Investor Presentation
September 19, 2006
OTC BB: FODL
Disclaimer
• This document contains forward-looking statements. The forwardlooking statements may be identified by words like "plans", "expect",
"focused", "vision" and similar expressions. These forward-looking
statements are based on current conditions and assumptions and
are not a guarantee of future events. Actual events could differ
materially as a result of changes to the Company’s plans and the
impact of certain events, risks and uncertainties. All statements that
address expectations or projections about the future, including
statements about the Company’s strategy for growth, expected
expenditures, commodity prices, costs, schedules and production
volumes, operating or financial results, are forward-looking
statements. These statements are not guarantees of future
performance and involve a number of risks, uncertainties and
assumptions.
OTC BB: FODL
Forster Drilling Corp., Investor Presentation
2
Investment Highlights
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Forster, a Name Synonymous With Drilling For Over 75 Years
Early Stage Pure Play Onshore Driller
Concentration in Forster's own backyard - Texas and New Mexico
Building a Fleet of Standardized, Modern, Bigger, Better Rigs In-house
A Planned Growth Company
Small Additions to Fleet Meaningful
OTC BB: FODL
Forster Drilling Corp., Investor Presentation
3
Executive Summary
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Forster is building/rebuilding a modern fleet of bigger, better rigs standardized
as to make (National Drawworks and Lee C. Moore Masts) and rated at between
950hp and 2,000hp with 11,000 to 20,000 foot maximum drilling depths.
We will concentrate our operations in own backyard, Texas and New Mexico,
where rig utilization rates and day rates remain higher, due to prospect quality
and a heavy concentration of natural gas resources.
In addition to the original capital contribution by Company founder F. E. Forster
III, we have raised approximately $5M dollars from three equity rounds. Those
funds were used to purchase seven drawworks, two masts, a substructure,
rotary tables, swivels, block and hook, floor motors and mud pumps. This also
paid for the construction and deployment of our first rig, Forster Rig No. 15, a
National 50CA (MEL Valuation $9.5 million dollars - construction costs $4.5M).
4th quarter 2006 - we plan to build two rigs and deploy one. We plan to finance
this growth with $5M in debt and $5M in equity.
In 2007 we plan to build seven rigs and deploy eight rigs. We intend to finance
this growth with cash flow, $17M dollars in debt and $11M in equity.
By the end of 2007, we plan to seek a listing on a senior U.S. Stock Exchange,
deploy a total of ten rigs and participate with our customers in the exploration
for and production of oil and natural gas.
OTC BB: FODL
Forster Drilling Corp., Investor Presentation
4
Market Analysis
OTC BB: FODL
Current Rig Demand
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Growing demand for natural gas, the transition to unconventional gas
(coal-bed methane and shale gas), steeper declines rates, smaller
reserves per well, rapidly rising returns to operators, along with an
antiquated rig fleet translates into current demand and long-term
demand for rigs outpacing supply.
Baker Hughes Rotary Rig Count
U.S. Gas
1,325
77%
U.S. Oil
307
18%
U.S. Offshore
95
6%
Total
1,727
*Source September 8, 2006 Baker Hughes Weekly Count
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Over the past decade, up to 90 percent of all wells drilled in the U.S.
were drilled for natural gas.
OTC BB: FODL
Forster Drilling Corp., Investor Presentation
6
Trillion Cubic Feet
Natural Gas Demand by Sector
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According to the Energy Information Administration, natural gas
demand is expected to increase by approximately 22% in the next
decade, from a current level of 26 Tcf per year to 32 Tcf per year, with
the largest increases coming from the Industrial and Electricity
Generation sectors.
OTC BB: FODL
Forster Drilling Corp., Investor Presentation
7
Natural Gas Production by Sector
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OTC BB: FODL
In the last decade,
unconventional U.S. natural
gas production has
increased from 24% of total
production to 41% and will
continue to be the largest
contributor to domestic
production in the coming
years.
Unlike the global oil market,
the natural gas market is
limited to North and South
American production, due
to the logistical constraints
of pipeline infrastructure
and the financial
constraints of shipping
LNG.
Forster Drilling Corp., Investor Presentation
8
Unconventional Natural Gas
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Unconventional Gas
include: Shales, Tight
Sands and Coal Bed
Methane. Examples
include the Barnett
Shale and the San Juan
Basin.
Source: Gas Technology Institute
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They are typically resource plays, which have a high probability of
success per well, tempered by severe initial decline rates, low total
recovery and smaller reserves per well. Basically, lower risk and lower
total production wells.
The net effect is – more wells are needed to produce the same amount
of gas.
OTC BB: FODL
Forster Drilling Corp., Investor Presentation
9
Forecasted New Production
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This illustrates the additional annual production needed to offset
production decline and domestic demand growth.
OTC BB: FODL
Forster Drilling Corp., Investor Presentation
10
Shale Reserves in the Lower 48
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U.S. shale production is still in its infancy and will require decades of drilling to
develop.
OTC BB: FODL
Forster Drilling Corp., Investor Presentation
11
Rig Count and Forecasted Demand
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At the beginning of the last oil boom (1973-1983), the active U.S. land based rig count
was 1,100 rigs with 1,700 rigs available. By 1983, the number of active rigs had grown to
4,000 with over 5,500 rigs available.
At the beginning of the current boom 2003, the U.S. active land rig count was 800 rigs,
with 1,600 rigs available.
Fast-forward to 2005, we are to the point where excess supply has been cannibalized, the
existing rig fleet is twenty-five years old, and rig utilization is approaching 98% in many
active regions of the United States.
Raymond James estimates that there will be demand for an additional 850 rigs in the U.S.
over the next five years. That represents as 50% increase over today’s rig fleet and
equates to a 7% compounded annual growth rate.
It is anticipated that the current shortfall in drilling equipment will last for up to ten years.
In 1981, the available domestic rig fleet peaked at 5,530 or approximately 4,000 more rigs
than are available today. At the 7% compounded growth rate it will take twenty years to
reach that level again.
OTC BB: FODL
Forster Drilling Corp., Investor Presentation
12
Average Rig Utilization
120%
100%
Pioneer
80%
Helmerich & Payne
60%
Grey Wolf
Patterson-UTI
40%
Nabors
20%
Source:
0% Company Filings
2000
•
2001
2002
2003
2004
2005
2006
Rig utilization rates have continued to increase, even while
companies have added to their fleets.
OTC BB: FODL
Forster Drilling Corp., Investor Presentation
13
Drilling Economics
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Exploration and Production companies/operators pay drillers by
dayrate contracts, footage contract (by the foot) or turn-key contact
(negotiated payment for drilling to an agreed upon depth).
Day rate contracts are considered the most profitable for the contract
drillers and are thus preferred. Over 85% of all drilling contracts are
day rate.
Under a day rate contract the contractor is responsible for labor,
insurance, rig maintenance, drill pipe, most consumables, "soap, dope
and rope". The operator is responsible for rig mobilization and
demobilization, drilling fluids and fuel.
Dayrates have doubled in the past 12 months for a 12,000' gas well
from 10,000 dollars per day to 20,000 dollars per day. Much of the
increase can be attributed to an increase in rig utilization rates in
Texas from 87 percent to 96 percent.
As demand outstripped supply, operators were forced to bid-up
dayrates to insure rig availability.
While contractors have experienced increased labor and equipment
costs over the past 12 months, much of the increase in day rates falls
to the bottom line.
OTC BB: FODL
Forster Drilling Corp., Investor Presentation
14
Drilling Economics
Company
Bronco Drilling Co. Inc.
Grey Wolf Inc.
Nabors Industries Ltd.
Patterson-UTI Energy Inc.
Unit Corp.
Average
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Ticker
Mkt. Cap
Gross
Margin
NasdaqNM:BRNC
AMEX:GW
NYSE:NBR
NasdaqNM:PTEN
NYSE:UNT
437.51
1,650.13
9,125.73
4,155.98
2,208.83
3,515.64
48.81%
43.29%
45.69%
50.51%
56.83%
49.02%
EBITDA
Margin
41.23%
41.18%
38.64%
48.43%
55.47%
44.99%
Contract dayrates have doubled over the last 12 months and the current per
day economics for a typical 12,000 foot gas well contract are as follows:
Dayrate: 20K , Labor 7K, Maintenance, Insurance and Consumables 3K
.......(Remember on a dayrate contract operator pays for fuel)
Dayrate: $20K
Labor: $7K
Maintenance, Insurance and Consumables: $3K
Gross Margin = $10K (50%)
Less: G&A: $1K
EBITDA Margin = $9K (45%)
OTC BB: FODL
Forster Drilling Corp., Investor Presentation
15
Current Business
OTC BB: FODL
Introduction
FORSTER, A NAME SYNONYMOS WITH DRILLING FOR OVER 75 YEARS.
• Forster Drilling Corporation is a Nevada domiciled publicly traded
(OTC BB: FODL) holding company engaged, through its' wholly-owned
subsidiaries, in three related business activities:
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Forster Drilling, Inc. – Providing contract onshore drilling services to oil
and natural gas exploration and production companies.
Forster Tool and Supply, Inc. – Building new rotary drilling rigs and
refurbishing to "like new" stacked rotary drilling rigs and major rig
components.
Forster Exploration and Production, Inc. – Joint Venture participation with
drilling service customers in the exploration, development and production
of oil and natural gas.
The short term goal of the Company is to build and/or refurbish and
put into service under term daywork contracts 10 rotary drilling rigs in
our own backyard, Texas and New Mexico.
The Company's long term goal is to build new and/or refurbish to "like
new" and/or buy new and put into service under term daywork
contracts 40 rotary drilling rigs.
OTC BB: FODL
Forster Drilling Corp., Investor Presentation
17
History
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Fred Forster, Sr. started his drilling career with Manville and
Thompson Drilling (later A.W.Thompson Drilling) in the early 1920s. He
worked for A.W. Thompson for over 30 years, during which he made
many innovations that are standard practices today.
Fred Forster, Jr. joined his father in 1948 and together they founded
Forster Drilling in 1952, which grew to 10 rigs.
In 1966, Forster Drilling joined with Major and Giebel Oils of Midland to
form the partnership Major, Giebel and Forster (later MGF Oil). MGF
grew to 55 rigs.
In 1975 Fred Forster, Jr. Retired from MGF and was joined by his son
Fred Forster III, together the organized the second Forster Drilling in
1977 and acquired 4 rigs. This Company was eventually sold to
Williams Brothers.
In 1983 the Forsters acquired Pulliam Drilling a 3 rig company that was
eventually sold to Wes-Tex Drilling.
First quarter 2005 Forster Drilling Corporation was organized pursuant
to the laws of the state of Nevada with Fred Forster, Jr. as Chairman
Emeritus and Fred Forster III as the Chairman and CEO. The Company
is currently building a 7 rig fleet.
OTC BB: FODL
Forster Drilling Corp., Investor Presentation
18
Contract Drilling Services
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The Company's primary focus is to provide contract onshore drilling
services to companies that explore for and produce oil and natural gas
("operators").
Drilling operations will focused in three major geographical regions:
(i) The Permian Basin of West Texas and Southeastern New Mexico
(ii) The Barnett Shale Trend of North Texas
(iii) The Cotton Valley/Travis Peak Trend of East Texas.
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The Company will concentrate its operations in Texas and New
Mexico, where utilization rates and dayrates remain higher, due to
prospect quality and higher concentrations of natural gas.
Natural gas production is typically found deeper and generally
requires bigger, better equipment & more experienced crews to
exploit.
Up to 90% of all wells drilled in the U.S. during the last 10 years have
been drilled for onshore natural gas.
The trend in drilling depths is ever deeper. The Company is currently
refurbishing to "like new condition" a standardized fleet of modern,
bigger, better rigs.
OTC BB: FODL
Forster Drilling Corp., Investor Presentation
19
Forster’s Current Fleet
Count
Description
Planned Deployment
Horsepower
Rated Depth
1
Rig No. 15 National 50CA
Sep-06
950hp
11,000'
2
Rig No. 12 National 55
Nov-06
1,100hp
13,000'
3
Rig No. 18 National 110UE
Jan-07
2,000hp
18,000'
4
Rig No. 16 National 100
Mar-07
1,500hp
16,000'
5
Rig No. 10 National 50A
May-07
950hp
11,000'
6
Rig No. 11 National 55
Jul-07
950hp
11,000'
7
Rig No. 17 National 50A
Sep-07
950hp
11,000'
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The Company is standardizing its' Fleet as to Drawworks and Masts:
National and Lee C. Moore. The Industry "Gold Standards".
The Company plans to trade its' Continental EMSCO A550 for a
National 55
The Company is looking to acquire an additional National 55 and two
National 80Bs to rebuild and deploy in 2007.
OTC BB: FODL
Forster Drilling Corp., Investor Presentation
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Fleet Deployment
Rig No. 15, National 50CA
Rig No. 12, National 55
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Deployed: September 12, 2006
Operator: Chesapeake Energy
Term: 365 days
Dayrate: $16,000
Location of Rig: New Mexico
Rig Condition: As New
Appraised Value: $9,500,000
Deployed:
Operator:
Term:
Dayrate:
Location:
Rig Condition
Appraised Value:
Rig No. 18, National 110UE
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OTC BB: FODL
Deployed:
Operator:
Term:
Dayrate:
Location:
Rig Condition
Appraised Value:
Forster Drilling Corp., Investor Presentation
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Manufacturing, Refurbishing and
Fabricating
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The Company owns a purpose-built manufacturing facility in Odessa,
Texas. The facility consists of five fenced acres, with controlled
access, two 15,000sq ft "rig hangers" each with twin overhead electric
cranes for heavy equipment mobilization and assembly, a stand alone
engine shop, complete machine shop, sandblasting/paint booth and
associated offices.
This facility provides an all-weather environment with the necessary
tools and equipment to build new rigs, refurbish/rebuild stacked rigs &
major components to "like new" and make each rig field ready.
The Company currently employs experienced machinists, mechanics
and fabricators to build and/or refurbish much of each of our rig fleet
in-house.
• The Company can build or rebuild a rig using rebuilt
components for approximately 1/2 the cost of buying a new
build.
OTC BB: FODL
Forster Drilling Corp., Investor Presentation
22
Exploration and Production
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The Company's oil and natural gas exploration and production ("E&P")
activities will leverage off its' contract drilling activities.
The Companies E&P will be focused in the same geologic basins as
its' contracting activities: The Permian Basin, The Ft. Worth Basin and
The East Texas Basin.
Our hands-on experience with exploration and development of trends
within these basins and teaming with customers that have a proven
tract record in the trend will allow management to high-grade
prospects, thus lowering risks while increasing returns.
Due to the current tight supply/high rig utilization rates in these
Basins, management anticipates that the Company will be able to
participate in high quality prospects with customers on an unpromoted basis.
The Company will participate in customers prospects as a time proven
method of building assets and income not dependent on service
contracts.
OTC BB: FODL
Forster Drilling Corp., Investor Presentation
23
Location of Drilling Operations
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The Company will offer its' contract drilling services and conduct its'
oil and natural gas exploration and production activities in its' own
backyard, Texas and New Mexico where rig utilization rates and day
rates remain higher due to prospect quality and heavy concentrations
of natural gas.
Permian Basin West Texas Southeastern New Mexico encompasses
66,000sq miles and according to the DOE contains estimated 29
percent of the US's yet-to-be-discovered oil reserves.
Barnett Shale Trend North Texas-Barnett Shale is a continuous,
unconventional gas accumulation, a single very large gas field that
encompasses 1,000s of sq. miles. Advancements in fracturing
technology have enabled operators to make the Barnett Shale the
regions largest gas producer.
The Cotton Valley/Travis Peak Trend of East Texas is a continuoustype basin-center conventional gas system that encompasses 1,000s
of sq miles. One of the 25 onshore provinces that USGS says contain
95 percent of the U.S. known and undiscovered gas resources. Wells
drilled in the Cotton Valley are: predominately natural gas, have high
probability of success, have significant development potential and
repeatability.
OTC BB: FODL
Forster Drilling Corp., Investor Presentation
24
Competitive Strategy
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We will concentrate our operations in our backyard, Texas and New Mexico where
rig utilization rates and day rates remain higher due to prospect quality and heavy
concentrations of natural gas resources.
Natural gas is typically found deeper and natural gas exploration generally requires
bigger, better equipment and more experienced crews to drill the wells.
Rigs rated to deeper depths will demand higher dayrates and deliver wider profit
margins than rigs rated to shallower depths.
We will build bigger, better rigs.
We will standardize our fleet as to make: National Drawworks, Lee C. Moore Masts,
the industry "gold standard“.
Bigger, better rigs, a standardized fleet attracts and retains more experienced
crews.
We will maximize our rig utilization rates by:
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Making our customers stakeholders in the Company and we, in turn ,will become
stakeholders in our customers oil and natural gas exploration and production
projects.
We will not build a rig without first having customer for it.
We will build the rig to the customers requirements.
We will develop in-house our own high quality exploration and development
prospects to JV with industry partners and drill them with our own equipment.
Our Competitive Strategy emphasizes working close to home, building our fleet
internally, one rig at a time as needed, building a standardized fleet of modern,
bigger, better rigs, the quality and experience of our crews and the Forster 75-year
history to differentiate us from our competitors.
OTC BB: FODL
Forster Drilling Corp., Investor Presentation
25
Growth Plan – Use Of Proceeds
OTC BB: FODL
Looking Back
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In addition to the original capital contribution by Company founder,
F.E. Forster III, the Company has raised approximately $5M from three
equity rounds.
Those funds were used to purchase seven drawworks, two masts, a
sub, rotary tables, swivels, block & hooks, floor motors and mud pumps
and the build and deployment of the Company's first rig, Forster Rig No.
15, National 50CA.
Many of Rig 15's major components: drawworks, mast, rotary table,
swivel, block and hook, floor motors and mud pumps were purchased
used and rebuilt to "as new condition".
Other major components: the substructure, mud system, water tanks,
and crew quarters were fabricated in-house.
The Company spent approximately $4.5M build the rig and purchase
drill pipe. Rig 15 has been independently appraised by MEL Valuations
at $9.5M.
Rig 15 has been deployed to New Mexico pursuant to a 365 day term
daywork contract at a dayrate of 16,000 with anticipated gross margins
of 46%.
The Company is currently building Forster Rig 12, a National 55. This
Rig has been spoken for and will be deployed in November to the
Barnett Shale.
We have accomplished a lot with a little, just imagine what we could do
if we were fully funded.
OTC BB: FODL
Forster Drilling Corp., Investor Presentation
27
Growth Plan
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Company's short term goal is to build and deploy (put into service) ten
rigs.
4th quarter 2006-Company plans to build two rigs and deploy one.
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2007-Company plans to build seven rigs and deploy eight.
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Company plans to finance this growth through cash flow, bank debt of
$17M and equity of $11M.
Company 2007 cap-ex budget is $45M.
2008-Company plans to build five rigs and deploy five rigs .
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Company plans to finance this growth through bank debt of $5M an equity
of $5M.
Company 4th quartet 2006 cap-ex budget is $10M.
Company plans to finance this growth through cash flow.
Company 2008 cap-ex budget is $15M.
Company's long term goal is to build and put into service forty rigs.
As the Company grows its' Fleet, it will seek to participate in
customers oil and natural gas exploration and development projects,
in order to build assets and cash flow independent of contract drilling
services.
OTC BB: FODL
Forster Drilling Corp., Investor Presentation
28
Valuations
OTC BB: FODL
Capitalization Table
Fully Diluted Capitalization
Founders Shares (2005)
Other
Series A
Series B
Public Shell Shares
Total Shares
31,580,000
2,845,464
2,530,000
3,099,999
2,000,000
42,055,463
• Fully Diluted shares outstanding are approximately 42M shares.
OTC BB: FODL
Forster Drilling Corp., Investor Presentation
30
Comparables
Company
Bronco Drilling Co. Inc.
Grey Wolf Inc.
Nabors Industries Ltd.
Patterson-UTI Energy Inc.
Unit Corp.
Average
Ticker
Land
Rigs
FYE 2006
EV/Rigs
TTM
P/E
TTM
P/OCF
NasdaqNM:BRNC
AMEX:GW
NYSE:NBR
NasdaqNM:PTEN
NYSE:UNT
64
114
536
403
111
7.69
12.13
21.10
9.94
20.99
14.37
N/A
9.91
13.09
8.24
9.02
10.06
28.82
6.64
N/A
6.35
N/A
13.94
• Forster’s peers are trading at approximately $14M in Enterprise Value
(EV) per rig.
OTC BB: FODL
Forster Drilling Corp., Investor Presentation
31
Asset Value Proposition
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Total construction costs for Rig #15 were approximately $4.5M, (well
below the industry average for this type of rig).
Current third party appraisal for the rig is approximately $9.5M with a
$7.5M Loan Value.
Forster is one of the few remaining companies with the expertise to
build a rig from the ground up, which results in large cost savings
limits competition.
OTC BB: FODL
Forster Drilling Corp., Investor Presentation
32
Investment Considerations
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Company Management has demonstrated that it can execute.
Pure-play onshore driller.
High Growth.
Small additions to the fleet meaningful.
High Quality Assets.
Conservative Balance Sheet.
Return on investment focus.
The Company's short-term objective is to build and deploy 10 rigs.
Upon achieving this short-term goal, the Company anticipates that
then "orderly liquidation value" of the fleet would approach 110 million
dollars.
As a going concern The Company's public peer group valuation based
on multiples of pro-forma, sales, earnings, cash flow and book value
could approach 250 million dollars
OTC BB: FODL
Forster Drilling Corp., Investor Presentation
33
Conclusions
OTC BB: FODL
Conclusions
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Increasing domestic demand for natural gas coupled with lower reserves
per well and steeper decline rates will necessitate more wells and more
rigs.
The excess supply from past booms have been consumed and the
current shortfall in drilling equipment could last for ten years. The
Company has built and deployed one rig.
The Company plans to build two rigs and deploy one 4th quarter 2006,
The Company plans to build 7 rigs and deploy 8 in 2007 for a total of 10
rigs built and deployed.
The Company's short-term objective is to build and deploy 10 rigs. Upon
achieving this short-term goal, the Company anticipates that the then
"orderly liquidation value" of the 10 rig fleet could approach 110 million
dollars. As a going concern, the Company's peer group valuation based
on multiples of pro-forma sales, earnings, cash flow and book value
could approach 250 million dollars
OTC BB: FODL
Forster Drilling Corp., Investor Presentation
35
Contacts
Forster Drilling Corporation
6371 Richmond Ave., Ste. 275
Houston, TX 77057
www.forsterdrilling.com
For Information Contact:
W. Scott Thompson
wst@forsterdrilling.com
713.823.2489
OTC BB: FODL
Jonathan Buick
jbuick@buickgroup.com
1.877.748.0914
Forster Drilling Corp., Investor Presentation
36
Appendix
OTC BB: FODL
Management
Fred Forster Jr., Chairman Emeritus
After service in WWII as a bomber instructor pilot, Fred Forster, Jr., joined his
father at Thompson Drilling in 1948 as an engineer and then rig supervisor
(tool pusher). In 1952, they formed Forster Drilling headquartered in Odessa,
Texas with one rotary-drilling rig. The Company ultimately grew to a 10-rig
fleet including a division operating in Arkansas. Mr. Forster served as
President of Forster Drilling from 1952 to 1966. In 1966, Forster Drilling
consolidated with Major and Giebel Oils of Midland, Texas forming the
partnership of Major Giebel and Forster (later becoming MGF Oil
Corporation) and MGF Drilling Company, a wholly owned subsidiary of which
Mr. Forster became President. MGF Drilling eventually grew to a 55 rig drilling
fleet operating in five geologic provinces including offshore drilling barges. Mr.
Forster was a Partner with Forster Companies from 1980 to 1988. He has
worked as an Independent Oil Operator since 1988-present. Drilling
companies under Mr. Forster’s direction have drilled several thousand wells
since 1948. Drilling companies under Mr. Forster’s direction have drilled
several thousand wells since 1948. Mr. Forster received a BS in Chemical
Engineering from The University of Texas at Austin in 1948.
OTC BB: FODL
Forster Drilling Corp., Investor Presentation
38
Management
Fred Forster III, Chairman, President and CEO
Fred Forster III has served as Chief Operating Officer and Chairman of the Board of
Directors of Forster Drilling Corporation since its inception in 2005. Mr. Forster has over
30 years of experience working in the land drilling and financial industries. He began
working on drilling rigs during summer vacations. After graduating from the University of
Texas at Austin with BBA and MBA degrees, he and his father acquired a 4-rig drilling
company in 1977 which was renamed to Forster Drilling Co. Inc. He serviced as VicePresident and remained with the company after it was sold to Williams Brothers of
Tulsa, OK. In 1981, he acquired and served as President of Pulliam Drilling from 1981
to1984 and as President of D & F Machine Company, Odessa, Texas 1980 from 1985.
D & F Machine repaired and refurbished large gas compressors and provided global
service to its customers. Under Mr. Forster, annual sales doubled. The company was
sold to Compressor Components in 1985. Mr. Forster was Chief Executive Officer of
the Rankin Oil Company from 1986 to 1988. Mr. Forster has significant experience in
the financial services industry and was with Solomon Smith Barney from 1989 to 1996.
He served as Senior Vice-President of Sunpoint Securities from 1996 to 1998, and he
was a Founder of Petroplex Saving in Midland, Texas in 1981. From 1998 to 2005, Mr.
Forster was an independent drilling consultant working on wells in the Barnett Shale
and the Permian Basin. During this time he built rigs for Jelco Energy which is now part
of Patriot Drilling. Mr. Forster holds a BBA and an MBA from The University of Texas at
Austin, and has taught accounting and economics at The University of Texas - Permian
Basin.
OTC BB: FODL
Forster Drilling Corp., Investor Presentation
39
Management
Bud Najvar, CPA, Chief Financial Officer
Mr. Najvar began his career in 1979 as a staff auditor for Touche Ross & Co. From 1980 to 1990, he
worked for KPMG Peat Marwick in the tax department as well as serving as the firm's liaison to the
Corpus Christi business community. Mr. Najvar then served as the Director of Tax for David Taylor
Cadillac from July 1990 through March of 1991. From 1991 to 1997, Mr. Najvar was a sole
practitioner focusing on tax and business work. Mr. Najvar then became a partner at May, Swaim &
Najvar in 1997, where he worked until 2000, focusing on tax and acquisition work. In May of 2000
through May of 2002, Mr. Najvar was the Senior Tax Manager at Margolis, Phipps & Wright, P.C. In
May of 2002, Mr. Najvar became a partner in Najvar & Najvar, CPAs. Mr. Najvar is a certified public
accountant who received his B.B.A. degree from the University of Texas in 1979.
Keith Atwood, Senior Vice-President – Drilling Operations
Keith Atwood has wide-ranging experience in the oil and natural gas industry. He has held the
primary responsibility and supervision of the drilling and production of over 3,000 wells in 10 states.
He began his career working as an Assistant Drilling Superintendent for father’s Abilene, Texas
based drilling company from 1973 to 1975. Mr. Atwood worked with Otis Engineering’s special
services division from 1975 to 1977, and he worked with Gearhart-Owens in open hole and cased
hole operations from 1977 to1979. Mr. Atwood was Operations Manager for Union Exploration from
1980 to 1983. He was Operations Manager with Mussleman, Owen, and King from 1983 to 1994, and
served as Senior Vice-President of Operations with Costilla Petroleum and Costilla Energy, Inc., from
1994 to 1999. Recently he has been Contract Operations Manger for Atlantic Operating and
Compass Operating from 1999 to 2005. Mr. Atwood attended Southwest Texas State University.
OTC BB: FODL
Forster Drilling Corp., Investor Presentation
40
Management
W. Scott Thompson, Secretary, Treasurer and Director
Scott Thompson has 30 years of experience in developing petroleum and financial companies. Mr.
Thompson began his career as Administrative Assistant to Preston Smith, Governor of Texas from
1971 to 1974. He was a Partner of Geosearch in 1977, and he served as Chief Operating Officer
and Director, of American Crude, Inc. from 1978–1982. Mr. Thompson served as President and
Director of Great Western Production Company, Inc. from 1983 to 1986. He served as Officer and
Director of Harris-Forbes, Inc. between 1983 and 1993. Mr. Thompson was President and Director
of Eurotrade Financial Inc. from 1993 to 2005. He returned to Harris-Forbes, Inc. in 2005, where he
is currently acting as President and Director. Mr. Thompson is Vice President and Director of
Process Technology Systems, Inc., he has served as President and Director of Clear Creek Oil &
Gas, Inc. since 2001, and he is also currently a Director of Oilsands Quest Inc. Mr. Thompson holds
a BBA from The University of Texas at Austin and completed work at the Graduate School of
Business at University of Texas at Austin.
Dean Willis, Drilling Superintendent
Forty-five years ago, Dean Willis began his career in the oilfield as a Floor-Hand on a Forster
Drilling Co., Inc. rig. Mr. Willis has experience at every position on a drilling rig. Prior to joining the
Forster team for the second time, Mr. Willis was an Assistant Drilling Superintendent for Adobe
Drilling in Odessa. Mr. Willis has drilled thousands of wells in Texas and New Mexico as a floor
hand, derrick man, driller, or rig supervisor (tool pusher). His depth of experience is invaluable to
the Company.
OTC BB: FODL
Forster Drilling Corp., Investor Presentation
41
Management
Cullen Hudnall, General Manager - Fabrication, Refurbishing, and Machining
Employee of Penco Machine from 1986 to 1995. Mr. Hudnall began his career as
machinist’s journeyman and ultimately became general manager and part owner.
Penco specialized in repair and remanufacture of oilfield drilling rig components.
After retirement of Penco’s co-owner, Mr. Hudnall founded Petroplex Machining and
Supply, Inc., a drilling component fabricator and supply house, from 1995 to
January 2005. Mr. Hudnall joined Forster immediately after liquidating Petroplex in
2005.
OTC BB: FODL
Forster Drilling Corp., Investor Presentation
42