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Re: 113399 post# 670

Monday, 06/20/2011 12:47:41 AM

Monday, June 20, 2011 12:47:41 AM

Post# of 2998
The $25 million or so in assets appeared on the balance sheet by virtue of a transaction in which UTOG gave 10 million shares and 10 million warrants in exchange for a 75% interest in the Musselshell Prospect.

That value uses the share price at the time of $1.19 and an option value of $1.14 to determine the value of the asset. There is no independent appraisal nor is there any significant cold hard cash changing hands. If the transaction was done today the same asset would have a stated value of $10 million or so, not $24 million, due to the decline in share price.

It's a charade. To say those 10 million shares and warrants were worth $25 million is to say that the $400 million market cap of UTOG prior to this transaction was reasonable based on its $789 total assets. The real value of 10 million restricted shares + warrants was and remains worth a very tiny fraction of the $24 million.

The share price was ridiculous, the transaction value is vastly over-stated and UTOG's current market cap of $150 million remains absurd.

As regards the $2.4mm private placement of 1 million shares, it's a sure bet that the buyer of the shares is the same entity who owns the majority of the shares. The money spent on stock promotions could be paid by this entity, but instead was probably paid by the company using that entity's money. The placement says nothing about UTOG's true value.

It's all part of the game to entice unwary people to buy the stock.

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