Shale Natural Gas, Oil and NGLs and ESA Message Board

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Gold/Mining/Energy : Shale Natural Gas, Oil and NGLs and ESA

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To: thwerth who wrote (6)	8/19/2008 6:46:36 PM
From: jrhana	Read Replies (1) of 6160

The warrants dilution situation is definitely a strong possibility, but that would be good news not bad news. In order for the warrants to be forcibly exercised the stock would have to trade over $8.50 for 20 out of 30 trading days. So as far as I am concerned, bring it on. I do know that Marshall Reynolds very much wants that money. He, himself, would have to put over $15 million dollars additional into the company because he owns over 3 million warrants. My assumption is that ESA will have no problems putting that money to good use. In fact I believe small privately held, well run and well financed niche energy related companies have been approaching ESA for some time now. The "dilution" caused by the forced warrant exercise should not cause much or any dilution to short term earnings per share as I expect these new additions would themselves be quite profitable. What kind of company wants to sell itself to ESA? Two potential examples I've heard: There are two partners and one wants to retire and the other wants to keep working and expand his horizons with ESA. Another type of scenario is where the original founder dies and leaves a thriving business to his heirs. The heirs do not want to manage the company and do not want to jeopardize the jobs on loyal long term employees. Ergo sell the business intact to ESA. Remember Marshal Reynolds likes to create jobs not eliminate them. The goal here is to fairly rapidly build a company with over 500 million of revenues in the broad field of energy services/infrastructure but starting with an emphasis on NG in Appalachia. But really sky is the limit. Marshal Reynolds goal is to sell out the company well north of $30. He is a man who generally meets his goals. This consummate deal maker has said this will be his best deal ever. Exact details I can't give, and obviously nothing is guaranteed here. But I personally have bet the farm on ESA.

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