Introduction

CosmoSeis is an ideal medium to longer term investment, especially well suited to investors that believe the world’s rapid economic development and growth in population will lead to increased demands for hydrocarbons. Logic suggests, as hydrocarbon demands increase and hydrocarbon supplies decrease, due to natural production declines that occur with the depletion of existing fields, then there will be very strong upwards pressures on hydrocarbon prices. With a dedicated integrated team of experienced professionals, unique advanced technologies, low cost base, significant competitive advantages, strong strategic alliances, and high level official contacts in the Middle East, Asia, Africa, Australia and North America, CosmoSeis is extremely well positioned to benefit from escalating hydrocarbon prices, and well insulated against any temporary retractions in prices. We believe that investments in hydrocarbons will perform extremely well in either the fairest or foulest of future economic climates.

Some important questions that investors may really want to know the answer to:

“What do you see as being the main risks in CosmoSeis’s business strategy?” 

Political risks are moderate to high in some of the countries which CosmoSeis is operating in and will be operating in. This risk will be substantially mitigated by spreading CosmoSeis’s hydrocarbon equity investments portfolio, and other activities into many different countries. Exploration risks will also be significantly mitigated by applying the most advanced technologies and the best decision making strategies that are available.

“What has been achieved since CosmoSeis’s inception?”

CosmoSeis has established its headquarters, seismic processing and interpretation facility in the CERT technology park, Abu Dhabi, UAE. The centre is well furnished, with a network of computer workstations and has the capacity to accommodate 20 geoscientist, plus management and support staff. The unique design of the grid computing network provides very high performance computing from very economic hardware. The new NemeSys technology has been implemented and has been successfully demonstrated to produce top quality results for several important customers. This technology is producing results that are significantly superior to those offered by competing companies. Several important strategic alliances have been negotiated, and memorandums of understandings have been signed with CERT, KACST, Halliburton and ResModTec. Negotiations on some further important strategic alliances are now also well advanced. Negotiations for several processing and interpretation services contracts are now almost finalized and will be signed shortly.

“What are CosmoSeis’s future strategic business development plans?”

The main business strategy is for a staged development of business activities along with an expansion of those activities into other markets. In the next stage, CosmoSeis intends to expand the offerings of seismic processing and interpretation services into the SE Asian market as well as investing more efforts into developing new advanced seismic processing computer software. Once these activities are generating substantial cash flow and profits CosmoSeis intends to apply its cash flow along with investor funds to expand its activities, possibly with interests in seismic acquisition, G&G data management, and in seismic exploration by acquiring equity stakes in attractive seismic exploration and production permits.

“At what price does CosmoSeis consider it to be worthwhile to invest capital into equity stakes in hydrocarbon reserves?”

Ideally the entry price for buying into hydrocarbon reserves should be as low as possible, however realistically CosmoSeis is targeting to buy into hydrocarbon reserves at below USA $10 per producible barrel of oil equivalent. Entry at such a level is still relatively easy in today’s market and will provide the opportunity to produce around a 10 fold return on funds invested. In areas with exceptionally favourable production economics, investments below USA $15 per producible barrel, will still create very attractive returns.

“What types of hydrocarbon prospects is CosmoSeis considering in investing in?”

Initially CosmoSeis will focus its interests into onshore areas, with a strong preference to areas that are close to infrastructure and large energy consuming markets. Onshore hydrocarbon prospects are much quicker and cheaper to explore and produce. Once the onshore hydrocarbon equity asset portfolio has grown sufficiently then CosmoSeis will consider participating in transition zone and offshore exploration and production prospects. Usually these areas offer the prospect of finding much larger hydrocarbon reserves, albeit at greater exploration, production and infrastructure costs.

“What measures does CosmoSeis management take to maximize investor returns and minimize the risks?”

The main initiatives taken to increase productivity and minimize capital investment centre around using advanced technology. For instance, to reduce investments into costly computer hardware, it has been possible to perform an in depth analysis of the available hardware alternatives to determine which one provides the best cost versus performance and reliability. To increase staff productivity, workflows are analysed in detail to identify steps that are disproportionately slow or are difficult to QC, and then better alternatives to these steps are developed. Risks are being considerably mitigated by marketing a larger variety of services to a more diverse customer base, rather than spending too much effort on chasing the “big jobs”. 

“Is CosmoSeis considering any expansion of its business into other markets?” 

Yes; CosmoSeis is initially contemplating entering the SE Asian market, most probably with a new facility in Kuala Lumpur (Malaysia). Further in the future, other locations such as the Former Soviet Union, India, China, North Africa, and South America will also be considered.

“What values does CosmoSeis consider most important in the pursuit of its business aspirations?” 

Honesty, integrity and the preservation of CosmoSeis’s good brand name are the most important values. We at CosmoSeis always seek to deliver the highest quality of work, in a timely manner if possible. We are most interested in performing advanced seismic processing and interpretation services at reasonable prices. We are not prepared to compromise data quality and our good trade name for the sake of offering exceptionally quick turnaround or excessively low prices.

“Does the CosmoSeis CEO have an equity stake in the company?”

Yes, the CosmoSeis CEO has invested considerably in the company, firstly by electing to exchange his intellectual property interests in several key inventions, including NemeSys and ARK Migration, into company shares and options. Next, he has also been electing to have only about half of his remuneration paid in cash, with the other half being used to acquire company shares and options. These initiatives reflect that the CEO has a great deal of confidence in the future prospects of CosmoSeis; as he is prepared to invest significant portions of his personal wealth.

“Do CosmoSeis employees and management have equity stakes in the company?”

Yes! CosmoSeis has implemented a retirement profit sharing plan based entirely on investing in company shares. Under this plan all employees and management have the opportunity to invest up to 5% of their base salary into company shares. The company will match their investments into the plan, subject to a 5 year vesting period. The vesting period operates as follows: after each full year of service, the employee’s vested interests into the company’s matching contributions will be increased by 20% until reaching 5 years of service after which the employee will be considered 100% or fully vested.