January 23, 1998
TO OUR SHAREHOLDERS AND INTERESTED PARTIES
OILEX, INC. STARTING OFF RIGHT IN 1998
On January 9, 1998 the management of OILEX, INC. (OTCBBC - OLEX)
announced a reverse split of its common stock of 20 to 1. The new cusip number is 678034 20 8 and the temporary trading symbol effective January 26, 1998 is OLEX D. This reverse split, management believes, will facilitate funding efforts, re-establish a market price that is identifiable with corporate assets, company goals and management's future expansion plans. This is one of the many steps management has taken to facilitate a NASDAQ small cap market listing in 1998. As a development stage company, the re-alignment of our capitalization in relation to our increased asset base, management feels, makes OLEX a candidate for additional equity financing and provides a rational basis for potential growth through acquisitions or mergers. The corporation plans to elevate its listing status from Bulletin Board to NASDAQ SMALL CAP as early as possible during 1998. Currently OLEX has 18 employees, approximately 4,000 shareholders and assets of $13,600,000 (as of 9/30/97) versus assets of $9,000,000 as of year end 1996, approximately a 30% growth in its asset base.
In 1998 OLEX will complete and bring into production its first four new infield wells that were drilled in late 1997 on its Big Foot field. On its Texas oil fields - Big Foot, Luling, Revilo and Walker Queen, the company anticipates spending additional funds in 1998 to
drill new infield wells, remedialise existing wells for portable swabbing, buy additional portable swabbing units and other equipment as required. Management believes these expenditures will increase production while enhancing cash flow. Also, subject to funding and increased positive cash flow, the company plans to initiate a three year direct development and drilling program on its 83,000 acre fee interest in West Virginia.
...IN 1994 THERE WAS A NEW CORPORATE DIRECTION
Privately owned Phoenix Reserves, Inc. (Phoenix) acquired its interest in OLEX in 1994. At that time, OLEX, had minimal assets, zero acreage, a small interest in five wells (which OLEX did not operate), limited market for its stock and no corporate direction.
The investments by Phoenix in OLEX proved to be a turning point toward the companies major growth during 1995 and 1996. With the investments, OLEX has been able to acquire approximately 600 wells in Texas, a fee ownership of 83,000 +/- lease acres in West Virginia and a 13,000 +/- acres in White River Dome, Colorado. OLEX's practically debt-free status is accountable to Phoenix's investing nearly $2 million dollars cumulatively during 1996 and 1997. OLEX owns outright all of its trucks, trailers, portable swabbing units,
inventories, pipelines, tank storage facilities, four fully equipped and operational field offices and approximately 11 acres of land in Luling, Texas, where OLEX maintains its field headquarters.
...48 MILLION ACRE AUSTRALIAN PLAY AND MORE
Another gem negotiated by Phoenix Reserves in 1997 that directly benefited OLEX and its shareholders is the overriding royalty interests on 35,000,000 +/- gross acres in Australia. There are currently eleven drilling rigs operating on this giant acreage position and OLEX receives its revenue free of operating costs. An additional overriding royalty interest of 1/2 of 1% was also
negotiated by Phoenix on behalf of OLEX in Australia on a single adjoining 13,000,000 +/- acre block planned for development in `98 by Titan Energy Corp. These interests are in Australia's oil rich Eromanga Basin which is similar to the producing geological graben formations under the Middle East and greater in size.
In 1997 new legal counsel, accounting, investment bankers and investor
relations were added while OLEX became a fully reporting company. This new tier of professionals will assist management in addressing future mergers & acquisitions, production, financing and joint venture opportunities. OLEX is pleased to announce that earnings forecasts will be forthcoming once field procedures and cash flow are optimized and long term investment banking arrangements are finalized.
...OLEX UNWINDS TRANSACTIONS
In 1997, OLEX entered into agreements to acquire privately held Geronimo and a two year option to acquire 40% of the common stock of Titan Energy Corp., Inc. (OTCBB-TANC). The Geronimo and TANC transactions would add $21.5 million in debt to the OLEX balance sheet. OLEX Management believes that while in a developmental stage status, and upon the advise of our investment banking consultants,
taking on the debt would endanger the growth curve the company has historically experienced under current management. We have unwound both agreements.
THANK YOU.
The management and personnel of OLEX thank you for your support and
continued interest in our affairs and activities. We look forward to another year of service on your behalf.
In compliance with corporate policy the following statement is included:
This news release includes forward looking statements that involve risks and uncertainties. The forward looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially due to a variety of factors including, without the limitation, the company's ability to produce and market products and/or services and other risks detailed from time to time in the company's reports filed with the SEC.
Thanks The Baron |
