Anthony,
On page 42 of the 10KSB they state that they are looking into doing
more private placements. Here's the relevant paragraph:
" In order to meet current and long-term working capital
needs, the Company intends to utilize expected increases in cash
flow from oil and gas production activities, potential additional
equity raised through private placements, and additional
availability under its credit facility as increases in the
borrowing base are achieved through oil and gas reserve
increases. To immediately assist with the Company's ongoing
development of the Gulf Coast region, in February, 1997, the Den
norske credit agreement was amended to reduce the interest rate
to prime rate plus 1/2% per annum. The borrowing base was
redetermined to be $25,000,000; and at March 1, 1997, the Company
has $24,083,000 of outstanding borrowings against the borrowing
base. Additionally, Den norske established a $2,500,000
development facility which allows the Company to borrow up to
$2,500,000 at prime rate plus 2% per annum for development of its
Gulf Coast properties. The development facility matures on March
1, 1998, and the Company had borrowings against the development
facility of approximately $832,000 at March 17, 1997. The
Company also completed two private placements totalling
$7,000,000 during 1996, which generated approximately $5.9
million after placement costs. The Company is continuing to seek
funds through private placements in 1997 in order to assist
funding its exploration, development and acquisition activities.
The Company is also exploring the availability of funds through
volumetric production payments similar to the production payment
42
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consummated in 1996 with Williams Energy Services Company.
Volumetric production payments allow the Company to obtain non-
recourse financing on specific properties. This type of
financing is especially attractive for the Company's Kentucky
region production in Appalachia."
But I think you are right on target with the call that they have
not done another private placement yet. I agree that the stock is
dirt cheap. The GASS pres. and his buddies agree also -- last week they
filed a Schedule 13D saying their investment co. Prima Capital bought
another 150,000 shs. the week before at around $2.25. If this thing
goes belly up at least the captain will go down with his ship!
Curious as to whether you've bought any of this or not, and if so what
earnings or cash flow number (if any) would induce you to buy at these
prices. |
