Investor Update, August 2005

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Investor Update, August 2005 Powered By Docstoc
					Toreador Resources Corporation
 NYSSA 8th Annual Energy Conference
        November 15, 2005
                            Safe-Harbor Statement
Except for the historical information contained herein, the matters set forth in
this presentation are “forward-looking statements” within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. The company intends that all
such statements be subject to the “safe-harbor” provisions of those acts. Many
important risks, factors and conditions may cause the company’s actual results
to differ materially from those discussed in any such forward-looking statement.
These risks include, but are not limited to, estimates or forecasts of reserves,
estimates or forecasts of production, future commodity prices, exchange rates,
interest rates, geological and political risks, drilling risks, product demand,
transportation restrictions, the ability of Toreador to obtain additional capital, and
other risks and uncertainties described in the company’s filings with the
Securities and Exchange Commission. The historical results achieved by the
company are not necessarily indicative of its future prospects. The company
undertakes no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.

                                                                                  2
                        Cautionary Note to Investors

The Securities and Exchange Commission (SEC) permits oil and gas companies, in their
filings with the SEC, to disclose only proved reserves that a company has demonstrated
by actual production or conclusive formation tests to be economically and legally
producible under existing economic and operating conditions. We use certain terms in
this presentation, such as probable reserves and potential reserves, that the SEC’s
guidelines strictly prohibit us from including in filings with the SEC. Investors are urged to
also consider closely the disclosure in our Form 10-K for the fiscal year ended December
31, 2004, available from us by calling (214) 559-3933. You can also obtain this form from
the SEC at www.sec.gov.


The terms “potential” and “probable,” when referring to Toreador’s reserves or its
percentage of reserves, represents Toreador management’s current belief or judgment,
based on information available to it, regarding the potential reserves that could be
recovered or could be recoverable. These numbers should not be viewed as reliable for
the purposes of estimating Toreador’s reserves or its prospects. Additionally, the terms
“potential” and “probable” have no engineering significance and are not related to the
term “possible” as that term may be used by the Society of Petroleum Engineers.

                                                                                           3
                          Company Overview

U.S. Independent culture, focused on underexplored international basins




Visible near-term growth in South Akcakoca Sub-basin offshore Turkey




        Significant growth opportunities across entire portfolio



 Experienced management team and considerable technical and local
                           expertise



                                                                     4
                                                       Company Overview
              International Operations                                              Net Acreage


                                                                       Country                    Net Acreage
                Hungary
                                Romania                                Turkey                        1,978,518
France
                                                                       Hungary                         764,237
                                                                       Romania                         625,325
                                    Turkey                             France                          306,636
                                                                       United States                    77,613
                                                                       Total                         3,752,329


            Estimated Proved Reserves                                   18 Month CAPEX Budget
               Turkey                                                          United States
               11.0%                                    France                     1.6%                      Turkey
         PV10 = $22MM                                                                     $2                 52.8%
                          1.7                           75.4%               Hungary
                                        11.8        PV10 = $211MM           11.0%      $14
         United States                                                                              $67
                        1.7
             10.6%                                                      Romania
         PV10 = $40MM 0.5                                                               $20
                                                                         15.7%
                Romania
                 2.9%                                                                      $24
                                                                              France
             PV10 = $11MM                                                     18.9%
              Total Estimated Reserves 15.7 MMboe                                   Total CAPEX $127 million
                       Total PV10 = $284MM                          Note:     White numbers indicate CAPEX budget in country in
  Note:     White numbers indicate estimated reserves in country              $millions for 2H 2005 and FY 2006
            in MMboe as of September 1, 2005                                                                                5
                                                Near Term Upside:
                                       South Akcakoca Sub-basin Gas Project

  South Akcakoca Sub-basin represents only 50,000 acres of the
  962,000 acre Western Black Sea permits
                                                                        Reserves Estimate (Bcfe)1,2
Reserve Category                                                   High Case     Likely      Low Case

Probable                                                                        16                  16              16
Possible                                                                        19                  19              19
Potential                                                                      558                 176              48
Total Potential Reserve Additions                                              593                 211              83

Toreador 36.75% Interest - Bcfe                                               218                  78               31
Toreador 36.75% Interest - Mmboe                                               36                  13                5

Multiple of Total Current Reserves (x)                                          2.3                0.8              0.3
No te: 1 P ro vided by independent petro leum engineers LaRo che P etro leum Co nsultants as o f September 1 2005
                                                                                                            ,
     2 "P o tential"   reserve catego ry estimate reduced to reflect o utco me o f Cayagzi-1well


                                                                                                                    6
                           Potential Net Reserves Growth


Potential Reserve Additions by Dec. 31, 2007*                                       Range
                                                                                  (MMBOE)
              Turkey
                - Black Sea, So. Akcakoca Sub-Basin                               14   -   36
                - Black Sea, Eregli Sub-Basin                                     10   -   15
                - Calgan Permit                                                    7   -   15
                  Turkey Potential Reserve Additions                              31   -   66

              France                                                              10   - 15
              Hungary                                                             10   - 15
              Romania                                                              6   - 15
                Total Potential Reserve Additions                                 57   - 111

  *Note: Reserve additions include “proved,” “probable” and “possible” reserves




                                                                                                7
       Typical Prospect Profile

  Located in areas with good technical merit


Availability of geological and geophysical data


    Existing transportation infrastructure


  Availability of equipment and contractors


         Local market for production

                                                  8
                                         Focus on EU or EU-Candidate
                                                  Countries
•   Net importing countries with strong projected demand for oil and natural gas
•   Stable governments with favorable business and regulatory climates
     •   Attractive royalty and tax environments
     •   Western, market-oriented economies
     •   Permits secured with work commitments; no upfront fees
•   Strategically located on East – West transportation infrastructure
                                         900

                                         800                                                             Demand – Low Growth

    European Natural Gas                 700

     Supply & Demand
                                         600
                                                                    LNG Contracts
                            Gas, bcm/y




                                         500

                                         400                      Pipeline Gas Contracts

                                         300


                                         200                         Indigenous Supply

                                         100


                                               2005                           2010                              2015                    2020
                                               Source: Quigley, T., “Europe looks for supply diversity in the Caspian, Persian Gulf,”
                                               Oil and Gas Journal, June 13, 2005; BP internal data                                            9
                                       Turkey: Prospective
                                    Offshore/Onshore Acreage


                                                                                Eastern
                                                                                Black Sea
                                                                                Permits




                                                                                            SE Turkey Permit




Natural Gas Pipelines—Existing   Natural Gas Pipelines—Under Construction   Oil Pipeline
                                                                                                               10
                              Turkey: Black Sea Prospects

              Tertiary Prospect
              Cretaceous Prospect
              Fault
              Proposed Well Site
              Gas Discovery

                                             Eregli Deep
                 10 km                                                             So. Eregli



                                                          Coastal
   South Akcakoca                                         Eregli
   Sub-Basin   Akcakoca-1
                              Akcakoca-2
       Akcakoca                                                           Eregli
                                                 Alapli
                                           Akkaya
3D Seismic                Ayazli-1
               Ayazli
 (190 km2)                                   Akkaya-1

                           Ayazli-2
             Ayazli-3                         Cayagzi
      Coastal Akcakoca     Cayagzi-1                                               16” pipeline under construction from
                                                    Production Facility             national grid to production facility
                    Akcakoca

                                                                                                                    11
                                     Hungary



                                BUDAPEST


                               Szolnok
                               Block



                             Tompa
                             Block




Oil Field
Gas Field            50 km
Exploration Permit


                                               12
Tompa Permit Analogs


           Tompa
          Prospect




                       13
                               France: Paris Basin Offers Solid
                                Production, Exploration Upside

                                                  Meaux
                                      Paris                                                 Chalons-en-Champagne

                                                                Nangis
                                                                Permits

                                                                                                                  St.
Core from La Tonnelle-1 well                 Melun                          Provins                               Dizier
                        Malesherbes
                        Application
                                                            Charmottes
                                                            Field
                                                                                            Troyes                   20 km
                                                      Nemours             Rigny le Ferron
                                                      Permit                 Application
                                              La Tonnelle - 1                                 Oil Field
                               Aufferville                                                    Gas Field
                                  Permit
                                                                                              Neocomian Channel Trend
                                                                              Courtenay       Interest in Exploitation Permit
                                                                              Extension
                                       Montargis                                              Exploration Permit
                                                                    Neocomian
                                                                    Field Complex             Exploration Application
                                                Courtenay
                                                Permit                                        (Pending)




                                                                                                                                14
                        Romania: Rehabilitation,
                         Exploration Balance



                                                 Moinesti
                                                 Permit
                                                              Natural gas flaring from
                                                             Fauresti-187 during testing
                          Carpathian Mountains


                                                 Viperesti
                                                 Permit

                              Fauresti           BUCHAREST
                              Permit

Oil Field
Gas Field
Exploration Permit              50 km
Rehabilitation Permit




                                                                                      15
                                                   Financial Performance
                                Revenues                                                                  EBITDAX1

               35,000
                                                                                         16,000
                                                            28,749                                                                  13,697
               30,000
                                                                                         14,000

               25,000                                                                    12,000
                                                   21,028




                                                                          ($thousands)
($thousands)




                                                                                         10,000                           8,681
               20,000
                                          16,846
                                 15,375                                                                           7,212
                                                                                         8,000
               15,000
                                                                                         6,000
                                                                                                          4,034
               10,000                                                                             3,791
                        7,963
                                                                                         4,000

                5,000
                                                                                         2,000

                   0                                                                         0
                        2001     2002      2003     2004     LTM                                  2001     2002   2003    2004        LTM
                                                            9/30/05                                                                 9/30/05
                                                                      Note:
                                                                      1     Please see Appendix A for a reconciliation of Net Income to EBITDAX

                                                                                                                                       16
                                     Capitalization
                                                   As of September 30, 2005
                                                                 % of Total
($ thousands)                                        Actual         Cap
Cash and Cash Equivalents                             108,395

Convertible Debenture - Related Party                       810               0.4%
Long Term Debt                                            4,833
                                                                   1
Convertible Senior Notes                                 86,250             38.6%
Total Debt                                               91,893             41.1%

                                                                   2
Total Stockholders' Equity                             131,463              58.9%

Total Capitalization                               $    223,356            100.0%
Notes:
1 In September 2005, Toreador sold $86.25 million aggregate principal amount of
convertible senior notes, due October 1, 2005, w ith a 5.00% coupon and a conversion
price of $42.81 per share, in a private placement
2 In September 2005, Toreador sold $25 million of its common stock (806,450 shares)
in a private placement

                                                                                       17
                    Investment Considerations

U.S. Independent culture, focused on underexplored international basins




Visible near-term growth in South Akcakoca Sub-basin offshore Turkey




        Significant growth opportunities across entire portfolio



 Experienced management team and considerable technical and local
                           expertise



                                                                     18
                  Appendix A




Reconciliation of EBITDAX to Net Income




                                          19
                                                                    Reconciliation of Net Income to
                                                                               EBITDAX
                                                                                                                                                                                                Twelve
                                                                                                                                                                                              Months Ended
                                                                                                                   For the Year Ended December 31,                                              Sept. 30,
($ thousands)                                                                                         2001                   2002                   2003                    2004                     2005
Net Income from Continuing Operations                        $                                           (2,747) $               (5,666) $               1,200 $                7,480          $         5,108
Less: Income Tax (Benefit) Provision                                                                     (1,802)                 (2,061)                  (266)                (3,576)                  (2,021)
Plus: Interest Expense                                                                                      421                   1,692                  1,193                  1,611                      543
Less: Interest and Other Income (Expense)                                                                  (163)                    621                   (173)                  (396)                    (720)
Plus: Turkish Currency Remeasurement                                                                          0                       0                      0                  1,140                    1,140
Less: Foreign Currency Exchange Gain (Loss)                                                                   0                    (437)                  (979)                (5,044)                    (388)
Less: Gain (Loss) on Sale of Property and Other Assets                                                      510                   2,143                    (80)                   336                      369
Less: Equity in Earnings (Loss) of Unconsolidated Affiliates                                                206                   1,186                    (22)                    18                      (78)
Plus: Reduction in Force                                                                                      0                       0                    511                    172                       56
Plus: Impairment of Oil and Natural Gas Properties                                                        1,237                     525                    171                      0                        0
Plus: Depreciation, Depletion and Amortization                                                            3,510                   3,797                  3,246                  3,538                    3,851
Plus: Exploration and Acquisition                                                                         2,619                   2,234                  2,411                  3,402                    4,331
Plus: Dry Hole and Abandonment Cost                                                                           0                       0                      0                      0                    1,506
EBITDAX                                                      $                                            3,791 $                 4,034 $                7,212 $                8,681          $        13,697

EBITDAX represents earnings before interest, income taxes, depreciation, depletion and amortization, impairment expenses and exploration expenses, including foreign currency remeasurement and exchange
gain, gain (loss) from the sale of properties and other assets, equity in earnings (loss) of unconsolidated affiliates, reduction in force and impairment of oil and natural gas properties. The Company has reported
EBITDAX because the Company believes EBITDAX is a measure commonly reported by oil and gas exploration and development companies and widely used by investors as an indicator of a company's
available cash flow, operating performance and ability to incur and service debt. The Company believes EBITDAX assists investors in comparing a company’s performance on a consistent basis without regard
to depreciation, depletion and amortization, impairment of natural gas and oil properties and exploration expenses, which can vary significantly depending upon accounting methods. EBITDAX is not a measure
of performance under accounting principles generally accepted in the United States of America and should not be considered in isolation or construed as a substitute for net income or other operations data or
cash flow data prepared in accordance with accounting principles generally accepted in the United States for purposes of analyzing the Company’s profitability or liquidity, because it does not consider the
impact of working capital growth, capital expenditures, debt principal reductions and other sources and uses of cash, which are disclosed in the Company’s statements of cash flows. Investors should carefully
consider the specific items included in the Company’s computation of EBITDAX. While the Company has disclosed its EBITDAX to permit a more complete comparative analysis of its operating performance
and debt servicing ability relative to other companies, investors should be cautioned that EBITDAX as reported by the Company may not be comparable in all instances to EBITDAX as reported by other
companies. EBITDAX amounts may not be fully available for management’s discretionary use, due to requirements to conserve funds for capital expenditures, debt service, preferred stock dividends and other
commitments.




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Toreador Resources Corporation