good analysis.
On page 24 it states the expected cost for operating the next 12 months are $ 1,775,000. The revenue on page 4 was $330,226 for 2 months of production. There was no production in the 3rd month due to hurricane damage. Multiply $330,226 times 6 to get 12 months revenue and you get $1,981,356 for the next 12 months before any new wells are brought on line.
assuming $50/bbl oil and $6/mcf natural gas, i'm getting even lower revenues. $363588.75 for a quarter, $1454355 for the year. (i can show my math if you want.) though "hopefully", hyper inflation will have kicked in by late 2009. ;)
What the company plan states is ...We anticipate that the full amount of the Debentures will be converted into shares of our common stock... which indicates that no revenue will be used to reduce the debentures.
if they fully anticipate the debt becoming stock, why didn't the fools just issue a secondary offering of stock in the first place? they'd have FAR less dilution that way. a perfect time for such an offering would've been early Summer 2007, when the stock was breaking $2.00/share, and was consistently above $1.40. let's say they just had an offering price of $1.20/share. an 8-million-share offering (compared to the 29.9 million shares already outstanding) would let them raise $9,600,000. that would have funded a lot of projects, and they wouldn't have risked paying any interest on it.
obviously, Summer 2007 has come and gone. but the company's had multiple opportunities for offerings since then. when the stock was at 50 cents, 20 cents, 5 cents.. hell, even at a penny. yet time and time again, they go for this convertible debt poison. maybe they concluded a secondary offering would dilute and frustrate shareholders.. but exactly what the hell do they think the CD conversions are doing to us?!?
or are there really so few buyers out there that a stock offering between June 2007 and June 2008 wouldn't have worked? it's hard to believe there wouldn't be interest. oil and nat gas prices were soaring back in June.
i think UVSE's problems underscore that having smart and hard-working people running a public company isn't enough. you also need people who know something about the stock market.
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