Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Microcap & Penny Stocks : Benz Energy (BZG.V) -- Ignore unavailable to you. Want to Upgrade?

To: c.d who wrote (110)	3/31/1999 10:19:00 PM
From: Ed Ajootian	Read Replies (2) \| Respond to of 272

c.d., LOL, I like your sense of humor! You also raise some excellent questions --- far too many for me to be able to answer in one shot. But let me mention a few points now and then try to catch up with the rest tomorrow night. Benz essentially is the old Texstar Petroleum. Prentis contributed his shares in Texstar to Benz, which previously was a publicly held venture capital company, in exchange for a ton of Benz stock. This technique (referred to as a reverse merger) is a common way that private companies go public. I have several sources of information on Benz which I view as very reliable. I dare not mention these poor slobs' names publicly for fear of losing their confidence. This is a stock that the market has forgotten, largely due to its being on the wrong trading market. It is a mismatch. The Canadians have no interest in a company that just explores in the US, and the Americans have no interest in buying a company that just trades on the VSE. The debt structure is presently complicated but soon will be simplified. The biggest debt issue out are $36 mm of convertible bonds, previously mentioned here. Then they have a loan from Encap, which is set to be refinanced by Shell Capital, via a Volumetric Production Payment (VPP). Bottom line is that they are poised to pay off Encap with this VPP and then at that point their only debt will be the converts. I got the 30,000 mcfd figure as follows: 1) Current production other than at Oakvale Dome = 5,000 mcfd Oakvale Dome wells: 2) Byrd well, 10,000 mcfd x 55% w.i. = 5,500 3) Howell well, 15,000 mcfd x 64% w.i. = 9,600 4) Fortenberry well (yet to be logged), 15,000 x 70%= 10,500 _______ Total production, rounded down for conservativism 30,000 mcfd With this production level this company will have positive cash flow even after backing out the amount of production that is to be dedicated to paying off the VPP! I really feel it would be a good idea to acquire some of this stock tomorrow if you feel you like the stock, since the VSE is closed on Friday and by Monday we will likely have the log results in hand (at least unofficially). If they show SEVERAL HUNDRED feet of pay like the Howell well did I would suspect that it would be very difficult to obtain this stock for anywhere near the current quote. The May gas contract blasted through the $2 mark and my bet is that there'll be no turning back from here. Why would May gas be going up now? Today it was 70 degrees in Boston, for chrissakes, about 20 degrees warmer than normal! The pricing of the May contract is critical to Benz since that will be the first full month that they will be cranking out all this gas. When you say you have extensive "technical background", is that in the O&G business? If so I'd like to pick your brain to help understand the significance of the upcoming well announcements, if that's OK.

To: c.d who wrote (110)	3/31/1999 11:57:00 PM
From: Ed Ajootian	Read Replies (1) \| Respond to of 272

Another thing, c.d., I want to make it very clear that Benz is NOT IN DEFAULT on any debt at this time. The written record may lead one to conclude that they are in default on their Encap loan since that loan, which was originally due on 12/31, has, according to the press releases only been extended to 2/28. But I know that in fact it has been extended further to 4/30. Also, Benz has been lent another $3 mill. to be able to do what they gotta do. It helps having one of the Managing Directors of Encap on your board of directors! Hopefully Benz will make an announcement re: this further extension of the Encap loan soon so that folks like you will not worry about this sort of thing. I believe this confusion about these facts is a major contributor to the low stock price.