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I -- and I am sure all posters -- appreciate the energy and focus Howard brought to the board.
He has been a great fan of what could happen, or what shareholders want to happen -- but I don't think he would get the highest grade as a prognosticator of what in fact was going to happen. Not from a known lack of effort or integrity, but likely due to the accuracy of what he was hearing from the company. Which, of course, is the bane of all of us who can only assess the public announcements which have also not been accurate.
As always, if this is a subject which needs to be debated, bring on the contrary facts.
$4M for Bellevue sounds about right. However, if it were my 'game' I'd want sufficient funds for a few wells, allowing for a dry one or two, so $15M - $20M perhaps.
The funding issue is that the company wants debt - but has no collateral; why management ever thought that Sure Capital could issue 'principal protected' notes is beyond me.
The cynic in me would say that the entire GMH 'gambit' was to create the illusion of cash flow to act as collateral, but that obviously was not successful with Sure and may be why the GMH transaction hasn't actually closed (despite the Oct 26 PR to the contrary, I'm assuming it hasn't closed because of no 8-K from either company).
Investors want equity, but the company doesn't want to dilute (except, apparently, in favor of Mr. Bendall).
The company will have to massively dilute in order to obtain funding (even Sure Capital was to get a percent of gross margin (which is effectively dilution), in addition to interest). The question is when they will do so, and how bad the dilution.
Less than five months to lease expiration.
IMO, the financing barrier is likely the level of dilution the company is willing to accept.
Which is ironic, since the company is allowing Mr. Bendall to dilute the rest of us. The RO was subscribed by him as a deposit on his mystery technology. The remaining $14M is a note convertible to equity at $.07/share. On the one hand, that is well above the current level; on the other, it is once again heads I win, tails you lose for Mr. Bendall:
- If oil is not drilled for, or drilled for and not found, likely EEGC goes under and Mr. Bendall does not get paid for his 'mystery' technology. But no harm, since the 10-Q reports that his basis (amount he himself paid) for the technology is $0.
- If oil is found, then EEGC goes over $.07 (depending on the level of dilution accepted to achieve funding) and Mr. Bendall takes double the shares that he did in the RO.
This level of self-dealing is incredible to me, and is likely a point of concern for potential investors. For all my 'rants,' I had not doubted Mr. Bendall's personal integrity until this RO and 'mystery technology' situation arose.
PS. Wonder what the Smart-Win deal was (even the 'revised' deal when the Chinese wanted to revise the agreement) from which EEGC walked? Bet it valued the company well over the current level....
PPS. Note that the company posted on its website, the RPS Energy report valuing the leasehold; but -- assuming the 'mystery technology' is the flare gas technology -- has not done so with the third party report which formed the basis for the $21M purchase price. We know (or expect that we know) there was such a report based upon various PRs on the subject.
Psalm112, are you suggesting that although the Oct 26 PR said that EEGC had 'completed' the re-acquisition of GMH, maybe they hadn't?? It certainly seems like poor form to publish something that isn't accurate; certainly, those of us who have questioned EEGC PRs in the past have been told that they were of course accurate.
As to there being negotiations of which I am unaware, I have no doubt. All I can do is read what is published, and point out when it is not self-explanatory, as is clearly the case here:
- Mr. Bendall assumes company debt, in return for which he exercises shares in the RO (RO 8-K during the summer). Nothing said about what debt he assumed.
- Americas rights for flare gas technology recently acquired by GMH in negotiations, transferred to EEGC as part of a 'completed' re-acquisition (Oct 26 PR)
- 10-Q discloses that the company debt assumed by Mr. Bendall in the summer, was actually owed to a company controlled by Mr. Bendall, and is for a $7M deposit on $21M purchase for unnamed technology, with the $7M recorded as executive compensation because Mr. Bendall's acquisition basis was $0.
So:
(1) unnamed technology is not the flare gas technology; OR
(2) The Oct 26 PR 'fibbed' about GMH's ownership of flare gas technology distribution rights (note: GMH has never filed an 8-K on said ownership, which is required as this would be a material event for a self-proclaimed shell); OR
(3a) Mr. Bendall sold the Americas distribution rights to GMH which then turned around and sold it to EEGC; and
(3b) sold the technology itself to the company.
Net, you are right, there are things going on which are not disclosed. I can accept that.
I have a much harder time with things which are disclosed as historical fact, and apparently had not happened (GMH re-acquisition). How do others feel about the importance of factual statements in PRs? We had a previous discussion about the use of the word 'anticipate' in the Oct 26 PR, and I accepted correction on that -- this is a whole other case, seems to me.
PS. By the way, per the 10-Q the rest of the $21M is due to Mr. Bendall as stock convertible at $.07/share -- which of course will be worth nothing and likely never be paid unless oil is found; if oil is found, Mr. Bendall has figured out how to further dilute the rest of us!!
The reason I thought that the GMH deal had closed -- with the accompanying transfer of flare gas technology rights -- is because EEGC issued a press release saying it had:
LEAWOOD, Kan.--(BUSINESS WIRE)-- Empire Energy Corporation International (Empire) (Pink Sheets:EEGC.pk - News) announced on Tuesday, October 26th 2010 that Empire has completed its re-acquisition of Grand Monarch Holdings Incorporated.
EEGC sufficiently 'bought' the technology, in a transaction of a 3x+ multiple of the company's market cap, that they diluted the stock 50% just for the down payment.
Feels pretty material, particularly as it appears to be unrelated to their self-defined objective: exploration for oil and gas in Tasmania.
Yes, the newest PR is factual and to the point. But so was the Sure Capital PR six months ago. Worth noting that it took five months to determine no money would be coming from Sure Capital's investors, and that is all the time left on the lease.
Devil is in the details -- EEGC published the Sure Capital Agreement in an 8-K (which enabled some to appropriately predict that financing would not be successful), hopefully an 8-K will be equally forthcoming for the new arrangement. Investors can then read and make an assessment of the likelihood cash will result; initial market assessment of the PR has not been positive, with a nominal 6.5% increase in stock price on average volume with a pps downtrend during the day as the news was assimilated, after an initial uptick.
Certainly, one has to like the 'footprint' of the proposed investment advisor, much better suited for EEGC than Sure Capital with their principal-protected note strategy. One has to hope that the newest effort will survive the referenced due diligence, e.g. an understanding of the 2% likelihood of Bellevue being commercially successful. I am less worried than some about the fact there is not a current lease on all of the other structures, since they are much smaller with even lower percentage likelihoods, and likely to be re-awarded to EEGC if Bellevue can be successfully drilled -- certainly haven't seen a stampede from other oil companies to acquire the remaining domes.
I continue to not understand the desired size of the offering ($200M); why not raise less initially, then more later (at a much better pre-money valuation following successful initial drilling). Perhaps there will be a 'stepped' arrangement; certainly, a company with a $5M market cap and no 'collaterizable' assets will have to pay dearly (read: dilution) for $200M in financing.
So, let me see if I understand this:
- Mr. Bendall paid $7M to a company he controls, for some unnamed technology, with $14M still to go. So, I am guessing no cash changed hands, but EEGC was diluted 50%?? And, when EEGC defaults on the remaining $14M (three times the company's market cap), he gets to keep the shares as the deposit is forfeited??
If cash in fact changed hands (or bank accounts), why wouldn't the company have preferred the cash for drilling, rather than some new technology?
Wonder what the technology is, since the October 26 PR said that the flare gas technology was being purchased with GMH, which is NOT a company he controls (at least, not per GMH's most recent filings, which state it is controlled by Mr. Villarreal).
Given that Sure Capital's business model revolves around 'principal protected' notes, it is not a surprise that they did not provide funding to EEGC.
What is a surprise is that EEGC directors couldn't read the same website as iHub readers, and instead spent months chasing a wish, not a plan.
On October 26, the company announced it was fourteen days away from the LOC necessary to get Sure Capital funding (and drilling) beginning; now, with slightly over five months remaining on the lease, the restart button has been pushed.
Mr. Bendall's June 2009 announcement of a credit line which would be used to finance EEGC -- an assertion repeated within SEC filings related to the failed Rights Offering -- was part of the series of 'pending finance' announcements to which I was referring:
continual announcements of pending finance which have to date not materialized.
Well, absent any news of real financing, the clock ticks on the lease, and hence one can't expect a rising stock price other than on a rumor. The overall price trend has been down because there have been continual announcements of pending finance which have to date not materialized.
Some have hoped that GMH would provide some level of revenue to the company, but there is no SEC filing that EEGC has in fact acquired GMH (and at what price).
Further, there is no SEC filing to support EEGC's claims that GMH has an affinity credit card business and flare gas technology; GMH's most recent filings say simply that it is a shell, available for a reverse acquisition.
I saw nothing in the Oct 26 PR promising to provide an update in a week; rather, the Company said that certain things (LOC, drilling rig mobilization) were 'anticipated' in '14 days.' But that was six weeks ago....
If I were to speculate on why the Oct 26 PR was so optimistic, it is because Directors were hoping it would spur a higher share price which would result in lower dilution from the inevitable demands of potential investors. Unfortunately, that did not happen, as the company has 'cried wolf' on 'imminent' financing too often.
Meanwhile, we await a 10-K filing from EEGC to explain how the RO resulted in 50% dilution of the stock (itself responsible for the stock being at .02 rather than .03, since stock price = total value divided by outstanding shares) -- with negative net cash raised (after RO expenses).
Also waiting for some sort of filing to validate the company's claim that it has purchased GMH -- and a filing from GMH to indicate that it actually owns the businesses (affinity credit card, flare gas technology) which EEGC claims to be acquiring with the GMH transaction.
Still hard for me to understand how EEGC could have completed acquisition of GMH (per Oct 26 PR), without GMH having previously filed that they had actually acquired the businesses EEGC said it was acquiring. Perhaps we have an SEC lawyer on the Board who can explain.
Given the information from martinm, as he posted an EEGC chief geologist message expecting drilling 'in the next months,' and the fact that drilling did not commence in November, the Directors clearly did not achieve the Middle East funding success they had expected when they put out the September and particularly the October press releases. The latter anticipated an LOC and drilling contractor remobilization within 14 days of publication, that is, by November 9.
To dmwarrens point, the new directors (like the old) have clearly NOT gone to the school of 'under commit, over deliver,' indeed arguably the opposite.
It is no fun carrying the 'basher banner,' I'd rather celebrate successes; but can the 'pumpers' please point to alternative data so longs can all feel better?
Good work martinm in getting the response.
The key phrase would appear to be:
(we) are confident that the first oil and gas well will be drilled in a few months.
Re: Flare gas technology and EEGC share value.
EEGC's most recent PR said that AECOM, a 'Fortune 500 company,' had done a business appraisal of the technology, and evaluated the annual revenue potential at $2.7B. Have to believe that any reputable business appraisal company would take into account existing technology and its development trajectory against GMH's new, patented technology and its development timetable, in presenting such numbers.
Having said that, who cares?
There are no SEC filings to indicate that GMH - a self proclaimed shell company in business to be the target of a reverse acquisition, with no revenue through its Q1 CY 10 filing, and whose Q2 CY 10 filing is 3.5 months overdue and whose Q3 CY 10 filing has not even been dignified with an NT filing -- owns such revolutionary technology (and on what terms), or that EEGC has in fact purchased GMH (ditto).
Tech Master --
Well, executive personnel have been widely discussed. For me, Mr. Leach's background is particularly intriguing, I hope he can bring it to bear on EEGC's greatest need: cash. He sits on the board of a company that does get involved in funding development stage companies, clearly applicable to EEGC situation.
On accounting personnel -- others have speculated on the potential departure of Mr. Garrison, I have no knowledge of that (have thought of calling the office, but haven't). I did send a fax to the Kansas office several weeks ago which didn't receive a response, so I guess that would be consistent with his departure but hardly conclusive. Net: no take at all.
From a larger perspective, companies EEGC's size routinely have 10-Q delays; there was more anticipation than usual to see this 10-Q, to try to understand how the debt load was taken off the company's shoulders in return for 50% dilution of the stock.
NT 10Q was filed Nov 15. Reason given for delay:
The Registrant recently experienced a change in accounting personnel and has reorganized related functions as a result of changes in executive personnel.
I agree EEGC could flourish with small financing (and rent a rig rather than buy a rig).
Indeed, if there is high confidence in Bellevue, just get a small amount to drill the first well or two. If one is successful, future 'large' financing will be a LOT cheaper than it would be today. Today, EEGC is financing wildcat exploration; with a successful well, EEGC would be financing developmental drilling, far cheaper.
You would think that the cost of drilling an initial well would be almost pocket change for a gentleman of the new vice-chairman's stature -- and Mr. Leach comes from the board of a company which specializes in lending to early stage companies. If EEGC can't convince his company to lend it sufficient funds, how can it convince others?
The only possible explanation for the 'big bang' financing strategy I can think of is that management has read the RPS Energy report in detail, and knows that the 2% commercial likelihood placed on Bellevue may mean that they will need to drill a few wells to determine, once and for all, the existence of commercial oil at that site -- which has the best odds of the entire (original) leasehold.
Even then, a five or ten well program doesn't require $180M.
Meanwhile, speaking of $180M, Sure Capital financing was announced five months ago with no announced progress to date other than the determination that to get that financing, a $20M LOC had to be in place (some would call that going backward). And drilling was announced for November in September, and 'anticipated' for November at the end of October. Indeed, big news including LOC in place and drilling mobilization was 'anticipated in 14 days with the late October PR, and it is now 23 days and counting, a miss of 50%+.
And GMH acquisition still not represented in an 8-K, and GMH itself is now 3+ months late with its Q2 10-Q, and has not even bothered to file an NT 10-Q for the current quarter.
Doesn't feel like the ship is being well directed at the moment.
And hopefully on the millions converted by other board members; Mr. Bendall was not the only one whose company debt was turned into equity.
Earnie --
I'm just speculating; can't think of any other reason a Tasmania-focused oil and gas exploration company would pick up GMH, a US shell company, the controller of which (Mr. Villarreal) appears to separately (from GMH) control the businesses which EEGC says they are acquiring from GMH. Of course, could be the overlapping director thing (Tad Ballantyne), but there are multiple directors of EEGC so can't believe that would be it other than as an introduction.
Now, it could be the fact that we have heard nothing out of the financing talks, and the appropriate 8-Ks have not been filed, are related. If the projected $10M profit stream cannot be monetized by EEGC, perhaps the parties will not complete the transaction. Still, if GMH is in fact the owner of certain distribution rights for flare gas technology, as stated in the EEGC press release, would have expected at least that 8-K to have been filed by GMH.
In fairness, GMH itself has not claimed ownership of anything in GMH press releases, but with the owner of GMH being the Chairman of the Board of EEGC, would expect the EEGC PRs to be accurate or the SEC to come calling.
Unbelievable -- I disagree with rigman and give EEGC a kudo (consistent with a prior post I made) for moving from a rig purchase strategy to a rig leasing strategy -- at least, that is how I read the recent EEGC PR (if you read it differently, share with the class) -- and saying that all it needs to be successful is 'money in the bank,' and you blast away that I am trying to project EEGC strategy??
If you think there is some other potentially successful strategy other than 'money in the bank' (and EEGC's move to rig leasing) for EEGC to be successful, please share with Mr. Villarreal (a newbie to oil and gas exploration) so we can all make some money; but my reading of recent EEGC PRs is that they fully recognize the 'number one' requirement for cash, why else is new EEGC management globe-trotting and talking (in their PRs) about LOC as the mechanism to fund mobilization of drilling equipment, and talking about end of November drilling based on an LOC that was supposed to be finalized this week??
IMO, that is the reason for the (as yet undocumented, to the SEC) GMH purchase, they are hoping that they can give the $10M/yr in prospective GMH pre-tax profits as collateral for an LOC.
If you disagree with the prior paragraphs -- please provide an alternative perspective. And (message to all of us, including dale1953) let's focus on substance, not the perceived 'bias' of the messenger, be that me or others.
With the change in strategy from rig purchase to rig lease, I am less concerned about the MRT well completion deadline, now about six months off; IF there is money in the bank, and the only reason drilling has not happened is because third party rigs are booked (and EEGC can demonstrate its place in queue), I suspect MRT will be flexible.
BUT, there has to be money in the bank (or in the driller's hands)....
It would seem to me that before EEGC can complete the acquisition of GMH, GMH must first buy the businesses they are said to own (affinity credit card, medical waste technology distribution, and the infamous flare gas technology distribution).
GMH has not filed an 8-K to show these business have been added since their last 10-Q filed last spring (for Q1CY10; Q2CY10 is almost three months late), in which they announced they had no revenue and existed solely to be the target of a reverse acquisition (that is, to be bought by someone desiring to quickly become a public company).
The confusing thing about all this, of course, is that EEGC announced 26 October that
Empire has completed its re-acquisition of Grand Monarch Holdings Incorporated.
Psalm112, fair comments.
Yes, I am frustrated. And TBH, I had hoped for a better communication pattern from the new management team -- but perhaps they are so new they have not yet learned how to calibrate the what they are hearing from prior management who are still there, although in different roles.
I do think the entire acquisition/8-K filing thing should be sorted out sooner rather than later; who in fact has bought who/what? This feels like a very practical thing -- the
'forward looking' PR boilerplate clause would not seem to apply if a company announces it has already 'formally' acquired another public company which is represented as already owning certain businesses and technology rights. That ownership should be reflected in the 8-K filings, which is not the case with GMH -- which is also almost three months late on its CY Q2 10-Q.
The quiet is deafening -- and concerning -- since it is two weeks since new management 'anticipated' approval within fourteen days of a $20M LOC required to (a) support the Sure financing effort; and (b) support remobilization of drilling resources, so that drilling could recommence this month.
I had hoped that new senior management would desire to curry favor with investors by (a) under promising; and (b) over delivering, rather than favor the opposite approach practiced (if not intended) by prior senior management.
Trading volume since last week's sell-off remains sharply reduced, indicating that the 'smart money' is (unfortunately) not anticipating a positive announcement in the near future.
Meanwhile, board members certainly believe that the 'formal reacqusition of GMH,' announced in the most recent press release as completed and bringing with it $10M in 'capacity' for 2011 pre-tax profit and an earth-shattering potential of $2.7B in new technology, is a Material Event (otherwise, why a PR??); any thoughts as to why it has not made it to an 8-K from either EEGC or GMH?? Indeed, GMH has yet to file its CY Q2 2010 10Q; in its most recent SEC filing (CY Q1 2010 10Q), its objective had continued to be the object of a reverse acquisition, not the vehicle to deliver value to an already listed company.
Indeed, there is nothing in SEC filings to support EEGC's assertions of GMH's ownership of flare gas technology marketing rights, affinity credit card business, or West Africa medical waste technology distribution. As a declared 'shell,' ownership of such business opportunities would certainly warrant an 8-K filing.
'Where's the beef'??
Per the 10-K, Mr. Bendall has received no salary since at least the beginning of 2008. Instead, salary/consulting pay earned was part of the debt converted in the RO process.
While we are on the RO, hopefully the 10-Q will be filed on time in the next week, and we will learn more about the mysterious debt which was removed from the EEGC balance sheet and taken on by Mr. Bendall and the other Directors.
The high volume is only nice if you are a short, since it has accompanied price decliines.
I'd prefer to see high volume pushing the pps up. Note this week, after volume at three times normal level driving pps down to .016, it rebounded to .20 on less than $1K in volume.
Not sure how any technical analyst would view this sort of volume as a positive sign -- other than as a 'selling climax'?
In fairness to Earnie, it has been almost a year since the 'back to site' agreement was signed by Hunt and trumpeted in a press release.
It has been all about cash for almost two years, hopefully it shows up soon. Meanwhile, there has been 50% dilution of the stock in a transaction which netted the company no cash (assuming that the costs of the offering were greater than the $58K which came in).
Not a good two years.
Ten year spending is 'itemized' on Pages 65ff of the SEL 13/98 Final Report, posted on the EEGC website.
There are eleven different categories, with expenditures shown for each by quarter (so, a spreadsheet 40 x 11). Unfortunately, although the years are totaled in a subsequent table, the categories are not totaled (and I don't wish to invest the time in totaling, perhaps someone else will).
An 'eyeball' suggests the the Admin and Other categories appear to be the largest.
Two items in particular stuck out as I looked at the table:
- $15M in the April - June 2005 period for 'Other.' This is 30% of the total spending on all categories over ten years!!
- $1.8M for Admin in the same period. Five times larger than Admin in any other period.
Maybe an 'old timer' can detail what was going on in that time frame; the report does contain a footnote which explains some of it (but, if I am reading the following correctly, only one-half at most):
AU $8 million Licence expenditure requirement over the first 5-year term over SEL13/98, which includes the
costs associated with the public float of GSLM (refer to condition 6 in SEL13/98, The licencee must proceed
with the public float of GSLM…). Part of these public float costs are included during 2005 expenditure
Psalm112 I wish I did agree with you.
Here is the data I am looking at as I disagree:
- Today's volume was very light, less than 10% of the volume as the stock plunged to long term lows at .16 over the prior two days.
- 384K shares -- about a third of average trading volume -- equals less than $10K, hardly a rousing endorsement for unannounced new financing
Rather, I think the upward bounce today took the stock back to the level it was before someone decided to unload a relatively large amount of stock, TRIPLING average trading volume the last two days. Note that many of the trades were 250K share blocks, near as I could tell, suggesting a selling program.
Net: I am more concerned that the seller knew something, than believing we have buyers taking advantage of inside info. If buyers knew something, IMO there would be MUCH higher volume on an upward climb.
Perhaps someone has a different technical analysis -- I am not an expert -- but that is how I see it. Wish I had a more positive conclusion.
Only three more trading days until the 'anticipated' fourteen days (26 Oct PR) expire, so we should know soon. Look for high upside volume as a harbinger of positive news.
IF they have the cash to remobilize, they will have the cash to pay the government.
Should know more on or before the 9th when the $20M LOC -- to provide $12M+/- for Sure financing pre-requisites and provide immediate remobilization cash for EEGC -- is to be available. With collateral of (projected) GMH stock/cash flow?
But agree, right now the coffers are empty, and someone bet a lot of stock in the last week that they will stay that way.
With respect to when EEGC will drill, the September 3 PR said the following:
Empire has scheduled recommencement of its 12-hole drilling program.... we prepare shipment to Australia of the new rig and its components in the very near future....Once the rig has completed construction and shipment, Empire’s drilling contractors have agreed to be mobilized to the Bellevue site by mid-November to embark on a summer (Australian summer, US winter) drilling program
The Company continues to anticipate resuming drilling operations during the month of November, subject to government re-approvals. Empire’s drilling contractors are prepared to move a drilling rig back on to the Bellevue site.
The Company anticipates authorization for an initial $20 million line of credit to complete the conditions precedent to the $180 million structured finance facility and recommence mobilization of the drilling rig within the next fourteen days
The outstanding shares number needs to be increased for completion of the RO, where Mr. Bendall and other directors personally took on mostly undocumented EEGC debt in return for 50% dilution of the company, and potentially for unexercised stock options (new directors are not working for free, and they certainly aren't working for non-existent cash).
In terms of the number of shares to acquire GMH, flare gas technology is 'out there' in time (if not in fact) -- of more immediate interest is the stated 2011 capacity to generate $10M 2011 pre-tax profits, call it $6M after tax. Earnings are typically valued at ten to twenty times. At 15 times, for example, that would be $90M valuation, 18 times EEGC's current valuation. At .175 per share, that would take 5 billion shares. Add whatever feels right for patented flare gas technology.
Unless, of course, the $10M in pre-tax earnings 'capacity' is (gasp) exaggeration of what is really expected to happen based on programs in place?
Fair comment that EEGC did not 'commit' 14 days; I, for one, would have taken the 'over' based on prior date forecasts.
The LOC is required for the Sure financing, and first proceeds from that are not 'expected' for 100 days; do we anticipate a rig going to site without being paid? Maybe Mr. Leach's company can lend some 'bridge' money to expedite the process?
I've been puzzling over the lack of an 8-K. Maybe it is because the acquisition is not formally complete, despite the PR's headline that it is.
Note that the announcing PR has some (typical?) double talk:
... Empire has completed its re-acquisition of Grand Monarch Holdings Incorporated.
Grand Monarch has finalized all negotiations for its re-acquisition by Empire.
Depends on your definition of 'winner.'
IF 10M credit card/medical waste equipment revenue is achieved in 2011 (and EEGC only says it is 'achievable,' no indication GMH has come close in the past) and IF 10% margin after tax is achieved on that business (and the oil business has NO expenses), that would be $1M of margin. With about 500M shares O/S (assuming no dilution to buy GMH), that works out to .002 per share.
A multiple of 10 results in -- voila -- .02 pps, roughly the current price. Which admittedly is better than the $0.00 pps which might otherwise result if EEGC got to the MRT deadline (6.5 mos and counting) without a well comleted.
Other than Villarreal, the new directors do not have obvious expertise in the affinity credit card or medical waste management technology business, so if those are to flourish we would need yet another set.
We should get an early indication of GMH revenue potential with the Q4 earnings announcement.
P.S. Is the GMH acquisition really completed? If so, why no 8-K?
I'm not as enthusiastic about the '$10M revenue stream' from GMH.
- No idea what revenues were in 2010, that number was a 2011 projection.
- At 10% after tax (generous for the businesses described), margins would be $1M; is that enough to support a $20M LOC? I'm guessing not; further, note that the $180M Sure Capital notes require 'principal protection' -- the $20M LOC can't be the source for the protection.
- 10% margin equates to .002 per share; a enerous 20 multiple on earnings would be $.04 pps, not sufficient to drive a lot of new investors.
- We still have no idea how the GMH acquisition was financed -- more shares and dilution?? Certainly, $1m/yr in margin (if achieved) is dramatically better than EEGC's loss numbers.
I have not found anything to validate the flare gas technology, either technology or revenues, and no links have been supplied by posters or company. The EEGC website has an RPS Energy report which explains the $3.3B frequently used by Mr. Bendall for 13/98 valuation; in the most recent PR, there is reference to a $2.7B annualized revenue stream for flare gas technology, with no link or posting to understand how it was calculated. Maybe because EEGC regretted the fact that readers were able to read the RPS Energy report, and see that the $3.3B 'valuation' ($2.2B for Bellevue/Thunderbolt) had a 2% likelihood?
EEGC is in the 'oil and gas exploration' business, 'operating in Tasmania,' per its PRs. That is why we have invested; I remain concerned that GMH and flare gas technology are diversions.
It is always good to have a short term deadline to measure credibility, particularly of a new management team.
14 days from Oct 26 is November 9, so the company is saying that by that date, they will have authorization for the $20M LOC required for the financing and will recommence mobilization of the drilling rig by that date.
The company also states that drilling is expected by end of November -- a delay but not hugely so from the mid-November in the early September PR.
The market cap has gone up about $1M since the announcement of progress toward the $3.3B oil reserve (per Mr. Bendall; $5/bbl 600K+ barrels), indicating that a healthy level of skepticism about these dates and financing remains in the market.
In addition to Mr. Bendall's debt conversion, other Directors converted $2M or so of 'debt' in the RO, will be interesting to learn about its provenance.
Yes, the next 10-Q should be very illuminating.
Mr. Haftel, you say:
I have the final and real report not the fabricated one that people on this board have been touting....The report I am quoting is dated December 20th, 2009
http://www.empireenergy.com/pdf/Competent%20Persons%20Report-Part%201,%2023%20October%202008.pdf