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Gold/Mining/Energy : Westrend Natural Gas - I.D.E. Hot Stock
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To: Leigh McBain who wrote (1612)8/19/1998 9:04:00 PM
From: Wink  Read Replies (1) of 2011
 
I just spent about 2 hours pouring over the financials and don't know what to make of the minority interest issue. The balance sheets show it under liabilities so you may be right about the 23.5% Taylor interest. It is definitely not a services issue as I had earlier speculated (the accompanying notes prove this point).

My earlier point about the 4/98 income vs. cash flow on this point is still fuzzy though. The balance sheet shows an increase of $102,692 in minority interest as does the cash flow statement, but the income statement shows it as $86,193 for a $16,499 difference. Maybe an accounting oversight?

Note that goodwill was booked on the order of $708,574 for the excess over asset value on Taylor and Alamo. This means that when purchased, management felt that there must have been a bundle to be made with the Taylor name since the purchase price of Taylor was around $900,000 for assets worth only a couple hundred thousand. Until profit from Taylor has equaled this goodwill amount, WRN will not have recovered its purchase price. This alone leads me to believe that there is no way WRN can give their interest in Taylor up to SkyTex for only $3-400k in stock.

I will be very interested in seeing the 7/98 numbers! If WRN can control costs and Taylor can continue to sell rigs, then we are finally on our way to profitability. I'm still in for now, even though my stake in this company is being diluted to death. Hopefully WRN will be able to generate enough cash flow to avoid more dilution, but based upon July press releases I'm not convinced that they are there yet. We'll see soon enough. ;>)
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