New IBOX as of August 26, 2014
Business Continuation Plan
Our intended business operations are in the development, production, and low risk exploration of oil and gas including unconventional natural gas, in the Rocky Mountain region of the continental United States; specifically, in the Rocky Mountain area of Utah, Colorado, Montana and Wyoming, and some Mid Continent areas.
The Company intends to strive to be a low cost and effective producer of hydrocarbons and intends to develop the business model and corporate strategy as discussed herein. Its focus will be in the Rocky Mountain Basin and Mid Continent.
The Company’s approach to lease acquisition, development and production is founded on the discipline of only acquiring leases in areas of proven production. In most cases the leases that are under consideration have at one time contained producing oil or gas wells and currently have production or shut-in wells that are viable for work over and or re-completion. In some cases the prospects are stepout well development. In addition, the Company attempts to seek leases and producing properties that generate oil and gas at a depth of 8,500 feet or less, where rework and drilling costs are typically less. There are many prospects in our area of interest that meet these criteria. In many instances, the wells were shut-in during a period of declining oil and gas prices and in most cases are ideal for our business model. Our business model is simple; strict adherence to lease acquisition surrounded by proven production, offering well workovers, re-completion, and enhanced oil recovery opportunities in the known producing formations, with long term production potential at a low cost of development, maintenance, and operation. The Company is not an exploration company, per se; rather it seeks leases with discovered oil and gas with current or prior production or step out/development locations.
Our corporate strategy in developing our operations and evaluating potential acquisitions is as follows.
Pursue concurrent development of our core area of the Rocky Mountains.
In the coming year we plan to spend up to $10,000,000 on acquisition, drilling, re-completion, and development programs, some of which will be started in 2014 and will continue in 2015. We plan to raise these funds in Private Placements of Common Stock, Preferred Stock and/or convertible debt or through industry participation in working interests. Many of our targeted prospects are in reservoirs that have demonstrated predictable geologic attributes and consistent reservoir characteristics, which typically lead to more repeatable drilling and re-completion results than those achieved through wildcats.
Achieve consistent reserve growth through repeatable development
We intend to achieve consistent reserve growth over the next five years through a combination of acquisitions, rework and drilling. In 2014, we intend to continue to focus on our acquisition, re-completion, initial drilling and development programs. We anticipate that the majority of future reserve and production growth will come through the acquisition of production, the execution of our drilling and re-completion program, and on development activities on prospects of which we are aware, which include proved and unproved locations. Our targets generally will consist of locations in fields that demonstrate low variance in well performance, which leads to predictable and repeatable field development.
Our reserve estimates, if any, may change continuously and we intend to evaluate such reserve estimates internally on a frequent basis — quarterly if warranted — with independent engineering evaluation on an annual basis. Deviations in the market prices of both crude oil and natural gas and the effects of acquisitions, dispositions, development and any successful exploration activities may have a significant effect on the quantities and future values of our reserves, if any.
Maintain high percentage ownership and operational control over our asset base
We intend to retain a high degree of operational control over our asset base, through a high average Working Interest or acting as the operator in our areas of significant activity. This is designed to provide us with controlling interests in a multi-year inventory of drilling locations, positioning us for reserve and production growth through our drilling operations. We plan to control the timing, level and allocation of our drilling capital expenditures and the technology and methods utilized in the planning, drilling and completion process on related targets. We believe this flexibility to opportunistically pursue low risk exploration and development projects relating to selected prospects may provide us with a meaningful competitive advantage.
Acquire and maintain acreage positions in high potential resource plays
We believe that our intended acquisition and development in known production prospects in the Rockieswill take most of our resources.. We intend to continually evaluate our opportunities and pursue potential opportunities that take advantage of our strengths. We are examining potential prospects in such areas as Utah, Colorado, Wyoming and Montana, which have gained substantial interest within the exploration and production sector due to their relatively under-explored nature and the potential for meaningful hydrocarbon recoveries. There are other mid-size and large independent exploration and production companies conducting drilling activities in these plays.
Pursue a disciplined acquisition strategy in our core areas of operation
We intend to also focus on growing through targeted acquisitions. Although drilling prospects may provide us with the opportunity to grow reserves and production without acquisitions, we continue to evaluate acquisition opportunities, primarily in our core areas of operation.
Experienced management and operational team with advanced exploration and development technology
Our management team has over 30 years of experience in the oil and gas industry, and has experience in creating value both organically and through strategic acquisitions. Our management intends to utilize the best available and fit-for-purpose technology, sophisticated geologic and 3-D seismic models to enhance predictability and reproducibility over significantly larger areas than historically possible. We also intend to utilize state-of-the art drilling and completion technology, as well as multi-zone, multi-stage artificial stimulation (“frac”) technology in completing wells to substantially increase near-term production, resulting in faster payback periods and higher rates of return and present values. Our team has successfully applied these techniques, normally associated with completions in the most advanced Rocky Mountain crude oil and natural gas fields, to improve initial and ultimate production and returns, in other companies.
New Management Team
Mr. Donald L. Walford serves as the Director and Chief Executive Officer of Terex Energy Corporation. He served as the Chief Executive Officer OF Three Forks, Inc. and served as its Executive Vice President of Finance from October 22, 2013 to January 28, 2014 and also served as its Chief Executive Officer from March 28, 2012 to October 22, 2013. Mr. Walford served as Director at Three Forks, Inc. until February 27, 2014.
Mr. Martin R. Gottlob serves as the Director and Vice President of Geology. He also serves as a Director of Rancher Energy Corp. He is the owner of Independence Oil II, LLC, where he has developed, drilled, completed and operated wells on behalf of sixteen clients. Since 2004 he has been responsible for exploration and operations for Edward (Tiger) Mike Davis' oil properties (Davis Oil Co.), where he has been responsible for many phases of field development in the D-J Basin, in Colorado, Wyoming, and Nebraska. He has worked in similar capacities for Petrogulf, Minoco, Decalta,Resource Technology and Mountain Minerals all in Colorado since 1979. Mr. Gottlob has been a Director and Vice President of Geology for Terex Energy Corp since March 2014. He has a B.A. in Geology from the University of Colorado with an emphasis in petroleum exploration and sedimentary basin analysis, and a Master of Science from the Colorado School of Mines, in oil and gas operations research, and management science of oil and gas investment projects.
The total number of shares of stock which the Corporation shall have authority to issue is Three Hundred Twenty Five Million (325,000,000); of which Two Hundred Seventy Five Million shares (275,000,000) are designated as Common Shares, $0.001 par value per share, and of which Fifty Million (50,000,000) are designated as Preferred Stock, $0.001 par value, which may be subdivided into various Classes or Series with Rights, Privileges and Preferences to be hereafter determined and designated by the Board of Directors, in the Boards sole discretion in the exercise of its business judgment by filing a Certificate of Designation for each separate Class or Series, containing such Rights, Privileges and Preferences.