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Looks like panic has set in...
I don't know why, because there is nothing new that would cause the share price to fall this low. The only thing I could fathom is that there is a misunderstanding of exactly what is going on, because the news releases have been far & few in between.
Contracts
First thing is that there are two different sets of contract awards, with only one that was holding things up:
1) Drilling Contract
2) Civil Construction Contract
The Drilling contract was already awarded several months ago; nevertheless, it was the Civil Construction contract that was holding things up. The Civil contract consists of road construction (4 KM from the highway), plus the required infrastructure.
Apparently, the Civil contract was awarded in July; however, questions/answers were going back & forth, that Sonoro realised that the company who they had awarded the contract to, didn't understand the terms. As a result, Sonoro had to re-submit the tender.
If you listen to the First Energy presentation ( http://jetslides.tv/webcasts/503 ), Richard states that all they are waiting for now, is the signature from the drilling contractor (fast forward to 8:40 of the presentation). This implies that the Civil contract has finally been settled (Although the slide in the presentation states that the Civil contract has yet to be finalised).
While they were re-tendering the Civil contract, they were negotiating further terms with the Driller. Apparently, the contract with the driller is now vertically integrated; meaning that the driller will be buying the oil from them until the Topping facility is completed. Another way to look at it, they will be paying the driller for his services with oil.
Although the terms of the Drilling contract were negotiated a long time ago, nobody was willing to finalise it until the Civil contracts had been finalised. According to the presentation, it would appear that the Civil contracts have now been finalised. As such, the driller can now sign his contract.
Construction & Drilling
According to the presentation, it states that the Civil construction can take 30-45 days. This statement is confusing, because it leads people to conclude that it will take 30-45 days before the drill rig can be moved into position.
That is not the case: The road will take one, maybe two weeks at the most. As soon as the ground is levelled, the drill rig can be moved into position. Yes, the Civil construction can take up to 45 days, but that is for the entire project - not simply the road.
Once the drilling starts, it will take ten to twelve days for the first well.
Cash Position
When the Q2 results came in, the cash position was $7.2 Million. It’s obvious that they have spent millions since the beginning of the year. However, the question that had most concerned: Can they complete the drilling program before running out of cash?
The fact that they are presently looking for a farm-in partner, scared many into believing that they don't enough cash. However by my calculation, (granted, I don’t know how much the security aspect is going to cost), they should have enough cash on hand for the 3-well program (definately enough for two wells).
The problem is what’s going to happen after that, given the fact that they want to drill a further 12 wells in 2012. I believe this to be the reason for the farm-in partner(s). If they are looking for a partner today, it will take several months before someone signs on, because that’s the time one would need to conduct proper due diligence... It will not happen next week.
Nevertheless, when Richard revealed that they were looking for a farm-in partner, it gave the impression that Sonoro wouldn’t be able to complete the present 3-well program without help. The present 3-well program will go-ahead without a partner… the partner is for next year’s program. The problem is that most didn’t understand this; hence the fall in share price.
As far as I know, everything is still on schedule.
The civil work will begin after Labour Day and take a couple of weeks. The drilling rigs will then be transported in and drilling will take another couple weeks. End of September is still the target date.
For Killawhale...
MHT, how concerned are you that we are still waiting on the drilling contracts? I realized this is not a huge concern (yet), but it does make me a little uneasy that they will be able to deliver on time and commence drilling in late September. Do you think this delay will have any effect on the timing of the drilling?
I'm not too concerned with the awarding of the drilling contracts, since they have ample time to award these before September. However, I am concerned with the delay of the civil contracts. These are the contracts that will build the infracture leading to and at the drilling site (e.g. road leading from the highway to the drilling site).
With August being Ramadan, I have no clue as to how long it will take to build the required infrastructure before drilling can commence.
For bwldforbucks1...
Sorry for getting back to you this late, but I've been on vacation for the past several weeks and off internet. I'll try and answer some of your questions.
Could you provide your general thoughts on how you see the infrastructure (topping facility, wells, pipelines, etc.) coming together in concert with necessary equity / debt raises?...
...the question is, what is the timing of these expenditures and where does it come from? I understand that until they have proven a viable asset (oil reserves) and cash flows most of this will probably have to come from SNV equity.
Once that is established, could they potentially project finance a topping facility and / or pipeline etc., if they have established viable offtake contracts? Or will it be a slower, more gradual approach that focuses on slowly building out wells / production and building up internally generated cash flow and expanding development in that manner. Or will they JV and share capital costs?
PIPELINE SYSTEM
Let's talk about the pipelines first. Iraq already has a pipeline system, although archaic. There are two major and several minor pipelines. To give you an indication of where these are located, please go to Google Maps:
IRAQ-TURKEY PIPELINE
The first major pipeline is the Iraq-Turkey pipeline which runs north-south. It starts in Bagdad, follows the highway northbound through Samarra, Tikrit, west of Mosul into Cizre (Turkey). It basically goes right through Sonoro's first prospect oil field.
IRAQ STRATEGIC PIPELINE
The other major pipeline runs from the shipping port in Basra northwest (again following the highway) to Karbala, and then a straight line from there past the two lakes to Ramadi (directly west of Bagdad). From there on, it follows the highway to Al Haqlaniyak.
IRAQ-SYRIA & KIRKUK PIPELINES
At Al Haqlaniyak, the Iraq Strategic Pipeline joins up with the Iraq-Syria & Kirkuk pipelines.
The Iraq-Syria pipeline runs northwest from Al Haqlaniyak, following the highway (#12 on Google Maps) into Al Bukamal (Syria).
The Kirkuk pipeline runs eastwards from Al Haqlaniyak, north of Tikrit, into Kirkuk. The Kirkuk pipeline intersects with the Iraq-Turkey pipeline just to the south of where SNV will be drilling its first prospect.
Now having said all of the above, I asked Richard at the AGM if they will be using Iraqi's pipeline system. I got the general sense from him that they will not (at least not initially).
While starting up, they will be selling their oil into the domestic market (this has already been stated several times in their news releases). What he means by this is that local entrepreneurs will be arriving at the drill site with their own personal tanker trucks. He then fills up their trucks by selling them oil at a discount. These locals then drive their trucks and re-sell the oil at refineries located either in Jordan or Turkey.
Nevertheless, the sale is made at the site, not when the trucks arrive at the refinery (Sonoro will not be selling their oil to refineries... Sonoro sells the oil to the local entrepreneurs, who in turn transport the oil and re-sell it at a profit for themselves to refineries located in other countries).
As such, since Sonoro is selling the oil at a discount directly into the local market, there will be no capital requirement towards the transportation of the oil.
TOPPING FACILITY
In the future, the plan is to re-direct the oil towards their own diesel/kerosene Topping facility. At the AGM, they talked about several ways of financing the Topping facily. A 5,000 bbd facility will cost them around $30 Million. A 30,000 bbd facility will be in the neighbourhood of $75 Million.
Once they have a proven reserve, they will be able to some debt financing. The amount of financing will depend on the size of the reserve. Another option they are contemplating is a JV on the topping facility (with the partner footing the bill for the entire facility).
Whichever option they choose, the Topping facility will not be ready until the Fall of 2012. As such, you can count of them selling their oil into the domestic market (local entrepreneurs with their own tanker trucks) for at least the next year.
bwldforbucks1............
To answer your question: Different Reservoirs
We are not talking about light oil lying beneath heavier oil within the same reservoir; rather light oil reservoirs lying below heavier oil reservoirs. Wikipedia talks about how reservoirs are formed:
http://en.wikipedia.org/wiki/Petroleum
Crude oil reservoirs
Three conditions must be present for oil reservoirs to form: a source rock rich in hydrocarbon material buried deep enough for subterranean heat to cook it into oil; a porous and permeable reservoir rock for it to accumulate in; and a cap rock (seal) or other mechanism that prevents it from escaping to the surface. Within these reservoirs, fluids will typically organize themselves like a three-layer cake with a layer of water below the oil layer and a layer of gas above it, although the different layers vary in size between reservoirs.
Because most hydrocarbons are lighter than rock or water, they often migrate upward through adjacent rock layers until either reaching the surface or becoming trapped within porous rocks (known as reservoirs) by impermeable rocks above. However, the process is influenced by underground water flows, causing oil to migrate hundreds of kilometres horizontally or even short distances downward before becoming trapped in a reservoir. When hydrocarbons are concentrated in a trap, an oil field forms, from which the liquid can be extracted by drilling and pumping.
So to answer your question as to why the light oil reservoirs are found below heavier ones, it has to do with the Geothermal Gradient. For instance in Western Canada, the increase in temperature with depth (Geothermal Gradient) is 1.8 degrees C per 100 meters. Without going into all the chemistry, light oil reservoirs need a higher temperature to be formed, which is usually deeper.
Seismic Data
If you refer to page 17 of the latest presentation, you will notice these blue lines drawn across the province. These are the seismic data lines that they acquired from a 3rd party, and represent over 600 KM. With this data, they've identified several oil reservoirs.
Originally, they were just going to drill on top of the old abandoned well (because they knew that oil was already there) while completing the seismic work on the rest of the province. This would have taken them at least one year, plus an additional 6 months for analysis, and cost over $20 Million.
With the seismic data in hand, not only did they save themselves the money, but also a lot of time. Although they received a 5-year monopoly on exploration, they won't need it now, since they already know where the fields are located. Now, it's just a question of how deep this fields extend. The oil gets lighter as they go deeper.
Why is SNV moving so slow?
You have to put everything into perspective; there is a reason for it. Richard Wadsworth is an ops guy and he has a real good reason for the timeline.
First as I stated in an earlier post, the awarding of the drilling contracts will be done this month. This should stabilize the share price, if not move it a bit higher. Then the construction begins.
Initially the Company was going to drill on top of the old abandoned well from 1935. However, when they got their hands on the seismic data, they noticed that the old well was not constructed on the highest pressure point of the oil reservoir.
Please refer to page 14 of the latest presentation ( http://www.sonoroenergy.com/upload/media_element/54/01/sonoro_corp_pres_june_v5.pdf . You will notice that the place to drill the wells is actually located 2 KM to the west of the old well. Next, if you look at page 13 of the presentation, you will notice that the old abandoned well is located 2 KM of the west of the highway; hence the new wells will 4 KM to the west of the highway.
Since they are now contemplating drilling 2 KM to the west of the old abandoned well, they now have to construct the required infrastructure (roads leading from the highway to the location of the new wells) that they had not contemplated before. They will use the month of July to construct the infrastructure required for the new locations.
They could start drilling in August, but are holding off for two reasons:
1) Ramadan. Although you could get some people to work during the religious holiday, they won't be as effective as they would after.
2) Rainy season. They will need water to extract the oil out of the ground. The rainy season doesn't start until September, in which time they can accumulate enough water to last until next year's rainy season. What's the point of drilling in August, only having to wait until September to extract the oil?
The terrain of the wells is located approximately 250 meters above sea level. Again, referring to page 14, the oil reservoir is located between 200 to 300 meters below the surface (+40m to -60m from sea level). Normally, it should only take 1 day to drill to this depth. However, since they are not familiar with this area's geology, they are going to take their time, constantly change the drill bits. Hence, it will take between 10 to 12 days. According to the seismic, they believe that this reservoir contains approximately 100 million barrels at this depth. They can always drill deeper at a future date.
I know it seems like it is taking forever; however, we've waited this long, so what is another month if they going do it right the first time?
Theoretically, the share price should be around $0.25 right now. Probably down, because the rest of the juniors are down. Nevertheless, there should be a significant move up mid-August as we get closer to the drilling date.
Share Price over the Summer
I have no idea where the share price is going to go over the summer. I'm expecting the following news releases over the next couple of months:
June: Awarding of the drilling contracts
July: Contruction of the oil wells begin
August is a write-off due to Ramadan. Spudding of the well will only take 11 days (they are only going down 200-300 meters). As such, I believe the stock price will rise significantly in August as we get closer to the date of the first well being spudded.
The share price should increase when the above news items are released. It will show that they are on track with Iraq becoming a reality.
P.S. The seismic data that they acquired from a third party is the equivalent of one year's work & worth $20 Million.
Yes, I am still here.
Richard Wadsworth bought 138,000 shares today at $0.20. It was mainly 3 big time investors selling over the past few days. They were not selling because of anything having to do with the Company.
The Albania project stalled because of the recent change in regulation. The present JV partner is looking to back out. They are actively looking for someone and very hopeful to having him replaced very soon, and finally bring this project to completion.
Iraq oil production project is moving full steam ahead. They should be in production by late September.
Although the debt financing for the topping facility was hinged upon getting a Government Oil Supply contract, that is no longer the case. With the recent discovery of seismic data which was gathered by other parties (under Sadam`s rule), they now know exactly where to drill -not requiring to do any of their own seismic- and have realised that they will have enough oil that they won`t need the Government`s oil. Nevertheless, this puts the plans for their topping facility on hold until they start producing. This most probably scared some investors as this is added risk. A Government contract is a sure thing... this is not.
Of the three sellers, it would appear that one is still there. Once he is done, the share price should recover to above 25 cents.
The shares from the second $0.25 Private Placement are becoming free-trading on the 20th. However, I don`t believe that these shares will place any pressure on the share price, since the people who bought these are the buy & hold type. Nevertheless, the shares from the first $0.25 Private Placement are still out there, and will keep the pressure on the price close to $0.25.
The share price will appreciate next month, when the contruction of the oil wells begin. Once they are in production, they will have defied the odds, and the share price will finally reflect the true value of the Company.
My Dissemination of the Corporate Update
First things first, this was not a news release; rather it was a corporate update. We have yet to hear any of the pending news. Most of the present information was already released last November 29th within their MD&A.
Supply Contract
I was expecting to hear some news regarding the Supply Contract between February 15th-23rd. Probably a lot of investors were anticipating the same timeline; hence, the Company had to release an update indicating that they are still working on it. Hopefully they'll get it by next week. The share price should consolidate above $0.40 with the announcement of a Supply Contract.
Debt Financing
Since news regarding the Supply Contract is past due my initial timeline, I will have to revise my timeline for the debt financing: I am now looking towards mid-March. The one concern I have is with the following statement just released:
"The Company anticipates debt financing of all or a significant portion of the processing facility's total cost."
I was anticipating debt financing in the range between $50 and $100 Million. This statement means that they may not even get $30M, and will have to place some of the funds they had just acquired from their latest Private Placements towards the refinery.
Prospective Resource Estimate
I was expecting a NI 51-101 Resource Estimate in April, after they had completed their drilling. I understand that this independent resource assessment was prepared in accordance with the definitions of a NI 51-101, but is this report an actual NI 51-101? Why the need to drill, if there is no need to prove up the resource estimate? As such, I'm guessing that we will see an actual NI 51-101 by sometime in April.
Parameters of Heavy Oil
Please note the following statement:
"The prospective heavy oil resources ((less than)25 degrees API) are expected to be between..."
I had heard that Iraq doesn't set the same parameters on the definition of "heavy oil" as the rest of the world. Is 25 degrees API really considered "heavy"? The rest of the world defines "Heavy" as any oil below 22.3 degrees ( http://en.wikipedia.org/wiki/API_gravity ):
• Light crude oil is defined as having an API gravity higher than 31.1 °API.
• Medium oil is defined as having an API gravity between 22.3 °API and 31.1 °API
• Heavy oil is defined as having an API gravity below 22.3 °API.
• Extra heavy oil is defined with API gravity below 10.0 °API.
Anything above 20 degrees is pipeline-able. If they have exclusive rights for oil up to 25 degrees API, then we are really in business.
Conclusion
Although some people may have taken this Corporate Update as a news release, I am still waiting on the news releases; which should be imminent.
P.S. I have no idea as to the requirements for electrical power, utilities and all other supporting facilities of the project. As for security, I am told that they are in the "green zone", and there are no hostilities in this area.
You are going to have to be more specific when you state Iraq, because Sonoro Energy's interests in Iraq are two-fold - they have 2 different projects going on simultaneously:
1) Topping Facility
2) Exploration & Production
Topping Facility
The topping facility in this case will be a diesel/kerosene refinery. The objective is to secure a supply of crude oil for a diesel/kerosene refinery that they would like to construct & operate. Please go here for the requirements to construct/operate a refinery in Iraq:
http://www.oil.gov.iq/Law-of-Private%20Investment-in-Crude-Oil-Refining.pdf
Most people are under the impression that this is a done deal - it is not. Please re-read the 3rd Quarter MD&A found on Sedar. Note the following paragraph:
Initially this will include pursuing immediate cash flow by securing a modular topping facility and a supply contract from Salah ad Din and the Ministry of Oil. A new modular topping facility has been identified, and the Company is reviewing options to finance it with debt instruments.
Then please re- read the following paragraph from the Company's Dec 2010 Presentation to Investors:
Topping facility – 1,000 to 5,000 bbls/d
• Discussing potential early supply contract while exploration program develops
• Reviewing possible debt financing with supply and sales contracts
In other words, at the present time, they do not have a deal in place for the Topping Facility. What they are saying is that they will be negotiating with the Iraqi Ministry of Oil and/or the Salah ad Din Province in securing a crude oil supply contract for a diesel/kerosene refinery that they would like to construct & operate.
As per the law above, the refinery will fall under the Ministry of Oil's jurisdiction - not the Provincial Government, and as such, they will have to negotiate with the Ministry of Oil to construct the refinery.
As most of you are aware, Iraq just formed a new government in November 2010. A new Minister of Oil (Abdul Karim al-Luaidi) wasn't appointed until just recently (December 21st, 2010: http://www.iraqoilreport.com/oil/production-exports/oil-output-up-fourth-bidding-round-planned-5255/ ). As such, it would have been impossible to negotiate anything pertaining to constructing a refinery until a couple weeks ago (when the new Oil Ministry opened for business).
Although they presently do not have a deal, I believe - given their contacts - they should have one secured within the next couple of weeks. As such, I believe that the first news headline to come out of Iraq to be either (or both):
a) SONORO ENERGY SECURES CRUDE OIL SUPPLY CONTRACT FROM THE IRAQI MINISTRY OF OIL
b) SONORO ENERGY SECURES CRUDE OIL SUPPLY CONTRACT FROM IRAQ'S SALAD AD DIN PROVINCE
Once they have a Supply Contract in hand, the next step will be to negotiate a Sales Contract for the diesel fuel (enter Mr. Nasser Bin Jarallah). With the Supply & Sales contracts in place, they can then apply for the debt financing (enter Mr. Ahmed Al-Shamsi) to acquire the Topping facility. Therefore once that has been achieved, the subsequent news heading will read:
SONORO ENERGY ACQUIRES DEBT FINANCING TO CONSTRUCT & OPERATE DIESEL/KEROSENE REFINERY IN IRAQ
For a total of $30 Million, one can procure a Diesel Topping facility from Texas, and have it shipped & installed in Iraq. Inglett & Stubbs International Ltd. has been retained to construct the facility.
If they can obtain the debt financing within a month from now, the Topping facility can be shipped as early as March. As such, it could be up and running by year's end.
Oil Exploration & Production
I've seen pictures of oil just seeping out of the ground in Iraq. As such, they would not have to do much drilling. According to the "December 2010 - Presentation to Investors" they will be drilling 10 shallow holes. If they start this program now, they should have a Resource Estimate out by the end of March / beginning April. They should be into production by the Fall 2011 (October - December).
As opposed to the Topping Facility, this is a done deal. Heavy oil does not come under the Petroleum Law; rather it falls under the Mining Law, and as a consequence, falls under Provincial jurisdiction. The Salah ad Din Province has already given Sonoro exclusive exploration & production rights for their entire province.
Incidentally, the Iraqi Ministry of Industry & Minerals was just renamed the Ministry of Energy a couple of weeks ago. The new Minister of Energy is the former Minister of Oil: Husayn al-Shahristani (http://en.wikipedia.org/wiki/Hussain_al-Shahristani)
Conclusion
As such, when you ask when do I expect to hear concrete plans out of Iraq, this is my guess for the next 3 months:
1) Secure Oil Supply & Sales Contracts by Mid-February.
2) Secure Debt Financing for the Topping Facility by the end of February.
3) Acquisition of Topping Facility in March.
4) Initial Oil Resource Estimate (from the shallow drilling) by the end of March / beginning April.
note: Iraqi Ministry of Oil's website is http://www.oil.gov.iq/
There is only one reason as to why one would tripple the P/P from $5M to $15M:
Someone who wasn't invited to the party wanted in so desperately that he flashed a lot of green at the bouncer, and I mean a lot of green.
The fact that Macquarie is buying this on behalf of someone else, as opposed to buying it for themselves like they did the last time, means that this person wants to remain anonymous (anonymous as far as other investors are concerned, but known to the Company). This information will never be made public.
I'm guessing this person is so high profile, that Richard doesn't want to bar him from the party. What if this person is an Arab Sheik with many, many connections? Or what if this is Eric Sprott? Will you show him the door just because he doesn't have an invitation?
From what I heard, the original Private Placement wasn't really that oversubsribed (at least when compared to the one from earlier on this year). As such, there was no real interest which would have warranted a 3-fold increase.
My biggest concern with the latest, is what would happen the day those 60 Million shares start hitting the street (that's an increase of 50% of the float when they become unrestricted in 4 months from now)? However, if it is truly only one individual (or entity) who took up the entire $10M for his portfolio, we probably wouldn't see those 40 Million shares any time soon.
From my investigation, it is obvious that Richard didn't need the money. So why did he do it? It must be someone so important that he didn't have the courage to show him the door.
P.S. Capital expenditures for 2011 will be $34 Million. As such, Richard will still need debt financing.
Latest Private Placement
So the Company mailed off the subscription agreements to the various Brokerages/Funds this past Friday afternoon (some after Market close). As opposed to giving it solely to one group (like they did last time when Macquarie got almost half), they are spreading the wealth this time around, involving numerous Funds.
I guess a lot of Brokerages/Funds thought that they would have been alloted a greater share of the PP than to what they are presently being offered.
The paperwork has to be submitted by the 16th, with the cheques clearing by the 22nd. It should make for an interesting Friday (17th) trading as far as the share price is concerned.
Sonoro NOT Affected in Albanian Flooding
I'm sure you've all already heard about the floodings this back week in Albania. Go here for some pictures:
http://www.bankerspetroleum.com/en/components/investor/bnk_dec6_flooding.pdf
Although Bankers Petroleum is suffering at the moment (see news release below), I've been assured that our plant has not been affected whatsoever, as it sits near the port and not inland.
------------------------------------------------------
CALGARY, December 6, 2010 – Bankers Petroleum Ltd. (“Bankers” or the “Company”) (TSX: BNK, AIM: BNK) would like to provide the following update on the flooding situation in Albania.
On December 4th, 2010, the banks of the Semani river which winds through the northern half of the Patos-Marinza oilfield were breached by high water levels due to heavy rainfall. The flooding, which extends into current areas of development in the field, has caused Bankers to shut in 1,800 bopd of production and shut down operations of three workover rigs and one drilling rig.
The rain has currently ceased, the river is back within the banks, water levels are beginning to recede and as of this morning, 1,200 bopd of production have been restored. While new rainfall may add to delays in resumption of activity, Bankers is optimistic that activity will resume at full capacity in short order.
A full assessment of property and equipment damage is underway. Bankers is happy to report that all employees and consultants are safe and no injuries have been sustained. Additionally, the Company is pleased to be assisting the local communities.
Please refer to Bankers website www.bankerspetroleum.com for pictures of the flooding.
Bankers active production on December 4th, prior to curtailing activities due to flooding, was 11,200 bopd with multiple horizontal wells in the early ramp up stage of production and several new wells planned for the remainder of this month.
My Take
My last post was the week prior to the release of the 3Q Results where I commented on the rash of power outages throughout Albania. Their Nov 29th Management Discussion & Analysis provides an honest update as to their progress to date.
CASH
On September 30th, they had $700,000 on hand after having spent $2.1 million in the previous 3 months (a one-time charge of $250,000 to Berkeley, $255,000 for Albania which their JV partner will pay back, etc).
Their burn rate was about $400,000 per month, mostly attributable to the travelling back & forth to Europe & the Middle-East. It doesn't take a rocket scientist to figure out that if they only had $700,000 at the end of September, and burn through $400,000 a month, they are left with negative $100,000 on December 1st.
DEBT FINANCING
Although they were cash poor, I was hoping that they were going to get the debt financing in time without having to go to the Equity Market to raise more cash.
Although they told me personally over the phone that they were going to go down the debt financing road, they finally put it in print within their Q3 Management Discussion & Analysis report.
Nevertheless, upon closer examination, I see that they got caught up in a catch-22 in the last minute:
In order to acquire debt financing, one would have to have enough assets to put up as collateral. They do have that in the form of exclusive oil exploitation rights for 30 years within a 24,000 square KM area within Iraq, and a minimum guaranteed supply contract from the Al-Salah ad Din Province for their topping facility. On SEDAR, you can download the entire agreement with the Province. All of the signatures are there; however, what is missing is the rubber stamp needed from the Iraqi National Government.
A new National Government was just formed last month. As per law, no documents can be stamped until the new government is in session, which won't happen until January. So what we have here is an agreement in principle, which is missing the rubber stamp needed to make it official. Nevertheless, without this rubber stamp, they are unable to provide any collateral in order to get the loan. Had the government not changed, they would have had their rubber stamp; hence the loan.
It's obvious that Sonoro's management also thought that they were getting the loan this year. They knew of their financial situation -that they would be cash poor by December 1st- and would have done a Private Placement in October had they thought this would have become reality (when the share price was trading above $0.40). They were actually buying additional shares for themselves on the open market right into the second week of November. Why would they do that if they didn't think they had the loan? Nevertheless, they will still get the loan, but it will now be in the new year. I don't see anything that would preclude the new government from rubber stamping the agreement, especially since this new government is all about bringing investments into Iraq.
ALBANIA
What can I say other than that this is a frustrating exercise. After a very short negotiation session, Richard convinces an Albanian company to partner up with him, where they provide all of the capital to bringing the plant into production. The Albanian company dives in with both feet. Then we run into problems which is beyond their control and could not have been foreseen: Ash Cloud restricting their travelling to Europe, Albania Government's new policy on Environmental Assessments, power outages due to Albania's changing to a new power grid system, etc. All the while, their JV partner sinks money into this, without ever doing any due diligence in ensuring that the Sonic Reactor can do what Sonoro claims it can.
So the machine is now up and running, but requires an oil cooler to run 24/7. Before the JV Partner pays anymore money, they are now sending the batch samples to a lab to confirm what Sonoro has been stating all along. They then thereafter want to first find a buyer for their batch samples, before they spend the additional $400,000 needed for the oil cooler. It will get done, but this will delay the process by a few more month. As far as I am concerned, it's been delayed by so much thus far, what is an extra 3 months?
I suggest for the future that they no longer get into these types of JVs. Instead, once the pilot plant is up and running, and the world sees what the Sonic Reactor can actually do, they get into the business of selling the Reactor to customers with a royalty program attached to the amount of barrels of oil upgraded using the Reactor (much like the EIG agreement). In other words, don't upgrade the oil yourself, but get a piece of the action for every barrel that is upgraded. As such, they won't have to worry about capitalisation to building new plants, finding buyers, or be dependent to the price of oil. You might make less, but at least it's guaranteed without the headache.
NEW PRICE TARGETS
Although they were most probably caught off-guard and now require an equity financing, this should be their last. $5 Million should last them something like 10 months, if you include a drilling program in Iraq. It will provide them with enough cash, that they won't have to force those 18-cent warrants once the share price appreciates over 36 cents again. My prediction is that the share-price will stay around the 25 to 27-cent level for the next week or so. As we get closer to the closing of the placement, it will go back up to 30 cents, and over 30 cents in the new year. Once they get the Iraqi rubber stamp, it will trade in the 35 to 45-cent range. The Albanian news will finally make it break out.
Earlier this year (March 2010), I had predicted 20 cents by the end of summer and 50 cents by Christmas, but that was based on Albania being on-line. Given the recent delays, we'll probably now only see that price around Easter. Nevertheless, that's a 100% appreciation from this price level. Management is committing at least $1 Million of their own money in this Private Placement, so you know that they believe it's going to happen. Where it is trading today, will most probably the cheapest share price we'll see from here on in.
Don't Worry about ARMO
Although Bankers signed a deal with the ARMO Refinery, ARMO isn't big enough to handle all of Bankers' oil. Besides, the oil will only be getting heavier from here on in (lower API), which will create some difficulties for them. Sooner of later, they will be coming to Sonoro, once it has been established that the technology works.
Looking at the local press in Albania, it would appear that they've had a rash of power interuptions as of late. Unfortunately, the PetroSonic Generator requires electricity to function. I would assume that this most probably affected their operation.
Regardless of the above, Iraq is where it is at. Developments in Iraq will be 100 times bigger than anything we could ever expect out of Albania. I guess we'll have to wait until next week to see where they are at, once they release their 3rd Quarter and Management Discussion & Analysis.
Please refer to my Aug 9th post:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=53120670
Re: Canaccord
Yes, Canaccord had received 4 Million shares in the Private Placement. However, they had sold 1.5 million in July (to be covered with the shares from the PP) and sold the remainder thereafter. However, they were big buyers when SNV was trading in the 20-cent range.
Re: Questions
If someone is exercising their warrants is the company required to report this? Would this be reported anywhere?
Yes, it will be reported within their next Quartely results.
During that time the stock price was never allowed to run and it wasn’t until all of their shares had been sold that the company released a PR that caused a rise in stock price.
The share price was at $0.34 when Macquarie removed all of it's offers (Thursday, Sept. 23rd around 3:30PM). It immediately jumped, closing at $0.38. The following day, it went as high as $0.43. On Monday Sept. 27th, Mr. Al Shamsi was appointed to the BoD, and the price hit $0.46.
As the warrants have an exercise price of $0.18 per share it seems to fit with Macquarie Capitals MO of dumping at a profit to reduce risk as opposed to holding on to discover what happens with this company.
I would guestimate that at least 2 Million warrants have been exercised thus far. In July, just over 1.5 million shares were shorted. These were covered when the shares from the Private Placement became unrestricted August 3rd. In October, 1 million shares were shorted; presently there are none. I would conclude that these 'shorts' were covered with the warrants.
I also ask this question because, despite what Sonoro says, $2 million dollars is not a lot of cash, especially when they have hired additional people and are looking to undertake a major exploration effort.
$2 Million is enough to pay for the present salaries, rent and daily expenses. The 3 Shell Executives are presently not on the payroll. They have given their notice to Shell, but as of today, they are still working for Shell.
The result would be Sonoro doesn’t have to expedite the expiry of the warrants, the investor decides to exercise at their own discretion. The resulting impact would be more dilution and about $8 million dollars in our account (something a bank would like to see before offering financing at the levels we require).
Correct: As the share price moves higher, the warrants will be exercised on their own, without Sonoro having to force anyone. However, I don't believe any bank will care as to how much money they have in their present account; it will depend on how much future revenue Iraq will bring. We are not looking for a few million-dollar loan; rather a few hundred-million dollar. What do you think would happen to the share price if they got a billion-dollar loan?
My gut tells me the PR about Iraq didn’t produce the desired results (.50 cent stock price) so Wadsworth’s plan needed to be modified. When a company releases information (like the Iraq PR), halting a stock is a great trick for bringing additional attention to a company about to release big news. The only problem was the PR wasn’t as well received as they had planned.
My guess is that the Iraqi news was already taken into account into the share price when it left the 20-cent range. Please see my post from August 9th, when the share price was trading at 9 cents:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=53126126
These were my comments at the time: "I'm more interested in comments made by Richard Wadsworth during the AGM regarding SNV acquiring heavy oilfields of their own (northern Iraq maybe???). If he is successful in that endeavour, then the share price will really take off."
If on August 9th, I had already guessed northern Iraq, what do you think the Market was thinking when he appointed the four Executives to the team 6 weeks later?
I don’t have the tools to research my gut feeling, however, my hope is that one of you has the ability to see how many shares ‘Anonymous’ has sold since the last run in price. If my suspicion is right, once we reach the 18 million share mark news will be quick to follow…. In addition to a jump in share price.
Unfortunately, I don't know either how many Macquarie has sold thus far.
RE: Financing for Iraq
Here's your banker:
-------------------------------------------------------------------
H.E. Hamad Abdulla Al Shamsi
(Chairman Essdar Capital Holdings Limited, Essdar Capital Limited and Essdar Capital Managers Limited)
H.E. Hamad Abdulla Al Shamsi is one of the UAE’s most prominent business figures. H.E. Al Shamsi started his career in the Investment Department of the Abu Dhabi Investment Authority (ADIA) after which he joined the Private Department of the Late His Highness Sheikh Zayed Bin Sultan Al Nahyan as Head of Global Investments.
H.E. Al Shamsi is currently Chief Executive Officer of International Capital Trading LLC whose objectives encompass investments and large scale real estate development projects. H.E. Shamsi is also Chairman of Al Qudra Holding, a leading private strategic investor in the Emirate of Abu Dhabi, and is a Director of the Board of several leading institutions engaged in commercial, financial and service based activities such as Etihad Airways, Finance House and Qatar telecom (Qtel). In addition he is a member of the Board of Directors of the Abu Dhabi Council for Economic Development and Chairman of the council’s Business Environment Committee.
H.E. Al Shamsi is a graduate in Business Administration from Al Ain University, UAE and holds an MBA majoring in Finance and Banking from Southeastern University, Washington DC, U.S .
-------------------------------------------------------------------
I'm expecting the following news releases next, in no particular order:
1) Iraqi financing and construction dates
2) Albanian pilot plant
3) Update on SonoOil JV
Financing for Iraq
When I called the Company last time, I queried as to how they were going to raise the cash for Iraq. I was told debt financing. Hence the last addition to the Board; he's our connection to the big banks in the UAE. They are not contemplating any additional equity financing.
I stand by my previous prediction: As soon as the Albania results are in, the share price will settle in the 50-cent range. If they can add contracts upwards of 10,000 bod in Albania, it will go over $1.
Just Amazing
Follow a stock long enough, and you get to know exactly when an Insider buys or sells, just by his trading pattern.
Adam bought just as I suspected:
http://www.canadianinsider.com/coReport/allTransactions.php?ticker=snv
All of the News is Already Out
When they release the press release on the opening of the Albanian plant, it's not going to be any new news that will prevent the Insiders from buying at the present time, and right up to the day of.
They already released the news within their Q2 Financials that they expect the plant to come on-line in the Fall of 2010. As such, since they already reported this, they are not blacked out from buying right up to opening day.
The deal with the acquisition of Iraqi oil fields was news that prevented them from buying more. It was obvious that something was in play when they announced the 4 heavy hitters to the Executive Management team. However, they were prevented from buying during this time until that deal was announced. The moment that deal was announced, they started buying... and they will be allowed to keep on buying right up to the opening of the Albanian plant.
Speaking of Insider buying, did anyone notice the following trade that just went through a few minutes ago?
15:02:58 V 0.335 0.02 3,000 59 PI 124 Questrade
15:02:58 V 0.33 0.015 52,500 59 PI 79 CIBC
15:02:58 V 0.325 0.01 43,000 59 PI 1 Anonymous
Insiders Keep on Buying
Again today, they bought another 132,000 shares, in four transactions, for a total of $41,490.
http://www.tmxmoney.com/HttpController?GetPage=SearchInsiderTrade&Language=en&Submit=Submit&QuerySymbol=snv&x=40&y=2
They just haven't stopped buying since August. Maybe they are on to something?
Yes, I have recently talked with the Company.
Richard Wadsworth is presently conducting a promotional tour. On Tuesday and Wedsnesday, he was in Toronto, meeting with several brokers and fund managers to promote the company.
Today he arrived in London (England), again to meet with several people over the next few days.
Although Albania is a bit behind schedule (dealing with one delay after another: From the Ash Cloud to the Albanian Government last-minute requirement of an Environmental Assessment before they were allowed to proceed with the plant construction), things are progressing nicely, as they are now in the final stages.
I stand by my targets from my August 21st post: http://investorshub.advfn.com/boards/read_msg.aspx?message_id=53585428
At the time, I stated that:
* It would remain within the 20 to 25-cent range for the remaining two weeks in August, with dips below 20 cents. Looking back, it remained within this range, with a dip to 19 cents.
* It would surpass the 30-cent mark once they announce the subsequent addition to the team. I didn't expect this to happen until after Labour day. The share price surpassed this level with the addition of the 4 heavy hitters to the Executive Management team on September 22nd.
* That it would trade as high as 40 cents by the end of September. Granted, I assumed that the Albanian results would have been out by then; nevertheless, I did say that the sky would be the limit once they acquired their own oil fields. The share price hit 46 cents after their oil field announcement.
Although the threat of the warrants remains, I had calculated that the Company is flush with cash and that there would be no need to call them in at the present time. This was confirmed to me after having talked with the Company.
As such, I still believe that the stock will be trading in the 50-cent range by years-end; I don't mean touching, rather consolidating within that range.
Originally, I had predicted that the share price would be over $1 with contracts -similar to the Albanian venture- upwards of 25,000 bod. However, given the latest acquisition of its own oil fields, I predict that they would only need 10,000 bod to get the share price over $1.
Obviously the Insiders know that things are only going to get better from here on in, because they have been buying like crazy over the past several weeks:
http://www.canadianinsider.com/coReport/allTransactions.php?ticker=snv
Quote - INK RESEARCH:
Between October 4th and 5th, Sonoro Energy (SNV) CEO Richard Wadsworth bought 207,000 shares in the public market between the prices of 33.5 and 34.5 cents. The CEO now holds 3,133,000 shares of the company representing 2.6% of the stock's quoted market value based on SEDI filings.
The insider with the largest beneficial ownership of company stock based on SEDI filings is executive board chair Adam Sumel who holds 3,170,455 shares.
Warrants:
When I talked with the Company, they said there is no plan to call in the warrants at the present time, since they presently don't need the cash.
Iceberg Order
...the public sees only a small portion of the order at a time--just as the 'tip of the iceberg' is the only visible portion of a huge mass of ice.
http://www.investopedia.com/terms/i/icebergorder.asp
http://www.tmx.com/en/trading/products_services/iceberg_orders.html
The $0.33 support is actually an iceberg by Macquarie.
You can either subsribe to Stockwatch and pay a monthly fee, or register with Vantagewire for free ( http://www.vantagewire.com/portfolio?qm_page=80150&qm_symbol=SNV:CA ). With Vantagewire, you will get real time sales with the houses doing the buying/selling.
Looks like Macquarie Capital is back
However, this time it's with an iceberg on the bid.
The Market Has No Idea as to the Significance of this Deal
It would seem that many are confused over the news release, as was I, so I called the Company.
To answer the first question:
" is oil considered a by-product from the production of asphalts?"
Yes, bitumen & heavy oil are the by-product in this case.
Other points of interest:
* Berkeley is one of the few companies that operated in the area before the fall of Saddam, and is still there.
* They will be building a facility in an area where present-day plants are half-destroyed, and surrounded by a present-day production of 300,000 bod.
* They will also be allowed to export (sell internationally) their products/by-products. Many companies are restricted in this regard.
Give it a couple of weeks for the Market to absorb the significance of this play. It is obvious that Richard is not done with the Middle-East; I am expecting a few more annoucements for additional projects.
Please check this site after 8 PM tonight. I predict that Insiders bought some more shares today:
http://www.tmxmoney.com/HttpController?GetPage=SearchInsiderTrade&Language=en&Submit=Submit&QuerySymbol=snv
This deal will tower over the Albanian & the Shell (SonoOil) deals. Nevertheless, as I stated once a long time ago, the Market has taken show-me-the-money attitude towards SNV, due to its past history. I assume that once the Albanian plant exits the testing phase, and starts producing (i.e. generating cashflow), that the Market will change its attitude.
I told you Richard wasn't done after he had appointed Bin Jarallah. All one had to do is look at his past practice over at Bankers to see what he would do here next.
However, as the press release states, everybody is in position now. Albanian project press release should be out within the next couple of weeks.
Re: Exercing of Warrants
Quote: InterestedParty99
MHT, thanks for the info... Do you figure we'll have the same kind of challenge when the warrents are exercised?
The shares are presently in new hands. Which means it has a new strong base.
Going through the Q2 Financials, you will notice that the Company is flush with cash. There is really no need to call in the warrants at the present time.
Unless they are forced, the investors from the P/P will most probably not exercise all of their warrants until March 2012; maybe a bit here and there, but not the whole boatload of them.
Once the share price is over $1, the redemption of the warrants will only have a very minute effect on the share price. Once the Company announces contracts totalling something like 10,000 bbod, the share price will immediately go north of $1.
However, that is only my opinion. But I haven't been too far off with previous guestimates.
Today's Events
MacQuarie (House 11), who acquired 18 million shares during the private placement, and a constant seller from the $0.09 level right up to now, made a cross to itself at 15:30 this afternoon for $0.34, and then for the first time since August 3rd disappeared from the offer.
With MacQuarie not holding the share price back anymore, it quickly ran up thereafter. If MacQuarie is actually gone, the share price will run to its full potential.
I called it a month ago:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=53585428
All you have to do is see what Richard Wadsworth did over at Bankers. He's employing the same strategy over here: Adding heavy hitters to the team.
Next news release should be on Albania; I expect it within the next two weeks.
I'd give it another week for an update.
The Fall season officially starts in 4 days.
One of the Funds has been selling consistently over the past 6 weeks. However, if it is who I think it is, it still has quite a few million shares left.
Q2 Results + MD & A
I'm sure you are aware that they released their Q2 Financials on August 27th. It's really interesting to see how they hide the one-liners within the document. Those one-liners say so much but with so few words, that unless one conducts some proper due diligence (i.e. reading in-between the lines), one will miss the message entirely.
Take for instance:
The Company is pursuing oil and gas resource opportunities in the Middle East and internationally. The Company plans to leverage its technology to acquire such resources.
My translation:
They are looking to acquire some oil fields of their own in the Middle-East, trading their technology for the acquisition of the land.
The Company is also constructing its first PetroSonic facility in Albania which continues and is expected to commence operations in the Fall of 2010.
My translation:
The Fall season officially kicks-off September 21st. That's pretty much in-line with my previous predictions on the start-up date of operations (see my previous posts). Hopefully we'll have some news on Albania by the end of September or beginning October.
The Company has recently decided to pursue continuous flow testing of its SonoAsh technology as a result of encouraging SonoAsh results.
"Continous flow" sounds like field testing to me. If that is the case, then Nalco has moved out of the lab (as a consequence of encouraging "lab" results) and has hooked up the generator to an actual power plant (how else would you get continuous flow?), in an effort to determine how the generator would handle a 24/7 operation.
There are still a few more things they revealed (or hinted at), but I will leave those for another time.
RE: Target
I’m wasn’t expecting any progress news on Albania in August, and if you really think about it, other than making an addition to the Board of Directors, there really hasn’t been any significant news.
I’m expecting an update on the Albania JV sometime during the mid to final week of September (after the plant has been in operation for the testing phase). Once that process has been completed and deemed successful, the next stage would be to find a buyer/distributor for the upgraded oil and by-product asphalt.
Although I was expecting them to take the month of October to look for one, it would now appear, with the latest announcement, that they’ve secured one and are presently in negotiations with him. I don’t expect an announcement on this front until at least after Labour Day.
While at Bankers Petroleum (in the early days), I believe Richard also brought in some heavy hitters in the form of Madeleine Albright (former Secretary of State) and General Wesley Clark to assist the then start-up company. General Clark still sits on the BoD at Bankers’: http://www.bankerspetroleum.com/index.php?page=board_of_directors . As such, I don’t believe Richard is done yet with SNV’s team. If he is to repeat his past actions, expect another heavy hitter to join the team in the near future.
Absent the Board appointee news, the share price should have languished between the $0.09 & $0.12 level, because the investors of the Private Placement were starting to sell their shares to recoup their investment, while riding the warrants. Approximately 4 Million shares from the Private Placement were sold prior to August 10th.
It’s kind of interesting to see the movement of the share price and the corresponding volume over the past two weeks. They announced the addition to the Board on August 10th prior to Market Open. Once the Market opened, Adam Sumel bought some additional shares.
Just under 3 Million shares were traded that day, with the price touching 17 cents. I highly doubt that a business deal with the Saudi would have been secured at that point; otherwise Adam would have been precluded from trading until the details of the deal had been made public. Nevertheless, it’s obvious that they had entered business negotiations. The share price increased on speculation as to what this new board member would contribute to SNV.
Over the next few days, the share price creeps up, as people try to figure out exactly what the appointment signifies. On the 12th, SNV becomes the most active traded stock on the TSX Venture, which causes a completely different crowd to monitor the stock. The stock price hits 20 cents.
On the 17th, around 1:30 PM ETD, the Canadian Government announces that SNV will be receiving a grant. Within an hour, the stock price hits 27 cents, before falling back down to 23.5 when the Market realises that it was only for $285K.
It’s the Alberta Research Council Grant –not the National Research Council- that would be in the millions, but so far no word. We should have heard from the ARC by June, which leads me to conclude it isn’t going to happen. As such, the Mirex project is now more than ever on the backburner.
On August 18th, the Edmonton Journal carries the story (http://www.edmontonjournal.com/business/Firms+nanotechnology+research+centre+boost/3410365/story.html?cid=megadrop_story) , and a new investor base is being introduced to the Company. As a result thereof, 5 Million shares trade the following day. Same thing happened last year, after the Calgary Herald covered the story regarding the Shell joint-patent for SonoOil: The share price touched $0.28 in record trading.
Since the latest news release regarding the Board appointee, 23.2 Million shares (or 19% of the total float) have traded with an average price of 20.2 cents. In order to get a floor of 20 cents, we would still need another 7 million shares (25% of the total float) to trade above the 20-cent level.
As I am not expecting any major news within the next two weeks (other than maybe another addition to the BoD), the share price may retreat to a low of 18 cents. However, if there is any news, it will stabilise in the 20-cent range.
I’m also monitoring the overseas buying. Look for UBS and HSBC to be in that category. So far, HSBC has bought 1+ Million shares with an average price of 17.2 cents. UBS has only bought a couple of hundred thousand.
As far as my targets go, I can see it remain in the present range over the next two weeks, with dips below 20 cents. Once they announce a deal with the Saudi or another addition to the Board, the share price can surpass the 30-cent mark, and trade as high as 40 cents once the Albania results are released at the end of September.
Nevertheless, there will be a lot of pressure to get it above the 40 to 45-cent range, because once the shares trade above the $0.36 level for a period of 20 business days, the Company can call in the warrants. If that happens, another 44.6 Million shares will be hitting the Market, and the share price will most probably dive right back down to 25 cents.
Should the Company decide not to call in the warrants, the share price could hit 50 cents by the end of the Fall. Once they’ve secured contracts upwards of 25-30,000 bbd, the share price will go over $1, especially if the timeline to get them to production is very short. Nevertheless, I don’t expect this to happen until next Spring.
In addition, the joint patent filed with Shell should be made public in November. This announcement will really get the Market’s attention.
Last, but not least, there is also Richard’s vision in acquiring his own oil fields. If that were to happen, then the sky will be the limit.
RE: MHT, what is your opinion on SNV price
Back in February/March of this year (after the Albanian deal was announced: http://investorshub.advfn.com/boards/read_msg.aspx?message_id=47413795), I stated that the price should approach 20 cents this summer, and hit 50 cents by the late fall. However, that was before the Ash Cloud delayed things substantially.
I now don't believe it will hit 20 cents by the end of August, but we'll see 50 cents by year's end.
I'm more interested in comments made by Richard Wadsworth during the AGM regarding SNV acquiring heavy oilfields of their own (northern Iraq maybe???). If he is successful in that endeavour, then the share price will really take off.
As for the analyst's prediction of $0.71, I don't believe a word of it. He's basing that price on income from SonoAsh, which has yet to leave the R&D hemisphere.
Nevertheless, it should get interesting from here on in. The initial start-up phase (testing) of the Albanian plant should be completed by the end of September. Although they predicted that the annual profit from that one machine alone will be $900,000, they will know for sure in October.
If that one machine proves to be economically viable, then they'll have numerous customers lined up. I'm hoping for contracts of 25,000 bbd by the end of the year.
Add to that, in November, the SonoOil patent will be made public. That news alone should lift the shareprice.
News from the advances of the SonoAsh division should be available by next winter.
Then there is the Environmental division. Thus far EIG has only paid $250,000 of the $1.5 Million. Waiting to see when they are going to pay the remainder.
RE: Let's hope this is the week.
I don't believe this to be the week for any news release; a couple of the Pros still have a few more million shares to unload. I don't believe SNV management will release any news until the Pros are done, because they will just drive the price down again to 9 cents (until they have recouped their initial investment).
Below you will find the names of the professionals, firms and insiders who bought into the Private Placement. So far, over the past week, Macquarie has sold 1+ Million; Canaccord 500,000+; and Haywood (Eric Savics???) 1 Million. To limit their risk/exposure, they are going to try and recoup the amount they spent in acquiring the shares from the PP, while riding the warrants.
As such, might as well place your bid orders in at $0.09 because that's the lowest they will let it go for.
+++++++++++++++++++++++++++++++++++++++++++++++++++++++
TSX Venture Exchange has accepted for filing documentation with respect to a
Non-Brokered Private Placement announced March 4 and March 9, 2010:
Purchase Price: $0.09 per share
Warrants: 44,585,995 share purchase warrants to purchase 44,585,995 shares
Warrant Exercise Price: $0.18 for a two year period
Number of Placees: 44 placees
NAME No. of Shares Dollars
-----------------------------------------------------------------------------------------
MACQUARIE CAPITAL MARKETS 8,525,560 $767,300
Craig Brenner SR Vice President, Institutional Sales 555,555 $ 50,000
Robert Colcleugh Managing Director, Calgary 1,111,111 $100,000
Dan Cristall Executive Director, Calgary 1,111,111 $100,000
Ron D'Ambrosio Moved to TD 222,222 $ 20,000
Carly Dean Vancouver 111,111 $ 10,000
Jesse Janzen Vancouver 222,222 $ 20,000
Chris Naprawa Toronto 1,111,111 $100,000
Michael Nininger Toronto 1,111,111 $100,000
Harry Pokrandt SR Vice President, Toronto 1,666,666 $150,000
Alex Rothwell Head Cdn Equities, Toronto 555,555 $ 50,000
Donato Sferra Toronto 555,555 $ 50,000
Tim Sorensen Head of Institutional Sales 555,555 $ 50,000
David Washburn London 555,555 $ 50,000
--------- --------
17,970,000 $1,617,300
HAYWOOD
Eric Savics Vancouver 1,110,000 $ 99,900
CANACCORD FINANCIAL 4,000,000 $360,000
LEEDE FINANCIAL MARKETS 555,555 $ 50,000
INSIDERS
Adam Sumel Chairman 555,555 $ 50,000
Brian Farrell CFO 278,000 $ 25,000
Richard Wadsworth CEO 1,870,000 $168,300