Gregg226 thanks for your post, haven’t had a lot of time checking into the Schedule 14A filing on the 31st and then the additional 14A filing today. Been busy with Isaac related issues, three of our investment properties had damage but the rest of them were OK as was my home. My sailboat made it through the storm, no real damage to the marina but couldn’t get into the facility for four days. Today is our first full day back in the office and I'm trying to get caught up here.
The 31st filing looks like another mistake by KR and crew or was it? Believe the EFL information was placed in there intentionally, who could screw that up? EFL Overseas is based in Houston, but they are the Holloman Energy folks. Not sure why Holloman would want EFL and not sure why EFL would want Avalon.
One of the more interesting elements in these filings KR doesn’t seem to have the votes to raise the authorized. He may want to invest in EFL’s Yukon assets. Did have a chance to quick read EFL’s investor presentation dated the 17th of August. They are trying to raise $33.85 million to develop the Yukon territory property they purchased from Devon Canada. That investment cost them $289K in cash, and of course there are other strings attached.
The below is a little information about the Devon purchase by EFL.
In exchange for Devon’s working interest in the KGP, (the “Devon Assets”), EFL paid CAD$293,700 (USD$289,295) in cash, and indemnified Devon against its portion of the abandonment, reclamation and environmental liabilities associated with the Devon Assets. Early estimates of those liabilities range from USD$7,000,000 to USD$8,000,000. To secure indemnity, EFL provided Devon a corporate guarantee (the “Guarantee”) in the amount of CAD$10,000,000 (USD$9,830,000) and delivered a letter of credit in the amount of CAD$4,380,000 (USD$4,306,000) to Devon (the “Devon LOC”). They also agreed to deliver a letter of credit in the amount of CAD$625,000 (USD$614,000) to the government of the Yukon Territory as soon as practicable (the “Yukon LOC”). The amounts of the Devon LOC and Yukon LOC reduce the amount of the Guarantee on a dollar-for-dollar basis. They intend to actively develop and explore the KGP lands which will defer potential abandonment and reclamation liabilities into the longer term. The Guarantee was provided to Devon by their largest shareholder, Holloman Corporation, in exchange for 3,250,000 shares of our restricted common stock. Likewise, the Devon LOC was provided to Devon by Pacific LNG Operations Ltd. (“PLNG”). PLNG is also committed to provide the Yukon LOC to the government of the Yukon Territory. In exchange for the Devon LOC and Yukon LOC they issued PLNG 4,000,000 shares of our restricted common stock. PLNG is an investor specializing in energy related transactions and is currently a 47.5% partner in Liquid Niugini Gas Ltd., a company established to build and operate a facility to deliver liquid natural gas and natural gas liquids in Papua New Guinea. PLNG is also a substantial interest holder in the Elk and Antelope gas discoveries in Papua New Guinea. Henry Aldorf, the Chairman of EFL’s Board of Directors, is President of PLNG.
Just me, but today my vote is NO to raise in the authorized, KR is now stuck, legally Avalon is authorized for 3.333 million shares which 3.1 million have been issued. His preferred shares are limited to the available unissued shares. Which would be 142K, he does have voting rights equal to 40% of the outstanding shares issued, but his ownership in the company is majorly limited as long as the authorized remains at 3.33 million, and he doesn’t have the votes today to raise it.
I would advise everyone to not vote for the increase and at the special meeting on the 25th, someone needs to make a motion to have KR removed as an officer of the company. KR’s 40% does not control the company anymore, only with your vote can he get that control back, don’t give him your vote.
Just as a closing note, I purchase more shares the Friday before the storm and still haven’t sold any of my holdings.
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