WOW! ALMOST HAD ME BELIEVING IN THIS.ALEX CRAVEN=DIRT BAG..More hype. And speaking of egregious, take Fox Petroleum of London. The company wants to be a wildcat driller but needs to raise money to explore the properties on which it holds leases. Its stock (FXPE.OB), which is quoted on the OTC BB, traded for $2.50 on September 11.
Fox's stock price had doubled between early July and mid August but had begun to slip. The company bought ads in the September 17 issue of Fortune and the August 27 issue of Barron's, among other publications. The ads describe the potential oil production from leases Fox owns and drop the names of major oil producers, such as BP, Chevron and Exxon Mobil.
But you wouldn't learn from the advertisements that the company lacks any active production sites, has few employees and needs to raise millions before it can start drilling, according to SEC filings. Fox spent $300,000 on advertising in various publications, says Alexander Craven, the company's vice president of finance, treasurer, secretary and one of three full-time employees. "We felt the expenditure was important to promote awareness both for the company and for our investors," Craven says.
One has to wonder why Fox spent thousands on magazine and newspaper advertising for investors to check out a stock when it needs millions for drilling operations. Fox has only $1.7 million of cash on hand, according to its most recent quarterly report filed with the SEC.
In addition to the promotion in the Fox-paid ads, an online publisher, Contrarian Press, began pushing Fox shares on June 11. Contrarian is run by Scott Fraser, who has had a run-in with regulators. The SEC issued a cease-and-desist order in September 2003 claiming that Fraser made false and misleading statements relating to the past performance of stock recommendations in his Natural Contrarian newsletter. But that hasn't stopped Fraser from saying on his network of Web sites that he's "Profit-Proven Master of Contrarian Strategies."
He boasted of his skills in a full-page ad in the September 2007 issue of Kiplinger's Personal Finance -- mea culpa -- as well as in Forbes and Barron's. Editors at Kiplinger's refused to accept a full-page ad in the October issue because it hyped companies with no ongoing businesses or revenues. Fraser wouldn't return calls and e-mails seeking comment, so we don't know his motives for recommending Fox and similar stocks. Craven says Fox executives are not involved with any stock promoters.
Another oil company is following the Fox Petroleum model. Sun Cal Energy is a Canadian company that converted in November 2006 from a mining company with no revenue to an oil business with no revenue. The company had $267,817 in cash on hand as of March 31, according to an SEC filing. Yet it took out an ad in the September 3 issue of Forbes that neglects to mention the company doesn't have any active production sites. The ad only describes the potential profits from unexplored oil and gas leases that Sun Cal owns in Southern California.
George Drazenovic, Sun Cal's chief financial officer, treasurer and secretary (and one of two full-time employees), says that the company has a duty to keep shareholders informed and that 90% of Sun Cal's funds go into developing its leases. But despite what Drazenovic says, Sun Cal hasn't even begun developing those leases, according to its latest SEC filing.
Sun Cal stock (SCEY.OB) could certainly use some help. After trading above $3 a share through mid summer, it plunged steadily during August and closed at $1.26 on September 11, on the OTC BB.
Bottom line: Don't let the prestige of these national publications cause you to suspend disbelief. Before investing in any OTC Bulletin Board stock, go to the SEC's Web site and look at its most recent 10-K annual report and 10-Q quarterly report and closely examine its revenues and assets and disclaimers. That precaution alone could prevent your being sucked into a costly and embarrassing ripoff.
THEY ONLY HAVE 1.7 MILLION,YOU ALL KNOW THEY ARE NOT GOING TO USE THAT MINISCULE AMOUNT FOR OPPS..THEY WANT YOU BOZOS TO FINANCE DRILLING..HELL THEY MAY HAVE NO REAL INTENTION OF DRILLING IMO..CAREFUL HERE TAKE PROFITS
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