Anything from PEII’s CEO since this update?
Petron Energy II, Inc.
17950 Preston Road, Suite 960
Dallas, TX 75252
972.272.8190 • 972.485.1324 Fax
March 21, 2017
Dear Shareholder:
The intent of this letter is to provide an update to our shareholders regarding current company status and inform shareholders of our plans for moving Petron forward in the future. Additionally, we want to confirm our commitment to finishing what we all started together!
Regarding our current company status, we have three primary objectives which must be solved before we can move our company forward. The first objective involves completing current efforts towards raising operational capital from investment banker Major Asset Group, LLC (MAG). We have a signed contract which commits MAG to fund Petron. Based on information from the investment group, they appear to be close to completing their funding. MAG has informed us that once their funding is finalized, Petron would be funded according to our contract. This is the second funding group we have engaged during the past several months. Regrettably, most of our time was spent with the first group Sayegh & Associates, which were not able to secure any funding commitments on behalf of Petron. MAG has demonstrated a higher level of transparency and executed a funding agreement with Petron based on the strength of our development plans. It is our belief that we will have all funding efforts completed soon with MAG.
The second objective is directly tied to our funding; it involves negotiating final payoffs to a group of convertible debt creditors. This collective group holds conversion rights to a significant number of PEII free trading shares which were received from executing various funding transactions with PEII. Upon conversion, this block of free trading shares held by group members allows them to sell on the open stock market. The challenge created for Petron by this group is their historical unwillingness to sell their shares in a responsible way. Unfortunately each member has sold their block of shares in an extremely aggressive way which has contributed enormously to suppressing our PEII share price to its current position. Our plan is to use a portion of the raised funds to secure buyouts for each member in the group in order to avoid future pressure on PEII’s stock price; once they are removed it clears the path forward for PEII and its remaining shareholders to have a stock unencumbered by convertible debt creditors.
The third objective addresses our plans for Petron's move forward. Nothing has changed regarding our game plan to develop "Shallow Well" leases to scale. With current oil prices in the range of $48 - 50 per barrel coupled with our current development cost to produce a barrel of oil at $16, market conditions support our narrative that the current financial climate is still very favorable to create a very strong company and increase shareholder value. Our efforts to scale the growth of the company will center on our current pipeline infrastructure which provide access to approximately 400,000+/- acres. Many of the leases within our targeted area already possess equipment assets. It is expected that some equipment modifications will be needed to bring these assets up to acceptable operational levels.
This is a very important time in the growth of PEII and we are working very hard to meet the challenges we face on a daily basis to accomplish the goals we have set. I look forward to our next update letter where I hope to announce that all funding efforts have been successfully completed.
We feel very optimistic about the future of PEII!
With My Most Sincere Regards,
Floyd L. Smith
CEO
