I think I found the problem. The key phrase in the following GWGI press release seems to be "RIGHT OF FIRST REFUSAL". Which meant they didn't actually "own" a position...we were buying GWGI on the prospect of them having a position. I think what happened is Northern Exploration took that position leaving Galloway with nothing. Since May 8th they have been trying to regain some sort of foothold. That is why nobody in the Ozona area heard of them...because they were really not a part of the deal.
If you look at the press releases below, on April 13th Galloway's says they have "secured a first right of refusal to purchase 50% of Dominus' working interest". Again on May 1st they refer to "first right of refusal", therefore they still didn't have any ownership. On June 1st Northern's says "Norex has acquired a 63% Working Interest in the project located near Ozona in Crockett County, Texas. The agreement is based on future commitments whereby Norex will pay 100% of the cost of drilling and completion of the gas wells in exchange for their 63% Working Interest."
The Oilfield Glossary defines "first right of refusal" as:
1. n. [Oil and Gas Business]: The right that other parties to a lease, well, unit and/or concession, have to acquire the interest that a selling party owns prior to selling to any third party.
It looks like Galloway lost out to "the third party", which was Northern and now GWGI is back with a smaller position. This is my hypothesis of the situation.
You can see the whole PR's below:
April 13th: "Galloway Energy Inc, today is pleased to announce it has entered into an agreement with Swiss-based resource management corporation Dominus Energy AG whereby Galloway has secured a first right of refusal to purchase 50% of Dominus' working interest in a large, gas production play located in West Texas."
May 1st: "As previously announced, Galloway has secured a first right of refusal to participate in the gas project located on 12,900 acres in the Barnett Shale area of West Texas. The area is a well documented and prolific region benefiting from the presence of established companies such as Chesapeake, Devon, EOG, XTO, and Quicksilver Exploration. The Barnett Shale is one of the largest sources of Natural Gas in the USA with proven reserves of 2.5 Trillion cubic feet (Tcf) which many companies believe is far short of a reserve potential that may prove to be significantly closer to 30Tcf or more. The property in question has over 115 working wells currently in production, as a result of which Galloway's participation will result in immediate cash flow for the Company."
June 1st: "Northern Exploration (Norex) is pleased to announce that the Company has now completed the execution of a definitive agreement in regards to the "Ozona Gas Project" with Swiss-based resource management corporation Dominus Energy AG.
Under the terms of the agreement, Norex has acquired a 63% Working Interest in the project located near Ozona in Crockett County, Texas. The agreement is based on future commitments whereby Norex will pay 100% of the cost of drilling and completion of the gas wells in exchange for their 63% Working Interest. Under the terms of the underlying agreement with the vendors and royalty holders, Norex will receive a 47.5% Net Revenue Interest in all natural gas production from the project."
AI
