American Energy Production Inc(fka AENP)

[ctb]

More Doc and Tharmon (below):

By: doc726 08 Aug 2006, 05:06 PM EDT
Msg. 87653 of 87673 (This msg. is a reply to 87647 by aicjofs.)
Jump to msg. #

aicjofs, I talked with Joe and Charlie a good bit about cash flow. I know for certain it is tight but they are paying bills and are very proud that they don't owe the banks any money. I think the Challenger is an issue of parts and basically getting to it to get it ready to go. They are very stretched on resources. There were 7 or 8 guys working the IDECO rig on the Padgett ranch and another crew out working the other leases. I spoke with a couple of the guys on the Ideco rig and they were very complimentary of Charlie and his treatment of them. Charlie has already made the deal to buy the water, but it sure would be nice to get the rain. Unfortunately it might take a hurricane to get some moisture up there. I'd rather them buy it than to see a bunch of misery. I am on the same page as you. Cautiously optimistic

***********************************************************

By: tharmon51
08 Aug 2006, 06:08 PM EDT
Msg. 87670 of 87673
(This msg. is a reply to 87653 by doc726.)
Jump to msg. #
Thanks for your report, doc. Your impressions pretty much match mine from when I was there three weeks ago. There were a couple of things I was disappointed in also, the current state of the Challenger rig being one of them.

I believe that you hit the nail on the head about resources. I think they are spread too thin to get the Challenger and the trained crews it would take in the field right now. This is still a small start-up company. I have always been impressed with how Charles finds and uses serviceable equipment that may not look very pretty anymore, but gets the job done (with a little TLC). Too many new businesses bury themselves in debt with fancy stores or equipment and they never dig their way out of debt. Until they get a couple of new big producers on-line, they will be cash limited which also means personnel and equipment limited. That right now limits progress to a snail's pace. I personally think they have too many irons in the fire. It is frustrating, but I can't really fault Charles for being fiscally frugal. I am in for the long haul and want them to succeed.

The Hart #8 started out as only a test well to be a shake down trial for the Ideco rig. I think as they got started and looked at the 3D Survey they would have liked to have done more with it, but I believe they had down-hole problems and finished the well as originally planned. They are still having problems, but they are focusing on completing the bigger wells and getting them on-line first. I don't like it, but they do need to focus and finish something to boost everyone's confidence in the company.

I found your comment about looking Charles in the eye most interesting. I did not get to see him this last trip, but when I was there in November I had a similar experience. Also, the tone or passion in his (gravely) voice when discussing what he wanted AMEP to become. The man has a dream.

I was pretty frustrated when I left Mineral Wells last month, but the bottom line was I saw undeniable, significant signs of progress from when I was there the end of January. Boy, it is taking a long time (and without news), though.

th

http://ragingbull.lycos.com/mboard/boards.cgi?board=AMEP&read=87670