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Gold/Mining/Energy : Westrend Natural Gas - I.D.E. Hot Stock -- Ignore unavailable to you. Want to Upgrade?

To: Ryan who wrote (1600)	8/18/1998 1:39:00 AM
From: Patrick	Respond to of 2011

To all.... Can anyone add analysis to this? I am in business, but not a CPA. While the trend of Westrend's performance since joining the shareholder ranks in 1996 is pathetic, I'm looking for prognostication about the future. Glanced through the filed reports and found disappointing information. The auditors on 8/6/98 (referring to the 4/30/98 submission) clearly point to the trend of losses and working capital deficits such that "these raise substantial doubt about the Company's ability to continue as a going concern". Management, in the notes, state that "the company's ability to continue as a going concern is dependent upon its ability to generate sufficient funds through operations and to make financing arrangements to meet its obligations as they come due". Further, "management believes that actions presently being taken to revise the Company's operating and financial requirements provide the opportunity for the Company to continue as a going concern. On 8/12/98, Mark Roberts specifies some of the issues and favorable changes since 4/30/98... "The financial statement reflects certain issues, in the opinion of the management, such as startup costs, overhead, administrative costs, legal and accounting, commissions and notes and accounts payable that have changed favorably since April 30th". The management acknowledges that investment is finalized and that "we must cut expenses and overhead in order for our subsidiaries profitability to show up on our financial statements in the future. Finally, the current price of oil and gas is seen as affecting (holding back) Alamo Wireline, but Taylor Rigs is in demand by international clientele. Net verbage from management, the future looks good. I read this as a mixed bag. Warnings by the auditor about the trend and state of financial strength... but management says that acquisitions are paid, operational expenses are getting paid and in fact overhead is getting reduced so that a profit can show. Finally, there is demand in one business and if the price of oil rises, the company is positioned to benefit in every business. Integrating a multiline business through acquisitions of entrenched entities is very tough and these folks seem to have accomplished much. The oil & gas market is a drag in this instance as well.... La Nina is here too... potentially a long, cold winter. What does anyone think about all this??? Patrick

To: Ryan who wrote (1600)	8/18/1998 3:19:00 PM
From: Leigh McBain	Read Replies (1) \| Respond to of 2011

Ryan, I agree, I do not really want to see the Taylor Rig component sold off. With regards to the management issue, the subsidiary itself must be being managed not too bad or it's own earnings would not have been as good as they were. What needs to be dealt with is the overhead being introduced by WRN itself. This having been said, I have little doubt that the wheeling and dealing being done at this point, over JV's, mergers, acquisitions, etc. would fall into that overhead category. There may even be some benefit to different management, however, I suggest you check my earlier calculations as to where the Skytex stock would have to get to, if we were to only see the 435,000 shares, in order to start to drive any significant upswing in WRN. I believe that continued ownership of this asset along with a focus on the overall management (reduction of management costs) of WRN itself should be the way to go, given what I know thus far. Salut, Leigh McBain PS - I have not yet had an opportunity to go thru the numbers with any detail.