This just in.............
Rocky Mountain Energy Corporation ........................
Shareholder Update .....
Rocky Mountain Energy Corporation Announces
Shareholder Update
Houston, Texas - Feb. 28, 2003 - Dear Shareholder: There has been a good deal of speculation regarding our potential merger. I would like to address a few things at this time.
Disclosure- Although I disclosed that we are discussing a merger with certain companies (one NASDAQ and one American Exchange), I cannot and will not disclose the symbols. Regulation "FD" is in effect and it would be unwise to disclose what is not a fact. Credibility is key. As we have done (so far) what we announced we would do, I do not want to cite a certain company and have it be something else. In addition, I don't want to jeopardize the negotiations until a deal is consummated. One rumor that I will put to rest once and for all is that Powder River Basin Gas (PRVB OTCBB) was a potential merger candidate. This is not so and no discussions are contemplated with this company.
Exchange Rate- Process The current rate of our stock to merger candidate stock is not set yet, so I will not speculate about it. One thing is for certain. Such an exchange of shares is based on the value of the reserves and current cash flowing properties which we own and have under contract at the time of the merger announcement, not our stock price. Frankly, the short-sellers (who are also the message board bashers as well) would love to assume that that can affect the merger by manipulating our share price, but the transaction will not be predicated on our stock value. The process, if completed, is likely to be structured as a sale of RMEC to our merger partner. They will "buy" us with their shares. This will involve filing a proxy with the SEC and taking a vote. The rate of share exchange of RMEC stock to merger company stock will be known. The shares will be exchanged (key word "exchanged") for the stock of the NASDAQ or American Exchange company's stock.
Rather than speculate regarding those whose interests are opposite our shareholders are doing, I would rather focus on fundamentals. The acquisition of the cash flowing properties which you are reading announcements on (Stifel Nicolaus etc.) is the key to developing fundamentals. We have made ourselves attractive to several NASDAQ and American Exchange companies who put a premium value on the assets, reserves and cash flows being purchased. Those of you who wondered what we were doing can now see that a permanent solution to the naked shorting problem was, in fact, being solved by simply pursuing the fundamentals as I said it would. They can't fight the merger since it's not based on the stock price, but acquisition and asset value. There is no naked shorting allowed on the NASDAQ or American Stock Exchange.
Remember that we said we would close Trinidad. We said we would close U.S. Oil. We said we would go get our stock back in a lawsuit. We said we would seek out cash flowing assets. We said we would give a 10% stock dividend. We have delivered on each of our commitments. You may have seen our latest announcement. The 750 bopd and 5.5 mmcfpd gas will generate $1.1 million at current prices or $0.20 per share. The other properties already announced will generate $0.05 per share. Cash flow of $0.25 per share isn't a bad start in fundamentals. At least an equal amount is being negotiated at this time.
I would like to put something in focus for everyone. EL Paso Gas began twenty-five years ago with nothing and became the largest gas company in the world. When they finally sold off their older assets (after Burlington took a run at them), that start up company who bought those assets is now known as Williams! The point is that it takes time to build fundamentals. The source of credibility is that I am not promising you a rose garden overnight! I do not work for day traders. I work for long holders who want a sound company, built on solid fundamentals.
This merger is not a done deal. We are in discussions and are pursuing it.
As each acquisition announced brings us closer, keep watch for that news. The deal is being structured in such a way that naked shorters are a sideshow and will only drive the price higher when they have to cover shares.
On other matters, I would like to address two questions put to me recently: 1. We received some free trading shares as our salary. There is some concern we will flood the market. Not so. The SEC requires that an officer of the company can only sell 1% of the total shares outstanding every 90 days. Therefore, I can only sell less than 24,000 shares per day average, which on our volume will have no effect (less than 700,000). 2. Revenue on Weston/Crook County (U.S Oil Properties) - I learned on February 13, that the filing of our 10Q would not include the Weston and Crook County revenues (filed February 14th) as we have not finished paying off the $200,000 note due U.S. Oil, although we have made good progress during the first quarter. We expect it to be reported in our Second Quarter (March 31st). Conclusion We have pursued and continued to pursue the cash flowing properties that build our fundamentals and create a favorable merger opportunity for us. As we have performed on everything we have promised so far, we expect to continue in that same pattern. As more news is forthcoming regarding building the company, we will release it. We went public in late May 2002. If we could consummate our merger and purchase the cash flowing properties as expected by May 2003, we will have done very well for one year of effort.
