AND NOW A MESSAGE FROM RMEC PAST SCAMMY CEO:"We thank all of you who have held the faith and been here for the long haul. We believe that your patience and trust will be rewarded."
John Ehrman
President / CEO
email: Jehrman@rmec.org
voice: 281 448-6500
Letter from CEO 3/31/03
Houston, Texas - March 31, 2003 - Dear Shareholder, Over the last week you have witnessed some significant movement at Rocky Mountain. We have two new directors and have purchased a company that gives us significant cash flow per month. Our new board members bring significant support to us in their management skills and financial contacts.
Mr. Molina is a business consultant to various government and industrial clients in Central and South America. He represents numerous investment and institutional funds. Mr. Molina has accumulated 30 years of experience representing American companies throughout Latin America. Currently, he is serving as President of Zeros Energy Systems International and is implementing the marketing strategy of the patented Zero-emission Energy Recycling Oxidation System for Latin America and the State of Florida. In addition, he is coordinating Dade County and the State of Florida EPA in support of a proposal for remediation of the Miami River before the US Army Corps of Engineers. Mr. Molina was appointed by Mayor Suarez to head the Miami Economic Development Office, in which he relocated light industry to the depressed areas of the city to bring about revitalization. He has represented such clients as Peabody Peterson, Superior Products Int'l, Lawyer's Title Insurance Co. and International Games Technology (Las Vegas) in Latin America and represented companies and governments of Central and Latin America in the United States.
John Sifonis is a Managing Director in the Internet Business Solutions Group of Cisco Systems. Mr. Sifonis has over thirty-seven years of industry and management consulting experience. Prior to joining Cisco Systems, Inc., Mr. Sifonis, was the Chief Executive Officer of SAI International, LLC, a management consulting firm specializing in formulating business and information technology strategies. He is currently responsible for Cisco's Global Energy Practice. Under his leadership Cisco's global energy practice has delivered outstanding financial performance exceeding annual goals by as much as 300 percent. Over the past three years, Mr. Sifonis and his team have conducted over 100 Executive Briefing Sessions for domestic as well as global energy companies. His clients include Texaco, Chevron, British Petroleum, Exxon Mobile, Duke Energy, Halliburton and Royal Dutch Shell. He is an author of three business books including one of which was listed on the Wall Street Journal bestseller business book list. You will note an S-8 is being filed to give them stock. It is all §144 as they are insiders so you will not see it hit the market except through §144 restrictions.
Of equal importance as our new directors is the closing of OCS, Inc. (Oilwell Control Services, Inc.). OCS, Inc is one of only five companies in the world qualified to interdict oil wells which are blowing out or on fire. During the first Gulf War, OCS, Inc. was one of the companies which helped put out the fires in Kuwait. In that regard, OCS, Inc. has been put on notice by Halliburton that they may be called up in the event of a similar situation in this current conflict. We are proud to be able to provide support to our war effort in this capacity should the need arise. OCS, Inc. maintains service agreements with most of the major oil companies such as Exxon Mobil Corp., ChevronTexaco Corp. and ConocoPhillips as well as major supplies and service companies like Halliburton Co., Fluor Corp., Bechtel, and Lockwood Green. The company's proprietary products include the Zeros System remediation plant to clean up waste material for the U.S. Environmental Protection Agency. The company will net $12 million annually from this contract. The company will operate as a wholly owned subsidiary of RMEC. Mr. Clark will remain as manager of the company.
The acquisition was financed through the issuance of a $5 million convertible note, payable March, 2006 at 2½ % interest. Mr. Clark received a consulting agreement to act as manager of the company at $10,000 per month. If the note is converted OCS, Inc. will be the largest shareholder of RMEC with 30+ million shares. These shares will be subject to insider rules under §144 and will thus be restricted under §144. This acquisition not only bears heavily on our development of existing proved undeveloped reserves in that we have proprietary systems designed to improve coalbed methane well performance but also provides the monthly cash flow to self fund our development programs to further increase our cash flow. The cavitation process which OCS developed with Halliburton is a "controlled underground blowout" for lack of a better term. Burlington has used it extensively in the Rockies and has coal gas wells that produced 11,000 mcfpd versus an expected 1,000 mcfpd. Average wells do 3,000 mcfpd to 5,000 mcfpd on this process. As we have some 200 coal gas wells to drill, this technology should prove invaluable to us.
The fact that OCS will produce $12 million in net income from contracts on its Zero's Remediation Systems this year (12 month period) needs no explanation. Everyone can agree that $12 million in income per year as a base will be a good thing for RMEC and provide our budget to self fund our core business. It is interesting to speculate on what impact the sales and installation of further Zeros Remediation Systems will have on our operations and bottom line performance.
As a result of closing the above, we have ceased pursuit of two of the acquisitions that we have spoken of previously. These are the two smaller acquisitions announced January 31, 2003 ($8 million purchase price doing $150,000 per month) and March 4, 2003 ($11.2 million purchase price doing $400,000 per month). Our assets, time and attention are better used elsewhere at present. We continue to pursue closing on the other projects. Perhaps we will be able to announce another closing very soon.
On the merger front, this acquisition makes us much more attractive, but also puts us in the position of not needing a merger to move off of the OTCBB. Thus, we are in a much stronger negotiating position as the profit and net worth requirements can be satisfied through the above "fundamentals". We are continuing negotiations on the merger front. As I have held for these past months, building fundamentals will take care of the stock price. As we succeed in doing so, we will advance our cause. Hence, my statements to many of you that this is a long term hold, not a "short term trade". Our decisions have to be based on building our fundamentals, not daily fluctuations of our stock. The value of what we are doing should be reflected in our stock value.
About Rocky Mountain Energy Corporation
Rocky Mountain Energy Corporation, based in Houston, Texas, is an emerging developer of proven oil and natural gas reserves with assets in the resource rich area of the Rocky Mountains. Rocky Mountain Energy's diversified production mix allows us the opportunity of high cash flow with predictable production. Rocky Mountain Energy's strategy includes a property mix of producing and non-producing assets. The producing properties provide immediate net income and cash flow while non-producing assets will provide Rocky Mountain Energy with future development opportunities, and ultimately, reserves at a reduced cost. With a management team that has over 100+ years in the oil and gas industry, Rocky Mountain Energy knows how to increase production, expand profit margins and maximize field potential. Its team of highly qualified technical professionals can examine old wells and find indications of producing zones that have never been produced, as well as develop the known proved undeveloped reserves which are the basis of any acquisition.
Company Website: rockymountain.cc
We thank all of you who have held the faith and been here for the long haul. We believe that your patience and trust will be rewarded.
John Ehrman
President / CEO
email: Jehrman@rmec.org
voice: 281 448-6500
Statements regarding financial matters in this press release other than historical facts are "forward-looking statements" within the meaning of section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and as that term is defined in the Private Securities Litigation Reform Act of 1995. The company intends that such statements about the Company's future expectations, including future revenues and earnings, and all other forward-looking statements be subject to the safe harbors created thereby. Since these statements (future operational results and sales) involve risks and uncertainties and are subject to change at any time, the Company's actual results may differ materially from expected results. In the event the company cannot continue to obtain financing, the development program may be unable to continue as scheduled.
Commitment to Expansion
Rocky Mountain Energy Corporation
333 N. Sam Houston Pkwy. E.
Houston, Texas 77060
Phone: 281/448-6500
Email: Jehrman@rmec.org
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