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it was that tremendous jump that spoiled everyone.
It wasn't that tremendous jump that spoiled me... It was that plunge from 22 cents to 0.57 cents that soiled me...
Onco wrote (paraphrasing here since message got removed): "With all your knowledge, how come you "messed" up so bad..."
You'll have to be more specific, in 30+ years of investing I've messed up plenty with picking stocks - if that's what you are referring to. The difference is once I realize a mistake, I don't keep buying the hype and averaging down.
I bought into HEMI when reading some of their 2007 PR's and knew there was a lot of oil left in place for these shallow type blanket formations. The promise of EOR and 4th generation oil patch know-how and all that proprietary well data in their "vast library" led me to take a flyer on this stock. If they had tried to the best of their ability to do the things their website and PR's led me to believe they would do, and things just didn't work out, then I could live with that.
What I didn't expect was for all the promises that never materialized and then near total secrecy over the last 6 months.
Until last night, I didn't even know that Tom (wildcatter) was the main man of EDEX... I back read about 2-3 months of posts and all of Tom's going back to the Illinois wells. I came across this company when reading some posts from someone I have marked as a fav. on another board.
I like reading the exploration tales on these small o/g pink stocks when they are into their drilling programs. There is no bigger gamble than taking geophysical data and experience and trying to find hydrocarbons through the bit. Some do it better than others but the stories are always different and entertaining. I hope for the investors here that the losing streak comes to an end soon. Seems to me based on averages that the PIP gizmo just isn't working out as expected.
As for me, I had 10 years of wireline logging experience in the 1980's. I also owned / operated my own stripper lease (avg. production about 60 bbls. per month) for a couple years.
Good luck to all, hope this stock investment has a happy outcome.
So what did the logs show? Did you miss the reef or hit it but found it poorly developed (low porosity and permeability)? What was your suite of wireline logs on this well?
Dual Induction
MicroLog
Density
Neutron
Other(?)
Don't try to confuse the optimists with cold hard economic facts and figures, it just doesn't resonate with them.
It's one thing to sell assets and redeploy them to get a better ROI using the proceeds to prove up reserves and or increase production. All I can see from the financial picture KA gave us is that the asset sale was needed to offset the $60k in fixed costs each month for salaries, rent, upkeep on the leases, etc.
I was hopeful that the Silvey horizontal might indeed be that type of "investment" and utilization of capital. Now it's on hold. FWIW, I believe CT had everything technical lined up and was chewing at the bit to get the well drilled. KA pulled in the reins as he is in charge of the company finances. Time will tell which one had the right plan.
You are so right, the best business decision KA made in the last 6 months was issuing all that stock while it was still valued over a penny.
If they do a RS, won't the A/S also come down in the same ratio? Of course they can always increase it just by filing the change in authorized shares but I can't imagine the A/S being able to be left at 100M if they do a say 100/1 RS.
Very well stated imshredin2, you have summed up the "reality" of the Hemi 0.006 SP.
I don't see any catalyst to bring the SP up either now that the horizontal has been put on extended hold. The cash burn rate has used up most of the Wyoming asset sale proceeds by now. More assets will need to be sold and/or more stock being issued will indeed be forthcoming...
But hey, at least they are "debt free". Soon to be asset free and maxed out on the A/S. Hedging results may have netted some coin for Hemi on the severe drop in prices from 130 to 30 bucks a bbl. but that play doesn't work well in steady to rising prices which we are now in.
I hope I am wrong and will admit it if this sucker ever turns around or gets bought out. When you are kept in the dark as much as we are with this company, I will just assume no news is bad news. A 97.3% paper loss on this investment in 19 months for me based on my first buy price of 22 cents and today's close of 6/10th of one cent.
Kels - my bad... I meant to say anyone with an avg. cost of less than 0.007 would be in the money based on Wednesday's closing price. All these zero's are hard to keep up with unfortunately.
Myself - I need HEMI to do a 17 bagger going forward just for me to break even (avg. cost for me is 12 cents). Just curious how other board members were faring compared to me with this stock.
Wildcatter - You stated a target depth of 3300', the drilling application that Badge714 linked to showed a projected TD of 3900'. Is that drilling application the same well that is currently being drilled?
Do you know the objective payzone formation they are targeting? Is it a sandstone or carbonite? Just curious as I spent 10 years in N. Central Texas in the 80's as an open hole logging engineer and I see this well is somewhere around Abilene. I was not familiar too much with the geology around there but would probably recognize the geologic structure name they are targeting.
Good luck to all, this is my favorite part of o/g investing - waiting on the drilling results. Hope it turns out well.
USC Cowboy - Did you ever get your answer back from your email you sent to HEMI management? I never saw you post back to that effect so I assume no.
Based on recent SP action and today's intraday low of 0.0057, I would say anything north of 1 cent could be considered "high price"...
Please post back anyone here on the board that has HEMI holdings with an avg. cost less than today's close of 0.07 (this makes you in the money!!!)...
Full disclosure, my avg. cost for my HEMI holdings is ~12 cents.
Glad to hear from you BigMur... With only two posts on the Hemi board for the month of April prior to today, I was getting worried about you.
Thought maybe you visited the SEK leases and got kidnapped by the locals to help with the spring planting.... LOL
Any update from the company that is newsworthy???
You said it, you meant it and you backed it up... No doubt about that !!!
When you got filled on your 500K trade, is it comprised of many smaller share volumes to total up to the 500K or is it a single trade for the full amount? I am trying to see how the MM's show this on their trade tally today...
TIA
Thank you Badta99... I can only imagine where this SP would be now if you hadn't made your millions of shares buy trades over the last few months.
Do you consider yourself a technical trader or one who relies on fundamentals when choosing their stock purchases?
Honestly, I think you have become too fixated on the "debt free" angle of this stock. It's one of the few bright things that can be said about the story so I don't blame you if you have to keep bringing it up...
I ask all of you HEMI defenders, would you rather Hemi be debt free and have 0.5 million in marketable assets -or- have Hemi be 2 Million in debt but with 5 Million in marketable assets?
If you understand the financial results of companies including the balance sheet, you will see that debt by itself isn't bad as long as you have more assets to cover the debt. To remain debt free by liquidating assets or selling stock and diluting is a death spiral.
Another thing to ponder... Based on cash burn rate of about $60K a month for salaries and fixed operating costs, that $400K Wyo. asset sale will be totally depleted in about half a year. That long promised buy out of Hemi in the future would surely get a higher bid if they still owned the Wyo. asset - no??? Of course they would, you sell assets to fund operations and you are a dying company.
Since KA has stated that the Silvey Horiz. drilling will be delayed until oil prices recover, what is the possibility for them to strengthen the balance sheet during this time? Lets see, lower revenue coming in from lower production and lower oil prices but fixed costs of $60K a month, it doesn't look good. KA showed some hedging profits in that recent letter but that is unlikely to continue in flat to slightly rising oil prices.
I truly do hope that somehow KA can pull a magic bullet out of his holster and come up with something to grow/save the company, I truly do. There are several posters here that seem to have most if not all of their investment dollars in this stock and want them to come out whole (at least)...
Just some hard cold financial realities to ponder.
Well Kels, that's what makes a market... You read the data and are happy with what Hemi is saying and willingly buys the stock. I read the same data, apply 30+ years of stock investing and 10+ years of o/g business knowledge and come to the opposite conclusion. I would be a seller if my commissions wouldn't almost wipe out the current value of my remaining holdings.
There is a real concern that Hemi can survive as a going company based on simply a few lines of the P/L statement for 2008.
(Revenue)
Oil Sales 169,794.28
Uncategorized Income (hedging, asset/lease liquidation) 746,231.79 (Throw this out for future analysis, it is non-recurring. You cannot continue to sell assets/leases and realize income from hedging)
(Expenses)
Total $907,726.97 (~$820K if you take out the two lease acquisitions and the drilling / completion costs for 2008)
Oil Sales revenue are going to be substantially lower in 2009 due to their admitted lower production and average sales price. Costs will likely be a little lower than the $820K unless they drill that horizontal.
That looks like a potential negative cash flow situation of > $650K for 2009. What is going to fill that gap? Sale of stock or lease/assets is the only thing I see unless head count is an option.
How many years can Hemi survive with negative $650K in cash flow, I would say about two based on that limited finance statement from KA.
A companies financial statement should consist of both a P/L section and a balance sheet. Without seeing both, you cannot get a true picture of what is happening with the money side of the business.
IMO, Hemi's finance statement from KA's recent "Report from the CEO" showed only the P/L side fully but only half of the Balance Sheet as the Asset side was included but not the Liability section. The Balance sheet should have also included year to year comparisons to see what assets / liability changes occurred during that year. As others have already pointed out, the Wyo. asset sale in 2008 made the small $8K profit possible. The Balance sheet surely shrank substantially during 2008 as the Wyo. lease was disposed of and other lease holdings would have been marked down substantially because of falling oil / ng prices.
"Income statement (P/L) describes the current year performance while balance sheet describes the overall position of company right from the starting year of business to current year.
income statement provide the current year net profit information while balance sheet provide information about the overall assets and liabilities of company applied in the business."
What Does Profit and Loss Statement - P&L Mean?
A financial statement that summarizes the revenues, costs and expenses incurred during a specific period of time - usually a fiscal quarter or year. These records provide information that shows the ability of a company to generate profit by increasing revenue and reducing costs. The P&L statement is also known as a "statement of profit and loss", an "income statement" or an "income and expense statement".
What Does Balance Sheet Mean?
A financial statement that summarizes a company's assets, liabilities and shareholders' equity at a specific point in time. These three balance sheet segments give investors an idea as to what the company owns and owes, as well as the amount invested by the shareholders.
The balance sheet must follow the following formula:
Assets = Liabilities + Shareholders' Equity
Each of the three segments of the balance sheet will have many accounts within it that document the value of each. Accounts such as cash, inventory and property are on the asset side of the balance sheet, while on the liability side there are accounts such as accounts payable or long-term debt. The exact accounts on a balance sheet will differ by company and by industry, as there is no one set template that accurately accommodates for the differences between different types of businesses.
Hemi mentioned their use of EOR on these KS leases in several PR's in 2007 - 2008 as "de-watering" the formation to allow the oil to migrate back to the well perforations.
http://www.reuters.com/article/pressRelease/idUS154789+18-Dec-2007+BW20071218
http://markets.chron.com/chron?GUID=4735692&Page=MediaViewer&Ticker=HMGP
Now in 2009 in Keith's operations update, he seems to be using the excuse of the formation losing its "fizz" for the less than expected production. Well, that is what "de-watering" does, you remove the fluid from a reservoir, the pressure drops and less fluid is produced.
I am surprised that 4th generation oil patch didn't know it worked that way....
Whatever "unsolicited promotion that's been takin place on certain websites." you're talking about sure isn't working - the trading volume and SP movement lately has been non-existent.
Please provide further info on this unsolicited promotion you mention. We need something to discuss here on the board...
I agree that the quiet is nice on the boards if it avoids senseless snips and rebuttals by the opposing sides.
What I really want to see though is some meaningful info on the horizontal drill project and status on the Barnett leases (ever get production flowing) on those small parcels held by Hemi?
SP has flat lined sub penny...
10 total message board posts in 5 days...
No official company PR since Nov. 2008...
Man this stock is flying high and very exciting !
it's hard keeping this sp straight when there are so many leading zero's before that first integer.... lol
Only in the game of golf can one count on the players to "self police" themselves... I very much doubt that the investment community as a whole has a reputation to follow the rules...
It's been a while since the NSS topic has hit this board. We all had hopes that new reg's put into place many months ago would help out with this MM manipulation (in particular with our HMGP stock if you believe it was falling into this NSS scenario).
Kels - I would guess that your tip to the SEC was part of the 5000 or so logged with the agency, I wonder if the 123 investigated so far was in regards to HMGP???
By Zachary A. Goldfarb
Washington Post Staff Writer
Thursday, March 19, 2009; Page D01
The Securities and Exchange Commission doesn't have the right guidelines in place to enforce laws surrounding a form of short selling that some investors blame for exacerbating the financial crisis, the SEC's inspector general said in a report yesterday.
The report focused on naked short selling, a technique in which traders bet against a company's shares in an unconstrained fashion that critics say can drive down the price of a stock until it is worthless.
The report says complaints about naked shorting have increased dramatically since December 2007, but the SEC's enforcement staff did not respond accordingly. Only 123 of 5,000 naked short-selling tips were forwarded for further investigation, and none led to enforcement, the report said.
"Complaint-receipt and processing procedures hinder Enforcement's ability to respond effectively," the report said.
"We determined that Enforcement's current policies and procedures appear to limit significantly the referral of naked short selling complaints, and its written policies and procedures result in naked short selling complaints being treated differently from other types of complaints of securities law violations," SEC Inspector General David Kotz said in the report.
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New SEC Chairman Mary Schapiro is working to revamp the agency's system for collecting tips and pursuing investigations.
The report said the SEC should develop in-depth guidance for handling naked short selling complaints, similar to guidance the agency has for other types of complaints, such as insider trading. It also recommended that the agency develop more uniform practices for handling complaints at its Washington headquarters and at its regional office.
The SEC's enforcement division disagreed with most of the report's findings.
"There is hardly unanimity in the investment community or financial media on either the prevalence, or the dangers of, 'naked' short selling," it wrote.
The division added, "The people closest to the trading, with the deepest understanding of and access to the data, did not see and refer any of the large-scale, damaging 'naked' short sale abuse
Kels - looking at the data from the Owl Creek area gives me these conclusions.
1) In the 39 years of data (since 1970), extracted oil is about 2.5 million bbls. This probably took 1000's of wells over this time as old wells were P&A'd and new wells took their place. Since Hemi reserves in this area is stated to be in the 3-5 million barrel range, it seems that it has taken 1000's of wells over 39 years to produce only about half of Hemi's stated reserves on their 10k (plus or minus) acres. I conclude that the Hemi numbers must surely be overstated, these cannot be 1P reserve figures.
2) Looking at recent years, 2006 - 2007 - 2008 data, the active wells on average produce less than 0.5 bbls a day... Takes a while to get return on investment for this type of production.
Anybody on this board want to take credit for that 12 buck trade today (1000 shares x 0.012) that moved up the stock price 50%???
The MM's must be asleep at the wheel with the big bear trap rally taking place.
Would be nice to see the Hemi SP hold above a penny all day, just for inspiration...
Not even close, it was actually 100,000 at 0.0077 - sheesh! LOL
I wonder what price level oil will have to reach for KA to sell all that "tanked oil" that has been stored for the last 8 months...
I guess it depends what information is in the data.
Scenario 1: If it is indeed valuable data that could be exploited by a competitor (such as acquiring offset acreage), then I as a Hemi shareholder would like to see the info kept secret as long as possible.
Scenario 2: If on the other hand, there is data in the report that contradicts any public PR's that Hemi has made, then I would like to get this out in the open as soon as possible.
I would say the odds are favoring scenario 1 over scenario 2 by 80% to 20%, imo of course...
The date for making public "tight hole" well data will probably be moved out again. I posted a couple months ago when this "killer - near blowout - Texas type" well was about to become public. A day or two later, the end date was moved out several months.
Don't know what the rules are on extending the "tight hole" data but I can guarantee that Hemi will keep this locked up as long as the statutes allow...
The flood was in the spring of 2007 and costs for those repairs were made mainly in the 2007 calendar year...
Now we're waiting patiently for the insurance company to pay up or tell us to take a swim.
That would be me, feel free to discuss your points directly with me. That's why I'm here, to have a dialog about this stock investment of mine...
Regards, B
Welcome to the Hemi Board, lets see if Diamonds and Oil mix...
You raise some very valid points. Each investor now has the decision to make if they feel Hemi's business model will allow the investment made in the company by buying stock to be worthwhile.
Look at the fixed costs in this document, do you think that the salaries, vehicle, travel, office rentals, etc. are in line with the future revenue stream coming in? If cash flow from oil sales and gas royalties do not pay these fixed cost bills, then I see three ways to fill that gap. 1) Issue stock, 2) Issue debt, 3) Sell assets. None of those are good options as far as making my stock investment profit.
Remember too that o/g production from a lease is a wasting asset. If that horizontal well comes in and makes good production numbers, that helps the cash flow in the present. However, each barrel of oil extracted lessens the value of that lease by reducing its reserves and thus its value to an acquiring company. It's the long standing view of the Hemi supporters that the end game and big payoff is in the sale of the company. Just hope they can keep enough assets and oil reserves to make this outcome realized.
Mur - Now answer me truthfully, were you a bit surprised at the 20M additional shares in the O/S being PR'd today??? I don't mean that they were posted, I mean that these shares were issued since July?
Reazo, Kels, MM2B, Tex - I would appreciate your honest answer on this question too...
That's a good point Mur, not all of the Hemi holdings in SEK are swiss cheese drilled like part of the Bennett and the adjoining leases.
Manti - I was pulling the comp's from the iBox data:
Share Structure:
Auth:..............100M
O/S:....approx....68,500,000 (7/22/2008)
Insider: approx....24M
Float: approx......41M
I would like the board mod's to update this figure in the iBox now that the new O/S has been PR'd. I would also request that they leave the 7/22/2008 value along with the new 3/2/2009 value for archive purposes.
Just remember, that soda can lost all its "fizz" when the previous operators shook the can and all the pressure escaped... It will take a lot of expensive drilling (H or V) for the water flood and/or EOR (polymers / CO2 / NG) injection to try and extract that 4+ million bbls of oil still in the Squirrel.
I liken it to the Canadian oil sands, lots of bbls. locked in the reservoir, just very difficult to get it out at the present cost / sales ratio.
Lease sales is probably part of that "uncategorized income" as well as the issuance of ~20M new shares... 20M shares at 1.5 cents a share is $300K... With as much debate as the O/S was rumored to be, I can't believe KA just posted that 87M number and didn't explain the increase at all....
The $170K in oil sales is pretty close to the revenue expected from the KCC oil production figures for Hemi also.
It's nice to have some of this info made public, I appreciate it but think the economy and low oil prices are going to make this an even tougher year for small o/g companies in general and Hemi in particular. You can only sell so many assets before you have nothing left to sell and the stock O/S is close to the A/S now...
Oh I definitely agree, there are ways to maximize cash flow when dealing with a commodity based business. Tanking oil makes sense in a rising price environment, not a falling one. In a perfect world, Hemi would not have sold a drop of oil until July 2008 and then sold it all at the peak.
I do agree with your other points though that Hemi is lean enough to keep expenses down and sell just enough oil to cover the bills. Of course they have that $475K Wyo asset sale to draw down too if need be to pay for extra normal monthly fees and such.
Kels said in regards to the question on whether Hemi remains monthly cash flow positive: "Hmmmmmm...........let's see.
Could it be due to the current tanking strategy that Hemi conveyed earlier in the 2008 year?"
Looking at crude oil prices from 2008, the 1st qtr. averaged about $85 a bbl, the 2nd qtr. about $115 a bbl. Since you've long touted the Hemi strategy of "tanking oil" can you please explain to us investors how storing oil when it could have been sold at >$100 a bbl. is something good now that oil is selling at <$30 a bbl???
Oil price source, Coffeyville Crude for Eastern Kansas grade:
http://www.coffeyvillecrude.com/CVRCrude/showPriceBulletins.do