Cross Border Resources, Inc. (XBOR)

[boomer23]

Ed...just my humble opinion here so take it for what it's worth...
XBOR has an acreage position that cannot be acquired or assembled in the Permian. The nature of the leases (perpetual) make it all the more attractive. The good and the bad is that there has never been a huge budget behind XBOR to exploit the acreage (bad) but the good is that the upside is undeniably intact. So "frying pan to the fire"?? May be a good point. Look at the "frying pan" first. Previous management was limited by both resources and scope. One has to admit that a measley $5mm did triple production and reserves under their watch. This is probably more to the credit of the acreage and operators rather than management but the results speak for themselves. There is no question that XBOR was staring down the barrel of a highly dilutive financing to continue under previous management. Look at the "fire" as an option (RDMP). Whether we like it or not RDMP has acquired and will continue to acquire a controlling interest resulting in a combined company. In the interest of full disclosure I have converted. Once RDMP has a requisite number to create the merger I'm afraid that the 2:1 goes away and remaining shareholders are likely to receive something less than that so if we gotta drink the Kool-Aid it may as well be from the biggest cup we can get. My strong opinion is that RDMP has substantial operational advantages over XBOR. If XBOR's acreage is going to prove itself, it will happen much faster under the RDMP team.
I have zero concerns about RDMP resolving it's debt issues at this point. This includes XBOR's. I have zero concerns about any monetary issues right now (going concern language). It can be safely said that companies don't have cash right up until the day they do.

I have no idea when I'll sell. My plan is to watch how RDMP develops/manages the acreage. If they are only as successful as previous management we'll see reasons to stay in for the long term. If RDMP is successful at acquiring the drilling company they have been pursuing it will be a huge coup. I have the BK filings and that company would run almost a million a month in EBITDA when you pull out the BK expenses.

Another solid Q for XBOR. Pull out depreciation and XBOR has solid free cash flow. The combined SG&A now has a huge impact. They are completing several new wells and bringing those on line in the next few weeks so there is no question that should they need the borrowing the line will increase.

I'm not advising, suggesting or otherwise encouraging you or anybody else to convert. RDMP certainly did not earn any "style points" in the manner at which they went about acquiring XBOR but they do have their money where their mouth is. It will be interesting to see what happens in the next few weeks to say the least!