MIAMI BRANCH OFFICE DRIFT

1. Business Overview
Drift, based in Miami (Florida), is a company focused on providing services to
the oil industry in environmental matters, solids control, drilling mud
dewatering, waste treatment, water treatment allowing recovery and disposal
of them, ensuring satisfaction of entirely customer needs. Always working with
the highest quality standard, process, technology and infrastructure. Innovating
traditional strategies offered in the oil industry and generating brand new and
profitable proposals in the whole operations. Drift incorporates high quality
service and technology support to improve the service. Drift promotes the
economic sector and generates social inclusion in the region by creating direct
and indirect employment. Drift respects the environment through
environmentally responsible practices in all its processes. In this way, reaches
and reinforces competitiveness and market positioning in the highest levels.
We are a company focused on oil sector providing high quality integrated
services, aimed at minimizing environmental impacts and the provision of
equipment, in the exploration, exploitation and transportation of hydrocarbons.
The orientation of our efforts in providing services is in benefit to our clients,
because they are the most important thing for the company, and their
satisfaction is for us the greatest value. We contribute to the socioeconomic
development of the country where we operate, generating sources of
employment in the regions where our operations are conducted, providing the
best possible health and safety conditions at work, conserving natural
resources and environment. The investigation, innovation and optimization are
essential parts of our daily activities, seeking to provide services which
promote the unconditional loyalty of our customers.

1.1. Business Areas

1.1.1.Solids Control
Specialized equipment to maintain proper drilling fluid conditions.
Centrifuges HGS & LGS
Storage
Selective Flocculation
Reconditioning of drilling fluids
Recovery of barite
Disposal of solids with low and high density.
1.1.2.Dewatering of Drilling fluids

Is the separation of liquid and solid phase of the drilling fluid. This separation is
performed when the operation fluid is discarded, either by contamination of
fluid or the end of any phase of oil well.
Equipment used:
Dewatering Unit
Pumping equipment
Decanter centrifuge
1.1.3.Handling of Cuttings and Wastewater
The company will supply the equipment and qualified personnel to carry out
the treatment of drilling cuts from wells drilled and wastewater generated. The
cuts are handled by dilution with fresh soil and to treat wastewater is made
physicochemical processes in order to be discharged into the environment or
reused in the operation. The management of these wastes and their disposal
parameters are governed by the law of each country.
1.1.4.Maintenance and Washing of Storage Tanks
It will feature rental services, cleaning services, preventive and corrective
maintenance on storage tanks for the fluids used in oil fields.
1.1.5.Fluid Treatment with High Bsw (Slop Oil)

Hydrocarbon treatment system with high water and solid content.

Centrifuging processes to separate water, oil and solids.
2. Market analysis

2.1. Oil industry in the US

America has an extraordinary ability to reinvent itself in different industries.
The oil manufacturing sector in the 1970s it seemed inevitable to decline,
whereby the big multinational oil companies have opted for a globalized
strategy to survive the American market perspectives in terms of hydrocarbons
industry.
The history of oil in the US has been increasingly positive, through time has
been introduced over the oil industry becoming one of the biggest oil producers
worldwide. Despite of also being a major consumer of oil has remained in
balance because every time production is higher and his rising trend is
positive.
In recent years the United States has used a process called "fracking"
(hydraulic fracturing) due to this method, the oil production has increased
considerably settling in third place worldwide as one of the largest oil
producers in 2014.

The collapse in oil prices have affected economically and politically the world
order, a spin on the wheel of fortune that strengthened the interests of the
United States and led to financial crisis several of the largest oil exporters,
especially those whom are hostile with West, such as Russia, Iran and
Venezuela. It is a huge boost for the US, three of its four most active opponents
are seriously debilitated and their incomes have been severely reduced.
It is expected that between 2015 and 2017 United States will be the largest oil
producer in the world overtaking Russia and Saudi Arabia, approaching to
energy efficiency.
It can be seen below an average of how America has been growing in recent
years:
Table No.1. US Oil Production

Source: Reuters
2.2. The Petroleum Industry in the US
In America there are many companies dedicated in the oil industry always
focusing on high-tech processes in exploration and exploitation, seismic
processing and crude oil treatment. Among major US companies in oil sector
we list the following:
Operating oil companies

BP PLC
Occidental Petroleum Corporation
PJP4
Texaco Petroleum Co
Marathon Oil
Apache Corp.
Chevron Corporation
Conoco Phillips
Hunt oil company

Seismic Companies

Seabird exploration
Tesla Exploration
Schlumberger
DAWSON
Geokinetics Knowledge revealed

Crude Oil Treatment Companies

RWL Water
Aquatech
Veolia
Altela.

Is estimated positive growth in the hydrocarbons sector by facilitating the entry

into the sector and expecting good signs of development in the field of
exploration, allowing Drift to get a position in oil market, economic stability and
maximum ROI

Table No.2. Matrix of Competition Analysis

Source: Own Calculations

2.3 SWOT Analysis:

The SWOT analysis provides an opportunity to examine the internal
strengths and weaknesses Drift be addressed. It also allows us to
examine the opportunities presented to the company as well as
potential threats. Also the strengths include the wide range of action
and its clear vision of market needs.
Opportunities
Strengths
The strong US market in Increased investment in the
terms of products and prices.
sector,
especially
with
the
development
of
non-conventional
The extensive experience of
Increasing
its owners on the needs of the technologies.
possibilities
to
share
a
segment
in
productive sector.
market in the US.

Permanent
Technical Strategic alliances with medium
assistance by the team of and small companies in the sector.
specialists from the owners
Increase possibilities of market

Technical
and
financial penetration.
backing
of
owners,
and
employees.
Weaknesses
Threats

 Dependence on operating
companies to meet customer
requirements, they may have
problems with delivery times,
quality, guarantees, etc.
In relation to new customers
who may be competing with
companies offering equipment
for oil and gas and have their
headquarters in the country
where their operations are
present.

An important variable as the

price of oil will determine many
political and economic dynamics
globally.
The process of devaluation of
Latin
American
currencies,
thereby increasing the internal
cost of the machinery required in
production
processes.
Our
investments
come
from
LA
market.
The global economy and drastic
changes in the exchange rates of
the United States.

Table 2.1. SWOT Analysis.

2.3.1 Competitive Advantage
The competitive advantage of Drift is that offers independent
management of drilling fluid, solids control and waste management
under a single plan. We contribute to operations, engineering and
environmental controls by surveying operations, program planning and
execution and optimization programming with our team of project
managers, fluid specialists, solids control, and waste management
technicians.

Our services also include developing waste strategies, well studies,

fluid programs, technical evaluations, training, waste management
selection, fluid and solids analysis, risk management, regulatory liaison,
waste treatment, planning and execution.
2.3.2 Specific Market Summary
Waste is an inevitable by-product of drilling activities in the form of
cuttings and mud. The increasing demand of energy and growing
environmental concern is driving the solids control equipment market.
Solids control equipment optimizes the drilling efficiencies by reducing
fluid losses. The American Petroleum Institute (API) has estimated that
approximately 1.21 barrels of total drilling waste fluids are generated
for every foot drilled.

Drilling fluids and cuttings are the largest potential waste stream
generated during drilling operations. Solids control equipment
separated the solids cuttings from the fluid and processed further for
treatment and disposal. On the drilling rig, solids control equipment
applies different technologies to remove unwanted solids and recover
drilling mud for reuse.
The global solids control equipment market is segmented on the basis
of its major types which include shale shakers & screen, mud
centrifuges, hydrocyclones, mud cleaner, and others. Also, the market is
segmented on the basis of its applications which include onshore and
offshore.

3. DRIFT Certifications
Drift has the following certifications:

ISO 9001
ISO 14001
OHSAS 18000
RUC score 96
4. Drift Contracts

Since December 27, 2012, Drift has a signed contract with the company
Metapetroleum Corp, whose purpose is the provision of treatment sludge
production.
5. Team Work and Organizational Structure
DRIFT is composed of a group of professionals with expertise in each of their
areas and graduate level training. The team has complementary skills and
expertise of the service offered, it is necessary for the work team to possess
specific expertise.
Personal plant consists of five persons as follows:

No.6 Organization Chart

6. Staff Profile
The professional training of Drift officials is:

GILBERTO CAICEDO BATTISTON

Professional Training:
Petroleum Engineering
Universidad de Amrica
Bogota, Colombia (2005)
Degree in Project Management
Universidad de la Sabana
Bogota, At present
Professional Profile:
High capacity professional for teamwork, good interpersonal relationships,
commitment, dedication, honesty and leadership, ethical, capacity domain of a
group and project management in the oil sector. With experience in the
administrative and operational aspects of the hydrocarbon sector.

FRANK DARIO MARTINEZ SEPULVEDA

Professional Training:
Petroleum Engineering
Universidad Industrial De Santander
Colombia, (1979)
Postgraduate in Financial Management
Universidad De Santander
Colombia, (1998)
Professional Profile:
Petroleum Engineer with extend experience in planning and Technique,
Administrative and Financial Direction in the petroleum and gas sector.
Decision making, projects dinamization and personnel management.

ANDREY FERNANDO ACOSTA SALAZAR

Professional Training:
Petroleum Engineering
Universidad Nacional de Colombia
Medelln (Antioquia) (2003- 2009)
Master of Business Administration (Executive MBA)
At present, EUDE
Msc. Financial Markets and Risk
At present, EUDE.
Professional Profile:
Petroleum engineer with 5 years of technical and operational experience,
expertise in areas of business development, sales-services, operations
logistics-service companies and operators for the hydrocarbon industry in
drilling, completion, workover & well design. Skills in strategic planning,
monitoring and operations management, project implementation and team
management.
JOHN JAIRO CORREA RODRIGUEZ
Professional Training:
Economist
Universidad del Valle
Colombia,(2004)

Master in Economics and Finance

Universidad Torcuato Di Tella
Argentina, (2007)
PhD. Finance(T)
CEMA
Argentina, (2010)
Professional Profile:
Specialized in the construction, validity and interpretation of financial
modeling, risk management, derivates, asset valuation and investment
banking. Linked with companies dedicated to the structuring and project
promotion, investment banking, business valuation, risk analysis and
structuring investment portfolios.
7. Business Strategy
The company strategy is to grow based on contracts to be obtained. During the
first year of operations in the United States, was appointed as responsible for
giving the opening to the US market a Board member, that person will evaluate
opportunities and according to these, begin the hiring process.
By the end of the first year there must be at least 5 employees, of which 3
must be professionals with oil industry experience and two others, not
professionals, for general services and other tasks that would be required, once
take place the startup for different contracts, more employees will be hired
according to the requirements of the contractor.

7.1 Marketing Strategy

One common market penetration strategy is to make price adjustments. By lowering
prices, the business hopes to generate more sales volume by increasing the number of units
purchased and to make prices more appealing to consumers when compared to the
competition. In our particular case Drift is willing to get a market quote by proposing best
quality services and lowest cost per service using manufacturing contracts in Latin
America.
The promotional and advertising strategy as a strategic dimension of the business plan,
design and establishment of strategic relationships and focusing on positioning , according
to the strategic plan , in those niche markets where greater acceptance and dissemination
meaning in better volumes of income for Drift LLC
The promotion will aim to present our products and services; such are solids control and
waste management, positioning itself as the best alternative in the hydrocarbon sector in the
US

The initial proposal of advertising to reach potential customers will be:

Advertising through magazines and journals of the American oil industry.
Through Brochure folders for advertising.
Promotion through portals specialized for services in the oil and gas sector of the United
States.
Public relations of share holders and employees.
Exhibition in oil fairs such as the OTC in Texas.
Constant communication with potential customers and suppliers to obtain the best market
shares.

The company will determine the stages of development of the company according to the
level of sales, profits and capital works achieved characteristics and market trends,
expectations and agreements between partners.

The corporate marketing plan will contain a clear definition of the overall market, the target
market and the market share is expected to achieve. Thereby it can be supported by the
design of strategies, operation and monitoring of the business, defining processes and
corporate procedures during the operations of the company in the US market.
8. Economical and Financial Plan
8.1. Assumptions
To make projections, the following assumptions were made:
1. Structure of equity and debt are constant.
2. Growth rates for each item are indexed to the inflation forecast.
3. Growth of salaries, personnel and other expenses are indexed to the
Consumer Price Index (CPI).
8.2. Fixed Investment - Investment Required
The company Drift LLC, requires for startup an initial investment of $ 1.70
million USD to purchase equipment to the development its objective such as
office equipment necessary for the development of the operation. Additionally,
$ 500,000 USD is required for pre-operating and installation costs.
In total the fixed investment required for the project is $ 1.75 million USD
8.3. Cost Structure
To Drift LLC, the following direct costs structure is defined:

Table No.3. Direct Costs and Expenses

Source: Own calculations

The direct labor, costs of transport and the item of maintenance, repair and
services, are the items most relevant at 15%, 19.52% and 10%, respectively.

Chart No.1. Direct Costs

Source: Own Calculations

Indirect costs contemplated are salaries and benefits for personnel working in
the administrative area, also insurance and needed tools. Likewise, leases,
utilities, advertising, depreciation and others. In that way the indirect costs are:

Table No.4. Indirect Costs and Expenses

Source: Own Calculations

The costs and indirect costs represent 13% of total costs. The most
representative item represents the labor indirect and administrative with 7% of
the total.

Chart No.2. Indirect Costs

Source: Own calculations

3.4. Projected Sales

The sales budget is done based in the equipment operating at 50% the
first year to reach 100% at year 5. The number of teams and rates for
the services provided are taken into account: slop oil and solids control.
Table No 5. Revenue Projection Assumptions

Source: Own Calculations

The estimated value for the first year is $ 2,250,000 USD, of which $
1,575,000 USD correspond to Slop Oil and $ 675,000 USD to control
solids. For years 4 and 5, the total revenue amounted to $ 3,108,825
USD and $ 3,655,958 USD, respectively.
Table No.6. Sales forecast

Source: Own Calculations

The estimated sales are subject to the installed capacity of the company. The
growth projection for the year is 67%.
Chart No.3. Sales Forecast

Source: Own Calculations

3.5. Revenue Projection
Drift LLC, has the following financial projection for the first five years:
Table No.7. Operating Income

Source: Own Calculations

Drift LLC operating income is $ 1,690,003 for the first year of operation. For
years 4 and 5, will ascend to $ 2,335,077 USD and $ 2,746,035 USD,
respectively.
Chart No.4. Operating Income

Source: Own Calculations

Cash flow available for investment in Drift LLC amounts to $ 1,105,003 USD for
the first year of investment and $ 1,795,486 for the fifth year of the projection.
This is the cash available from the company to make investments in current
and non-current assets and to repay principal and interest of financial creditors.
Chart No.5. Operating Cash Flow

Source: Own Calculations