I have blasted this situation for their ways, but I am with contractor here, for I am NOT naively betting on the upside.
I for one think he has been holding back reporting on the Padgett's & MN leases, for as long as possible. He may have had problems in the drillings, maybe not, but I think what's important is, what are the RESERVES in the ground? The "needle in the haystack," the "diamond in the ruff," CB's words in late in 2005. IMO, he doesn't want anyone to know what he has until he absolutely has to, his words to me in 2005. That's, what I am betting on. Add to that O & G prices, equipment seen on site, MN #1 being hooked up, the PRI recovery possibilities, no further dilution, SEC approval, etc......
The upfront structure, the preferred set up, the financial conversion, the SEC investigation and the RS, were executed professionally. I love when CB answers, well why did you do the RS, "because they told me to." This is NO Beverly Hillbillies deal with Jed Clampett and Mr. Drysdale.
Think about this, when he started the company, he had only 2 million out of the 500 million shares. He put essentially NO money up and had less than 1% interest, fully diluted, but he was the man, the owner, the founder, the Mr. Everything with less than 1% ownership. The founder usually has 33% to 100% interest. 1%? Please.
He set up the perfect instrument, a loan, covered by the preferred stock offering which gave him 10.5 million shares. Here is the $50,000 dollar question, how is the hell did they come up with a 3X multiple? Why not 5X or 6X, or 2X or NO X, just common shares. Its magical how you come out with 1/3rd interest when you do a nice 1:25 multiple RS. We all know what happens from there, this turned into 262.5 million shares pre RS, or 1/3 the company. Oh my, how did that happen? No, my friends this is no Jed Clampett. He wasn't out hunting and up from the ground came a bubbling crude, or as many would have us thinking, a lot of dry holes.
Everyone's betting this is a dog. Not me. You better be ready to change your tune and get in, if you are wrong. If I'm wrong, nothing lost, we are already here. CB and the BOD's took us down as far as he could without going to the goose egg.
The RS, the promises, the conference call, the silence, the directors leaving, no stock issuance's that we know of, the mother hood PR in early December of "we going to be an EXXON," the PRI PR in late December, the MN #1 sighting, what's up CB?
No,I am still betting on the upside. This may not be a pedigree, it may not be pretty, but it's clearly not the flee infested dog that we think we are holding or that management has been presenting/showing us, all IMO.
