Grifco Inc (GFCI)

[cyofish]

Rex, I saw exactly how profitable those wells were by looking at Victory Energy's financial statements who also scammed people with Adams Ranch. They were stupid enough to make quarterly filings until the last audit discovered a lot of misstatements. So much so that Victory went from .ob to .pk and basically disappeared.

Victory was generating about $60K - $100K in revenues quarterly at an expense of $1+ million. There were doing this around the time gas was selling for around $6/unit. So even if gas prices tripled or quadruple they still wold have been in deep caca.

The accrual accounting the O & G business uses to match income and expenses doesn't give a realistic picture of how much cash they are burning up front. Exploration & drilling cost, which run in the millions, are all capitalized as an asset on the balance sheet. They are slowly expensed as a depletion expense against the quarterly operating income. IMO, it would be better served to look at the Statement of Cash Flows - Operating Cash Flow when evaluating a small time operation.

Victory Energy for example had $4 million in capitalize cost for Adams Ranch...that's $4 million they spent up front. Making $60K - $100K per every 3 month isn't going to help very much in paying down that cost.