. This possibility is also another structural type present in Badin area. Seismic line NJ08-10 passing through the structure Figure3.23.
F IG U R E 3 .2 2 T W T S T R U C T U R E MAP ON BASAL SAND ( C R E T A C E O U S ) W IT H P O S S IB I L I T Y - 2
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FIGURE-3.23 SEISMIC DIP LINE PASSING OVER POSSIBILITY - 2
POSSIBILITY 3 & 4 LOWER GORU PLAY 3 WAY DIP ONE WAY FAULT BOUNDED STRUCTURE Possibility - 3 & 4 are located in the east of P1 and river Indus as shown in Figure-3.24. The seismic line crossing over possibility shows its location closing on step fault inside graben. It is again a typical Badin style three-way dip one way fault bounded structure. The area is around 2 sq km on Basal sand level. Seismic dip line NJ08-32 Figure-3.25, passing through it confirms fault and structure. Possibility-4 again a high mapped on the downthrown side of the fault where P1 & P3 are located on upthrown side Figure3.26, with seismic line NJ08-20 showing the structure - Figure-3.27.
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F IG U R E 3 .2 4 T W T S T R U C T U R E M A P O N B A S A L S A N D (C R E T A C E O U S ) W IT H P O S S IB IL IT Y - 3
FIGURE 3.25 - SEISMIC DIP LINE PASSING OVER POSSIBILITY - 3
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FIGURE-3.26 TW T STRUCTURE MAP ON BASAL SAND (CRETACEOUS) W ITH POSSIBILITY-2
FIGURE 3.27 SEISMIC DIP LINE PASSING OVER POSSIBILITY - 4
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POSSIBILITIES 5, 6 & 7 LOWER GORU PLAY 3 WAY DIP ONE WAY FAULT BOUNDED STRUCTURE All three possibilities having same structural configuration. Possibilities 5 & 6 are located in the corridor which is linking the southern part of the block Figure 3.27 & 3.28. All these possibilities are mapped on single line basis with different area coverage. The last possibility (P-7) has significant area Figure 3.29, and its corresponding seismic line showing its validity Figure 3.30. These possibilities are to be placed in future consideration for exploration activities and should be looked into.
FIGURE-3.27 TWT STRUCTURE MAP ON BASAL SAND (CRETACEOUS) WITH POSSIBILITY-6
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FIGURE 3.28 SEISMIC DIP LINE PASSING OVER POSSIBILITY 6
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F IG U R E
3 .2 9 T W T S T R U C T U R E M A P O N B A S A L S A N D ( C R E T A C E O U S ) W IT H P O S S IB IL IT Y - 7
F IG U R E 3 .3 0 S E IS M IC D IP L IN E P A S S IN G O V E R P O S S IB IL IT Y 7
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CONFIDENTIAL
SECTION 4.
Technical Description of Proposed Assets
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New Applications
NHEPL has also filed applications for another 5 blocks namely Hisal, Makhad, Dil Jaba, Sanghar South and Gambat South. The Company is the first applicant in Hisal and Makhad blocks which are located in Zone-I, where the Company has a right to match the highest bid as per the Pakistan Petroleum Policy 2007. The Company has to go in the competitive bidding on the other blocks. All 5 blocks are expected to be announced for bidding in the next bidding round in early 2009. The technical details on these blocks are given below:-
Hisal Block
Potwar Zone I
Introduction
Hisal Block covers an area 1401.42 sq km and falls in Zone-I in Punjab province. It is located about 30 km south of Islamabad in the prolific oil province of Potwar The block has common boundary with Fateh Jang EL (OGDCL) in the north, and then it is completely surrounded by Margala EL (MOL), Turkwal ML (POL), Fimkassar ML (OGDCL), Dhudial EL (OGDCL), Kot Sarang EL (PPL), Dhulian ML (POL), Khaur ML (POL) and Dhurnal ML (OPII) in a clockwise direction, respectively (Figure - 3.10). The block falls in Zone-I where the Company has a right to match the highest bid as per the Pakistan Petroleum Policy 2007. The application has been accepted by Directorate General Petroleum Concessions (DGPC).
ACTIVE EL
APPLIED FOR EL
PRODUCING FIELDS
Figure 3.10. Location of Hisal Block
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Business Plan

Geological and Tectonic Setting
The block is located in an active Himalayan frontal fold and thrust belt in the northern part of the Lower Indus basin. The Potwar thrust and fold belt came into existence as a result of thrusting of Indo-Pakistan plate under Eurasian plate. The Phanerozoic sediments moved from north to south about 100 km as a decoupled coherent sheet over the detachment in the Infra-Cambrian Salt Range Formation overlying the north dipping crystalline basement. Structurally the northern part of the sub-basin shows intense deformation during Plio-Pleistocene. The central part of the Potwar sub-basin known as Soan Synclinorium shows minimal deformation, while towards south the leading edge of the fold and thrust belt has well developed folds and faults. The axial trend of structures on both sides is generally parallel to the main axis of the synclinorium. These structures are mostly hydrocarbon bearing and contribute about 45 % to the indigenous oil production. The ramp expression of Salt Range scarp is due to a down to the south normal fault in the basement followed by the under-thrusting. The strong folding and faulting and uplift in the east Potwar and rotation of eastern Salt Range also took place during Plio-Pliestocene epochs. Stratigraphic succession is shown in Figure-3.11.
Figure 3.11. Generalized Stratigraphic Column of Potwar (eastern)
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Petroleum Setting
Reservoir: Fractured carbonates within the Bhadrar and Sakesar formations of Eocene age and Lockhart Formation of Paleocene age are significant productive reservoirs in Potwar. However, Tobra conglomerate (early Permian) and Khewra sandstone (Cambrian) are productive in the eastern half only. In central and western part Datta Formation (Jurassic) and Chidru carbonates of younger Permian age are also proven reservoirs. Chidru Formation (Late Permian) and Tobra conglomerates (early Permian) are the secondary reservoir targets in the block. Source: The Paleocene Patala Shales and Infra-Cambrian Salt Range Formation are considered to be the source rocks in Potwar Basin. Source rock studies suggest that Patala shale predominantly contain type I kerogen. Palynological studies also indicate the presence of type II and type III kerogen. Apart from these two, the carbonaceous shales in Permian and pro-delta shales in Mesozoic sequence are potential source rocks. The source rock attained maturity as a result of Neogene molass overburden that initiated the primary hydrocarbon migration. Presence of numerous oil and gas discoveries suggests a mature system of source rock and migration of hydrocarbons in the area. However, in view of the absence of the porous and permeable carrier beds in the carbonates, relatively short distance and vertical migration through fractures and faults is the more likely case. Seal: Most of the potential reservoir rocks are overlain by shaly intervals, which are suitable seals. In addition, there are intra-formational shales and tight carbonates, which also provide / strengthen the seals.
Conclusion
The block represents the last relatively unexplored/remaining part of the Potwar sub-basin, where the molass represents a large thickness, particularly below the axis of Soan Synclinorium. Soan River more or less follows the axis of the syncline and flows from west to east through the central part of the block, on either side of which the structures are generally hydrocarbon bearing. Extensive seismic is present on these proven structural trends while generally tails of the seismic lines extend along the periphery of the proposed block. NHEPL plans to evaluate the up dip limits of the productive zones on either side of the synclinorium.
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Business Plan

Makhad Block
Potwar Zone I
Introduction
Makhad Block (Figure - 3.12) is located in the western Potwar. The total area of the block is about 2,321 sq. km. The area has a well developed infrastructure and is easily accessible by road from Islamabad and other cities. The block falls in Zone-I where the Company has a right to match the highest bid as per the Pakistan Petroleum Policy 2007. The application has been accepted by DGPC.
ACTIVE EL
APPLIED FOR
PRODUCING FIELDS
Figure 3.12: Makhad Block
Geological and Tectonic Setting

Potwar Plateau is the traditional and prolific oil province of Pakistan since 1915. It owes its origin to the compressional tectonics at the northern part of the Indian plate which resulted from the continental collision of Indian and Eurasian plate, subduction of the Indian plate, and thrusting in the areas to the north. In the south the Salt Range escarp bounds this plateau. For relatively detailed description refer the text in Hisal Block above.
Petroleum System
Potwar represents an established and active petroleum system where a correctly located well invariably finds oil. Tertiary and Paleozoic rocks are proven reservoirs towards east while Mesozoics can also be targeted towards west along with the Tertiary carbonates. In this block Tertiary carbonates and Datta sandstone are the primary targets. For relatively detailed description refer the text in Hisal Block above.
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Sanghar South Block
Lower Indus III
Gambat South Block

Lower Indus III
Introduction
NHEPL has also submitted two new applications in Sindh province of Pakistan (Figure-3.14). The applications for these licenses that fall in Zone III have been accepted by DGPC. The bids for these block are expected to be announced in the next bidding round.
Granted Licenses Granted Leases
Applied blocks
Block Gambat South
Area 2458.95 (sq km)
Sanghar South
2491.00 (sq km)
Figure 3.13. Location of Gambat South and Sanghar South Block
Prospectivity
The two blocks fall on either side of the proven Lower Goru sand fairway of Cretaceous age. The geological setting for Gambat South resembles that of Jherruck Block located to the south and Sanghar South resembles to Kunri (may be referred for further details as described above). However, some slides are shown below to share specific information of Sanghar South and Gambat South blocks. A generalized stratigraphic column which represents both the blocks is shown in Figure - 3.15.
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Sanghar South - Satellite Imagery

(True colour)
Sand Dunes
Cultivation
Block is located immediately to

the east of competitors ELs where hydrocarbon discoveries have been made
GAMBAT (OMV) KHEWARI (OGDCL)
Latif-1 (OMV)
OMVs Latif-1 discovery to the

north indicates a broadening of the Sand Fairway to the east and into the Sanghar South Block
GAMBAT SOUTH (NHEPL)
BITRISM (OGDCL) SINJHORO (OGDCL)
QAMAR (OMV)
HALA (PPL)
SANGHAR SOUTH KHIPRO (NHEPL) THAR (OPII) (ENI)

MIRPUR KHAS (OPII)
IN DI A
ACTIVE EL
ACTIVE D&PL
UMARKOT DIGRI (ENI) (OPII)
RAJAR (ENI)
Sanghar South
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Age
Recent
Formation
Lithology
Top (m) Thickness (m) 0.0 1 150
Alluvium
Eocene
Laki / Kirthar
150
100
Paleocene
Ranikot
250
450
Khadro / Basalt
U. Goru
700
50
750 850
100 1000
Cretaceous
L. Goru
Sembar Jurassic Chiltan
1850 2550
700 50
Figure 3.14 - Generalized Stratigraphic Column
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Over 1350 Lkm of seismic data acquired in six vintages (1972 2003) Quality of data is fair to good Regional dip is towards west The grid of seismic lines is fair to moderate in the western part of the block Few scattered lines are in the central part of the block Reasonable seismic data coverage in the eastern part Mapped few leads on existing data
Sanghar South
Unable to disclose fully prior to bidding
Recent gas discovery in north by OMV (Tajjal-1) and Adam-1 (PPL) in the south Gas discovery within the blocks eastern part (Jakhro) Several discoveries in the east This setting enhances the prospects of the Block
Gambat South
Tajjal-1
Gas / Condensate Gas/Condensate Discoveries Discoveries
Jakhro-1 (OGDCL)
Adam-1
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Gambat South - Satellite Imagery

(True colour)
Gambat South Jakhro D&P Lease (OGDCL)
Sand Dunes
Cultivation
Geographical location of Gambat South
One gas discovery within the Block Deeper Lower Goru sands (Massive & Basal) not yet tested Mostly dry wells did not reach deeper levels The target structures in the area are the fault associated closures of small to medium size, which are significant producers of oil, condensate and gas
Gambat South
Upper Goru Shale
Upper Sand
Upper Shale
(Talhar Shale) (Massive Sand) (Turk Shale)
Middle Sand
Lower Shale
Basal Sand
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More than 2200 line km 2D data acquired in sixteen different vintages from 1974 2000 Quality of data is poor - fair Regional dip is towards west Sufficient seismic already exist, but data quality is main issue Re-processing could partially help Few structures mapped
Gambat South
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CONFIDENTIAL
SECTION 5.
Operational Plan for Current Assets
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Overview
This section describes the key objectives, activities and metric targets for the Kunri and Jherruck block. The strategic objective lists the key minimum and actual expenditures to date for major exploration activities such as G&G analysis, seismic analysis and drilling. Corporate general and administrative costs are also allocated to each block based on the time allocations of the Companys staff. The progress checks and key metric targets for each block are also listed as well as a high-level project plan. A summary of the overall expenditures for the Kunri and Jherruck fields is shown:
Note: The normalized monthly overall cash burn rate calculation for Q1, 2008 removes the payment of a bonus to the CEO, which is treated as an extraordinary item. The bonus was re-invested into the company via a purchase of common shares.
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Kunri: Strategic Objective
To discharge the obligations related to minimum work program and minimum expenditure as given in the Petroleum Concession Agreement is given below:
Contract Year First Year
Minimum Work G&G Studies New 2-D Seismic 300 L. Km New 2-D Seismic 500 L. Km or new 3-D Seismic 170 sq.km. 1st Exploration Well to a depth of 2400 m, or 50m inside Chiltan Formation, whichever is shallower
Minimum Expenditure $300,000 $2,400,000 $4,000,000
Actuals up to Q4 2008 (NHEPLs 60% Share) $346,532
$3,991,137
$3,000,000
$53,533
Initial Term
Phase-I
Second Year Third Year
G&G Studies G&G Studies 2nd Exploration Well to a depth of 2400 m, or 50m inside Chiltan Formation, whichever is shallower 3rd Exploration Well to a depth of 2400 m, or 50m inside Chiltan Formation, whichever is shallower
$200,000 $150,000
$31,337 -
$3,000,000
$3,000,000
Total Minimum Expenditure
$ 16,050,000
$ 4,422,539
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Kunri Expenditures
The main target of the Company is to meet the total commitment on the block over 3 years is to acquire 800 L. km 2D seismic and drill 3 exploration wells. NHEPLs 60% share of expenditures by quarter is given below:
Activities:
1. 2. 3. 4. 5. 6. 7. 8. Seismic Acquisition Data processing / reprocessing Seismic Data Interpretation Identification of well location Land Acquisition and Site Preparation Rig Mobilization Drilling of wells Post Mortem Report
Progress check:
1. 2. 3. 4. 5. 6. Weekly Management Meetings Monthly Department Reports Monthly Performance Reviews Monthly Progress Check of Activities Quarterly Joint Venture Partner Meetings Frequent Board Meetings
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Key Metric Targets
To drill first exploration well in fourth quarter of 2009. To drill second and third exploration wells in first and second quarters of 2010.
Timeline
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Jherruck: Strategic Objective
To discharge the obligations related to minimum work program and minimum expenditure as given in the Petroleum Concession Agreement and quoted below: Actuals up to Q4 2008 (NHEPLs 60% Share) $136,106 $1,571,620 -
Contract Year First Year
Minimum Work G&G Studies New 3-D Seismic 150 L. Km or 2-D Seismic 350 sq.km.
Minimum Expenditure $250,000 $2,800,000 $200,000 $3,000,000
Initial Term
Second Year Phase-I
G&G Studies 1st Exploration Well to a depth of 2950 m, or 50m inside Chiltan Formation, whichever is shallower
Third Year
G&G Studies 2nd Exploration Well to a depth of 2700 m, or 50m inside Chiltan Formation, whichever is shallower
$200,000 $2,500,000 $ 8,950,000
$ 1,707,726
Total Minimum Expenditure
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Jherruck Expenditures
The main target of the Company is to meet the total commitment on the block over 3 years is to acquire 350 L. km 2D seismic and drill 2 exploration wells. NHEPLs 60% share of expenditures by quarter is given below:
Activities:
1. 2. 3. 4. 5. 6. 7. 8. Seismic Acquisition Data processing / reprocessing Seismic Data Interpretation Identification of well location Land Acquisition and Site Preparation Rig Mobilization Drilling of wells Post Mortem Report
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Progress check:
1. 2. 3. 4. 5. 6. Weekly Management Meetings Monthly Department Reports Monthly Progress Check of Activities Monthly Performance Reviews Quarterly Joint Venture Partner Meetings Frequent Board Meetings
Key Metric Targets

To drill first exploration well in third quarter 2009. To drill second exploration well in second first quarter of 2010.
Timeline
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CONFIDENTIAL
SECTION 6.
Operational Plan for Proposed Assets
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Operational Plan for Proposed Assets

New Applications: Strategic Objectives
Currently NHEPL has 4 outstanding applications for additional exploration licenses with the Government of Pakistan. The Company is the first applicant in Hisal and Makhad blocks which are located in Zone-I, where the Company has a right to match the highest bid as per the Pakistan Petroleum Policy 2007.
Activities:
1. 2. 3. 4. Data Purchase G & G Studies Seismic Acquisition Drilling of exploratory wells
Progress check:
1. 2. 3. 4. 5. 6. Weekly Management Meetings Monthly Department Reports Monthly Progress Check of Activities Monthly Performance Reviews Quarterly Joint Venture Partner Meetings Frequent Board Meetings
New Applications Expenditures

The following are the estimated expenditures by key activity for the proposed new blocks (assuming a NHEPL ownership stake of 25%):
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CONFIDENTIAL
SECTION 7.
Financial Plan
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Financial Plan
Funding Requirements
Assuming NHEPL's existing 60% ownership in each of the Kunri and Jherruck fields, the cumulative finding cost is estimated to be approximately USD 39 million for exploring five wells. The Company requires approximately USD 18 million after accounting for actual expenditures to date. The Company intends to procure these funds through equity financings. Further, development and facility costs of such wells would be met through project financing. The overall funding requirements for the exploration blocks are shown below:
The cumulative finding costs for the proposed, new blocks, where the Company assumes an ownership interest of 25%, is estimated to be USD 12 million.
A summary of NHEPL's historical financial statements has been attached as Appendix A.
Economics
The base case assumes two discoveries in a five well program from the Kunri and Jherruck fields. Net present values for these two discoveries are calculated using crude oil reference prices ranging from USD 50 per barrel to USD 70 per barrel and discount rates ranging from 18% to 26%. The resulting net present values range from USD 55 million to USD 114 million.
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Financial Plan
Cash Flow Analysis

Assumptions for Economic Evaluation Cash flow projections and valuation are based on the consolidated cases of Oil and Gas. Two discoveries are assumed out of 5 wells. The plan assumes that NHEPL owns 60% of each of the Kunri and Jherruck blocks. Two discoveries chance-weighted reserves are 35.4 MMBOE (NHEPLs share). Cumulative exploration well cost assumed is USD 24 million (NHEPLs share). Cumulative development well cost is USD 50.4 million (NHEPLs share). Cumulative facility cost is USD 27 million (NHEPLs share). First discovery is predicted in 2010. Local inflation is assumed at the rate of 20% and the rate of price index is assumed internationally at the rate of 2%.
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Financial Plan
Key cash flow metrics showing the results of choosing a reference price of crude oil that goes from USD 50/bbl to USD 70/bbl are shown below:
Product Pricing
Oil Prices: The Price for crude oil is based on the Reference Crude Price (RCP) equal to C&F price of a comparable crude oil or a basket of Arabian/Persian Gulf crude oils plus or minus a quality differential. A windfall levy is applied over a Base Price as shown below. Effective Crude Price = Base Oil Price + Windfall Levy Base Oil Price: The base oil price for crude oil and condensate is US$ 30 per barrel. This base price for crude and condensate escalates each calendar year by US$ 0.25 per barrel starting from the date of first commercial production in contract area. Windfall Levy: Windfall Levy = 0.5 (M-R) x (P-B) M = Net production R = Royalty P = Market price of crude oil and condensate as defined above B = Base Oil price Condensate - The Producer Policy Price for condensate is the FOB price of comparable condensate delivered at the nearest refinery gate plus or minus a quality yield differential. Gas Prices: For all gas pricing, a Reference Crude Price (RCP) equal to the C&F price of a basket of Arabian/Persian Gulf Crude Oils imported in Pakistan is used. The gas price formula differentiates the underlying risk and reward of the three onshore zones in Pakistan by specifying higher premium prices for relatively less explored and high cost Zones.
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Financial Plan
The gas price forecast for each onshore zone is graphically plotted below:
Ministry of Petroleum and Natural Resources has already agreed with the E&P industry on a 2008 policy, which considerably improves the gas price. This policy is currently under the government approval. All new discoveries, even on blocks allotted under previous policies will be given 50% of the increase in gas price. For NHEPLs Kunri and Jherruck Blocks this would essentially increase the Zone III gas price shown in the above plot to around Zone I price shown, around a 15% increase.
Payments to Government
Payments to Government of Pakistan under the fiscal regime applicable to E&P Sector are as follows:
Total Payments Royalties Workers Participation Fund Workers Welfare Fund Income Tax
12.5% of
Gross Revenue
5.0% of
Gross Revenue Less: Opex Less: Royalties Less: Book Depreciation
2.0% of
Gross Revenue Less: Opex Less: Tax Depreciation Less: Depletion Allowance Less: Royalites
40.0% of
Gross Revenue Less: Opex Less: Tax Depreciation Less: Depletion Allowance Less: Royalties Less: WPPF & WWF
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Other Assumptions
Other Assumptions Production Start Field Assumptions Exploration Start 2010 Dec 2007
Tax Rate Royalty Payable Financial Assumptions Depletion Allowance Tax Depreciation Inflation (USD)
40% 12.5% 15% of Revenues or 50% of Net Income ( whichever is less) 50% year 1 then 10% Per annum 2.0%
Tax Benefit to E&P Companies in case of Dry Hole

The Company has a tax advantage in Pakistan in case of dry hole expenditure. As mentioned in the Fifth Schedule to the Income Tax Ordinance, 2001 and in the Petroleum Concession Agreement (PCA) signed by the Company with the Government of Pakistan, where any expenditure allocable to a Surrendered Area or to the drilling of a dry hole is deemed to be lost shall be allowed to be setoff against all other income of the Company accruing or arising from under or under any separate business or undertaking or under the PCA or any other past, present or future agreement of the Company with THE PRESIDENT for Petroleum, exploration and production or from any other activity, on a fully consolidated basis. Further, if the loss of the dry hole expenditure against the income of the Company of that year, the portion of the said loss shall be carry forward to the next ten year. This unique tax advantage is not available to any other country of the world. Another tax benefit the company has in Pakistan is the ring fencing which is not available in other parts of the world. Under this concept, the company is allowed to setoff their exploration cost of one field to the production of another field irrespective of Zones.
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CONFIDENTIAL
SECTION 8.
Risks and Mitigants
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Risks and Mitigants

Political Uncertainty
Al-Qaeda and Taliban activities within the North West Frontier Province (NWFP) continue to pose a huge challenge to the Government. Although most of the activities are focused into FATA (Federally Administered Tribal Area) some have spilled over to larger cities like Islamabad, Lahore & Karachi. There is hope that the increased focus by US on Afghanistan and reassignment of US troops from Iraq to this region will help improve the situation. In addition, the democratic government has returned to power after nearly 9 years and is working more closely with US to resolve the problems. With the return of democracy Pakistan is also enjoying significant support from US, UK, Saudi and other G-8 countries, which are looking at enhancing the financial support to Pakistan in order to boost the economy. International institutions like IMF and ADB have also been working with the Government to help strengthen the financial conditions. NHEPL has focused on stable areas in the country as a part of its strategy. The Company has acquired assets only in areas that have not been impacted by the political crisis in the NWFP. NHEPLs two blocks are located close to the south eastern end of the country. This area enjoys significant ethnic, religious and racial diversity that has induced a lot of tolerance in the people. All five of NHEPL applications are also in similarly politically stable areas. NHEPL has no plans to venture in NWFP or volatile parts of Baluchistan until significant political improvement takes place.
Exploration Risk
Exploration is a high risk-high reward business. Pakistan has a fairly high exploration success rate as compared to the global average (28% vs < 10%). The exploration risk is mitigated by drilling of higher number of wells spread over several different blocks. Instead of drilling 1 well with 100% equity, a company may choose to have 25% equity in 4 wells in different blocks. Currently, NHEPL plans to drill 5 wells in two blocks, which has a 80%+ probability of making a discovery.
Change in Regulatory Regime

Government is working hard to attract foreign investment to address its severe energy shortage. Any changes made in the last two policies (2007 & 2008) have improved terms for the industry. At this time it is foreseen that this trend will continue. However, what is most important is that government has always recognized the Sanctity of Contract and has honoured all PCAs. In cases where changes in other ministries have impacted oil industry, the Ministry of Petroleum & Natural Resources (MPNR) has worked with the industry to successfully resolve the issues.
Macroeconomic viability and Foreign Exchange Rate Risk

Pakistans economy enjoyed a rapid growth in last 5 years but it is now slowing down due to high international commodity prices, devaluation of Pak Rupee, record high inflation and political crisis. Key macroeconomic indicators are: - GDP growth trend in Pakistan has shown a declining trend and has fallen from 6.2% to 6%; - inflation has surged to 30%; and - foreign exchange reserves are being utilized to cater to fiscal account deficits.
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Risks and Mitigants

These indicators would improve owing to: - enhancing tax revenue mobilization through enlarging tax base; - providing competitive returns on savings to reduce dependency on foreign inflows and savings investment gap; - bilateral arrangements with friendly/partner countries; - multilateral loans from IFIs; and - improving the function of State Bank of Pakistan (SBP) to strengthen the currency. The Privatization process has also started to pace up and the commitment shown newly elected Government of Pakistan (GoP) has gained credibility by pursuing these reforms and overcoming the fall in the macroeconomic indicators.
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CONFIDENTIAL
SECTION 7.
Appendix A Summary Historical Financial Statements of NHEPL
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Financial Statements
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CONFIDENTIAL
Appendix B ISO Certificate
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ISO Certificate
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CONFIDENTIAL
Appendix C Organizational Chart (Current and Prospective)
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Organizational Chart
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CEO
Secretary
Organizational Chart
GM Exploration
GM Operations
GM Finance
GM Services
GM Govt. Relations
Secretary Secretary Receptionist
Secretary
Secretary
Secretary
Manager Geological Geoservices Manager Drilling Manager HSEQ Manager IT Manager Reservoir Manager Project/ Production Manager Manager Financial Accounting
Manager Geophysicist
Treasury & Corporate Planning Manager
Commercia l Manager
Contracts & Procurement Manager
Human Resource & Admin Manager
Govt Relations Officer
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2 Snr. Reservoir Engineers 2 HSEQ Officers 2 Snr. Petroleum Engineers Snr. Drilling Officer Tax & Compliance Officer Reservoir Engineer 2 Petroleum Engineers 2 Drilling Engineers 2 Community Officers 2 Tressury & Payables Officer Trainee Reservoir Engineer Trainee Drilling Engineer Field Contractor
2 Snr. Geologists
2 Sr. Geophysicist
2 Accounts Officer
3 IT Officer
Legal Advisor
3 C & P Officers
3 HRA Officers
Admin Officer
2 Geologists
2 Geophysicists
Inventory Controller
IT Trainee
Trainee Officers
2 Trainees
Trainee Geologist
Trainee Geophysicist
Trainee Accountant
3 Admin Assistants
Business Plan
Support Staff
Support Staff
CONFIDENTIAL
Appendix D Brief Profiles of Core Management Team
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Brief Profiles of Core Management Team

Chairman & CEO Syed Wamiq Abrar Bokhari Syed Wamiq Bokhari is a senior international petroleum executive who has worked on various projects in five continents. He attained his Bachelors and Masters degrees in Petroleum Engineering from University of Texas. He has attended several technical and management courses, including advance management course in Oxford. Wamiq started his career with US based ARCO (Atlantic Richfield Company) in US, working with them in the Gulf of Mexico, Permian Basin, Alaska, South America, Yemen, North Sea and Far East. He later joined LASMO (later acquired by Eni) and served as the Operations Manager in Pakistan, and was involved extensively with the green field developments of Bhit, Zamzama, Miano and Sawan fields. He later moved to Nigeria to head Enis Partner Operated Business Unit that was responsible for an annual net budget of US$ 250 million and net production of around 100,000 BOEPD. In Nigeria he was involved with the worlds largest FPSO (Floating Production, Storage & Offloading facility) development that was located in deepwater. Lately, he was assisting Kuwait Foreign Petroleum Company (KUFPEC) in managing the Exploration & Production activities in the Far East & Australia Region that is almost entirely offshore. Wamiq has acquired broad based industry knowledge (technical & managerial) through a life time of Exploration & Production work. In addition, he has established credibility with several multinationals and has a vast professional network in the international as well as regional petroleum sector. Wamiq has also been very active in the Society of Petroleum Engineers and has authored several technical papers. As the conference Chairman, he organized the first ever Oil & Gas show in Pakistan in 2002 which was very successful attracting several international companies despite the environment generated by 11th September 2001 event. He is also serving as President Expert Committee of PPEPCA (Pakistan Petroleum E&P Companies Association), is on the Board of PPEPCA and Society for Petroleum Engineers (Pakistan), and is the Chairman of Pakistan Chapter of American Association of Petroleum Geologist.
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Business Plan
EXPLORATION
General Manager Exploration Nusrat Kamal Siddiqui Nusrat Kamal Siddiqui acquired M.Sc. in 1969 from Geology Department, Punjab University, Lahore (Pakistan), specializing in Petroleum and Structural Geology, and in 1979-80 completed a post-graduate diploma related to Photo-geology and Remote Sensing from ITC, The Netherlands. Nusrat has over 37 years of diversified experience including +26 years (1980- 2006) of mainly hydrocarbon exploration and development, and some mineral exploration with Pakistan Petroleum Limited. In addition, he also worked in hydrogeology with Ministry of Agriculture, Government of Libya (1975-79) and engineering geology for earth fill dams (1970-75). He has attended several technical and advance management courses, both locally and abroad-including the UK and USA. His interests involve prospect generation, log evaluation, field studies/geological modeling of reservoirs, field geology, stratigraphy and remote sensing applications. He has published several papers on petroleum exploration, field development, reservoir modeling, remote sensing applications to petroleum geology and flood control, and have presented them both locally and abroad. He was Chairman Technical Committee of the Annual Technical Conference & Oil Show held in Pakistan in 2002, and its Chairman and Organizer in 2003. He is serving on the Board of Studies of couple of universities, and is frequently invited for delivering lectures to students. He is one of the senior editors of SEGMITE International an English magazine on geology published from Pakistan, and is also a member of Stratigraphic Committee of Pakistan. Nusrat also represents Mining Journal of UK in Pakistan. A 275 page book in Urdu language Uz Adam ta Ein Dum (From Adam to Myself), recently completed by him, is ready for publication. Nusrat is an active member of American Association of Petroleum Geologists (AAPG), and a founding member of Pakistan Association of Petroleum Geoscientists (PAPG - an affiliate of AAPG). Geoservices Manager Syed Riasat Ali Syed Riasat Ali obtained his M.Sc in Earth Sciences from University of Karachi in 1987. He has over 32 years of industry experience as a Geophysicist, both in Pakistan and overseas. His overseas experience includes around 10 years in Kuwait, Somalia & Chad. He has worked for several years managing operations and has been directly responsible for HSE for over 8 years. He received his HSE training from international companies like Schlumberger & Western Atlas. He has provided onsite management for field operations in some of the remotest areas of Pakistan in Balochistan Province. Riasat is an expert in all aspects of Geophysical activity including acquisition, processing and interpretation. He has worked as an interpreter with Pakistan Petroleum Limited, Gulf Oil and Canada Northwest Energy. His acquisition and processing experience is with Western Geco/Schlumberger, Western Atlas, Geosource and Asia Geophysical Services.
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Chief Geophysicist Syed Raza Zaidi Syed Raza Zaidi obtained M.Sc in 1990 from Department of Geology, University of Karachi. In addition he acquired Diploma in Geophysics (1985) from Faculty of Earth Sciences, King Abdul Aziz University, Jeddah (K.S.A). He started his professional career with CGG (Pakistan) and later Joined Pakistan Oilfields Limited, Orient Petroleum International Inc. and is now working with New Horizon Exploration & Production. During his 14 years in E&P industry, he has been involved with seismic data acquisition, processing and interpretation of both onshore and offshore data. His key interest remains in seismic data interpretation using workstation. He has worked on various interpretational projects in Pakistan, Iraq, Yemen, Jordan and UAE. His innovative thinking in the structural modeling of the areas was followed in the interpretation that resulted in discoveries in the Potwar sub-basin of Pakistan. He also took active participation in Annual Technical Conference (ATC 1998) held in Islamabad. Raza is an active member of Association of Petroleum Geoscientists (PAPG-an affiliate of AAPG), a global member of Society of Exploration Geophysics (SEG) and is a founder member of Karachi University Geology Alumni Association (KUGAA). Currently, he is also a member of the steering committee for the Technical Affairs in PPEPCA.
OPERATIONS
General Manager Operations Zia Akhtar Zia Akhtar is the General Manager Operations NHEPL. He obtained an MS Degree in Industrial and Operations Engineering from the University of Michigan in 1980 and a BE in Mechanical Engineering from the NED Engineering University. He brings 30 years of experience in the upstream Oil & Gas and Petrochemical industries and has worked in several international projects in U.S.A., Abu Dhabi and Libya. Zia joined NHEPL from a senior position at Eni Pakistan, a leading international E&P company. He has a rich experience in operations and project management. His last assignment with Eni was as head of Non-Operated Joint Ventures, where he managed all aspects of partner operated business including field development, facilities projects, production, drilling, exploration and commercial. His responsibilities included several large gas fields in Pakistan including Zamzama, Sawan, Miano, Rehmat, Latif and Gambat Fields. Prior to this assignment Zia also held positions of Project Manager and Engineering & Construction Manager for Eni responsible for Design, Engineering, Procurement, Construction & Commissioning of several Eni operated projects. Zia also led the Contracts & Procurement Department at Eni responsible for company wide activities.
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Drilling Manager Syed Zafar Ahmed Syed Zafar Ahmed is an Associate Engineer (Mech.) with over 30 years of experience in oil & gas drilling, with diversified exposure to under balance drilling, smart completions and multi-lateral horizontal wells. Zafar started his professional career in 1975 and moved on to work in international companies, like SONATRACH, Algeria and Saudi Aramco. He also worked in Pakistan Petroleum Limited for about 8 years at a senior management position. He is a member of SPE and has attended several management, HR, HSEQ, H2S (hazardous gas detection), SAP and Oracle-based reporting systems, helicopter safety and offshore survival courses. Procurement Manager Shah Mohammad Shah Mohammad has over 27 years of experience with multinational companies. He has an engineering background and since 1980 is a member of Institute of Engineers, Pakistan. He is also member of Institute of Supply Management. His vast experience includes working with ENI (Pakistan) Limited, Marriot Hotels and Tungsram Electrical Industries Pakistan Limited. He has performed his duties in the capacities of Procurement Officer, Plant Support Engineer, Maintenance Engineer and Deputy Chief Engineer. HSEQ Manager Muhammad Anees ur Rehman Anees ur Rehman is a graduate Mechanical Engineer from University of Engineering and Technology Lahore with over 17 years of HSEQ experience. He has done accreditation courses from School of Leadership, Links Associate International, DNV Singapore, Tripot Beta Netherland and several national and international institutes. He has managed HSEQ operations for multinational companies in Pakistan, Middle East and Southwest Asian countries. He has contributed in development, implementation, certification and maintenance of Integrated Health, Safety and Environment management policies, management systems and standards. He has successfully led cross-functional teams for the achievement of ISO 9001, ISO 14001, OHSAS 18001 Certifications and GHG monitoring protocols. Anees has experience in developing HSE Management System that includes HSE guidelines and requirements, risk identifications and mitigation controls, HSE plans, monitoring and auditing strategies and Management reviews. He has strong background in staff training, emergency response and crisis management. As a member of plant and project site management, he has executed various projects in oil & gas, petrochemicals, fertilizers and cement industries. He is a life member of Pakistan Engineering Council and the Society of Mechanical Engineering. Before joining NHEPL he was working for ENI in Pakistan . He also worked in Middle East with DESCON Engineering for oil and gas fields as HSE Manager.
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FINANCE
Finance Manager Muhammad Atif Muhammad Atif is an associate member of the Institute of Chartered Accountants of Pakistan. During his chartered accountancy training with Ernst & Young Pakistan, he was involved in audit, consultancy and tax advisory services of various companies. His work experience of over 8 years includes 3 years with power generation industry. Prior to joining NHEPL, he was working with the Hub Power Company Limited, the largest independent power producer in Pakistan as Manager Finance, managing the finance and accounts of the Company. Mohammad Atif joined New Horizon Exploration and Production Limited as Head of Finance and also serving as Corporate Secretary. He manages the overall financial and secretarial affairs, and the accounting side of the business.
INFORMATION TECHNOLOGY
IT Manager Ahsan Rizvi Mr. Ahsan Rizvi has joined as the IT Manager in 2008 and is now leading the IT team. Ahsan graduated with a BSE in Computer Systems Engineering from Arizona State University Tempe, Arizona, USA and then went on to do his MS in Computer Science from the same university. Prior to joining NHEPL, Ahsan was working as Manager, Data Management Services at Instec Digital Systems. Before this he was working as a Manager Database Services at Softchoice Corporation - Toronto, Canada. He also had the chance to work at BP Pakistan Exploration & Production Inc. as an Applications Team Lead. Being an Oracle Certified Professional, Ahsan specializes in design, implementation, recovery, and security of databases and also has extensive experience in implementation and support of ERP applications. He has been involved in planning and implementation of disaster recovery strategies for large scale environments. During his career, he has managed various teams comprising of System Administrators, Database Administrators, Service Desk, Data Center Operations, Developers, and Application Specialists. Ahsan is a member of Project Management Institute (PMI) Karachi Chapter and also has awareness of Six Sigma Methodology.
HR & ADMINISTRATION
HR & Administration Manager Asim Masood Khan Asim Masood Khan graduated in Economics from Karachi University and has an MBA (Mktg) from Preston University, Karachi. He has over 25 years of work experience with Sheraton Hotel, Marriott Hotel, The Forums, Textiles, Supermarket & Department Store in Managerial and Management Positions. His last assignment was in Ethiopia, East Africa. He attended several courses in Management, Marketing, Labor Laws, Safety and Environment etc.
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NEW OFFICE PROJECT

New Office Manager Hassan Rasheed Abbasi Hassan Rasheed Abbasi did his graduation from Punjab University and has attended several industry courses on management, marketing and interpersonal skills with multinational companies. Rasheed served as the CEO of Polyment Trading Company in Sharjah for 14 years. He had also worked as Marketing Manager for M/s Lambert Chemical Company in UAE and Oman. Prior to moving overseas he had worked with Beecham (Pakistan) Limited and Organon (Pakistan) Limited for 10 years.
GOVERNMENT RELATIONS
General Manager Government Relations Abdul Rauf Khan Abdul Rauf Khan graduated in 1965 from Punjab University, Lahore. He joined Government service upon graduating from CSS Academy, Lahore in 1978. During 30 years of service with Government of Pakistan he served in the Ministry of Industries, Production and Special Initiatives, Ministry of Labour and Ministry of Communication as Joint Secretary. He has also served as Deputy Secretary in Ministry of Commerce and Deputy Financial Advisor in Ministry of Finance. He attended a number of courses including Financial Management, Public Administration, Banking Supervision, Green Supply Chain & Green Procurement etc. As a career bureaucrat Mr. Khan brings a deep understanding of the inner working of the Government of Pakistan, which allows NHEPL to address government related matters in a professional and timely manner.
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Business Plan

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Updated March 2009

NHEPL has attained ISO 9001:2000 certification (Appendix - B).

KASB Capital and KASB Securities

Exploration and Production Sector in Pakistan

E&P Sector in Pakistan

E&P Sector in Pakistan

Market Capitalization (USD mn)

Listed Listed Listed Listed

2,008 5,076 561 62

Listed Listed Listed Not Listed Not Listed

Not Listed Listed Listed Not Listed

E&P Sector Overview

E&P Sector in Pakistan

Fig 2.4: Energy Production Vs. Consumption

2003 2004 2005 2006 2007

Source: Pakistan Energy Yearbook 2007

Oil & Gas Supply and Demand

Fig 2.6: Crude Oil Consumption (mmtoe)

Gas Consumption (mmtoe)

Oil Consumption (mmtoe)

2005 Industrial Domestic

E&P Sector in Pakistan

Source: Pakistan Energy Yearbook 2007

E&P Sector in Pakistan

E&P Sector in Pakistan

E&P Sector in Pakistan

E&P Sector in Pakistan

Fig 2.12: Gas Reserves by Company Total : 32.376 TCF

Source: Pakistan Energy Book 2007

Oil & Gas Exploration Activity in Pakistan

Energy Year Book, PPIS, Vision 2030, Planning Commission of Pakistan

E&P Sector in Pakistan

231 128 359

1080 720 1800

1800 1200 3000

Technical Description of Current Assets

Technical Description of Current Assets

Block No. 2468-7 Kunri

Figure 3.1. Location of Kunri EL and the surrounding concessions.

Technical Description of Current Assets

TWT STRUCTURE MAP

TOP CHILTAN Fm.

Structural Stratigraphic Creta ceous Stratigraphic Paleozoic

P 20 P12 P9 P13 P6 P2 1 P3 P1 P4 P2 P 17 P7 P18 P15

Figure 3.2. Top Chiltan map showing location of 22 Possibilities

Technical Description of Current Assets

TWT STRUCTURE MAP

TOP SEMBAR Fm.

Technical Description of Current Assets

Figure 3.4 Generalized stratigraphic column in Lower Indus Basin.

Depositional environment and reservoir characteristics of Goru and Sembar formations

Technical Description of Current Assets

Technical Description of Current Assets

Technical Description of Current Assets

Technical Description of Current Assets

Figure 3.6 Possibility 1 on seismic dip line NK07-12

Technical Description of Current Assets

Technical Description of Current Assets

F ig u re 3 .8 . D ep th S tru c tu re m ap o n B a sa l san d (L o w er G o ru ) w ith P o ss ib ility 8

Technical Description of Current Assets

Technical Description of Current Assets

Technical Description of Current Assets

Up-dip stratigraphic trap sealed by transgressive marine shale