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From Legacy Q4 report.
Legacy, as operator, drilled and completed two strat to horizontal wells in the Big Valley (Three Forks) formation in the southern Alberta Bakken light oil play. Results have been encouraging but in line with an exploratory, early stage play. Both strat wells encountered multiple oil saturated horizons and the horizontal laterals were drilled into a light oil bearing, overpressured reservoir. Technical work continues on analyzing the geological and reservoir model based on the data gathered from these two wells and will be integrated with recent successes other operators have announced in immediate proximity to Legacy's land. Together, all the information will be used to determine the pace of development in 2012.
<<< $ROAOF Links! >>> ~ MAC's Quick DD Links without the charts.
PennyStockTweets ~ http://www.pennystocktweets.com/stocks/profile/ROAOF
OTC Markets Company Info ~ http://www.otcmarkets.com/stock/ROAOF/company-info
OTC Markets Charts ~ http://www.otcmarkets.com/stock/ROAOF/chart
OTC Markets Quote ~ http://www.otcmarkets.com/stock/ROAOF/quote
OTC Markets News ~ http://www.otcmarkets.com/stock/ROAOF/news
OTC Markets Financials ~ http://www.otcmarkets.com/stock/ROAOF/financials
OTC Markets Short Sales ~ http://www.otcmarkets.com/stock/ROAOF/short-sales
OTC Markets Insider Disclosure ~ http://www.otcmarkets.com/stock/ROAOF/insider-transactions
OTC Markets Research Reports ~ http://www.otcmarkets.com/stock/ROAOF/research
Google Finance Summary ~ http://www.google.com/finance?q=ROAOF
Google Finance News ~ http://www.google.com/finance/company_news?q=ROAOF
Google Finance Option chain ~ http://www.google.com/finance/option_chain?q=ROAOF
Google Finance Financials ~ http://www.google.com/finance?q=ROAOF&fstype=ii#
Google Finance Historical prices Daily ~ http://www.google.com/finance/historical?q=ROAOF
Google Finance Historical prices Weekly ~ http://www.google.com/finance/historical?q=ROAOF&histperiod=weekly#
Y! < Company >
Y! Profile ~ http://finance.yahoo.com/q/pr?s=ROAOF+Profile
Y! Key Stat's ~ http://finance.yahoo.com/q/ks?s=ROAOF+Key+Statistics
Y! Headlines ~ http://finance.yahoo.com/q/h?s=ROAOF+Headlines
Y! Summary ~ http://finance.yahoo.com/q?s=ROAOF
Y! Historical Prices ~ http://finance.yahoo.com/q/hp?s=ROAOF+Historical+Prices
Y! Order Book ~ http://finance.yahoo.com/q/ecn?s=ROAOF+Order+Book
Y! Message Boards ~ http://messages.finance.yahoo.com/mb/ROAOF
Y! Market Pulse ~ http://finance.yahoo.com/marketpulse/ROAOF
Y! Technical Analysis ~ http://finance.yahoo.com/q/ta?s=ROAOF+Basic+Tech.+Analysis
Y! < Analyst Coverage >
Y! Analyst Opinion ~ http://finance.yahoo.com/q/ao?s=ROAOF+Analyst+Opinion
Y! Analyst Estimates ~ http://finance.yahoo.com/q/ae?s=ROAOF+Analyst+Estimates
Y! Research Reports ~ http://finance.yahoo.com/q/rr?s=ROAOF+Research+Reports
Y! Star Analysts ~ http://finance.yahoo.com/q/sa?s=ROAOF+Star+Analysts
Y! < Ownership >
Y! Major Holders ~ http://finance.yahoo.com/q/mh?s=ROAOF+Major+Holders
Y! Insider Transactions ~ http://finance.yahoo.com/q/it?s=ROAOF+Insider+Transactions
Y! Insider Roster ~ http://finance.yahoo.com/q/ir?s=ROAOF+Insider+Roster
Y! < Financials >
Y! Income Statement ~ http://finance.yahoo.com/q/is?s=ROAOF+Income+Statement&annual
Y! Balance Sheet ~ http://finance.yahoo.com/q/bs?s=ROAOF+Balance+Sheet&annual
Y! Cash Flow ~ http://finance.yahoo.com/q/cf?s=ROAOF+Cash+Flow&annual
FINVIZ ~ http://finviz.com/quote.ashx?t=ROAOF&ty=c&ta=0&p=d
Investorshub Trades ~ http://ih.advfn.com/p.php?pid=trades&symbol=ROAOF
Investorshub Board Search ~ http://investorshub.advfn.com/boards/getboards.aspx?searchstr=ROAOF
Investorshub PostStream ~ http://investorshub.advfn.com/boards/poststream.aspx?ticker=ROAOF
Investorshub Messages ~ http://investorshub.advfn.com/boards/msgsearch.aspx?SearchStr=ROAOF
Investorshub Videos ~ http://ih.advfn.com/p.php?pid=ihvse&ihvqu=ROAOF
Investorshub News ~ http://ih.advfn.com/p.php?pid=news&btn=s_ok&ctl00%24sb3%24tbq1=Get+Quote&as_values_IH=&ctl00%24sb3%24stb1=Search+iHub&symbol=ROAOF&s_ok=OK&from_month=3&from_day=15&from_year=2012&order=desc&selsrc%5B%5D=prnca&selsrc%5B%5D=prnus&selsrc%5B%5D=zacks&selsrc%5B%5D=money2&selsrc%5B%5D=djn&selsrc%5B%5D=bw&selsrc%5B%5D=globe&selsrc%5B%5D=edgar&selsrc%5B%5D=mwus&force=1&last_ts=1331855999&p_n=1&p_count=&p_ts=1331794260
CandlestickChart ~ http://www.candlestickchart.com/cgi/chart.cgi?symbol=ROAOF&exchange=US
Barchart Quote ~ http://barchart.com/quotes/stocks/ROAOF?
Barchart Detailed Quote ~ http://barchart.com/detailedquote/stocks/ROAOF
Barchart Options Quotes ~ http://barchart.com/options/stocks/ROAOF
Barchart Technical Chart ~ http://barchart.com/charts/stocks/ROAOF&style=technical
Barchart Interactive Chart ~ http://barchart.com/charts/stocks/ROAOF&style=interactive
Barchart Technical Analysis ~ http://barchart.com/technicals/stocks/ROAOF
Barchart Trader's Cheat Sheet ~ http://barchart.com/cheatsheet.php?sym=ROAOF
Barchart Barchart Opinion ~ http://barchart.com/opinions/stocks/ROAOF
Barchart Snapshot Opinion ~ http://barchart.com/snapopinion/stocks/ROAOF
Barchart News Headlines ~ http://barchart.com/news/stocks/ROAOF
Barchart Profile ~ http://barchart.com/profile//ROAOF
Barchart Key Statistics ~ http://barchart.com/profile.php?sym=ROAOF&view=key_statistics
OTC: American Bulls ~ http://www.americanbulls.com/StockPage.asp?CompanyTicker=ROAOF&MarketTicker=OTC&TYP=S
NASDAQ: American Bulls ~ http://www.americanbulls.com/StockPage.asp?CompanyTicker=ROAOF&MarketTicker=NASD&TYP=S
NYSE: American Bulls ~ http://www.americanbulls.com/StockPage.asp?CompanyTicker=ROAOF&MarketTicker=NYSE&Typ=S
Marketwatch Profile ~ http://www.marketwatch.com/investing/stock/ROAOF/profile
Marketwatch Analyst Estimates ~ http://www.marketwatch.com/investing/stock/ROAOF/analystestimates
Marketwatch Historical Quotes ~ http://www.marketwatch.com/investing/stock/ROAOF/historical
Marketwatch Financials ~ http://www.marketwatch.com/investing/stock/ROAOF/financials
Marketwatch Overview ~ http://www.marketwatch.com/investing/stock/ROAOF
Marketwatch SEC Filings ~ http://www.marketwatch.com/investing/stock/ROAOF/secfilings
Marketwatch Picks ~ http://www.marketwatch.com/investing/stock/ROAOF/picks
Marketwatch Hulbert ~ http://www.marketwatch.com/investing/stock/ROAOF/hulbert
Marketwatch Insider Actions ~ http://www.marketwatch.com/investing/stock/ROAOF/insideractions
Marketwatch Options ~ http://www.marketwatch.com/investing/stock/ROAOF/options
Marketwatch Charts ~ http://www.marketwatch.com/investing/stock/ROAOF/charts
Marketwatch News ~ http://bigcharts.marketwatch.com/news/symbolsearch/symbolnews.asp?news=markadv&symb=ROAOF&sid=1795093&framed=False
The Lion ~ http://thelion.com/bin/aio_msg.cgi?cmd=search&msg=&si=1&tw=1&tt=1&rb=1&ih=1&fo=1&iv=1&yf=1&sa=1&fb=1&gg=1&symbol=ROAOF
Search NYSE ~ http://www.nyse.com/about/listed/lcddata.html?ticker=ROAOF
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StockHouse Delayed LII ~ http://www.stockhouse.com/financialtools/sn_level2.aspx?qm_page=46140&qm_symbol=ROAOF
AlphaTrade ~ http://tools.alphatrade.com/index.php?t1=mc_quote_module&t2=mc_quote_module2&t3=historical&template=historical2html&sym=ROAOF&client_id=2740&a_width=680&a_height=1000&language=english&showVol=1&chtype=8
Reuters ~ http://www.reuters.com/finance/stocks/companyOfficers?symbol=ROAOF.PK&WTmodLOC=C4-Officers-5
StockWatch ~ http://www.stockwatch.com/Quote/Detail.aspx?symbol=ROAOF®ion=U
Search NASDAQ ~ http://www.nasdaq.com/symbol/ROAOF
NASDAQ Divy History ~ http://www.nasdaq.com/symbol/ROAOF/dividend-history
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NASDAQ Institutional Ownership ~ http://www.nasdaq.com/symbol/ROAOF/institutional-holdings
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NASDAQ After Hours Quote ~ http://www.nasdaq.com/symbol/ROAOF/after-hours
NASDAQ Pre-Market Quote ~ http://www.nasdaq.com/symbol/ROAOF/premarket
NASDAQ Historical Quote ~ http://www.nasdaq.com/symbol/ROAOF/historical
NASDAQ Option Chain ~ http://www.nasdaq.com/symbol/ROAOF/option-chain
NASDAQ Company Headlines ~ http://www.nasdaq.com/symbol/ROAOF/news-headlines
NASDAQ Press Releases ~ http://www.nasdaq.com/symbol/ROAOF/news-headlines
NASDAQ Sentiment ~ http://www.nasdaq.com/symbol/ROAOF/sentiment
NASDAQ Analyst Summary ~ http://www.nasdaq.com/symbol/ROAOF/analyst-research
NASDAQ Guru Analysis~ http://www.nasdaq.com/symbol/ROAOF/guru-analysis
NASDAQ Stock Report ~ http://www.nasdaq.com/symbol/ROAOF/stock-report
NASDAQ Competitors ~ http://www.nasdaq.com/symbol/ROAOF/competitors
NASDAQ Stock Consultant ~ http://www.nasdaq.com/symbol/ROAOF/stock-consultant
NASDAQ Stock Comparison ~ http://www.nasdaq.com/symbol/ROAOF/stock-comparison
NASDAQ Call Transcripts ~ http://www.nasdaq.com/symbol/ROAOF/call-transcripts
NASDAQ Annual Reports ~ http://www.nasdaq.com/aspx/annualreport.aspx?symbol=ROAOF&selected=ROAOF
NASDAQ Financials ~ http://www.nasdaq.com/symbol/ROAOF/financials
NASDAQ Revenue & Earnings Per Share (EPS) ~ http://www.nasdaq.com/symbol/ROAOF/revenue-eps
NASDAQ SEC Filings ~ http://www.nasdaq.com/symbol/ROAOF/sec-filings
NASDAQ Ownership Summary ~ http://www.nasdaq.com/symbol/ROAOF/ownership-summary
NASDAQ Institutional Ownership ~ http://www.nasdaq.com/symbol/ROAOF/institutional-holdings
NASDAQ (SEC Form 4) ~
--------- All Trades ~ http://www.nasdaq.com/symbol/ROAOF/insider-trades
--------- Buys ~ http://www.nasdaq.com/symbol/ROAOF/insider-trades/buys
--------- Sells ~ http://www.nasdaq.com/symbol/ROAOF/insider-trades/sells
The Motley Fool ~ http://caps.fool.com/Ticker/ROAOF.aspx
The Motley Fool Earnings/Growth ~ http://caps.fool.com/Ticker/ROAOF/EarningsGrowthRates.aspx?source=itxsittst0000001
The Motley Fool Ratios ~ http://caps.fool.com/Ticker/ROAOF/Ratios.aspx?source=itxsittst0000001
The Motley Fool Stats ~ http://caps.fool.com/Ticker/ROAOF/Stats.aspx?source=icasittab0000006
The Motley Fool Historical ~ http://caps.fool.com/Ticker/ROAOF/Historical.aspx?source=icasittab0000004
The Motley Fool Scorecard ~ http://caps.fool.com/Ticker/ROAOF/Scorecard.aspx?source=icasittab0000003
The Motley Fool Statements ~ http://caps.fool.com/Ticker/ROAOF/Statements.aspx?source=icasittab0000009
MSN Money ~ http://investing.money.msn.com/investments/stock-ratings?symbol=ROAOF
YCharts ~ http://ycharts.com/companies/ROAOF
YCharts Performance ~ http://ycharts.com/companies/ROAOF/performance
YCharts Dashboard ~ http://ycharts.com/companies/ROAOF/dashboard
InsideStocks Opinion ~ http://www.insidestocks.com/texpert.asp?sym=ROAOF&code=XDAILY
InsideStocks Profile ~ http://www.insidestocks.com/profile.asp?sym=ROAOF&code=XDAILY
InsideStocks Quote ~ http://www.insidestocks.com/quote.asp?sym=ROAOF&code=XDAILY
InsideStocks Projection ~ http://charts3.barchart.com/procal.asp?sym=ROAOF
Zacks Quote ~ http://www.zacks.com/stock/quote/ROAOF
Zacks Estimates ~ http://www.zacks.com/research/report.php?type=estimates&t=ROAOF
Zacks Company Reports ~ http://www.zacks.com/research/report.php?type=report&t=ROAOF
Knobias ~ http://knobias.10kwizard.com/files.php?sym=ROAOF
StockScores ~ http://www.stockscores.com/quickreport.asp?ticker=ROAOF
Trade-Ideas ~ http://www.trade-ideas.com/StockInfo/ROAOF/HOT_TOPIC.html
Morningstar ~ http://performance.morningstar.com/stock/performance-return.action?region=USA&t=ROAOF&culture=en-US
Morningstar Shareholders ~ http://investors.morningstar.com/ownership/shareholders-overview.html?t=ROAOF®ion=USA&culture=en-us
Morningstar Transcripts~ http://www.morningstar.com/earnings/NoTranscript.aspx?t=ROAOF®ion=USA
Morningstar Key Ratios ~ http://financials.morningstar.com/ratios/r.html?t=ROAOF®ion=USA&culture=en-US
Morningstar Executive Compensation ~ http://insiders.morningstar.com/trading/executive-compensation.action?t=ROAOF®ion=USA&culture=en-us
Morningstar Valuation ~ http://financials.morningstar.com/valuation/price-ratio.html?t=ROAOF®ion=USA&culture=en-us
CCBN (Thompson Reuters) ~ http://ccbn.aol.com/company.asp?client=aol&ticker=ROAOF
TradingMarkets ~ http://pr.tradingmarkets.com/?lid=leftPRbox&sym=ROAOF
OTCBB ~ http://www.otcbb.com/asp/SiteSearch.asp?Criteria=ROAOF&searcharea=e&image1.x=0&image1.y=0
Insidercow ~ http://www.insidercow.com/history/company.jsp?company=ROAOF&B1=Search%21
Forbes News ~ http://search.forbes.com/search/find?tab=searchtabgeneraldark&MT=ROAOF
Forbes Press Releases ~ http://search.forbes.com/search/find?&start=1&tab=searchtabgeneraldark&MT=ROAOF&pub=businesswire,prnewswire&searchResults=pressRelease&tag=pr&premium=on
Forbes Web ~ http://search.forbes.com/search/web?MT=UNGS&start=1&max=10&searchResults=web&tag=web&sort=null
YouTube Symbol Search ~ http://www.youtube.com/results?search_query=ROAOF
Buy-Ins ~ http://www.buyins.net/tools/symbol_stats.php?sym=ROAOF
Quotemedia ~ http://www.quotemedia.com/results.php?qm_page=47556&qm_symbol=ROAOF
Earnings Whispers ~ http://www.earningswhispers.com/stocks.asp?symbol=ROAOF
Bloomberg Snapshot ~ http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?ticker=ROAOF
Bloomberg People ~ http://investing.businessweek.com/research/stocks/people/people.asp?ticker=ROAOF
Financial Times ~ http://markets.ft.com/Research/Markets/Tearsheets/Summary?s=ROAOF
Investorpoint ~ http://www.investorpoint.com/ enter "ROAOF" and click search.
Hotstocked ~ http://www.hotstocked.com/ enter "ROAOF" and click search.
DTCC (PENSON/TDA) Check - (otc and pinks) - Note ~ I did not check for this chart blast. However, I try and help you to do so with the following links.
IHUB DTCC BOARD SEARCH #1 http://investorshub.advfn.com/boards/msgsearchbyboard.aspx?boardID=18682&srchyr=2011&SearchStr=ROAOF
IHUB DTCC BOARD SEARCH #2: http://investorshub.advfn.com/boards/msgsearchbyboard.aspx?boardID=14482&srchyr=2011&SearchStr=ROAOF
Check those searches for recent ROAOF mentions. If ROAOF is showing up on older posts and not on new posts found in link below, The DTCC issues may have been addressed and fixed. Always call the broker if your security turns up on any DTCC/PENSON list.
http://investorshub.advfn.com/boards/msgsearchbyboard.aspx?boardID=18682&srchyr=2011&SearchStr=Complete+list
For a complete list see the pinned threads at the top here ---> http://tinyurl.com/TWO-OLD-FARTS
MACDlinks
I think the real question should be, have they provided enough proof that their leases have enough oil and gas to sell 'Bowood Energy to a Bigger Oil Company.
It is my understanding that there a dozen other small companies trying to do the same. I am also hearing that they don't have the Drill Team perfected to drill and frac this type of shale as of yet to get the max oil out.
Yes and we are the Pawns that help this fraud keep going. The US has all of this Oil and the BIG OIL COMPANIES are refining the oil and selling it off shore in the world market to keep the price high in the US, to keep the fraud going and prices high they are blaming OPAC and the Saudis for not pumping more oil.
I remember the Alaskan Pipe Line, it was sold to us to lower our prices at the pump in the states and our big oil companies took it to the west coast and put it on Tankers and sold it to Japan, then imported more foreign oil to sell to the US.
I hate to say this, but most of that has been known for the past 25-40 years. The U.S. has had enough oil to last us 200 years or more. The U.S. has been on a 50-60 year kick of "Need to spreed the wealth around". Greed set in and they never stopped it. You are correct, but before they start drilling, the land will probably be owned by foreigeners. thank you for your post. jmo
You have to read this! We could be drowning in our own oil!
It is unfortunate that the Reps. don't have a "plan" to defeat Obama. As you read below, it demonstrates the power of the green fascists that are killing this country.
Subject: Oil surprise
Read this and think about it each time you pay more and more at the pump, because of special interest groups, which cause severe economic challenges over the next few months. $5 per gall on gas is not that far away.
scroll down
OIL---you better be sitting down when you read this ! !
You "will" pay $5 a gallon + again and you won't complain loud enough to make a difference, RIGHT!
Here's an astonishing read. Important and verifiable information :
About 6 months ago, the writer was watching a news program on oil and one of the Forbes Bros. Was the guest. The host said to Forbes, "I am going to ask you a direct question and I would like a direct answer; how much oil does the U.S. Have in the ground?" Forbes did not miss a beat, he said, "more than all the Middle East put together." Please read below.
The U. S. Geological Service issued a report in April 2008 that only scientists and oil men knew was coming, but man was it big. It was a revised report (hadn't been updated since 1995) on how much oil was in this area of the western 2/3 of North Dakota, western South Dakota, and extreme eastern Montana ..... Check THIS out:
The Bakken is the largest domestic oil discovery since Alaska 's Prudhoe Bay , and has the potential to eliminate all American dependence on foreign oil. The Energy Information Administration (EIA) estimates it at 503 billion barrels. Even if just 10% of the oil is recoverable... At $107 a barrel, we're looking at a resource base worth more than $5...3 trillion.
"When I first briefed legislators on this, you could practically see their jaws hit the floor. They had no idea.." says Terry Johnson, the Montana Legislature's financial analyst.
"This sizable find is now the highest-producing onshore oil field found in the past 56 years," reports The Pittsburgh Post Gazette. It's a formation known as the Williston Basin , but is more commonly referred to as the 'Bakken' It stretches from Northern Montana , through North Dakota and into Canada . For years, U. S. Oil exploration has been considered a dead end. Even the 'Big Oil' companies gave up searching for major oil wells decades ago. However, a recent technological breakthrough has opened up the Bakken's massive reserves..... And we now have access of up to 500 billion barrels. And because this is light, sweet oil, those billions of barrels will cost Americans just $16 PER BARREL!
That's enough crude to fully fuel the American economy for 2041 years straight. And if THAT didn't throw you on the floor, then this next one should - because it's from 2006!
U.. S. Oil Discovery- Largest Reserve in the World
Stansberry Report Online - 4/20/2006
Hidden 1,000 feet beneath the surface of the Rocky Mountains lies the largest untapped oil reserve in the world. It is more than 2 TRILLION barrels. On August 8, 2005 President Bush mandated its extraction. In three and a half years of high oil prices none has been extracted. With this mother-load of oil why are we still fighting over off-shore drilling?
They reported this stunning news: We have more oil inside our borders, than all the other proven reserves on earth.. Here are the official estimates:
- 8-times as much oil as Saudi Arabia
- 18-times as much oil as Iraq
- 21-times as much oil as Kuwait
- 22-times as much oil as Iran
- 500-times as much oil as Yemen
- and it's all right here in the Western United States .
HOW can this BE? HOW can we NOT BE extracting this? Because the environmentalists and others have blocked all efforts to help America become independent of foreign oil! Again, we are letting a small group of people dictate our lives and our economy.....WHY?
James Bartis, lead researcher with the study says we've got more oil in this very compact area than the entire Middle East -more than 2 TRILLION barrels untapped. That's more than all the proven oil reserves of crude oil in the world today, reports The Denver Post.
Don 't think 'OPEC' will drop its price - even with this find? Think again! It's all about the competitive marketplace, - it has to. Think OPEC just might be funding the environmentalists?
Got your attention yet?
By the way..this is all true. Check it out at the link below!!!
GOOGLE it, or follow this link. It will blow your mind.
http://www.usgs.gov/newsroom/article.asp?ID=1911
Penny, the question of what will the price be....its hard to say because we don't know the true value of the wells. People selling on the news because it is speculative. Its good because it needs a little consolidation.
My guess, from a low end, would be .45 cents, high end, .90 cents.
I'll be adding as much as possible.
A Double would be nice. Read This.
Slide 14 in the presentation really addresses the value of the land. ased on recent purchases company should be in the 50 cent per share range or more
http://www.bowoodenergy.ca/pdf/2012-01-2
any guess as to where we are currently valued at?
could this be the buyout we were looking for?
Bowood Announcement.
Bowood News Release
CALGARY, ALBERTA--(Marketwire - Feb. 27, 2012) -
NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
Bowood Energy Inc. ("Bowood" or the "Company") (TSX VENTURE:BWD) announces that its Board of Directors has determined to evaluate a range of strategic alternatives aimed at enhancing shareholder value. In addition, Bowood has engaged GMP Securities L.P. ("GMP") to advise the Board of Directors with respect thereto.
Strategic alternatives may include, among other alternatives: a sale of the shares of the Company, either in one transaction or in a combination of transactions; a merger, recapitalization, arrangement, amalgamation or any combination thereof; or a sale of a material portion of the assets of the Company.
The Company cautions that there are no guarantees that the strategic alternative review process will result in a transaction or, if a transaction is undertaken, as to its terms or timing. The Company has not set a definitive schedule to complete its evaluation and does not intend to disclose developments with respect to this process unless and until the evaluation has been completed or a definitive agreement has been reached, unless otherwise determined or required by law.
Nice call H8ster.
Volume picking up. Something is on the horizon. Possible bounce coming.
California Has 4x the Oil that's in the Bakken
Another Bakken Found!
By Brian Hicks
Friday, February 10th, 2012
When was the last time you heard this: There’s a glut of oil in the United States.
It’s true.
There’s so much oil right now in the United States that oil produced in the Bakken was selling for $72 a barrel this past Monday.
The Canadians took the biggest hit from this supply glut. The heavy crude produced from the oil sands fell 28% YTD, dropping 15% in the past week to close Monday at $61.
This development is accelerating...
Oil production numbers for North Dakota hit another record in December and finished 2011 at an all-time high.
In fact, oil production in ND has gone hyperbolic. Take a look:
ndnoilproduction
To be honest, it’s not the supply of oil that’s the problem... it’s pipeline capacity.
The construction of pipelines literally cannot keep up with the oil being produced.
"The declines have been driven by congestion in the market," according to a Simmons International & Co. note, "as production growth has exceeded infrastructure development."
The growth is quite shocking.
Oil production in the Bakken, centered mainly in North Dakota and Montana, has ballooned from 2,000 barrels per day a decade ago to over 500,000 barrels per day.
Yes, this is a crisis. But remember our investment thesis here at Wealth Daily: Every crisis contains the blueprint for its own cure.
Pipeline operator Enbridge has launched projects to add 10,000 barrels per day of rail capacity for Bakken oil by July, with another 70,000 barrels per day planned by 2013.
Simmons forecasts the congestion may see some relief in May, when Enbridge and Enterprise Products Partners begin to fill their reversed Seaway Pipeline, from Cushing, Oklahoma, to the Gulf Coast, which will require two to three million barrels of capacity.
The line is scheduled to begin delivering 150,000 barrels per day to the Gulf Coast in June, reaching total capacity of more than 400,000 barrels per day by late 2012/early 2013.
To say this is bullish for pipeline stocks — particularly pipeline MLPs — is an understatement.
The oil and gas boom in the United States has given birth to a massive bull market in pipelines.
Again, this is only half the story...
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You see, once considered a joke and, ahem, pipe dream, there’s serious discussion going on that the United States could actually become oil independent.
Many still consider it a pipe dream. But when you consider how fast the Bakken came online — and overlay that with the rest of America’s oil shale formations — you can see that it is possible.
Take the Monterey Shale Formation in California, for example.
It is estimated to have 64 percent of the recoverable shale oil reserves in the lower 48 states.
Below is a recapitulated table from the U.S. Energy Information Administration report, “Review of Emerging Resources: U.S. Shale Gas and Shale Oil Plays — July 2011”:
Recapitulated Table of U.S. Technically Recoverable Shale Oil Resources
Play
Technically Recoverable Resource
Oil – Billions of Barrels (BBO)
Area in Square Miles
Average EUR
Oil — Millions of Barrels per Well
GULF COAST
Eagle Ford Formation
Texas
3.35 BBO
13.9 Percent
3,323
300
SOUTH WEST
Avalon & Bone Springs Formation
New Mexico & West Texas
1.58 BBO
6.5 Percent
1,313
300
ROCKY MOUNTAIN
Bakken Formation
Montana, No. Dakota & Canada
3.59 BBO
15.0 Percent
6,522
550
WEST COAST
Monterey-Santos Formation – California
15.42 BBO
64.4 Percent
1.752
550
TOTAL 48 STATES
23.94 BBO
100 Percent
12,910
460
California Dreaming
You may remember when, late last year, California Gov. Jerry Brown pushed for a top state regulator to ease regulations for energy companies seeking to drill for California’s oil. The official refused.
A week later, Brown fired the regulator — along with a deputy, Elena Miller.
The governor appointed replacements who agreed to stop subjecting every fracking project to a top-to-bottom review before issuing a permit.
California could have more than four times the recoverable shale oil than the Bakken in North Dakota.
It has more than 4.5 times the reserves of the Eagle Ford Formation in Texas. And it has nearly ten times the shale oil reserves in the Avalon and Bone Springs Formation in New Mexico and Texas.
According to the same EIA report:
The largest shale oil formation is the Monterey/Santos play in southern California, which is estimated to hold 15.4 billion barrels or 64 percent of the total shale oil resources shown in Table 1. The Monterey shale play is the primary source rock for the conventional oil reservoirs found in the Santa Maria and San Joaquin Basins in southern California.
The next largest shale oil plays are the Bakken and Eagle Ford, which are assessed to hold approximately 3.6 billion barrels and 3.4 billion barrels of oil, respectively.
And the Monterey Shale is just one oil shale play in the United States
For those who want to know.
Earlier this week, experts told the US Senate Energy and Natural Resources Committee that breakthroughs in technology and more access to prospective acreage are creating a US oil production revival that is a major break from nearly 40 years of declining production. "We believe that by 2020, the United States will become the largest producer of hydrocarbons in the world, surpassing Russia," said Roger Diwan, partner and head of financial advisory operations at PFC Energy. Meanwhile, James Burkhard, managing director of IHS CERA Inc.'s global oil group believes that the scale of the opportunity to increase US oil production is greater than in most other countries over the next decade.
The Paragon Report provides investors with an excellent first step in their due diligence by providing daily trading ideas and consolidating the public information available on them. For more investment research on the Oil & Gas Sector, register with us free at www.paragonreport.com and get exclusive access to our numerous stock reports and industry newsletters
Oil prices have struggled to stay above $100 per barrel as US national oil data has showed slower refinery throughput and mounting crude stocks, raising concerns about demand. The Department of Energy said total products supplied to the market over the past four weeks was down by 4.3 percent from a year earlier, and crude inventories were high for this time of year.
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If we don't get a pipe line soon they will have to dig a pit to put the oil in just like Russia.
Excellent Info...
When was the last time you heard this: There’s a glut of oil in the United States. By Brian Hicks
It’s true.
There’s so much oil right now in the United States that oil produced in the Bakken was selling for $72 a barrel this past Monday.
The Canadians took the biggest hit from this supply glut. The heavy crude produced from the oil sands fell 28% YTD, dropping 15% in the past week to close Monday at $61.
This development is accelerating...
Oil production numbers for North Dakota hit another record in December and finished 2011 at an all-time high.
In fact, oil production in ND has gone hyperbolic. Take a look:
ndnoilproduction
To be honest, it’s not the supply of oil that’s the problem... it’s pipeline capacity.
The construction of pipelines literally cannot keep up with the oil being produced.
Highlights:
Latest Bowood Corporate Presentation update: January 26, 2012.
Bowood's First two Alberta Bakken horizontal wells have been drilled and are now on production.
Bowood views the early technical data on our wells as positive first steps toward establishing a commercial development on our lands.
Due to the confidential nature of the wells, industry results are coming out slower than we would like, however we remain committed to releasing our own well information as soon as possible to shareholders. Lengthy operations and flowback of large volumes of fracture fluids before meaningful production rates can be established mean that well results in this play will take longer than in conventional plays.
Bowood enjoys a material Alberta Bakken land position; approximately 110,000 net acres (220 gross sections) in the Alberta Bakken prospective fairway, an area in which industry has spent over $239 MM on Crown land acquisitions since April, 2010.
Net land reflects the October 25th, 2010 closing of the Blood First Nations Land Acquisition of 60,600 acres and the December 7, 2010 announced strategic joint venture and farmout with Legacy Oil + Gas Inc. together with continued land acquisitions by Bowood and its partner Legacy Oil + Gas.
Over 60 wells have now been licensed by industry in the play in Alberta and thirty-nine have rig released to date, 22 of which are on production. In Montana, in the same fairway, thirty-eight wells have been licensed and twenty-three have rig released to date, ten of which are now on production.
NEWS RELEASE January 23, 2012
BOWOOD ENERGY INC. ANNOUNCES BAKKEN WELL OPERATIONAL RESULTS AT KIPP AND
SPRING COULEE
FOR IMMEDIATE RELEASE TSX VENTURE EXCHANGE: BWD
– Calgary, Alberta - Bowood Energy Inc. (“Bowood” or the “Company”) provides the
following operational update on current activity in the southern Alberta Bakken Fairway.
Blood/Kipp Exploration well at 8-30-8-23 W4
Bowood is pleased to report that the Company’s second Alberta Bakken test well located at Kipp, started
production in December 2011. This well is located on the Blood First Nation Reserve. We have yet to
establish a stabilized production rate due to the high pressure, multiphase influx of oil, water, and gas
which has hampered pump performance during this early stage of production. The Company expects
these issues are now largely resolved as the well continues to clean up and expects that production will
start to increase with better pumping efficiency. The following is a summary of Kipp well operations to
date:
1) After fracture stimulation (which occurred from Oct 25th to 29th, 2011), and subsequent flow
back of completion fluid, the well was shut in for three weeks to record a static bottom hole
pressure. The pressure data and the extrapolated pressure gradient confirm that the formation
is over-pressured as expected.
2) Despite the fact that the early production operations at Kipp have been delayed, between the
post frac clean up, the initial equipping operation and the first two weeks of intermittent
production the well has recovered over 5,000 bbls of light, oil and approximately 50% of injected
load water.
3) A comparison of public data on industry wells indicates that based on early cumulative
production, the Kipp well appears to have the potential to be a one of the better wells in the
play to date.
Spring Coulee Exploration well at 2-36-3-23 W4
At Spring Coulee, the Company’s first Alberta Bakken test well has been on production for approximately
three months. This exploration well confirmed two important criteria in establishing commercial
unconventional oil production in the area. The first is that the area is over pressured, and the second is
that the area is optimally located for peak oil generation, based on core results.
The Spring Coulee well has now produced approximately 2,500 bbls of oil since it was fracture stimulated
and approximately 60% of injected load water has been recovered. The Company believes that the
modest inflow is attributable to the inability to effectively fracture stimulate the well due to mechanical
difficulties encountered in the wellbore during completion operations coupled with the low permeability
of the formation. Since the Spring Coulee well encountered the light oil and over-pressured part of the
fairway, the next steps to establishing commerciality at Spring Coulee will be to determine optimal
stratigraphic placement of the horizontal well path in the multiple formations that make up the Bakken
Petroleum System, and to establish an effective fracture stimulation program. The Company continues
2
to believe that this area of the fairway is highly prospective for both the Alberta Bakken and the Second
White Specks oil plays.
About Bowood Energy Inc.
Bowood Energy Inc. is a TSX-V Tier 2 corporation. Through its wholly owned subsidiary, Bowood Energy
Ltd., the Company is engaged in the acquisition, exploration, development, and production of oil and gas
resources. Current projects are in the Province of Alberta.
Reader Advisories
Forward-Looking Statements: Certain information in this press release is forward-looking within the meaning of
Canadian securities laws as it relates to anticipated financial performance, events or strategies. All statements other
than statements of historical fact contained in this news release are forward-looking statements. Readers can
identify many of these statements by looking for words such as will, anticipate, believe, plan, intend, target, and
expect or similar words that suggest future outcomes. Although management believes that the expectations
represented in such forward-looking statements are reasonable, there can be no assurance that such expectations
will prove to be correct.
Forward-looking information in this press release includes, among other things, information relating to: (i)
expectations regarding the Company's production results in its properties; (ii) expectations relating to the
Company’s financial position and its ability to access capital (iii) expectations regarding the Company's production
rates, (iv) expectations regarding the completion and evaluation of the Company's wells; and (v) expectations
regarding the spudding and drilling of new wells, including the timing of such activities.
The forward-looking statements included in this press release involve substantial known and unknown risks,
uncertainties and assumptions, certain of which are beyond the Company's control. Such risks, uncertainties and
assumptions include, without limitation, those associated with oil and gas exploration, development, exploitation,
production, marketing, processing and transportation, loss of markets, volatility of commodity prices, currency
fluctuations, imprecision of reserve estimates, environmental risks, competition from other producers, inability to
retain drilling rigs and other services, delays resulting from or inability to obtain required regulatory approvals and
ability to access sufficient capital from internal and external sources, the impact of general economic conditions in
Canada, the United States and overseas, industry conditions, changes in laws and regulations (including the
adoption of new environmental laws and regulations) and changes in how they are interpreted and enforced,
increased competition, the lack of availability of qualified personnel or management, fluctuations in foreign
exchange or interest rates, stock market volatility and market valuations of companies with respect to announced
transactions and the final valuations thereof, and obtaining required approvals of regulatory authorities. The
Company's actual results, performance or achievements could differ materially from those expressed in, or implied
by, these forward-looking statements and, accordingly, no assurances can be given that any of the events
anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits that the
Company will derive there from. Readers are cautioned that the foregoing list of factors is not exhaustive.
Additional information on these and other factors that could affect the Company’s operations and financial results
are included in reports, including the Company’s annual information form for the financial year ended December 31,
2010, on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website
(www.sedar.com). All subsequent forward-looking statements, whether written or oral, attributable to the
Company or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements.
Furthermore, the forward-looking statements contained in this news release are made as at the date of this news
release and the Company does not undertake any obligation to update publicly or to revise any of the included
forward-looking statements, whether as a result of new information, future events or otherwise, except as may be
required by applicable securities laws.
3
BOE may be misleading, particularly if used in isolation. A BOE conversion of 6 Mcf: 1 bbl is based on an energy
equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at
the wellhead.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the
TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.
This news release is not for dissemination in the United States or to U.S. persons.
For more information on Bowood Energy Inc. (BWD: TSXV) and to see the updated corporate
presentation please visit our website at: http://www.bowoodenergy.ca or contact:
Robert Mercier
President & C.E.O.
T: (403) 265-2525
E: info@bowoodenergy.ca
I live in the area where bowood is drilling and if you google search alberta bakken players it brings up a series of names up there and you would be surprised at the some of the smaller companies in that list. I would love to see this company get bought out. I am sitting on the sidelines now observing as i made a nice chunk of cash when it hit .71 pps on the canadian market. Glta thought i would share this with you guys. Cheers
Hey everybody. Just getting back from a week of vacation. Followed it a little bit while I was away. Good to see some news.
Something to consider.
It appears that we have had a week of 'sell on the news' mentality. As well as 'sell on news that wasn't what was anticipated" mentality.
I don't look at this play as a 'Bowood! Oil Company of the Future'. more like, as many of you know, 'Bowood! Buyout Candidate of the Future'. Why? First of all, its a junior company surrounded by the Majors. And the Majors do not like having a Junior in their backyard. Especially when there is proven that the Junior is sitting on confirmed oil. Bowood has the Armada Well, the Spring Coulee Well, and the Kipp Well. All producing oil.
Here's the catch. Why the pps is so low. Or at least a theory as to why. Facts. You gotta have the technology to get the oil. More oil/less Water, Frac Fluid. Bowood is lacking in the tech department that deals with the recovery of the crude, as confirmed in their latest update. Legacy, not quite a Major, not quite a Junior does not have the best technology either. They are the ones doing the majority of drilling. Eventually they will work it out. Just takes time, as stated in the latest update. Majors, such as Shell, Murphy's, Petrobakken, Cresent Point, etc, have the technology to get the Crude:Water ratio where it needs to be to maximize profits and BPD gains.
Depending on how BWD's and Legacy's relationship goes, whether Legacy itself makes a buyout play for Bowood, which is the most likely, or whether a Major such as Shell, etc, make a play for it, Bowood will not last long on the market which is fantastic for us.
Thats what the general market is missing right now when it comes to Bowood. Traders appear to be misinterpreting the play, missing the equation: Junior Company + Confirmed Oil = Buyout from Major. Not: Junior Company + Confirmed Oil + Junior Company Keeps Land = Junior Competes with Major for Confirmed Oil = Junior Lives Happily Ever After.
Hard to say when to add more. Looks like its bottoming. Very volatile. Could fall more on easy volume or rise on easy volume.
Good luck to all. There hasn't appeared to be institutional selling. If there was the daily average volume would be much higher. Last weeks sell off appears to just be weak hands, misreading the play.
You did well. I'm hoping that this is the Bottom..
Disregard last two post, I used the wrong symbol the right one is BWD.V @.13
Put new order to buy at .10 before price moves
Take a look at BOW.V it's at .47 Looks like an Arb. between Ca. and USA
Called .125 here. Got a small starter. Will keep watching.
Look at the closing for the last month.
http://ih.advfn.com/p.php?pid=historical&symbol=ROAOF
if you look at TRADES , All trades today were buys and moved lower to close.
PS Don't put all your eggs in the same basket.
Good Luck don't forget to do your DD.
Bowood Energy Inc. Reports 2011 Third Quarter Results
CALGARY, ALBERTA--(Marketwire - Nov. 28, 2011) -
THIS NEWS RELEASE IS NOT FOR DISSEMINATION IN THE UNITED STATES OR TO U.S. PERSONS.
Bowood Energy Inc. (TSX VENTURE:BWD) ("Bowood" or the "Company") is pleased to announce its financial and operational results for the three months ended September 30, 2011. The unaudited Financial Statements and related Management Discussion and Analysis will be filed with the Canadian securities regulatory authorities on SEDAR. An electronic copy of these materials will also be publicly available under Bowood's issuer profile on SEDAR at www.sedar.com and on the Company's website at www.bowoodenergy.ca.
Operating Highlights
Operating Highlights Three months ended
September 30 Nine Months Ended
September 30
2011 2010 2011 2010
(6:1 boe conversion)
Average daily production
Natural gas (mcf/d) 2,753 2,779 2,435 3,027
Liquids (Oil & NGLs) (bbls/d) 88 49 84 38
Oil equivalent (boe/d) 547 512 490 543
Production (boe/d) per million shares 2 3 2 3
Average sales price (including fixed commodity contracts):
Natural gas ($/mcf) 3.75 5.28 3.93 4.88
Liquids (Oil & NGLs) ($/bbl) 77.67 64.55 82.27 66.61
Oil equivalent ($/boe) 31.33 34.83 33.62 31.92
Operating cost ($/boe) 13.52 14.47 13.49 13.68
Operating netback ($/boe) (including fixed commodity contracts)
15.31
16.76
17.09
15.51
Bowood's oil weighting was positively impacted in the third quarter by the receipt of regulatory approval to produce our 35% working interest oil well at Armada 2-1-17-19 W4 without Energy Resources Conservation Board ("ERCB") allowable restrictions. The Armada well has been producing approximately 60 bbls/d of oil net to Bowood since it resumed production in late July, 2011. Production was also positively impacted by the successful drilling and completion of a new 90% working interest gas well at 8-3-17-19 W4 also in Armada. The well averaged gas production of 950 mcf/d (150 boe/d at a 6:1 conversion ratio) net to the Company since August, 2011. The Armada area now represents over 50% of Bowood's production. Management is optimistic regarding additional development locations, and additional drilling is currently anticipated for Armada in 2012. Company current field estimates of production are 600 boe/day (100 bbl/day oil and 3.0 mmcf/day natural gas).
Financial Highlights
Financial Highlights Three months ended
September 30 Nine Months Ended
September 30
(all amounts in Cdn $ except common share data) 2011 2010 2011 2010
Petroleum and natural gas revenue 1,575,360 1,194,460 4,494,122 4,154,848
Per share - basic 0.006 0.006 0.016 0.022
- diluted 0.006 0.006 0.016 0.022
Funds flow from operations 292,563 89,293 708,284 581,047
Per share - basic 0.001 0.00 0.003 0.003
- diluted 0.001 0.00 0.003 0.003
Net loss (1,123,387) (1,118,486) (1,639,453) (1,796,103)
Per share - basic (0.004) (0.006) (0.006) (0.01)
- diluted (0.004) (0.006) (0.006) (0.01)
Capital expenditures 4,759,424 2,925,886 9,201,589 5,165,094
Net debt (excluding fixed commodity contracts) (2,147,171) 5,767,557 (2,147,171) 5,767,557
Shareholders' equity 48,972,022 25,136,646 48,972,022 25,136,646
Total assets 59,273,426 38,252,601 59,273,426 38,252,601
Common share data:
Basic 274,933,373 186,233,373 274,933,373 186,233,373
Diluted 290,253,373 202,303,373 290,253,373 202,303,373
The third quarter net loss is in large part a result of the expiry of 8,800 acres of crown land in the Wildwood Area in central Alberta. The lands, originally acquired by Bowood in 2006 for shallow gas potential, were allowed to expire during Q3. Under International Financial Reporting Standards, as undeveloped land expires, the carrying value is removed from Exploration and Evaluation Assets and expensed to the Statement of Income (loss).
At the end of Q3, 2011 Bowood had net debt of $2.2 MM on an $8.5 MM credit facility through the Canadian Western Bank. The majority of the $4.8 MM of capital expenditures in Q3 was focused on land, seismic and drilling activity in the Alberta Bakken play.
Southern Alberta Bakken Exploration
During the third and the fourth quarter to date, Bowood concluded the drilling and completing of our Spring Coulee and Kipp wells and management is encouraged by the early results from these exploration wells. The Spring Coulee well was recently placed on production, while the Kipp well is currently shut in awaiting production equipment. Bowood anticipates releasing comprehensive results for both wells within the next few days.
About Bowood Energy Inc.
Bowood Energy Inc. is a TSX-V Tier 2 corporation. Through its wholly owned subsidiary, Bowood Energy Ltd., the Company is engaged in the acquisition, exploration, development, and production of oil and gas resources. Current projects are in the Province of Alberta.
Reader Advisories
Forward-Looking Statements: Certain information in this press release is forward-looking within the meaning of Canadian securities laws as it relates to anticipated financial performance, events or strategies. All statements other than statements of historical fact contained in this news release are forward-looking statements. Readers can identify many of these statements by looking for words such as will, anticipate, believe, plan, intend, target, and expect or similar words that suggest future outcomes. Although management believes that the expectations represented in such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct.
Forward-looking information in this press release includes, among other things, information relating to: (i) expectations regarding the Company's production results in its properties; (ii) expectations relating to the Company's financial position and its ability to access capital (iii) expectations regarding the Company's production rates, (iv) expectations regarding the completion and evaluation of the Company's Spring Coulee, Kipp and Armada wells; and (v) expectations regarding the spudding and drilling of new wells, including the timing of such activities.
The forward-looking statements included in this press release involve substantial known and unknown risks, uncertainties and assumptions, certain of which are beyond the Company's control. Such risks, uncertainties and assumptions include, without limitation, those associated with oil and gas exploration, development, exploitation, production, marketing, processing and transportation, loss of markets, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other producers, inability to retain drilling rigs and other services, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources, the impact of general economic conditions in Canada, the United States and overseas, industry conditions, changes in laws and regulations (including the adoption of new environmental laws and regulations) and changes in how they are interpreted and enforced, increased competition, the lack of availability of qualified personnel or management, fluctuations in foreign exchange or interest rates, stock market volatility and market valuations of companies with respect to announced transactions and the final valuations thereof, and obtaining required approvals of regulatory authorities. The Company's actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits that the Company will derive there from. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on these and other factors that could affect the Company's operations and financial results are included in reports, including the Company's annual information form for the financial year ended December 31, 2010, on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com). All subsequent forward-looking statements, whether written or oral, attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. Furthermore, the forward-looking statements contained in this news release are made as at the date of this news release and the Company does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.
BOE may be misleading, particularly if used in isolation. A BOE conversion of 6 Mcf: 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
Bowood Energy Inc. was recognized as a TSX Venture 50(R) company in 2011. TSX Venture 50 is a trade-mark of TSX Inc. and is used under license.
For more information on Bowood Energy Inc. (TSX VENTURE:BWD) and to see the updated corporate presentation please visit our website at: http://www.bowoodenergy.ca.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.
Bowood Energy Inc. Announces Bakken Well Operational Results at Kipp and Spring Coulee
CALGARY, ALBERTA--(Marketwire - Jan. 23, 2012) -
THIS NEWS RELEASE IS NOT FOR DISSEMINATION IN THE UNITED STATES OR TO U.S. PERSONS.
Bowood Energy Inc. (TSX VENTURE:BWD) ("Bowood" or the "Company") provides the following operational update on current activity in the southern Alberta Bakken Fairway.
Blood/Kipp Exploration well at 8-30-8-23 W4
Bowood is pleased to report that the Company's second Alberta Bakken test well located at Kipp, started production in December 2011. This well is located on the Blood First Nation Reserve. We have yet to establish a stabilized production rate due to the high pressure, multiphase influx of oil, water, and gas which has hampered pump performance during this early stage of production. The Company expects these issues are now largely resolved as the well continues to clean up and expects that production will start to increase with better pumping efficiency. The following is a summary of Kipp well operations to date:
After fracture stimulation (which occurred from Oct 25th to 29th, 2011), and subsequent flow back of completion fluid, the well was shut in for three weeks to record a static bottom hole pressure. The pressure data and the extrapolated pressure gradient confirm that the formation is over-pressured as expected.
Despite the fact that the early production operations at Kipp have been delayed, between the post frac clean up, the initial equipping operation and the first two weeks of intermittent production the well has recovered over 5,000 bbls of light, oil and approximately 50% of injected load water.
A comparison of public data on industry wells indicates that based on early cumulative production, the Kipp well appears to have the potential to be a one of the better wells in the play to date.
Spring Coulee Exploration well at 2-36-3-23 W4
At Spring Coulee, the Company's first Alberta Bakken test well has been on production for approximately three months. This exploration well confirmed two important criteria in establishing commercial unconventional oil production in the area. The first is that the area is over pressured, and the second is that the area is optimally located for peak oil generation, based on core results.
The Spring Coulee well has now produced approximately 2,500 bbls of oil since it was fracture stimulated and approximately 60% of injected load water has been recovered. The Company believes that the modest inflow is attributable to the inability to effectively fracture stimulate the well due to mechanical difficulties encountered in the wellbore during completion operations coupled with the low permeability of the formation. Since the Spring Coulee well encountered the light oil and over-pressured part of the fairway, the next steps to establishing commerciality at Spring Coulee will be to determine optimal stratigraphic placement of the horizontal well path in the multiple formations that make up the Bakken Petroleum System, and to establish an effective fracture stimulation program. The Company continues to believe that this area of the fairway is highly prospective for both the Alberta Bakken and the Second White Specks oil plays.
About Bowood Energy Inc.
Bowood Energy Inc. is a TSX-V Tier 2 corporation. Through its wholly owned subsidiary, Bowood Energy Ltd., the Company is engaged in the acquisition, exploration, development, and production of oil and gas resources. Current projects are in the Province of Alberta.
Reader Advisories
Forward-Looking Statements: Certain information in this press release is forward-looking within the meaning of Canadian securities laws as it relates to anticipated financial performance, events or strategies. All statements other than statements of historical fact contained in this news release are forward-looking statements. Readers can identify many of these statements by looking for words such as will, anticipate, believe, plan, intend, target, and expect or similar words that suggest future outcomes. Although management believes that the expectations represented in such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct.
Forward-looking information in this press release includes, among other things, information relating to: (i) expectations regarding the Company's production results in its properties; (ii) expectations relating to the Company's financial position and its ability to access capital (iii) expectations regarding the Company's production rates, (iv) expectations regarding the completion and evaluation of the Company's wells; and (v) expectations regarding the spudding and drilling of new wells, including the timing of such activities.
The forward-looking statements included in this press release involve substantial known and unknown risks, uncertainties and assumptions, certain of which are beyond the Company's control. Such risks, uncertainties and assumptions include, without limitation, those associated with oil and gas exploration, development, exploitation, production, marketing, processing and transportation, loss of markets, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other producers, inability to retain drilling rigs and other services, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources, the impact of general economic conditions in Canada, the United States and overseas, industry conditions, changes in laws and regulations (including the adoption of new environmental laws and regulations) and changes in how they are interpreted and enforced, increased competition, the lack of availability of qualified personnel or management, fluctuations in foreign exchange or interest rates, stock market volatility and market valuations of companies with respect to announced transactions and the final valuations thereof, and obtaining required approvals of regulatory authorities. The Company's actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits that the Company will derive there from. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on these and other factors that could affect the Company's operations and financial results are included in reports, including the Company's annual information form for the financial year ended December 31, 2010, on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com). All subsequent forward-looking statements, whether written or oral, attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. Furthermore, the forward-looking statements contained in this news release are made as at the date of this news release and the Company does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.
BOE may be misleading, particularly if used in isolation. A BOE conversion of 6 Mcf: 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
For more information on Bowood Energy Inc. (TSX VENTURE:BWD) and to see the updated corporate presentation please visit our website at: http://www.bowoodenergy.ca.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.
just got this email..
Christopher,
We finally got a bit of information out on the Southern Alberta Bakken. My apologies for the delay in responding to your email, however Legacy has been doing everything they can to get it stabilized and pumping properly. If you would like to speak to me directly now, I can be more open about what we have encountered but long and short of it is management is still bullish on the Bakken potential. As the month goes on we will be monitoring Kipp production and hope to follow up with more news.
Robert F. Mercier P.Eng
President & CEO
Bowood Energy Inc.
Suite 1850, 717 - 7th Ave. SW
Calgary, AB, Canada, T2P0Z3
ph: (403) 265-2525 ext 229
From: Pennybuster [mailto:pennybuster@yahoo.com]
Sent: January-12-12 3:34 PM
To: Bowood Info
Subject: shareholder update
Will we be getting any shareholder update this month?
update on Bowood web site 22-Jan-12 11:18 am Not sure if many have seen this.
Below is off the front page of the Bowwod web site. Further in their latest presentation they indicaste that they have permitted 6 more horizontal wells on Blood reservation land. They are not flat saying it but indications look decent for their Alberta Bakken wells
•Bowood's First two Alberta Bakken horizontal wells have been drilled and are now on production.
•Bowood views the early technical data on our wells as positive first steps toward establishing a commercial development on our lands.
•Due to the confidential nature of the wells, industry results are coming out slower than we would like, however we remain committed to releasing our own well information as soon as possible to shareholders. Lengthy operations and flowback of large volumes of fracture fluids before meaningful production rates can be established mean that well results in this play will take longer than in conventional plays
JV partner MUST READ
MUST READ
http://seekingalpha.com/article/310681-legend-oil-greedy-insiders-are-the-only-ones-positioned-to-benefit-from-this-overvalued-overhyped-oil-stock?source=yahoo
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Legend Oil: Greedy Insiders Are The Only Ones Positioned To Benefit From This Overvalued, Overhyped Oil Stock
13 comments | November 29, 2011 | about: LOGL.OB
In the first 2 articles of my series on Legend Oil and Gas (LOGL.OB) (here and here), I made a case against the men leading the company based on their previous corporate involvement in 4 separate companies which were the subjects of pump and dump schemes utilizing numerous paid stock touts. In all 4 cases, these companies today stood between 87-95% below the peak prices realized during the “pump” stage of the schemes.
Although management is the foundation upon which a business is constructed, there are also other aspects of a business. To gain a full, 360-degree view of a company and its intrinsic value one must also examine the company itself, not just the men running it. Today I will analyze the corporate history and present-day business of Legend Oil and Gas. I will chronicle how, thanks to a combination of slick corporate transactions and a healthy dose of paid-pushing by stock promoters, Legend has arrived at the point where it is today: astonishingly overvalued and utilized like an ATM machine by its founders to personally extract funds at the expense of shareholders. I will illustrate that Legend is a marginal oil company with negligible business activities to date. Furthermore, despite the hype surrounding the recent acquisition of assets from International Sovereign Energy Corp., the assets’ questionable economics, newly created off-balance sheet liabilities and management’s greed ensure that this transaction will do little to enhance Legend’s dubious intrinsic value.
The Birth of Legend Oil: How James Vandeberg and Marshall Diamond-Goldberg Manufactured Millions of Dollars of Wealth on Paper in Their Names
Legend Oil and Gas was born on May 18, 2010 when James Vandeberg purchased an 82.44% interest in the common shares and 100% ownership of the preferred shares of a shell company called SIN Holdings (SNHI). The price ticket for the 6,000,000 common shares and 100,000 preferred shares was $191,000 and the seller was a man named Steve Sinohui. Based on this transaction, the implied full valuation for the company at this point was $231,684 ($191,000/0.8244). The transaction’s change of control filing is available here.
Sinohui’s declared disposition of ownership is viewable here and James Vandeberg’s initial statement of ownership can be accessed here. During the change of control transaction, 151,000 shares were also gifted to an undisclosed third party, which is described on page 14 of the 10-Q for Q2 2010. The preferred shares were also cancelled subsequent to the change of control. According to his statement of ownership, Vandeberg later cancelled 4,250,000 shares which left him with 1,599,000 shares.
Marshall Diamond-Goldberg entered the picture when he joined Legend in October 2010, as is described in that year’s 10-K:
On October 1, 2010, Mr. Vandeberg transferred 605,600 shares of restricted common stock of the Company held by him to Marlin Consulting Corp an entity wholly owned by Marshall Diamond-Goldberg. Mr. Vandeberg also gifted a total of 548,800 shares of restricted common stock of the Company to three other persons. These transactions resulted in Mr. Vandeberg owning 595,600 shares of restricted common stock an approximately 20% interest in the Company.
Also described in the same 10-K is an October 5, 2010 transaction where Legend did a 20-for-1 forward split of its stock, meaning each share in existence at that point became 20 new shares. Post-split, Diamond-Goldberg and Vandeberg owned 12,112,000 and 11,912,000 shares, respectively. In April 2011, they each cancelled half of their shares, according to form 4 filings here and here. Ultimately, Diamond-Goldberg and Vandeberg were left with with 6,056,000 and 5,956,000 shares, respectively. By the end of Q2 2011, Legend’s shares were trading at $2.07 per share, meaning that on paper, Diamond-Goldberg and Vandeberg’s stakes were worth $12.5 million and $12.3 million each.
What had fundamentally changed to justify the dramatic increase in the value of this former shell company of which 82.44% was purchased only 11 months earlier for $191,000?
The value of a company in the long run is based on a company’s assets and their ability to generate cash flow and profits. Therefore, examining Legend's 10-K for 2010 and 10-Q for Q2 2011 are good places to start looking for clues to the answer.
During 2010, but after the change of control transaction, the company received $900,000 in funds based on 2 unregistered private placements to undisclosed foreign investors documented on page 40 of the 10-K:
On October 26, 2010, the Company sold 1,300,000 Units to a foreign investor in exchange for $650,000, or a per Unit price of $0.50. One Unit consists of one share of restricted common stock and one warrant to purchase an additional share of common stock at $0.50 per share for a period of 3 years.
On December 3, 2010, the Company issued 500,000 shares of restricted common stock to a foreign investor in exchange for $250,000, or a per share price of $0.50.
During 2011, there was an infusion of $400,000 of cash into the company via 2 unregistered private placements to undisclosed foreign investors described on page 21 of the 10-Q:
On February 2, 2011, the Company completed an offering and sale of 300,000 units at a price of $0.50 per unit, for a total of $150,000 in proceeds, to one foreign investor residing outside of the United States. This offering was exempt from registration pursuant to Regulation S under the Securities Act of 1933, as amended (rules governing offers and sales of securities made outside of the United States without registration). Each unit consisted of one share of restricted common stock and one warrant to purchase an additional share of common stock of the Company at $0.50 per share with a term of three years. As of June 30, 2011, no warrants had been exercised.
On April 28, 2011, the Company completed an offering and sale of 250,000 units at $1.00 per unit, for a total of $250,000 in proceeds, to one foreign investor residing outside of the United States. This offering was exempt from registration pursuant to Regulation S under the Securities Act of 1933, as amended (rules governing offers and sales of securities made outside of the United States without registration). Each unit consisted of one share of restricted common stock and one warrant to purchase an additional share of common stock of the Company at $1.00 per share with a term of three years.
We can also see via the cash flow statements in the 10-K and the 10-Q that until that point, the warrants issued in 2010 and 2011 had still not been exercised. Based on these fund-raising transactions, the company’s overall valuation should have increased by $1.3 million, the total amount of funds raised. This gives Legend a theoretical “at-cost” valuation of $1,531,684 ($1.3M in funds raised + the shell deal’s implied valuation of $231,684).
In the time period from change of control through the end of Q2 2011, Legend used some of the funds raised to acquire properties, as can be seen in the cash flow statements of the 10-K and 10-Q. In 2010, Legend spent $628,600 purchasing properties and in the first 6 months of 2011 it spent $171,774. These transactions would not lead to an increase in the total book value of the company since they just represent a reclassification of cash assets into property assets.
As I will show, an increase in the intrinsic value of these properties during this period cannot justify the increase in valuation that occurred through Q2 2011. The cash flow statements disclose that there was no additional investment into the properties up to that point. Since there was no additional investment in the properties, it cannot logically be the case that the increase in value they experienced was due to a major change in their status as producers. Additionally, without any incremental investment in exploration, their underlying reserve numbers also should not have changed.
Between October 29, 2010 when Legend purchased its first property and July 1, 2011 the price of oil increased from $81.43 to $94.94. This could justify some increase in the fair-value of the properties which would translate into a fair value for the company that was somewhat higher than the $1.53 million “at-cost” value assigned earlier. Yet the market capitalization of Legend had increased to $97.3 million, based on the 47.0 million shares outstanding as of June 30, 2011. This represents an increase vs. the “at-cost” value of 6259.5%, or 62.5 times. Oil markets have consistently experienced the kind of volatility that occurred between October 29, 2010 and June 30, 2011 for many years now and it is unlikely that any seller would sell an asset to Legend that would increase in value 6259.5% in 8 months based on a short-term $13.51 increase in the price of oil and no additional discoveries.
It is unreasonable to argue that the intrinsic value of the company could have increased by $97 million based on the material developments that occurred at the company itself or within the oil market at large. A $1.3 million infusion of capital and $800K spent purchasing properties is certainly not sufficient to justify an increase in valuation from $231,684 to over $97 million by the end of Q2 2011. What was most likely supporting the unreasonable stock price was the powerful mix of a tightly-held and manipulated float, coupled with several concurrent paid-for stock promotion campaigns via online email blasts and conventional “snail-mailers”. The first was by James Rapholz documented here in March 2011 and then came another by Eric Dany in April 2011. By searching Google for results from a specific time period, May 18, 2010 – June 30, 2011, we can establish that paid stock promoter Don McShane also began touting Legend’s stock during this period.
Current Oil Production is Negligible with Poor Development Results to Date
So far, we have examined the history of Legend Oil through June 30, 2010. Let us now examine the state of the company today based on their most recent 10-Q and relevant subsequent filings. For their Kansas property, the single producing property as of the 10-Q for Q3 2011, Legend revealed:
Oil production (“bbls”) increased 62.5% during the three months ended September 30, 2011, as compared to the three months ended June 30, 2011 (see table above). Production increased due to the completion of drilling three wells, the recompletion of the drilling of a fourth well, and general streamlining and improvements to our existing well operations.
While this might sound impressive, oil production in nominal terms grew by only 3.5 Barrels of Oil Equivalent per Day (“BOEPD”). With an average operating margin in 2011 of $18.52/BOE, this adds a mere $23.6K of operating margin on an annualized basis. These gains should also not be viewed as existing in perpetuity because over time, they are likely to experience declines and increased water content vs. oil without additional capital spending. Based on the daily production rate achieved in Q3 2011 of 9.2 BOEPD and an average operating margin per barrel (“netback”) of $18.52/BOE for the first 9 months of the year, which is actually higher than Q3's netback, on an annualized basis Legend Oil is on track to produce a total operating margin of $62,190 (9.2 BOEPD x 365 Days x $18.52/BOE).
I want to note that Legend’s operating margin of $18.52/BOE also seems to be exaggerated based on other figures in their financials. Based on the table found on Page 21 of their 10-Q, Legend produced 1877.4 BOE in the first 9 months of 2011. Additionally, in their income statement they disclose oil revenue of $162,854 and lease operating expenses of $136,814. This equates to an average sale price of $86.74/BOE and lease operating expense of $72.87/BOE. Subtracting the operating expenses from the revenue we arrive at an operating margin figure of $13.87/BOE, not $18.52/BOE as Legend states in the table on Page 21. These inconsistencies may be indicative of larger issues related to the accuracy of Legend’s supplemental disclosures, but for analysis’ sake I will give them the benefit of the doubt and simply use the higher figure here because given how little oil they are producing, it doesn’t matter to the overall investment thesis.
Since purchasing them, Legend has not spent any money exploring its non-producing properties. The 10-Q discloses on page 17 that it holds a 10% working interest in these North Dakota properties. Based on the subsequent acquisition of International Sovereign Energy, it does not currently possess the financial ability to even commit to a single well here which is disclosed on page 17 of the 10-Q as having a potential cost of $600,000 ($6M x 10%). Additionally, Legend has never disclosed the identity of the holder(s) of the 90% working interest in the properties in either in a press release related to the properties or a 10-Q. This is very suspicious and in the best case scenario represents remarkably deficient disclosure.
Overall, as of September 30, 2011, the company had a figure of $62,200 representing annualized cash flow from their producing oil properties. Furthermore, the operating margin referred to here has absolutely no allocation of overhead or general and administrative expenses. This is an important distinction because relative to its scale, Legend Oil currently has sky-high G&A expenses.
Poor Operating Results Have Little Connection with Excessive Executive Salary
Contrast meagre operating results such as those outlined with the salaries paid to executives at Legend Oil, and it becomes apparent that there is a large disconnect and perhaps very little direct relationship between the business performance of the company and executive compensation. Legend announced in their most recent 10-Q:
Effective July 1, 2011, the Board of Directors increased the amount of compensation paid to our President, Mr. Diamond-Goldberg, from $8,400 per month to $26,250 per month, which amount is being paid to Marlin Consulting Corp., of which Mr. Diamond-Goldberg is sole owner. Under the consulting services agreement, Mr. Diamond-Goldberg is also entitled to a “gross-up” to cover applicable taxes. Also effective July 1, 2011, the Board of Directors increased the amount of compensation paid to our Chief Financial Officer, Mr. Vandeberg, from $5,000 per month to $20,833 per month.
Executives both more than tripled their salaries and in nominal terms Diamond-Goldberg and Vandeberg are making $315,000 and $250,000 per year respectively, or $565K in total. These generous salaries are in spite of the fact that Legend Oil had oil revenue of only $163K in the 9 months of 2011.
From a corporate governance standpoint, this is made worse because the board of directors, a corporate entity that is supposed to protect shareholders, consists only of James Vandeberg and Marshall Diamond-Goldberg. This isn’t to say a similar transaction wouldn’t still be approved with a larger board in place, since additional board members who in reality are willing to be subjugated to management aren’t too hard to find. Still, it is worthy of noting that these officers/directors are the only legal gatekeepers to an ostensibly public company and are at the same time giving themselves large raises in salary significantly above and beyond what the company can support.
The executives/directors of Legend Oil appear to run the company in a kleptocratic and dictatorial manner, looting the entire company cash flow without any shareholder recourse. Based on their new salaries, executives Marshall Diamond-Goldberg and James Vandeberg are on track to pay themselves significantly more than the company's producing properties have been able to generate in operating margin on an annualized basis. This results in a projected annualized cash flow shortfall due to executive salaries of approximately $500K.
Assets Recently Acquired from Quasi-Related Party Are Marginal, Result in Significant Off-Balance Sheet Liabilities and Primarily Serve to Enrich Insiders
On October 20, 2011, Legend Oil filed an amended 8-K with respect to the closing of a previously announced agreement to acquire the majority of the producing assets of International Sovereign Energy Corp. (“ISEC”), a company which was listed on the Toronto Stock Exchange but recently elected to delist and relist on the NEX, the lowest-tier Canadian stock market. I call ISEC a quasi-related party because Marshall Diamond-Goldberg served as a director for the company until July 1, 2011, 2 months before the acquisition was announced.
The original price agreed upon was to be $9.5 million in cash and 3.75M common shares. However, the 8-K/A reveals that:
The net purchase price for the Sovereign Assets paid at closing was CA$8,905,031 in cash and 3,552,516 Common Shares. At closing, the purchase price was adjusted, on a pro-rata basis, for each Boepd (barrel of crude oil equivalent per day) that Sovereign’s monthly average Boepd production during the month of August 2011 was below the threshold production level of 300 Boepd, as provided in further detail in Article 4 of the Asset Purchase Agreement. This resulted in a downward adjustment to the purchase price at closing, reducing the cash portion to CA$9,105,031 and reducing the number of Common Shares to 3,552,516 shares. Also at closing, Sovereign made a working capital adjustment payment in the amount of CA$200,000 to Legend Canada in accordance with the Asset Purchase Agreement, which reduced the net cash portion of the purchase price to CA$8,905,031.
Looking at the original asset purchase agreement available here we can see that based on Article 4.1 found on page 14:
The Purchase Price will be reduced, by the Per Barrel Value, for each barrel of oil equivalent by which the August Monthly Average is below the Threshold Production, in an equal amount of cash and Common Shares valued at US$2.00 per Share.
Based on page 5 of the asset purchase agreement we can see that: “’Per Barrel Value’ means that each barrel of oil equivalent shall have a value of fifty six thousand, six hundred and sixty seven dollars ($56,667) for the purposes of Section 4.1”. So we can arrive at the assets’ August average production rate shortfall in BOEPD by taking the cash portion of the downward adjustment of $394,969, dividing by the $56,667 Per Barrel Value and then multiplying that by 2, since only half of the Per Barrel Value is measured in cash. We arrive at a production rate shortfall of 14 BOEPD, which means that the average August production of the assets was 286 BOEPD.
We can gain additional information about the operating metrics of these producing assets by looking at the Sedar filings, Canada’s equivalent to SEC filings, available for ISEC. In the Q3 2011 Management’s Discussion and Analysis section (.pdf), we learn that “ISR’s production for the nine months ended September 30, 2011 averaged 74% gas and 26% oil and natural gas liquids (“NGL”) production.” This is material information because it shows that ISEC is heavily weighted towards natural gas production which yields a significantly lower price per BOE than oil or NGL and also experiences steeper decline rates.
We can see on page 9 of the report (.pdf) that the assets acquired have a rapidly declining production profile having produced 292 BOEPD in Q3 2011 vs. 457 BOEPD in Q3 2011 amid “sizeable losses in gas production with the Boundary Lake and Berwyn fields ongoing water concerns.” We can also note on page 11 that the operating netback achieved by these assets was $16.66/BOE during Q3 2011. Using this number and multiplying by the most recent production rate we know, August’s 286 BOEPD, we arrive at an annualized operating cash flow for the properties of $1,739,137.
This amount is prior to any allocation for associated G&A expenses which is important to note because Legend has stated its acquisition of the properties required it to hire 2 full-time employees, a petroleum engineer in the position of Manager of Engineering and a Controller to manage the day to day operations. Although the salaries of these individuals has not been disclosed, this is likely to result in at least another $200k in annual overhead for Legend.
It is also important to examine the financing structure of the acquisition itself because it has major implications to the residual value of the assets for shareholders. The acquisition was in part financed by a commercial Line of Credit from National Bank of Canada (“NBC”). Note the disclosure on page 13 of the 8-K/A:
On October 19, 2011, Legend Canada drew down CA$5.4 million on its CA$6.0 million credit facility with the National Bank of Canada. The Bank has the right to demand repayment of the loan at any time. We currently do not have sufficient cash assets to repay the loan in full if the Bank were to demand repayment. We may not have sufficient funds to repay the loan if it is called earlier than we plan. In such a case, we would be forced to sell assets or renegotiate with the Bank. The loan is secured by security interests in all of the assets of Legend Canada, including the Sovereign Assets. In addition, the CA$6.0 million borrowing base under this credit facility is subject to an annual review by the Bank and there is no assurance that the available credit facility will continue to be available or whether it will be reduced. The next review is scheduled to occur on or before January 1, 2012.
NBC’s interest is fully secured against the properties, which by themselves do have a value associated with the positive future cash flows. In the offering document issued by NBC, it reveals that if there were any issue or default by Legend in respect to the Line of Credit, National Bank’s right to seize the property is backed up by a “$25,000,000 Debenture with a floating charge over all assets of the Borrower” which shall, “be registered in Alberta in a first priority position, subject only to Permitted Encumbrances.” The drawn portion of the Line of Credit has an associated floating interest rate of 4%, based on 1% above NBC’s “Prime Rate”, now at 3%. The undrawn portion is subject to a charge of 0.25% per year. Based on the $5.4 million already drawn, this translates to $217,500 of interest expense per year.
After applying these interest charges ($217.5K), the current shortfall in Legend’s ability to pay executive salaries ($500K), and the additional overhead of 2 new full-time employees (~$200K), it appears as though shareholders will likely be left with perhaps $821,637 or about 47% of annualized cash flow from the acquisition.
The acquisition of these assets has also saddled the company with a significant off-balance sheet liability in the form of a put option on the shares given to ISEC in the transaction. Page 13 of the acquisition’s 8-K/A reveals that if Legend is not listed on an exchange more senior than the OTCBB by March 31, 2012, that ISEC can force Legend to redeem the 3,552,516 shares exchanged in the transaction for $2.00/share, payable in cash. This translates to over $7 million dollars and based on Legend’s post-acquisition cash position of less than $1 million, if ISEC were to exercise this put option, it would bankrupt the company. I suggest that in light of much of the information presented in this series of articles, it is highly unlikely that Legend will be able to make good on the commitment to up-list its stock and there is a high chance this put option could come into play.
The acquisition also serves as a further illustration of the depths of management’s greed. Based on the information found on page 53 in the 8-K/A, Legend’s board of directors, which consists only of management, decided to award themselves a cash bonus of $110,000 for concluding the transaction. This is highly irregular and greedy considering that if they were truly creating value via this acquisition, management’s substantial existing share position would stand to benefit.
Overall, the acquisition of assets from ISEC will do little to enhance the value of Legend Oil and Gas. Based on their current production profile and rapid ongoing field declines, the ISEC assets acquired by Legend are marginal. Furthermore, due to of the aforementioned adjustments, the majority of associated after-interest cash flows have already been effectively earmarked away from shareholders. Finally, the off-balance sheet liability created as a result of this transaction presents the very real possibility of bankrupting Legend Oil within 4 months.
Arriving at a Fair Valuation for Legend Oil
Based on its current production in Kansas and the ISEC assets in Canada, Legend Oil can probably produce about $900K in operating cash flow after applying G&A and interest expenses. Applying a multiple of 10x, which is generous based on the various associated liabilities and management’s track record, we arrive at a total value for the equity of the company of approximately $9 million or $0.18/share based on 50.58 million shares outstanding.
If they were to be separated from the current management Legend Oil’s assets would probably be able to unlock some additional value, since via their inflated salaries, Diamond-Goldberg and Vandeberg are currently on track to consume over 30% of the cash flows produced from the properties. A decent point of reference is the third-party petroleum engineering reserve reports which assign a net asset value (“NAV”) to the properties themselves. For the Kansas Assets, this amounts to $956,000 based on the third-party report prepared by KLH consulting. Looking at the report prepared by InSite Petroleum Consultants on the ISEC assets, using the same 10% discount rate applied in the KLH report, the NAV of the Canadian assets amounts to $15,384,400. Finally, for the North Dakota leases, although the company has done absolutely nothing to prove the existence of oil here or enhance the value of these assets thus far, to be generous let us assume that these leases have increased in value 100% since their purchase earlier this year, giving us a value of $343,548.
Kansas Assets - $956,000
ISEC Assets - $15,384,400
North Dakota Assets - $343,548
Enterprise Value Based on Net Asset Value - $16,683,948
Less: Outstanding Debt - $5,400,000
Value of Equity - $11,283,948
Using this NAV, we arrive at a value for Legend’s equity of $0.22/share based on 50.58 million shares outstanding. Both cases illustrate that at Friday’s closing price of $1.59/share, Legend is substantially overvalued.
Conclusion
Today I have examined Legend Oil and Gas itself, documented its history of management greed, paid-promoter hype and evaluated the underlying intrinsic value of its assets. In Legend’s most recent press release, Marshall Diamond-Goldberg seems very proud to have “grown the company from zero production to over 300 BOEPD in less than one year.” Upon closer examination, one realizes that less than 10 BOEPD of this growth is organic growth “from the drill bit”, the majority being derived from a questionable corporate transaction. Based on its intrinsic value, Legend currently justifies only 11.3 - 13.8% of the current market capitalization. Conversely, Legend’s Stock currently has 86.2 - 88.7% downside based on this intrinsic value. That said, due to its off-balance sheet liabilities, Legend faces the real possibility of bankruptcy and 100% downside 4 months from now.
I had intended for Part 3 to be the final in this series, but upon closer examination of all the data it has become clear that the content of what I had originally planned to cover in Part 3 is so substantial that it ought to be covered over 2 reports. Therefore, Part 4 of the series will present concluding arguments, as yet unexplored supporting evidence that Legend Oil’s stock is the subject of a pump and dump scheme, and several instances where specific corporate malfeasance committed to date by Legend Oil and its executives merits an SEC trading halt of the stock.
Disclosure: I am short LOGL
Bowood Ir..
mcurtis@cardwellcap.com
Shoot then an email...
I,HAVE BEEN LOOKING AT BOWOOD FOR SOME WEEKS, GET A FEW THOUSAND SHARES , FOR A START . THANKS FOR YOUR INFO .
When dealing with a spec play like this, its hard to rely on a three year chart. Especially since, 1.5 years ago, they were another company. A US company. Road Runner Oil & Gas. After they became Bowood Energy, a Canadian Company. So many things have happened since since the summer of 2010. Being put on the TSX, land acquisitions, etc, etc.
If I was to rely on any chart for a spec play, of this type, in this industry, in this unproven area, with this volatility, I wouldn't look at anything over a year, let alone a 3 year span. Even then I wouldn't use it as the deciding factor in making a trade.
Right now it's holding solid where it's at. I do think it is a good idea to have some buys where you currently have them. As long as you continue to watch daily volume and whatnot. That'll tell you where it wants to go. Large volume and big block trades will come a couple days before the news. I'm prepared to buy more at .18-.20 and .13-.15.
INCHING EVER SO SLOWLY BACK UP. WE NEED TEST RESULTS.
Look too how the BB's pinched hard before the last upswing.
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Important!!!! Bowood Energy has 2 tickers. A Canadian ticker and an American ticker. BWD & ROAOF
ROAOF used to be Road Runner Oil and Gas, an American company. They were acquired by Bowood, BWD. If you are in the United States, you
trade Bowood using it's American ticker, ROAOF. If you are Canadian, you trade it using it's Canadian ticker, BWD.
The prices are different, obviously, due to currency exchange rates.
The charts below represents how both the American and Canadian tickers are trading
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