Regarding relationships between Oilex, Phoenix Reserves and Allen L. Burditt, II.
This is a question which has been raised on several occasions on this thread, most recently by Scott and Prudent Investor. The relationships do seem to raise several issues and questions. Here are just a few:
1. Allen L. Burditt, II is reported to be a "consultant" to Oilex.
2. Allen L. Burditt, II, according to an SEC filing by Oilex (August 1997) owns 100% of Phoenix Reserves, a privately held, non-public company.
3. Phoenix Reserves, according to an SEC filing by Oil Retrieval Systems (April 1997) is a "Bahamian Corp". It is one of seven companies involved in a purchase of stock from Oil Retrieval Systems (total 1,567,047 shares) on March 12, 1997. All seven of the companies, including Phoenix Reserves, is reported on the SEC filing as either "Bahamian Corp" or "British Virgin Islands".
4. Oilex acquired, according to an SEC filing by Oilex (August 1997), "from a related party of a 20% interest it owned in Oil Retrieval System, Inc. ("ORS") . . . Oilex issued 3,000,000 shares of common stock to the related party in exchange for its ownership of 1,205,420 common shares of ORS.".
5. Funscape (now Titan Energy), according to an SEC filing by Oilex (August 1997) issued 2.5 million shares of its common stock in exchange for all the outstanding shares of ORS.
6. Phoenix Reserves is the company to which Oilex transferred over 8.7million shares to acquire certain properties including the Wilson leases.
7. Phoenix Reserves and Oilex are co-plaintiffs in legal action currently pending (Cause 97-24160 in the 80th District Court, Harris County, Texas). In this suit, both Phoenix Reserves and Oilex report their principal place of business at 3050 Post Oak Blvd, Suite 1760, Houston, Texas. In addition, I am in personal possession of not less than two documents which show Allen L. Burditt, II, as an individual without company affiliation, operating from the same address of 3050 Post Oak Blvd., Suite 1760, Houston, Texas.
The above issues certainly raise, among many others, the following questions:
A. What exactly is the relationship of Allen L. Burditt, II to Oilex? Is he an independent "consultant" who advises the company or is he, in fact, the individual who controls the daily operation of the company? Is there a formal agreement for contractual services between Allen L. Burditt, II, as a consultant, and Oilex? If so, what are the terms of that agreement?
B. Since it appears that Oilex is sharing its office headquarters with both Phoenix Reserves and Allen L. Burditt, II, what formal agreements exist between the parties regarding the allocation of overhead expenditures such as office rent, utilities, telephone, supplies, clerical support and professional services? Are Phoenix Reserves and Allen L. Burditt, II reimbursing Oilex for some portion of these expenses?
C. Who is the "related party" to which Oilex issued 3,000,000 shares for the 20% interest in Oil Retrieval Systems?
D. What value did Oilex receive when it transferred over 8.7million shares to Phoenix Reserves to acquire certain properties? Was Allen L. Burditt, II, as sole owner of Phoenix Reserves and as a consultant to Oilex, involved in the negotiation and implementation of this share transfer? Are these properties still controlled by Oilex? If so, what production is Oilex currently generating from these properties?
E. Since it appears that both Oilex and Phoenix Reserves are interested parties in the pending lawsuit (Cause 97-24160), what formal agreements exist between the parties regarding the allocation of professional fees and expenses which are incurred by the co-plaintiffs in pursuing the action? In the event of a judgment against the defendants, what formal agreements exist between the parties regarding the allocation of any award or damages which may be ordered to benefit Oilex and Phoenix Reserves?
These are just a few of the many questions which investors (past, present or potential future) need to address when exploring the issue of relationships between Oilex, Phoenix Reserves and Allen L. Burditt, II. Hopefully, we'll soon find some answers.
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