Octagon 88 Resources (OCTX)

[bhumiartha]

Petermic, Garry and Bill Tighe are the principals behind OCTX, Zentrum energie Trust, and CEC North Star, the companies all related in this.
Previously, they had run successful pump-and-dump, using the same and similar properties, under thenames Cougar, Kodiak and Tamm Oil.
The OCTX holding is actually a 32 per cent share in a privately held company called CEC North Star, which in turn is financed by Zentrum Energie. both CEC North Star and Zentrum are Tighe-controlled entities.
You have seem the pump about the well they have drilled, the success they have had, how they have moved into the production phase, and even a video of the production method. And you have valuation of Ersnt Schlotter, swho says the property could produce a fortune of up to several billion dollars.
This is meant to create the impression that this a lucrative property about to produce oil and bring in lots of money for shareholders.
Then you look at what OCTX filed with the Securities and Exchange Commission, a couple of weeks ago, in their 10Q:
The Mineral Rights Agreement contains the following terms, amongst others:


·
An 8% Royalty of Gross Monthly Production to be paid to Zentrum;

·
On or before December 31, 2013, the Company shall have drilled a minimum of one (1) Exploration Well to Contract Depth at locations to be provided by Zentrum and agreed to by the Company on Section 9 89 R3W5 of the Trout Property;


·
On or before June 30, 2014, unless otherwise mutually agreed to, the Company shall perform a 3D seismic program on Sections 4,5, 6 89 R3W5 of the Trout Property. A copy and rights to the seismic data shall be provided to the Vendor within 60 days of the completion of the project;


·
On or before December 31, 2014, unless otherwise mutually agreed to, the Company shall have drilled a minimum of one (1) Exploration Well at a location to be mutually determined based on the 3D seismic above;


·
Any default in the terms above will terminate the Mineral Rights Agreement and the Company shall return the Trout Property to Zentrum.


When you have a eight per cent gross overriding royalty on production, that means almost the entire potential profit margin is consumed by the GORR. What is left for investors?
Moreover, the oil "that has moved into porudction phase" is described in the legal document as an exploration well that will lead to a 3D seismic program: a prliminary step to delineate the reservoir, which seems to be many years from production.