Table of Contents - Darlene Dion Design...that deals in a new oil frontier that’s been off-limits...

Table of Contents

INTRODUCTION ....................................................................................Page 1

CHAPTER 1The End of Easy Oil ....................................................................Page 1

CHAPTER 2The ‘Alternatives’ Won’t Help ..............................................Page 5

CHAPTER 3Alaska’s Untapped Resources....................................Page 8

CHAPTER 4Producers Profiting in the North Slope..........Page 11

CHAPTER 5A Great Way to Profit from Alaska..........Page 13

CHAPTER 6Bald Eagle Economic Analysis ..........Page 16

CHAPTER 7Sources ..............................................Page 20

Dear Reader,

Since the year 2000, the price of oilhas risen over 394 percent.

And with soaring demand coming from China, India, Brazil and Russia, you can be sure that oil prices willcontinue to skyrocket. But while theworld focuses on the danger that higheroil prices bring, you’re going to learnabout the opportunity that this spells.

First, you’ll see how the supply of oilhas actually peaked — meaning oil supplyper day is actually SHRINKING. Thenyou’ll see how it’s becoming increasinglymore expensive to find new supplies.

You’ll also see government statisticsthat show booming oil demand. So ifgovernment knows that this is going tohappen, why don’t they do somethingabout it?

They are. But even if the United

States reduces oil demand by half,emerging economies will pick up theslack and take demand to higher levels.

As oil prices rise, every conceivableplace that oil can be found will beexplored. And that includes an area inAlaska which you’ll learn about. You’lleven find out about a small company that deals in a new oil frontier that’sbeen off-limits until recently.

The company you’ll learn about is, attoday’s prices, an astounding investmentto make. Not only are they riding uponthe inevitable rise in the price of oil, but they’re also exploring property withextremely promising reserves.

The viability of what they do and theteam leading this company will virtuallyguarantee that they remain extremelysuccessful at what they do. And as theybecome even more successful, you’llwatch your holdings in them grow.

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The Last Great Discovery:America’s $240 Billion Secret

CHAPTER 1

The End of Easy Oil“All the easy oil and gas in the world has pretty much been found.

Now comes the harder work in finding and producing oilfrom more challenging environments and work areas.”

William J. Cummings, ExxonMobil’s spokesman in Angola, Dec 2005

Nearly every day the news talks aboutoil prices hitting new highs.

It’s gotten so bad these past eightyears, that rising gas prices seem like a

normal occurrence. But what’sso normal about a 394 percentincrease in the past eight years?

Not one thing.

The truth is nobody has seengas prices go up this much sincethe 70’s. And all indicationspoint to this little trend gettingfar worse before it gets better.

And the biggest reason has to do with a little phenomenoncalled peak oil.

The theory goes like this: There is only a set amount of oil on the earth.

But after years of removing that oil fromthe ground, there will come a point when allthe cheap and easy oil has been found andwe’re left looking for more expensiveoil in hard to reach places.

Has peak oil happened yet, or is there time?

At a recent conference by the Energy InformationAdministration, they found that global crude oil productionpeaked in May of 2005.

Since then, the world hasn’tbeen able to increase the amountof oil produced every year.

Now, you have to understand thatpredicting how much easy oil left in theground is a hard task. Of all the supergiant fields in the Middle East, only a fewhave meters which tell how much oil hasbeen produced and how much is left inthe ground, according to the EIA.

Then countries like Russia and Chinawhich, according to the EIA, habituallyoverstate the amount of oil they have. Butwhat is known is that oil production isdeclining in countries all over the world.

Iran, Nigeria, Mexico and Venezuelaall produce more than 2 MMBO/day andhave experienced sharp declines in recentyears. Just take a look below at the declinerates of two of the world’s leading oil wells.

It’s Good to Know…

According to Wikipedia.org, M. King Hubbert firstused the theory in 1956 to accurately predictthat United States oil production would peakbetween 1965 and 1970. His logistic model, nowcalled Hubbert peak theory, has since been usedto predict the peak petroleum production of manyother countries, and has also proved useful inother limited-resource production-domains.

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As you can see, these declines canhappen very quickly. And the scary partis that most of the oil being found todayis under water. Underwater oil wells areinfamous for having sharp declines onceproduction has peaked.

While peak oil sounds bad, the pictureis far worse than just that.

Just a few years ago the world’s leadingminds thought that oil demand wouldpeak in 1994 at around 66-68 million

barrels per day. Since then,demand grew to over 88 millionbarrels per day!

According to the EIA, thisunplanned growth took up 99percent of the world’s spare oilcapacity. And this growth isn’tgoing to stop anytime soon.

Just think about it. Today Chinesecitizens buy roughly eight millioncars per year. In the next tenyears, this is expected to double.

Today, citizens in India only buy 1.8 million vehicles per year. In the nextten years, they should triple that.

And these figures don’t include thegrowth that’s happening right now inBrazil, Russia, Eastern Europe, Africa,and South East Asia.

As thesecountriesmodernize they will demand more energy. Andwhere is thatenergy going tocome from? Crude oil.

And then there’s the issuewith populationgrowth. Accordingto Wikipedia.orgthere are anestimated 6.7 billion people. By 2050, thatnumber is expected to grow to 9.4 billion.

It’s obvious that demand is going toexplode over the next 42 years.

With production slowing and demandgrowing, we have one of the most extremepictures of higher oil prices that we could

Population Year (in billions)

2010 6.8

2020 7.6

2030 8.3

2040 8.9

2050 9.4

U.S. CensusBureau Estimates

Source: http://www.wikipedia.org

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ever imagine. And there’s no quick or easy fix to this.

In the 80’s there sure was. WhenReagan became president, he made a deal with Saudi Arabia to open upthe oil spigots. Thanks to that talk,oil prices dropped dramatically andRussia (the biggest supplier at thetime) went bankrupt.

But today there is no new SaudiArabia. There is no massive, cheap oil field that we can just ‘open up’ toinstant production. Instead, we’re leftlooking for oil in places like the Canadianoil sands, where the National EnergyBoard of Canada predicts production costs are ten times more expensive thanconventional oil.

We’re left with huge shale reserves which,according to the RAND Corporation, couldcost in excess of $95 per barrel just to produce!

At this point, the world has to look foroil in contested areas like the North Pole ordrilling underwater. To think that oil priceswill ever drop down to $30 a barrel wouldbe naive. After all, producing oil today costsfar more than it used too.

The fact is that at today’s value, oil is a bargain. The world already doesn’thave enough oil to meet demand. Andaccording to the EIA, that short change is 14 million barrels per day.

Considering the supply and demandfundamentals driving the price of oil,prices could easily eclipse $200-$300 a barrel in as little as three years,according to Goldman Sachs.

Let’s face it, people won’t stop drivingcars. Oil use may go down in the U.S.,

but around the world it will continue to climb for some time to come. There’s no doubt that this will put a crimp intoworld economic growth. But unlesssomething catastrophic happens, theworlds thirst for oil will continue to grow.

Just take a look at the chart abovewhich projects demand growth andsupply shrinkage in the next ten years.

With such a horrible outlook in thesupply and demand for oil, you can be surethat governments are trying to do all theycan to get this situation under control.

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That includes looking for alternativesources of fuel. In the next chapter you’lllearn more about these options.

But before that, you should understandthat high oil prices shouldn’t scare you.

Everything that will happen becauseof high oil prices shouldn’t set you back.

And that’s because high oil prices is oneof the biggest opportunities you’ll have.

Had you put your money into crude oilless than ten years ago, you’d be sittingon nearly 1,000 percent growth.

Just remember that trying to discover theviability of a potential oil field can take years.

Even if the government started workingon getting every oil producing property inthe U.S. to produce oil, it could take five toseven years for that production to go online.

And with demand growing at one to two

percent every year, it may not be enough tomake up for ever increasing energy needs.

As more of the super-giant oil fieldspeak around the world, supply willcontinue to dwindle.

What that means is that any opportunityyou have to find a producer who canproduce cheap oil is one you should take.

And that’s an opportunity you’ll seelater on. But before that, you should seethe impact alternative fuels might haveon the price of oil. As you’ll soon see, theimpact will be negligible.

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CHAPTER 2

The ‘Alternatives’ Won’t Help“If every bushel of U.S. corn, wheat, rice and soybean

were used to produce ethanol, it would only cover about 4 percent of U.S. energy needs on a net basis.”

Bloomberg.com

The quote you just read is extremelypowerful because it speaks a truth thatpoliticians don’t want to acknowledge.

And that truth is that billions arebeing spent on an energy policy thatwon’t help the U.S. substantially

reduce its demand for foreign oil.

And if the U.S. — which has millionsupon millions of acres of arable farmproperty — can’t possibly make a dent inoil demand with alternative fuels, how canany other country expect to do the same?

“When you think about it, oil should be one of themost expensive commodities of all. It requiredmillions of years to accumulate the carbon-basedlife-forms, millions of years to cook it, and over ahundred million years to transport it to its currentlocation and preserve it in rare geological structures so it can be extracted today.”

— Profit from the Peak

And even worse, according to cars.com your cars fuel economy usingethanol is up to 28 percent less thanconventional oil.

Sure, politicians are trying to point to the future. They saythat once the world figures outhow to create cellulosic ethanol(which could make ethanol from the sugars in everythingfrom trash to switch grass) it couldcontribute greatly to offsetting oil demand.

But with current technologies, itwould cost $120 in cellulosic ethanol toreplace one barrel of oil. Of course, by2012 that is expected to be cut in half.

Regardless, it will take years forcellulosic ethanol to be in mass operation.

If 2012 is the time when industryexperts believe that cellulosic ethanol willbe cost-effective, then you can expectmass-production to start making a dentin oil prices by about 2020.

That means that until 2020, oildemand shouldn’t drop one bit.

So what about the otheralternatives?

Hybrid technologyis increasingly

being built into more andmore cars.

This technologywill certainly lower

U.S. demand for oil, but not anytime soonand not by as much as you’d think.

According to CNN, in 2006 only onepercent of all cars sold are hybrids. This number is increasing by about half percent per year.

What that means is that by 2015, onlyfive percent of all cars sold in the U.S.will be hybrids.

With population growth and anincreasing number of households buyingmore than one car, this uptick in hybridadoption won’t be nearly enough to offsetthe growth in demand.

As you see, neither hybrids norethanol will make much of an impact onoil demand. And therein lay the secret…

It could take 20 years just for Hybrids toaccount for ten percent of sales. The onlyother big alternative which could make an impact on oil demand is hydrogen.

The National Hydrogen Associationestimates that simply putting twopercent of Americans on Hydrogen by2020 would cost around $20 billion.Imagine what it would cost to put 30% of people in Hydrogen?

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Once that infrastructure is in place,you can expect adoption of hydrogenvehicles to rise at the same pace of hybrid technology.

In other words, it could take up to30 years for hybrid AND hydrogenvehicles to make any kind of impacton U.S. oil demand.

30 years is a long time. The EIAexpects global oil demand to reach over110 million barrels per day by that point.And with oil production in severe decline,that means oil prices are sure to be farhigher than they are today.

To make matters worse, there is nopush for hydrogen or hybrid vehicles inemerging economies like China. Peoplesimply can’t afford the added expense.Heck, American’s can barely afford it.

In fact, most emerging economies can only afford yesterday’s technology.That means that while the U.S. workstowards cutting demand, it will only bereplaced by much more demand from

emerging economies around the world.

There is no easy way to lower oilprices. This is a situation which tookyears to get into. And you can be surethat it will take a number of years to getout of it. In the meantime, there’s amassive opportunity for you to makemoney from ultra-high oil prices.

That’s because companies andgovernments are going to do thingsthey’ve never done before just so they can squeeze more oil from the ground.

For example, just ten to fifteen yearsago, oil companies didn’t try and look foroil on the bottom of the ocean. The oilwould have been so deep that the drillswould have burst from the pressure.

But today you have companies like Petrobras (a Brazilian oil major)making multi-billion barrel finds deepunderwater. Today, the technology letsthem extract the oil. But it’s veryexpensive and inefficient.

They need special equipment to producethe oil. They need ships and pipelines builtto transport the oil. And they need to becareful of any spills or accidents.

Oil companies today must take onhuge risks just to try and find oil. And big risk for them means there’s a risk for you, as well.

The beauty about all of this is thatthere’s a perfect area to find oil. It’s a placethat was previously taboo. But with today’shigh oil prices, there is more politicalmotivation to drill for oil in this place.

And the oil that could be recoveredhere is extremely cheap. Want to knowwhat place that is?

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There’s no doubt that an energyshortage is going to force governments totake actions that may be unpopular, justto guarantee a supply of oil.

One of those actions is recovering oil from environmentally sensitiveproperties in Alaska.

Alaska is one of those states where oilruns deep. Citizens even collect a yearlydividend (up to $1,963) check thanks to oil.

The only big field in Alaska (up untilrecently), was Prudhoe Bay. But just likeall other big oil fields, Prudhoe Bay oilproduction entered decline 18 years ago.

So what did that leave Alaska with?

In 1995 the United States surveyed

the property and determined that up to24 billion barrels of oil lay beneathAlaska. And there was a five percentchance that those reserves might exceed34 billion barrels.

That’s a potential $340 billion worth of oil yet to be produced!

While this oil lay in various differentfields and by no means constitutes a hugefield like Prudhoe Bay, the truth is thatany company that is able to recover evena fraction of that oil is set to make somemassive profits.

That’s because unlike the oil which liein shale and sands, the oil that comesfrom Alaska goes through minimalprocessing work.

There is no separating it from sand orrock. There is no need for ultra-massivedump trucks to bring tons of sand to aprocessing facility. And there’s no need toinstall billions of dollars worth of capitalupgrades just to make sure the oil flows.

That means the cost to produce this oil is far cheaper. And any companyproducing this oil should see greatoperating margins, even if prices drop by 50 percent.

CHAPTER 3

Alaska’s Untapped Resources“We have numerous resource development priorities

over the next few years of my administration. The number one priority is ensuring the construction

of the North Slope natural gas pipeline.”

Governor Sarah Pallin, Alaska

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You see, the advantage companies inAlaska have, is that they can withstandhuge drops in the price of oil and remainvery profitable.

With the oil sands, you need oil to stayabove $50 a barrel to break even. Withthe shale, that number is nearly $100.But in Alaska, that number is under $20.That gives you a huge margin of safety.

And you can thank new drilling techniqueslike ‘Micro hole’, TTRD (through tubing rotary drilled), and advancements inhorizontal drilling for these low explorationcosts. And to make matters even better,these new techniques for oil drilling ismuch easier on the environment too.

One other thing that you should knowis that Alaska is FILLED with natural gas.

In 1995, the Minerals ManagementServices of the U.S. estimated that 126trillion cubic feet of natural gas lay in the ground!

And there was a five percent chancethat this gas exceeded 230 trillion cubicfeet. That’s over $2 TRILLION worth ofnatural gas reserves in the ground!

So if there’s so much oil and naturalgas in the ground, why haven’t big oilcompanies tried to recover it?

Well they have — they just haven’tbeen super-successful at it.

Since 1973, part of Alaska was deemeda wildlife refuge. Since then, this areahad been known as the Arctic NationalWildlife Refuge (ANWR).

This area in the northern slope of Alaskacontains up to 14 billion barrels of gasoline.

As part of a wildlife sanctuary, drilling is off limits. That didn’t stop oilcompanies and oil friendly congressmanfrom trying.

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It’s Good to Know…

According to Wikipedia.org … The Arctic NationalWildlife Refuge (ANWR) is a National WildlifeRefuge in northeastern Alaska. It consists of19,049,236 acres (79,318 km?) in the AlaskaNorth Slope region.

The move to protect this corner of Alaska beganin the early 1950s. National Park Service plannerGeorge Collins and biologist Lowell Sumnerrecruited Wilderness Society President OlausMurie and his wife Margaret Murie into an effortto permanently protect the area. They werejoined by thousands of the era’s prominent conservationists.

The region first became a federal protected area in1960 by order of Fred Andrew Seaton, Secretaryof the Interior under U.S. President Dwight D.Eisenhower. In 1980, Congress passed the AlaskaNational Interest Lands Conservation Act.

Ever since the 90’s, politicians have beentrying to allow drilling in Alaska. The EIAcontends that production could scale up to1.6 million barrels per day. By 2025, thatwould lower U.S. dependency on importedoil from 70 percent down to 64 percent.

That’s enough for an up to sixteen billiondollar yearly reduction in the U.S. tradedeficit every year. If this oil were used tosatisfy five percent of U.S. demand, the fieldcould last for over 30 years.

You can be sure that theU.S. will eventually takeadvantage of this richresource. And when it does, any company that’s in the area will boom.

The best part is thatthere are already a lot ofimprovements that weredone to the property in Alaska. In fact, most of the drills and technologyneeded are already there!

That’s because they werefirst installed years ago,when oil companies werebusy upgrading the property for thePrudhoe Bay deposit.

Even better is the fact that the Trans-Alaska pipeline goes directly from thenorthern slope (where the ANWR is)down to the Gulf of Alaska for delivery.

But since Prudhoe Bay is in significantdecline, more than half of the pipeline isempty, and a lot of equipment was leftabandoned at wells no longer in production.This equipment can easily be moved a fewmiles to the next billion barrel field. Thisdrops the operating costs significantly.

Just think of this — according toWikipedia.org, to get the Canadian oilsands to produce 200,000 bpd of oil, it willtake over $100 billion in the next ten years.

Producing oil from smaller wells inAlaska won’t even cost one one-hundredthof that. And considering the steep climb ofoil prices, the likelihood of governmentallowing companies to drill in the ANWRgoes up by the day.

President Bush alreadytried to make it happen.But due to significantopposition by moderaterepublicans anddemocrats, the billnever passed.

But as our oil supplysituation gets uglier and uglier, more focuswill be put on thepotential reservesavailable in Alaska.When there is no oil left, no place will betaboo. And as moreattention is placed onAlaska’s oil reserves,

the more money there is to be made.

Alaska represents one of the last U.S.frontiers for oil exploration. It’s practicallythe only place producers can still recoverbillions of barrels of oil without diggingdeep into the water or converting rock orsand to oil.

In other words, Alaska represents thecheapest place the U.S. can presentlyrecover and produce oil from. But untildrilling in the ANWR is legalized, oilproduction in Alaska will be morebeneficial for smaller oil companies.

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Source: http://www.alaskascenes.com

That’s because smaller companiesdon’t need to scale production very highto make money. All they have to do is geta smaller field which gives them a fewthousand barrels of oil every day.

These are fields that big playerswouldn’t want to touch. After all a fewmillion dollars a year is nothing to them.But to a smaller company, that’s a windfall.

Clearly, if you look to make money from

the cheapest oil field in the U.S., lookingto smaller companies is the way to go.

But that’s not to say that largercompanies are ignoring the fields. It’s justthat production wouldn’t be enough tomake a huge impact in their profits.

In order to fully understand howpromising the North Slope is, you shouldsee what some of these Oil Majors aredoing there.

Higher oil prices have a habit of forcingproducers to explore places they previouslydidn’t look at. And that’s the biggest reasonwhy there’s so much interest in drillingthis property. Much of this property wasleased out in the 70’s, yet no major playerstried to develop the property.

Why? Oil and natural gas prices didn’tmake that profitable.

Today there are four big companiesdrilling the North Slope, each with verypromising reserves. And they all point tothe vast resources in the North Slope.

ExxonMobilExxon recently became the very first

producer to sell natural gas from theNorth Slope.

In an agreement with FairbanksNatural Gas, they agreed to sell 10billion cubic feet of natural gas per year.According to the Anchorage Daily News,Fairbanks plans on building a plant at

the Prudhoe Bay field to supercool thegas and turn it into liquid form.

Making matters even better, Alaskarecently cut the tax rate on North Slopegas production. This was one of the biggestcatalyst as to why this deal occurred.

Their biggest lease, Point Thompson,is estimated to have 8 trillion cubic feetof natural gas and hundreds of millions of barrels of oil and condensed naturalgas. This is a huge reserve. And Exxonplans on exploiting this reserve byworking on a $30 billion project to helpdrill and ship this oil.

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CHAPTER 4

Producers Profiting in the North Slope

From January of 2000 to mid 2008, a barrel of oilclimbed from $32 to $142 — a 443% increase.But during those same 71/2 years, shares ofExxon Mobil, BP, Chevron and ConocoPhillipsclimbed on average just half as much!

Meanwhile, early shareholders in tiny energycompanies like GGR, CHK and CRZO all postedgains of WELL over 1,000%, while other smallenergy companies like Ultra Petroleum gainedover 10,000%!

BP Exploration and Conoco Phillips

Both companies have been includedhere because both are working togetherto develop fields holding an estimated 35trillion cubic feet of natural gas. But thekey to making these fields economicallyfeasible is transportation.

Currently, there are no natural gaspipelines in Alaska. But both companieslook to change that by building a multi-billion dollar, 3,200 km pipeline acrossAlaska. This pipeline should deliverabout four billion cubic feet of natural gasa day. That’s enough to feed six to eightpercent of U.S. daily gas consumption.

An important point is that ConocoPhillips is the largest oil producer in the North Slope. Their Alpine Field isconsidered a model for North SlopeDevelopment because it has nearly zero-impact on the environment.

According to Conoco Phillips website“Production from Alpine began in 2000, andthe field reached a production milestone —its 100 millionth barrel — in late 2003. TheAlpine field maintained an average netproduction of 64,500 BOEPD in 2003.”

“The Greater Prudhoe Area (GPA)consists of the Prudhoe Bay field, itssatellites and the Greater Point McIntyreArea fields. The Prudhoe Bay satellitescontinued their strong performance in2003 with net production of 16,200BOEPD, and further development isplanned in 2004. Average net productionfrom GPA was 180,100 BOEPD in 2003.”

“The Greater Kuparuk Area (GKA)includes the Kuparuk field and foursatellites. GKA reached a major milestonein early 2004, producing its 2 billionthbarrel of crude oil. Development of thePalm discovery expanded the Kuparukfield and helped maintain GKA’s netproduction of 104,400 BOEPD in 2003.”

As you can see, ConocoPhillips has hadtremendous success in the North Slope.Now imagine how they’ll do once thatnatural gas pipeline is up and running.

As for BP, they have a 30-percent interestin North Slope natural gas resources. At 35trillion cubic feet, this area represents one ofthe largest undeveloped sources of naturalgas in the company’s portfolio.

ChevronToday Chevron is the fourth largest

producer on the North Slope, pumpingout 40,000 barrels of oil per day.

The Vice-President of the company evensaid “We plan to … increase investment inAlaska not (only) over the next three yearsbut over the next 15 to 20 years.”

Where are they looking to invest? In theirCook Inlet field which is already producing25,000 barrels of oil equivalent per day.

Chevron also owns a one to tenpercent working interest in North Slope

Source: www.channel6.dk

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fields. But their most promising propertyis their White Hills exploration block,which is located just south of PrudhoeBay. This is 430,000 acre area whichcould easily hold a lot of oil.

According to Chevrons Alaska assetdevelopment manager Steve Wright “We’recurrently conducting 2-D seismic acquisitionefforts on the slope this winter and we plana two-year drilling program kicking off inthe winter of 2007-2008 and extending intothe winter of 2008-2009.”

The last — and most promising —company isn’t an oil major. It’s a smallcompany, with experienced geologists thatsee much promise in the North Slope.

As you can see, they aren’t alone. The North Slope has become a veritable‘gold rush’ of opportunity for big andsmall oil companies.

The company you’ll hear about todayhas five leases in the North Slope. Andthey expect to find very good things.

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Source: USGS.GOV

CHAPTER 5

A Great Way to Profit from Alaska“Current debates over where and how to drillfor oil in the country soon may be rendered

irrelevant by a nation desperate to maintain its quality of life and economic productivity. War over access to the diminishing supply

of oil may be inevitable unless the U.S. and other countries act now to develop alternatives to their dependence on oil.”

Senator Mark Hatfield

The key to making money with oil inAlaska is to look to small companiesexploring proven properties.

And that’s exactly what you’d get

with Bald Eagle Energy.

Bald Eagle recently acquired six State-issued oil and gas leases in Alaska’s North Slope.

Why the North Slope? Because it containsthree discovered super-giant oil and gas fields.

First is Prudhoe Bay which had 15 billionbarrels of oil and 27 trillion cubic feet of gas.Then there’s the Point Thompson Fieldwhich has 8 trillion cubic feet of gas. Lastly,the Kuparuk River field which has 2.6 billionbarrels of oil and 1 trillion cubic feet of gas.

The reason why this is important istwo fold.

First, the likelihood of more oil in Bald

Eagles property is very high. Second,because the infrastructure is already inplace for rapid production and transport.

For instance, these fields are extremelyclose to the Prudhoe Bay pipeline. Andthere is a proposed natural gas pipelineunder construction as well.

The North Slope also has another 69fields, some of which are producing andexporting oil and gas.

Altogether, the North Slope has about 27billion barrels of discoveredrecoverable oil and about52 trillion cubic feet ofrecoverable gas. And thebest part is that it remainsquite under-explored!

That lowers the risk thatBald Eagle is exposed too.

Not only is most of theinfrastructure already inplace for quick production, but the property itself is chockfull of oil and natural gas.

One important point aboutBald Eagles leases are that they were privatelyacquired. Meaning, theproperty wasn’t state owned.Because of that, they payroyalties on production of5% instead of 16.6%.

That gives them a greaterprofit margin onceproduction starts.

As you can imagine, BaldEagle isn’t in the businessof buying unprovenproperties. Previousoperators have drilled

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wells within the Bald Eagle leases and innearby areas based on seismic andgeophysical data, interpretations andcorrelations with other wells.

But all of this was done years ago.According to Bald Eagle, the data forthese wells need to be re-processed usingmodern modeling procedures to ensurethat favorable zones are identified fordrill stem testing in existing and newwells on Bald Eagle’s leases.

The biggest thing Bald Eagle will do is begin three-dimensional modelingwhich will provide crucial information for developing new exploration drillingtargets within the leased areas.

Based on previously discovered fieldson the onshore portion of the centralNorth Slope Basin, they expect a newlydiscovered field to have as much as 30 million barrels per square mile.

One thing to note is that theseestimates reflect the lease location southof the Barrow Arch, meaning that BaldEagle does not expect these fields havethe greatest productivity as would befound in the apex of the arch.

Since there is only one well in theBald Eagle lease acreage, it would bepossible to discover a three square mile

oilfield on all of Bald Eagle’s six leases.

According to the Bald Eagle EconomicReport, if you use the most conservativeestimates of a one square mile fieldrecovering only five million barrels, theywould make nearly half a billion dollars.And that’s using $80 per barrel as the price.

Today, oil is 40% more expensive. Thatmeans this company could make nearly$600 million — as a low ball estimate.

If you look at the most promisingestimate — a three square mile field with30 million barrels of oil — then you’d seethat Bald Eagle could make $7.3 billion!

And again, that’s using $80 oil. If youuse today’s price, then they stand tomake a possible $10.95 billion!

And did you know that all of thesefields are within a few miles of the TransAlaska Pipeline? That makes these fieldsextremely economically viable.

The last thing to note is that these figuresDO NOT consider potential gas reserves sincethe value of cash flows resulting from gassales would be low due to the delay associatedwith current gas pipeline negotiations.

Until that pipeline gets built, recoveryof natural gas is a no-go.

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Development PlansAccording to the Bald Eagle Economic

Report, because there is no gas pipeline yet,gas from Alaska has never been produced on acommercial basis for sale to distant consumers.

But Alaska is set on developing thispipeline. After all, Prudhoe Bay is decliningand they need more oil and gas revenue toreplace any lost revenue from Prudhoe.

Once this pipeline is completed, thepotential revenue from gas sales couldapproach the point where it will behigher than the increased revenue gainedfrom increased oil production due to gasre-injection into oil reservoirs.

Because the Bald Eagle leases are locatedbetween 12 and 20 miles from the Trans

Alaska Pipeline and the Dalton Highway,development possibilities are good.

Trucking would cost a few dollars abarrel (depending on quantities, insurance,envionmental licenses, etc…). And if BaldEagle does find a significant amount of gas(and Alaska finished construction of theproposed gas pipeline) they are close enoughto be sold through that pipeline.

Better yet, thanks to newer technologiesconverting gas into synthetic crude is aneconomic reality. According to the BaldEagle Economic Report, British Petroleumwas recently converting gas to 300 barrelsof crude per day.

While this may not sound like much, it allowed them to make $30,000 perday… or nearly $11 million every year. This makes Bald Eagles prospectsbetter than ever.

So what do you have here? A chance toinvest in a startup oil and gas companythat has…

Six promising leases (that havealready been tested) next to existing major oil finds

All of its property nearby existingpipelines or oil fields for quick and cheap transportation

The experience necessary to successfully explore the property they have and extract every lastdrop of oil and gas from it.

Remember — oil production ispeaking. Oil prices will continue risingfor years. And Bald Eagle Resources isyour key to capitalizing on it all.

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CHAPTER 6

Bald Eagle Economic AnalysisThe following three pages are the Bald Eagle Energy, Inc.

North Slope Alaska Oil Well Economic Analysis, New Field Discovery — Estimated Cash Flow.

Analysis A — Assumes discovery is: 90 million barrels of oil.

Analysis B — Assumes discovery is: 30 million barrels of oil.

Analysis C — Assumes discovery is: 5 million barrels of oil.

All analysis show the years 2010 through 2025.

Analysis prepared by D. Lappi, May 12, 2008.

Mr Lappi received a postgraduate Diploma in Geoscience (Mineral Exploration)from Macquarie University in Sydney, Australia in 1977 and graduated from theUniversity of Alaska in Fairbanks, Alaska, U.S.A. with a Bachelor of Science degreein Geology in 1974, and has have more than 30 years experience in a variety ofinternational exploration environments.

17

Analysis A

Bald Eagle Energy, Inc.

Estimated Cash Flow Based on 90 Million Barrels

Discovery Is: 90 million barrelsDrilling Cost: $2 million per wellProduction Facilities: $5 million per wellProduction Rate: 450 bopd per wellWell Decline Rate: 10.00% per yearWell Downtime: 5.00% per yearOil Price Inflation: 0.00% per year

Net Present Value at 15%: $910,806,623



Internal Rate of Return: 62.08%

AssumesCost Inflation Rate: 2.00% per yearAverage Oil Price: $80.00 per bblLease Operating Cost: $10,000 per well/monthLifting Costs: $2.00 per barrelTransportation Cost: $7.00 per bblNet Revenue Interest: 78.33333%

Lifting cost is $2.00 per barrel.

Transportation costs are: Feeder $1.50, TAPS $3.50, Tanker, $2.00, or $7.00 per barrel.

A private 5% royalty exists on this lease.

Petroleum Property Tax is 2% of undepreciated tangible capital cost (dep @ 30%pa).

All known royaltites, charges, and costs have been included.

No credit is taken for the sale of the field at the end of the project.

State and Federal corporate taxes are not includedin the analysis.

Gross Average GrossProduct Oil Price Revenue

Year (MM bbl) ($/bbl) (mill $)

2010 0.0 80.00 0.02011 7.8 80.00 489.42012 11.3 80.00 710.02013 11.8 80.00 739.42014 10.1 80.00 632.22015 8.6 80.00 540.52016 7.4 80.00 462.22017 6.3 80.00 395.12018 5.4 80.00 337.82019 4.6 80.00 288.92020 3.9 80.00 247.02021 3.4 80.00 211.22022 2.9 80.00 180.52023 2.5 80.00 154.42024 2.1 80.00 132.02025 1.8 80.00 112.8

89.9

18

Analysis B


















2010 0.0 80.00 0.02011 3.7 80.00 231.82012 4.2 80.00 264.42013 3.6 80.00 226.02014 3.1 80.00 193.02015 2.6 80.00 165.22016 2.3 80.00 141.32017 1.9 80.00 120.82018 1.6 80.00 103.32019 1.4 80.00 88.32020 1.2 80.00 75.52021 1.0 80.00 64.62022 0.9 80.00 55.22023 0.8 80.00 47.22024 0.6 80.00 40.32025 0.6 80.00 34.5

29.5

19

Analysis C


















2010 0.0 80.00 0.02011 0.7 80.00 41.22012 0.7 80.00 44.12013 0.6 80.00 37.72014 0.5 80.00 32.22015 0.4 80.00 27.52016 0.4 80.00 23.52017 0.3 80.00 20.12018 0.3 80.00 17.22019 0.2 80.00 14.72020 0.2 80.00 12.62021 0.2 80.00 10.82022 0.1 80.00 9.22023 0.1 80.00 7.92024 0.1 80.00 6.72025 0.1 80.00 5.7

5.0

Bald Eagle Energy Lease Prospectivity and Economics SummaryDavid Lappi, President LAPP Resources.

Arctic National Wildlife Refuge(ANWR)http://en.wikipedia.org/wiki/ANWR

Peak Oilhttp://en.wikipedia.org/wiki/Peak_oil

M. King Hubberthttp://en.wikipedia.org/wiki/M._King_Hubbert

Energy Information Agencyhttp://www.eia.doe.gov/

North Slope Charthttp://geology.com/news/images/alaska-oil-map.gif

Making the Case for ANWR Developmenthttp://www.anwr.org/case.htm

World Auto Sales Flat in 2007http://www.metrics2.com/blog/2006/12/28/world_auto_sales_flat_in_2007_china_becomes_no3_re.html

Oil Pipeline Charthttp://www.alaskascenes.com/blackgold.html

Rand Corp Report: Infrastructure,Safety, and Environmenthttp://www.rand.org/pubs/mono-graphs/2005/RAND_MG414.pdf

World Populationhttp://en.wikipedia.org/wiki/World_population

Canadian Oil Sands, Economicshttp://en.wikipedia.org/wiki/Canadian_oil_sands#Economics

New ‘Super Spike’Could Mean $200 a Barrel Oilhttp://www.marketwatch.com/news/story/goldman-sachs-raises-possibility-200/story.aspx?guid=%7B4B702F7F-41F8-45F0-A133-630F12F2C764%7D

Profit from the PeakBy Brian Hicks

ISBN 978-0-470-12736-0

Forget the Ethanol Myth — Avoid Biofuel Bubblehttp://www.bloomberg.com/apps/news?pid=20601039&sid=a0uHD5Li.uLM&refer=columnist_wasik

E85: Will It Save You Money?http://www.cars.com/go/advice/Story.jsp?section=fuel&story=e85&subject=fuelAlt&referer=&aff=boston

20

CHAPTER 7

Sources

Hybrid Cars Will Pay for Themselves Over Timehttp://www.cnn.com/2006/AUTOS/08/22/bc.autos.hybrids.reut/index.html

Hydrogen Cars Are Here http://blog.wired.com/cars/2008/03/hydrogen-cars-a.html

Historical U.S. Hybrid Vehicle Saleshttp://www1.eere.energy.gov/vehicle-sandfuels/facts/printable_versions/2007_fcvt_fotw462.html

Dispelling the Alaska Fear Factorhttp://www.asiaing.com/dispelling-the-alaska-fear-factor-a-guide-to-alaskas-oil-and-gas-basins-and-business-enviro.html

Alaska Permanent Fund Corporationhttp://www.apfc.org/alaska/dividendPrgrm.cfm

Minerals Management Servicehttp://www.mms.gov/

21

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