Jim,
There are some rumors about an attempted coup of the Preferred stockholders. See the Yahoo thread on WPOG and also here is some discussion in the latest 10QSB:
"Under the existing commitments, the Company's anticipated capital requirements
to meet expected drilling and development costs will be approximately $0.6
million for the remainder of 1998 and approximately $2.8 million for 1999. The
Company's current and anticipated cash position will be insufficient to cover
the future working capital and exploration obligations. The Company has
vigorously explored various alternatives for additional sources of capital.
However, with the hyper-dilutive potential of the outstanding Series B Preferred
Stock (should the holders elect to convert into common stock), the Company has
been unable to attract any additional equity capital during 1998. For example,
using the Company's recent common stock price of $0.25, and applying the
applicable discount of 22%, should all the holders of the Series B Preferred
Stock elect to convert into common stock, approximately 27.5 million shares
would be issued in the conversion. This would represent approximately 63% of the
then outstanding common shares. The Company has entered into preliminary
negotiations to restructure the Preferred Stock into a non-dilutive debt
instrument. However, should this occur, the Preferred Stockholders have
indicated they would require a paydown on their outstanding obligation of at
least $1.5 million. The negotiations on the specific terms are ongoing. However,
should a paydown be required, the Company would attempt to fund this obligation
through existing working capital, the sale of its remaining Rocky Mountain
assets, the sale of additional common stock and/or a sale, either in whole or in
part, of its interest in the Formosa, Texana and Ganado 3-D Prospects located in
and around Jackson County, Texas (operated by Parallel Petroleum). It should be
noted this concept and negotiation is in its early stages and there can be no
assurance such a transaction will ever come to fruition."
Still trying to figure out why on earth the preferred stockholders would entertain restructuring discussions. In any event, looks like its time to put this one back up on the radar screen. |
