Replies to post #17533 on Empire Energy Corporation Intl. (fka EEGC)

[Moneytree420]

Agreed! Not only that but a business plan has to be drafted and submitted to the finance company before being approved any loans!
180 mil is a huge chunk of change!

[EarnestDD]

Yeah right .... EEGC has always done everything right.

And that is why after spending $50+ Million they havent drilled more than 240 meters.
lolol
jmo

[goodoil]

THANK YOU HOWARD, FOR SAYING THAT!!!!! GO EEGC. WE WILL SEE EEGC MAKE IT. SOME PEOPLE HERE WONT LIKE THAT, MAKES ME SO VERY, VERY HAPPY....

[BobSinCA]

We should be sure to keep our facts accurate as we discuss EEGC's prospects.

The following is not accurate:

company or investor that would commit to investing $180,000,000 over a 4 year period. Don't you think they tore this company apart and examined every aspect of it before they said they would finance this project. You don't commit that kind of money without the expectation of a return many fold.

A few factual issues:

- Sure Asset Management is not committing its own funds; as the Sept 3 PR says,

Subject to the notes being completed and placed, the Company expects to be able to begin drawing down on the $180 million

.- Due diligence costs are paid for by EEGC, per the Agreement (attached to the July 8-K), and were to be done SUBSEQUENT to the Agreement being signed. Indeed, the requirement for $12M for PPM and 'insurance,' etc., was not announced at the time of the $180M and is not in the Agreement. Either EEGC didn't find out until just now, or they knew and elected not to disclose. I am presuming the former, as the latter would not be a good thing. If the former, perhaps the insurance requirement arose out of the due diligence process? Sure Capital does have the ability to specify 'additional' Entrusted Assets, and this may have been the compromise on that. Now EEGC needs to convince an insurance company of the value...

(As a side observation, if EEGC could find $12M, why not just drill with the money; if oil were found, financing of the producing wells would be a lot cheaper. Note that in addition to interest on their principal-protected notes, per the Agreement noteholders will receive a so far undisclosed, and perhaps undecided, percentage of gross profit).

- And, Sure Asset Management's offer is not even yet confirmed! The Agreement had three steps which had to happen prior to funds being dispersed:

- The value of the company's collateral (likely, the lease) had to be confirmed. The 1 Sep PR says in process:

(EEGC)progresses closer to realization of the company's $3.3billion certified asset valuation

. - This value must also be acceptable to financial institutions. Proof of that will be when a note is bought, I would think.

- A(n) (agreed?) proposal with a gulf-based oil company (who would undoubtedly also get a cut of the gross profits). Per EEGC, not done yet. The Sept 3 PR says

the terms of a joint venture with a specific Gulf–based oil company evolve.

- And, once the notes are placed, the Sept 3 PR notes that Sure will be receiving management fees from EEGC (appears to be part of the $12M)!

(Note that Agreements can change, for example Sure could elect to modify the gulf oil company requirement.)

Net: Not accurate to say that Sure Capital has committed to investing $180M, OR to imply that they have invested a lot of their own money in the process prior to the Agreement being signed. It is fair to say that the due diligence process is still continuing -- on the one hand, better than it having been unsuccessfully concluded; on the other hand, two months into it, what is taking so long (again, my guess is the discovered need for insurance).

One very good thing in the PR was Mr. Green's stated willingness to assist in the financing process. This could well mean a longer or bigger lease as a pre-requisite for financing, which would be great, as it is hard to see how everything will be in place for mid-November drilling. I'll take the 'over' on mid-November, anyone want the 'under'?