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In the recent news:
Natural gas price plunge puts heat on producers
REUTERS — 12/30/11
By Anna Driver and Braden Reddall
(Reuters) - A steep drop in natural gas prices is squeezing the profits of producers such as Southwestern Gas Corp , EXCO Resources and Quicksilver Resources , which may need to shut wells, raise cash, cut staff or seek merger partners in the coming year.
Spot natural gas futures dipped below $3.00 per million British Thermal units on Friday, the lowest level in more than two years, as a glut of gas from shale fields across the United States pushed inventory levels to historic highs.
Market forecasters expect prices to remain weak in 2012, after falling nearly 40 percent since June -- a boon to major users of the fuel, such as chemicals and industrial companies.
Large gas producers including Exxon Mobil Corp and Chevron Corp have the deep pockets to ride through the low prices, but many of their smaller competitors are likely to suffer as they are heavily reliant on dry gas.
Shares of Exco and Quicksilver have lost about half their value in the last six months, far worse than the 5.4 percent drop in the NYSE index of natural gas companies .
Southwestern's shares have fared better, since the company has hedged half its natural gas production by buying protection at around $5 gas. Still, the company's projections show that low natural gas prices will cut sharply into both profits and cash flow.
Typically, gas producers respond to price drops by reducing spending on new wells, shrinking the amount of gas that enters the market and helping to turn prices higher. But analysts say more drastic action may be needed in 2012, including well shut-downs, spending cuts or even employee layoffs, as well as asset sales or full mergers with stronger peers.
"They'll muck through a couple ugly months of bad spot pricing as long as they see some hope in the strip," said Dan Morrison, senior energy analyst at Global Hunter Securities, referring to NYMEX futures "strip" prices. "When the whole strip melts down, that's what really alters behavior."
Graphic: http://link.reuters.com/mup44s
Weak gas prices have sparked chatter some companies could seek mergers or sell off assets.
"On the transaction side, you've always got the opportunistic guys, saying oil is at a relatively high spot in the last couple of years, and gas is low, so I'm going to chase the gas right now," said David Knox, senior vice president for negotiated transactions at the Oil & Gas Asset Clearinghouse in Houston.
EXCO earlier this year explored a sale but found no suitable buyers. It has said it may raise funds by selling its gas processing assets.
The company may find a willing buyer in its joint venture partner BG Group Plc, according to Michael Hall, analyst at Baird Equity Research. The companies are currently partners in the Marcellus and Haynesville shales.
That may hinge on whether BG decides to pursue a vertical integration strategy to help fulfill the long-term gas export deals it recently signed with Cheniere Energy Inc, Hall said in a note to clients earlier this month.
GAS WINNERS
Shale fields, such as the Marcellus in Pennsylvania and West Virginia, the Haynesville in Louisiana, Fayetteville in Arkansas as well as new fields in Ohio and other states, have pushed average 2012 prices for natural gas futures on the NYMEX near $3.30 this week, well south of the $4 mark that gas producers often cite as the benchmark to deliver healthy industry returns.
Southwestern has said cash flow from operations in 2012 could fall more than 14 percent when calculated using a $3.50 gas price, compared with gas at $4.50 per Mcf. By the same measure, the company's net profit falls more than 20 percent with $3.50 gas.
Southwestern's output is 100 percent gas, EXCO's production is 98 percent gas and Quicksilver's production is 82 percent gas, according to data from Bernstein Research.
Projections that gas prices will stay low have helped many other industries that rely on gas to produce chemicals, fertilizer or electricity.
Steel maker Nucor Corp has cited low natural gas prices as a key driver behind its move to build a new steel plant in Louisiana, and electricity producers have announced plans to build dozens of new gas-fired power plants to replace aging coal-fired generators.
"We have already seen companies that are in the chemicals, steel and aluminum and fertilizer industries either plan for new facilities or to restart old facilities," said Paul Cicio, the president of the Industrial Energy Consumers of America, a lobby group in Washington.
Each $1 drop in natural gas prices cuts costs for Dow Chemical DuPont (and other U.S.-based chemical makers by a total of $3.7 billion annually, according to the U.S. Department of Energy.
For an industry that only five years ago saw little future in investing in U.S. operations, the new price paradigm is a game changer that the American Chemistry Council, an industry trade association, estimates will drive $25 billion in investments in new facilities.
Royal Dutch Shell Plc's Shell Oil Co and Dow are the two biggest names planning new chemical plants. LyondellBasell plans to improve its use of natural gas in its production, and fertilizer producer CF Industries , which uses natural gas to make nitrogen, is planning to increase production.
"We have an opportunity in several of our U.S. facilities that will allow us to take advantage of lower costs using ethane from natural gas streams and some other NGLs," said LyondellBasell spokesman David Harpole.
"U.S. ethylene plants are (now) second only to the Mideast in production costs."
(Reporting by Anna Driver in Houston and Braden Reddall in San Francisco; additional reporting by Ernest Scheyder, Jeanine Prezioso and Matt Daily in New York, writing by Matt Daily and Anna Driver, editing by Matthew Lewis)
MNLU was not being generous to AEXP. The 20% is part of the JV legal contract, which is still binding.
In the news:
Natural gas price plunge puts heat on producers
REUTERS — 12/30/11
By Anna Driver and Braden Reddall
(Reuters) - A steep drop in natural gas prices is squeezing the profits of producers such as Southwestern Gas Corp , EXCO Resources and Quicksilver Resources , which may need to shut wells, raise cash, cut staff or seek merger partners in the coming year.
Spot natural gas futures dipped below $3.00 per million British Thermal units on Friday, the lowest level in more than two years, as a glut of gas from shale fields across the United States pushed inventory levels to historic highs.
Market forecasters expect prices to remain weak in 2012, after falling nearly 40 percent since June -- a boon to major users of the fuel, such as chemicals and industrial companies.
Large gas producers including Exxon Mobil Corp and Chevron Corp have the deep pockets to ride through the low prices, but many of their smaller competitors are likely to suffer as they are heavily reliant on dry gas.
Shares of Exco and Quicksilver have lost about half their value in the last six months, far worse than the 5.4 percent drop in the NYSE index of natural gas companies .
Southwestern's shares have fared better, since the company has hedged half its natural gas production by buying protection at around $5 gas. Still, the company's projections show that low natural gas prices will cut sharply into both profits and cash flow.
Typically, gas producers respond to price drops by reducing spending on new wells, shrinking the amount of gas that enters the market and helping to turn prices higher. But analysts say more drastic action may be needed in 2012, including well shut-downs, spending cuts or even employee layoffs, as well as asset sales or full mergers with stronger peers.
"They'll muck through a couple ugly months of bad spot pricing as long as they see some hope in the strip," said Dan Morrison, senior energy analyst at Global Hunter Securities, referring to NYMEX futures "strip" prices. "When the whole strip melts down, that's what really alters behavior."
Graphic: http://link.reuters.com/mup44s
Weak gas prices have sparked chatter some companies could seek mergers or sell off assets.
"On the transaction side, you've always got the opportunistic guys, saying oil is at a relatively high spot in the last couple of years, and gas is low, so I'm going to chase the gas right now," said David Knox, senior vice president for negotiated transactions at the Oil & Gas Asset Clearinghouse in Houston.
EXCO earlier this year explored a sale but found no suitable buyers. It has said it may raise funds by selling its gas processing assets.
The company may find a willing buyer in its joint venture partner BG Group Plc, according to Michael Hall, analyst at Baird Equity Research. The companies are currently partners in the Marcellus and Haynesville shales.
That may hinge on whether BG decides to pursue a vertical integration strategy to help fulfill the long-term gas export deals it recently signed with Cheniere Energy Inc, Hall said in a note to clients earlier this month.
GAS WINNERS
Shale fields, such as the Marcellus in Pennsylvania and West Virginia, the Haynesville in Louisiana, Fayetteville in Arkansas as well as new fields in Ohio and other states, have pushed average 2012 prices for natural gas futures on the NYMEX near $3.30 this week, well south of the $4 mark that gas producers often cite as the benchmark to deliver healthy industry returns.
Southwestern has said cash flow from operations in 2012 could fall more than 14 percent when calculated using a $3.50 gas price, compared with gas at $4.50 per Mcf. By the same measure, the company's net profit falls more than 20 percent with $3.50 gas.
Southwestern's output is 100 percent gas, EXCO's production is 98 percent gas and Quicksilver's production is 82 percent gas, according to data from Bernstein Research.
Projections that gas prices will stay low have helped many other industries that rely on gas to produce chemicals, fertilizer or electricity.
Steel maker Nucor Corp has cited low natural gas prices as a key driver behind its move to build a new steel plant in Louisiana, and electricity producers have announced plans to build dozens of new gas-fired power plants to replace aging coal-fired generators.
"We have already seen companies that are in the chemicals, steel and aluminum and fertilizer industries either plan for new facilities or to restart old facilities," said Paul Cicio, the president of the Industrial Energy Consumers of America, a lobby group in Washington.
Each $1 drop in natural gas prices cuts costs for Dow Chemical DuPont (and other U.S.-based chemical makers by a total of $3.7 billion annually, according to the U.S. Department of Energy.
For an industry that only five years ago saw little future in investing in U.S. operations, the new price paradigm is a game changer that the American Chemistry Council, an industry trade association, estimates will drive $25 billion in investments in new facilities.
Royal Dutch Shell Plc's Shell Oil Co and Dow are the two biggest names planning new chemical plants. LyondellBasell plans to improve its use of natural gas in its production, and fertilizer producer CF Industries , which uses natural gas to make nitrogen, is planning to increase production.
"We have an opportunity in several of our U.S. facilities that will allow us to take advantage of lower costs using ethane from natural gas streams and some other NGLs," said LyondellBasell spokesman David Harpole.
"U.S. ethylene plants are (now) second only to the Mideast in production costs."
(Reporting by Anna Driver in Houston and Braden Reddall in San Francisco; additional reporting by Ernest Scheyder, Jeanine Prezioso and Matt Daily in New York, writing by Matt Daily and Anna Driver, editing by Matthew Lewis)
Western Climate Initiative, “Quebec Adopts Cap-and-Trade
Regulation.”
Quebec has adopted a regulation for a cap-and-trade system for
GHG emission allowances, according to the Minister of Sustainable
Development, Environment, and Parks. Industries that emit 25,000
tonnes or more of CO2 equivalent per year will be subject to the
system, which will begin a transition year on January 1, 2012, allowing emitters to familiarize themselves with how the system works and make the necessary adjustments. The system will be officially enforced on January 1, 2013, at which point all emitters will be required to meet their new obligations for capping and reducing GHG emissions. Beginning in 2015, companies that import or distribute fuels in Quebec that are used in the transportation and building sectors, and whose emissions
exceed the 25,000-tonne threshold, will also be subject to capping and reducing emissions. For more information, visit: http://www.mddep.
gouv.qc.ca/changements/carbone/Systeme-plafonnement-droits-GESen.htm.
December 15, 2011,
http://www.westernclimateinitiative.org/
news-and-updates/139-quebec-adopts-cap-and-trade-regulation
Below, is a condensed summary of the relevant info to MNLU shareholders:
http://bcjustice.com/index.php?option=com_content&view=article&id=5954:mercer-gold-corporation-nevada-v-mercer-gold-corp-bc-for-an-order-under-commercial-arbitration-act-extending-the-time-for-giving-notice-to-submit-a-question-to-arbitration-for-injunctive-relief-and-for-other-related-orders&catid=502:natural-resources-2011&Itemid=1490
At the time the actions were started, the defendant Powers was Mercer Nevada's president and chief executive officer; Thomas was its chief financial officer, secretary and treasurer; and Jardine, Powers and Thomas were directors. The defendant Braumberger, also a director, was not represented in these proceedings. The defendant Pierce was an investor and the principal person against whom Mercer BC makes its allegations in the ACC.
[29] Differences began to develop between Jivraj and Pierce and several of the other named defendants. Pierce and Thomas say they quickly lost confidence in Jivraj's ability to operate as CEO and give proper direction to the venture. Jivraj came to believe Pierce had "loaded" the board of directors of and some of the investors in Mercer Nevada with his nominees and was engaging in a "pump and dump" scheme. Jivraj believed Pierce had this intention from the beginning: that is, to subvert the intent to develop the Property as a gold prospect to a fraudulent scheme to benefit Pierce and his nominees. Under the alleged scheme, Pierce's nominees and other shareholders were given discounted shares. The stock was then promoted using paid agents to issue various news releases with the intent of "pumping up" the price of the stock, after which the insiders (being Pierce's nominees) holding such stock would sell their shareholdings, likely leaving the shares worthless.
[33] In further conversations on July 6, 2011 and July 11, 2011, Jivraj appears to have had further electronic communications with Mr. Stonehouse where he attempted to enlist Mr. Stonehouse's assistance in inducing a default by Mercer Nevada. One exchange, on July 11, 2011, was as follows:
Rahim Jivraj: I don’t want HJ [Hector Jairo Giraldo, the individual responsible for preparing reports in Spanish that would be filed by Mercer Nevada with regulatory authorities in Columbia] to get paid. Can you snsure that doesn’t happen? If he doesn’t, he doesn’t file the report, then I can default mercer.
Rahim Jivraj: Yes, you are owed $48k and I will pay you that.
James Stonehouse: You are now officially out of you rmind [stet]. What About logan and all the rest. The total is over 1MM. Who pays that.
Rahim Jivraj: You told me logan is $250k approx. What’s $1mm??
James Stonehouse: You are asking people to do very very unethical things and in some short period of time you are fgoing to lose all respect that people have for you. You should give that some thought.
Rahim Jivraj: I’m asking for help and loyalty so that the property comes back to someone honorable.
[35] Mercer BC gave Default Notice (the "Notice") under the Agreement on July 11, 2011 when it sent a letter via e-mail to Thomas, Jardine and Mercer Nevada's counsel, Mr. Thomas Deutsch at the law firm of McMillan LLP. Notably, many of the electronic communications Mercer Nevada relies on took place prior to the date Mercer BC issued the default notice.
[36] The Notice reads:
We write to provide you with immediate notice of default under the MAOA pursuant to:
* Article 3.1.S. whereby the Optionee falsely represented true public distribution of the Company’s stock by failing to disclose majority ownership of the Company’s fully diluted stock directly and indirectly controlled by Brent Pierce. Further, pursuant to Article 4.1.M.ii, the Optionee failed to provide notice of direct knowledge of Mr. Pierce’s controlling position.
[40] The Termination Letter asserted a number of grounds for termination including:
* That a recent decision by the Securities Exchange Commission (United States) issued July 27, 2011 revealed Pierce controlled Mercer Nevada through his beneficial interest in a company called Newport Capital Corp. and the SEC proceeding, which had been ongoing at the time the Agreement was entered into was information which had not been disclosed to Mercer BC at the time contrary to Article 4.1(h), (i), (l) and (n) of the Agreement. Mercer BC took the position it had been induced to enter into the Agreement by this "actionable misrepresentation".
Conspiracy
11. Mercer BC says that the Defendants by Counterclaim, and whilst under their direction, the Plaintiff Mercer Nevada, engaged in a conspiracy, which conspiracy consisted of two parts: first, gain control of the Property; second, maintain control of a majority or controlling interest of Mercer Nevada’s stock; and conceal that control from the regulatory authorities and the other shareholders, including Mercer BC and Jivraj; and, then manipulate the price of the company’s stock to reap undisclosed profits (known in securities parlance as a “pump and dump” scheme).
12. In March and April 2010, Pierce learned from Mercer BC and Jivraj of the opportunity presented by the Property. Pierce approached Thomas, who was an officer and director of Mercer Nevada (known at the time as Uranium International). Pierce and Thomas, and by virtue of their control of it, Mercer Nevada (Uranium International), agreed to engage in a concerted scheme to obtain the option to the Property from Mercer BC; promote the Property and in so doing, artificially inflate the company’s stock, whilst at the same time reducing its exploration and operating costs. Once the price of the stock was inflated through their scheme, the stock would be sold at a profit, at the expense of the other shareholders of Mercer Nevada, including Mercer BC and Jivraj.
13. Beginning in or about August 2010, Braumberger joined the conspiracy and agreed with Pierce and Thomas, and through their control of it, Mercer Nevada, to act in concert to artificially inflate Mercer Nevada’s stock through promotional activities.
14. Beginning in or about January 2011, Powers joined the conspiracy and agreed with Pierce, Thomas and Braumberger and through their control of it, Mercer Nevada, to act in concert and seize control of a majority of Mercer Nevada’s stock in an undisclosed manner; reduce its exploration and operating costs; and, manipulate the price of the stock to reap undisclosed profits. Later, Powers also agreed with Pierce, Thomas and Braumberger to further effect the purposes of the conspiracy by assuming the offices of President, CEO and Director of Mercer Nevada which he did on or about July 29, 2011.
15. In or about May, 2011, Jardine joined the conspiracy and agreed with the other Defendants by Counterclaim and Mercer Nevada (which by then, due to the resignation of Jivraj from its Board, was completely under the control and influence of Pierce, Thomas, Powers and Braumberger) to; reduce the company’s exploration and operating costs; and, manipulate the price of the stock to reap undisclosed profits. Jardine also agreed with Mercer Nevada, Pierce, Thomas, Braumberger, and Powers to further effect the purposes of the conspiracy by assuming the office of Director of Mercer Nevada, which he did on or about May 16, 2011.
16. The concerted activity set forth in paragraphs 11 to 15 above was specifically directed at the other shareholders of Mercer Nevada, including Mercer BC and Jivraj. The conspiracy had as an obvious result leaving Mercer BC with an undeveloped Property, and leaving the other shareholders of Mercer Nevada, including Mercer BC and Jivraj, with worthless shares.
17. Under the circumstances, Mercer Nevada and the other Defendants by Counterclaim had actual, implied or constructive knowledge that their unlawful conduct would cause potential harm or injury to, inter alia, Mercer BC.
Unlawful Activity
82. In furtherance of the conspiracy described herein, Mercer Nevada and the Defendants by Counterclaim, and each of them, engaged in the following specific unlawful activity:
a. In March and April 2010, Pierce and Mercer Nevada by way of its agent Pierce, made the Pierce Misrepresentations to induce Mercer BC to enter the Option Agreement for the purpose of gaining control of the Property;
b. Prior to April 13, 2010, Pierce and Thomas, and by virtue of their control of it, Mercer Nevada, deliberately concealed the settlement of the Newport Loans by the company and the fact that $2 million would not be available to finance the exploration program. They concealed the settlement of the Newport Loans to induce Mercer BC to enter the Option Agreement for the purpose of gaining control of the Property and to decrease the company’s exploration and operational expenditures;
c. On April 13, 2010, Mercer Nevada, at the direction and control of Pierce and Thomas, made the Option Agreement Misrepresentations to induce Mercer BC to enter the Option Agreement for the purpose of gaining control of the Property;
d. Beginning in August 2010, Pierce, Powers, Thomas, Braumberger and Jardine promoted Mercer Nevada’s stock in contravention of relevant securities laws and regulations for the purpose of artificially inflating the company’s stock price and then reaping undisclosed profits;
e. In March 2011, Pierce, Powers and Thomas used Pierce’s undisclosed control position in Mercer Nevada to force Jivraj, on behalf of Mercer BC, to enter the Amendment Agreement to reduce Mercer Nevada’s exploration expenditures;
f. In March and April 2011, Pierce, Powers and Thomas used Pierce’s undisclosed control position in Mercer Nevada and Westrock to cause Mercer Nevada to assign to Westrock “convertible” loans previously made to Mercer Nevada by other Pierce-controlled companies, and secure those loans with an undisclosed GSA(s). This activity is in breach of securities regulations in Canada and the United States, and was for the purpose of eventually reaping profits in an undisclosed manner;
g. Beginning on or about July 11, 2011, Pierce and each of Powers, Thomas and Jardine, and by virtue of their control of it, Mercer Nevada, breached securities laws and regulations in Canada and the United States in failing to make timely or any meaningful disclosure to the public or to securities regulators that the company had received a Notice of Default concerning the company’s single asset. This deliberate non-disclosure was for the purpose of eventually reaping undisclosed profits;
h. On or about August 11, 2011, the Defendants by Counterclaim, and by virtue of their control of it, Mercer Nevada, breached securities laws and regulations in Canada and the United States by announcing a 2.5 million private placement for the purpose of manipulating the company’s stock and reaping undisclosed profits; and,
i. Mercer Nevada and all of the Defendants by Counterclaim were aware that Pierce, by virtue of his undisclosed control position in Mercer Nevada’s stock, was a de facto director, officer and insider of Mercer Nevada contrary to securities laws and regulations in Canada and the United States. They concealed this fact in order to first take control of Mercer Nevada; take control of the Property and then manipulate the company’s stock for the purpose of reaping undisclosed profits.
...
89. The conspiracy described herein also deprived Mercer BC of the opportunity to achieve its sole objective pursuant to, inter alia, the Underlying Option Agreement – finding a bona fide partner to proceed with the exploration and development of the Property and the genuine profits and other opportunities flowing to Mercer BC therefrom.
[55] At issue is whether the dispute between the parties arising out of the default and termination is a dispute "in respect of" the Agreement. The dispute must be understood in the context of the positions taken by the parties in the exchange of notice of default, response to the notice and notice of termination, and in light of the subsequent pleadings. In the ACC Mercer BC claims that:
* Pierce made false and or negligent representations to induce Mercer BC to enter the Agreement: ACC, paras 46-47.
* at the time of doing so Pierce was the authorized agent of Mercer Nevada and that Mercer Nevada was therefore liable as Pierce's agent: ACC, paras. 48-49.
* during the negotiations leading to the Agreement, Pierce falsely represented his regulatory history and his "investor group" percent interest in Mercer Nevada: ACC, para. 46 and Response to Notice of Civil Claim, paras. 29, 32, 50 and 52.
* "Mercer Nevada also made misrepresentations contrary to the Representations and Warranties contained in the Articles of the Option Agreement described therein..." inducing Mercer BC to enter into the Agreement to its detriment: ACC, at paras. 50-51.
* Pierce and Thomas and through them, Mercer Nevada, deliberately concealed Newport's Loans just prior to the making of the Agreement and such concealment constituted fraudulent or negligent misrepresentation without which Mercer BC would not have entered into the Agreement: ACC, paras. 52 and 53.
* the "Amendment Agreement is ... a breach by Mercer Nevada and Pierce of their representations made to Mercer BC to enter the ... Agreement...": ACC, para. 65.
[59] Other matters in dispute are not so clearly "in respect of" the Agreement. The Termination Letter of August 25, 2011 raised "additional concerns" of Mercer BC. It asserted Pierce exercised full control over Mercer Nevada's management and directors. Mercer BC asserted that through Pierce's ownership of Newport, Pierce (Newport)'s ownership in Mercer Nevada exceeded the reporting requirements specified by the Securities Exchange Commission, was not disclosed to Mercer BC, and thus constituted "but one actionable misrepresentation by the optionee and its agents including Brent Pierce, which induced Mercer BC to enter the Option Agreement, to its detriment."
[60] The ACC Mercer BC filed on October 24, 2011 expanded on its allegation that Mercer Nevada was controlled by Pierce through his associates Thomas, Powers, Jardine and Braumberger. Mercer BC has also asserted that other companies, who were shareholders of Mercer Nevada, were controlled directly or indirectly by Pierce. That is, Mercer BC alleges that Mercer Nevada was an alter ego of Pierce and, as stated earlier, it was Pierce's (and his nominee's) intent to artificially "pump" the price of the shares of Mercer BC and then to "dump their undisclosed stockholdings and enjoy the undisclosed profits thereto" (ACC, at para. 33).
[103] Mercer Nevada alleges that Mercer BC has taken active steps to interfere with Mercer Nevada's ability to carry on business and fulfill its role as operator under the Agreement.
[104] Mercer Nevada alleges that Jivraj has attempted to cause Mercer Nevada to default under the Agreement. It says that Jivraj communicated with one of Mercer Nevada's employees over Skype instant messenger in an attempt to convince that employee to take steps to ensure that a third-party service provider was not paid so that he would not complete a report which would, in turn, lead to Mercer Nevada's default. Mercer Nevada also says that Jivraj has been threatening Mercer Nevada's consultants with lawsuits to convince them to provide him with data and other information pertaining to the Property. It says that he seeks this information so that he can engage in discussions with third parties relating to a potential deal for the Property.
[105] Mercer Nevada further alleges that Mercer BC has interfered with its computer operations. The allegations include the control and interception of e-mails directed to accounts belonging to Mercer Nevada. Mercer Nevada further alleges that Jivraj has retained passwords and codes necessary to access their computer server and administration of the website domain www.mercergoldcorp.com, which it says was purchased for Mercer Nevada. Mercer Nevada is concerned that Jivraj used the website passwords to remove Mercer Nevada's web pages and to replace them with a web page promoting Mercer BC.
[106] Finally, Mercer Nevada alleges that Jivraj has been actively soliciting offers to develop the Property by way of a new deal that would be inconsistent with Mercer Nevada's rights as optionee. Further, it says that Jivraj has taken steps to try to remove the trade restrictions placed upon the shares he received as part of the Agreement.
[107] In light of these allegations, Mercer Nevada seeks broad injunctive relief against Mercer BC including orders: enjoining Jivraj from communicating with employees, consultants, investors and contractors; directing that all communications from Jivraj or Mercer BC be directed to Powers or Mercer Nevada's legal counsel; disclosing the names of persons with whom Jivraj has discussed a possible sale of the Property; enjoining Jivraj from dealing with a website domain and accessing e-mails intended for Mercer Nevada; requiring Jivraj to deliver to Mercer Nevada all emails directed to Mercer Nevada received by him; and enjoining Jivraj from otherwise interfering with Mercer Nevada's ongoing role as operator under the Agreement.
[108] Mercer BC argues that Mercer Nevada is seeking what is in substance a mandatory injunction which would require Mercer BC to continue a contractual arrangement with Mercer Nevada pending the arbitration award. Mercer BC says that if Mercer Nevada obtains the injunction it seeks, it will use the funds it has said it will raise through a public offering to fund the arbitration and to continue to deceive the public through its planned pump and dump scheme.
[118] It was argued by Mercer BC that if Mercer Nevada failed to meet its commitments under the Agreement, that failure could well jeopardize Mercer BC's relationship with Communidad under the Underlying Agreement and perhaps lead to the latter terminating such agreement, thereby terminating Mercer BC's rights thereunder. Mercer Nevada responds by pointing out that should it default Mercer BC has sufficient time under the Underlying Agreement to remedy such default and hence is not unduly prejudiced.
[119] The Agreement appears to have been drafted such that if Mercer Nevada defaults under the contract, Mercer BC will have time to remedy the breach before being found by Communidad to have breached the Underlying Option. Further, granting an injunction would allow Mercer Nevada to continue its operations on the Property. The continued operations and payment by Mercer Nevada pursuant to the Agreement will in fact preserve Mercer BC's position with respect to the Underlying Option.
[120] Mercer Nevada's business interests are solely wrapped up in the Property. Without its interest under the Agreement it would lose its singular asset. In addition to its right to act as the operator it would lose the $450,000 it has paid to Communidad, it would lose the value of the $1.5 million it has spent on exploration, the $200,000 paid to Mercer BC upon execution of the Agreement, as well as the 10 million shares it issued to Mercer BC or its nominees.
[121] While it is arguable these losses are compensable in damages, effectively, if the injunction is not granted in the terms sought, Mercer Nevada will lose any effective control over the Property and its rights under the Agreement. The loss of those opportunities would likely harm Mercer Nevada's reputation and would prevent it from raising funds to continue operations in the future and, consequently, result in its demise. Without an injunction, Mercer Nevada could well cease to exist altogether. This certainly weighs in favour of Mercer Nevada's position.
[122] The irreparable harm factor is particularly important because many of the other factors are equally balanced between the parties. Based on the conflicting affidavit material filed by the parties I am unable to draw any conclusions as to the strength of either party's case. Each party accuses the other of misconduct and breaches of the Agreement. I am of the view that Mercer Nevada has made out a stronger case that the arbitration clause applies to resolve all disputes arising from the Agreement. I am also of the view that Mercer BC has established that there is a question regarding the effect of the requirement in Article 17 that a party respond to a default notice within 10 days by submitting the dispute to arbitration. This factor is evenly balanced.
[123] I am also unable to make a determination whether there is a public interest to be protected. If Mercer BC is correct that Pierce and his nominees' sole intent is to "pump" the price of Mercer Nevada's shares and then to dump or sell them without developing, then clearly the public interest of prospective shareholders who might buy under such scheme is adversely affected. Such scheme is vehemently denied by Pierce and the other named defendants.
I just posted this on the MNLU JV partner message board:
Got my last reply from Steve (CEO of AEXP), at 2 am, LOL. In summary, he says no one holding AEXP shares lost more than him in this mess, if that makes us feel any better.
He says, that his latest (but how old is that?) info led him to believe Westrock still held 4 million restricted shares of AEXP (but that needs to some how be verified now, transfer agent might know?).
He too is unhappy about what I turned up, and was unaware of most of it. He also said he does not really know Gary Powers (Westrock). While he said he could no go into any details, he said basically that he was going to try and get AEXP actively going again (my summary interpretation of what he said), meaning to me that he is not going to sit around and wait for MNLU and the 20% JV to make or break the company. Or in other words, AEXP is not likely to just disappear soon.
Keep in mind that AEXP's hands were tied while the merger was pending, and they are now free to work on other prospects. Let's hope it is oil this time!
I have done some more DD on Steve Harding, to see if he has any dark sinister past I missed!!! Here is what I have found so far:
http://investing.businessweek.com/research/stocks/people/person.asp?personId=50035546&ticker=AEXP:US&previousCapId=33012331&previousTitle=AMERICAN%20EXPLORATION%20CORP
http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?ticker=HEI:CN
http://investing.businessweek.com/research/stocks/people/people.asp?ticker=CEX:CN
http://investing.businessweek.com/research/stocks/people/relationship.asp?personId=50035546&ticker=CEX:CN&previousCapId=3109185&previousTitle=CONTACT%20EXPLORATION%20INC
http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?ticker=CEX:CN
http://investing.businessweek.com/research/stocks/people/people.asp?ticker=HEI:CN
I may not have time to dig further for a week(s) or more, so if some one else can grab the ball run, it would be most appreciated!!!
I think the next questions are does Westrock or Gary Powers still hold 4 million shares of AEXP?
Does Brent Pierce (et. al, LOL) still own about 20% of MNLU?
I think the answers to those 2 questions are critical now!!!!!
If they sold, what does that mean, if they held what are the implications for us, and will either one be forced to sell?
Got my last reply from Steve (CEO of AEXP), at 2 am, LOL. In summary, he says no one holding AEXP shares lost more than him in this mess, if that makes us feel any better.
He says, that his latest (but how old is that?) info led him to believe Westrock still held 4 million restricted shares of AEXP (but that needs to some how be verified now, transfer agent might know?).
He too is unhappy about what I turned up, and was unaware of most of it. He also said he does not really know Gary Powers (Westrock). While he said he could no go into any details, he said basically that he was going to try and get AEXP actively going again (my summary interpretation of what he said), meaning to me that he is not going to sit around and wait for MNLU and the 20% JV to make or break the company. Or in other words, AEXP is not likely to just disappear soon.
Keep in mind that AEXP's hands were tied while the merger was pending, and they are now free to work on other prospects. Let's hope it is oil this time!
I have done some more DD on Steve Harding, to see if he has any dark sinister past I missed!!! Here is what I have found so far:
http://investing.businessweek.com/research/stocks/people/person.asp?personId=50035546&ticker=AEXP:US&previousCapId=33012331&previousTitle=AMERICAN%20EXPLORATION%20CORP
http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?ticker=HEI:CN
http://investing.businessweek.com/research/stocks/people/people.asp?ticker=CEX:CN
http://investing.businessweek.com/research/stocks/people/relationship.asp?personId=50035546&ticker=CEX:CN&previousCapId=3109185&previousTitle=CONTACT%20EXPLORATION%20INC
http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?ticker=CEX:CN
http://investing.businessweek.com/research/stocks/people/people.asp?ticker=HEI:CN
I may not have time to dig further for a week(s) or more, so if some one else can grab the ball run, it would be most appreciated!!!
I think the next questions are does Westrock or Gary Powers still hold 4 million shares of AEXP?
Does Brent Pierce (et. al, LOL) still own about 20% of MNLU?
I think the answers to those 2 questions are critical now!!!!!
If they sold, what does that mean, if they held what are the implications for us, and will either be forced to sell?
One last bit of news for the New Year folks regarding MNLU and AEXP!
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=70425403
A bit of good news, last minute for the New Year. My last email reply from Steve Harding, AEXP CEO, indicates that he is just as shocked at what I turned up today, as we are, and was unaware of most of it as well. Seems he is just as unhappy and financially hurt by this mess as we are, maybe even more so.
I may just hang on to my AEXP shares for now and see if we can't dig up more solid info to go after the real crooks with.
Still trying to determine, at this time, what happened to Westrocks 4 million AEXP shares!!!! If they kept them, then why did they switch horses to MNLU this month?
http://yahoo.brand.edgar-online.com/EFX_dll/EDGARpro.dll?FetchFilingHtmlSection1?SectionID=7128365-222302-250158&SessionID=5LklHjM7t3WLn47
According to that link above Brent Pierce, aka, Parklane Investments Inc., owned 20.79% of MNLU shares!!!
http://www.sec.gov/litigation/admin/2011/33-9205.pdf
Yes it does, and I fell like a fool for not finding and seeing most of it sooner. That lawsuit that turned up today, IMHO is the last nail in the coffin for MNLU for sure and probably for AEXP as well. AEXP CEO does not seem to have been aware of this either, but that leaves us (AEXP) with either a naive, gullible CEO, or a liar, neither of which is good. Unless we can round up a good lawsuit and ambulance chaser that can seize these guys assets, before the SEC beats us to it, or unless Steve Harding (AEXP CEO) was hoodwinked as well, and can get AEXP into a new deal, we may be toast.
I got an email back from Steve Harding this evening, that sounds like they hoodwinked him too (but who knows for sure).
Gary Powers is listed elsewhere as the sole officer (presumed owner) of Westrock Land Corp, the company AEXP had the BP/BV leases with in Miss!
http://www.corporationwiki.com/Texas/Dallas/westrock-land-corp/38164406.aspx
And "Gordon Brent Pierce also known as Brent Pierce", turns out to be the MNLU insider that loaned over $1 million dollars to MNLU earlier this year, and collected back $500,000 of that debt by forcing MNLU to sell the Louisiana assets about 6 weeks ago, at a fire sale, as his loan was senior secured debt at MNLU. Brent Pierce was indicted by the SEC and convicted of illegally selling restricted shares of another company through a Cayman Islands operation he controlled, among other issues it seems!
https://www.google.com/search?q=gordon+brent+pierce+sec&ie=utf-8&oe=utf-8&aq=t&rls=org.mozilla:en-US:official&client=firefox-a
http://regulatorycomplianceblog.com/tag/gordon-brent-pierce/
http://incakolanews.blogspot.com/2011/06/scam-runner-gordon-brent-pierce-has-got.html
http://investorstemcell.com/forum/cellcyte-genetics-corp/2201.htm
http://search.nwsource.com/search?similarto=MB%3A2008553135
http://www.sec.gov/litigation/admin/2011/33-9205.pdf
This all smells of a scam to take the well and leases and other assets out of MNLU and AEXP, strip the carcass clean, (no need for BK even?) and shovel them back to Brent Pierce, his buddies and Gary Power's Westrock Land company.
Gary Powers is listed elsewhere as the sole officer (presumed owner) of Westrock Land Corp, the company AEXP had the BP/BV leases with in Miss!
http://www.corporationwiki.com/Texas/Dallas/westrock-land-corp/38164406.aspx
And "Gordon Brent Pierce also known as Brent Pierce", turns out to be the MNLU insider that loaned over $1 million dollars to MNLU earlier this year, and collected back $500,000 of that debt by forcing MNLU to sell the Louisiana assets about 6 weeks ago, at a fire sale, as his loan was senior secured debt at MNLU. Brent Pierce was indicted by the SEC and convicted of illegally selling restricted shares of another company through a Cayman Islands operation he controlled, among other issues it seems!
https://www.google.com/search?q=gordon+brent+pierce+sec&ie=utf-8&oe=utf-8&aq=t&rls=org.mozilla:en-US:official&client=firefox-a
http://regulatorycomplianceblog.com/tag/gordon-brent-pierce/
http://incakolanews.blogspot.com/2011/06/scam-runner-gordon-brent-pierce-has-got.html
http://investorstemcell.com/forum/cellcyte-genetics-corp/2201.htm
http://search.nwsource.com/search?similarto=MB%3A2008553135
http://www.sec.gov/litigation/admin/2011/33-9205.pdf
Now I have a migran headache, just found this:
WILLIAM D. THOMAS. Mr. Thomas has been our Chief Financial Officer and Secretary/Treasurer since August 18, 2008. Mr. Thomas has over thirty years of experience in the finance and accounting areas for the natural resource sector. Currently, Mr. Thomas is also the Chief Financial Officer of Mainland Resources, Inc., and Morgan Creek Energy, Nevada corporations that trade on the OTC Bulletin Board as well as Mira Resources, a Canadian public company traded on the TSX Venture Exchange.
Here:
http://bcjustice.com/index.php?option=com_content&view=article&id=5954:mercer-gold-corporation-nevada-v-mercer-gold-corp-bc-for-an-order-under-commercial-arbitration-act-extending-the-time-for-giving-notice-to-submit-a-question-to-arbitration-for-injunctive-relief-and-for-other-related-orders&catid=502:natural-resources-2011&Itemid=1490
All three backed by leases from Westrock and Mr Powers!!!
I did not see anything in the latest news that precludes AEXP shareholders (or AEXP for that matter) from suing Mr Powers, or Westrock. I would really like to know if he is the one that dumped all the AEXP shares between Dec 12th and Dec 23rd? Strikes me as a major conflict of interest, owning a lot of shares in AEXP, and having separate lease deals with AEXP and MNLU, and then pulling the rug out from under AEXP shareholders in favor of MNLU, after dumping his shares? If I am right, this stinks, and MNLU shareholders should have no reason to trust MNLU or Westrock not to stiff them next?
Holy cow, this looks like the entire gig is up for all these jokers?
All of them named in lawsuit today?
Quote:Mercer Gold Corporation (Nevada) (formerly Uranium International Corp.,
Gordon Brent Pierce also known as Brent Pierce, Gary Powers,
William (Bill) Thomas, Gerry Jardine and Leonard Braumberger
http://www.corporationwiki.com/Texas/Dallas/westrock-land-corp/38164406.aspx
Mercer Gold turned up on my radar about 9 months ago, when an MNLU director left MNLU and Mercer Gold, and Gerry Jardine took over both their director spots, IIRC. Now it turns out the only name tied publicly to Westrock, Gary Powers is also the CEO of the defunct Mercer Gold (which Jerry told me earlier this year was broke and being reorganized).
IIRC Rahim Jivraj was the director that left MNLU and Mercer Gold earlier this year, he is involved in the law suit. Brent Pierce is the guy who had loaned MNLU 1-2 million $s this year, and collected $500,000 of the MNLU debt by forcing MNLU to sell the Louisiana assets at fire sale (steal) price!!!! They are all named in today's press about the law suit!
Even William Thomas, CFO of Mainland is named in the lawsuit!!!!
Pop corn, peanuts, get your pop corn and peanuts right here folks!!!!
Time to check out the dirty laundry folks! The lawsuit is not about MNLU or AEXP, but it does, once and for all show the sordid incestuous relationship that we have been scammed with by MNLU and AEXP, and Westrock, and the major people players, like Garry Powers, et. al., IMHO.
IIRC we recently read news that Brent Pierce was the previously undisclosed insider lending to MNLU this year, that partially pulled the plug and forced the Louisiana asset sale, and was also the person who got fined and tried by the SEC for illegal share sales of restricted shares of another company via the Cayman islands back door?
Holy cow, this looks like the entire gig is up for all these jokers?
All of them named in lawsuit today?
Mercer Gold Corporation (Nevada) (formerly Uranium International Corp.,
Gordon Brent Pierce also known as Brent Pierce, Gary Powers,
William (Bill) Thomas, Gerry Jardine and Leonard Braumberger
More MNLU AEXP Westrock DD links to dig through folks:
Here is an eye opener!!!!!
http://www.faqs.org/sec-filings/100316/MAINLAND-RESOURCES-INC_10-K.A/ex10-7.txt
OUCH!!! So so does Westrock control, or did they control all the MNLU / AEXP leases? How much does or did Westrock control? The sold another huge option in Miss to Morgan Creek Energy in 2009 as well.
http://globaldocuments.morningstar.com/documentlibrary/Document/6366fceeff0e95ea65ef49830e661904.msdoc/original
http://marketbrief.com/mcke/4/insider-trading/2011/7/25/8942896/filing
And is, or was Mira Resources, also had a Westrock deal? Note that Westrock seems to be a one man operation, Gary Powers?
http://www.marketwire.com/press-release/mira-proposes-acquisition-financing-and-change-of-business-nex-board-mrp.h-930352.htm
More links to Westrock deals with other nearly dead possible pump and dumps?
http://www.faqs.org/sec-filings/111117/MORGAN-CREEK-ENERGY-CORP_10-Q/R8.htm
http://www.reuters.com/finance/stocks/MCKE.OB/key-developments
Bottom of the page is 2009, but has the names of major stock holders then!!!
http://www.equityhive.com/main/Individual/assetview.aspx?i=1502150
http://www.insider-monitor.com/trader/cik1502150.html
I for one would like to know what happened to the restricted shares Westrock got from AEXP in 2009? Do they still own them? Why would they have kept them, if they were going to do an end run around AEXP while cutting a back stabbing deal with MNLU?
http://msnmoney.brand.edgar-online.com/EFX_dll/EDGARpro.dll?FetchFilingHTML1?ID=6767563&SessionID=GKeKWZn2t35_P49
One thing is for sure, Garry Powers and his private company Westrock Land Corp is and or has been deeply involved behind the scenes in deals with AEXP and MNLU for at least 2 years now!!!!
Effective on August 19, 2009, the Company entered into a further amendment to the Option Agreement (the "Third Amended Option Agreement") with Westrock. Pursuant to the Third Amended Option Agreement: (i) the Company agrees to issue an aggregate of 4,037,500 shares of its restricted common stock to Westrock as satisfaction for an aggregate amount of $2,018,750 , which remains due and owing from the aggregate purchase price of $3,125,000 (the "Purchase Price"); and (ii) the Company agrees to drill and complete a minimum of at least one well on the properties in the Haynesville geological zone no later than December 31, 2010. As of the date of this Current Report, the Company has paid an aggregate of $1,106,250 for the Purchase Price under the terms and provisions of the Option Agreement. All other terms and provisions of the Option Agreement remain valid and binding.
Even a broken clock is right twice a day. I don't give pigroast any credit, as he posted no DD to back up his claims. He was just short, and was trying to capitalize on it.
At this point, the question is what do the real power players have in mind, and who holds the real power? For all I know, they may be planning to finish the BP#1 well now via MNLU, do a 1:2 forward split, again, and sell (meaning dump) shares again on the good news like they did last time in 2009. Their may be more than one power player trying to s...w each other here for all I know, with us caught in the middle!!!! So IMHO, it is DD time to dig up the actual legal contracts that are public, the history of the players like Westrock, and do a lot of what iffing here before we get hosed and slaughtered again. I hope there are others here in the business, that know where to look and find those legal documents, like land leases, and O&G permits etc, as the SEC/OTC reports and Google are about the extent of my current DD abilities.
More Westrock DD related to the recent AEXP disaster:
http://biz.yahoo.com/e/111117/mcke.ob10-q.html
Is Westrock behind a public company setup to fleece investors? Is MCKE the next game? Are there others that Westrock is behind? Westrock is in Dallas...
Effective on August 26, 2010, our Board of Directors authorized the execution of an option agreement dated August 26, 2010 (the "Option Agreement") with Westrock Land Corp. ("Westrock"), to purchase approximately 21,000 net acres of mineral oil and gas leases on lands located in Lamar, Jones and Forrest counties in the State of Mississippi (the "Acquired Properties"). The Company has entered into the Option Agreement with Westrock, as the mineral leaseholder, and has received representations that Westrock owns all right, title and interest to all depths, including the Haynesville Shale Formation pursuant to the oil and gas leases with a minimum 75% net revenue interest.
In accordance with the terms and provisions of the Option Agreement: (i) we agreed to issue to Westrock an aggregate of 15,000,000 restricted shares of our common stock by November 30, 2010; (ii) Westrock granted us a period to conduct due diligence to October 31, 2010; and (iii) at closing, Westrock would convey to us the Acquired Properties by assignment and bill of sale and other associated documentation.
We subsequently completed due diligence on the Acquired Properties and issued 15,000,000 restricted common shares to Westrock on October 21, 2010.
Bonanza Resources Corporation, through its subsidiary, acquired an 85% interest in the North Fork 3-D prospect pursuant to an agreement with Radiant Energy, LC and Ryan Petroleum, LLC dated February 25, 2008 (the "Original Agreement").
Looks like this one, MCKE, died 14 months ago? What happened? I am on the trail here to find out who is pulling the strings in deals like this one, where Westrock was or is involved in the land lesase deals that got these companies PRs rolling. For more details see AEXP and MNLU posts I made today, and the drill shaft Westrock gave AEXP recently. I am wondering how many MCKE like deals Westrock was behind, were they nothing more than plans to take retail investors money and run with the assets still held or returned to Westrock? IF so how many of these scams, like MCKE was Westrock behind?
I think we saw a PR way back about a planned 3 stage frack.
This (below) is a post I just made on the AEXP page, but it has a whole lot to with MNLU!!!!
Keep in mind that AEXP had the original deal with the real (?) property lease owners, Westrock (who we need to do some DD on IMHO!!!
I have been digging back and reading today, and I find it most curious that the last 2 months of MNLU PRs and SEC filings make no mention of WHO they have this new deal with by name! Very odd IMHO, while the latest AEXP SEC report does go into detail as to who s..d us and how.
I for one would really like to know who owns Westrock, and whether or not there was a back door set up to s...w retail AEXP/MNLU investors in this deal...
From the AEXP Dec 21, 2011 8-K:
Westrock Option Agreement
Effective on November 3, 2008, the Board of Directors of American Exploration Corporation, a Nevada corporation (the “Corporation”) authorized the execution of an option agreement (the “Option Agreement”) with Westrock Land Corp., a private corporation (“Westrock”). Westrock owns all right, title and interest in and to approximately 5,000 net acres of oil and gas leases located in Mississippi (collectively, the ”Leases”). The Corporation had an option to acquire 100% of the working interest and 75% of the net revenue interest in the Leases at $625 per net acre for a total purchase price of $3,125,000. The contiguous acreage involved several landowners, with mineral lease expiry extending beyond 2011. The original terms of the Option Agreement required spudding a well on or before October 1, 2009. The effective date of the conveyance of the revenue interest in the Leases to the Corporation was to be no later than May 15, 2009 upon final payment of the remaining balance of $2,018,750.
Extensions
Effective on January 8, 2009, the Corporation entered into an amendment to the Option Agreement (the “Amended Option Agreement”) with Westrock. Pursuant to the Amended Option Agreement, Westrock granted to the Corporation until February 2, 2009 to complete its due diligence. Effective on March 18, 2009, the Corporation entered into a further amendment to the Option Agreement (“the “Second Amended Option Agreement”) with Westrock. Pursuant to the Second Amended Option Agreement: (i) Westrock granted to the Corporation until May 15, 2009 to complete its due diligence; (ii) the Corporaiton paid to Westrock an additional non-refundable amount of $325,000 as consideration for the extension; and (iii) the effective date of the conveyance of the working and revenue interest in the Leases to the Corporation would be no later than May 15, 2009. Effective on August 17, 2009, the Corporation entered into a further amendment to the Option Agreement (the “Third Amended Option Agreement”) with Westrock. Pursuant to the Third Amended Option Agreement: (i) the Corporation agreed to issue an aggregate of 4,037,500 shares, valued at $2,664,750, of its restricted common stock to Westrock as satisfaction for an aggregate amount of $2,108,750, which remained due and owing from the aggregate purchase price of $3,125,000 (the “Purchase Price”); and (ii) the Corporation agreed to drill and complete a minimum of at least one well on the properties in the Bossier/Haynesville geological zone no later than December 31, 2010. The 4,037,500 shares of restricted common stock were issued to Westrock and the transfer of title to the Leases was finalized. On November 2, 2010, the Corporation executed a letter amendment to the Option Purchase Agreement with Westrock. In the November 2, 2010 letter agreement, the Corporation agreed to drill and complete at least one well on the Leases in the Bossier/Haynesville geological zone no later than December 31, 2011.
In 2010, a well operated by Mainland Resources Inc., a publicly traded corporation (“Mainland Resources”) was drilled on the leases, however the well has yet to be stimulated and drill stem tested.
Termination of Westrock Option Purchase Agreement and Transfer of Leases
On November 11, 2011, the Corporation received a letter from Westrock advising that Westrock was willing to grant an extension to the December 31, 2011 deadline for the Corporation to meet its drilling and completions obligations under the terms and provisions of the Option Purchase Agreement if the Corporation proposed reasonable financial consideration acceptable to Westrock by December 15, 2011. In the event the Corporation was unable to provide reasonable financial consideration acceptable to Westrock, the Corporation shall be deemed in default of the provisions of the Option Purchase Agreement and shall automatically forfeit and transfer to Westrock all rights under the Option Purchase Agreement including, but not limited to, the acquired properties, and Westrock shall retain all payments made by the Corporation under the Option Purchase Agreement and all improvements made to the acquired properties. During the past three weeks, management has been seeking to identify sources of financial consideration to offer to Westrock and has been unsuccessful.
2
The Corporation was deemed to be in default of the Option Purchase Agreement. In accordance with the terms and provisions of the Option Purchase Agreement, and in the event of a default, the Corporation is to automatically forfeit and transfer back to Westrock the Leases. On December 12, 2011, the Corporation entered into a transfer of oil, gas and mineral leases with Westrock (the “Transfer of Leases”), pursuant to which the Corporation transferred, delivered and assigned to Westrock all of the Corporation’s interests in and to those certain Leases.
Edit (Ecomike), so why did we not hear about this default on Dec 12th or 13th, why did the companies withhold this info for 13 days? And why did this all happen before the Dec 31st deadline?????????
Notwithstanding the Transfer of Leases, the Corporation still retains a twenty percent working interest in the 8,225 adjoining acres in Mississippi that Mainland Resources Inc. first contributed to the joint venture.
Termination of Merger
The Corporation and Mainland Resources previously entered into that certain merger agreement and plan of merger dated March 22, 2010, which was amended by a letter agreement dated July 28, 2010, and further amended by an amending agreement dated September 7, 2010, an amending agreement dated December 23, 2010, an amending agreement dated March 14, 2011, an amending agreement dated May 17, 2011, an amending agreement dated August 18, 2011, and an amending agreement dated October 31, 2011 (collectively, the “Merger Agreement”) which, subject to certain conditions, contemplated a merger between the Corporation and Mainland.
Under Section 7.3 of the Merger Agreement: (i) either the Corporation or Mainland Resources may terminate the Merger Agreement if certain conditions specified in the Merger Agreement are not satisfied at or before the “Termination Date”, which is defined in Section 1.1 of the Merger Agreement to mean January 31, 2012, (was this also a lie to shareholders?) or such later date as may be mutually agreed; or (ii) the Corporation and Mainland Resources may mutually agree to terminate the Merger Agreement (without further action on the part of the shareholders of the Corporation) anytime prior to the filing of the Articles of Merger.
The Board of Directors of the Corporation has determined that it is in the best interests of the Corporation and its shareholders to mutually agree with Mainland Resources to terminate the Merger Agreement. The Board of Directors based its decision upon considerable analysis of certain factors including, but not limited to: (i) the Corporation is in default of the Option Purchase Agreement and based upon the Transfer of Leases, no longer has the asset base, including the Leases, it previously had to contribute now making such a merger compromised; (ii) the Corporation retains its twenty percent (20%) working interest in the 8,225 acres based upon the joint venture with Mainland Resources; (iii) the potential legal fees and costs, time and energy associated with any protracted litigation with Mainland Resources associated with termination of the merger; and (iv) the ability of the Corporation to pursue new business operations and asset base following termination of the merger.
Therefore, effective December 21, 2011 (the “Effective Date”), the Corporation and Mainland Resources entered into that certain termination and release agreement (the “Termination and Release Agreement”), pursuant to and in accordance with Section 7.3 of the Merger Agreement, the Corporation and Mainland Resources mutually agreed to the termation of the Merger Agreement as of the Effective Date. In further accordance with the terms and provisions of the Termination and Release Agreement, the Corporation and Mainland Resources agreed to release one another from any further liability as to the performance of the respective party’s duties and obligations under the Merger Agreement and that Mainland Resources shall have no further obligations to issue any shares of common stock of Mainland Resources or grant any options or warrants of Mainland Resources to the shareholders of the Corporation.
3
New Promissory Note
In connection with the Merger Agreement, the Corporation and Mainland Resources previously entered into that certain promissory note dated September 27, 2010, and as amended by amendment no. 1 dated December 23, 2010, amendment no. 2 dated March 30, 2011, amendment no. 3 thereto dated May 17, 2011, amendment no. 4 dated August 18, 2011 and amendment no. 5 dated October 31, 2011 (collectively, the Original Promissory Note”. , as amended, being, collectively, the “Original Promissory Note”). The Promissory Note shall supersede and replace the Original Promissory Note.”; and
In accordance with the terms and conditions of the Termination And Release Agreement, the Corporation and Mainland Resources entered into a new promissory note dated December 21, 2011 (the “New Promissory Note”), which shall supersede and replace the Original Promissory Note. The New Promissory Note evidenced the Corporation’s current obligation to pay to Mainland Resources $67,002.73, comprised of $60,000 in principal and $7,002.73 in accrued interest.
Now that AEXP has been released from the merger deal, what is to keep AEXP from raising cash, and cutting a later deal with Westrock, and buying up MNLU and Westrock assets if MNLU goes BK?
Sorry to be tossing out the conspiracy theories here, but at this point I smell rats, somewhere.
Who do we trust now, and why should we trust them?
Some Westrock DD links:
http://biz.yahoo.com/t/36/8399.html
http://investing.businessweek.com/research/stocks/private/snapshot.asp?privcapId=51626515
http://www.secform4.com/insider-trading/1502150.htm
http://finance.yahoo.com/q?s=mcke.ob
But keep in mind that AEXP had the original deal with the real (?) property lease owners, Westrock (who we need to do some DD on IMHO!!!
I have been digging back and reading today, and I find it most curious that the last 2 months of MNLU PRs and SEC filings make no mention of WHO they have this new deal with by name! Very odd IMHO, while the latest AEXP SEC report does go into detail as to who s..d us and how.
I for one would really like to know who owns Westrock, and whether or not there was a back door set up to s...w retail AEXP/MNLU investors in this deal...
From the AEXP Dec 21, 2011 8-K:
Westrock Option Agreement
Effective on November 3, 2008, the Board of Directors of American Exploration Corporation, a Nevada corporation (the “Corporation”) authorized the execution of an option agreement (the “Option Agreement”) with Westrock Land Corp., a private corporation (“Westrock”). Westrock owns all right, title and interest in and to approximately 5,000 net acres of oil and gas leases located in Mississippi (collectively, the ”Leases”). The Corporation had an option to acquire 100% of the working interest and 75% of the net revenue interest in the Leases at $625 per net acre for a total purchase price of $3,125,000. The contiguous acreage involved several landowners, with mineral lease expiry extending beyond 2011. The original terms of the Option Agreement required spudding a well on or before October 1, 2009. The effective date of the conveyance of the revenue interest in the Leases to the Corporation was to be no later than May 15, 2009 upon final payment of the remaining balance of $2,018,750.
Extensions
Effective on January 8, 2009, the Corporation entered into an amendment to the Option Agreement (the “Amended Option Agreement”) with Westrock. Pursuant to the Amended Option Agreement, Westrock granted to the Corporation until February 2, 2009 to complete its due diligence. Effective on March 18, 2009, the Corporation entered into a further amendment to the Option Agreement (“the “Second Amended Option Agreement”) with Westrock. Pursuant to the Second Amended Option Agreement: (i) Westrock granted to the Corporation until May 15, 2009 to complete its due diligence; (ii) the Corporaiton paid to Westrock an additional non-refundable amount of $325,000 as consideration for the extension; and (iii) the effective date of the conveyance of the working and revenue interest in the Leases to the Corporation would be no later than May 15, 2009. Effective on August 17, 2009, the Corporation entered into a further amendment to the Option Agreement (the “Third Amended Option Agreement”) with Westrock. Pursuant to the Third Amended Option Agreement: (i) the Corporation agreed to issue an aggregate of 4,037,500 shares, valued at $2,664,750, of its restricted common stock to Westrock as satisfaction for an aggregate amount of $2,108,750, which remained due and owing from the aggregate purchase price of $3,125,000 (the “Purchase Price”); and (ii) the Corporation agreed to drill and complete a minimum of at least one well on the properties in the Bossier/Haynesville geological zone no later than December 31, 2010. The 4,037,500 shares of restricted common stock were issued to Westrock and the transfer of title to the Leases was finalized. On November 2, 2010, the Corporation executed a letter amendment to the Option Purchase Agreement with Westrock. In the November 2, 2010 letter agreement, the Corporation agreed to drill and complete at least one well on the Leases in the Bossier/Haynesville geological zone no later than December 31, 2011.
In 2010, a well operated by Mainland Resources Inc., a publicly traded corporation (“Mainland Resources”) was drilled on the leases, however the well has yet to be stimulated and drill stem tested.
Termination of Westrock Option Purchase Agreement and Transfer of Leases
On November 11, 2011, the Corporation received a letter from Westrock advising that Westrock was willing to grant an extension to the December 31, 2011 deadline for the Corporation to meet its drilling and completions obligations under the terms and provisions of the Option Purchase Agreement if the Corporation proposed reasonable financial consideration acceptable to Westrock by December 15, 2011. In the event the Corporation was unable to provide reasonable financial consideration acceptable to Westrock, the Corporation shall be deemed in default of the provisions of the Option Purchase Agreement and shall automatically forfeit and transfer to Westrock all rights under the Option Purchase Agreement including, but not limited to, the acquired properties, and Westrock shall retain all payments made by the Corporation under the Option Purchase Agreement and all improvements made to the acquired properties. During the past three weeks, management has been seeking to identify sources of financial consideration to offer to Westrock and has been unsuccessful.
2
The Corporation was deemed to be in default of the Option Purchase Agreement. In accordance with the terms and provisions of the Option Purchase Agreement, and in the event of a default, the Corporation is to automatically forfeit and transfer back to Westrock the Leases. On December 12, 2011, the Corporation entered into a transfer of oil, gas and mineral leases with Westrock (the “Transfer of Leases”), pursuant to which the Corporation transferred, delivered and assigned to Westrock all of the Corporation’s interests in and to those certain Leases.
Edit (Ecomike), so why did we not hear about this default on Dec 12th or 13th, why did the companies withhold this info for 13 days?
Notwithstanding the Transfer of Leases, the Corporation still retains a twenty percent working interest in the 8,225 adjoining acres in Mississippi that Mainland Resources Inc. first contributed to the joint venture.
Termination of Merger
The Corporation and Mainland Resources previously entered into that certain merger agreement and plan of merger dated March 22, 2010, which was amended by a letter agreement dated July 28, 2010, and further amended by an amending agreement dated September 7, 2010, an amending agreement dated December 23, 2010, an amending agreement dated March 14, 2011, an amending agreement dated May 17, 2011, an amending agreement dated August 18, 2011, and an amending agreement dated October 31, 2011 (collectively, the “Merger Agreement”) which, subject to certain conditions, contemplated a merger between the Corporation and Mainland.
Under Section 7.3 of the Merger Agreement: (i) either the Corporation or Mainland Resources may terminate the Merger Agreement if certain conditions specified in the Merger Agreement are not satisfied at or before the “Termination Date”, which is defined in Section 1.1 of the Merger Agreement to mean January 31, 2012, or such later date as may be mutually agreed; or (ii) the Corporation and Mainland Resources may mutually agree to terminate the Merger Agreement (without further action on the part of the shareholders of the Corporation) anytime prior to the filing of the Articles of Merger.
The Board of Directors of the Corporation has determined that it is in the best interests of the Corporation and its shareholders to mutually agree with Mainland Resources to terminate the Merger Agreement. The Board of Directors based its decision upon considerable analysis of certain factors including, but not limited to: (i) the Corporation is in default of the Option Purchase Agreement and based upon the Transfer of Leases, no longer has the asset base, including the Leases, it previously had to contribute now making such a merger compromised; (ii) the Corporation retains its twenty percent (20%) working interest in the 8,225 acres based upon the joint venture with Mainland Resources; (iii) the potential legal fees and costs, time and energy associated with any protracted litigation with Mainland Resources associated with termination of the merger; and (iv) the ability of the Corporation to pursue new business operations and asset base following termination of the merger.
Therefore, effective December 21, 2011 (the “Effective Date”), the Corporation and Mainland Resources entered into that certain termination and release agreement (the “Termination and Release Agreement”), pursuant to and in accordance with Section 7.3 of the Merger Agreement, the Corporation and Mainland Resources mutually agreed to the termation of the Merger Agreement as of the Effective Date. In further accordance with the terms and provisions of the Termination and Release Agreement, the Corporation and Mainland Resources agreed to release one another from any further liability as to the performance of the respective party’s duties and obligations under the Merger Agreement and that Mainland Resources shall have no further obligations to issue any shares of common stock of Mainland Resources or grant any options or warrants of Mainland Resources to the shareholders of the Corporation.
3
New Promissory Note
In connection with the Merger Agreement, the Corporation and Mainland Resources previously entered into that certain promissory note dated September 27, 2010, and as amended by amendment no. 1 dated December 23, 2010, amendment no. 2 dated March 30, 2011, amendment no. 3 thereto dated May 17, 2011, amendment no. 4 dated August 18, 2011 and amendment no. 5 dated October 31, 2011 (collectively, the Original Promissory Note”. , as amended, being, collectively, the “Original Promissory Note”). The Promissory Note shall supersede and replace the Original Promissory Note.”; and
In accordance with the terms and conditions of the Termination And Release Agreement, the Corporation and Mainland Resources entered into a new promissory note dated December 21, 2011 (the “New Promissory Note”), which shall supersede and replace the Original Promissory Note. The New Promissory Note evidenced the Corporation’s current obligation to pay to Mainland Resources $67,002.73, comprised of $60,000 in principal and $7,002.73 in accrued interest.
I agree. It could happen sooner, but I have no reason to expect it, or bank on it. I agree, this a sweet risk / reward opportunity, just not likely to pay off over night.
Happy New year all.
Market cap here is $129,000 today. Last 10-Q showed $313,000 in current assets, 200,000 in cash!!!!
http://ir.manhattanpharma.com/secfiling.cfm?filingID=1144204-11-63558
Basically placing no value on the multiple biotech IP products in the pipeline. <8 million shares outstanding, PE is .01 right now (LMAO), based on a cash legal settlement they won with a prior JV partner, and a US federal grant the last 12 months, and wiped out options value, and they got rid of most of their debt earlier this year (was $2 million in convertibles from 2008, all gone now).
No one is watching this stock, it is way oversold, and there is another merger deal lurking on this one based on the latest news.
So price wise, This is a steal right here.
http://www.manhattanpharma.com/pipeline/overview.htm
The problem I see is it might drag out for a year getting the APWR accounting fixed and a report filed. I went through that with Deloitte and CGYV 2 years ago. Took forever for them to redo and report the financials. It did finally get done, and all was OK in the end, but it took over a year, so this is one to lock up and wait long term for IMHO. I don't expect anything substantial report wise here any time soon, so I won't be disappointed with unfulfilled expectations here until 2013 in my case if nothing gets totally fixed here in 2012.
I can't help but wonder how this sordid affair will turn out in the end. I was just re-reading the recent MNLU ( AEXP ) news and noted that the deal they made with Westrock to screw over AEXP shareholders is only tentative, and thus may be dependent on MNLU getting funding and avoiding BK to put it bluntly. Which begs the question, of what happens if MNLU drops the ball next, and Westrock backs out of the "tentative deal"? Do they negotiate a new deal with AEXP, and let them look for funding, again, like they did before? Or does Westrock screw both companies and cut a new deal with Guggenheim? Who is Westrock anyway?
One good thing, if MNLU goes belly up due to debt and a failed JV funding...., AEXP is no longer tied at the hip to MNLU! Right now AEXP has no reason to hit us with serious dilution, but that risk still exists for MNLU, IMHO, and could screw up the Westrock deal?
If MNLU went BK, AEXP could conceivably raise some cash and buy up cheap defaulted MNLU leases, and maybe even cut a new deal with Westrock. One thing is for sure, this whole picture is starting to look like a soap opera suspense murder mystery on TV!!!!
It is too late for Santa Claus this year!!!
Mainland Reaches Agreement in Principle to Acquire Buena Vista Acreage and Terminates Merger with American Exploration
BY Market Wire
— 8:00 AM ET 12/23/2011
HOUSTON, TEXAS -- (MARKETWIRE) -- 12/23/11 -- Mainland Resources, Inc., (the "Company" or "Mainland") (OTCQB:MNLU)(WKN:A0ND6N) announces it has reached an Agreement in Principle, subject to certain conditions precedent, including entering into a definitive agreement, to purchase, from the owner, all rights, title and interest in and to approximately 4,580 acres of oil and gas leases located on the Buena Vista prospect in Mississippi (collectively the "Leases"). The Leases were previously held by American Exploration Corporation ("American"). As consideration for the purchase, the Company has agreed to issue 15,000,000 shares of its capital stock to the owner and has agreed to grant the owner a 5 percent working interest, after payout (100% recovery of all drilling and completion costs), of any wells drilled and completed on the approximately 12,800 acres (including the Leases) initially contributed to the Buena Vista Joint Operating Agreement by Mainland and American.
The Leases were previously held by American by way of an Option Purchase Agreement. American was unable to provide reasonable financial consideration acceptable to the owner of the Leases and was deemed to be in default of the provisions of the Option Purchase Agreement. As a result, American automatically forfeited and transferred to the owner all rights under the Option Purchase Agreement including, but not limited to, the Leases. The owner retained all payments made by American under the Option Purchase Agreement and all improvements made to the Leases. American will retain a 20% working interest in the 8,225 acres in the Buena Vista prospect contributed by Mainland to the Joint Operating Agreement.
Based on these events, Mainland and American have agreed to terminate their contemplated merger. The 15,000,000 Mainland shares being issued to purchase the Leases represent approximately the same number of shares that would have been issued to the shareholders of American on completion of the contemplated merger.
Mike Newport, President of Mainland, states, "We are extremely pleased to have succeeded in reaching an agreement in principle to purchase this acreage, which will complete the assembly of the entire land package representing the Buena Vista prospect turtle back structure target first discovered by the Chevron Long Well and confirmed by Mainland''s Burkley Phillips No. 1 well."
The Company is considering several alternatives including joint venture partners and equity financing in order to fund the well completion and testing. A completion program has been developed and will be commenced once acceptable funding or partnership and site access issues are resolved.
LOL, in other good old news this year:
http://smallcapvoice.com/blog/10-12-11-smallcapvoice-interview-with-mantra-venture-group-otcbb-mvtg/
LOL, Happy New Year, let's hope!!!!
Has anyone talked to Larry the last 2-3 weeks? I have been swamped, and have not had time to bug him....
The game plan, or hope at this point, is that MNLU CAN finish, complete, and produce the current well, prove the value, and then start drilling new wells on other existing leases (needed to hold those leases), using JV money. Once that happens AEXP should have no trouble attracting money to cover their 20% of any new wells on the remaining AEXP/MNLU leases under the JV. I am currently under the impression MNLU needs to start drilling wells on those leases before too much longer, but I do not have the details. I am told the details are in 3 year old (apx) public documents in the earliest JV and lease term document filings.
So if MNLU gets this well producing, they may move on drilling at the MNLU/AEXP shared leases sooner than most are thinking here, unless the lease holders agree to extensions.
AEXP CEO (based on a phone call I had with him) thinks it will be easy to get MNLU and AEXP funding once the BP #1 well is online. He also believes that fracking this well is NOT a big risk, FWIW, which I found interesting.
Yes, to the cross me thinks! LOL
I don't think they had or needed a plant on the board(s), with the CEO being one of the best PR guys in the public company business.
They had (and have) a great idea, and presumably some real, new tech behind it, but they have failed to get a pilot plant funded, which was needed to debug any preliminary design flaws and prove out the idea and IP, and to create any additional IP needed to make it work cost effectively. They tried modifying the IP to a more marketable format, which had (and has promise), but until they get a JV funded deal signed and funded, and a lot more transparency it is just another slowly sinking ship, bleeding cash along the way.
Sad too see so many promising IP technologies die these slow deaths like this, as the dreams of solving real world problems slowly drown. I won't be surprised to see their Tech installed and operational in 10-20 years. All one needs to do is look at ones that actually got DOE funding, like Solyndra and Beacon Power, that are now in BK, to see how tough it is to get major game changing alt energy new tech to the market.
Ouch!!!! LOL
The question is when. We may be in for a long wait, but I am holding here and will add if we get .20, or lower.
There has been a large volume of shares sitting on the ask for almost 2 weeks now, down from about 700,000 initially to about 200,000 left now. I still have very high hopes for these guys!!!
This one has never been a scam, in the true sense of the word. Too many top notch seriously credentialed scientists, and patent work involved. But it has been pumped both to retail investors and the Shell, Exxons of the world for 3 years now, to try and land a business deal, pumped by a true expert at advertising, the ex-VP of PR of AOL, one of the guys that built AOL 20 years ago, Byron Elton, the current CABN CEO.
But they have dumped one novel product and Chem Engr combo, twice now in 3 years, and are on their third version now, all the while diluting old investors to keep the lights on. At this point, the pattern suggests that it will either take them years to get to market, if they survive, but all they need is one announced, real deal with a major player like Exxon, to run the stock way up on the news. But even with a big deal with an Exxon, it may take years to turn a profit for them. At this point, after 3 years, it seems unlikely they will cut a huge Exxon like deal.
One thing is for sure, it is doubtful they could fund building their own plant, ever, even with massive dilution to raise the cash needed at this point, IMHO. And right now alt energy is just not the darling it was 3 years ago.
But if they were where they are now, back in 2007, they might have been able to land a serious partner back then. Right now, the markets are just too paranoid to risk funding a real plant with this outfits tech IMHO.
First? They do have power plants running.
There is always TTissue if we are screwed, LOL!
Don't forget that MNLU holds apx 90% of the debt that AEXP does, and MNLU needs to pay that debt off, and raise the cash to get that well fracked and connected next, so MNLU is likely to see some dilution before AEXP does.
If MNLU dilutes at about .16 to raise the 10 million they need, it will be a near 50% dilution for MNLU, which will flip that ratio and favor AEXP in the next possible move. Long term is another story.
Other possibilities do exist....
Really???? I wish he would nibble on the other one I told him about, LOL.