Here is more...Enjoy the trip down memory lane.
I'm no expert, but . . .
I do know a good thing when I see it! And whenever I subsequently happen to firmly believe even more in the ultimate potential after some very careful and exhaustively diligent study, it is all the more reason to grope for the big brass ring! And when it comes to a point when I clearly see that big brass ring coming round to approach me, I grab it with all the power that I am ble to muster from within me (with both tooth and toenail, as they say down here in the deep south), and I also hope rather sincerely that others I know do the same.
Now, everyone here has their unique story; every able-bodied man or woman has a distinctly notable beginning and ending. That’s just the way it is in life. We each know quite well our own personal story—how we happened to come upon this ol’ hunk of coal we’ve come to know as Grifco International, Inc. (Grifco). Many of our stories may be strikingly similar, while others of ours may tell tales that are entirely different. Only each of us knows.
So what is my own story? Well, my story begins on the Yahoo message boards for Viropharma (VPHM). At that time, I held a respectably sizeable position (leveraged on margin, of course) of 36,000 shares, which I had purchased at an average price of between $7 and $8 per share. I rode that one all the way up into the $20’s and never even saw the one-two punch coming -- the bottom falling out from under it as the threat of the OGD (Office of Generic Drugs) waving tests for bioequivalence loomed on the horizon (I still believe in its awesome potential, by the way, as it is a very cheaply priced stock for all of its future potential, for it is a totally debt-free company with cash reserves totaling half a billion dollars . . . anyhow, enough of that pump).
At any rate, as I was about to disclose, back at the time, I lingered on the VPHM Yahoo message boards as a mere once-in-a-while poster, under the not so anonymous and not so creative alias of VPHM_rules. Actually, my very first post for VPHM (yes, that’s right—my very first post) on the Yahoo message boards, which will tell all of you just how green or wet behind the ears I was to the posting exercise at the time, was my primary e-mail address (I currently have three of them: 1) my primary address; 2) my secondary address, listed under my RB profile; and 3) my work address, which some of you happen to know. Obviously, there were no secrets to harbor on my end in the darkness of any supposed anonymity.
Anyhow, I posted every once in a while on the VPHM Yahoo message boards and had gotten somewhat familiar with a few of the other posters (Visxlaserman, to name one). Then on one not so busy day, I’m casually reading the VPHM Yahoo message board when all of a sudden there is this intriguing post from a fellow poster (some Leeds or something or other . . . actually, I really do know what his entire name was, but for the sake of keeping his true name or identity anonymous, I will refrain from giving you the rest of it). This poster turned out to be the famous Cleverrox. It was an extremely sharp post, to be sure; in fact, I actually thought that the stock analysis on the referenced link was written by a professional stock analyst or something (at least it was written and formatted to seem that way, but then again, I was only a novice).
What follows is what our well-respected Cleverrox posted on the VPHM Yahoo message board, nearly verbatim. Ok—I embellished it a tad bit in order to improve on his writing style. I just couldn’t help myself. That’s just what I do, as most of you know! Now, when I say that I embellished it, I don’t mean to imply that I willfully changed any of the hard facts expressed, but only that I improved on the creative style of the writing that simply served as a frame around those hard facts. It seems like it was only yesterday; the day was June 28, 2005.
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I present to you an absolutely incredible investment opportunity: Grifco International Inc. (pink sheet stock ticker symbol: GFCI; home web address: www.grifco.org). The stock research report is located at the following link: www dot rowdyrhino dot com/stocks/gfci dot htm. Today's price: $0.45 per share . . . the 1-year price target for June 28, 2006: $10.20 . . . that’s over a 2000% gain.
Coiled tubing drilling (CTD) is a hot area of the oil drilling industry, projected to grow by a remarkable rate of 70% from July 2005 to June 2006. Grifco is capitalizing on this new market with the Jet Motor product, a piece of machinery to make CTD wells 15%-25% more efficient. They will have a heftily projected 80% profit margin on the rental of this product. And in addition to the Jet Motor product, Grifco designs and manufactures over 350 products for the oil & gas industry with a clientele boasting the biggest names in the business, including Halliburton, Exxon, and Schlumberger.
Management is conservatively predicting $20 million of 80% net margin revenue per year from the Jet Motor product line, in addition to the $0.46-$0.50 run rate of their current product line. It is easily possible that earnings per share (EPS) will be as high as $1.35 for the time period July 2005 to June 2006, and that is a conservative estimate. Company management may release their preliminary guidance for FY2005-2006 by the end of July of this year.
Pink sheet companies do not have to file any reports with the Securites Exchange Commission (SEC). However, Grifco has a goal to file with the SEC by the end of September 2005. This is in preparation for an AMEX or Nasdaq filing hopefully by the end of March 2006. In the May 26 conference call, management said it was sick of the share price market manipulation by naked shorting hedge funds, which lowers the stock price, and they are seeking SEC listing to prevent that from happening in the future.
Obviously, the stock is ridiculously undervalued, and this is due in part to all the naked shorting that is going on right now. I don't believe at all that the guidance management will soon issue can do anything less than rocket the stock from its current price of $0.45 per share.
This is only a preliminary report, and I will be seeking some additional information from industry resources (IR) and management. But even if I am off by 20%, the stock is VERY UNDERVALUED . . . an EASY 20 bagger (easily returning 20 times your initial investment). Furthermore, the industry has an average price to earnings (P/E) of over 30, so my 1-year price target of $10.20 with a P/E of 12 is very, very reasonable.
Shooting for the skies (using the industry P/E of 30), it’s not too unreasonable to expect this stock to go to a possible share price of $25.50 . . . a POSSIBLE 50 bagger (quite possibly returning 50 times your initial investment).
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Now, I knew absolutely nothing about Grifco International, Inc., the public company (I’d never even heard of it), but I did know (and I still know) more than enough about the oil & gas industry to believe to some extent in the lofty claims, as the oil & gas industry was (and even now still is) caught right smack in the middle of a phenomenal boom.
I copied the post that Cleverrox had written on the VPHM Yahoo message board and sent it the very next morning via e-mail to my cousin (y’all know him as TxTowers here on RB), because he is exceedingly far more familiar with that particular end of the oil & gas industry than me (I happen to know exceedingly far more about the refining end of the business than him). At any rate, I figured that if anyone could find something out about Grifco International, Inc., or any of its wholly owned subsidiaries, I knew he could do it.
Well, I followed up that e-mail with a telephone call, and my cousin and I discussed the company’s potential prospects, and he said that he had actually heard of their most recent acquisition—Coil Tubing Technology, Inc. (CTTI). In fact, he had even used some of their tools out in the field in the past—known in the oil patch by their more often used nicknames, Venturi Junk Basket and Yankee Screwdriver. He said that as far as he knew CTTI was a good, solid company, and that he had heard that Jerry Swinford was well respected in the business.
My cousin also told me that although he had never heard of Grifco International, Inc., he would gather in as many of his oilfield contacts as he could manage to drum up in order to dig into as much of the hidden facts about this company as was humanly possible. I knew that he would put both of his ears right to the ground. I left it at that.
After a few days had passed, my cousin had found a supervisor who worked for BJ Services in Brazil, and this guy was very familiar with not only CTTI, but also its parent company, Grifco International, Inc. In fact, this supervisor (let’s just call him the BJ Guy) knew of both Jerry Swinford and Jerry Griffith, especially Jerry Griffith, whom he knew much, much better.
The BJ Guy said that Grifco was doing a lot of work down in Mexico and in Venezuela. The BJ Guy also said that as far as he knew, Grifco’s tool lines, at least back at the time that he knew of them, were not the most sophisticated tools in the market—that they were more along the lines of the generic or knock-off types, nothing too fancy or proprietary, but that it didn’t need to be all that fancy to make money in such a booming market.
As a matter of fact, here are some direct quotes from the BJ Guy:
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“I've known Jerry Griffith (ex. owner of Grifco Inc. or maybe still a partner?) for years, as a matter of fact he wanted to get together last year to talk business (a possible job in Mex.). He is a great guy, his tools have always been low market, lot's of old stuff and very little RD work ... the quality control has traditionally been very poor also.”
“I’m sure that with the recent acquisitions (CTTI & GOT) and the injection of fresh money this scenario might change for the better.”
“With the industry as hot as it is, you know they’re making some real money!”
“I've used the MacDrill for many years (especially in South Texas) and the 2 7/8" works ok, but very slow in the smaller sizes (2 1/8” & 1 11/16”) work but have lots of negative aspects and have limited applications.”
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My cousin was also able to make a service industry contact with another guy working for Thru Tubing Solutions, Inc. (an RPC, Inc. subsidiary and a primary client for CTTI), down in Mexico. This is what that TTS Guy had to say about Swinford’s tools:
“We run his indexing tool, and his impact hammer. Both tools work good.”
Well, suffice it to say that both my cousin and I were adequately satisfied to buy in with a small measure of caution. In other words, I felt comfortable enough to buy 10,000 shares at $0.47 apiece, given what my cousin and I had uncovered up to this point. To invest any more into this company or to feel more comfortable with what we had initially invested, we would have to do a bit more studying. My cousin and I would continue to put our ears to the ground.
So, once we were both somewhat convinced that Grifco International, Inc. was a real company with real tools and real business, we began to scour the internet for all available PR’s and such. That’s when we came up with the infamous SUPERBLY GLOWING PR (what follows is but a small excerpt, the first paragraph, of that shining PR):
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GFCI Operational Update and Earnings Guidance for 2004-2005
Thursday March 3, 2:55 pm ET
HOUSTON, TX, Mar. 03, 2005 (MARKET WIRE via COMTEX) -- Grifco International, Inc. (GFCI), a provider of oil and gas services equipment to the worldwide oil and gas industry, announces net income of $2.6 million, or approximately $0.13 per share on $7.5 million gross revenue for the six months ending December 31st, 2004.
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Now, after I read carefully and with some rather unrestrained excitement through that wonderful PR, I quietly thought to myself, “This has got to be about as good as it gets,” or so I thought. Even private company fair valuations are generally established at a nominal 7x net annual income, according to BVMarketData, which bases its statistical findings on valuation data for a total of 7,503 private company transactions—that is, those valued under $100 million—made between the years 1990 and 2005.
Of course, this is not an all-inclusive amalgamation of the entire universe of such private company transactions, but it is quite likely that it is based on more than enough real data points to establish fair market valuations within acceptable statistical margins of error. Therefore, rather conservatively and unbelievably, factoring in that 7x net annual income multiple would essentially mean that Grifco International, Inc. was back at that time (yes—more than two long years ago, now) worth quite a bit more than what the share price would show (again, this is in full accordance with those non-forward-looking claims about actually achieved revenue and earnings over the second half of 2004—claims made in that awesome PR of March 3, 2005). So, what should one have reasonably expected for the fair market value of Grifco at that time?
2 (remember, that was a 6-month net income) x $2.6 million x 7 = $36.4 million
And for their publicly claimed 20 million shares outstanding, that would translate to a reasonable and conservative and very respectable $1.82 per share! C’mon, who could resist buying up a boatload of shares after that much positive news? Answer: Not many people!
Now, what about publicly traded companies? Let’s not forget that Grifco International, Inc. was (and even now still is) a publicly traded company, not a private company. According to the same data source (BVMarketData), fair valuations for publicly traded companies are better and are established at a nominal 24x net annual income, which is based upon statistical findings on valuation data for a total of 1,233 publicly traded company transactions—that is, those valued under $100 million—made between the years 1990 and 2005. Using that multiple, Grifco International, Inc. should have been fairly valued (back at that time):
2 (remember, that was a 6-month net income) x $2.6 million x 24 = $124.8 million
And for their publicly claimed 20 million shares outstanding, that would translate to a reasonable and very respectable $6.24 per share! Once again, who could resist buying up a boatload of shares after that much positive news? Again I answer: Not many people!
Of course, one can easily argue that this was not your typical publicly traded company, seeing as how we were at that time dealing with a Pink Sheet publicly traded company stock, not some Nasdaq- or Amex-traded company stock. Ok, even assigning a hefty 50% discount for having been a Pink Sheet stock, we are still talking a publicly traded stock that was back at that time selling at a mere fraction of its supposed fair market value of $3.12 per share (again, this is based on that glowing PR!). But wait! That’s not all!
There was also the second paragraph of that same glowing PR, as follows:
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Grifco International goals for the second half of the year are predicated upon achieving significant growth in revenue and shareholder equity. Based upon Grifco's aggressive acquisition schedule and expanding product line, management believes the third and fourth quarter 2005 will earn an additional $0.23 to $0.25 per share for the fiscal year ending June 30th 2005. Of course, the Company's forecast is based on its ongoing projects and acquisitions, including:
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What could a bystander with a good amount of money—any reasonable amount of money—do with such an awesome potential for financial windfall? Answer: Sell the wife and children and buy the family farm! (Just kidding)
Quite obviously, I read through all of those wonderful forward-looking revenue stream and net income projections that were so convincingly offered, and I took the bait and hook, and so did a barrage of other investors. I was not alone in my perceptions of anxiously awaited returns, nor was I alone in my seemingly oblivious ignorance about what one could likely expect.
O’ it gets even better, friends! One late Friday night, my cousin and I together listened to that intriguing conference call (the May 26, 2005 conference call), and we were both astounded at the optimistically glowing convictions coming from the likes of Jim Dial, Jerry Griffith and Jerry Swinford. There was BIG MONEY to be made by this company, and by virtue of investing in this company, there was BIG MONEY to be made by investors in this company. It seemed a win-win situation from every conceivable angle, an unlikely chance for a losing proposition.
Swinford’s Jet Motor alone was quite convincingly promised to bring in at least $20 million in annual revenue all by itself, not to mention the revenue and net profit stream that would come by way of all other equally profitable business operations. I mean, c’mon, there were both the Global Oil Tools acquisition and the glowing prospects of the Libyan venture, not to mention all the money—truckloads of money—to be made through them! All of this was supported by a bevy of operational promises and affirmative business dealings.
And let’s not forget the promise of what Grifco’s newly hired CFO would bring to and do for the company—financial audits and full disclosure and SEC reporting requirements, etc. This surely seemed to be a very necessary step toward the already widely accepted potential for financial greatness. And not only Grifco’s greatness, but ours, as well!
On April 4, 2006, four of us (TxTowers, Kennerflip, Cleverrox, and myself) visited Jim Dial at Grifco in Spring, TX. We had a 4-hour visit. We asked Jim Dial about a Mike King e-mail that circulated around to Grifco shareholders who were on their Princeton Research Newsletter mailing list. We told Jim Dial that Mike King's e-mail had gone out to us on September 30,2005. We also told Jim that in the e-mail, Mike King mentioned how Grifco generated $14.0 million revenue, with $4.4 million in net earnings, for fiscal year ending June 2005; we asked him if that was accurate.
Dial answers us (and I quote), "Mike King was privy to many of our numbers, but he probably put out financial numbers for only one of our divisions; so no, it is not accurate; our revenue and earnings should be higher than that." Well, that was positive, to be sure!
We also asked Jim Dial if Grifco had any preferred shares, options, warrants or debt convertibles. He said, "No." We asked if Grifco had any kind of debt, and Jim Dial said, "Oh no, zero debt." That was even more encouraging news!
And then there was that Libyan facility project binder with ribbon and official seal from the U.S. State Department, outlining future revenue and earnings streams for the first five years. Once again, very promising news! It was all good!
About two months after King's circulated e-mail, Jody Tomita of the same Princeton Research put out a few e-mails, detailing how in the third quarter of 2005 (July-Sept), even through those Hurricanes of that year, Grifco generated a very respectable $2.7 million monthly revenue, and CTT generated an equally respectable $1.3 million each month -- that's $4 million per month combined! Truly, this company was headed off into a very promising future.
Then on April 10, 2006, Jody Tomita (Princeton Research) sent to me yet another e-mail, saying that Mike King had given her preliminary financial figures on GFCI sales YTD: $14 million, one facility (Jet Motor), $6.5 million profit and Houma, $1.5 million profit. Who in their right mind could resist the appeal to logic? Answer: No one!
There was just no mistaking it. Grifco was way undervalued, and it had no logical reason to be priced so cheaply. That one fact alone bewildered even the most precautious investor. Was it a case of an overbullied stock? Answer: It sure seemed to be the case.
And then there were those ramp-ups in manufacturing capacity and those noteworthy increases in purchase orders and the like, not to mention the much-anticipated CTT spin-off. Also, let’s not forget the lucrative listing on the Libyan Stock Exchange. And then there was that more gloriously compelling tidbit, let’s not forget those supreme merger and acquisition offers from the United States, the United Kingdom, and Libya—that’s right, stock buy-out offerings! Now, these were not paltry offerings by any means, as they ranged “from GBP 28 Million British Pounds (USD $49 Million equivalent) to GBP 36 Million British Pounds (USD $59 Million equivalent).” That’s definitely not chump change, by any conceivable means!
Being told repeatedly and convincingly by Jim Dial that there were but only a mere 38 million shares issued and outstanding, investors could easily see these attractive merger and acquisition offers as unquestionably implying that at the very least we investors would each get about $1.29 per share to at the most $1.55 per share for our shares of GFCI. Now, who wouldn’t get all flustered and excited about the prospects of such awesome news? Answer: Nobody!
Now, what was the most gloriously compelling news of all? It is far and away that illustrious $2.25 per share offering! And that awesome news was touted on not just one, but TWO different PR’s—one coming from Lyamec and the other coming from Grifco! Invariably, investors would stand to gain some truly amazing (if not utterly dizzying) returns for their money. Who would have ever thought that absolutely nothing would ever pan out with that monstrously exciting news? Answer: Not me! Not anyone!
I believed it all—hook, line and sinker. Sad as it seems even to this day, my cousin purchased more shares of GFCI at the high of the day on that Freaky Monday (at the cost of $0.40 per share). What a foolish sucker he was! What a foolish sucker I was, to be sure! What a foolish sucker we all were! So, what ever became of all those offers? I’d really like to know.
It was at this time that I began to notice that Grifco shareholders seemed to own exceedingly far more shares than was often admittedly claimed by Jim Dial as the official count. Dial was claiming about 12 million shares as free-trading float, but I was then determining through some exhaustive research through my contacts, that at least on a conservative basis, there were at least 32 million shares that were owned by just RB posters and known non-posters. Clearly, some discrepancy in the share counts seemed very plausible. Could it be the shorts? I didn't have enough information to know for sure.
As a result of this discrepancy, Visxlaserman and I then decided to pay Jim Dial a second visit (Visxlaserman had visited by himself in May 2006). The day was August 9, 2006. We each went with a unique purpose in mind -- Visxlaserman held shareholder faxes of brokerage statements in hand to push for more disclosure about Grifco's share counts (in fact, he held what totaled about 22 million shares), and myself, I held affidavits for 24 shareholders, representing exactly the sum total of 7,183,969 shares, which we believed represented as much as 18.1% of the admitted total of 39,682,540 shares issued and outstanding, which were necessary to impose legal rights, according to NRS 78.105 and NRS 78.257 of Nevada Law, to inspect and copy two items of keen interest, the stock ledger and financials.
Nevertheless, Grifco had just the day before our arrival (August 8, 2006) restructured as a corporation, and having issued 56.5 million shares as a security pledge for UERI, had oppressed by way of issue of shares our minority interests, not to mention that new issue for Jim Dial, 18 million preferred shares with 20 to 1 voting power. I understood that Grifco now had a total of 350 million common shares and 50 million preferred shares authorized. With 360 million votes at his disposal, Dial could very easily squash the combined vote of all 350 million common shares, assuming they were all issued. Yes, Dial was now the majority voter, all by his lonesome self.
So what did we take away from the 6-hour meeting? Visxlaserman and myself were both treated to lunch, and we were both allowed to view some powerpoint presentation outlining Grifco's business plans that entailed an aggressive acquisition plan. Of course, before I had a peek at it, I was asked to sign a Non Disclosure Agreement. We saw those plans as very positive developments, to be sure. If Jim Dial proved to be successful in accomplishing his plan, it would mean an awesome potential going forward. UERI was part of that plan. Dial told us that we would be having all of the details revealed in that shareholder meeting coming in the Fall.
Now, let’s not even venture into that JOKE of a shareholder meeting! In my own opinion, the joke was definitely in the lack of real substance in that meeting and not in the Jay Leno impersonator who was hired in order to make us all laugh at the spectacle of it all. I attended that meeting (and spent good money, I might add, along with my cousin and many others) simply because Jim Dial promised that we would hear substantial information about historical revenue and earnings, pro forma financial information for a variety of acquisition targets, planned execution of the forward business plan, and future revenue and earnings projections for not only the existing subsidiaries but also any and all new subsidiaries that would be brought online by the acquisition schedule of that business plan. Did we get that? Answer: No!
But then there were those share counts that seemed to climb just as fast as the lofty promises.
As Jim Dial disclosed the ever changing share counts to a variety of investors, it became rather obvious that we very quickly went from 20 million shares that were officially issued and outstanding as of March 2005 to 24.5 million shares to 27 million to 28 million to 31.57 million (and quite likely up to this point, everything beyond 20 million shares was a direct result of those Robinson Reed financing agreements over the course of that entire summer) to 37.57 million (following Lyamec’s good-faith purchase of 6 million shares) to 39.8 million (as of May 1, 2006) to 44 million (now, up to this point, a few private placements were likely tendered to raise much-needed capital) to 100 million (following the August 8, 2006 issue of 56 million shares as a security pledge for options to lease gas producing properties for UERI) to 118 million to 140 million (more pledging against required capital is my best guess).
So where do we all stand now? Well, it does seem as though Jim Dial has very painfully traipsed us all into the outer rim of what anyone could consider excruciatingly intolerable. And that’s no lie! Many of us have witnessed the demise of our brokerage accounts (some by as much as 95%, or more). We still await that long-awaited (for more than a year, now) CTT spin-off and its subsequent dividend distribution. It’s good to hear that progress is being made here.
Furthermore, we still wonder about just how serious Jim Dial was when he announced that Grifco shareholders would partake in dividends of UERI (FTXN, being the parent company—the publicly traded company). We speculate about why there is such blatant disregard for promised action (vis a vis, those still very much anticipated weekly updates about UERI’s gas well drilling program), with little to no responsible follow-through, nor with any adequate reasons kindly provided to explain the gross lapse of southern integrity.
In the south, especially deep down in heart of Texas, a man says what he really means, and a man really means what he says. To behave any differently is just not good southern practice! Why the apparent secrets? Is it favor or foul? Answer: I don’t know!
Could Jim Dial simply be the unwitting victim of some long and drawn-out game of “I’m gonna get you sucka!”? Are the Jarvis boys still involved in an inconspicuous way? Is Lois Newman doing her own dirty thing, squeezing the life essence of the company where it hurts? I don’t know, but whatever it is that is going on, it is more than obvious—more obvious than a horsefly in your clam chowder! In fact, for a lot of us, it sure seems to be more like a hot, steaming piece of dark dung in our morning oatmeal cereal. At least it seems that way!
And now for the $64 million question: Do I still believe the way I used to believe? You betcha! I may not fully understand the machinations of all that has nefariously transpired over the last two dreadfully painful years, but operationally, we have a relatively sound array of decently profitable businesses. And that is no lie! Once again, allow me to quote that BJ Guy: “With the industry as hot as it is, you know they’re making some real money!”
Global Oil Tools and Grifco Scott (formerly known as Advanced Oilfield Technologies) have never been busier than they are now (some friends of friends have repeatedly visited and gone by over the recent weeks and months and report their firsthand observations). What they report are more and more workers. And more workers mean more work, and more work means more money, and more money means . . . well, you know. That’s just the nature of the game.
My cousin established a few more contacts out in the field that have actually used and are still using Swinford’s tools. They report nothing but good news—they love the tools, and they can hardly wait for future manufacturing of the larger production sizes.
Assuming that Grifco shareholders are in fact getting a dividend of FTXN in the very near future, and by virtue of being a wholly owned subsidiary, a share in UERI, it is good to hear that their gas well drilling program is steadily moving forward, even though there have been no formal announcements by Grifco, as clearly promised. There are 208 proposed drill sites (actually, more like 230 possible). I have discovered that in that area striking a productive gas well is about as certain as it comes -- 94% success rates.
And then there's UERI's partly owned drilling subsidiary, Precision Drilling & Exploration, Inc. (PDEI). UERI owns 51% of the company, while the Ronnie Taylor family own 49%. One nice thing about being just another driller is that the guys will get paid, whether or not the newly drilled well is productive. And with a slot of 208 drill sites at $300,000 each, PDEI is poised to make some good revenue in the upcoming years. At just 1 well drilled per month, it is poised to generate $3.6 million annually; for 2 wells, $7.2 million; for 4 wells, $14.4 million. You get the picture. Grifco shareholders do get to receive a dividend in this company, as well.
And then there's the final Global Oil Tools dividend, also. Grifco shareholders should receive dividend shares in that, too. After we all get our CTBG dividend, we shall begin to see details about each of these three other dividends. Hopefully, these dividends will be distributed more efficiently than CTBG. Yes -- let's hope!
Notwithstanding the big shroud of secrecy with the drilling program, the TRRC representatives are always more than happy and very willing to provide publicly available information about UERI's well drilling activity, as well as their open flow test results for each completed well. In fact, I happen to have the open flow test results for both the first and second wells, and the results are impressive and quite promising. If but only half of the proposed wells yet to be drilled prove to be equally productive, we are talking a profitable business here. In fact, in keeping with these assumptions (only a 50% success rate), we have a business that could be valued at around $35 million (using the typical PV-10 analysis for oil & gas properties).
Joe C. Neal (UERI’s consulting petroleum engineer) does seem to have projected revenue and earnings streams based on initial flow rates of 230 mcf/day, but the first two wells (Adams “127” Wells #12 and #11) came firing out of the box, as it were, with initial flow rates of 337 mcf/day and 355 mcf/day, respectively, which is well beyond what was actually expected by our consultant.
Believe me when I tell you that real work is being done at each of Grifco’s subsidiaries and arms length affiliates; real business is being conducted as we patiently wait for some positive sign in the share price; and real money is being made despite what it now seems. We may not fully realize it at the moment, but in the end, the hard truth does have a way of rising up to the frothy surface, no matter how dark or murky the waters seem to be. In the end, I feel that we will all be vindicated for our positive convictions.
One final note: I have never once urged anyone here to buy GFCI. I only shared my own unrestrainable exuberance about their seemingly obvious and very positive prospects!
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