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EZ ~~ There are "new photos" posted of the KS property (Big Bertha and other wells/storage tanks) on the CHAG Club site. Investors should check them out. I was quite impressed. It's going to be interesting to see what the first infill well brings out.
Peace,
M&M Man
Hi Arch!
Thanks for the friendly welcome. . .particularly in this "unfriendly" market LOL. Anyway, I'll keep you all updated on CHAG. For now, the stock should continue to trade in a tight range. I've been buying from 23 cents all the way to 50 cents. I'm quite happy with the progress the company is making. It appears the stock should continue to progress. I'm looking for a short-term of at least 41 cents. Particularly with the forthcoming news that the first infill well is complete . . .and the new separator tank is functional. Also, they will be moving towards drilling their first wells on their TX property (Glass Mountain). The "proven reserves" of both natural gas and sweet crude oil, are incredible. Financing is in place and the Barklay report along with latest PRs. . .indicate things will be progressing over the summer months.
Other: Keep an eye on HRCT, folks. The stock should do very well when/if WTO accession of China takes place. Look for value entry points. EZ should be the one to listen to on this one.
Peace everyone. . .glad to be onboard.
Let the waves of the past, push you into the walls of the future.
M&M Man
AHA! I should have read the ihub box, first. Indeed, then, you may want to keep an eye on CHAG (for what it's worth). We've tried to keep the CHAG ihub thread updated, so go ahead and read up as you will. CHAG may be a good "ground level" energy stock to keep a close eye on.
Peace,
M&M Man
Arch & EZ. . .Thanks for adding CHAG. I'm working with another individual on trying to keep the ihub CHAG thread updated. There appear to be good things coming with the company. Anyway. . .I'll keep it to the ihub thread. Can anyone update me as to what "Archie's Corner" is? I was invited over here by another investor. . .and I'm not sure what the rules of game are over hear. I guess I could read the ihub box, huh? LOL! Anyway. . .any tips on what is "game" and what is a "foul" over hear. TIA.
Peace,
M&M Man
TickerNova. . .
Very well said. And you are "most" welcome for the response.
With OTC BB stocks, the fall in shareprice can be quite a scare. HRCT continues to move forward and engage partners/relationships with many organization. My concern with HRCT is that there is something wrong with the caliber of the individual that assesses the need for revenues and earnings. Again, HRCT (inclusive of subsidiaries) has partnerships with some of the most behemoth organizations in the world. They did not (during the bubble era), however, have the tenacity to focus on making some money. Revenues, earnings. . .etc. I'm quite sure their focus has changed.
In my opinion. . .HRCT will survive. The mistakes of the past are the lessons for the future. And unfortunately, HRCT appears to have to learn the "hard way." But most of us that have gone through the "school of hard knocks" are not easily bent or broken. Nothing that is easy to achieve, is ever worth achieving. Not for those out for a true challenge. However, along the route to one's vision/dreams. . .one must not forget the simple procedure of "application of knowledge." Many OTC BB CEOs and execs, forgot about basic building blocks as the bubble grew. . .
Today, no company will survive without a firm foundation. That foundation is a strategic cadre of "excellence" onboard. And it comes in "rare" human talent. Again, we'll see if HRCT came up with the right stepping stones to create the "Yellow Brick Road." I hope Alan reads this message.
Peace,
M&M's Mark
We will survive.
"Although we do have some extremely attractive minerals projects available to us, one or two of which are compelling in their economics, our entire present focus is on completing the Shinkle development and commencing Glass Mountain's development, while also commencing the recovery action for our Kentucky assets.
Our website will shortly undergo a substantial update and overhaul, as it is very much out of date now."
Website update coming soon. . .
Peace,
M&M Man
Following the charts:
http://host.wallstreetcity.com/wsc2/Chart.html?Symbol=CHAG&Timespan=260
Peace,
M&M Man
TickerNova. . .
I can appreciate your absense from the boards. There has been much "dire" speaking of HRCT's future. However, we are there. Never mind the hits you'll take while the market is down, it's just a matter of fact that emotions are a bit high. Anyway. . .
HRCT is already positioned with "big" names and companies. It's just a matter of the OTC BB coming around. . .in it's normal cyclical pattern after being hit by the last bubble to burst. It's a tough ride, right now. But anyone that is in the right stocks. . .right now, could see some of the best returns on their investment they will see in YEARS. Many stocks are very severely oversold. Should HRCT prove they have revenues. . .and a viable potential for earnings, during this "down" phase of the market. . .you guys are all going to be very happy campers.
In the end, we'll all find out whether HRCT and their executives had the "true spit" to make things come to fruition. At present, I'm drawing another card and refusing to fold my hand.
Peace,
M&M Man
RULES OF THE GAME....
In every profession, there are probably a dozen or two major rules. Knowing them cold is what separates the professional from the amateur. Not knowing them at all? Well, let's put it this way: How safe would you feel if you suddenly found yourself piloting (solo) a Boeing 747 as it were landing on an airstrip? Unless you are a professional pilot, you would probably be frightened out of your wits and would soil your underwear. Hold that thought as you read this essay because I will explain to you how market manipulation works. What the professionals and the securities regulators know and understand, which the rest of us do not, is this.
"RULE NUMBER ONE: ALL SHARP PRICE MOVEMENTS -- WHETHER UP OR DOWN -- ARE THE RESULT OF ONE OR MORE (USUALLY A GROUP OF) PROFESSIONALS MANIPULATING THE SHARE PRICE."
This should explain why a mining company finds something good and "nothing happens" or the stock goes down. At the same time, for NO apparent reason, a stock suddenly takes off for the sky! On little volume! Someone is manipulating that stock, often with an unfounded rumor. In order to make these market manipulations work, the professionals assume: (a) The Public is STUPID and (b) The Public will mainly buy at the HIGH and (c) The Public will sell at the LOW. Therefore, as long as the market manipulator can run crowd control, he can be successful.
Let's face it: The reason you speculate in such markets is that you are greedy AND optimistic. You believe in a better tomorrow and NEED to make money quickly. It is this sentiment which is exploited by the market manipulator. He controls YOUR greed and fear about a particular stock. If he wants you to buy, the company's prospects look like the next Microsoft. If the manipulator wants you to desert the sinking ship, he suddenly becomes very guarded in his remarks about the company, isn't around to glowingly answer questions about the company and/or GETS issued very bad news about the company. Which brings us to the next important rule.
"RULE NUMBER TWO: IF THE MARKET MANIPULATOR WANTS TO DISTRIBUTE (DUMP) HIS SHARES, HE WILL START A GOOD NEWS PROMOTIONAL CAMPAIGN."
Ever wonder why a particular company is made to look like the greatest thing since sliced bread? That sentiment is manufactured. Newsletter writers are hired -- either secretly or not -- to cheerlead a stock. PR firms are hired and let loose upon an unsuspecting public. Contracts to appear on radio talk shows are signed and implemented. Stockbrokers get "cheap" stock to recommend the company to their "book" (that means YOU, the client in his book). An advertising campaign is rolled out (television ads, newspaper ads, card deck mailings). The company signs up to exhibit at "investment conferences" and "gold shows" (mainly so they can get a little "podium time" to hype you on their stock and tell you how "their company is really different" and "not a stock promotion.") Funny little "hype" messages are posted on Internet newsgroups by the same cast of usual suspects. The more, the merrier. And a little "juice" can go a long way toward running up the stock price.
The HYPE is on. The more clever a stock promoter, the better his knowledge of the advertising business. Little gimmicks like "positioning" are used. Example: Make a completely unknown company look warm and fuzzy and appealing to you by comparing it to a recent success story, Diamond Fields or Bre-X Minerals. That is the POSITIONING gospel, authored by Ries and Trout (famous for "Avis: We Want To Be #1" and "We Try Harder" and other such slogans). These advertising/PR executives must have stumbled onto this formula after losing their shirts speculating in a few Canadian stock promotions! The only reason you have been invited to this seemingly incredible banquet is that YOU are the main course. After the market manipulator has suckered you into "his investment," exchanging HIS paper for YOUR cash, the walls begin to close in on you. Why is that?
"RULE NUMBER THREE: AS SOON AS THE MARKET MANIPULATOR HAS COMPLETED HIS DISTRIBUTION (DUMPING) OF SHARES, HE WILL START A BAD NEWS OR NO NEWS CAMPAIGN."
Your favorite home-run stock has just stalled or retreated a bit from its high. Suddenly, there is a news VACUUM. Either NO news or BAD rumors. I discovered this with quite a few stocks. I would get LOADS of information and "hot tips." All of a sudden, my pipeline was shut-off. Some companies would even issue a news release CONDEMNING me ("We don't need 'that kind of hype' referring to me!). Cute, huh? When the company wanted fantastic hype circulated hither and yon, there would be someone there to spoon-feed me. The second the distribution phase was DONE....ooops! Sorry, no more news. Or, "I'm sorry. He's not in the office." Or, "He won't be back until Monday."
The really slick market manipulators would even seed the Internet news groups or other journalists to plant negative stories about that company. Or start a propaganda campaign of negative rumors on all available communication vehicles. Even hiring a "contrarian" or "special PR firm" to drive down the price. Even hiring someone to attack the guy who had earlier written glowingly about the company. (This is not a game for the faint-hearted!)
You'll also see the stock drifting endlessly. You may even experience a helpless feeling, as if you were floating in outer space without a lifeline. That is exactly HOW the market manipulator wants you to feel. See Rule Number Five below. He may also be doing this to avoid the severe disappointment of a "dry hole" or a "failed deal." You'll hear that oft-cried refrain, "Oh well, that's the junior minerals exploration business... very risky!" Or the oft-quoted statistic, "Nine out of 10 businesses fail each year and this IS a Venture Capital Startup stock exchange." Don't think it wasn't contrived. If a geologist at a junior mining company wasn't optimistic and rosy in his promise of exploration success, he would be replaced by someone who was! Ditto for the high-tech deal, in a world awash with PhD's.
So, how do you know when you are being taken? Look again at Rule #1. Inside that rule, a few other rules unfold which explain how a stock price is manipulated.
"RULE NUMBER FOUR: ANY STOCK THAT TRADES HUGE VOLUME AT HIGHER PRICES SIGNALS THE DISTRIBUTION PHASE."
When there was less volume, the price was lower. Professionals were accumulating. After the price runs, the volume increases. The professionals bought low and sold high. The amateurs bought high (and will soon enough sell low). In older books about market manipulation and stock promotion, which I've recently studied, the markup price referred to THREE times higher than the floor. The floor is the launchpad for the stock. For example, if one looks at the stock price and finds a steady flatline on the stock's chart of around 10 cents, then that range is the FLOOR. Basically, the markup phase can go as high as the market manipulator is capable of taking it. From my observations, a good markup should be able to run about five to ten times higher than the floor, with six to seven being common. The market manipulator will do everything in his power to keep you OUT OF THE STOCK until the share price has been marked up by at least two-three times, sometimes resorting to "shaking you out" until after he has accumulated enough shares. Once the markup has begun, the stock chart will show you one or more spikes in the volume -- all at much higher prices (marked up by the manipulator, of course). That is DISTRIBUTION and nothing else.
Example: Look at Software Control Systems (Alberta:XVN), in which I purchased shares after it had been marked up five times. There were eight days of 500,000 (plus) shares trading hands, with one day of 750,000 shares trading hands. Market manipulator(s) dumping shares into the volume at higher prices. WHENEVER you see HUGE volume after the stock has risen on a 75 degree angle, the distribution phase has started and you are likely to be buying in -- at or near the stock's peak price.
Example: Look at Diamond Fields (TSE:DFR), which never increased at a 75 degree angle and did not have abnormal volume spikes, yet in less than two years ran from C$4 to C$160/share. Example: Look at Bre-X Minerals (Alberta:BXM), which did not experience its first 75 degree angle, with huge volume until July 14th, 1995. The next two trading days, BXM went down and stayed around C$12/share for two weeks. The volume had been 60% higher nearly a month earlier, with only a slight price increase. Each high volume and spectacular increase in BXM's share price was met with a price retreat and leveling off. "Suddenly," BXM wasn't trading at C$2/share; it was at C$170/share.... up 8500% in less than a year!
In both of the above cases, major Canadian newspapers ran extremely negative stories about both companies, at one time or another. In each instance, just before another share price run up, retail investors fled the stock! Just before both began yet another run up! Successful short-term speculators generally exit any stock run up when the volume soars; amateurs get greedy and buy at those points.
"RULE NUMBER FIVE: THE MARKET MANIPULATOR WILL ALWAYS TRY TO GET YOU TO BUY AT THE HIGHEST, AND SELL AT THE LOWEST PRICE POSSIBLE."
Just as the manipulator will use every available means to invite you to "the party," he will savagely and brutally drive you away from "his stock" when he has fleeced you. The first falsehood you assume is that the stock promoter WANTS you to make a bundle by investing in his company. So begins a string of lies that run for as long as your stomach can take it.
You will get the first clue that "you have been had" when the stock stalls at the higher level. Somehow, it ran out of steam and you are not sure why. Well, it ran out of steam because the market manipulator stopped running it up. It's over inflated and he can't convince more people to buy. The volume dries up while the share price seems to stall. LOOK AT THE TRADING VOLUME, NOT THE SHARE PRICE! When earlier, there may have been 500,000 shares trading each day for eight out of 12 trading days (as in the case of Software Control Systems), now the volume has slipped to 100,000 shares (or so) daily. There are some buyers there, enough for the manipulator to continue dumping his paper, but only so long as he can enlist one or more individuals/services to bang his drum.
He may continue feeding the promo guys a string of "promises" and "good news down the road." (Believe me, this HAS happened to me!) But, when the news finally arrives, the stock price goes THUD! This is entirely orchestraÿ
"RULE NUMBER SIX: IF THIS IS A REAL DEAL, THEN YOU ARE LIKELY TO BE THE LAST PERSON TO BE NOTIFIED OR WILL BE DRIVEN OUT AT THE LOWER PRICES."
Like Jesse Livermore wrote, "If there's some easy money lying around, no one is going to force it into your pocket." The same concept can be more clearly understood by watching the tape. When a market manipulator wants you into his stock, you will hear LOUD noises of stock promotion and hype. If you are "in the loop," you will be bombarded from many directions. Similarly, if he wants you out of the stock, then there will be orchestrated rumors being circulated, rapid-fired at you again from many directions. Just as good news may come to you in waves, so will bad news.
You will see evidence of a VERY sharp drop in the share price with HUGE volume. That is you and your buddies running for the exits. If the deal is really for real, the market manipulator wants to get ALL OF YOUR SHARES or as many as he can... and at the lowest price he can. Whereas before, he wanted you IN his market, so he could dump his shares to you at a higher price, NOW when he sees that this deal IS for real, he wants to pay as little as possible for those same shares... YOUR shares which he wants to you part with, as quickly as possible.
The market manipulator will shake you out by DRIVING the price as low as he can. Just as in the "accumulation" stage, he wants to keep everything as quiet as possible so he can snap up as many of the shares for himself, he will NOW turn down, or even turn off, the volume so he can repeat the accumulation phase.
In the mining business, there seems to always be another "area play" around the corner. Just as Voisey's Bay drifted into oblivion, during the fourth quarter of 1995 and early into 1996, the same Voisey Bay "wannabees" began striking deals in Indonesia. Some even used new corporate entities. Same crooks, different shingles. The accumulation phase was TOP SECRET. The noise level was deadingly silent. As soon as the insiders accumulated all their shares, they let YOU in on the secret.
"RULE NUMBER SEVEN: CONVERSELY, YOU WILL OFTEN BE THE LAST TO KNOW WHEN THIS DEAL SHOWS SIGNS OF FAILURE."
Twenty-twenty hindsight will often show you that there was a "little stumble" in the share price, just as the "assays were delayed" or the "deal didn't go through." Manipulators were peeling off their paper to START the downslide. And ACCELERATE it. The quick slide down makes it improbable for your getting out at more than what you originally paid for the stock... and gives you a better reason for holding onto it "a little longer" in case the price rebounds. Then, the drifting stage begins and fear takes over. And unless you have nerves of steel and can afford to wait out the manipulator, you will more than likely end up selling out at a cheap price.
For the insider, marketmaker or underwriter is obliged to buy back all of your paper in order to keep his company alive and maintain control of it. The less he has to pay for your paper, the lower his cost will be to
commence his stock promotion again... at some future date. Even if his company has no prospects AT ALL, his "shell" of a company has some value (only in that others might want to use that structure so they can run their own stock promotion). So, the manipulator WILL buy back his paper. He just wants to make sure that he pays as little for those shares as possible.
"RULE NUMBER EIGHT: THE MARKET MANIPULATOR WILL COMPEL YOU INTO THE STOCK SO THAT YOU DRIVE UP ITS PRICE SHARES."
Placing a Market Order or Pre-Market Order is an amateur's mistake, typifying the US investor -- one who assumes that thinly traded issues are the same as blue chip stocks, to which they are accustomed. A market manipulator (traders included here) can jack up the share price during your market order and bring you back a confirmation at some preposterous level. The Market Manipulator will use the "tape" against you. He will keep buying up his own paper to keep you reaching for a higher price. He will get in line ahead of you to buy all the shares at the current price and force you to pay MORE for those shares. He will tease you and MAKE you reach for thehigher price so you "won't miss out." Miss out on what? Getting your head chopped off, that's what!
One can avoid market manipulation by not buying during the huge price spikes and abnormal trading volumes, also known as chasing the stock to a higher price.
"RULE NUMBER NINE: THE MARKET MANIPULATOR IS WELL AWARE OF THE EMOTIONS YOU ARE EXPERIENCING DURING A RUN UP AND A COLLAPSE AND WILL PLAY YOUR EMOTIONS LIKE A PIANO."
During the run up, you WILL have a rush of greed which compels you to run into the stock. During the collapse, you WILL have a fear that you will lose everything... so you will rush to exit. See how simple it is and how clear a bell it strikes? Don't think this formula isn't tattooed inside the mind of every manipulator. The market manipulator will play you on the way up and play you on the way down. If he does it very well, he will make it look like someone else's fault that you lost money! Promise to fill up your wallet? You'll rush into the stock. Scare you into losing every penny you have in that stock? You'll run away screaming with horror! And vow to NEVER, ever speculate in such stocks again. But many of you still do.... The manipulator even knows how to bring you back for yet another play.
What actors! No wonder Vancouver is sometimes called "Hollywood North."
"FINAL RULE: A NEW BATCH OF SUCKERS ARE BORN WITH EVERY NEW PLAY."
The Financial Markets are a Cruel, Unkind and Dangerous Playing Field, one place where the newest amateurs are generally fleeced the most brutally.... usually by those who KNOW the above rules.
Just as I have a duty to ensure that each of you understand how this game is played, YOU now have that same duty to guarantee that your fellow speculator understands these rules. Just as I would be a criminal for not making this data known to you, YOU would be just as criminal to keep it a secret. There will always be an unsuspecting, trusting fool whom the rabid dogs will tear to shreds, but it does NOT have to be this way.
IF every subscriber made this essay broadly known to his friends, acquaintances and family, and they passed it on to their friends, word of mouth could cause many of these market manipulators to pause. IF this effort were done strenuously by many, then perhaps the financial markets could weed out the crooked manipulators and the promoters could bring us more legitimate plays.
The stock markets are a financing tool. The companies BORROW money from you, when you invest or speculate in their companies. They want their share price going higher so they can finance their deal with less dilution of their shares... if they are good guys. But, how would you feel about a friend or family member who kept borrowing money from you and never repaid it? That would be theft, plain and simple. So, a market manipulator is STEALING your money.
Peace,
M&M Man
PS: ~~ The previous message is circulating around the message boards. I did not write it, but I believe the writer is pretty educated on what he/she was talking about.
Investment Highlights ~~ update of CHAG business plan as received via CHAG Club site (requested via email) ~~
"Chancellor Group Inc is putting in place the building blocks that will establish a solid foundation for sustained long-term growth and industry leadership, specifically:
· During 2001, CHAG plans to undertake a staged series of equity and debt raisings commencing with a June placement of up to $500,000 in equity and convertible debt securities, a September placement of debt or equity to raise a further $3 million, and a December private placement of up to $30 million in new debt or equity securities. The monies raised through these offerings will be used principally to fund the development of existing resource assets, as well as for additional acquisitions. Additionally, several potential opportunities exist to acquire publicly listed energy companies in the second half of 2001, using Chancellor Group stock as the acquisition currency.
· In the last quarter of 2001 or early 2002, CHAG plans undertake a placement to already identified and qualified investors to raise up to $400 million in new common and preferred equity capital for a proposed spin-off, Chancellor Energy, Inc. (CEI) . CEI will undertake bank borrowings and or a bond issue to raise an additional $400 million in debt. All of the CEI equity and debt will be used to finance the acquisition of a large portfolio of principally North American producing oil and gas properties; an attractive portfolio of properties held for near-term commercial development, supplemented by a strong inventory of high-potential exploration sites. After vending in certain of its existing assets, as well as those where the acquisitions are pending, Chancellor will own at least 51% of CEI. Adoption of this structure maximizes Chancellor’s leverage, whilst defraying risk, provides heightened liquidity and borrowing capacity, and better positions the energy business for sustained growth. The forecast market value of this subsidiary at the end of fiscal 2002 is $2.5 billion based on earnings and other fundamentals only, with Chancellor holding a minimum of 50%, fully-diluted, controlling interest.
· A portfolio of environmental engineering, remediation, and waste control businesses and related infrastructure service entities. These businesses will be contained and controlled within a separate publicly held entity, to maximize the company’s leverage, and to maximize the size of the unit and it’s growth potential. Forecast value of Chancellor’s proposed 60% of these publicly held businesses at the end of fiscal 2002 is $150 million.
· By the second quarter of 2002, Chancellor Group Inc. intends to be publicly traded on the NASDAQ National Markets System; the Australian Stock Exchange; and the London Stock Exchange.
· Given the recent gas value of $ 4.50+ per MCF and the posted oil value of $28.00 per barrel the potential exists for Chancellor to greatly increase its estimated revenue projections.
Company Overview
Chancellor Group Inc. (NASDAQ OTCBB : CHAG) is an emerging energy, power, and environmental concern with strong management and a tight, focused business model which aims to be a leading mid-sized participant in each of it’s core business segments by 2005.
The focus of the company is directed towards assets that can generate substantial cash flows, with fast payouts and superior rates of return. The company has access to institutional equity capital, subject to certain criteria, in order to take advantage of some exceptionally attractive investment opportunities, particularly in the U.S. energy sector.
Mission Statement
The mission of Chancellor Group Inc is to acquire energy producing properties that can be value-added, brought into production as quickly as possible, and maximize further potential through aggressive exploration. Chancellor plans to build up the balance sheet of the company through substantial, but carefully considered and controlled growth, and in so doing position the company to have the necessary strength and critical mass to participate in the development of significant, qualitative, resources projects.
Related Industry Highlights
· According to the 1998 Edition of the GRI Baseline Projection, the commercial sector’s demand for natural gas could potentially increase from 3.3 quads in 1996 to 4.1 quads by 2015. The continued growth in commercial floor space is the key driver contributing to the increase in commercial energy demand, representing more than 40 percent of the energy consumed.
· The natural gas industry should continue to see a wave of mergers as traditional barriers to competition are released due to deregulation. In particular, there's likely to be more mergers between electric utilities and natural gas companies.
· Oil prices have firmed up as a result of OPEC's decision to limit production. Recent oil industry mergers have also enhanced prices which reduces competition and gives companies an opportunity to raise prices to pass along to heavy oil consumers.
· International investment opportunities for international petroleum companies to explore, develop, and produce crude oil and natural gas in many areas of the world are increasing rapidly. Nations are relaxing constraints on the conduct and financing of those companies' operations. In the Asia-Pacific area, relaxation of constraints is due principally to the rapid increase in domestic demand for energy. In the republics of the former Soviet Union, a shortage of internal funds has been the reason.
· Many countries are awarding foreign firms production-sharing contracts (for the first time in some instances), higher production shares than before, or tax breaks to induce them to invest Fifty-five percent of total U.S. demand is from foreign oil.
· The U.S. has been in search of alternative fuels to reduce their dependence upon foreign oil. However, it could be many years before there is any significant shift to alternative sources of fuel.
· The separate countries of the former Soviet Union are believed to have 5.6% (or 57 billion barrels) of the world's oil reserves. Further, the region is believed to have 2,000,000 billion cubic feet (Bcf) of gas. This would represent approximately 40% of the worlds known reserves.
· Environmental concerns, which in the past were restricted to a few countries, products and processes, now encompass most countries and a widening range of activities. In the United States, the Energy Policy Act of 1992 (EPACT) affects virtually all sectors of the energy industry with a range of research-and-development provisions, conservation and fuel requirements, tax incentives, Federal mandates, and regulatory changes. The oil and gas sectors are affected both directly and indirectly. Independent oil and gas producers are helped by changes to the alternative minimum tax system, which became effective at the beginning of 1993. The changes may increase the profitability of their operations and could result in substantial additional investment. Independent producers account for significant percentages of crude oil and natural gas reserves and for an estimated three-fourths of annual well completions.
· Natural gas producers are also expected to be favorably affected by sweeping changes EPACT made to the 1935 Public Utility Holding Company Act. The changes create a new class of independent power producers (IPPs), who will now have access to utility-owned transmission lines. The IPPs will be able to sell their power directly to utilities. IPPs tend to favor gas power plants because of lower initial costs. Gas producers are also affected by changes made to the "Section 29" tax credits. These credits are granted for the production of some alternative (or nonconventional) fuels, including gas from tight sands and coal seams.
· According to the US DOE, over 350,000MW of new generating capacity will be needed over the next 20 years in the US alone, to meet ongoing electricity demand and to offset the retirement of existing capacity. Environmental concerns, constraints on siting new capacity, and growing grid congestion all favor the increased use of distributed resources to meet this need, while continued deregulation of the US electric sector heightens the importance of efficient capacity utilization.
Business Model
Chancellor's basic business model is to spin off start-up and acquired operating businesses, for the benefit of shareholders, in order to position the operating entities for growth, and provide the parent company with maximum leverage. The parent company focus is on capital appreciation and incremental increases annually in per share net worth, with the focus of the operating companies being on cash flow and earnings. Chancellor believes that through this strategy it can create, sustain, and grow significant long-term shareholder wealth and capital
Chancellor’s business unit strategy is to create three distinct operating segments:
· Petroleum;
· Energy ( power generation ); and
· Environmental and Engineering
The intent is for each of these segments, or parts of them, to be taken public in it's own right in order to finance continued growth while minimizing the company’s risk concurrently with maximizing its exposure to a range of high-quality projects and profit centers within each segment.
Business Objectives
Management is committed to a high-growth / low-risk strategy to achieve its’ goals, with an emphasis on:
· Building a strong recurrent cash flow base
· Building a strong and conservatively financed balance sheet
· Being proactive, and responsive to new opportunities
· Acquisition and development of high quality businesses and assets
· Acquisition of low-cost, long-life oil and gas reserves and production
· An aggressive cash-flow funded exploration program
· Annual growth in per-share earnings, as well as per share net worth
· Recruitment and ongoing education of high quality, achievement-focused management and staff at all levels
· Maintaining TQC and Worlds Best Practice in all areas and operations
Projects, Assets & Operations
The Delstar / Northstar gas properties, Kentucky
Through Delstar Gas Systems, Inc.; Northstar Gas Systems, Inc.; and Delstar Resources Inc.; Chancellor owns substantial proven producing and proven non-producing gas reserves; some 90 miles of pipelines connected to the state grid: and pumping and transmission equipment on more than 16,700 acres of freehold and leasehold lands in eastern Kentucky. Without attributing any value to the non-proved reserves and exploration upside, the properties and the proven reserves, plant, and equipment are conservatively appraised at $35million, including properties acquired at the end of 1995.
These properties contain considerable proven, probable, possible and inferred reserves of oil and gas, lending substantial upside potential and exposure to the assets. The subject properties have produced gas since 1941, and are reliably estimated to be capable of producing commercial quantities of hydrocarbons well into the future: proven recoverable reserves of 1,285 - 1,360 BTU gas, according to a 1995 report by R.W. Cobum, CPG, exceed $350 million at only $2.80 per thousand cubic feet. The in situ gross value of these recoverable reserves at $4.25 per thousand cubic feet, more in line with today’s market levels for natural gas, is $530,000,000, or more than $12 per Chancellor share, fully diluted.
In 2002, Chancellor plans to commence and undertake a comprehensive equipment upgrade and the rehabilitation of 51 existing wells at an estimated cost in the order of $3,000,000. It is anticipated this program will generate annual revenues of approximately $21 million and operating profit in the order of $17 million; as a result of the projected sale of 6,280 decatherms of gas per day at $20.00 per decatherm (Appalachian Price Index) for daily revenues of $105,000 and forecast operating income of $60,000. A comprehensive rehabilitation study has been undertaken by Coburn Petroleum Engineers on behalf of Delstar Gas Systems Inc., dated July 12, 1995. Current recoverable reserves exceed 125 million MCF of natural gas.
The Glass Mountain Property, Texas
In September 1997, Chancellor acquired Radly Petroleum Inc. The Glass Mountain gas development project is a low-risk moderate cost, high reserves and high cash flow project, comprising over 7,700 contiguous acres in western Pecos County, South Texas extending net proven and probable property reserves to a total estimated 348 bcfe of gas, and condensates.
The property is a Caballos oil formation play, and lies within one of the "hottest" oil exploration and production regions in Texas. Productive Caballos fields in the West Texas counties of Pecos, and Terrell, have proven oil and/or gas reserves of at least 380,000 barrels of oil per well and/or 3.8 billion cubic feet of gas. The Caballos produces 38o sweet Oil and/or 1143+ BTU Gas from Caballos fields of west Texas. All Glass Mountain’s acreage is believed to be located on proven productive Caballos structures. All of the Glass Mountain acreage is located in the Marathon-Quachita Thrust region of Pecos County, Texas. The acreage is also on the same structure which has a well, the Exxon Glass Mountains C-1 well, which should be productive from the Caballos formation as indicated by an Exxon flare test with an estimated 1.36 MMCFGPD from the Caballos formation.
Some of the large companies - including Chevron - who have productive Caballos acreage close to Chancellor's acreage have given their wells reserves as high as 30 billion cubic feet. A 77-well development program, spread over 31 months, has been devised and costed by Nova Petroleum Resources, of Dallas, Texas. Total development cost is projected at approximately $35 million, with a peak-funding requirement of approximately $16 million in month fifteen. Chancellor will commence drilling in mid 2001, with an initial 2 wells and site works to commence late in the second quarter of 2001. Chancellor 's current net proved recoverable reserves at this project are estimated at more than 348 bcfe of gas and condensates, with a pre-tax NPV using SEC SX-10 of $489MM (Note: See Schedule A for Economic Impact Analysis of Glass Mountain Properties on Chancellor).
The development and operation of the property will be managed by Chancellor in conjunction with Nova Petroleum Resources, Inc. of Texas. The development program is projected to result in initial average daily production of 71 BOE per well, or more than 5,600 BOE per day, fully developed on an unrisked basis. At $4.24 per MCF of gas, the project is forecast to generate in excess of $70 million in operating free cash flow after all taxes, royalties, and other operating expenses, in it's first year, fully developed. With gas prices substantially higher than $4/mcf in early2001 and posted oil value of $ 28 per barrel, as of the date of this profile, Chancellor expects that its earnings projections could increase, at least in the short to medium term. As projected in the development plan, revenue from commercial gas production is anticipated by the fifth month.
Chancellor 's reserves, categorized "Proved Undeveloped", and "Probable", in strict accordance with the criteria for reserves classification as established by the Society of Petroleum Engineers and the World Petroleum Congress have been independently appraised, by Joseph V. Rochefort of Dallas-based Nova Petroleum Resources Inc., with a net present value of over $489 million in accordance with SECSX-10 and NASD mandated standards for the valuation of such reserves, using a 10% discounted cash flow rate.
Chancellor acquired the Glass Mountain "B" property in exchange for 12.3 million shares of common stock, issued to the vendors at $6.00 per share, or a total of $73.8 million (At a more conservative 15% discount rate, the asset is valued at $76 million, after deducting development costs).
In July, 1998, Chancellor purchased all the common stock of Texas corporation Lichfield Petroleum America, Inc. ("Lichfield" ). Lichfield owns the Glass Mountain South-SW gas project which borders the southern side of Glass Mountain 'B', and contains additional proved, probable, and possible reserves of more than 133 million MCF, net, of recoverable gas reserves. Chancellor acquired Lichfield in exchange for $49 million of preferred and common stock. The preferred stock of $48 million is convertible at $6 per share of common stock. The remaining acreage was acquired in September 2000 in exchange for 4.5 million shares of restricted common stock. Chancellor at that time acquired 100% ownership of Getty Petroleum Inc., increasing its strategic position in the region. Chancellor has merged the assets of Radly and Lichfield into Getty.
Kazakhstan petroleum exploration joint venture
Chancellor intends entering into an agreement to acquire seventy (70) percent or more Net Working and Revenue Interest in two (2) oil & gas exploration licenses covering some 6 million+ acres located in the Pavlodar-Irtysh region, in Kazakhstan's West Siberian petroleum province. Chancellor will be the senior joint venture partner of KUAT Holding Company ( "KUAT" ), a privately held Kazakhstani company.
The Exploration Basin is a southern branch of the vast West Siberian Petroleum Province of North Central Asia. It lies within the Irtysh River valley in northeast Kazakhstan, and is the only portion of the West Siberian Petroleum Province that lies outside the boundaries of Russia. The Exploration Basin has been intensely studied for more than 50 years. The consensus of all the studies is that there is a very high probability that the Exploration Basin contains very large recoverable reserves of light crude oil (+ 360 API), exceeding one (1) billion barrels in shallow (1,500 meters) locations. The prospect area is located near a major pipeline, less than 50 kilometers from a refinery, within established surface transportation and oil exploration infrastructures.
Upon payment of option fees, subject to completion of due diligence and an independent expert's report and appraisal, Chancellor will acquire the partnership and operating vehicle, together with interests in certain U.S. bypassed recovery petroleum properties (see below). The transaction will be financed for mostly common and / or preferred stock, from interests associated with directors, and others. Chancellor will be obligated under the option agreement to finance the drilling, from 2002, of an initial three appraisal wells within the license area, on drilling targets already identified, and deemed to have a high chance of success based on all presently available data.
Chancellor has received advice that the overall valuation on the project, as is, may exceed $250 million. Phillips Petroleum and a Japanese consortium in 1999 paid the Kazakhstan government $500 million for a 14.5% interest in exploration blocks comparable to the subject license areas in prospectivity. Phillips therefore valued the project in which it is participating at $3.5 billion. The Phillips consortium also undertook to build refining and petrochemical plants, and a pipeline.
Appraisal drilling of three initial wells on, identified targets, will be undertaken by 2002. Chancellor will fund the drilling and certain other project field and administrative expenses, with funds raised through either a secondary stock offering, or by "downstreaming" the project into a proposed new oil & gas subsidiary (see below, Chancellor Energy).
Chancellor has financing tentatively available in order to fund it's expenditure commitment, capped at US$30 million, through a share placement in either itself or in a proposed Chancellor Energy subsidiary, to an institutional investor group with whom a series of positive formal discussions have been held to date.
In addition to the above, and as part of the package of properties being acquired, Chancellor will also gain 70%+ ownership and control of a proven gas resource, “Taldy-Korgan”, located only 85 kilometers from Almaty, the country’s former capital, and measuring over three (3) trillion cubic feet in recoverable reserves. While a pipeline would have to be built, Chancellor believes that the size of the resource warrants the infrastructure and development. Chancellor is considering the option of processing the gas into methanol, and exporting the product into Western markets.
Chancellor Energy Inc.
The company has developed a proposal to create a new publicly-held oil & gas subsidiary which will house most of it's oil & gas assets, and which would raise further funds from investors to finance the acquisition of producing oil & gas properties. The new company would use the cash flows from the producing properties to fund the development of the company's Glass Mountain gas project in Texas, and the company's share of exploration and development costs in Kazakhstan.
Chancellor has a group of institutional investors who have advised of their interest to invest $400 million or more in common and preferred equity capital into the new company, subject to review and approval of a formal investment proposal. The Glass Mountain; Kentucky; Kazakhstan; and other US assets would be sold into the new company for some $300 million - supported by independent appraisals. The private placement to a group of institutional investors, who are close to Chancellor 's board, and any public offering, will generate in the order of $388 million of new capital, net of offering expenses and fees. $380 million of this money, supplemented with a further $400 million in credit facilities, will be used to acquire up to $780 million of producing oil & gas assets in North America which we would expect to generate a free cash flow after interest of at least $300 million annually, and an after-tax profit in the order of $160 million. This does not include earnings that will be generated by Chancellor’s Texas and Kentucky projects, nor the several other US projects to be acquired by Chancellor Energy.
Chancellor anticipates funding via a private placement, with an IPO to occur in a 6-12 month timeframe after closing the private placement, allowing the institutions to book a profit by selling down half their common stock position in the company. Chancellor Group Inc. would own 60 million out of a beginning total 100 million shares of common stock, issued at $5 each, including some for cash. In addition, there would be $200 million of preferred stock, which may or may not be convertible.
Chancellor anticipates that the share price of the new company could potentially climb to at least $16.00 per share within 6 to 12 months, which would represent a 2003 prospective price/earnings multiple of 10x, based on earnings from the company's portfolio of producing properties, and a 225% stock gain for the original shareholders. This could further substantially rise as Glass Mountain and other projects come on stream, and as, and if, Chancellor encounters positive drilling results in Kazakhstan. At $16.00 per share, Chancellor 's interest, based on 60 million shares of common stock held, would have a market value of $960,000,000. However, this valuation is based only upon a very conservative price earnings multiple for the producing property portfolio, and does not include properties to be developed, including Kazakhstan and Glass Mountain, and does not include an extensive exploration inventory.
Powder River Basin Coal Bed Methane project, Wyoming.
Chancellor is examining the feasibility of a 20% interest in a Coal Bed Methane development project located in Wyoming’s Powder River Basin, and situated on some 13,500 acres, next to an existing and highly successful project operated by CMS Energy. If feasible, the project would be developed to +160 wells, and is anticipated to be cash flow positive by the end of the second year. Chancellor would invest an initial $2.7 million for a 20% equity interest.
Shinkle Field ( the Walker Property ), Kansas
The Shinkle Field is located on a northwest-southwest trending anticline in the Cherokee basin in Greewood County, Kansas. Chancellor, in January 2001, acquired two adjacent leases from the B&L Oil Company, controlled by Mr. Bill Walker, of Texas, who is retiring and reducing his business interests. The leases cover 1,082 contiguous acres and Chancellor has acquired a 100% working interest and 7/8 net revenue interest in them for $1.75 million payable as $750,000 in the form of a 12-month note, and the balance in the form of a 2-year note, convertible to common stock at a minimum price of $2.00 per share.
In addition, Chancellor has the opportunity to acquire adjacent acreage. Chancellor technical personnel have reason to believe, following detailed analysis, including analysis of core samples, that there may ultimately be 20 million + recoverable barrels on the combined acreage. We are confident that this property, with pending reserves definition work, will also hold recoverable natural gas reserves in excess of 50 million MCF. In addition, there are some nine (9) coal beds throughout the entire section leading to very good potential for several billion cubic feet of gas from a coal bed methane project. The property will produce substantial quantities of natural gas immediately. Chancellor brought the property on stream in the second quarter of 2001, with initial daily production of 350 BOPD crude oil and 1.5 million cubic feet of gas from 7 existing wells and the first three of at least twenty new infill wells, rising to 2,400 BOPD of crude and 10 million cubic feet of gas per day once the field is fully on stream. All crude production is being sold to Plains Transportation Inc, of Houston, one of the largest crude oil purchasers in the United States.
The company is planning an initial 20-well in-fill drilling program, in addition to remediating and restoring to production up to 18 of the existing shut-in wells, with the expectation that this will be completed by November 2001, and with targeted initial production from each new infill well of 100+ barrels per day of oil and 500,000 cubic feet of gas. Estimated drilling time for these wells is a maximum of ten days each. Chancellor’s development strategy will be to drill down to the deepest zones, and then complete each well as it depletes. Payout for well costs is estimated at approximately six weeks based on Crude oil production only.
Criner Hills Tilt oil project, Oklahoma
Chancellor expects to expend an equity investment of up to $350,000 to earn up to a 30% interest (with 25% back-in after payout in the Criner Hills Tilt prospect in Carter County, Oklahoma. The prospect is situated in a very attractive oil & gas area, and has the potential for quick payout. The prospect is located on top of the Criner Hills uplift, and on the same extension of the feature that the nearby Cottonwood Creek field produces from at 8,350 feet (10 million barrels of oil in the past five years from several pays, but mostly from the Brown zone).
Anticipated production on this feature (622 acre play) could be 600 - 2400 BOPD and 280 - 2845 MCFGPD id comparable to Cottonwood Creek (7 miles distant), or the Davis Field (20 miles). Ultimate recoverable reserves could be in the range of 10 - 20 million barrels of crude oil, and 7 - 8 BCG of gas. Gas and oil pipelines are readily available, and cash payouts inside 3 to 4 months are anticipated. Up to 18 wells could be completed, on 40-acre spacing.
Production over the first five years is projected at 4,518,000 barrels of oil. Based on an average selling price of $25.70 per barrel, held constant over the five year period, revenue - net of royalties - is forecast at $80 million.
Chancellor's share of net profit, after the 25% back-in, is forecast at $35 million. Based on a 15% discounted cash flow rate, Chancellor's interest would be valued at $19 million, and the project would generate an internal rate of return of +50%. Project development is expected to be self-funding after the completion of the first two producing wells.
Arkoma Basin gas project, Oklahoma
Subject to further technical examination, Chancellor has committed to spend an initial $660,000 to acquire up to a 60% interest in a potentially very large, and highly prospective, greenfields gas exploration project, covering an area of more than 18,000 acres in eastern Oklahoma. A well-established and successful Oklahoma company, Jay petroleum Inc., will operate the project and hold a 20% interest in it.
Anticipated production from the Hunton zone is 10 - 12 billion cubic feet of gas per well, based on analogy, and assuming one well holds 640 acres of leases. Return on investment would therefore be 60:1 at $4.00 per mcf selling price. With production rates expected of 2,000,000 cubic feet of gas per day, 1 month payouts could be possible. The first development would be near major pipelines located in the area.
Environmental and Engineering Unit
Chancellor is also planning to acquire an environmental services and engineering company and other related businesses, which exhibit synergies with its Oil and gas activities. The goal will be to float these companies in an IPO, with Chancellor retaining the controlling interest. The IPO will enable Chancellor to recover its entire initial equity investment while maintaining control, as well as fund further expansion by the subsidiary. Chancellor plans a secondary public offering in the fourth quarter of 2001 to raise $60 million or more, in order to fund these proposed acquisitions.
Chancellor anticipates that by the end of fiscal mid-2002 it will hold controlling interest in a publicly-held environmental subsidiary with a market value of at least $250 million, 2002 net income in the region of $16 million, and perfectly positioned for substantial and sustained ongoing growth, organically and through further add-on acquisitions.
People
Board of Directors
Ashraf Khan ( Chairman / CEO )
William H. Stinson
Shane X.G. Rodgers ( Vice Chairman )
Bassam Abu-Ghazaleh
Mr. Stinson , 46, is based in Houston, Texas. He is a highly experienced petroleum Geologist and, up until 1990, held a number of senior technical positions with Atlantic Richfield International, working for them in Los Angeles, Britain (London and North Sea), Indonesia, and Africa, including positions as Chairman of Joint Venture technical sub-committees. Since 1990, he has continued as an external advisor to Atlantic Richfield on projects in Asia and the Middle East. He is also retained by Hunt Overseas Oil Company; CMS Energy; the Abu Dhabi National Oil Company; and interfaces with Industry on new concessions, and with the World Bank and the United Nations on program funding.
Mr. Abu-Ghazaleh, 60, is based in Riyadh, Saudi Arabia, where he is the Executive Director of the Saudi Arabian operations of Talal Abu-Ghazaleh & Co.(TAGI, http://www.tagi.com ). He is also on the board of directors of the parent company. The TAGI Group is the largest accounting and management consulting firm in the middle east, with 34 offices in over 20 countries, including the United States. It employs 600 personnel servicing over 3,000 corporate, private, and government clients. Prior to TAGI, Mr. Abu-Ghazaleh was a senior executive in the middle eastern operations of Shell (Shell Marketing Middle East), based in Dubai. Mr. Abu-Ghazaleh was born on August 17th., 1940.
Management
In the fourth quarter of 2001, following the completion of it’s proposed $30 million Private Placement of equity securities, Chancellor Group plans to establish a new corporate head office in Los Angeles, California, and in Houston, Texas. In addition, the company will hire several new executive officers and support staff, including a new President and Chief Operating Officer with a resources and financial background; a new Group Treasurer; and a Group Technical Director, with a senior geological and engineering background.
Shane X.G.Rodgers; Vice-Chairman, and President
Mr. Rodgers, 40, has an extensive and successful career as an investment banker, working primarily in Australia and in the United States. In recent years he has taken six companies public in the United States. Mr. Rodgers worked in the power-generating sector in the United States in the mid-1980s, as vice-president of a small publicly held energy and environmental concern. He has also been involved in the financing of power generating facilities. During his career, Mr. Rodgers has been involved in a number of resource ventures, and has bought and sold mining leases and properties, and options over the same, in Australia, the United States, Canada, and Mexico.
Mr. Rodgers is particularly capable in the area of initiating, negotiating, and structuring complex acquisition and financing transactions for resource and industrial projects. Mr. Rodgers founded Capital General Corporation Limited in Australia. Capital General successfully undertook a range of financing and advisory mandates for various private and public companies, with an emphasis in the resources, communications, manufacturing and media sectors.
Ashraf Khan; Chairman of the Board and Chief Executive Officer
Mr. Khan, 60, initially joined the board as a representative of a number of Middle Eastern investors who are investing substantial funds in CHANCELLOR, and who are considering joint ventures with CHANCELLOR relative to acquisitions and to project development.
Mr. Khan is a graduate of Agra University (India). In 1965 Mr. Khan joined United Bank Limited (of Pakistan) in Karachi as a Trainee Officer and was Manager of a large branch from 1969 to 1972. 1973 to 1975 - Manager of a Kuwaiti foreign exchange company, in Kuwait. 1975 to 1980 - Country Manager of the Bank of Credit and Commerce in Sudan, with 3 branches. 1981 to1982 - Country Manager of Bank of Credit and Commerce, Oman. Headed an operation of 12 branches with 175 local and foreign staff. 1983 to mid 1984 - Representative of Bank of Credit and Commerce in Beijing, China. Mid 1984 to July 1990 - Vice Chairman and Managing Director of Kuwait International Finance Company, Kuwait. This was a large Kuwaiti company. Handled portfolio management of multinational Kuwaiti companies, and dealt in US and Japanese stocks through Merrill Lynch, Salomon Brothers, etc. Also lead-managed Dollar / Dinar funds for governments including Mexico and Yugoslavia. Mid 1990 to mid-1991 - Managing Director of Investment & Management Associates Limited, London. This company provided assistance to clients in the Middle East; South Asia; and Africa. 1992 to 1997 - Consultant to various Arab clients, including the Chairman of Talal Abu Ghazaleh International (TAGI), the largest management consulting and accounting firm in the Middle East, with more than 34 offices in 20 countries.
W. J. (“Zeke” ) Pearson, Vice President, Kansas Operations
Curtis Jackson Gay; Consultant: Petroleum Group
Mr Gay has many years of US petroleum industry experience, particularly in Texas. He has substantial exploration drilling and operating experience in the Fort Worth Basin area. He has worked with a variety of major oil companies, and has successfully operated as an independent and as an investor with other companies operating in West Central Texas.
Neil A. Green, Consultant: Compliance and Administration
Mr Green, aged 46, was a Director of CHANCELLOR for several years. He is an experienced public Company Director and Company Secretary, having been involved in the stock exchange listing and financial management of a wide variety of Australian companies over the past twelve years. Mr Green is a qualified accountant and a member of the Australian Society of CPA's. Born in Sydney, Australia, he has a wide knowledge of and experience with, Australian and US securities laws and stock exchange requirements.
The management team is complemented by a wide range of financial, legal, technical, and project acquisition consultants, covering the full spectrum of operating segments. Further, very experienced operators and field personnel are in place with respect to the groups petroleum assets. Both the management and advisory teams will grow in line with the group's anticipated growth in technical and operating capabilities and needs.
Mr. Khan recently joined the Board of Directors of a new Australian merchant banking firm, headed by a leading Australian corporate attorney. The new firm was created to direct the flow of substantial private and institutional capital from the middle east, to the US and Pacific Rim regions, and to assist US and Pacific Rim companies, including Chancellor, to access trade, capital, and investment opportunities throughout the middle east.
Strategic Plan
The company’s underlying strategic goal is to maximize value, net worth, and earnings per common share, and through successful execution of its plan add to the company's share price, consistently, year-over-year.
In tandem with increasing financial strength and capital formation ability, the company plans to achieve the financial and technical critical mass required to retain full ownership/control and operation of its’ resource projects. This will, or should, also result in Chancellor being viewed as a desirable joint-venture partner by other resources companies with projects of their own that require financing, technical and management support.
By creating a broad-based resources group with counter-balanced holdings in different mineral sectors, the company will be positioned to benefit from both economic upswings, as well as downswings. This is not seen as diversification for its own sake, but rather a smart and strategic diversification that will ensure the long-term survival and prosperity of the group.
Chancellor Group Strategic Development Plan
1. The Phase 1 plan is to purchase various interests in low risk proven Minerals and Oil & Gas reserves and development projects, at or below industry cost. Chancellor’s development of these low-cost proven reserves will establish a cash flow that will allow further expansion.
2. Phase II targets will consist of low-risk higher reserves projects with leveraged positioning of the company's shareholder interests in order to optimize the company's long-term cash flow and revenue stream for CHANCELLOR, thereby allowing, through various financing strategies, the capitalization of subsequent expansion of reserves and continued increases in shareholder values.
3. Phase III projects will consist of selected acquisitions of producing properties. These projects will increase Chancellor’s leverage within the capital formation markets and allow a lower cost of capital, thereby lowering any prior capital financing cost and increasing the return on investment, of existing production. Subsequent phased expansion will occur with this lower cost capital and/or developed cash flows and cash reserves. This positions Chancellor to take full advantage of its established borrowing power, and of the company's developed assets, and will allow for the implementation of Phase IV expansion.
4. Phase IV projects will utilize Chancellor’s developed capital leverage and revenues to allow the company to take full advantage of the many opportunities for joint ventures, etc. with other mining, and oil & gas industry, partners. Chancellor will join with other well-established industry partners to participate in various larger development projects. Once Chancellor’s joint venturing phase is complete, it will begin its own significant mining and oil & gas ventures, and seek participation with other industry partners.
5. A key strategy the company will undertake is to "downstream" certain projects into separately listed public vehicles. This approach will allow investors to make direct investments where required, shift the financing burden away from the parent company, and at the same time provide liquid asset ownership interests in public companies, which may enhance Chancellor’s ability to move on new project acquisitions in a timely and opportunistic manner. It also means that the parent company can maintain a small, focused core management team, cost effectively.
Oil & Gas
Chancellor believes that the global economy will remain fundamentally buoyant into the foreseeable future, and certain regional economies well into the next century, notwithstanding short-term slowdowns in some economies. As such, the company has sought to obtain a substantial petroleum industry exposure in order to benefit in the medium to longer term from energy increases attributable to dwindling supplies and concurrent increases in demand.
1. Chancellor’s existing petroleum properties, and those being acquired or otherwise considered for investment, have considerable potential for increases in proven reserves through further exploration. The company intends to pursue aggressive exploration programs on these and other properties, funded by cash flows from existing operations. There are also opportunities to use cash flows from low-risk US production to fund high-risk/reward offshore exploration plays.
2. The company’s initial oil & gas project financing strategy is to seek joint-venture partners for its projects wherever possible or appropriate, and preferably with investors who can contribute management and technical expertise to the asset. In certain circumstances, the company may seek to sell projects, or interests therein, into other publicly-held concerns that can bring both cash and management to the table. As the company develops, it will add technical and management personnel.
3. In the case of petroleum-related assets, one of the cornerstone policies is to acquire such assets through company stock, thereby building up its asset base and balance sheet strength, and then selling the asset down into a dedicated publicly-held oil company with its own management and technical team, controlling it as a subsidiary. This subsidiary company would carry the development and financing burden of those assets. We see a very real opportunity to create, over time, an integrated oil & gas company covering exploration, production, trading, refining and transporting.
Energy, Engineering & Environmental
As an adjunct to its resources businesses, and partly as a result of its petroleum exposure, Chancellor will seek energy generation and environmental projects and businesses related to those fields.
The company is particularly interested in gas-fired power generation, and in heavy industry exhaust control systems, as well as environmental clean up and remediation service providers. These business sectors are anticipated to provide Chancellor with very substantial leverage into global economic growth, as they are in some of the fastest growing industries with tremendous growth particularly over the next 15 to 20 years. Environmental services and products are also a natural fit with the petroleum extraction and mining aspects of Chancellor’s businesses, and represents an area where the company has existing knowledge and experience.
Financial
Capital Requirements
Chancellor Group, excluding the proposed new Chancellor Energy spin-off (consisting of $400 million of new common and preferred equity, and $400 million of debt), has a forecast 12-month equity capital raising program totaling $95 million, as follows :
1. A June 2001 third round private placement of $500,000 in convertible securities, and a September placement of debt securities or convertible notes in the amount of up to $4,000,000.
2. December 2001 private placement of securities to raise up to $30,000,000, to fund drilling and investment expenses, acquisitions, and new corporate head office establishment and staffing. This funding will finance development start-up at Chancellors existing properties in Texas and Kentucky, and will further fund or leverage the company into more than a dozen additional projects or acquisitions, including a profitable environmental business analogous with its oil & gas operations; control of possibly two other publicly traded US oil & gas companies with very large reserves, and which could form an exciting platform for our launch of “Chancellor Energy, Inc.”, and several new oil & gas exploration, and development, opportunities in the US and in Central Asia.
USE OF PROCEEDS
USE OF PROCEEDS FOR UP TO US$4,000,000 PLACEMENT OF DEBT
$ 700,000 - Walker note payout
$ 700,000 - Additional equity for Shinkle Field development completion
$1,000,000 - To drill and complete 2 wells at Glass Mountain project, Texas
$ 400,000 - Maximum estimated placement and facility fees ( 10% )
$ 100,000 - Officers and Directors past due compensation ( part only )
$ 125,000 - Related to acquisition of the Kazakhstan leases, initial expenses
$ 100,000 - Take up of options over Wyoming coal bed methane project;
Arkoma gas project, and Criner Hills, Oklahoma.
$ 100,000 - Travel over several months, including investor roadshows.
$ 64,000 - Interim residential costs ( 6 months ) LA-based directors
$ 100,000 - Commence litigation to restore title to Kentucky gas assets.
$ 50,000 - Payout of miscellaneous corporate debt
$ 50,000 - Cost of Option to acquire Glacier Valley tax shelter structure
$ 25,000 - Legal, re capital raising PPM
$ 25,000 - Other front-end PPM related costs
$ 20,000 - David Kagel, attorney, on account
$ 10,000 - Stockholder report and mailing cost estimate
$ 431,000 - Cash and sundries
__________________
$4,000,000
DECEMBER 2001 PRIVATE PLACEMENT / PART ASSET SALE
( All figures in US$ )
Cost of Private Placement Memorandum - $100,000
Number of PPM copies to be printed - Fifty
Lead manager / placement advisor - WestPark Capital Inc., LA
Legal advisor - David Kagel, Los Angeles
Amount to be raised - $30,000,000
FORECAST USE OF PROCEEDS :
$ 5,000,000 - Funding for proposed New Mexico gas project
$ 4,000,000 - To pay out the $4 million note facility
$ 3,000,000 - Reserved for additional energy development investments
$ 2,700,000 - Wyoming CBM development 20% equity
$ 2,400,000 - 8% placement fees and expense
$ 1,540,000 - Cash at bank
$ 3,000,000 - Redevelopment of the Kentucky gas assets
$ 1,500,000 - Glass Mountain gas project, Texas : next 3 wells
$ 1,500,000 - To secure the Kazakhstan oil and gas exploration
project interests
$ 1,000,000 - Michigan aggregates project site works and preparation
$ 440,000 - To acquire a 40% interest in the Arkoma gas
exploration prospect
$ 350,000 - 40% interest, Criner Hills, Oklahoma
$ 500,000 - Option fee to secure a majority interest in four large
US secondary oil and gas recovery projects
$1, 500,000 - New head office set-up and staffing
$ 500,000 - Prospectus cost : April 2002 secondary public stock
offering to raise a further $60 million+
$ 600,000 - Funding prospectus and prep. work : Chancellor
Energy, Inc.
$ 250,000 - Kentucky project : Legal, and data recompilation
$ 100,000 - Executive compensation owing by the company
$ 120,000 - Provision for Nasdaq NMS application and listing fees
________________
$30,000,000 - TOTAL
Key assumptions
1. RISK FACTORS
LACK OF FINANCING
There is no assurance that the company will be able to attract the equity and debt financing for all or any part of it’s requirements pursuant to it’s business plan, thereby putting it, and it’s survival, at risk.
MANAGEMENT (see also loss of key personnel )
The company may not be able to attract high-quality executive personnel of a caliber considered essential to the optimum realization of it’s goals and plan targets, and to the optimum day to day management of it’s business units.
ENERGY PRICES
Energy demand and energy prices may again, and at any time, collapse or decline significantly. This in turn would severely impact upon the profitability of the group; it’s ability to service debt; the value of it’s assets; the price of it’s stock; and potentially it’s continued viability as an independent company.
DRILLING AND DEVELOPMENT RISK
The company faces a variety of drilling and other field / technical risks associated with the exploration and development of its current and future portfolio properties. The company may also encounter certain political or economic risk or problems at its proposed projects in Kazakhstan. These risks, if realized, could adversely affect the forecast revenue and earnings streams from these properties, in turn affecting the group and it’s results, overall. Such risks could also entail significantly higher development or operating costs, to those projected or forecast.
LIMITED OPERATING HISTORY
Chancellor is development stage company and, accordingly, has only a limited operating history that can be used to evaluate it and its prospects.
LIMITED REVENUE HISTORY
Chancellor had no revenues in 1997, 1998, 1999, and 2000, other than from sales of equity securities. Future revenues and earnings will derive from new properties and businesses presently slated for acquisition, and from the commercial development of our existing energy assets in Kansas, Texas and Kentucky.
TECHNICAL RISKS (see also Drilling and Development Risks)
The Company, in the development of it’s environmental products and services, may encounter risks or delays that could adversely affect the successful and profitable introduction of such products and services into the market place.
GOVERNMENT REGULATION
U.S., and other, government regulation in the energy; power; or environmental areas may increase the company’s cost of doing business or cause the company to change the way it conducts its business(es), and as a result the value of the group could decline.
ENVIRONMENTAL LIABILITY
Current, pending, and future operations may expose the company to environmental liabilities that could adversely affect its operating results, asset values, and stock price.
LOSS OF KEY PERSONNEL
The loss of key personnel and the company’s failure to attract and retain additional highly skilled personnel could harm its business and competitive position, and cause operating results and stock price to decline.
The company’s success will depend on the continued services of its senior management team, especially Shane Rodgers; Ashraf Khan; William H. Stinson; Zeke Pearson; and other pending key personnel. The loss of the services of any of its senior management team or other key employees or consultants could adversely affect its business, financial condition, and operating results.
Chancellor will also depend on the ability of its senior management and key personnel to work effectively as a team. The company’s future success also depends on its ability to identify, attract, hire, train, retain, and motivate highly skilled technical, management, sales, and marketing personnel. Competition for such personnel of the highest standard is intense. Failure to attract, retain, train and motivate such personnel could adversely affect our business, financial condition, and operating results.
INABILITY TO CONCLUDE ACQUISITIONS IN A TIMELY MANNER
The market for quality energy assets, whether currently producing properties, those awaiting and ready for commercial development, or exploration sites, is highly competitive. Thus, there can be no assurance that all or any of the energy assets currently slated for acquisition, or investment in, by Chancellor will still be available when Chancellor is in a position to affect financial closing on such planned acquisitions or investments. Chancellor is also considering several full, or partial, acquisitions of other publicly-held concerns, using it’s stock. There can be no assurance that those companies will still be available when Chancellor is ready to launch formal takeover bids, or that they or their stockholders will accept the Chancellor securities that are tendered. Nor can there be any assurances that suitable replacement acquisition candidates can be found and locked in, meeting the same criteria and measure of strategic attractiveness.
Chancellor will also, early 2002, commence negotiations and due diligence in respect to a number of acquisition targets in the environmental and engineering sectors. Again, the market for such potential acquisition targets, meeting tough financial and other criteria, is highly competitive. Chancellor will acquire a controlling shareholding in a public entity through which to make such acquisitions. There are several possible candidates, but there can be no assurance that Chancellor will be successful in such an acquisition, and that in turn will affect its ability to build and environmental and engineering segment with sufficient financial and competitive critical mass.
KEY BUSINESS PLAN ASSUMPTIONS
Chancellor’s business plan makes a variety of assumptions, most of which are conservative. There can be no assurances, however, regarding any or all of these assumptions. Differing outcomes may have a material adverse affect on the operations, finances, or even the survival or the future shape and direction of the group in whole or in part.
Chancellor has assumed, during 2001 and 2002, that it will be able to successfully implement and close multiple debt and equity financings, while concluding all proposed acquisitions, and at the same time establishing a new corporate head office and hiring a slate of new executive and technical personnel, and support staff. We are highly confident that all the above can and will be achieved in an efficient and timely manner.
Chancellor has assumed no unforeseen technical or regulatory problems in the development of our existing oil and gas properties, nor those of which the acquisition is pending.
That there are no political or other problems in Kazakhstan that would make the exploration and development of our proposed projects in that country untenable, and that we will conclude the acquisition of the proposed projects in that country.
That the company’s proposed energy spin-off, “Chancellor Energy Inc.” will be able to acquire a portfolio of producing oil and gas properties in North America that will meet its criteria of maximum 3-year cash paybacks; long-life reserves; and additional exploration potential.
That the company will conclude a $4 million securities or debt offering, followed by a $30 million stock offering through the private placement process, in the second half of 2001.
That Chancellor Energy Inc. will be able to raise the $400 million of equity and $400 million of debt necessary to support it’s acquisition of North American producing energy properties.
The company has assumed the successful acquisition of at least a 40 (forty) percent controlling interest in a publicly-held concern with a minimum net worth of $100 million - and the purchase in turn funded from the proceeds of a proposed early 2002 secondary public offering - through which it will acquire at least $250 million of environmental businesses in accordance with certain financial criteria and price / cash flow multiples, and that after a re-capitalization Chancellor will own 60% of the equity. Chancellor has also assumed that the operating company purchases will be funded 40% by common equity; 40% by debt; and 20% by new preferred equity, some or all possibly being taken up by the sellers of the companies being acquired.
That gas prices, particularly in North America, will remain firm and reasonably stable, particularly following the establishment of Chancellor Energy Inc.
That crude oil prices, based on the West Texas Intermediate ( WTI ) benchmark, will remain in a range of $22 - $27 per barrel for the foreseeable future, and that Chancellor Energy’s producing property acquisitions will be based on maximum 3-year cash returns at the lower end of this price range.
That the company will successfully conclude a $60 million + secondary public offering of common stock early 2002.
That the equity markets will attach appropriate price / earnings multiples to the stock prices of Chancellor Group Inc., Chancellor Energy Inc., and the environmental unit, and further that retail and institutional investors will like the overall corporate structure. The company further assumes that the markets will recognize the quality of our businesses, assets, and management, as well as the forward earnings and growth potential of the group, and attach minimum p/e multiples in a range of 15x to 20x, to the traded entities comprising the group.
That following or concurrently with the $30 million equity placement, Chancellor Group Inc. will file for listing on either the NASDAQ National Markets System, or the American Stock Exchange. Chancellor Energy Inc. and the environmental unit will trade on either the NASDAQ National markets System, or on the New York Stock Exchange.
Relevant Links
1. Audio interviews with Shane Rodgers ( 6/26/00 ) and Ashraf Khan ( 7/18/00)
http://www.wallstreetnewscast.net/Clients/Chancellor-Group/Chancellor-Group- Main.htm
2. Chancellor’s Business Plan
http://www.chancellorgroupinc.com/business.htm
3. Engineering Reports
http://www.chancellorgroupinc.com/engineer.htm
4. Financial Statements
http://www.chancellorgroupinc.com/financia.htm
5. SEC Filings
http://www.chancellorgroupinc.com/sec.htm
6. Chancellor Yahoo Club
http://clubs.yahoo.com/clubs/chancellorgroup
7. Audio interviews at http://www.oilandgasprofiles.com"
Anyone wishing to have a complete copy of the report can go to the CHAG Club site. . .
Peace,
M&M Man
Good post on RB: http://ragingbull.lycos.com/mboard/boards.cgi?board=CHAG&read=5529
Peace,
M&M Man
From CHAG Club Site:
"Chancellor's executives met in New York yesterday with executives of May-Davis Group and Cornell Capital, and concluded arrangements and documentation in relation to the previously announced $5.5 million of equity financing. The first tranch of $500,000 is expected to close on schedule on Friday June 29.
The new tank is presently being installed in Kansas, and a further oil shipment is expected from existing production in the current week. The drilling rig is confirmed for the first infill well from July 4, and arrangements are being completed for an additional rig to drill the first four shallower squirrel formation wells simultaneously.
We do not have EPA issues despite the ill-informed comments of certain posters, and in fact are doing work that will exceed minimum EPA requirements in relation to the installation of the new tanks and the new drilling program.
We will also shortly commence new road construction and expand our storage tank battery capacity to meet the anticipated new production from the new wells, and are hiring additional personnel for field operations.
Chancellor has merged the operations and assets of its Texas subsidiaries into a single entity, and in the next 6-8 weeks will begin the permitting process for the drilling of the first two new wells at the Glass Mountain project in Texas.
Chancellor has updated its corporate profile and business plan. A copy of this document is available by email to all shareholders and other parties upon request, with a return email address.
Peace,
M&M Man
smlt. . .LOL! It usually takes a cup or two o' java to slow me down LOL.
Peace,
M&M Man
smlt. ..
Hopefully, that trend will change LOL. You and I both know that CHAG is most certainly moving forward with their business plan. And they will be doing that first infill well, shortly. The short-term effects on the pps (whether positive, or negative) will matter very little when it is all said and done. And I believe we are all banking on things getting done. It will be interesting to hear the update from NY.
Peace,
M&M Man
Sml. . .
What is your point? The stock is going to drop in accordance with demand. That's a fact-of-matter. Whether anyone chooses to sell their stock during the "chrysalis stage" of development, is up to them. Or am I missing your point?
Peace,
M&M Man
The "eye of the hurricane?"
Charts still look good. http://host.wallstreetcity.com/wsc2/Chart.html?Symbol=CHAG&Timespan=260
I would assume that we are going to here what transpired in NY (the meeting with Shane Rodgers and Ashraf Kahn. . .with financiers and CEOcast.com) at some point in the near future. What I'd like to know more than anything else, is how the separator tank is coming along. Anyway. . .plenty to look forward to over the next couple of weeks. However revenues, will be most interesting.
Stay the course!
Peace,
M&M Man
MisterEC. . .
I have a feeling it is the market makers feeding off the weak at heart. I do, however, wish that Alan (aka Dr. Phan) would stop reminding us of both the successes and the failures. I believe it only goes to serve the stock in a negative manner.
Well, we'll all find out over the next few months, about this SA and SB, ordeal. In my judgement, there's no sense selling at these levels if the SA and SB organizations come to fruition. Then again, if they don't, we'll all WISH we would have been out at 35 cents (grunt). There is no-way I can believe that any man (Dr. Phan) would put so much effort into building a company if it were not based on a measurement of reality. Therefore, I refuse to let go of any shares at this price. This is merely the "weak at heart" letting go of the dream. Like I posted on Raging Bull, I guess we'll all find out in the end. . .who was "right" and who was "wrong." But you all better believe. . .the bashers on RB will continue to focus on everything that has failed. Hell, HRCT can still exercise the Schwartz Equity line. . .(to shareholder's disarray) if they want to just move forward and forget about we who are focusing on the price of the stock. Like Dr. Phan said, they could go for 20 years with that money. Dilution would be a very bad thing in this market, however.
Peace,
M&M Man
EZ ~~
That certainly shows some of the complexities of companies that are out to raise capital! Anyway, what it all breaks down to is that last paragraph.
"All this talk of funky deals has obscured the most important part of being a venture capitalist," says Gregory Waldorf, general partner of Charles River Ventures. "What I care about - all I care about - is investing in great entrepreneurs building great companies."
Indeed. . .if only FINANCE could be that simple.
Peace,
M&M Man
Chris. . .
Very well said. Lets hope the ".com" era will survive. To me, it looks as if HRCT may have been just a little bit ahead of their time. I've been trying to mention the value of the "WTO's" involvement with China. . .for the past 18 months. I've been waiting for HRCT to deliver on their promises. I've been waiting for Enova to have some value. I've been waiting or the SA IPO. HRCT going to the NASD. A major U.S. partner, etc. HRCT has bought their ticket. And perhaps, HRCT will find their way out. What is it that is missing from this recipe?
Keeping the faith. Just looking for answers. . .
God's best to all. . .
M&M's Mark
Treasurechaser. . .no sweat! Will talk with you when things are better.
General George: I think, "Diary of a Madman" is more appropriate for CHAG LOL!
Time to review the market, and get off to work.
Peace,
M&M Man
It's a very tough time in the markets. This is actually the very first time I have lived through anything like the tech slide in the past year. I am seeing this "lethargic" feeling all over the message boards. I certainly do not want to jump out of the market right now (as I still believe it's a good time to position one's self in some good investments) but there isn't much to motivate a person to get enthusiastic about the markets. Anyway. . .
Keep your feet on the ground, people. Keep reaching for the stars. Have some fun. Go out and spend time with your friends and families. The market will eventually come back around. It's not going to be real soon, but it will turn around. And when it does. . .we can all share smiles and happy quotations & such. For now, we are certainly in a time where "values" need to be examined. And I believe most of you "value" your time. . .just as much as your money. So spend your time wisely. Now. . .if there is anyone that can speed up these dudes that are working on my sprinkler system, that would be nice! I'm ready to have my peaceful setting back.
Peace,
M&M Man
http://www.msnbc.com/modules/exports/ct_email.asp?/news/587313.asp
Enjoy. . .
Peace,
M&M Man
EZ ~~ Thanks for the post! The WSJ is always out to try and be the saviors of the world. In actuality, the entire market is driven on news and headlines, not just the OTC BB. Getting involved in emerging companies is always "HIGH RISK!" Someday, however and hopefully, the small companies once chooses to invest in will have earnings, revenues, and all of the finer things that the old-timers believe justifies investing in stock. But until there are laws made to stop stocks from being promoted. . .or to set guidelines for reporting based on earnings, revenues. . .and company growth. . .there will aways be the paid stock promotors. There will always be the "psych" of the market to get in touch with for short-term profits. . .and there will always be articles written by the WSJ ~~ which leads me to wonder which writers are buying the stocks they "talk highly" of, and which ones they are shorting. In other words, wherever there is a dollar to be made. . .by persuading public opinion, someone is doing it. It will never end.
Okay. . .would just like to see how our first infill well turns out. Production rates should move in accordance with available financing. I'm in no hurry. And actually, I'm of the opinion that this market is one to be patient with.
Peace,
M&M Man
Nathan. . .I can see what you're saying
http://host.wallstreetcity.com/wsc2/Chart.html?Symbol=CHAG&Timespan=260
Peace,
M&M Man
It's hot in TN!!! Just had to renew my Walmart Cola. If CHAG goes to a couple bucks a share, I'll start drinking name brand, again LOL!
Don't be afraid to try again. . .
Everyone goes south. . .
Every now and then, oooooo hooooooo. . .
You've done it, why can't someone else?
You should know by now. . .
You've been there yourself"
Gotta love that Billy Joel LOL!
Anyway, It looks to me like our OTC BB market is going to keep us in limbo for quite some time. I think that in September or October, the small caps and micros will begin to shine a bit more. Nonetheless, the market ~~ overall ~~ is having a difficult time pulling out of the tailspin from the interest rate hikes of last year. Now, there is nothing Greenspan or anyone else is going to be able to do to reverse the economy (short term). I'm hoping they stop reducing interest rates, or we're going to go through one hell of an inflationary period. Does anyone really want that? I doubt it. Then again, during these time periods . . .crude oil usually reaches new highs. The price of gasoline will probably depend more on the refineries.
Natural gas. . .I'm hoping CHAG can deliver on that one. That first infill well is going to be interesting to watch. I don't think I need to mention again though, do I? LOL!
Peace. . .everyone, have a great afternoon. I have to get back to work on my yard.
Treasureseeker. . .If you're calling, call soon. I got to get out on patrol (and that's not parol LOL!)
Peace,
M&M Man
Eloise. . .
Now we'll have to see if Shane can deliver. It is obvious he is finally making some "money" connections. I'm still keeping my fingers crossed for the first infill well!
Keep the faith! It's great to see you on both threads!
Peace. . .
M&M Man
Energy Company Chancellor Group Inc., Announces
Additional $5.5 Million in Financing, and Drilling Plans
LOS ANGELES, June 14, 2001--Oil and natural gas company Chancellor Group Inc. (OTCBB: CHAG ) today announced that it has secured a commitment for an additional $5,500,000 of equity financing from a New York-based investment partnership.
Chancellor Group said it expected to receive the first installment of $500,000 on or before June 30. The balance will be introduced, at the company's option, over the following 24 months. The financing, which complements the company's existing capital commitments, will enable the company to push ahead with its drilling program at its Shinkle Field in Kansas.
The company said that the first installment will pay for the drilling of one new deep infill well down to the granite wash at 2,800 feet and an additional four new wells down to the squirrel formation at 1,300 feet. The granite wash well is expected to result in +150 barrels per
day of crude oil production, and the four squirrels are each expected to flow +50 barrels per day. The company reiterated its overall eventual production target of 2,500 BOPD.
The company said that a drilling rig has been committed for the Granite Wash well commencing on July 4 and that arrangements were being finalized for a second rig to drill the new squirrel wells, commencing at approximately the same time. The Granite wash well has an estimated 10 day drilling and completion time, while the squirrels can be drilled and completed each within two days. The company said this would enable all five initial wells to be drilled and completed within a two week period beginning July 4, barring any unforeseen circumstances.
The company will also test for natural gas in the Granite Wash well and additional wells would enable it to begin defining the natural gas reserves as well as extend
the proved recoverable oil reserves.
Nathan, that's great news! I am anxious to see the results from the 2,800 foot granite wash well. Indeed, this is a ground level opportunity (no pun intended LOL).
Treasureseeker ~~ I'll make sure I'm right here! Look forward to hearing from you.
Peace,
M&M Man
Nathan. . .
It should be interesting to see what happens in the morning. I realize you are a techie. . .and you see the potential. Don't take too much off the table LOL!
Peace,
M&M Man
Georgia #2 ~~ I'd still like to know if HRCT can IPO subsidiaries on another exchange. . .if HRCT is listed on the OTC BB. Is there any kind of stipulation by the NASD or other officiating offices that would prevent an OTC BB stock from permitting one of its subsidiaries from listing on a viable exchange? IF one of HRCT's subsidiaries can apply to a major axchange (and hopefully get accepted). . .why wouldn't HRCT "reverse merge" with them. . .and then pursue IPOing other subsidiary interests? Are these questions that need to be forwarded to an expert in the markets? Because I still do not see how the IPOs of HRCT's subsidiaries can take place on a viable exchange.
Another note: How are we doing on the Enova shares? I have Enova shares in my account. . .from a long time ago, that still aren't worth anything. I also have shares from another company (VTCH) that aren't worth anything. And VTCH is a listed company. Is there a timeline that will be placed on any potential dividends (and value thereof) so that we can be informed of how to figure our tax consequences? I guess, perhaps. . .many are not considering this effect. However, I'd like to know how to retain my profits from holding this stock. I'd also like to get a little "more clear" on how HRCT can distribute their shares and IPO their subsidiaries. Can anyone direct me somewhere to find the answers to the questions I seek?
Any help would be appreciated. . .
Many thanks for your diligence. . .
Peace,
M&M Man
Georgia. . .
Thank you for the response. However, isn't there some way HRCT can verify that 2 million shares are of a possible "naked short" position? Also, I'm still not sure about these IPOs. Who is HRCT consulting for information related to how the dividends can be distributed? And "if" dividends are distributed, will they be "restricted" shares? My personal feeling about restricted shares are that in the long run, they are not good for the company. Particularly in a market environment like we have today. Restricted shares will get registered with the SEC. . .and then the bashers will say that insiders are selling. It's all a bunch of crap, but it happens. So, how does HRCT intend on distributing these shares to shareholders (if that is the case)?
I look forward to the response,
Peace,
M&M Man
Treasureseeker. . .
I got your message after the market closed, Brian. Feel free to contact me tomorrow. Let me know what time you'll be calling and I'll try to be at home around the phone. By the way, today may have been a good day to be picking up some CHAG shares.
Keep the faith. . .and keep in touch,
Peace,
M&M's Mark
Hey. . .Drpeacekeeper. . .Good work. Thanks for sharing. I was just going to post some similar information pertaining to that debate. CU soon.
Peace,
M&M Man
PS: Where are the answers to the questions I posed yesterday? Georgia. . .are you still there?
Peace,
M&M Man
EZ ~~
The summer months are historically low trading volume months for the OTC BB. That's why I'm focusing on Sept./Oct. . .to be a bit more exciting. Patience, I suppose LOL.
Peace,
M&M Man
Does anyone actually think that CHAG attained the KS property for the old wells? I'd be willing to bet that within a very short period, none of the old wells will be running, the new wells will have taken their place. What we need to know are the results of that first infill well. That, is going to be an "iconoclastic" period/event in CHAG's history. Then, we'll see our true value. ;)
Peace,
M&M Man
Deb. . .that makes sense.
Peace,
M&M Man
There will probably be a major shakeout, today. Hold onto your britches. The chart's reveal a possible "head and shoulders" formation. And in order to fulfill the shape, we'll have to hit the upper teens. Then it should be back home from there.
Peace,
M&M Man
Deb. . .
Don't get your hopes up too high. Also, don't set a deadline for when you're going to bail out of HRCT. You are smarter than that. Watch the charts, watch the news, watch the industry and by all means. . .watch the company! Saying you're going to sell at the end of the year is something you should REconsider. Particularly since there is a well documented bull run on the markets during the first two weeks in January. And, investors are selling their losers at the end of the year. In other words, you could really miss the boat. Then again, perhaps there will be a bull-run on HRCT in December. . .and that will be a good exit point. However, it would seem more logical to say, "I'm going to be out of HRCT stock before New Year's Eve." That will give you plenty of time to get out when the stock is in high demand. Nonetheless, us longs will hate to see you go.
Keeping the faith,
M&M's Mark
Lexmark. . .
I love that "mark" about you.
Keeping the faith,
Niters. . .aus Americana. . .
Tchuss!
M&M's Mark