Many hours of DD and reading between the lines, RMEC looks like it is in a squeeze. BAMM (mkt maker) is not having to much fun.
The following PR is large (actually could have been 3-4 PR's) and should be carefully read and weighed with previous news. I'm in and holding.
Rocky Mountain Energy Corporation Approves Recapitalization Plan
HOUSTON--(BUSINESS WIRE)--Nov. 5, 2002--Rocky Mountain Energy Corporation (OTCBB:RMEC), an emerging developer of proven oil and gas reserves in the resource-rich area of the Rocky Mountains, announced today it has approved a plan to recapitalize the Company's common stock. The plan is adopted to position the Company to take advantage of strategic opportunities which it is currently negotiating and to speed in the recovery of 8,000,000 shares, currently the subject of a lawsuit filed by RMEC.
Additionally, on the 31st of October, the board of directors authorized the repurchase of up to 8,000,000 of its shares of common stock representing approximately 30% of outstanding trading shares. These purchases have commenced as of Nov. 4, 2002 and are being conducted in the open market as well as in private transactions.
Under the recapitalization plan, the Company's CUSIP number will be changed along with a dividend of stock once the recapitalization is complete. Details regarding this forward split are expected to be announced in the near future.
"We believe this will help to establish shareholder and Company value to a fairer level," said John Ehrman, CEO and president of RMEC. "We have established a real and substantial value for our Company and for our shareholders through the acquisition of 59 billion cubic feet of gas reserves from United States Oil Company, in Sweetwater County, Wyo. Additional fields in Weston and Crook Counties, Wyo., were also acquired. We were fortunate to be able to purchase these properties using a convertible debt instrument for $2.9 million for 2% interest for two years. This allows the property to be used as collateral for development financing. This development, when complete, should raise cash flow to well over $1,200,000 per month net. This would give us substantial earnings per share. The asset value of the field is estimated at $88 million future net revenue over the next 20 years discounted net PV10% value of $58 million (at current gas prices), or approximately $2 per share. So it is absurd for our stock to be trading in the .04 to .05 range," Ehrman continued.
The bear market on the OTCBB has exposed a trend by many individuals and financing institutions to naked-short (selling a company's stock short without having the stock or cash to cover the transaction) and trap companies in death-spiral financing. Poor market conditions have made it possible for these individuals and organizations to destroy or attempt to destroy the stock and the companies behind the stock by driving prices down to such a level that the company cannot raise money using its stock. "RMEC is fortunate in that we are using our assets to raise money for development," said Ehrman. "We want a fair stock value, but as we use asset-based financing, we do not face the same urgency that other companies may face in light of 'naked-short' plays."
Ehrman said, "In recent months, however, companies have begun to fight back. Jag Media Holdings Inc. (OTCBB:JGHMA), Genemax Corporation (OTCBB:GMXX) and Neurotech Development Corporation (OTCBB:NEKAE), just to name a few, have fought back against the naked shorters and death spiral financiers with a measure of success. These companies have used recapitalization and various different legal actions to reclaim market value for their shareholders as well as the Company, with their stock values rising 300+% as a result."
"We are determined to get our shares back and restore the value of our stock lost through illegal actions by various individuals and firms," said Ehrman. "By recapitalizing our stock, continuing our acquisition strategy, pursuing our merger opportunity, and aggressively bringing into full production our extensive properties, we expect our valuation in the marketplace to be fully realized over the coming months," Ehrman concluded.
The Company shareholders will be directed to submit their certificates to the transfer agent, Securities Transfer, at 2591 Dallas Parkway, Suite 102, Frisco, Texas 75034. Upon submission of the current certificate, a new certificate reflecting the additional shares and new CUSIP number will be issued.
For further information call John N. Ehrman at 281/448-6500 or visit our Web site at www.rockymountain.cc.
FORWARD-LOOKING STATEMENTS: This report contains certain forward-looking statements and information relating to the Company that are based on the beliefs of its management as well as assumptions made by and information currently available to its management. When used in this report, the words "anticipate", "believe", "estimate", "expect", "intend", "plan" and similar expressions, as they relate to the Company or its management, are intended to identify forward-looking statements. These statements reflect management's current view of the company with respect to future events and are subject to certain risks, uncertainties and assumptions. Should any of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this report as anticipated, estimated or expected.
CONTACT:
Rocky Mountain Energy, Houston
John N. Ehrman, 281/448-6500
Web site: www.rockymountain.cc.
SOURCE: Rocky Mountain Energy |
