Replies to post #670 on UnionTown Energy Inc.(fka UTOG)

[cayman_west]

It's all in the filings. As an example:

Musselshell Prospect

On April 5, 2011, the Company entered into an option agreement to purchase a 75% interest in Musselshell Prospect in Montana. Under the terms of the agreement, the Company is required to issue 10,000,000 restricted common shares of the Company and grant 10,000,000 stock options with an exercise price of $3.00 per share until April 5, 2016.

Pondera County

On April 8, 2011, the Company entered into an exploration agreement for the acquisition and exploration of a 75% interest in certain oil and gas claims in the area of Pondera County, Montana. The Company has agreed to undertake all of the costs to drill a test well on the property, which will entitle the Company to a 70% working interest after all payouts. Under the terms of the agreement, the Company is required to pay $300,000 to reimburse exploration expenses within five business days of the agreement (paid), and an additional payment of $800,000 on or before April 15, 2011 (paid).

10.

Subsequent Events

a)

On April 13, 2011, the Company entered into a letter of intent to acquire a 25% interest in certain oil and gas claims in the area of Chouteau County, Montana. Under the terms of the letter of intent, the Company will pay $275,000 to reimburse exploration costs upon signing of the letter of intent (paid). On May 30, 2011, the Company signed an exploration agreement to acquire the oil and gas claims. To complete the acquisition, the Company must make option payments of $200,000 on or before May 31, 2011, $150,000 on or before June 15, 2011, and $1,000,000 on or before August 15, 2011.



Upon payment of a further $1,500,000 towards a steam operation pilot project on the property, the Company shall earn an additional 75% working interest, for an aggregate 100% interest in the leases, which shall entitle the Company to 85% working interest before the payouts and a 70% working interest after the payouts, subject to 75% net revenue interest earned.

b)

Subsequent to April 30, 2011, the Company issued 1,000,000 common shares for proceeds of $2,500,000, of which $2,405,000 was received prior to April 30, 2011.

[petermic]

The $25 million or so in assets appeared on the balance sheet by virtue of a transaction in which UTOG gave 10 million shares and 10 million warrants in exchange for a 75% interest in the Musselshell Prospect.

That value uses the share price at the time of $1.19 and an option value of $1.14 to determine the value of the asset. There is no independent appraisal nor is there any significant cold hard cash changing hands. If the transaction was done today the same asset would have a stated value of $10 million or so, not $24 million, due to the decline in share price.

It's a charade. To say those 10 million shares and warrants were worth $25 million is to say that the $400 million market cap of UTOG prior to this transaction was reasonable based on its $789 total assets. The real value of 10 million restricted shares + warrants was and remains worth a very tiny fraction of the $24 million.

The share price was ridiculous, the transaction value is vastly over-stated and UTOG's current market cap of $150 million remains absurd.

As regards the $2.4mm private placement of 1 million shares, it's a sure bet that the buyer of the shares is the same entity who owns the majority of the shares. The money spent on stock promotions could be paid by this entity, but instead was probably paid by the company using that entity's money. The placement says nothing about UTOG's true value.

It's all part of the game to entice unwary people to buy the stock.