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(hmmmmm... apologies but the data spacing still did not come out right. hahaha!!! i need some training for "IHUB post submitting" ... but that will be on a different day. at this moment: back to work on my real job!)
Proposal 1: The election of directors.
FOR Against
Nominees:
Donald W Prosser 413,852,956 25,366
Charles B Davis 413,852,956 25,366
John Herzog 413,852,956 25,366
Charles L Gamber 413,852,956 25,366
William Stewart 413,852,956 25,366
Proposal 2: Ratification of the appointment of Ronald R Chadwick PC. as the company’s independent certified public accountants.
413,853,332 (83.24%) 25,000 (00.005%)
Proposal 3: Approval of the reverse split of 100 to 1 of the outstanding common shares.
413,822,601 (83.23%) 30,121 (00.006%)
25,500 shares abstaining (00.005%)
About the Company: Arête Industries, Inc. is a publicly traded company. The Company is the operator of a gas gathering system and is in the process of buying oil and gas properties in the Rocky Mountain Region of the United States.
Arête Industries, Inc. Announces Results of Annual Shareholder's Meeting
04/13/2011 | 08:35 am
Print
Arête Industries, Inc. (OTC-QB: ARET) announced that on April 11, 2011, it held its Annual Meeting of Shareholders. For more information on the following proposals, see the Company's proxy statement dated March 17, 2011, the relevant portions of which are incorporated herein by reference.
In connection with the Annual Meeting, April 11, 2011, tabulated proxies representing 413,878,322 shares, or 83.25%, of the total outstanding shares voted in the following manner:
Proposal 1: The election of directors.
FOR Against
Nominees:
Donald W Prosser 413,852,956 25,366
Charles B Davis 413,852,956 25,366
John Herzog 413,852,956 25,366
Charles L Gamber 413,852,956 25,366
William Stewart 413,852,956 25,366
Proposal 2: Ratification of the appointment of Ronald R Chadwick PC. as the company's independent certified public accountants.
413,853,332 shares voting for (representing 83.24%)
25,000 shares voting against (representing 00.005%)
Proposal 3: Approval of the reverse split of 100 to 1 of the outstanding common shares.
413,822,601 shares voting for (representing 83.23%)
30,121 shares voting against (representing 00.006%)
25,500 shares abstaining (representing 00.005%)
About the Company
Arête Industries, Inc. is a publicly traded company. The Company is the operator of a gas gathering system and is in the process of buying oil and gas properties in the Rocky Mountain Region of the United States.
Statement as to Forward Looking Statements.
Certain statements contained herein, which are not historical, are forward-looking statements that are subject to risks and uncertainties not known or disclosed herein that could cause actual results to differ materially from those expressed herein. These statements may include projections and other "forward-looking statements" within the meaning of the federal securities laws. Any such projections or statements reflect Arête's current views about future events and financial performance. No assurances can be given that such events or performance will occur as projected and actual results may differ materially from those projected. Important factors that could cause the actual results to differ materially from those projected include, without limitation, Arête's inability to meet the conditions to acquiring its current business including providing financing to provide for servicing current and new contracts; unexpected difficulties encountered in the investment market, competition, government regulation or other action, the ability of management to execute its plans to meet its goals and other risks inherent in their businesses that are detailed in their Securities and Exchange Commission ("SEC") filings.
Arête Industries, Inc.
Charles Gamber, CEO
info@areteindustries.com
303-427-8688
www.areteindustries.com
© Business Wire 2011
farmerdave, i think sometimes i am reading too much into the press releases and this might be one of those examples; however, a few points from my perspective:
(in view of these points, keep in mind this response to oilbull's comment to me: i have done some due diligence, but i would not profess myself to be fully diligent with my investigation-following of this stock. just like most, i have my excuses ... and i am sure that i have missed some info.)
back to the press release:
a. i had not seen montana mentioned by the company with respect to the location of the DNR/Tindall properties of interest. (hmmm... how did i miss that one?)
b. regarding the use of the words "start" in the context of "immediate", "long term", or whatever, in the press release ... i suspect was just the choice of words ... into which i think i am simply reading too much. these words, in whichever way they are used, don't seem to materially affect anything significant. most likely not important; just curious wording.
c. based on conversations with the company i was under the impression that the $10MM bank loan was to be used for, at least, some of the drilling effort, which, after commencement of production coming from new drilling, said drilling effort would soon become self-funding. (hmmm... maybe i missed this one also.)
d. the two most fascinating items, to me, are the rather immediate completion of 'new' due diligence on an OK property ... and the mention of a joint venture. this tells me these guys are blow'n and go'n. this is good.
in summary, if these guys have approx 200 PUD's ... I will not say that $7.5MM loan is chump change, but, in due time, it will be a relatively smaller amount.
the big wildcard to me --- as i read between the lines --- will be the ratio of oil-to-gas in their total reserves base (contained within the PUD locations), and, by extension, that same ratio in this new OK stuff and any other future properties.
we will soon know this ratio from the soon-to-be-released Ryder Scott report regarding the DNR/Tindall properties, but, i don't think this report will include any of the volumes --- or categorizations --- from the new OK and any other longer term projects.
i am quite sure that such things will make a substantial material difference in the nearer future.
signing off. good night USA.
i have taken the recent press release and summarized, in some chronological order, below. some posters have already noted particularly some of these stated event details and dates. a few of these items --- all positive, it seems to me --- are either new (to me) or maybe a bit ambiguous ... (or, maybe, i have not been following close enough hahahaha!!) i have hi-lighted in red color these particular items:
26 Feb 2011: Signing date, “Definitive Agreement”: for purchase of Wyoming, Colorado, Kansas, and Montana oil and gas properties (No Oklahoma properties noted here.)
07 April 2011: Finalization date for Ryder Scott Consultants LLC reserve study
11 April 2011: We are in the due diligence process on additional properties in Oklahoma and expect to have a letter of intent for their purchase by the end of the week of April 11, 2011. "We expect that the acquisition of these assets will be the start of our long-term development plan for Arête," stated Donald W. Prosser, Chairman of Arête Industries, Inc.
11 April 2011: Annual stockholders meeting
12 April 2011: Effective date for 100:1 reverse split
12 April 2011: Date on which the Company expects to finalize purchase of the (DNR/Tindall?)properties
Note: A summary of Ryder Scott Consultants reserve study, and related purchase and sale agreement documents, will be published upon closing of the transaction.
15 April 2011: All details and documents will be filed by way of form 8-K within three days of the transaction date (12 April 2011).
Note: We have completed our evaluation of the properties and leases and have a development plan in place for the drilling of at least five wells and a possible joint venture on some Wyoming property during 2011
Middle May 2011: We have submitted an application for an (additional?) $7,500,000 line of credit at a bank and expect to be able to have final details on this credit facility by the middle of May 2011.
as noted (redundantly) in some of my previous posts, it will be difficult to estimate the full value of ARET, post-DNR/Tindall-purchase for several reasons ... one of the main one being that the ratio of oil vs gas, reserves in the ground is unknown. at least this will be the case until the details of Ryder Scott reserves study is released. however, this question of estimation will be further compounded by the purchase of these additional properties ... but, these are the kind of problems that ARET stockholders will be fortunate to have.
hmmmm.... i suppose all will be known in good time. more and more interesting (and postive) for ARET.
eurotiger, kloock did such an estimate several days ago. (am not sure of the exact price that he used nor of the post number.) for the amount of info that is publicly known, i believe he did quite the reasonable job. (you might be able to get his formula from the post and input your own variable values.)
regarding your request of an estimate at price of $100/bbl: using a specific value for a particular parameter is certainly something one can do ... but, also, it is something that loses meaning.
the reason:
(1) certainly we see that the day-to-day price of oil and gas commodities change ... and, lately, such prices have been changing dramatically because of the usual factors, in addition to the increasing middle east unrest along with the continuing decline of the dollar, etc, etc ...;
(2) the in-the-ground oil and gas reserves --- which we hope to see ARET soon drilling and soon commencing with production-sales-profits-etc --- will require several years to fully produce. [very roughly, i estimate this life-of-field, that is, life of production for the entire reserves volumes (approx 200 PUD's), to be something between 5 and 20 years, maybe more.] you can see where this is going, yes? during that life-of-field, obviously, there could be wild swings in the price of that commodity ... which is why one of the biggest challenges with completing a meaningful audit is to get a proper estimate of the commodity price ... for that ENTIRE period of time!
and, in the context of the full audit, there are several other significant variables which must be also be "estimated" ... simply because the general approach is "time-tested" and one must start some where with some estimate necessary for business decisions (which is one reason why oil and gas audits tend to be rather conservative ... which in itself is another reason to be optimistic about ARET!!)
in short, one can say a meaningful audit, from ARET's perspective, is one that is accepted by the current lending institution and produces the desired result: money! but, you can see where estimates --- as necessary as they might be --- can be a real can of worms. hahaha!
ps: the USA oil commodity price that is usually posted is for next-month-closing sales WTI; however, Mid-Continent oil prices --- which would be much more relevant to ARET reserves --- are approx $10-20 lower on a per barrel basis ... laws of supply and demand, you know. gas prices are more local.
piece by piece. another brick in the wall ... or, perhaps more appropriate for oilfield jargon: another stand of drillpipe on the string, or, blow'n' and go'n ... or, turn'n to the right, drill'n to TD ... etc, etc, etc!
is this new?
(full document is found at: http://www.faqs.org/sec-filings/110330/ARETE-INDUSTRIES-INC_10-K/arete10k12311010x311_330011.htm )
Exhibit 31.1
CERTIFICATION
I, Charles L. Gamber, certify that:
1. I have reviewed this annual report of Arête Industries, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report;
4. The small business issuer's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as 4efined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the small business issuer and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting; and
5. The small business issuer's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of the small business issuer's board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer's ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reporting.
Date: March 30, 2011
/s/ Charles L. Gamber
Charles L. Gamber
President
Read more: http://www.faqs.org/sec-filings/110330/ARETE-INDUSTRIES-INC_10-K/arete10k12311010x311_330011.htm#ixzz1IBSUqOTq
panther, you are exactly correct as i see it: kloock is giving his best guess, under the circumstances, but, there are too many variables, of unknown magnitude, necessary to give a better estimate with high level of confidence.
i will add, however, that there are many positive signs regarding the activities and plans of this company, presented here on this thread and other places (on more than several occasions) to suggest strongly that kloock is estimating in the right direction.
panther, i have found generally that conducting a petroleum reserves audits to entail a substantial amount of 'interpretation', that is to say, the comprehensive process has its 'scientific' and 'artistic' components. such artistic components are guided largely by the auditor's personal experience.
such interpretation style is necessary, most often, in situations where data ambiguity is high. (read: data quality/quantity is low; however, keep in mind the actual definition of a PUD.) in this particular situation, where approximately 200 PUD's are involved, such data ambiguity issues are likely in at least some of these PUD locations, especially in view of the fact that this effort comprises several different reservoirs. (it would not make sense, to me, to even guess at what percentage of data ambiguity is here in play.)
the point being that, for what the investment community most likely knows specifically, i see no reason to believe that the ryder-scott audit, with respect to 'what's in those wells' (as you say), will be higher or lower significantly than what had been previously estimated. yes, there is no compelling reason, at this moment, apparent to me as to why it should be lower, or higher, or the same.
what will change most likely, from what i can see, is the ultimate estimated value of the reserves volumes, total volumes or otherwise defined. this will be the result of the changes, from the time of the previous audit, of various things but mostly: a) commodity prices; and, b) drilling and operational costs.
in closing, i suspect that if the previous audit was conducted by the same audit company, the estimated reserves volumes of the new audit will be most likely similar to those of the previous effort (with adjustments of reserves produced since that time); otherwise, i can only guess at what any differences could be ... so such differences, at equal probability, could be lower or could be higher, or, could be zero.
PUBLIC SERVICE ANNOUNCEMENT for Arete Industries: for those interested in additional recent (10 March 2011) Arete DD ... for (GBPS) £155 you can be the recipient of the following:
(URL: http://www.companiesandmarkets.com/Company-Profile/arete-industries,-inc.-(aret)-oil-gas-deals-and-alliances-profile-532257.asp)
Arete Industries, Inc. (ARET) - Oil & Gas - Deals and Alliances Profile (Global Data)
Market: Energy and Utilities
Published Date: 10 Mar 2011
Report Type: Company Profile
Country: Global
Number of Pages: 14
View Table of Contents
Arete Industries, Inc. (ARET) - Oil & Gas - Deals and Alliances Profile
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Arete Industries, Inc. (ARET) - Oil & Gas - Deals and Alliances Profile - Arete Industries, Inc. (Arete) is a publicly traded oil and gas energy company. It is engaged in the business of oil and gas development in United States. The company's core activities rely on the development of traditional oil and gas projects, alternative and renewable energy resources and technologies. It invests in the traditional oil and gas development with a focus on the reworking of capped wells in existing fields, known reserves, and conservation of resources by exploiting under-developed existing fields. The Company owns the TOP Gathering System located in Campbell County, Wyoming and transports approximately 900,000 mcf of gas per day and has a capacity up to three times as much gas. It is also involved in efforts to purchase oil and gas production, interests in energy infrastructure such as pipelines and distribution. The company operates in Niwot, Colorado.The company is headquartered at Westminster in Colorado, the US.
Arete Industries, Inc. (ARET) - Oil & Gas - Deals and Alliances Profile provides you an in-depth data and trend analysis of the company's mergers and acquisitions (M&A) and financings. The report provides detailed information on M&A, Equity/Debt Offerings, Private Equity, Venture Financing and Partnership transactions registered by the company over a five year period. The report portrays detailed comparative data on the number of deals and their value subdivided by deal types, markets, and regions, besides highlighting the company's major recent financial deals.
Data presented in this report was derived from our proprietary in-house Oil & Gas eTrack deals database and primary and secondary research.
Report Scope
- Financial Deals - Analysis of the company's financial deals including M&A, Equity/Debt Offerings, Private Equity, Venture Financing and Partnerships.
- Deals by Year - Chart and table displaying information on the number of deals and value reported by the company by year, for a five year period.
- Deals by Type - Chart and table depicting information on the number of deals and value reported by the company by type such as M&A, Equity/Debt Offering etc.
- Deals by Region - Chart and table presenting information on the number of deals and value reported by the company by region for North America, Europe, the Middle East and Africa and South and Central America.
- Deals by Sector - Chart and table showing information on the number of deals and value reported by the company, by sector.
- Major Recent Deals - Information on the company's major recent financial deals. Each such deal has a brief summary, deal type, deal rationale, deal financials and Target Company's key financial metrics and ratios.
- Business Description - A brief description of the company's operations.
- Key Employees – A list of the key executives of the company.
- Important Locations and Subsidiaries – A list and contact details of key locations and subsidiaries of the company.
- Key Competitors – A list of key competitors of the company.
- Key Recent Developments – A brief on recent news about the company.
Reasons to Buy
Get detailed information on the company's financial deals that enable you to understand the company's expansion/divestiture and fund requirements.
- The profile analyzes the company's financial deals by region, by year, by business segments and by type, for a five year period.
Understand the company's business segments' expansion / divesture strategy
- Deals are presented from the company's core business segments' perspective to help you understand its corporate strategy
Access detailed information about the company's recent financial deals that enables you to understand the key deals which have shaped the company
- Major recent deals are presented in detail, which provides information on each deal's brief summary, deal type, deal rationale, deal financials and Target Company's key financial metrics and ratios.
Equip yourself with detailed information about the company to identify potential customers and suppliers.
- The profile analyzes the company's business structure, locations and subsidiaries, key executives and their biographies and key competitors.
Stay up to date on the major developments affecting the company
- Recent developments in the company presented in the profile help you track important events.
Gain key insights into the company for academic or business research.
- Key elements such as break up of deals by categories and information on detailed major deals are incorporated in the profile to assist your academic or business research needs.
The “especially positive” indications in the PR of 13 Mar: As stated previously, I had taken already the leap of faith that Arete was committed to make their best efforts to finalize: a) all SEC filings; b) new audit; c) bank debt financing; and, 4) DNR acquisition. Of course, these are not yet completed and there is no way for me (anyone) to say, with 100% certainty that all such things will come to pass; however, with this PR all such things appear to be well on the road to realization. To be direct: assign a 90%+ probability chance of success to all such things transpiring in the nearest future.
This would great news and, as such, very welcome!
Regarding another matter, which had been mentioned previously and was also emphasized in this PR: this caught me a bit by surprise --- very positive surprise --- as it stated: “We have a development plan that we are in the process of completing and will announce the plan in April 2011”.
Essentially, this is the detailed plan for DEVELOPMENT DRILLING / COMPLETION / FACILITIES CONSTRUCTION / PIPELINE CONNECTION / PRODUCTION / MARKETTING (SALES) plan, commonly referred to as the FDP or Field Development Plan (which, in this case, might be referred to more precisely as the Fields Development Plan … because there are several fields involved.)
This is not a simple few-page document which one constructs during spare lunch hour time. This is a comprehensive plan, including, but not limited to (as they say), detailed projections of all CAPEX operations, production schedules, economic forecasts, etc, ect, etc. Most likely, this FDP is for numerous new wellbores … possibly for as many as all the number of PUD’s included in the new reserves audit.
I advise investors to not take “lightly” the reference to this document.
Three additional “GOOD” comments regarding this doc: 1) the lenders, I am sure, required such a document so that they can see that there is a plan in-place to produce petroleum … so that there will be revenue to get their loan re-paid; 2) this documents further high-lights that Arete is a “serious” company and that they have a plan in place to develop their newly acquired assets --- a document for which, I will assume, they would NOT spend 10’s of thousands of dollars to write if they were not a serious company; and (finally, but of the largest significance for the stockholders), 3) the FDP represents the MIDDLE and LONGer TERM PAYOFF POTENTIAL for investment in this company (for these DNR/Tindall assets)!! (Remember, one of the company objectives is to continue further with additional acquisitions … so, DNR/Tindall properties are planned NOT to be the ultimate “LONGER” term trophies.)
I can only guess at this time; however, based on the above (and reading between the lines), I would not be surprised to see new wells being drilled within the coming months …. and, perhaps, new production a few months afterwards.
Note: the FDP will give you the “best” estimate regarding when “big revenues” will start to come in for all of the company’s efforts. And, with this FDP in place --- for all practical purposes --- it will not be long after the completion of the financing and the acquisition that drilling will commence on the PUD locations and that soon afterwards there will be additional significant revenues. (Sub-note: most likely, the investor community will not be privy to the details of the FDP; however, much of the financial info from the FDP will find its way into regular company reporting.)
Yes, the completion --- and announcement --- of the audit, financing and acquisition will be a big psychological boost which will boost materially the share price; however, the actual petroleum production, more precisely, the revenues from such production, as we all know, will be what will fundamentally grow this company.
In the meantime, a note to the shorts: there will be blood.
humsafar: this also is one of my questions; however, with this type of stock, in its current situation, i am not expecting to know the full answer ... at this time.
yes, this is a low "up-front cash" price, but, if you see the press release of several days ago which repeats the line from the 2009 press release ... it states (as i recall) the price shall be US$10MM "plus other consideration".
and, of course, that is the real question: what, specifically, is this other consideration?
the answer will not come out until the deal is finished; however, i speculate, in no way surprising, to say such consideration could be: additional stock, additional WI revenue, additional ORRI revenue, or, a combination of these or something different. which of these it is will affect the valuation of the company ... so this answer will be reflected --- somewhat --- in the new audit. with the release of some of the audit info, i am hoping that the investment community will be able to see "who gets what portion of the pie".
as a long investor in arete, i have taken the leap of faith --- based primarily on the large amount of SEC filings, new audit and other recent work that i estimate will have cost upwards of $75k that --- is being conducted for the purpose of completing an acquisition and growing this company. and, when that announcement is made, i anticipate a significant increase in the pps.
note: i see this issue of 'other consideration' to be of significance, but, not so much as the issue of commodity price forecasting model, that is, what price model --- for both oil and gas --- did the audit company use to estimate the revenue stream for the productive life of the field; where this productive life can reasonably extend beyond 10, 15 or maybe 20 years. in other words, in order for the audit company to estimate a NPV --- net present value --- they had to estimate the commodity price, rates of production, etc for the productive life of the field. as you can imagine there is much uncertainty in this; however, it is something which every company must do ... but, which is particularly challenging for petroleum because of the longer term price swings.
hmmmmm....
also, among others, in the following:
BLOOMBERG
http://investing.businessweek.com/research/sectorandindustry/news/article.asp?docKey=600-201102251224BIZWIRE_USPRX____BW5742-1¶ms=timestamp||02/25/2011%2012:24%20PM%20ET||headline||Ar%C3%AAte%20Industries,%20Inc.%20Announces%20Renewal%20of%20Deal%20for%20Purchase%20of%20Oil%C2%A0%26%20Gas%20Properties||docSource||Business%20Wire||provider||ACQUIREMEDIA
RTTNEWS
http://investing.businessweek.com/research/sectorandindustry/news/article.asp?docKey=600-201102251224BIZWIRE_USPRX____BW5742-1¶ms=timestamp||02/25/2011%2012:24%20PM%20ET||headline||Ar%C3%AAte%20Industries,%20Inc.%20Announces%20Renewal%20of%20Deal%20for%20Purchase%20of%20Oil%C2%A0%26%20Gas%20Properties||docSource||Business%20Wire||provider||ACQUIREMEDIA
http://finance.sympatico.ca/news/arete_industries_inc_announces_renewal_of_deal_for_purchase_of_oil_gas_properties/662b6f2d
CNBC
http://classic.cnbc.com/id/41782201
STOCKWATCH
http://www.stockwatch.com/News/Item.aspx?bid=U-b005742-U:ARET-20110225&symbol=ARET&news_region=U
THESTREET
http://www.thestreet.com/story/11023149/1/ar234te-industries-inc-announces-renewal-of-deal-for-purchase-of-oil160amp-gas-properties.html?cm_ven=RSSFeed
etc.
in all such publications where such announcements are commonly found. most of these web sites get much of their 'news' off the same 'wires'....
i found it here:
http://www.earthtimes.org/articles/press/purchase-oilnbsp-gas-properties,1672814.html
Posted : Fri, 25 Feb 2011 17:24:48 GMT
Author : Arête Industries, Inc.
Category : Press Release
News Alerts by Email ( click here )
WESTMINSTER, Colo. - (Business Wire) Arête Industries, Inc. (OTC—PK: ARET) announces that the Company has signed a renewed definitive agreement to purchase oil and gas properties in Wyoming, Colorado, Kansas, and Montana expected to close during the week of March 14, 2011.
The deal, a renewal of the deal announced March 29, 2009 was adjusted for any changes in existing well operations during that interim period. The Company expects to purchase the properties during the week of March 14, 2011. The purchase price remains at $10,000,000 in cash and other consideration. The purchase will be financed with bank debt and loans from private sources. A reserve study is being conducted by Ryder Scott Consultants LLC and a summary of that study and related documents from the agreement will be published upon closing of the transaction in March 2011. We plan to complete our evaluation of the properties and leases and plan to have a development plan in place by early April 2011.
We plan to complete the remaining filings due for Arête Industries, Inc. and be current by the early part of the week of February 28, 2011. “This has been a long time coming and we have worked very hard to make this happen. We are evaluating the pipeline operations and are looking at ways to increase revenues from that operation. We expect that the acquisition of these assets will be the start of our long term development plan for Arête,” stated Donald W. Prosser, Chairman of Arête Industries, Inc.
About the Company
Arête Industries, Inc. is a publicly traded company. The Company is the operator of a gas gathering system and is in the process of buying oil and gas properties in the Rocky Mountain Region of the United States.
Statement as to Forward-Looking Statements.
Certain statements contained herein, which are not historical, are forward-looking statements that are subject to risks and uncertainties not known or disclosed herein that could cause actual results to differ materially from those expressed herein. These statements may include projections and other “forward-looking statements” within the meaning of the federal securities laws. Any such projections or statements reflect Arête's current views about future events and financial performance. No assurances can be given that such events or performance will occur as projected and actual results may differ materially from those projected. Important factors that could cause the actual results to differ materially from those projected include, without limitation, Arête's inability to meet the conditions to acquiring its current business including providing financing to provide for servicing current and new contracts; unexpected difficulties encountered in the investment market, competition, government regulation or other action, the ability of management to execute its plans to meet its goals and other risks inherent in their businesses that are detailed in their Securities and Exchange Commission (“SEC”) filings.
Arête Industries, Inc.
Charles Gamber, CEO, 303-427-8688
info@areteindustries.com
www.areteindustries.com
Level4, to answer your tag question: no, most likely it is NOT so.
although it seems you are going in the correct direction --- and, i realize, one must begin estimates 'somewhere' --- the formulation you apply to calculate "$974,890,512,000" grossly violates many logical assumptions ... in a situation where, at this point in time, we have only assumptions with which to work.
i wish i had the time at this moment to explain further, but, with respect, i strongly encourage caution with such calculations.
in the meantime, based on what i CAN see, i have taken the leap of faith that there is a high chance --- greater than 75% --- that arete has found the mother lode in a more realistic scenario.
good luck to all arete longs.
dasgrunt, personally, i'd think that would be a real long shot ... and i believe it is safe to say that very few, if any people, put any money on such a possibility.
however, i would not want to discourage you. if you are so inclined, i suggest you check with the USGS and/or DNR (wyoming), that is, Dept Natural Resources, or geologic survey (wyoming) to see what general maps and/or documents they might have published ... regarding rare earth possibilities.
i would think that one of these entities would have done some work along these lines of investigation ... at some point in time.
personally, i'd be surprised/shocked if they did show something of commercial interest in PBR region .... but, who knows?
happy hunting.
dasgrunt, of course, this is only a guess, but based on my experience, most typically such leases are taken as "oil and gas mineral" leases; however, there are always exceptions ... but, such are quite unusual. in wyoming (PBR), i would take the bet --- every time --- that the DNR leases are for oil and gas only.
may i ask: why do you ask? what do you have in mind?
panther, yes, that is a good/interesting question; nonetheless, i put that one, along with several others, in the background.
although i do have some opinions regarding possible answers to such questions, to me, such questions not top priority at the moment.
i look at this investment opportunity in two phases; (I) near-term (including financing and deal, which includes result of audit), and, (II) mid-to-long-term (building value through PUD drilling and production and possibly other acquisitions ... and any "exploration").
phase I: from what i can see and glean from conversations with the company, i have taken my "leap of faith" and believe that something is very much in the air --- maybe a matter of weeks, or months, at most --- and have made my investment accordingly. for this phase, i see minimal use in acquiring much additional DD. (note: i did not say "no" DD; i said "much" DD.) as the financing and acquisition announcements approach --- as i have said i "believe" they will --- i strongly suspect that emotions and rapid-fire trading momentum will control largely the price movements; not the fundamentals. i suspect a lot of price volatility over a "period of time".
phase II: post-acquisition of DNR/Tindal ... which will be totally a different ball game ... and much more influenced/guided, i suspect, by fundamentals as encountered via legitimate DD; however, such pursuit of fundamentals will not be possible until after the deal and after much more data is made available by the company. i suppose i can guess what some of these numbers might be but i don't see much of a point to that ... at this time.
i have made my investment in arete, at a minimum, in the phase I ... because i believe the goods things, as anticipated, will happen quite soon. maybe i am right .... or maybe i am wrong. we shall see. (note: as mentioned in previous post, yes, there is risk in my investment, but, i believe the much riskier gamble is being taken by the shorts.)
in the event of "good things" my challenge will then be to spot an exit price for the shares i will want to sell ...or maybe i will play the volatility. (in that event, my plan is to sell some shares, but, not all.)
afterwards, my plan is to hold the remaining shares for the middle-to-longer terms which could be as much as a few years .... as my DD so suggests.
man make plans .... and then GOD laughs ... and then man cries.
panther, as you stated: "and hopefully imo the first quarter AFTER the aquistion of the PUDS that we will see some real earnngs."
this is what i see to be a real wildcard for the mid- to longer-term; that is, the drilling of new wells, most likely drilling the PUD locations.
the PUD's will be defined by the audit; however, will there be a prioritization for drilling these and what will be the criteria?
once that is addressed --- and i would not be surprised if some of this has already been done --- then there are several other major steps ranging ... from title transfer --- from seller to buyer --- through state/local drilling application submittals, approvals, etc... all the way through surface facilities, pipeline hook-ups, etc.
maybe much of this is already in place, at least for several of these PUD's --- that would be great --- however, it might still take several months, after the sale, before such wells can be drilled from which additional revenues/profits can be realized.
and, most likely, big revenues for the company will not be realized until more than several of these PUD's are drilled, tested and completed and put on line.
such drilling/completions is what is see to be the longer-term potential of this company; and, for all i know, it could be the mother lode! however, much of this can not be properly assessed from an investor's perspective until the terms of the deal --- and much more --- are known ... and that will not be until.....?
at this moment, i am focusing on the short term volatility of this pink sheet issue ... and this, to me, is very intriguing! here is bid investor potential here ... and the shorts, as far as i can see are playing a MUCH MORE dangerous game. again .... there will be blood.
tomtom, yes, had seen this ... and it is correct to point this out ... however, the negotiated price (from 2009?) most likely has/had a "due date" on it and does not remain in play forever; i would be surprised if terms set back then have not since expired.(nothing to say, as far as i know, that the new terms are very much like the old terms. i simply don't know.)
additionally, regardless --- to some extent --- of the "in-play" terms of any such newer deal, the lending institution most likely will insist on a "favorable situation" as defined by a "current" audit before they will loan any money ... an audit of which the precise status is unknown (to me, at least).
anyway, yes, many unanswered questions; however, i kind of expect such out of a pinkie. nothing new, yes? (big risk ... in exchange for potential big return.)
the important thing that i observe are some very good signs of something positive --- maybe something very big positive --- happening with this stock in the near-term.
in general, i assess the chances of the deal going through to be something in the range of most likely to highly likely, this is, somewhere between 60 and 80% ... and, the chances could be higher. (i very much do not think the chances are lower. this is no guarantee; only a qualitative assessment.)
my big challenge is how i evaluate the stock --- in its current context --- and trying to determine an exit point. i don't have a good feel for this "number" at this moment; too much emotion at play. i do see signs to hold this for the mid- to long-term; however, it's to early to decide this.
in the meantime, i continue to follow my instincts --- based on experience --- and as a result have taken the leap of faith with arete. nonetheless, as usual, will continue in pursuit of proper DD and fine tune my assessment.
panther, the other document --- which is CRITICAL --- is the new audit. as i see it, no financing and/or deal will be possible without it. simply because the bank will insist this to be one of the key requirements for the financing.
in the overall "hand" the audit is wildcard with respect to two factors: 1) timing on when it will be completed; and, 2) content, what will state to be the results, that is, similar or different --- better or worse --- than 2009 audit.
timing: i do NOT know the timing of its release, but, i suspect that this is also nearing, or is at, completion. no bank will loan money unless they have a completed --- signed --- audit.
((Note: my assumption is that the audit is being conducted only on DNR/Tindal assets ... the ones for which the financing is needed. also, i am not sure which party is paying for the audit. the reason i mention this is that this might also be one of the motivators for completing all the arete SEC documents, getting the financing and closing the deal ... because the price for the audit might be even greater than the price for the SEC document filings.))
content: i hope that the new audit will have results similar to those encountered during the previous audit effort; however, because these audits were/are being conducted by two different companies, it would be quite surprising to have identical results.
of course, there are many factors which go into such an audit procedure; one of the big ones, in comparison with previous effort, will be the change in the commodity price and the price FORECASTING MODEL. additionally, IMO, i am hoping that the number of PUD's will remain similar ... or, maybe even increase. who knows. we shall see. one way or the other we investors are hoping for audit content to show a substantially increased NPV of the DNR/Tindal properties.
... and, then, the next big question will be: with the closing of the deal, who gets what portion of the NPV ... that is, who gets what portion of the pie? what do the buyers get ... and what do the sellers get?
yes, SHORTS .... there will be blood!
euro, in concept, i definitely agree with your comments: i believe there is very high chance --- maybe as high as 90% --- that financing will be forthcoming in matter of weeks. i have taken this "leap of faith", and, believe that barring any unforeseen complications, this is simply a matter of time.
for what other (likely) reason would arete be spending a large sum of money --- maybe 10's of thousands of dollars --- for completing and filing all the necessary SEC docs?
... and, they seem to be burning the midnight oil working to get these docs all completed! (nobody at the office seems to have much time to "waste" talking with investors.)
these guys appear focussed and motivated.
further, i am assuming that completion/filing of these SEC docs is a requirement of the: a) sellers; b) lending bank; c) both. in other words: no docs .... no money and no deal!
hmmmmm.... this continues to look interesting ... positively: am reading between the lines, but, in line with the "rumors", regarding impending consummation of financing/acquisition/etc., it makes a lot of sense that such documents are spitting out to the public as soon as they get off the editor's desk.
more specifically: if i was a seller, in this situation, i'd "demand", at a minimum, that the buyer come up to full "document-filing" compliance with all such docs that are needed in order to get the job done. in other words: the sellers says there will be NO deal until all of your docs are competed and filed with SEC.
this strongly suggests to me that the "deal" is at hand.
what other --- logical --- motivation might there be to get out so many documents in such a time frame?
panther, yes, there is definitely possibilities of finding a new and larger reservoir "in some of the surrounding area", but, the "mother lode" as is currently defined IS the very low risk PUD"s and these drill sites are already well understood from a geologic and engineering perspective ... and, of course, this high number of PUD's is VERY good for this stock.
any such new mother lode reservoirs, although possible, would require "high risk" EXPLORATION DRILLING in order to identify. chasing such things would be a significant distraction for arete ... who wants to develop the PUD's after the deal is done. in fact, drilling money --- CAPEX --- is part of the total loan amount.
in the meantime, it's a big enough challenge to try to estimate the value of the "fish in the barrel" PUD drill sites ... let alone to try to estimate the value of some nebulous exploration play.
note: banks (and most investors) give, for all practical purposes, NO value to exploration "mother lodes"; however, they give the next to the highest valuation to PUD's and THESE PUD's are the mother lode for this investment.
and this, most likely, is VERY good for arete .... and its investors!!!
i have not checked for any PowderRiverBasin economic models for petroleum production --- single or multi-well --- but such would not be too difficult to produce ... for general purposes of stock value estimation; however, the much bigger challenge, in this case, would be that so many of the input variables --- to any such model --- have such a broad range of possibilities that any such evaluation would be of limited use. in other words, from any such model, the "high case" estimate would be just as likely as the "low case" estimate.
additionally, i like to play the fundamentals, but, IMO for this issue --- with so much "perceived" upside potential --- that the bigger driver of the share price will be the machinations of the momentum players and the emotions of the overall players.
many good signs of things to come --- in the not-to-distant future --- for the holders of this issue. hmmmmm.....
as stated in a previous post, based on my DD, i don't see the "if" to be the big question; rather, the "when". this is the question on which i continue to dwell.
regarding the "if", i interpret the general situation in which the sellers are a group of veteran oil folks who might want to soon reduce their workload and/or retire and who don't want to spend the next 10 years drilling 20 development wells/year. for private owners, in particular, that's a big task and could be very stressful.
additionally, as far as i know, i don't see that this current ownership group has drilled many/any new wells in at least the past few years, so, there is this consideration of depletion and daily production rate decline ... which, as time goes by, continually makes the seller's side less attractive. (they need new wells, in these PUD locations, to maintain/increase production.)
basically, i see these sellers as "motivated".
of course (1), for all that i/we know, we can read between the lines until the cows come home and not know for certain the degree to which these sellers are motivated; it's just my interpretation from my conversations that there is this sense of motivation from the sellers ... along with overall urgency.
of course (2), i have no way to refute your comment (assessment?) that completing the deal is slim at best. that is why i say i continue to dwell on the "when" question.
i will continue to call to the company to ask for some clarification on particular issues to satisfy my continual need to upgrade my DD and i hope to get some sort of answers ... but, i don't expect them to tell me anything dramatic and stock-shattering such as when, in advance, the deal will be done; nonetheless, i will take any such info and put it into the "big picture" fundamental data hopper and process with my interpretation.
in the meantime, i will continue to watch the stock movement resulting from buys/sells by people who, most likely know more than me.
the way i look at it is: if i believe that i have some "secret" information about this company, then i am only kidding myself regarding any such secret status. my approach is taking the bits of data, as openly presented to the investing community, calling the company for whatever discussion they can give me and trusting my experience/instincts to come out with some reasonable assessment based on the fundamentals.
so far, on this issue, i have made a few mistakes --- one bad one ... so far --- but several of the important components are falling into place. the big component --- when the deal will be done --- obviously has not materialized ... but so far, i see the parties to be pressing to do just that. that's just my guess ... and my guess is for this deal to happen within the next few months, or sooner, ... before the Rocky Mountains winter comes to a close
we shall see ... and see whether i change any of this working hypothesis.
oilbull, thanks for the info. did quick review; will go over them in more detail after work hours today. looks like a broad mix of things --- various fields with formations producing oil, gas and water, including the CBM stuff --- according to these state production records. the PUD's --- i'm sure it's a safe bet --- are in these fields.
this makes a lot of sense ... in conjunction with additional data on the web site; specifically, approx 46 producers with approx 200 PUD's. with this type of ratio, it's my bet that these PUD's are the result of "drill-site-spacing-reductions" for these fields. for example, these current wells might be drilled on 160-acre (qtr-section) spots and the spacing for new wells is now 40-acres (qtr-qtr-section) spots. (in Powder River Basin --- PRB --- with these formations, any PUD would need to be quite near to an existing well, so, that is why suspecting this opportunity as an "in-fill drilling" play seems to be most likely.)
not sure when i will have time --- or the desire --- to go much further into the PUD well site DD, before some significant announcement is made because i have taken the leap of faith that such producers and the PUD's are most likely properly defined. as stated previously, perhaps more specifics will be released by the company --- in the form of the new audit results --- in short order.
with these positive fundamentals in place, this stock is attractive to me because of the perceived high chance that arete will finalize the acquisition and will acquire funding in order to developed these reserves ... while in the background the commodity price continues to rise. hmmmmmmm....
The approx 200 PUD's, I understand from the reference on the web site and direct conversations with the company, are an integral part of this DNR/Tindal deal ... along with the existing production. These PUD's by definition contain reserves ... not contingent resources. These PUD's are the main attraction for my investment in this company.
As I see it, the big remaining questions are: 1) what are the estimated reserves/well (and production rates); and, 2) what % of these reserves will be purchased by Arete (or, conversely, how much will be retained by the sellers)?
Such information, hopefully, will come out with the consummation of the deal/acquisition; more specifically, this should be in the form of the "numbers" coming out of the new audit. It will be good, for obvious reasons, to have the new audit numbers agree with the 2009 audit results; or, maybe, show better numbers.
Yes, the deal/acquisition will also include some existing production; any additional production, realized from the drilling of PUD locations, will be "down the road" ... at least a few months but probably longer.
additional good signs for energy stocks:
from bloomberg --- By Karen Eeuwens - Jan 25, 2011 1:00 PM GMT+0300
"Companies are seeking to boost production as crude futures on the New York Mercantile Exchange have advanced 16 percent over the past year to $87.65 after reaching a 27-month intraday high of $92.58 a barrel on Jan. 3.
Crude may rally to as much as $100 a barrel this year for the first time since 2008 as central banks pump cash into their economies to revive growth, according to JPMorgan Chase & Co. and Bank of America Merrill Lynch.
""A lot of smaller, independent oil companies are gearing up with loans for the eventual development of more oil and gas fields,"" said Iain Armstrong, an analyst at broker Brewin Dolphin Ltd. in London. ""While the oil price stays over $70 a barrel, you’d be struggling to find any project in the world that isn’t going to at least break even.""
to go a step further regarding my DD and ... my metaphor: not only do we not know who gets what portion of the pie, we also do not know the number of pies (that is the number of fields in which drill sites are identified ... and the fewer the fields, in general, the better the economies of scale.)
nonetheless, the very good news, if we are to accept the results of the previous reserves audit (2009), is that there were identified approx 200 PUD's. if anything near this number is accurate, this MOST LIKELY would be very good for the company, investor's, etc. (i say MOST LIKELY because, from my conversations, that is the way i "read" these guys from arete. of course, i could be wrong, but, at this moment they appear to be --- for the most part --- on the up-and-up.)
the big thing i continue to investigate/contemplate is not so much the "if" ... but, the "when", the "how much" and "how long". (did i really write that?)
again, uncertainties such as these are part of the game for pink-sheeters.
have been watching this company for a while ... but this is my first time on this board. not familiar, yet, with the style.
personally, i watch fundamentals.
overall, my point is that, yes, there are some interesting things here ... only that, fundamentally, it will be difficult for me to get a good handle on things until I/we know who gets what portion of the pie when all the dealing is done. from my DD, including conversations with the company, i have not gotten anything close to a clear understanding of this question .... and, given that this is a pink-sheeter, am not expecting one. (maybe after the new audit is out ... or, at some later date. maybe.)
just part of the risk ... as far as i am concerned.
FYI: at this moment, based on what i see so far, i see a lot of positive potential from this issue. will definitely continue to follow. hmmmmmm.....
possibilities regarding price/boe, in general, look good to me; however, in the context of this deal our challenge (as i see it) will be to estimate the NRI --- WI and/or ORRI, if any --- to be acquired by arete; alternatively, what will be retained by the sellers after the closing? without such info, making meaningful estimates will be more challenging. the web current site gives an NPV but, as we are all aware, that is based on the previous commodity estimates (2009?) and there has been (significant?) depletion since then ... almost two years ago; further, the new "numbers" which most likely will be used in any forthcoming deal will be based on a new audit ... conducted by a different technical company. certainly, other factors will also come into play. hmmmm...