Mainland Resources, Inc.(fka MNLU)

[Ecomike]

For those that are new here, and may not have all the facts, here are SOME details and history (I think all of this accurate as of Dec 2, 2011, if you see an error please let me know):

Here is the latest source I used:
http://www.sec.gov/Archives/edgar/data/1395205/000118374011000791/f10q.htm

http://www.sec.gov/Archives/edgar/data/1395205/000118374011000186/f8k03142011ex99.htm

Covers the 14 billion BCF of natural gas per section (times 28 sections, 500 BCF estimate per well based on data from BV#1 well, 28 wells per section possible, IIRC)) PR for the Buena Vista Miss leases. At $3.50 per thousand cubic foot of natural gas, that works out to 1.37 billion dollars of natural gas across the entire MNLU+ AEXP leases in the immediate BV, Miss., area held by the post MNLU/AEXP merged company.

Book value of unproven reserves was .16/share (probably based on lease costs paid out?), before the Louisiana sale last month, and I don't think it included the 13 million spent on the BV#1 well yet??? (Not sure why, possibly not listed as a depreciable asset until the well is actually producing?).

http://www.sec.gov/Archives/edgar/data/1395205/000118374011000025/f8k01062011ex99.htm

The two separate studies of logging data while the well was drilled, and core sample studies, times the post merger acre size, yields a calculation of about $1.37 billion dollars of natural gas in place at 22,000 feet (400 F, +20,000 psi!!!!) in the Mississippi leases alone (based on NG at $3.50/1000 Cubic feet). This does not account for oil or condensates above 22,000 feet, or smackover oil believed to be below the current well in the same property in Miss.

The company has about $4 million dollars in total debt, that is mostly unsecured!!!! (only exception is a few liens from recent court judgements on recent past due bills, and an insider, stockholder loan, that was about $1 million dollars this year, and is now about 500 thousand dollars, with a security lien on assets. Half of the loan made this year was just paid off, by selling the Louisiana assets for about $500 thousand dollars, to pay off half of the secured loans).

On April 22, 2010, the Company closed the sale of its Haynesville Shale assets in East Holly Field, DeSoto Parish, Louisiana. The assets have been sold to EXCO Operating Company, LP, a wholly owned subsidiary of EXCO Resources, for $28,159,604 effective January 1, 2010. The Company has sold its 40% working interest in all rights deeper than the base of the Cotton Valley formation (which has been defined to be 100 feet below the stratigraphic equivalent of the Cotton Valley formation and includes all of the Company's producing wells as described above) in the East Holly Field. The Company continues to own a 100% interest in all rights above this depth and specifically, in the Cotton Valley, Hosston and Upper Bossier sections.

The Company has used the proceeds of the sale to fund the drilling of the initial well (designated as the Burkley-Phillips No. 1 Well) on its Buena Vista prospect in Jefferson County, Mississippi, and to retire its debt to Guggenheim Partners LLC. (Refer to Note 9).

An insider(s) and stockholder is reported to have loaned the company cash this year amounting to well over $1 million dollars during 2011, and recently paid roughly half of that loan off (by selling the remaining Louisiana assets at what looks like a 400% gain over cost) and still has an outstanding secured by assets loan of about $500,000.

On April 22, 2010, the Company closed the sale of its Haynesville Shale assets in East Holly Field, DeSoto Parish, Louisiana. The assets have been sold to EXCO Operating Company, LP, a wholly owned subsidiary of EXCO Resources, for $28,159,604. The Company used part of the proceeds to retire its debt to Guggenheim and to re-acquire the overriding royalty interests granted to Guggenheim in the DeSoto Acreage.

During fiscal 2011, a shareholder (the "Secured Party") advanced $650,000 to the Company pursuant to a Demand Secured Promissory Note which bears interest at 10% per annum. During the six months ended August 31, 2011, the Secured Party advanced a further $355,000 on the same terms resulting in a total of $1,005,000 owing to this Secured Party.

The 28 million dollar sale last year and prior JV involved Petrohawk which was bought this year for billions of $$s by a huge company (I don't have the details handy, IIRC Exxon Mobil bought XTO energy which bought Petrohawk which bought the last batch of MNLU assets? Or do I have that mixed up, LOL been so many billion dollar mergers and buyouts, I forget which was which). IMHO, these companies, Exxon Mobil, Petrohawk, and the partner Guggenheim, would not have reported buying (or selling in the case of Guggenheim) worthless assets from a scam company, so any claims that MNLU is a scam are outright lies!!!!!!