Treaty Energy Corp. (fka TECO)

[Belize Oilwatch]

On TRRC I have no knowledge or opinion.

I agree penny companies need to celebrate success but I am just concerned to make sure that it is genuine success that is being celebrated - as for penny companies the temptation is even greater (IMO) to overstate success to boost shareprice for speculative reasons.

My other points more clearly stated are:

(1) Even a penny company needs to do the basic things in the oil industry well and not endure too many delays and doing things over which cost money
(2) Lots of people make positive forward looking statements whereas I look at real peformance - financial as reported to SEC and operational as reported in PRs by TECO and in photos by others like yourself
(3) Cash Flow Positive is a much mis-used term and much mis-understood in business (not just in the oil industry).
- Even in a company as small as TECO you cannot isolate a specific area like W Texas and get a realistic view of how well the company is doing on a cashflow basis based only on that one area. As if you just consider one area you will be missing cash drains on Teco like their relatively large overhead expenses and other cash drains like investment in Belize.
- Also TECO accounting is getting very complex (the reason for delayed 10-Q and K reports IMO) with so many funding schemes like royalties, equity sales and rights sales on wells that we think are TECO's which would reduce the actual cashflow impact on TECO even when the barrels are coming
- And strategically, you would probably want a penny start-up company to be cash neutral not cash positive with cash generated from operations being invested in growing the company instead of being distributed. And with Profit (calculated in line with accepted guidelines) giving a better indication of company financial health.