The insanity is in the details (from the shareholder's letter)
"The agreement called for LEXG to fund the cost of an updated seismic analysis of the field and operating capital to complete the interpretation and prioritization of the development targets. Our partners obligation is to now raise money to drill the development wells and finance the full acquisition of the field between now and May 2018." - this means "although we know nothing about oil exploration and development for some reason we have agreed to fund the riskiest part of this venture - basically the looking for oil part so if there is no oil we are out the money and not our partner who supposedly did know something about oil E&P when they bid on this field with us." Moronic.
"We are very excited about the prospects for this partnership because the revenue potential of the override has the potential to sustain our efforts for years to come with no requirement for additional investment." - Since LEXG needs cash NOW and finances at extremely high 100%+ cost and supposedly will have a ton of cash from the magic steam machine later, why would they EVER want to lay down $680K now for a 3% royalty later - that makes no sense even if one assumes that they know this is the best oil field investment ever (which if it were someone with lower financing costs would have bid higher). Again either moronic or fraudulent.
"A secondary benefit of the partnership is that we now have a location just 100 miles from the Houston airport where we can work with our partners at Sonic Cavitation Ltd. to test various versions of their technology units on produced water, oil, and other fluids. We are in a position in which we have a working unit that can go into commercial production this year, but there will certainly be modifications to the design, size, and componentry in next generation units and applications. We will be able to use this field in Louisiana as the testing ground for future models, which is a massive benefit." - I thought there were so many people in the industry that thought the magic steam machine was the best thing ever - so you couldn't get one of them to test it for free rather than having to go out and buy a 3% royalty for $680K? Again, either stupid or a fraud.
