Replies to post #45185 on Hemi Energy Group Inc. (fka HMGP)

[plastipunk]

It took a lot of guts for KAA to cite the market in his report to imply that Hemi is subject to the main market forces, which it is not.

I remember when people were still falling for the pump a long time ago, the market would go down and Hemi would go up, so obviously Hemi is not subject to the main market forces.

Remember when oil was way up and other oil companies reflected that in their share value, while Hemi was on the way down all through these huge oil premiums.

After all these years of promise & pump Hemi couldn't even take advantage of record oil prices to sell oil or even sell their company. Remember, KAA said they would sell sooner than planned if market forced provided and opportunity. I believe this is the true revealing picture that Hemi is a pig-in-a-poke. In fact, I believe this report was KAA's first hint that he may shut Hemi down, maybe even by years end.

I believe that once the market digests this recent report Hemi will slide into the 000s.

[kelseyf]

Does the 87M O/S currently for Hemi surprise me? If KA had indicated a big increase in the A/S as well then Yes I would have been surprised, but he did not as the A/S remains at 100M

So NO I am not surprised......

Why, because it is very clear IMO that Hemi/KA is utilizing his resources and that of Hemi's through a stated business strategy that continues to grow the value of the Hemi assets; assets now valued at >$1.3M, NO DEBT and proven O&G reserve values that now provides some additional information and insight (Bennett B-documents).

And IMO this is the critical step for any emerging company, let alone an emerging O&G company to survive and strengthen.

Bottom line based on this report: it is a complete report. It provided the information that all were requesting and want to review. How one assess this information is up to each and everyone one to determine how this influences the going forward opportunity in Hemi.

But what this report does state for the record is exactly how KA presented Hemi during 2008.

Keeping very focused to an O&G business strategy as outlined, keeping Hemi as a financially strong and healthy emerging O&G company, taking on No Debt, building thru diversification within the O&G industry a portfolio of leases that continues to add asset and revenue capabilities for Hemi that allows for future growth.

And as an additional benefit KA provided some nice additional information that goes to the heart of the current business approach by Hemi in SEK and deliver a small NET PROFIT for Hemi in 2008.

Now how many emerging O&G companies in 2008 can claim a profit?

Kels

[Big Mur]

No, I was not surprised. I was hoping they hadn't increased it quite that much, but then again with the share price where it is, anytime the shares are used it obviously takes more shares to equate to any certain $ value.
With the price of oil down, and the economy being such as it is in general I figured there would be some points where some shares would get used to maintain that "debt free" status.

I know that KAA's preference has always been to preserve shares for use in acquisitions and making such deals. But I'm not surprised, nor alarmed, since it still appears the share usage comes sporatically.
Some are still stating that Hemi has used shares steadily over time even though we have specific PRs stating otherwise (that shares were used during certain time periods for certain reasons... but we also have had long stretches with almost no share usage).

I'm also not concerned that Hemi's O/S would reach their A/S anytime in the near future. I won't go so far as to say it could never happen, but I don't think it's likely to occur unless something happens in the energy market that extends the current price levels beyond 2009. Hemi has many options for funding if they need to use them, including surrendering that "debt free" status for readily available financing if it comes to that. They might not get a premium price for their non-core lease holdings in other states like New Mexico or North Dakota, but they could still get a tidy sum without doing much, if any, harm to their potential for being bought out at some point.
Considering what carrying a debt load does to the deal when a company like Hemi is being acquired by some other company, I'd say that Hemi maintaining that debt-free status is worth doing even if it takes the use of some shares to do so for now.

Frankly, I think it's really remarkable that they've gone from mid-2005 until now and only used 87+ million shares. For as much as some call Hemi a "typical pinky", I don't think that is typical at all.

[texas4286]

No, in conversations with other shareholders, we had figured @85M. While not thrilled with the 87M O/S, it does put to rest the wild speculations by some on this board that the A/S had been surreptitiously raised and that the O/S was in the hundreds of millions.