Reduced World demand and over supply have driven down natural gas and oil prices near historic lows where they are expected to remain for some time.This coupled with developing countries and new drilling technology makes it feasible for a low cost operation like PETROPANGEA, Inc. to excel as an independent broker offering wholesale petroleum products on a worldwide basis.
Our goals create a value added alliance with traders, physical suppliers and refineries providing our customers with one stop shop procurement of wholesale petroleum products on a global scale while reducing their overall operating costs.
To reach our projected growth model, we require $10 million to $15 million in capital investments.
PPI’s existing operations include a base line of over 180 specialized clients, and we anticipate double that number by the end of 2017.
The following summarizes key elements of our business plan: 1. Market
2. Target Customers
4. Scope of operations
5. Pro forma Financials for the past 3 years
6. Risk Assessment
PETROPANGEA's baseline of over 180 regular clients establishes our brokerage firm with procurement of petroleum products, and outlook for increased market share is bright.With investment capital, PetroPangea expects to add a GM, 4 to 5 new sales staff, increase purchasing power, and grow to over twenty five million in gross revenues while doubling our client base by year end 2017.Based upon an aggressive success rate, net profits from these clients are projected to be over $1.5 million dollars per year.The initial capital coupled with sales production will provide PetroPangea an estimated cash flow to fund aggressive growth, cover G&A costs and provide a handsome (ROI) Return on Investment.
In just the Houston, Texas USA market alone over 25 million gallons of D2 (#2 Diesel) are sold each month at about $0.20 profit margin per gallon. PetroPangea shares the bulk of this profitability with alliance partners, refineries, traders, and transportation cost overhead while still realizing an average of $0.10 cents per gallon profit margin.This regional footprint is repeated on global markets to include West Africa, Mexico, South America and SE Asia.
This business model includes the creation of a JV alliance with capital to gain 1/2% of global market share. Just the one petroleum product we specialize in will gain independence from traders, and increase potential to purchase direct from refinery sources.New blended products refined at our new terminal to increase market share and impact our profits on a per gallon basis to nearly double their current value.
PETROPANGEA decided in 2004 to develop a full service independent wholesale petroleum supply brokerage firm filling a niche in the market from clients desiring their fleet of ships and rigs to have one agency with extensive experience provide petroleum products and services regardless of where their equipment was deployed.This is done through extensive market coverage, market alignment, and market response to their petroleum requirements. PPI initiated this plan with heavy focus on the marine and offshore drilling industry accounts while developing container ship services, tug and barge operators and land based client opportunities.
Target customers include users of marine fuels such as D2 (Diesel fuel), MGO(Marine Gas Oil), MDO(Marine Diesel Oil), IFO 180Cst, 380, and 680 Heavy bunker fuels, lubricants of all major brands as well as specialty brands, environmental services, ancillary products such as coolants, synthetics, special blends, all backed by engineering and technical support service. Our plan with the new terminal location is to provide most of the products listed. Our land based target customers include users of low sulfur diesel, ultra low sulfur diesel, and all grades of gasoline.
In 2010, 2011, and 2012 we increased target customers with 25% growth rate each year and sold nearly 500,000 barrels.2013 we reached a 30% growth rate increase and sold over 100,000 barrels, with over $12,000,000 in revenue, and over $500,000 in gross profits.Our projected gallons in 2016 and 2017 are to reach over 20 million gallons, while more than doubling our revenues and profits.
Our alliance partner’s willingness to share more profits as well as develop new products and special blends of products are the key to increasing profit margins while the economy recovers from recessional downturns.
Assuming a capital investment and or JV alliance our growth stability impact on profit margins with purchasing power, increased sales, and product cost reduction will more than double to $0.20 cents per gallon providing well over $1,500,000 in gross profits.
Our clients report significant savings and the use of Traders and most other Brokers in doing business with our Brokerage Firm and have committed to years of relational growth.
SCOPE OF OPERATIONS
Operations are summarized into three groups:
1. Our G&A staff
2. Our alliance partners
3. Our Sales staff
PETROPANGEA operates in Seabrook, Texas along the upper Texas Gulf Coast positioned to accessrefineries, dock locations, industrial, construction and major corporations inside the Energy Capital of the world, Houston, Texas USA.We own over 3000 sq. ft. of office space plus rent warehouse of additional 10,000 sq. ft. at 630 Mcfarland, Houston, TX, with the ability to grow onsite to a sizeable corporation.
PPI operates with a Corporate Secretary (COO) overseeing all phases of administrative operations. Our Executive Assistant (Treasurer) oversees accounting department for AP/AR, and accrual based financial operations. Our CSR interfaces with supply, transportation and customer satisfaction requirements.
PPI maintains over 150 alliance partner’s worldwide providing excellence in delivery, price, products, and support to our client needs.Most of our partners are continually bringing us opportunities for increased growth in market share with new technologies, products, and exclusive distribution performance criteria.
PETROPANGEA has a sales staff that promotes professionalism, integrity, and performance bringing together broker opportunities on equipment, ideas, new markets, supply, and alliances that increases our market share. PPI anticipates additional sales and support staff as our corporation grows in size.
Summary:An investment for this plan is $10 Million to $15 Million and the payback is 112% over the next five years.There are a few critical success factors:
1. Successful capture of at lease 1/2% of the world market 2. Successful hiring and retention of personnel 3. Purchasing power increase through this investment allowing reduced overall cost of goods 4. Successful integration of non-fuel related services such as equipment brokerage, ancillary products and alliance building 5. Development of New Terminal - Highlands, TX
FINANCIAL PRO FORMA
A complete booklet of financials to be available along with a spreadsheet of the following:
1. Sales Revenues
2. Direct Operating Expenses
3. Indirect operating expenses
4. Selling expenses
5. G&A Overhead Expenses
6. Total Expenses (including P&L)
As with all investment opportunities a degree of risk is involved. PETROPANGEA desires to mitigate these risks to their absolute minimum and exposes the following systems that are subject to risk:
1. Price fluctuation
6. Economic Impacts
A complete risk analysis spreadsheet is available along with control parameters.
PetroPangea’s Five Year Plan
PetroPangea, Inc was founded by J. R. Harrison who successfully launched PPI in 2003 while maintaining contractual consulting work for Shell Oil Corporation, and seated on advisory council for a mid cap drilling corporation.Mr. Harrison previously managed the Western Gulf Region for a Major Oil Corporation as well as being instrumental in a JV operation bringing a Houston based distributor and Halliburton Energy Services to begin fuel operations in Galveston, Texas.
Mr. Harrison possesses the extensive experience as President of PetroPangea, Inc. to implement a successful plan.Our diligent work and employee growth with credible experience will maintain the highest profitability with the lowest amount of overhead and risk possible for our clients and ourselves.
During 2010 and the first two quarters of 2011 PPI successfully reached a milestone of over $15 million in gross revenues with an estimated ROI capital GP of nearly $1 million dollars which represents an 800% ROI from initial startup capital of $80,000.00.This 800% ROI represents an annualized ROI of over 110%.
Based on projections and performance to date, it is estimated that PPI will reach new milestones of 70% growth over the next five years with gross revenues from sales exceeding $ 25 million and GP exceeding $2.5 million.With a $10 million to $15 million dollar investment and successful growth plan this investment will equate to a ROI of at lease 112%.By the end of 2017, revenues from existing sales should fund all future development and provide positive cash flow covering all G&A expenses along with salaries of company officers.
Looking into the future
Like any successful fledgling corporation, we need a large pool of capital.Our five year plan with implemented growth goals will continue a forecast beyond marine and offshore business to more diverse land based business.Large contractual buy/sell purchases of equipment and various grades of petroleum products will produce more income.More importantly we need a competitive advantage with the large country owned oil companies such as Petrobras, Pemex, Sonangol, Lukoil, Irving Oil, etc. PPI has many buy opportunities on spot and contract purchases of special blended products such as MGO and MDO which will establish our continued market share growth.
The bulk of this capital formation needs are to be satisfied in the first quarter of 2017. PPI has the potential to make a public terminal located in Highlands, TX, along the Houston ship channel.
Our highly respected corporation is gaining a perpetual agreement with very large corporations around the world and from this base line vantage point we will make geographical leaps and bounds in the future.Our proven company track record since its inception has increased production in sales which translates to better than 70% success rate.
Central to our strategy is the belief that sound expansion based on consistent growth will be the stepping stones to a secure future, rather than a volatile range of expansion too fast for management to control.We must have a very large pool of prospective opportunities on our plate, and the new company terminal in Highlands, TX will provide excellent contracts even in economic downturns.Consulting with credible experts and rigorous grading of prospects is a great formula for investor success.
The Investment Payoff
With at least $10 million to $15 million in new capital, PPI plans to hire a GM and at least two new sales representatives in 2016, add new satellite office in the new terminal in Highlands, TX, in March 2017 and 4 to 5 new reps along with a CFO in 2017.The most likely scenario is a 70% success rate will add $17 million in production in 2017 and a cumulative total of more than $50 million in sales revenues in four years by the end of 2020.
This projected four year production growth will most likely increase PPI’s assets from proven sales records by nearly 200% to over $2.5 million.$50 million in sales production by year end 2020 will bring reserves of profit to a value of over $5.0 million.
When PPI secures the needed capital and executes this plan, initial investors should be handsomely rewarded.
Forward Looking Statements:
PETROPANGEA forecast may include forward looking statements solely based on past performance, present production and future projections. Some of these projections rely on sound management practices, economic conditions and moderate COGS flucuations. Actual results could vary.
Johnny Ray (J.R.) Harrison, formally Regional Manager, with major oil corporations, currently President of PPI, received a BA in Business Administration from the University of Florida in 1980 after honorable discharge from the U.S. Army, where he served from 1975-1977.Mr. Harrison began career in the oilfield with Energy Development Corp. after attending University of Houston’s continuing education in Mechanical Engineering.He held various positions leading to VP of marketing and sales.In the late eighties joined a major oil corporation working from S.W. Commercial Sales Division in Dallas, Texas.Continued education with an executive grant program and earned a Society of Tribologist and Lubrication Engineers degree from University of Houston in 1995.
In 1998, Mr. Harrison designed a JV package bringing major suppliers and clients into a complete turnkey dock operation supply to the offshore drilling industry operations in the Gulf of Mexico.He returned to downstream operations and staffed the JV as manager with a local distributorship until subsequent formation of PPI in 2003.
Member Society:ASME, IADC, OMSA, STLE, GICA, AADE
Member Board of Directors:Advisory Council to Pangea Petroleum Corporation, Mesa Resources
Publications:Lubrication and Engineering, and Texas Monthly Magazine
2206 Gleneagles Dr. League City, Texas 77573 Office: (281) 334-9110