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Kura .... thanks for your question on PPS….... based on the lack of “real news” from the company, the most one should expect to see” today” would be $.00446 per share. (3X stockholders equity of $746K, with 655 million reported shares reported outstanding)
If Avalon would have announced the Fosseltek property and Northeastern Colorado deals had closed, and the Oiltek IPO had been issued, we should have seen $.008. (Remember we have $160K deposit on the Fosseltek properties.)
If the JV announcement would have been handled differently with additional information about the JV structure, the stock should have made its way up to $.01 or maybe $.015. If Avalon should report a small pretax profit we would be moving to $.02 and it would not be unrealistic to see $.05 by the end of 2012. Two Thousand shareholders would have been very happy.
But none of this has been reported as yet.
It is going to be interesting to see the 10K report that should be coming out on the 29th. The last 10Q report was filed on time, but Avalon has a history of filing late, the good news they do file.
If we don’t see any new progress, than that’s going to be another issue the stockholders will have to deal with. My hope is that the company will report a new management structure.
From my DD I believe KR has had a few financial issues he has had to deal with, did anyone notice the foreclosure of the residence that was last reported in his Sec filings? Can’t confirm he still owned the property when it was foreclosed. I do believe he is looking for an exit strategy for himself.
The compliance deadline for the 10K is June 29th.
For those Avalon investors that have an interest in understanding the methods of oil and gas assets “discounted present value” evaluation, a good place to look would be from the Society of Petroleum Evaluation Engineers.
Do the research and run the different methods yourself, you will find the Avalon oil and gas assets are undervalued based on the current market cap figures.
Kura thanks for your question concerning PPS. In my DD I look for hidden value in Avalon. I do believe Avalon is undervalued, and I believe I understand why; therefore I am buying more shares “at ask”. Just a hint, if you are selling there are investors willing to buy Avalon at the “ASK”. I am also making a change to my Avalon purchasing strategy. Because I am buying Avalon at “ask” my transaction go through pretty quick, therefore when I buy Avalon I will be buying at the close.
For me it has always been about the Avalon oil and gas assets and the hidden value. Back in 2010 SEC changed the guide lines for reporting oil and gas reserves. The old guidelines incorporates certain specific concepts such as “lowest known hydrocarbons” which limit a company’s ability to claim proved reserves in the absence of information on fluid contacts in a well penetration, notwithstanding the existence of other engineering and geoscientific evidence. I believe the third party report that was done used these old guidelines in determining the proven and proved developed reserve figures we see in the last 10K report.
The new guidelines permit the use of new reliable technologies to establish the reasonable certainty of proved reserves. The revisions to the definition of “proved oil and gas reserves” also included provisions for establishing levels of lowest known hydrocarbons and highest known oil through reliable technology other than well penetrations. These revisions were adopted in 2010.
Reading the last 10K report; “Proved reserves are estimated quantities of natural gas and oil that geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions.” And “Proved developed reserves are those which are expected to be recovered through existing wells with existing equipment and operating methods”.
The SEC filing doesn’t include any verbiage that suggests these numbers were developed using the new guidelines, in fact it says. “Proved developed reserves are those which are expected to be recovered through existing wells with existing equipment and operating methods”; Technology changes everything.
From the SEC filing:
Proved Developed Reserves: Oil –bbls.
Balance, March 31, 2010; 23,133 bbls
Balance, March 31, 2011; 22,665 bbls
The SEC filing doesn’t speak of any unproven reserves which should be present in the additional lease acreage. It doesn’t speak of the other formations running through these properties that are being discovered recently in other fields. It doesn’t speak of the production equipment “cost to replace” which show as depreciated assets.
Look at the Avalon hidden value.
Just me but based on the Avalon assets the market cap should be around $10 million minimum. The JV and those involved should have increased that another $2 million.
I believe the stock is undervalued. And I also believe the market price of Avalon shares has been drive to these current lows by a small group of investors. I think I understand their motivation which reinforces my belief that the stock is undervalue.
We know that Avalon uses its common stock to pay the bills, as the stock price declines that ability decreases. I believe going forward with the JV we will see other means of funding for oil and gas assets. It will be interesting to see what the shares structure will be in this upcoming -10K release.
I love these low Avalon stock prices. What an opportunity we have been given as we wait for news from the company. The compliance deadline for the 10K is June 29th.
As reported in the last 10K filing, “the number of holders of record of Avalon’s Common Stock was approximately 1145. However, as reported, it was estimated that there are a significantly greater number of shareholders because a substantial number of shares are held in nominee names by brokerage firms.” It will be interesting to see what that number looks like today. And of course we haven’t seen any shareholders report a 5% or greater position.
Looks like Avalon may have a couple thousand shareholders. Most folks unwilling to sell their shares at these cheap prices.
So what’s up with the $.0006 activity, looks like some investors are willing to sell at a planned loss! Did read an interesting piece this A.M. which kind of explains it. Thanks for the low prices.
Just me, buying more shares; haven’t sold a share yet!
Good morning … Do you think the other Grace Partners, I think there is a new one these days, want the assets producing?
Thank you for the reported observation in post 12926 on Avalon asset; Grace 5A.
“I should also have added that the pumping rig at the Grace 5A site (and other Grace wells, less the Grace #2) was operating the same day when the Grace 2 figures were taken. Didn't have an opportunity to read the meter(s) there.”
From Avalon press releases:
"The Grace 5A was re-completed in February 2009 and shut-in in June 2010, and has produced less than 1,000 barrels of oil from the Redfork Sandstone. It offsets wells that have produced over 80,000 barrels of oil.” Also in the press release “We feel a successful workover on the Grace 5A will enhance our monthly income and increase the valuation of our oil reserves."
Avalon press release from 2009 and 2011.
“The company also stated its intent to acquire Prue Sand potential in the Grace #3, Grace #5A and the Grace #6 wells, with estimated reserves at 33,000 barrels of oil and 111 MMCF of gas.”
“Avalon owns a 75.00% working interest and 51.45% net revenue interest in the Grace #5A.”
For me it has always been about the oil and gas assets and how undervalued this stock is!
You suggest personal knowledge, all this information is available to all if you just spent the time looking. The real question should be why would someone spend this much time looking?
Always … thank you for this comment … “Until he finds they know him like he knows himself and he can't do to them what he does to others” ….
In my early DD research on Avalon, before Avalon became Avalon. One questionable character; Stephen B. Carlson popped up, folks will find his name in the SEC filings.
He got expelled like the rest, but KR wasn’t able to discard him in the same manner as he did the rest of the questionable characters. Mr. Carlson attended, our hero, KR's Alma Mater Carleton College and lived in the Twin Cities for a period.
Stephen B. Carlson ("Carlson") founded Aspen Capital Group. Aspen's primary business was short selling stocks. The NASD found that Carlson attempted to obtain stock at below-market prices by using threats, coercion, and intimidation. If you have a few minutes do your own DD on Stephen B. Carlson and Aspen Capital Group, he now lives up in Montana, and you will find it insightful.
I will have more to share on Mr. Carlson.
You suggest late filing again???? …… I’m sure everyone understands that 10Q reports are not required to be filed for the fourth quarter. Avalon is a non-accelerated small reporting company as the market value (market cap) of the company falls below $50 million. The compliance deadline for the 10K, which is required, is June 29th.
Morodd thanks for your post …… you ask about filing deadlines.
Avalon’s fiscal year ended March 31 …… I’m sure everyone understands that 10Q reports are not required to be filed for the fourth quarter.
Avalon is a non-accelerated small reporting company as the market value (market cap) of the company falls below $50 million.
The compliance deadline for the 10K, which is required, is June 29th.
Less-than-scrupulous promoters is nothing new, we see them every day. Once they are exposed Avalon booted them out. As documented in the early history of Apache, in 1956 Raymond Plank and Charles Arnao and Truman Anderson had their own issues with less-than-scrupulous promoters, at that time. Apache developed and capitalized on a strategy that marginalized the unscrupulous and expanded the legitimate investment pool. They too kicked the less-than-scrupulous characters out of there business element.
As we wait for news about the JV structure I am sure that folks are aware Cano Petroleum Inc filed for bankruptcy. Cano said it would ask the Bankruptcy Court for the Northern District of Texas, Dallas Division to approve a marketing process in which a "stalking horse" bidder would be appointed.
A "stalking horse" is a bidder chosen by a bankrupt company from a pool of potential suitors to make the first bid for its assets, which is used as the base for a sales process. That bid was $47.5 million for the reorganized Cano and the amount would then be distributed to creditors, the company said. More interesting is that some feel the assets sold separately would generate more revenue and some question the ability of the named “stalking horse” bidder to raise $47.5 million to purchase the assets. I have also heard that there are some companies making bids on the assets. The two Oklahoma properties are:
The Davenport Unit
In May 2004, Cano acquired certain properties in Lincoln County, Oklahoma (the "Davenport Properties") for 5,165,000 shares of their common stock and $1.7 million cash. Proved reserves as of June 30, 2009 attributable to the Davenport Properties are 1.3 MMBOE, of which 0.7 MMBOE are PDP and 0.6 MMBOE are PDNP.
Nowata Field
In September 2004, Cano acquired more than 220 wells producing from the Bartlesville Sandstone in Nowata County, Oklahoma (the "Nowata Properties"), for approximately $2.6 million cash. The Nowata Properties were previously waterflooded. Proved reserves as of June 30, 2009 attributable to the Nowata Properties are 1.5 MMBOE, all of which are PDP.
Just me, but maybe these two properties might be on the JV radar.
The wolf,thanks for your post,
I appreciate your true concern about folks investing in Avalon. Trying to weed through the information out there is difficult at times. What is fact and what is fiction, when KR has had a history of attracting less-than-scrupulous promoters bringing oil and gas and or technology deals to Avalon. One fact is clear from my DD on Avalon’s history; once these less-than-scrupulous characters are exposed they are removed from the business element.
Just me, and based on my own DD, I have found KR can be influenced very easily and very naïve at times, I believe he needs to do a better job of researching the folks brings these business opportunities to the table. It is easy for me to say as I look at the history and he is presented with the present and future, some of these chameleons are hard to see.
Dilution is an interesting topic here, raising capital and paying the bills with stock vs cash and or debt, I’m OK with. When more shares are issued it changes the dynamics of the ownership structure. Based on the last DEF 14C filing, KR has a fixed 40% position with his preferred shares;40% does not give you control. He only holds 5.6% outside his preferred position and when he converts his preferred shares that position gets reduced to 3.36%, 43.36% still doesn’t give you control.
Control of the company is in the hands of 51% percent of the voting stock. Sooner or later that 7.64 % that gives KR control will make a change. Since KR uses stock to pay the bills and raise capital those control positions get reduced with new investors. That is why a say large block holders will one day have a say.
You have suggested “you may want to chat with several depts in the SEC about all the filings of AOGN and AOGN does just what they need to do to stay trading". Your suggestion is well noted. My DD also includes SEC research on the company, the SEC does take “securities fraud” very seriously. Those companies that use convertibles and or have sales of unregistered equity securities are high on the SEC radar. But the amazing thing to me; is the number of public traded companies in this “pink market” that have no reporting at all and folks buy and sell these securities. I am reminded by the cost associated with being a fully reporting company. It is expensive, at least Avalon does file, maybe not always on time, but does file.
I think you make a very good point with Oiltek, as Avalon has a majority position in this private company. The IPO has not been done, but looking at the IPO documents, who benefits; a few of the current shareholders. There is no money being raised for the company. There has been a suggestion that Avalon’s position in Oiltek may be distributed to the Avalon shareholders. Me personally I would rather see Avalon maintain its majority position vs. distributing that position to shareholders. Those current stockholders that hold minority positions in this private company should be the most upset. The IPO lists those folks. Let’s also not forget about ex-director Thad Kaplan and his influence in bringing these technologies and business spin-off to Avalon.
The biggest concern to me is what Jill was supposed to be doing in building this company (Oiltek). Her public profile only suggests she is a director at Avalon, but the IPO lists her as an officer of Oiltek. Nowhere do I find her working on developing the IP as KR has announced in his Stockhouse interview. We know information is lagging with Avalon; maybe she has made some progress but I can’t find any that suggests she was involved. Then again maybe she has been fired from this role.
I did find the reports on the progress reported by KR, in the interview, concerning the Ultrasonic Mitigation Technology IP work and I did find the company that has agreed to the field testing. I did see the video on the testing of the technology and I did see the technology work. I know the inventors of the technology still believe the technology will work commercially. I also found what I would consider issues for Avalon. All of the information I am reporting here was my own DD, you too can find this information yourself if you are willing to look and ask questions.
For me it has always been about the oil and gas assets. Fields that were not commercial in the earlier days are commercial today because of technology. These older fields have hidden treasures that technology will help extract. To me it’s just a matter of assembling the right team to make Avalon profitable. I believe this new JV just might be the ticket.
You ask …… Is $AOGN going thru a merger or no?
Avalon has reported a JV with Blair Oil Company, Zacale Resources and Foy Streetman. The details of the JV have not been released so we don’t know the structure of the JV. I have done early DD on Foy Streetman and the FosselTek assets which I was able to find the Streetman operating company and the assets attached to that company. I think I know the well locations and production formations. I also looked at the formation structures in those areas.
Zacale Resources is Mr. Larry Coshow, his resume is quite impressive. Avalon investors would be quite lucky if he were to become the COO.
Kent Blair with Blair Oil, again I haven’t spent much time researching the company, as I have spent more time researching what I believe might be their oil and gas assets. I believe I have identified those assets, well locations and production data, production formations and formation structures in those areas.
If the JV includes any of the Fosseltek properties or the Blair properties they would add to the collection of Avalon oil and gas assets. I have always believed the Avalon oil and gas assets have “real value”.
And might add, I have been buying this stock for over a year and haven’t sold one share.
I like that “the games PHONIES play”, and in this game KR is the hero for kicking the phonies out once they are exposed. In this game Avalon is the “real” oil company.
So the phonies, who are they?
From Avalon 2005 SEC filings; enter RJ Abercombie ousted Avalon director, along with Mid-Continent Investments, who was issued 85,000,000 shares with a ownership position of 21.1 % and Sooner Leasing LLC, who was issued 48,000,000 shares with a ownership position of 11.91%. Of course history tells us these two companies are Robert “Brian” Boeckman. Mr. Abercrombie and Mr. Boeckman have a long history together. Mr. Abercrombie is executor of the Boeckman family trust
In February 2005 the Company named Ronald Abercrombie the Interim Chief Operating Officer, to assist the Company with the proposed transaction as contemplated in the Letter of Intent between the Company and MCI and he was appointed to the board of Directors. In April 2005 Mr. Abercrombie resigned from the board and lost 10 million stock options.
May 2005, the Company named Thomas M. Day to serve on the company's Board of Directors until the next shareholder meeting, and issued him 250,000 shares of the Company's Common Stock for his services.
Some folks may know Thomas Day was ousted from Avondale Resources and guess who now has control of the company, RJ Abercombie and Robert Brian Boeckman.
Another interesting footnote is the 2005 Avalon filing DEF 14C, it appears KR played is preferred share card here as MCI and Sooner thought they might have enough shares for control. We all know the deals were killed when MCI and Sooner didn’t deliver the ownership documents of the assets.
Do your DD on Robert “Brian” Boeckman and RJ Abercrombie. Look at Rockwell Energy and Mr Abercombies ownership of this company surely you will find the SEC issues with Rockwell Energy. One that may be harder to find is Mr. Abercrombie’s Monarch Investment Group. Tradestar Resources, another old Avalon partner in Janssen #1 has a history with Mr. Abercrombie, did you know they are not an oil company today. And we all know Proex Energy Management was operator of the Janssen asset but today the Texas Railroad commission shows the operator as Rockwell Energy. Janssen #1A well number 02-062357. Look at the production numbers, why do you think the operator would want those low production numbers? Maybe they don’t want Avalon to see the revenue from the assets.
Those numbers are going to make what’s left of Bedford Energy folks unhappy as they are trying to sell their interest to First Titan. Remember Bedford Energy, the Grace Assets, do you think the phonies had their eye on the Grace Assets? Isn’t there some Bedford folks working with RJ now?
Await your "FACTS", look forward to FACT, not the dreams and fantasies of Robert "Brian" Boeckman, PLEASE SHARE
Average daily volume last ten days sitting at 5,295,433, less than 1% of the outstanding shares.
Some folks aren’t selling and some folks including myself are buying more shares every day!
Folks playing a game to keep the stock price down creates an buying opportunity for those who have done their DD.
Some think JV will produce gross revenues of $100K a month, just on the FosselTek and Blair Oil assets, if they are a part of the JV.
Look at the production numbers on the FosselTek properties for the last three reporting periods and look at the Blair Oil asset production numbers.
Throw in the Avalon assets, the JV will put Avalon on the road to profitability.
You make a very good point, and ask a good question. “Any valid idea on why pps keeps dropping down to triple zeros despite your good confidence?”
We see the IR effort, spending monies to promote the stock. We see folks working the stock and high volume trading numbers. We see the Facebook and Tweeter space. We see an announcement regarding a JV and we see the stock dropping to triple zeros.
We hear the speculation from both sides; on the cause and effect. We know folks will buy low and sell higher to make a few bucks, but what is driving the stock to triple zero. My prospective suggests there are forces working here to drive the stock down as there might be forces working to drive the stock price up. What makes more sense to you, Avalon management wanting a higher stock price or lower stock price? So who wants the stock price down and why?
I believe the games folks might be trying to play here should only have a short term effect. I am only purchasing and not selling Avalon shares. I like the undervalued price and as the stock continues to drop I purchase more shares and cost average my holdings. I have been buying the stock for over a year and have not sold any of my holdings as I believe that large blocks holders will eventually have a say.
And why would I have any confidence in this company?
I believe the value in the company is not the management but the oil and gas assets and company structure. I like the business strategy Avalon has adapted of purchasing these mature oil and gas assets. I believe the Grace assets have real value, I believe the other oil and gas assets have value but are controlled by other partners. I believe some of these “other partners” have an interest in seeing KR fail and in time we will all understand why as we look back into history.
I believe KR might be looking for an exit strategy for himself and am hopefully this JV relationship will lead to new management of the company. If he is not looking for an exit strategy, I believe he should be as my continuing DD has identified a possible Achilles heel. I believe that it should be very easy to make Avalon profitable and this in itself should reverse the downward trend in the stock price.
If you haven’t visited Avalon’s facebook page go and read April 6th Oilfield Psalm by Foy Streetman.
A lot of dialog about dilution.
Rule 144: Selling Restricted and Control Securities
What Are Restricted and Control Securities?
Restricted securities are securities acquired in unregistered, private sales from the issuer or from an affiliate of the issuer. Investors typically receive restricted securities through private placement offerings, Regulation D offerings, employee stock benefit plans, as compensation for professional services, or in exchange for providing "seed money" or start-up capital to the company. Rule 144(a)(3) identifies what sales produce restricted securities.
Control securities are those held by an affiliate of the issuing company. An affiliate is a person, such as a director or large shareholder, in a relationship of control with the issuer. Control means the power to direct the management and policies of the company in question, whether through the ownership of voting securities, by contract, or otherwise. If you buy securities from a controlling person or "affiliate," you take restricted securities, even if they were not restricted in the affiliate's hands.
If you acquire restricted securities, you almost always will receive a certificate stamped with a "restricted" legend. The legend indicates that the securities may not be resold in the marketplace unless they are registered with the SEC or are exempt from the registration requirements. The certificates of control securities are usually not stamped with a legend.
What Are the Conditions of Rule 144?
If you want to sell your restricted or control securities to the public, you can follow the applicable conditions set forth in Rule 144. The rule is not the exclusive means for selling restricted or control securities, but provides a "safe harbor" exemption to sellers. The rule's five conditions are summarized below:
1. Holding Period. Before you may sell any restricted securities in the marketplace, you must hold them for a certain period of time. If the company that issued the securities is subject to the reporting requirements of the Securities Exchange Act of 1934, then you must hold the securities for at least six months. If the issuer of the securities is not subject to the reporting requirements, then you must hold the securities for at least one year. The relevant holding period begins when the securities were bought and fully paid for. The holding period only applies to restricted securities. Because securities acquired in the public market are not restricted, there is no holding period for an affiliate who purchases securities of the issuer in the marketplace. But the resale of an affiliate's shares is subject to the other conditions of the rule.
Additional securities purchased from the issuer do not affect the holding period of previously purchased securities of the same class. If you purchased restricted securities from another non-affiliate, you can tack on that non-affiliate's holding period to your holding period. For gifts made by an affiliate, the holding period begins when the affiliate acquired the securities and not on the date of the gift. In the case of a stock option, such as one an employee receives, the holding period begins as of the date the option is exercised and not the date it is granted.
2. Adequate Current Information. There must be adequate current information about the issuer of the securities before the sale can be made. This generally means that the issuer has complied with the periodic reporting requirements of the Exchange Act.
3. Trading Volume Formula. If you are an affiliate, the number of equity securities you may sell during any three-month period cannot exceed the greater of 1% of the outstanding shares of the same class being sold, or if the class is listed on a stock exchange or quoted on Nasdaq, the greater of 1% or the average reported weekly trading volume during the four weeks preceding the filing a notice of sale on Form 144. Over-the-counter stocks, including those quoted on the OTC Bulletin Board and the Pink Sheets, can only be sold using the 1% measurement.
4. Ordinary Brokerage Transactions. If you are an affiliate, the sales must be handled in all respects as routine trading transactions, and brokers may not receive more than a normal commission. Neither the seller nor the broker can solicit orders to buy the securities.
5. Filing a Notice of Proposed Sale With the SEC. If you are an affiliate, you must file a notice with the SEC on Form 144 if the sale involves more than 5,000 shares or the aggregate dollar amount is greater than $50,000 in any three-month period. The sale must take place within three months of filing the Form and, if the securities have not been sold, you must file an amended notice.
If I Am Not an Affiliate of the Issuer, What Conditions of Rule 144 Must I Comply With?
If you are not (and have not been for at least three months) an affiliate of the company issuing the securities and have held the restricted securities for at least one year, you can sell the securities without regard to the above conditions. If the issuer of the securities is subject to the Exchange Act reporting requirements and you have held the securities for at least six months but less than one year, you may sell the securities as long as you satisfy the current public information condition.
Can the Securities Be Sold Publicly If the Conditions of Rule 144 Have Been Met?
Even if you have met the conditions of Rule 144, you can't sell your restricted securities to the public until you've gotten the legend removed from the certificate. Only a transfer agent can remove a restrictive legend. But the transfer agent won't remove the legend unless you've obtained the consent of the issuer—usually in the form of an opinion letter from the issuer's counsel—that the restricted legend can be removed. Unless this happens, the transfer agent doesn't have the authority to remove the legend and execute the trade in the marketplace.
To begin the process, an investor should contact the company that issued the securities, or the transfer agent of the company's securities, to ask about the procedures for removing a legend. Since removing the legend can be a complicated process, if you're considering buying or selling a restricted security, it would be wise for you to consult an attorney who specializes in securities law.
What If a Dispute Arises Over Whether I Can Remove the Legend?
If a dispute arises about whether a restricted legend can be removed, the SEC will not intervene. The removal of a legend is a matter solely in the discretion of the issuer of the securities. State law, not federal law, covers disputes about the removal of legends. Thus, the SEC will not take action in any decision or dispute about removing a restrictive legend.
http://www.sec.gov/investor/pubs/rule144.htm
It has always been about the oil and gas assets, the SEC filings show the Proved Reserves, 2011 at 22,665 bbls, @ $100 a barrel, you do the math.
Grace unproven reserves in the Mississippian has my interest.
AVALON OIL & GAS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED MARCH 31, 2011 AND 2010
Oil - bbls
Proved reserves:
Balance as of March 31, 2011 22,665
Proved Developed reserves:
Balance, March 31, 2010 23,133
Balance, March 31, 2011 22,665
The Games Folks Play; the Dump / Pump; “Naked” short selling of Avalon Shares?
With 90% of the O/S traded, did we just see the “Dump and Pump”, “Naked” short selling of Avalon Shares.
Most companies have no way to stop this, and it drives the PPS down, which when they need capital they have to issue even more shares than before..."Who is talking about that right now?"
Then once they figure out what's going on it is too late, they complain about naked short selling, but the bashers on the board have already won.
Naked short selling is a case of short selling without first arranging a borrow. If the stock is in short supply, finding shares to borrow can be difficult. The seller may also decide not to borrow the shares, in some cases because lenders are not available, or because of the costs of lending.
When shares are not borrowed within the clearing time period and the short-seller does not tender shares to the buyer, the trade is considered to have "failed to deliver." Nevertheless, the trade will continue to sit open or the buyer may be credited the shares by the DTCC until the short-seller either closes out the position or borrows the shares.In some recent cases, it was claimed that the activity was larger than all of the available shares, which would normally be unlikely.
Naked shorting can be invisible in a liquid market, as long as the short sale is eventually delivered to the buyer. However, if the covers are impossible to find, the trades fail. Fail reports are published regularly by the SEC,and a sudden rise in the number of fails-to-deliver will alert the SEC to the possibility of naked short selling.
In 2008, the SEC banned what it called "abusive naked short selling" in the United States, as well as some other jurisdictions, as a method of driving down share prices. So what happens, these folks target a stock. There are many boards like this one where people talk about their stock every day. These folks go on the boards, and bash the company... They blame the company for selling shares and doing shady things, all while shorting the stock to no end...
Kura asked yesterday, “Do you still think this company is doing a great job to increase shareholders value?”
Most folks focus on “today”, and with today’s stock price, the obvious answer is “how could anyone say they are doing a great job”. I think there is more going on here than meets the eye.
I like the business strategy of purchasing these old producing plays and the hidden value that is buried within these assets.
Lake Washington and Swift Energy is an example of this strategy. Avalon has a small interest in the Lake Washington field and that acquisition did increased shareholder value. I also like the Lincoln County “Grace Wells” acquisition and how Avalon has increased our ownership interest in these properties. I believe that acquisition increased shareholder value. And I also believe that there was “Something” with the Grace assets that sparked a desire to increase that ownership interest.
Looking at the Grace Wells and our increased ownership position in these assets, maybe someone sees “Something” in these assets that could possibly produce large revenues for the company sometime in the future.
So now, what is that “Something”?
What is the hot play these days, the Mississippian formation.
Devon Energy (DVN) reported production results on the Matthews 1H well, the company’s first horizontal well drilled into the Mississippian oil play. Where Logan County Oklahoma. … Find Logan County, …… find Lincoln County.
The Matthews 1H well produced at a rate of 960 barrels of oil equivalent (BOE) during a 24 hour period and averaged 590 BOE per day during the first thirty days. Devon Energy said that 80% of the production was crude oil, with an API gravity of “around 40” and low sulfur content. The company plans to drill 15 wells into the Mississippian oil play in 2012.
Who is another player in the Oklahoma Mississippian, SandRidge, and look at JV partner Larry Coshow.
Now look at the Mississippian formation in Lincoln County history. “The Mississippian in this area consists of about 250 feet of dark fine grained argillaceous limestone’s, which is called locally “Mississippi lime” in the Stroud field and the “Mayes” limestone member of the Caney formation farther west in the county. Look at Magnolia Petroleum, Benedict No 2, drilled in the 1920’s, look at Union Petroleum 1923 discovery well, look at the new technology in horizontal drilling. The early history can be found by searching “oil and gas in Oklahoma, Lincoln County, by Dollie Radler, 1930.
Read what Kevin White, SandRidge VP says about Strategies for Oklahoma Mississippian Horizontal Plays. Kevin R.White, Senior Vice President of SandRidge Energy, Inc. Shared his company insight as to 'What Makes the Horizontal Mississippian a Great Play' in a recent interview with Investorideas.com. SandRidge's strategy, according to its recent investor presentation is to focus on shallow, low cost, conventional plays. In that light, Kevin White explains their current position, research and history in the Mississippian Formation.
"The Mississippian is shallow, low cost, and is actually a conventional reservoir rock. We spent about three years studying the play and looked at the thousands of vertical wells drilled into the Mississippian formation over the preceding several decades.”
"The company currently has over 900,000 net acres in the Mississippian. The majority of our property was purchased in 2010, with an average cost of $200 an acre. We really made our move in 2010 and increased our acreage from about 100,000 acres to 800,000 acres during the period from March to December 2010.”
"Having oil prices at $80 plus during the time we built the largest part of our position, it was an easy decision to see the rates of return would be really good.”
"In terms of lower costs, it is a shallow horizon, so you are able to kick off and drill horizontally at about 5500 feet. Since it is true reservoir rock, the formation actually drills faster and easier than other, tighter, resource type rocks. Lastly, because it's reservoir rock, that has real natural porosity and permeability, you don't actually have to be as intrusive with your completion process, so it requires a lot less horse-power to go in and frac these wells than what some of the other plays require. All of that combined: we can use smaller rigs (thousand horse-power rigs), smaller frac fleets (we require about 12,500 horse-power on site), those things just add up to less cost.”
"Also, the type of equipment we are using is not in high demand in any of the other high profile, expensive tighter rock plays that are going on in our industry”.
"As far as our drilling plans for 2011, our capital plan has us drilling about 140 producers in the Mississippian."
In asking to clarify that the company has never had a dry hole in this play, Mr.White replied, "That is correct. It's not really that unusual in a hydrocarbon charged reservoir. There are going to be a variety of wells; there are going to be some really good wells, average wells and below average wells. It's very large petroleum charged reservoir, so it's not surprising to us. It's a thick package of sands, where we have the majority of our acres in 200 to 600 feet in thickness, so it would be unusual to go in and drill the well and complete it and get nothing out of it."
Brainstorming ………. As folks speculate about the falling stock price and the demise of the company, history tells us that increased revenues and profits fix struggling companies very quickly.
As we have seen in the industry, oil companies can become very healthy in a relative short period of time. So if you could be so kind as to speculate with me for one moment.
Looking at the last 10Q report, on page 5, the Oil and Gas Sales line; add three zeros to the end of those revenue numbers. With that, what would your guess be as to the Avalon stock price if and when those numbers were to be accomplished by management?
Brainstorming thanks for your post .......I don’t think there is a toxic in play, yes 92% of the O/S has been traded is strange, but no CS13G reporting as yet. Some folks have this “game” down as an art form.
Look at the December 31, 2011 10Q, we all know Avalon pays its bills with stock, look at all past “UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS” in the filings. Folks will find some intersting numbers to consider.
Using the stock to raise equity money or paying the bills. Not collecting debt, thats the Avalon way.
From December 31 2011 10Q report.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
The Company issued 58,000,000 shares of common stock to consultants for services provided, pursuant to consulting agreements. The value of these shares was $80,946, and was charged to operations.
$.001395 a share when they time out. $80,946 of value added.
The Company issued 117,759,451 shares of common stock for the conversion of notes payable and for the assumption of debt and certain accounts payable. The value of these shares in the amount of $109,723 has been credited to the note (s) payable and accounts payable. No gain or loss was recognized on these conversions.
$.0009317 a share when they time out, $109K of value added.
This data is like a roadmap, 117 million shares at $.0009, where did anyone think the stock price might go if pumped in the right direction. The games folks play.
And now talk of a reverse split, when your authorized goes from 1B to 3B, the games folks play.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On November 16, 2011, a majority of the Company's shareholders approved an amendment to our Articles of Incorporation to increase the authorized number of shares of our common stock from 1,000,000,000 shares to 3,000,000,000 shares par value of $0.001.
And what has been missing from the dialog; AVALON ENTERS INTO JOINT VENTURE TO ACQUIRE OKLAHOMA OIL AND GAS PROPERTIES.
And folks think a “Toxic Death Spiral” is in play, these JV partners interested in buying Avalon shares must think they are receiving a gift from heaven.
If folks want to sell their shares cheap, there will be folks to buy them. The games folks play.
Morodd you ask …… “what properties in your opinion will AOGN acquire in Oklahoma???”
I believe the JV with Zacale, Blair and Streeman to be an excellent opportunity for Avalon and the shareholders. I am more excited about Zacale Resources and Larry Coshow involvement. He brings a portfolio of energy contacts that could raise the bar for Avalon. Before one can really speculate on what oil and gas properties might be targeted for acquisition, we need more information on the JV; details and structure going forward.
The good news is Mr. Coshow and Mr. Streetman’s involvement. Read Mr.Coshow’s profile on Zacale resources web page. Within the profile he speaks of his involvement with SandRidge’s (Riata Energy Inc) acquisition of the NEG Oil and Gas assets from Carl Icahn. (National Energy Group).
Another interesting aspect that Mr. Coshow might bring to the JV is the way SandRidge has raised funds to build their asset base. As an example, SandRidge formed SandRidge Mississippian Trust II (the Trust) to own certain royalty interests in oil and natural gas wells in the Mississippian formation in northern Oklahoma and southern Kansas and closed an offering representing a 60% beneficial interest in the Trust.
SandRidge Energy, Inc. as sponsor of the Trust, owns approximately 7.4 million common units and approximately 12.4 million subordinated units convertible into common units. The Trust has a total of 49,725,000 trust units outstanding. If this type structure is detailed in the JV documents, the JV might be able to raise some serious money to purchase oil and gas properties. Mr. Coshow also brings a vast knowledge of prospect definition and development.
With this JV and Foy Streetman’s involvement I would think we will see the Fossiltek properties as a part of the JV. The Fossiltec properties were reported to be five (5) producing oil wells and thirty-three (33) producing gas wells. The properties are located in the Anadarko Basin of Western Oklahoma, in the counties of Roger Mills, Grady, Caddo, Custer, Blaine, and Beckman. There might be additional leasehold acreage included.
If Avalon includes its assets into the JV, the oil and gas properties, it will be interesting to see how Mr. Coshow drives these stagnate assets into producing meaningful revenues.
One must ask themselves, why has Mr. Coshow and Mr. Streetman teamed up with Avalon to form this JV, they must see the value of such a relationship?
I have not had the time to look into what value Blair might bring to the JV. But I would think there is a good reason why he is involved. Blair Oil may have oil and gas properties or other assets that they may put into the JV.
It is going to be interesting to see how this JV progresses.
History shows it was broken in August and September 2010!
EVERY RALLY FOR YEARS has been met with HUGE selling, that's why the long term downtrend HAS NEVER BEEN BROKEN!
Avalon has a history of discarding questionable character’s as they are exposed.
Some of those characters are very vindictive.
It's not!
Trying to reload!
“We are pleased to report that the work-over of the Grace #2, Grace #5A, and Grace #6 wells have been completed.
You must have missed this in the 2009 release.
You must be reading something different than I posted.
And then in May 2009 this press release.
Don’t you just love the information being posted here. Look at the percent of ownership below. Who was that check from Scissortail Energy.
Don’t you just love the spin here,
"Avalon Receives Initial Revenues from Scissortail Energy for the Grace #2 and Grace #5A Wells"
"MINNEAPOLIS, MN, May 7, 2009 – Avalon Oil & Gas, Inc., (Avalon) (OTCBB: AOGN) provided an update on workover operations in the East Chandler Field, Lincoln County, Oklahoma, and reported that the company has received the first check for gas revenues from Scissortail Energy LLC, since Avalon consolidated its recent acquisition of fractional working interests in the Grace Wells.
“We are pleased to report that the work-over of the Grace #2, Grace #5A, and Grace #6 wells have been completed. Avalon began selling gas from the Grace #2 in January, the Grace #5A in February, and the Grace #6 in April, and we have received our first revenue check from production on the Grace #2 and Grace #5A wells,” said Avalon’s CEO, Kent A. Rodriguez. “We are excited to have completed the first portion of our initial work-over program in the Grace Field,” Rodriguez added. “Given the encouraging price movement for natural gas, production from the Grace wells will have a significant effect on Avalon’s revenue stream going forward” he added.
Avalon holds a 30.50% working interest and a 23.88% net revenue interest in the Grace #2; a 37.50% working interest and 23.72% net revenue interest in the Grace #5A; and a 33.50% working interest and a 25.69% net revenue interest in the Grace #6. The company is continuing to acquire additional fractional working interests in each well."
The company is continuing to acquire additional fractional working interests in each well Oh ... by the way .... didn't they do that?
always ..... you know oiltek has been spun-off, sec filing and new company established.
You know the fossiltek deposit and Foy hasn't killed the deal.
You know Harvard calls their EMBA something didn't than the rest
And you know the rules concerning the super pfd. Everyone knows
this.
You know the spin!!
You are referring to point of sale here?
They get caught!
Some folks are not shorting, they are buying low at the bid, say $.0009 or $.0008, waiting for the run than killing the run by selling short of ask, all the way back down.
Then, they reload at a reduced bid. Waiting to kill the run again, making money the whole time. In some cases this game is played by folks who have a vendetta against the company, which they feel their actions are justified. Look at the history over the years here, this has been going on for some time.
Folks doing this activity move outside the gray area when they post false and misleading information about the company and the CEO.
Reading this post I can’t help but smile. Well played, your strategy here has been text book!
always ..... are you referring to the wolfs post?
This may turn out to be a very interesting day, Friday selloff. Best time to buy, when speculators sell on Friday.
The frustration level here is so thick you could cut it with a knife….. 10.7 million sitting on the bid at $.0009.
Just me, I'm not selling!
moroDD .... thanks for your post ...... help everyone understand what you mean when you say its not retail. Brainstorming could you pipe in here also.
wolf thanks for your post ...... you said, "Where is the stock dividend OILTEK that Kent sent privately in a powerpoint to hand picked shareholders?"
Do you have a copy of this powerpoint and or a date and time that this was sent to the "hand picked shareholders"?
Would you also happen to have a list of those folks?
You also report "he hires a bunch of promoters to get the volume kicking into high gear so he can dump more after fake interest is created".
Would you happen to know who the "recorded" owner of these shares that you and other folks claim is being dumped to benefit KR.
Could you also help me understand why anyone in their "right mind" would do such an activity with the SEC reporting requirements and the electronic accounting that leads investigators like a "roadmap" to offenders. Even those folks playing their little games here are trackable. It is so easy to find things when you know where to look.
The market cap numbers here are less than $700K, who in their right mind would want to spend time in prison for this type of reported activity?