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Form 8-K for EXTERRA ENERGY INC.
Item 1.01 Entry into a Material Definitive Agreement.
On September 19, 2007, the Company entered into an agreement for the acquisition of all of the
assets of Star of Texas Energy Services, Inc., Star of Texas Minerals Resources LLC, Hydro-FX,
Inc. and Barnett Holding, LLC located in Lago Vista, Texas. Mr. Ray Ledesma is a principal owner of
the selling companies and is a shareholder and director of the Company. The assets consist of oil and
gas working interests and overriding royalty interests in over 80 wells primarily in North Central
Texas (Denton, Wise, Hood, Parker, Jack, Hill and Tarrant Counties) and producing out of the
Barnett Shale. The assets also include interests in gathering systems, undeveloped leases, vehicles
and office furniture. The agreement provides for a closing date of the purchase of the assets to be
on September 29, 2007. The purchase price for the Assets is $6,000,000.00 payable in shares of
restricted common stock of the Company valued at $0.75 per share for a total of 8,000,000 shares.
Management Compensation!! Seems to me management is accepting success of the company as their primary compensation...good for shareholders!!
The Board approved the following base salaries for Fiscal 2008 as detailed in the table below:
Maximum
Award Annual
Base Bonus Award Achieved (Percentage Bonus
Name Salary (1) (Percentage of Salary) of Salary) Awarded
--------------------------------------------------------------------------------------
John Punzo (2) $Nil N/A N/A $Nil
Ray Ledesma (3) $Nil N/A N/A $Nil
Randall K. Boatright (4) $59,400 N/A N/A $Nil
James D. Romano (5) $108,000 N/A N/A $Nil
Gordon McDougall (6) $64,800 N/A N/A $Nil
--------------------------------------------------------------------------------------
(1) All of the Executive Officers of the Company have agreed to defer a
proportion of their Base Salary. All Executive Officers of the Company are
also members of the Board of Directors with the exception of Mr. McDougall.
(2) Mr. Punzo joined the Company on July 1, 2008 as Chairman & CEO, therefore
no compensation was paid in Fiscal 2008. Per his Management Consulting
Agreement, Mr. Punzo is to receive a Base Salary of $150,000.00 per year.
(3) Mr. Ledesma became an Executive of the Company on October 17, 2007 as CEO
(he recently resigned as CEO to accommodate the appointment of Mr. Punzo;
he currently holds the positions of President & COO). Per his Employment
Agreement, Mr. Ledesma is to receive a Base Salary of $150,000.00 per year.
Mr. Ledesma has agreed to defer his entire compensation to allow the
Company to conserve cash.
(4) Mr. Boatright joined the Company on December 1, 2007 as EVP and CFO. Per
his Management Consulting Agreement, Mr. Boatright is to receive a Base
Salary of $129,600.00 per year.
(5) Mr. Romano joined the Company on November 14, 2006 as President and CEO
(subsequently he has resigned from these positions and is currently
Corporate Secretary and Treasurer). Per his Management Consulting
Agreement, Mr. Romano is to receive a Base Salary of $129,600.00 per year.
(6) Mr. McDougall resigned as an Executive Officer of the Company on April 4,
2008 and as a Director subsequent to the fiscal year-end on June 23, 2008.
Mr. McDougall was receiving $129,600.00 per year.
Currently all Executive Officers of the Company are receiving half of their
monthly Base Salary with the balance being accrued. Subsequent to the fiscal
year end, Mr. Romano elected to convert $60,000.00 of his outstanding accrual
into restricted shares in the Company.
33
--------------------------------------------------------------------------------
Equity Incentives. The Executive Officers received restricted stock awards as a one-time equity incentive. During Fiscal 2008, Mr. Ledesma received 1,200,000 restricted shares; Mr. Boatright received 1,000,000 restricted shares; Mr. Romano received 1,020,000 restricted shares; and Mr. McDougall received 1,020,000 restricted shares. Subsequent to the year-end, Mr. Punzo received 500,000 restricted shares (an additional 500,000 restricted shares are to be issued on January 1, 2009). All of these restricted stock issuances are one time stock incentive bonuses.
Employee Plan
Exterra does not currently have an Employee Plan.
Employment Contracts, Change-In-Control Arrangements and Certain Other Matters. We provide the opportunity for our executive officers to be protected under the severance and change in control provisions contained in their employment agreements. We believe that these provisions help us to attract and retain an appropriate caliber of talent for the position. Our severance and change in control provisions for the executive officers are summarized in their respective Employment Agreements.
Other Employee Benefits. Exterra does not currently have an employee benefit plans, such as medical, dental, group life and long-term disability insurance.
Fiscal 2009 Compensation Decisions
Base Salaries. No increases in Base salaries are planned for Fiscal 2009.
Equity Incentives. No further equity incentives are planned for Fiscal 2009.
Insider Ownership!! Let's see here who has the most to gain or lose by the success of the company? Management and shareholders look about even!
Security Ownership of Certain Beneficial Owners
Amount and Nature of Percent
Name and Address of Beneficial Owner Beneficial Ownership of Class
---------------------------------------------------------------------------
Ray Ledesma 9,352,500(1) 33.68%
1717 St. James Street, Suite 205
Houston, Texas 77056
James D. Romano 1,500,000 5.25%
1717 St. James Street, Suite 205
Houston, Texas 77056
John Punzo 596,016(2) 2.08%
16149 Morgan Creek Crescent
Surrey, BC, V3S 0J2
Randall K. Boatright 1,030,500 3.60%
1717 St. James Street, Suite 205
Houston, Texas 77056
Frank Simmen 325,000 1.13%
1717 St. James Street, Suite 205
Houston, Texas 77056
All Officers and Directors as a Group 12,804,016 45.74%
(1) Ray Ledesma directly owns 1,512,500 restricted common shares (5.45%), Star of Texas Energy Services, Inc. directly owns 40,000 restricted common shares (0.014%), Star of Texas Minerals Resources LLC directly owns 620,000 restricted common shares (2.23%) and Hydro-FX Inc. directly owns 135,000 restricted common shares (0.048%). Mr. Ledesma owns 100% of Star of Texas Mineral Resources, LLC and Hydro-FX Inc. Mr. Ledesma is also the trustee of SMLL Trust, which holds 100% of the shares of Star of Texas Energy Services, Inc., which directly holds 7,045,000 restricted common shares (25.37%).
(2) According to a Management Agreement signed July 1, 2008, Panterra Capital Inc., a company held 100% by Mr. Punzo received 500,000 common shares on July 1, 2008 and will receive an additional 500,000 common shares on January 1, 2009.
Provable Reserves: Gross $79 Million???? NET of $23 Million??? Not sure how to read these numbers. RK
"During the year ended May 31, 2008, The Company had reserve studies and estimates prepared on its various properties. The difficulties and uncertainties involved in estimating proved oil and gas reserves makes comparisons between companies difficult. Estimation of reserve quantities is subject to wide fluctuations because it is dependent on judgmental interpretation of geological and geophysical data.
(5) Standardized Measure of Discounted Future Net Cash Flows Relating to Proved
Oil and Gas Reserves
May 31, 2008 May 31, 2007
------------ ------------
Future cash inflows $ 76,423,350 $ --
------------ ------------
Future production (18,905,800) --
------------ ------------
Future development costs (7,315,340) --
Future income tax expense (10,726,992) --
Future net cash flows 39,475,218 --
------------ ------------
Discounted for estimated timing of
cash flows (16,457,167) --
------------ ------------
Standardized measure of discounted
future net cash flows $ 23,018,051 $ --
------------ ------------
Future income taxes were determined by applying the statutory income tax rate to future pre-tax net cash flow relating to proved reserves.
The following schedule summarizes changes in the standardized measure of discounted future net cash flow relating to proved oil and gas reserves:
Years ended March 31,
----------------------------
2008 2007
------------ ------------
Standardized measure, beginning of year $ -- $ --
Extensions, discoveries and improved recovery -- --
Revisions of previous estimates -- --
Purchases of minerals in place 29,623,803 --
Sales of minerals in place -- --
Net change in prices and production costs -- --
Accretion of discount -- --
Oil and gas sales, net of production costs (350,823) --
Changes in estimated future development costs -- --
Previously estimated development cost incurred -- --
Net change in income taxes (6,254,929) --
Change in timing of estimated future production -- --
------------ ------------
Standardized measure, end of year $ 23,018,051 $ --
============ ============
The above schedules relating to proved oil and gas reserves, standardized measure of discounted future net cash flows and changes in the standardized measure of discounted future net cash flows have their foundation in engineering estimates of future net revenues that are derived from proved reserves and prepared using the prevailing economic conditions. These reserve estimates are made from evaluations conducted by independent geologists, of such properties and will be periodically reviewed based upon updated geological and production data. Estimates of proved reserves are inherently imprecise. The above standardized measure does not include any restoration costs due to the fact the Company does not own the land.
Well, here's a link to the 10K Filing
http://yahoo.brand.edgar-online.com/displayfilinginfo.aspx?FilingID=6159415-1201-192267&type=sect&dcn=0001050502-08-000254
Impressions....
There's a fair amount of debt, numerous lawsuits, hefty asset values (over 60 cents per share), increasing revenue....looks like management has their work cut out for them.
But...with revenue flow continuing to increase and some pretty big money behind the company...I think this company has a future.
RE lawsuits....Here's a pretty important paragraph:
"Litigation
"The Company is aware of the following pending or threatened litigation. All of the litigation below relates to outstanding liens and encumbrances against approximately 7 wells acquired from Star of Texas during the year (see Note 4). Exterra expects to be able to settle these and the other liabilities and liens for approximately $5,000,000. "
I think the import of this is that we acquired some pretty valuable property that will end up costing us 8 million shares plus the $5 Million bucks....for $10-15 Million in provable reserves. If I'm reading this correctly...not too bad.
Hey JT, did you happen to noticed that EENR got their 10K filed yesterday??
From first glance looks pretty promising...I'l post a link next.
Revenue over a Million bucks...compared to $51K.
Later.
Randy
Come on guys your Due Diligance waning.....
I'm gone for a day, EENR gets their 10K filed and no body post any of the good news.
What's up with that?
Are you guys invested in this stock or not????
Randy
John Punzo, Chairman & CEO
Since 1981, Mr. Punzo has served as a Director and as President or Chief Executive Officer of
several businesses. During this time, Mr. Punzo played a key role in launching, directing and
obtaining the funding for a few of these entities into the public markets. Mr. Punzo has assembled a
successful team of energy experts, along with experienced accountants, financial and legal advisors
to assist his efforts. His experience and corporate leadership, combined with his dedication to
ensuring strict compliance and adherence to the rules and regulations of the Securities and Exchange
Commission, are a matter of record. In 2002, Mr. Punzo led the restructuring of Sonoran Energy,
Inc. into a successful energy company. He departed in 2004 to further develop his energy
consultancy and private management group. Most recently, Mr. Punzo was CEO of Wentworth
Energy Inc., an East Texas oil and gas exploration company. His experience and corporate
leadership, combined with his prior knowledge of the oil and gas industry, make Mr. Punzo not only
qualified, but also fully committed to establish Exterra Energy as an industry leader in the oil and
gas sector.
Randy appreciate to share a wonderfull report...i totally agree with you........the stock price will bounce back if something comes out strongly.......
Here's a recommendation from JR Budke an online newsletter/evaluation/recommendation....lot's of good information. He also sends out periodic updates. The link below is to his website....the paste below that is mosty recent email update about the company.
http://www.thespotlite.net/member/spotentry.htm
"STOCK PRICE ALERT"
A "Featured Spotlight" stock
Exterra Energy, Inc. (EENR)
(Oil & Gas) (news) $0.13
Exterra Energy, INC (EENR) (52 week range 0.13 - 1.50), now at $0.13. EENR is our newest "Featured" Spotlight stock, and also, our newest addition to the "Stocks in the Spotlight".
Exterra Energy first started trading as a new public company in January of this year, but it also started out as a "public company with a book value", something so rare it only happens a few times every thousand years.
EENR's already producing oil & gas, with over 50 wells in Texas and the promise of growth. EENR is one of the strongest investments I have seen in many years. Seldom do we have an opportunity to get in at the low, under "book value", in a young company like EENR, at a price better than those that have traded before us.
A young growing company in the economically hot "oil & gas" industry with a "book value" of about 0.34. I don't know of a better bet in these economically troubled times. This is a stock we should buy and hold for the longer term, with an opportunity to make the big bucks.
Don't miss out here. EENR, a "new to the public" company, with a low float, any strong news, of which I am expecting soon, creates a strong opportunity for higher ground ahead, quickly. Financials are expected soon and I am looking for something greater than $30,000,000 in recoverable reserves, or over a dollar a share in reserves. Recoverable reserves has to do with oil & gas that is known to be under the EENR properties.
I am also expecting news soon, on a couple of drilling programs, that could cover as many as 20 wells, with additional programs to follow.
Exterra Energy is made for this current market. We need to find a quality low-priced stock with some meat on the bones. Trading at the new all-time low, with a strong future and assets that make anything under a buck a good bet.
From 0.13 to 0.39, is a 200% move, and this should be a "piece of cake" for an oil & gas stock trading under "book value", and one that has already traded as high as $1.50.
A stock made for this market. Buy here and buy now!
BTW, I finally decided to bite a bit harder. I picked up some cheapies this AM.
I'm guessing we will see the filed 10K (that is presently late) would should give us some additional information about recoverable reserves.
I'm pretty sure that if any amount of buying shows up...the stock price will quickly leave current levels behind.
Randy
If you're going to post news sounding stuff. Please validate your information by indicating the source, date and publication.
That way if there is actually someone doing research, they will have access to current information.
Thanks.
Randy
Exterra Energy Inc. (OTCBB: EENR) is pleased to announce the Company has
retained Premier Media Services, Inc. (PMSI) to enhance shareholder
retention and acquisition. Exterra cited PMSI's track record in investor
and media relations, as well as its extensive relationships throughout
the financial community as primary reasons for choosing the firm.
Exterra Energy Inc. Announces Retention of Premier Media Services, Inc. as Investor Relations
Watch out for a bounce back EENR will be having good times sooner ...
Exterra Energy Inc. (OTCBB: EENR) announced today the successful fracture
stimulation of the RSK-Star #6 well on June 18 , 2008. The well is
situated in Wise County, Texas, within the core area of the Newark, East
Barnett Shale gas field of North Texas. On June 24th, the well commenced
gas sales at 550 Mcf per day on a 24/64" choke. Production flow is up the
casing due to tubing shortages. As of July 21st, gas sales have
stabilized at approximately were 320 Mcf per day with a flowing casing
pressure of 350 psi on a 30/64" choke. The installation of production
tubing is planned which will allow the continued recovery of frac fluids
and enhance the daily gas rates.
Exterra Energy Announces Successful Fracture Stimulation of RSK-Star #6 Well on June 18, 2008
Exterra Energy Inc. the successful fracture stimulation of the RSK-Star #6 well on June 18, 2008. The well is situated in Wise County, Texas, within the core area of the Newark, East Barnett Shale gas field of North Texas. On June 24th, the well commenced gas sales at 550 Mcf per day on a 24/64 choke. Production flow is up the casing due to tubing shortages. As of July 21st, gas sales have stabilized at approximately were 320 Mcf per day with a flowing casing pressure of 350 psi on a 30/64 choke. The installation of production tubing is planned which will allow the continued recovery of frac fluids and enhance the daily gas rates. Exterra Energy owns a 21.1% Working Interest (15.61% Net Revenue Interest) in the RSK-Star #6. The RSK-Star lease consists of 264.9 acres with six (6) producing Barnett Shale gas wells. Exterra owns varying working interest in each of those six producing wells. Three (3) additional Barnett Shale drill sites have been identified, which were delineated by a 3D seismic survey over the acreage.
Exterra Energy, Inc. announced delayed annual 10-K filing
On 08/28/2008, Exterra Energy, Inc. announced that they will be unable to file their next 10-K by the deadline required by the SEC.
Watch out for the company report at http://www.globalmarketplay.com/EENR.php
EENR as on expected terms since the falling crude. EENR has bottomed out on the charts...
The downfall in US Markets is the reason I feel so that the stock price for this stock are going down and down and the crude also reaching down to near about 91 to 92$ a barrel.
The crude is going to dip day by day and the reason behind is very clear.
Any predictions about crude are at present of no use as its going down in such a way that nobody would have thought of.
Below the red line is a signal that the crude is gonna dip down for the rest of the week.
EENR needs a protein drink to boost the secret of its energy.
It’s a kind of take rest day only but that’s good as it not going into dip.
Take rest take rest. I understand crude price going down..
Yet there are no volumes today, so its tough to say or say its early to say what and how would be the day ahead.
It seems its just the silence before a great blast coming ahead in the next coming days. so only crude is so silent and going down.
This is the only market ie energy/crude,which is affecting the stockmarkets the whole day, many people trade seeing the rates of crude in the market.
But the good thing is it has shown some good volumes today.
Could anyone tell me, would the nuclear deal signed by India wherein its got rights would affect the crude prices and anywhere the energy resources?
I mean it can reach the bottom also and we would not know when reaches the sky. Its unpredictable.
Crude can do anything, it will burn itself also and the consumer also.
Anyways EENR is always a good story since it is also into Energy sector and Oil price rise will help it act positively too..
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