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I like EERG at these prices. Recent insider buys indicate confidence in the 2012 development plan. Are you still researching or playing this one?
Here is the most recent financial data I found:
Results of Operations for the Six-Month Period Ended June 30, 2011 vs. 2010
We recognized net income of $2,348,363 for the six-month period ended June 30, 2011, compared to $3,713,044 for the six-month period ended June 30, 2010. A discussion of the key components of our statements of operations and material fluctuations for the six-month periods ended June 30, 2011 and 2010 is provided below.
Revenues associated with the sale of oil and gas totaled $52,805 for the six-month period ended June 30, 2011, compared to $74,485 for the six-month period ended June 30, 2010. A comparison of the 2011 and 2010 oil sales is as follows:
The 2011 sales relate primarily to our 50% working interest in the Hardy 7-9 well, which was acquired in June 2010 and placed on production in September 2010. In January 2011, the well encountered mechanical problems and was taken off of production due to a parted rod string. The well was repaired and returned to production in March 2011. The well was once again taken off of production in mid-April due to mechanical issues. The well bore was repaired in May 2011, but the well remained shut-in through June 30, 2011 due to inclement weather conditions.
In January 2011, we began recognizing revenue associated with our small, working interest position in the Aarestad 4-34 well, which was completed in December 2010.
The 2010 sales relate to revenues received from our 5% overriding royalty interests in certain properties located in Saskatchewan, Canada. We sold our overriding royalty interests to Ryland in June 2010.
In April 2010, we sold our gross overriding royalty interest in approximately 264,000 net acres within an area of mutual interest located in southeastern Saskatchewan to Ryland. In addition to cash consideration totaling $2.9 million, we received 2,145,883 shares of Ryland’s common stock, which were valued at approximately $874,973 as of the date of sale, and an assignment of Ryland’s 100% working interest in the Hardy Property (approximately 4,480 net acres located in Saskatchewan and related equipment). At the time of the sale, the Hardy Property had an estimated fair market value of $238,681. We recognized a gain in the amount of $4,735,253 during the six-month period ended June 30, 2010 related to the sale.
Also in April 2010, we sold our working interest in approximately 700 net acres located within the Pebble Beach prospect to Rover Resources Inc. for cash consideration totaling $1 million. Because the sale represented a significant reduction of the full-cost pool that is not subject to amortization, the Company reallocated the costs of the pool among the properties included within the pool based on relative fair market value at the time of the sale. The Company recognized a $509,934 gain on the sale of the Pebble Beach acreage during the six-month period ended June 30, 2010.
In May 2011, we sold half of our working interest in our Spyglass Prospect to a third party. Net proceeds from the sale totaled $3,777,793, of which $320,833 was receivable as of June 30, 2011. The receivable was collected in August 2011. Because our working interest in the Spyglass Prospect represented a significant portion of our full-cost pool that is not subject to amortization, we reallocated the aggregate cost of the full-cost pool, not subject to amortization, among the various properties included within the pool, based on their estimated relative fair market values at the time the sale occurred, and recognized a gain in the amount of $3,402,000.
Also in May 2011, we sold a portion of our working interest in the Pebble Beach Prospect for net cash consideration totaling $227,079. The net cash consideration was recorded as a receivable as of June 30, 2011 and collected in August 2011. Because the sale did not represent the disposal of a significant portion of non-amortizable full-cost pool at the time of the sale, the net proceeds received were recorded as a reduction of the full-cost pool, not subject to amortization.
Lease operating expenses associated with the Hardy 7-9 well totaled $115,691for the six-month period ended June 30, 2011. We did not recognize any lease operating expenses during the six-month period ended June 30, 2010 as the Hardy 7-9 well had not yet been re-worked and returned to production.
General and administrative expenses decreased from $452,402 for the six-month period ended June 30, 2010 to $344,906 for the six-month period ended June 30, 2011. The net decrease is primarily due to the following:
Payroll and benefits related expenses decreased by $156,359, as a result of staff reductions that occurred in November 2010.
Land management fees for the six-month period ended June 30, 2011 declined by $23,910 from the same period in 2010, as a result of switching from a full-time resource to a shared we share with AEE.
We recognized foreign exchange losses totaling $28,584 relating to currency fluctuations between the US Dollar and the Canadian Dollar. The majority of our transactions related to our Hardy Property are transacted in Canadian Dollars. No such losses were incurred during the comparable period in 2010.
In May 2011, we paid fees totaling $17,595 to a certain director as compensation for serving on the Special Committee that was formed to review the proposed merger transaction with AEE. This is the only time that we have ever compensated any of our directors through a cash payment.
Insurance expense increased by $16,120 related to the operation of the Hardy 7-9 well. We incurred no such cost during the six-month period ended June 30, 2010 as the well had not yet been returned to production.
Travel related expenses increased by 10,403 from 2010 to 2011 in connection with our proposed merger with AEE and related activities.
Professional fees increased from $238,426 for the six-month period ended June 30, 2010 to $649,154 for the six-month period ended June 30, 2011. Professional fees increased due to the following reasons:
We incurred legal fees totaling $390,266 during the six-month period ended June 30, 2011, primarily related to our proposed merger with AEE. Legal fees for the six-month period ended June 30, 2010 totaled $153,875. The 2010 fees related to a proposed merger with Ryland. The merger with Ryland was never completed.
We also incurred consulting fees totaling $153,192 during the six-month period ended June 30, 2011, the majority of which related to business valuation services obtained in connection with our proposed merger with AEE. Consulting fees for the six-month period ended June 30, 2010 totaled $52,550 and consisted of fees associated with the obtaining of a fairness opinion related to our contemplated merger with Ryland in March 2010. The Ryland merger transaction was never completed.
Accounting fees for the six-month period ended June 30, 2011 totaled $105,696, compared to $32,000 for the six-month period ended June 30, 2010. The increase is primarily due to additional auditing services obtained in connection with our proposed merger with AEE, and related SEC filings, as well as fees incurred as a result of outsourcing of all accounting related activities beginning in November 2010.
Depreciation, depletion, and amortization expense for the six-month period ended June 30, 2011 consisted almost entirely of depletion expense related to the Hardy 7-9 well, which was returned to production in September 2010. No such depletion expense was recognized during the six-month period ended June 30, 2010. Depreciation expense decreased from $23,580 for the six-month period ended June 30, 2010 to $4,406 for the same period in 2011, primarily due to the fact that the majority of our office equipment, furniture, and leasehold improvements became fully depreciated in December 2010.
We recognized dividend income totaling $34,532 related to our holdings of Crescent Point common stock, which were acquired in June 2010. No such dividend income was recognized for the comparable period in 2010, as we had not yet acquired the Crescent Point stock.
We recognized Canadian income taxes totaling $892,112 in connection with the sale of certain gross overriding royalties to Ryland in June 2010.
I like EERG at these prices. Recent insider buys indicate confidence in the 2012 development plan. Are you still researching or playing this one?
Here is the most recent financial data I found:
Results of Operations for the Six-Month Period Ended June 30, 2011 vs. 2010
We recognized net income of $2,348,363 for the six-month period ended June 30, 2011, compared to $3,713,044 for the six-month period ended June 30, 2010. A discussion of the key components of our statements of operations and material fluctuations for the six-month periods ended June 30, 2011 and 2010 is provided below.
Revenues associated with the sale of oil and gas totaled $52,805 for the six-month period ended June 30, 2011, compared to $74,485 for the six-month period ended June 30, 2010. A comparison of the 2011 and 2010 oil sales is as follows:
The 2011 sales relate primarily to our 50% working interest in the Hardy 7-9 well, which was acquired in June 2010 and placed on production in September 2010. In January 2011, the well encountered mechanical problems and was taken off of production due to a parted rod string. The well was repaired and returned to production in March 2011. The well was once again taken off of production in mid-April due to mechanical issues. The well bore was repaired in May 2011, but the well remained shut-in through June 30, 2011 due to inclement weather conditions.
In January 2011, we began recognizing revenue associated with our small, working interest position in the Aarestad 4-34 well, which was completed in December 2010.
The 2010 sales relate to revenues received from our 5% overriding royalty interests in certain properties located in Saskatchewan, Canada. We sold our overriding royalty interests to Ryland in June 2010.
In April 2010, we sold our gross overriding royalty interest in approximately 264,000 net acres within an area of mutual interest located in southeastern Saskatchewan to Ryland. In addition to cash consideration totaling $2.9 million, we received 2,145,883 shares of Ryland’s common stock, which were valued at approximately $874,973 as of the date of sale, and an assignment of Ryland’s 100% working interest in the Hardy Property (approximately 4,480 net acres located in Saskatchewan and related equipment). At the time of the sale, the Hardy Property had an estimated fair market value of $238,681. We recognized a gain in the amount of $4,735,253 during the six-month period ended June 30, 2010 related to the sale.
Also in April 2010, we sold our working interest in approximately 700 net acres located within the Pebble Beach prospect to Rover Resources Inc. for cash consideration totaling $1 million. Because the sale represented a significant reduction of the full-cost pool that is not subject to amortization, the Company reallocated the costs of the pool among the properties included within the pool based on relative fair market value at the time of the sale. The Company recognized a $509,934 gain on the sale of the Pebble Beach acreage during the six-month period ended June 30, 2010.
In May 2011, we sold half of our working interest in our Spyglass Prospect to a third party. Net proceeds from the sale totaled $3,777,793, of which $320,833 was receivable as of June 30, 2011. The receivable was collected in August 2011. Because our working interest in the Spyglass Prospect represented a significant portion of our full-cost pool that is not subject to amortization, we reallocated the aggregate cost of the full-cost pool, not subject to amortization, among the various properties included within the pool, based on their estimated relative fair market values at the time the sale occurred, and recognized a gain in the amount of $3,402,000.
Also in May 2011, we sold a portion of our working interest in the Pebble Beach Prospect for net cash consideration totaling $227,079. The net cash consideration was recorded as a receivable as of June 30, 2011 and collected in August 2011. Because the sale did not represent the disposal of a significant portion of non-amortizable full-cost pool at the time of the sale, the net proceeds received were recorded as a reduction of the full-cost pool, not subject to amortization.
Lease operating expenses associated with the Hardy 7-9 well totaled $115,691for the six-month period ended June 30, 2011. We did not recognize any lease operating expenses during the six-month period ended June 30, 2010 as the Hardy 7-9 well had not yet been re-worked and returned to production.
General and administrative expenses decreased from $452,402 for the six-month period ended June 30, 2010 to $344,906 for the six-month period ended June 30, 2011. The net decrease is primarily due to the following:
Payroll and benefits related expenses decreased by $156,359, as a result of staff reductions that occurred in November 2010.
Land management fees for the six-month period ended June 30, 2011 declined by $23,910 from the same period in 2010, as a result of switching from a full-time resource to a shared we share with AEE.
We recognized foreign exchange losses totaling $28,584 relating to currency fluctuations between the US Dollar and the Canadian Dollar. The majority of our transactions related to our Hardy Property are transacted in Canadian Dollars. No such losses were incurred during the comparable period in 2010.
In May 2011, we paid fees totaling $17,595 to a certain director as compensation for serving on the Special Committee that was formed to review the proposed merger transaction with AEE. This is the only time that we have ever compensated any of our directors through a cash payment.
Insurance expense increased by $16,120 related to the operation of the Hardy 7-9 well. We incurred no such cost during the six-month period ended June 30, 2010 as the well had not yet been returned to production.
Travel related expenses increased by 10,403 from 2010 to 2011 in connection with our proposed merger with AEE and related activities.
Professional fees increased from $238,426 for the six-month period ended June 30, 2010 to $649,154 for the six-month period ended June 30, 2011. Professional fees increased due to the following reasons:
We incurred legal fees totaling $390,266 during the six-month period ended June 30, 2011, primarily related to our proposed merger with AEE. Legal fees for the six-month period ended June 30, 2010 totaled $153,875. The 2010 fees related to a proposed merger with Ryland. The merger with Ryland was never completed.
We also incurred consulting fees totaling $153,192 during the six-month period ended June 30, 2011, the majority of which related to business valuation services obtained in connection with our proposed merger with AEE. Consulting fees for the six-month period ended June 30, 2010 totaled $52,550 and consisted of fees associated with the obtaining of a fairness opinion related to our contemplated merger with Ryland in March 2010. The Ryland merger transaction was never completed.
Accounting fees for the six-month period ended June 30, 2011 totaled $105,696, compared to $32,000 for the six-month period ended June 30, 2010. The increase is primarily due to additional auditing services obtained in connection with our proposed merger with AEE, and related SEC filings, as well as fees incurred as a result of outsourcing of all accounting related activities beginning in November 2010.
Depreciation, depletion, and amortization expense for the six-month period ended June 30, 2011 consisted almost entirely of depletion expense related to the Hardy 7-9 well, which was returned to production in September 2010. No such depletion expense was recognized during the six-month period ended June 30, 2010. Depreciation expense decreased from $23,580 for the six-month period ended June 30, 2010 to $4,406 for the same period in 2011, primarily due to the fact that the majority of our office equipment, furniture, and leasehold improvements became fully depreciated in December 2010.
We recognized dividend income totaling $34,532 related to our holdings of Crescent Point common stock, which were acquired in June 2010. No such dividend income was recognized for the comparable period in 2010, as we had not yet acquired the Crescent Point stock.
We recognized Canadian income taxes totaling $892,112 in connection with the sale of certain gross overriding royalties to Ryland in June 2010.
I like MNLU since its 52 week high is over $1, they have a pending merger and it recently hit bottom and bounced. I am holding until I see some more information. Potential concerns would revolve around their ability to finance operations.
I like FPP's portfolio of properties. Should be a good one to continue to hold into 2012.
Properties
Block A-49 and Block 6 Field, Andrews County, Texas is a producing oil field located in Andrews, Texas. The Company owns a 74%-100% working interest in five producing oil wells and three injection wells producing out of the Devonian and Ellenburger formations at an approximate depth of 7,000 to 9,000 feet.
South Vacuum Field, Lea County, New Mexico is a producing natural gas field located outside of Hobbs, New Mexico. The Company owns a 25%-50% working interest in three producing gas wells producing out of the McKee formation at a depth of approximately 11,600 feet.
Spraberry Trend, Midland County, Texas is a producing oil and natural gas field located 6 miles east of Midland, Texas. The Company owns a 6% to 15% working interest in five oil and natural gas wells producing out of the Spraberry formation at a depth of approximately 7,000 feet.
Flying M Field, Lea County, New Mexico is a producing oil and natural gas field located outside of Hobbs, New Mexico. The Company owns a 39.25% working interest in two oil and natural gas wells producing out of the ABO formation at a depth of approximately 8,300 feet.
Sulimar Field, Chaves County, New Mexico is a producing oil field located 35 miles north east of Artesia, New Mexico. The Company has a 100% working interest in one oil well producing out of the Queen formation at a depth of approximately 1,800 feet.
Apache Field, Caddo County, Oklahoma is a waterflood project producing from the Viola/Bromide formation. The Apache Bromide Unit is located approximately 5 miles west of the town of Apache and 25 miles north of Lawton, Oklahoma. The Company has a 25.23% working interest in the unit which consists of 11 producing oil wells and nine water injection wells.
North Bilbrey Field, Lea County, New Mexico is a producing natural gas field located outside of Hobbs, New Mexico. The Company owns a 50% working interest in the North Bilbrey #7 federal well producing out of the Atoka formation at approximately 13,000 feet.
Longwood Field, Caddo Parish, Louisiana is a producing natural gas field located north of Greenwood, Louisiana. The Company owns a 12.22% working interest in two natural gas wells producing out of the Cotton Valley formation at a depth of approximately 7,800 feet.
Lusk Field, Lea County, New Mexico is a producing oil and natural gas field located outside of Hobbs, New Mexico. The Company owns an 87.5%-100% working interest in two oil and natural gas wells producing out of the Bonesprings and Yates formations at depth ranging from approximately 3,400 feet to approximately 10,000 feet and a 14.06% working interest in one natural gas well producing out of the Morrow formation. The Company also owns an 87.5% working interest in one water disposal well. Working interest in Sections 15 and 14.
Loving North Morrow Field, Eddy County, New Mexico is a producing natural gas field located 2 miles west of Loving, New Mexico and 12 miles south east of Carlsbad, New Mexico. The Company owns a 4.3% - 12% working interest in three natural gas wells producing out of the Morrow formation from a depth of approximately 12,300 feet to 12,450 feet.
Chickasha Field, Grady County, Oklahoma is a waterflood project producing from the Medrano Sand. The Rush Springs Medrano Unit is located approximately 65 miles southwest of Oklahoma City, Oklahoma. The Company has a 20.64% working interest in the unit which consists of 21 producing oil and natural gas wells and 11 water injection wells.
Hutt Wilcox Field, McMullen and Atascosa Counties, Texas is an oil and natural gas field located approximately 60 miles south of San Antonio, Texas producing from the Wilcox sand. The Company has a working interest in 14 oil wells.
West Allen Field, Pontotoc County, Oklahoma is a producing oil and natural gas field located approximately 100 miles south of Oklahoma City, Oklahoma. The Company has a working interest in 52 leases or a total of 224 wells, the leases have multiple wellbores and the Company has plans to participate in the future recompletion of behind pipe zones.
Giddings Field, Fayette County, Texas is in the Austin Chalk field located in various counties surrounding the city of Giddings, Texas. In February 1998, the Company acquired a 97% working interest in the Shade lease. The lease currently has three producing oil and natural gas wells with a daily production rate of approximately 120 Mcfe net to the Company. Oil and natural gas are produced from the Austin chalk formation. The Company will evaluate whether additional reserves can be developed by use of horizontal well technology.
Big Muddy Field, Converse County, Wyoming is a producing oilfield located approximately 30 miles south of Casper, Wyoming. The Company owns a 100% working interest in the Elkhorn and J.C. Kinney lease which consists of three oil wells producing out of the Wallcreek and Dakota formations at depths ranging from approximately 3,200 feet to approximately 4,000 feet.
Whisler Field, Campbell County, Wyoming is a producing oilfield located approximately 15 miles north east of Gillette, Wyoming. FieldPoint Petroleum owns a 20% working interest in the Whisler Unit which consists of two wells producing out of the Minnelusa formation at depth of approximately 8,340 feet to 8,400 feet.
Serbin Field, Lee and Bastrop Counties Texas is an oil and natural gas field located approximately 50 miles east of Austin and 100 miles west of Houston. The Company has a working interest in 72 producing oil and natural gas wells. Oil and natural gas are produced from the Taylor Sand at depths ranging from approximately 5,300 feet to approximately 5,600 feet; it is a 46-gravity oil sand.
Tuleta West Field, Bee County Texas, is a natural gas field located North of Corpus Christi, Texas. The Company owns a 5% working interest in one natural gas well producing from the Wilcox formation at a depth of approximately 12,000 feet.
Regarding broke ass oil company's there are many lol. I actually look for distressed companies that with access to projects and capital can be turned around. That is one of the major objectives of this board actually.
I will look at PCFG more. I have a strong history in precious metals but believe the gold bull market has had its run and oil is now in the hot seat. Some of my executive broker associates at Canaccord and other firms feel the same way which is why I am 97% oil now.
Love to hear more of your ideas.
Thanks EM that is a good summary. This is certainly an interesting bottom play. It seems they are waiting for funding to be able to make the next big development.
Is the AEXP merger still going through as far as you know?
Do they have funding sources either JV, debt or equity funding?
TIA
Is the company communicating to any of the shareholders at this point? Any info to go on? TIA
I agree I like this one mid to long term as oil prices continue to climb. Their Bakken holdings are very strong.
In its 2008 report, the USGS estimated that there were 3 billion to 4.4 billion barrels of recoverable oil in the Bakken. Recently Continental Resources' (CLR) CEO said there approximately 24B barrels of recoverable oil in the Bakken using current technology. Various other reports have claimed anywhere from 167B to 500B barrels of potentially recoverable oil exist in the Bakken. It is unclear what the actual end figure will be, but it seems likely that technology will eventually improve, making more and more of the oil in the Bakken recoverable. It is already clear that the 2008 USGS estimate was an underestimate. The CLR CEO’s estimate is probably accurate (or close) for the current technology. However, big oil companies tend to plan for the future. If they buy now, they may find that they are eventually able to recover several times the originally forecast amount. It’s almost like purchasing an annuity for its current worth with a huge extra trust fund thrown in free as part of the bargain. A lot of big oil companies likely find this possibility appealing.
Many of the mid cap oil companies in these plays are likely good long-term investments. They are also the most likely buyout targets. A few of the most attractive of these are Continental Resources Inc. (CLR), Whiting Petroleum Corp. (WLL), and Denbury Resources (DNR).
Continental Resources has 901,370 net acres in the Bakken (68% de-risked) and many more net acres in other fields throughout the U.S. Its average EUR per ND Bakken well is 603,000 Boe. It has 23 operating rigs. The chart below indicates its growth in proved reserves. The chart to its right shows the approximate distribution of CLR’s proved reserves.
I have played this one in the past successfully. Any idea why the downward pressure?
Current production, great assets to liability ratio and only 55M shares issued and outstanding this one seems like it should be on the way up???
LOL that is funny I haven't seen that in a couple years :) You should consider posting your oil & gas stock DD on my board (see link in signature). All are welcome.
Thanks AT, to share ideas on this board can they be mid term plays or just short term like within a week?
Thanks for the detailed share of your DD on Norse Energy. I think the big game changer would be the lift in New York. I am working with a geologist / executive where we raised $12m for 30k arces in NY but it is currently on hold as well. Very tough on business.
Thanks for the heads up. I don't play TSX much but there seems to be some great opportunities. I will keep this one on my radar.
GP what I do like here is it is an emerging play. The stock seems to move on pretty light volume and they are in a hot area.
Do you know if they are considering joint venture or working interest programs to finance their leases or have they indicated they are mainly focused on being a land / lease bank for the time being?
Do you have any bullets or links that support your personal valuation of these leases?
Thanks for supplying me with some DD.
Small Cap Bakken Stocks: Watch Them Like a Hawk
With the recent acquisition of Brigham Exploration, there has been a spark of interest back in the Bakken. Small cap stocks are seeking some increased interest and benefits from this buyout. We like small cap stocks in the oil industry, and at this moment you should too.
Find additional research and charts here: http://turnkeyoil.com/2011/10/27/small-cap-bakken-stocks-watch-them-like-a-hawk/
GM thanks for the feedback. I will dig through the filings a bit and see what I can find out. It is moving on low volume and that is a positive sign. I may be interested in increasing a position.
Here is the outline of the current business / holdings I pulled from the filing:
We are a natural resource exploration company engaged in the exploration, acquisition and development of oil and gas properties in North America. We are currently focused on our interests in oil and gas prospects located in Louisiana and Mississippi.
Until April 22, 2010, acting primarily through our joint venture with Petrohawk, we had been concentrating on exploring and developing certain natural gas leases covering approximately 2,904 net acres in the East Holly Field of De Soto Parish, in the State of Louisiana. In early 2010, we entered into a purchase and sale agreement for the sale to EXCO Operating Company, LP, a wholly owned subsidiary of Exco Resources (NYSE - XCO), of our interest in the Haynesville Shale portion of the East Holly Field leases for $28,159,604. This agreement, which closed on April 22, 2010 with an effective date of January 1, 2010, provided for the sale of all of our Company's right, title and interest 100 feet below the base of the Cotton Valley formation in the East Holly Field. The base of the Cotton Valley formation has been defined to be 100 feet below the stratigraphic equivalent of the Cotton Valley formation.
We have retained all of the rights in all formations above the base of the Cotton Valley formation in the East Holly Field, encompassing 2,255 net acres with an estimated 65 net potential drilling locations. The five recent wells drilled by the original operator through the Hosston and Cotton Valley zones to the Haynesville Formation calculate as productive.
Based on the available data and economics, we plan to drill wells in the Hosston/Cotton Valley formations, possibly with a joint venture partner, in 2011 (subject to favourable natural gas pricing), and also to evaluate the gas production value of the Upper Bossier formation on the DeSoto Parish leases. We expect that these formations will provide continual solid pay with little risk and predictable development costs.
Our Buena Vista Prospect is located along the Gulf Coast Salt Basin in the Buena Vista area of Jefferson County, Mississippi. Based on proprietary information gained from previous drilling, we believe an extension of the Haynesville Shale similar to the discovery region in Louisiana may exist there.
Our Company has entered into a joint area development agreement with American Exploration to jointly develop contiguous acreage comprising the Buena Vista Prospect. In early April, 2010, we, as operator, issued an Authority for Expenditure (AFE) for the Burkley-Phillips No. 1 Well that has now been drilled on the Prospect for the purpose of evaluating the Haynesville Formation (Shale). The AFE estimated the drilling cost to be approximately $8,650,000 and completion cost to be approximately $4,900,000 for a total completed well cost of approximately $13,550,000.
American Exploration was unable to fund its 20% share of the estimated total well costs of the Burkley-Phillips No. 1 Well. As a result, American Exploration has forfeited its right to a 29% working interest in the well and in the Buena Vista Prospect in favor of our Company. American Exploration will continue to be entitled to receive a 20% working interest in the well and the Prospect after completion (subject to compliance by American Exploration with all other terms and conditions of our letter agreement and related joint operating agreement with American Exploration). If the merger is approved and proceeds as proposed, American Exploration's 20% working interest in the well and the Prospect after completion will be owned by Mainland Resources, the resultant merged entity.
We were previously required to pay 72% of the total cost to drill and complete the Burkley-Phillips No. 1 Well, for a 45.9% working interest. Due to American Exploration's inability to make its contribution in response to the cash call, we will now pay 90% of the total cost of the well to earn a 72% working interest, and Guggenheim Energy Opportunities, LLC ("Guggenheim") will pay 10% of the total cost to earn an 8% working interest.
Drilling of the Burkley-Phillips No. 1 Well commenced on July 21, 2010 and the well reached the projected total depth of 22,000 feet on December 27, 2010. Production casing was set on the well shortly afterwards, in early January 2011. We have engaged Stephen Schubarth, President of Schubarth, Inc., to design and supervise the fracture treatment ("frac") of the Burkley Phillips No. 1 Well.
The Burkley Phillips No. 1 Well was logged by Schlumberger. In addition, a 21-foot core was captured to a depth of 20,415 feet and has since undergone a series of analyses by Corelab that will be used in conjunction with the log results to further evaluate the reservoir and assist in completion design efforts.
Looking for small cap oil plays. This one looks interesting as a bottom play. Any DD is appreciated.
Recent financial data:
Financial Condition and Changes in Financial Condition
The Company had no revenues from the sale of oil and gas in the six months ended, June 30, 2011.
Consolidated operating expenses for the 2nd quarter ended June 30, 2011 amounted $ 80,529 compared to $ 157,505 for the prior year's 2nd quarter. The reduction in consolidated operating expenses was primarily due to a reduction in; Field labor for approximately $14,000, Lease costs for $12,000, Maintenance for $4,500, Utilities for $5,000, Advertising $6,700, Legal for $30,000, Management fees for $4,000 and Travel for $7,000.
The reduction in expenses over the prior year is attributable to the a reduction in activity the Company is experiencing with the work programs on the existing properties as the company awaits for approval from the Railroad Commission for commercial use of the Transportable Production System, and resulting cash flow and additional financing to support the Company's growth.
Overall field operation expenses for the 2nd quarter totaled $22,664 compared to $56,148 in prior years 2nd quarter.
June 30, 2011 2nd quarter general expenses totaled $57,865 compared to $101,357 for prior year's 2nd quarter ended June 30, 2010. . Interest charges were reversed in the quarter due to a over accrual of interest charges on convertible notes in the prior quarters.
Legal fees were reduced in the June 30, 2011 2nd quarter compared to the prior year's 2nd quarter due to costs associated with lasts years reverse merger and start up of operations.
All other costs were in line with the current level of activity at the company and consistent with the prior quarter.
Other Income/(Expense) Items
During the 2nd quarter ended June 30, 2011, and 2010 2nd quarter there were no Other Income/(Expense) items, however in the prior year's first quarter period the following items occurred.
Expense on Assumption of Liabilities on Acquisition
On a year to date basis there was an expense on assumption of liabilities on acquisition which was booked in the period ended March 31, 2010.
On the effective date of the acquisition, additional paid in capital was increased by $ 8,358,000.This was offset by $ 8,400,000 to record the basis in Intergrated Oil and Gas Solutions Inc. An expense of $ 633,279 was then recorded to recognize the assumption of liabilities on the acquisition.
Loss from share issue on debt conversion
On the effective date of the conversion, additional paid in Capital was increased by $ 1,791,000. A loss of $ 1,440,000 was then recognized to match the conversion to the book value of the convertible debenture.
These charges were booked in the period ended March 31, 2010.
Net Loss for the 2nd quarter ended June 30, 2011 amounted to $80,529 compared to a Net Loss of $157,505 for the priors years 2nd quarter and on a year to date basis the net loss for the six months ended June 30, 2011 was $203,456 compared to a net loss $2,283,047 for the prior year's period ended June 30, 2010.
Here is UAPC's latest press release:
RADIANT TO BUY LOUISIANA PRODUCTION
April 19, 2011
Radiant Oil & Gas, Inc. (OTC:ROGI), a Houston-based oil and natural gas producer, agreed to buy production in Louisiana from WLE, Inc. for $50,000 per flowing barrel as it seeks to expand production in the region.
The cash and stock transaction involves three fields on approximately 3,000 acres, and includes a Texaco legacy field with 15 pay sands that has produced since 1929; Radiant will be the operator. The properties have current output equivalent to about 150 barrels of oil per day and are near existing Radiant
acreage. The deal is expected to close by June 1.
In addition to immediately establishing cash flow for our company, which will aid in funding our organic program, we are establishing a partnership with a 50 year-old well-servicing company that owns completion rigs and can provide oilfield services through its 40-person strong company. Radiant will receive a 25% discount to market when choosing to use these services.
“We are extremely pleased about this acquisition and the dynamics developed in allowing a costcompetitive advantage. This partnership combines Radiant’s geosciences and engineering staff with WLE’s 50 years of hands-on well-servicing experience,” said John Jurasin, President and CEO at Radiant. “This acquisition strengthens our land position in Louisiana, leverages our operating capabilities and infrastructure and will contribute to future reserve and production growth. It will pave the way for
future acquisitions in Louisiana and Texas at a competitive cost advantage.”
Radiant Oil & Gas is an independent oil and gas exploration and production company with properties in Louisiana and Texas. More information about Radiant is available at ww.radiantoilandgas.com.
Contact:
Radiant Oil & Gas
Investors:
Chris Heath, 832-242-6000
Results of Operations
Radiant seeks to acquire, develop and produce oil and natural gas properties along Gulf Coast Texas and Louisiana. We seek to acquire and develop properties with proved undeveloped reserves, or properties located in legacy fields where large volumes of hydrocarbons have been produced. These fields are also in close proximity to existing infrastructure, allowing us to quickly get new production to market.
One of our primary strategies is to gather leasehold positions in fields that have produced large volumes of hydrocarbons, and find additional development opportunities while applying modern technologies. Our management team has extensive geological, geophysical, technical and engineering expertise in successfully developing and operating properties in our core areas of operation.
Rampant Lion . During the initial drilling of the 758 B-1 well, we had an agreement with Challenger Minerals, Inc. to be carried up to 105% of the AFE. The operator of this well is Medco Energi US, LLC (“Medco”). The AFE had significant cost overruns, and Medco is netting our production revenue against the AFE balance. Rampant Lion owns a before payout WI of 11.25% and NRI of 6.625%. JOG Holdings, owned by John M. Jurasin, also owns an ORRI in this well.
From recent filings: http://ih.advfn.com/p.php?pid=nmona&article=48915046
MC you still watching or playing this one?
SG have you worked up a profile that highlights their current holdings and projections or plans?
Are they conducting operations at this point? Who have you spoken to at the company?
GS I recently gained some interest in MNLU again. Is there any DD available on their current portfolio?
Hey JS anything interesting happening here?
Those are both on the TSX (Canada exchange?)
What other oil & gas stocks are you holding or considering?
Thanks watching it now. I thought you were saying 450M barrels not dollars. Thanks for pointing that out.
Do you expect them to post any facts or reports on their website?
I don't see any past PR's do you have a link?
Thanks for your help :)
RC can you tell me where you are reading about the amount of oil reserves.
Also where it indicates how much current production they have and their drilling program plans?
TIA!
Yeah its an interesting balance between prices taking off and the economy tanking when prices get to high. However the facts are clear we are out of cheap oil and we are still not in a strong economy and we are trading at $90. If the economy shows signs of life next year (which I think it will) then prices are going to break out. $225 as JR calls it may be a bit much but I am banking on a solid 50% move from here.
Very interesting DD Geo thanks for your links and information. I am looking at this one closely now. What interests me is what means do they have to develop their current portfolio and what prospects are there for new acquisitions.
I like the recent action here. Chart broke out today with a strong move to nearly $3.
Thanks for the information about SIOR. I am looking for new small cap spec oil & gas plays and this one looks interesting. Low volume but it moves pretty easy which is interesting.
I think we will still see some fluctuation in prices but we are not too far off from moving into triple digits again. Possibly even in 2011.
Lots of great opinions on what might happen in 2012 but I am making all my bets that oil prices are going to break out next year.
Some even arguing a double from here:
Jeff Rubin forecasts in his book Why Your World Is About to Get a Whole Lot Smaller: Oil and the End of Globalization that the price of oil will reach $225 a barrel by 2012, thanks to increasing demand and decreasing affordable supply. Jeff has been named Canada's top economist 10 times. Click here to read more about this research.
http://www.thegreeninterview.com/jeff-rubin-bio
.017 x .0195 currently. Not a bad spread but I guess it could be a lot tighter but that would require more bid support which drops off after .017 to .014. Continuing to watch.
The longer term outlook for oil:
Energy analyst Charles Maxwell of Weeden & Co says by 2020, when we have 1.5 percent increases in demand each year and 0.5 percent declines on the downside, then we’ll really be in a fix. At that time, I’m looking at $300 a barrel in money of the day.
http://turnkeyoil.com/2010/11/18/300-per-bbl-oil-by-2020/
Companies like UPL will see huge % gains when oil breaks out again. Here is some interesting commentary:
Jeff Rubin forecasts in his book Why Your World Is About to Get a Whole Lot Smaller: Oil and the End of Globalization that the price of oil will reach $225 a barrel by 2012, thanks to increasing demand and decreasing affordable supply. Jeff has been named Canada's top economist 10 times. Click here to read more about this research.
http://www.thegreeninterview.com/jeff-rubin-bio
Sounds like a good plan. The volume has dried up here this afternoon. Guess we will see what tomorrow brings.
From what I have researched many of these larger natural gas players are actually just shutting in production and slowing drilling programs of proven reserves while they wait for prices to start their move forward. $4 is still a very tough proposition.
Moving into oil now allows them to improve their cash flows and proven reserves while holding on to the natural gas.
I am long on SD but will also mention has a lot of upside here and meets lots of my criteria for a mid to long term hold. I am posting DD here: http://investorshub.advfn.com/boards/board.aspx?board_id=11742