John,
I posted this over on the "missing thread". I don't think this response from UPR caused the disappearance of the NAEC thread. I have permission to post this from the UPR rep. Since we are starting to talk about "agreements" again I thought it relevant again now. As John has suggested everyone should email Mr. Ebeling and ask the question: "What are the details of the IMMM-Patroclos agreement?". I also must point out that UPR told me in question 1 that there is no 50 well program with any company in Colorado. We must continue to ask the questions......
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Jay_
I sent a reply on 6/13/97 and am not sure why you did not receive same.
Below is a second "send" of my responses. One point of information: UPR
is not playing this IMMM relationship close to the vest. UPR does not
have any agreement with IMMM. UPR does have a farmout and farmout option
agreement with Patroclos. As I will restate later, any arrangement
between Patroclos and IMMM is their business. I recommend IMMM
shareholders contact IMMM for any information about that company.
My responses to your questions are below.
We bought into IMMM with the knowledge that it was risky to say the least
and understood that. We bought with some knowledge that they were
working with UPR and tipped of to us by the April 16th press release. We
would like to know the following:
1. Are you doing business with IMMM: Is this a joint venture? 50 more
holes to be drilled? How does Patroclas Finanz AG fit into all of this?
UPR has no agreement with IMMM (aka NAR). UPR has a farmout and farmout
option agreement with Patroclos. Any agreement between Patroclos and
IMMM is their business. No agreement exists, at this time, on a 50 well
program in Colorado between UPR and another company.
2. Have you (UPR) requested the wells drilled by/for IMMM "tight"? Why
would someone order a well "tight"?
Mike Stamm requested these wells be classified "tight hole", UPR
consented since Stamm/Patroclos was paying 100% of the drilling costs.
It is not uncommon to classify wells "tight hole" in the oil & gas
industry. "Tight hole" simply means that information is confidential and
released to only those who need to know. Companies use "tight hole"
status to capitalize on the results of their risked investments. If a
well is successful, a company would want to secure all offsetting rights
to drill before another company secures those rights.
3. Either through miss interpretation or miss communication we assumed
you would benefit from this exploration. News release from April 16th
stated "The well is being drilled on land farmed-in from (UPR), is funded
by IMMM, and operated by UPR." Operated by UPR means what? Farmed-in
means what to UPR?
UPR owns the mineral rights, via land granted to UP Railroad, in
alternating sections (1 section = 1 square mile) in a 40 mile wide (20
miles on both sides of the UP Railroad track) strip of land which runs
from eastern Colorado, north through the Denver area and across the
Southern part of Wyoming into eastern Utah. There are numerous oil and
gas producing fields on this land grant. However, there is also vast
amounts of land that has never been explored (i.e. drilled). These
minerals are not worth much unless oil and gas production is established.
Therefore, UPR either explores for or farms out the drilling rights on
our minerals in hopes that production will be discovered and established.
A farmout means the owner of the minerals agrees to allow another company
to drill on the owners minerals. This other company would bring their
own exploration idea and pay 100% of the cost to drill. The mineral
owner would retain the right to participate for some interest in the
completion of any successful well. Another way to state this is the
mineral owner would get a free look at the formations and would be able
to determine whether oil and gas are present before spending any dollars
- a good deal for the mineral owner.
"operated" simply means the property (or operation) is controlled by a
particular company. The daily responsibility of drilling, etc. is the
responsibility of the "operator".
4. News release from June 6th has dropped the use of UPR and is now
using "South Eastern Colorado land owner". Is this UPR? Have you
instructed them not to use your companies name?
UPR is concerned that our good name is referenced when an agreement does
not exist directly with a given company. I asked that UPR not be used
unless we approve the press release. I do not know if the "southeastern
Colorado land owner" is UPR. There are other companies who either own
minerals or have minerals under lease is the southeastern Colorado area.
5. As you have read on SI people are not happy with the way this is
coming out. Kind of like BRE-X. We need some type of clarification as,
holding shares in both companies, this has made us nervous to say the
least.
I have not read all of the SI responses but understand, by the volume of
calls I'm receiving, that many IMMM shareholders are unhappy with IMMM.
Any information on IMMM should come from IMMM.
I would hope no UPR shareholder is unhappy with UPR. UPR is attempting
to increase UPR shareholder value by working an arrangement to have our
mineral holdings explored/tested at no cost to UPR.
I will not publish or use your name, email address or anything you tell
me not to say on the internet. I would, if possible, use the info to
clear up what has become a very muddy story for all of us here.
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Jay |
