StockGuru Blog: Franklin Mining – Gas to Liquid PERFECT use for Isolated Tierra Del Fuego Gas Production

Setting the stage for Franklin’s Gas to Liquid plant in Tierra del Fuego. Why Tierra del Fuego?

1. That’s where the gas is!

2. Tierra del Fuego is the southern most province of Argentina, home of the Patagonia, isolated by the Chile and the Andes on the west, the Atlantic on the east and the Strait of Magellen to the north.

3. Best solution: take the natural gas and turn it into diesel fuel in a country that is starved for diesel fuel.

4. Argentina, like most of South America, suffers from infrastructure deficits. Transportation is impossible in many cases, roads do not exist and where they do exist are often impassable parts of the year.

Argentina is struggling to overcome energy shortages fueled by a lack of industry investment after nearly five years of government price controls. Its farmers are unable to plant their crops because of the diesel fuel shortage.

With Argentina’s rapid economic recovery in the past two years, gas and electricity demand has grown exponentially forcing the government to grant incentives to producers to ramp up production again as wellhead prices recover. As winter approached supply was still lagging behind demand and Argentina continues in an energy crunch. The government implemented emergency cuts on gas flows to industrial producers and exports to neighboring Chile.

Tierra del Fuego is home to an abundance of natural gas and the world’s best drilling companies are locating there.

Spain’s Repsol UPF is Argentina’s largest producer of gas. In January of 2007, Spain’s Repsol YPF produced 38% of Argentina’s oil and 28% of its gas. In 2004, the total net production of Repsol YPF in Argentina was 276.2 million barrels of oil equivalent, with proved net reserves of oil and gas estimated at the end of the year to be 2,364 million beop, equivalent to 8.6 years of production, based on the rate of production for 2004.

At the end of 2004, Repsol YPF had in Argentina mining rights to 113 blocks: 27 exploration blocks, with a total net area of 62,981 km2, and 86 exploitation blocks with a total net area of 24,834 km2, in the Neuquina, San Jorge, Austral, Cuyana and northwest basins.

French Total is Argentina’s second largest producer of gas. The French major produced 31 MMcf/d of gas in April, compared to 45 MMcf/d for Repsol.

French Total is engaged in the startup of natural gas production from its offshore Carina and Aries fields, located in Argentina’s southern Tierra del Fuego region, after more than a year of delays.

Production from the Carina and Aries fields, located in the country’s Austral Basin, will add an immediate 106 million cubic feet per day to help mitigate Argentina’s strained energy system. French Total estimates the project will eventually ramp up output to a plateau of 282 MMcf/d.

Apache Corp. of Houston acquired additional interests in Argentina’s Tierra del Fuego province from Argentina-based Pan American Fueguina SRL for US$429 million.

Apache gained interests in seven concessions in Tierra del Fuego, and is now the operator. Along with the company’s acquisition of Argentine assets from Pioneer Natural Resources Co., Dallas,in April, production is increased by 7,621 barrels of oil per day to a total of 8,960 barrels. Pro forma, Apache’s Argentina production is 148 million cubic feet of gas per day.

Gran Tierra Energy Inc., Calgary, has acquired interests in four properties in Argentina from Compania General de Combustibles SA (CGC), Buenos Aires, Argentina, for a total consideration of $2.1 million.

The assets acquired include a 93.18% participation in the Valle Morado Block, a 100% interest in the Santa Victoria Block and the remaining 50% interests in the Nacatimbay and Ipaguazu blocks bringing Gran Tierra’s holdings to 100%. The properties are on approximately 1.1 million gross acres in the Noroeste Basin. Gran Tierra will be the operator of all four properties.

Summary:

Argentina has a desperate need for diesel fuel. Gas once liquefied can be shipped. Tierra del Fuego is isolated geographically with an abundance of sea port access. Taking the natural gas and turning it into shippable diesel fuel is fundamental to Argentina’s growth. Diesel fuel is used both by farmers and industry. Some of the most experienced and solid drilling companies in the world have invested in Argentina and Tierra del Fuego.

GDR Privee, a New York City investment bank, has accepted this project and is acting as a financial consultant to the company to assist in securing project funding of $1.3 Billion for mining and energy agreements in Bolivia and contract in Argentina.

Charles Gregoire de Rothschild, GDR Privee Principal, and William A. Petty, Franklin Mining’s Consultant, will work together in securing project funding from Mr. Rothschild’s domestic and international banking relationships.

To Stock Guru ~ Franklin looks like its in the middle of a win and win bigger situation.