UBRG have produced an excellent business plan/10k. It sets out a sound strategy, and claims that the elements of that strategy are in place. Credit where credit is due. It's a good strategic plan.
Now for the BUT. But, in my opinion, the performance to date does not support the view that current management can carry out that strategy.
There is clear evidence that management understand marketing, and know how to promote a Penny Stock. There is less evidence that they can run an integrated energy company.
Despite what's been said on this board the only deal that UBRG has ever concluded was the acquisition of NDR. ALL of the other deals have fallen through for one reason or another.
The acquisition of effective control of NDR allows UBRG to claim that company's income in the consolidated P&L. The contracts subsequently won by NDR have not been won because of the link with UBRG. NDR continues doing what it has always done (including selling propane), and continues to make a tiny margin. The only change is that NDR now gives away 49% of what it makes.
The UBRG link is intended to do a number of things in the future. If they do those things, then management will deserve plaudits.
So far the score card looks bleak:
1. No income reported on the joint venture with Progas;
2. No indication of the jv percentage interest held by UBRG;
3. No gas purchased at well head prices by Texas Gulf Oil & Gas;
4. No details of a trading account with ICE, for sale of gas;
5. No sales of oil or gas by Texas Gulf Oil & Gas; and
6. No progress on the two (huge) management contracts.
In short, no contribution from UBRG.
Obviously the fact that UBRG has not yet contributed to income does not mean that they can't. But until they do, and increase overall profit margins, I'll take a sceptical view on the value of the underlying business.
It's equally obvious that only those inside the company know what's actually happening. But I would be very surprised if any 10Q for 2011 shows any real increase in profit margins. I'll be equally surprised if any contribution to income is shown from Texas Gulf Oil and Gas, and it will be a real turn up for the books if any income is contributed from the Progas jv.
Here's the final but. But, if those contributions do start to be made I'll not hesitate to hand out the plaudits, as I apologise for my lack of faith.
AI
