I found that too and investigated. I found out a number of things and was in touch with the newspaper directly. They took a tip and ran the story, but it looks like it may have been premature at this point. They'll be doing followup on the story. One thing was made very clear. Cambodia is a country with its fair share of corruption. If a deal was handled and anyone who felt slighted wanted to undermine the situation, you may see a report like this. The point is I connected with the reporter and they acknowledged this is not a definitive report by any means.
With Cambodia, you'll find it is set up as a monarchy with some ostensible parliamentary trappings and there is a prime minister. The CNPA is responsible for oil exploration and investment in Cambodia. But you can also see from an earlier link I found and posted here that the company evidently met with the highest officials directly and may have bypassed the CNPA initially. That would not happen in many countries, but what I've read up on Cambodia shows business as usual there is not so usual. Whether it is good or bad to say a country is known for corruption may simply mean that personal relationships count, regardless of what it takes to get a deal done. Its who you know that counts in business and I think XCHC brass would've had direct access to the top to pull in the block awards. For country background on this subject [remove spaces]:
tinyurl . com/6lm3b
The reporter Elena Lesley and I have corresponded. She said it is not a conclusive report and with the way business and government works in Cambodia the story is open to amendment with further work on her part to get a fuller story. She also pointed out there was a holiday period in Cambodia after which she could make further inquiries. She did not rule out other possibilities, three of which I suggested:
1. Jealous official who felt they had been
circumvented and/or excluded from special
considerations; or
2. Competing oil company and/or oil company that may
have been previously involved with the
onshore/offshore blocks of note and were not any
longer, perhaps after having fallout with government
officials; or
3. Individuals who have shorted the stock of XCHC,
i.e. borrowed against the stock and then oversold
trading shares they don't have at a higher share price
with hopes to scare the share price down and then
cover their margined position by buying back stock on
the open market at a subsequently depressed share
price. This happens in many stocks I've followed so
absolutely nothing surprises me. Cambodia is probably
clean as a whistle compared to the American stock
market. This possibility is the most far fetched, but
certainly not impossible if the individuals involved
had a Cambodian connection or there is in fact a well
placed Cambodian with ties to traders in other
countries (could be Canada, Germany, Lichtenstein,
etc.) who will short the stock. If this far fetched
scenario happened, it would mean they knew how to
place the story and it meant they were close enough to
the inside to have knowledge of X-Change's visit. This
knowledge would mean they understood the CNPA may have
not heard of X-Change yet and therefore such a story
plant could bear fruit if done in a timely fashion.
People do pull stunts like this so they can post the
subsequent stories on other internet venues and scare
shareholders into a selling panic. While #3 is least likely, I've seen so many things go down that I'm not ruling it out at all, particularly if there were a corrupt individual in Cambodia who knew there'd be a holiday period during which they could plant a false story that would take further time to be refuted.
XCHC management confirms their knowledge of this story and said it is rubbish. They said they have the contracts. I'm inclined to not rule anything either way, but I do not feel this is my sign to leave at all. I expect more news is forthcoming from the company. Perhaps we'll even get some comments on this report, but they are working in Texas. I personally am friends with one visitor to the company. And I did independently verify the background of their recent hire of an oil engineer who has gone to work immediately on putting their recently acquired Texas wells into production. That alone will give this stock a growing valuation so I feel I have a buffer to deal with any uncertainty about that article while it gets sorted out. And the point about ChevronTexaco not being aware of XCHC is simply not worth building any case on. In my due diligence, I've spoken to executives in mega corporations who didn't even know of other company with whom their own company was partnered in big deals. And Chevron had no reason to know of XCHC since no one else really does either. I said it before and I'll say it again - If the Cambodia deal shows itself as solid it is because of some obvious direct connections straight to the top and that in itself is the very plausible explanation for any misunderstandings from bypassing other channels if there are any at this point.
Emma
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