The 44% of commonshares were sold to Power Pex which is a sub of Wuxi Industry group, a state own company controlled by the Communist Party.
The 2013 world copper production top 4 were Chile 5.7 MT (million tons), China 1.65 MT, Peru 1.3 MT & USA 1.22 MT. Most of the Chinese copper was produced around Wuxi area (Wuxi means this mine has no tin, but all copper) which has been producing copper for more than 1500 years. Copper still is the main stay for export and employment in that areas. Thus copper products are critical to the local economy and the state owned enterprise. Wuxi Industry has $23B in assets, backed by the stae owned banks.
It is a common practice in the 1990s that new industrial companies were 50/50 ownership where the local state/city govt backed by local state banks provides 50% capital, i.e. land, factory structures, labors and local wages. The other 50% capital was foreign technical shares (equipment, technicians, export vanues, etc.) and some other Chinese financial institutions which includes some non-local state owned banks. Lihua probably was started in the similar manner then it IPO on Chinese and foreign markets to attract more investors. The ex-CEO and many ex-directors are probably very closely related to the governing core of Wuxi Industry who are the local communist party officials.
Therefore, when things go bad, the local govt wanted its 50% back but got 44% common shares and the facotries, instead. Lihua is just a very small part of the Wuxi areas copper industry, but its revenue of $900M (2013, probably true because it has to turn the mined copper to marketable products.) is not a small part of the local economy. The only missing parts of this mess is where did the cash go?? The local govt will probably never announe the truth found to avoid involvements.
The bottom line is the copper must be turned to products for the world markets, so that the local govt (communist party heads) will not have big unemployment.
MHR had two good buying opportunities, in Jan 2010 (I got some) and May of 2013. But now it's at all time high. I would sell 1/2, if I got in at $2.5 last summer. I did sell in 2011 for $3+.
MHR is NG /NGL heavy. Marcellus shales and Appalachian shales are both NG rich, while Utica shale is NG/NGL rich with spotty oil cuts. MHR's $2.5B EV is 80% NG/NGL (presented in MBOE so few can tell the truth.)
MHR's ND Wiliston leases are in Divide cnty and Canada, mostly 3-Fork/Sanish (100'-150' total depth). They are good long term producers in 150-250 BOPD 90-day range. SSN's 3-Fork wells probably are better since they are in Williams cnty.
MHR has $600M 2012 debts due 2020, near $500M pref stocks and $226M 2014 debts due 2016. Commons are $90M. Yearly rev is $330M, $27M cash in June 2014. If MHR management is willing to sell Utica shales (the hot one among 3) which they got it cheap ($4400/ac). Then their heavy debt interests will be OK in the long run. Strapped for cash to pay debt interest is a problem. The $180M 2014 debt was for paying just that. The major differences between MHR and SSN are the load of debts + pref stocks, and NG/NGL heavy Vs oil heavy. Unless the NG/NGL prices go up signinificantly, I don't see any reason MHR commons would go much higher than the current pps.
Oil/gas containning leases: Possible + Potential + Proven = 3P.
1P = Proven , 2P= Potential + Proven.
Lynch, it was a total management selfish mess up at GMXR. Good leases with good 2P & 1P ratings, but they refused the sale proposals in summer of 2012 @ $20K/acre for 7K acres and @ $12K acres for 16K acres. It was the "dynasty" mindset which killed its financing. I lost $20K but learned a lesson. They have 35K leases in Chugwater WY not far from SSN WY leases, it is probably for sale now by the NYC financers/owners. Yes, we were cheated out by their managemnt family.
SSN is a different case, it's a public owned company, no family "dynasty". They are here in the US to make money. They will sell anything for good cash to fatten everyone's wallet. I made more than $500K in the last 4 years. The Hawk Spring vertical wells can be @ 10-acre spacing, may produce more than 80 BOPD/well by surface pumps. Simple perf (or add frac) near the pay zones above the concrete plug could make Bluff-1 a producer. Drilling and completion of these shallow vertical wells are very cheap, SSN uses farm-in to share costs & risks is a safe & conservative plan. Of the 17K acres, at least 150 drill sites can be located. But after the leases becoming 1P, selling at prime prices may be their goal.
The lower Cretaceous and upper Jarussic groups ( Dakota/Lakota + Morrison formations) have 95.5' of pay zones. These formations are proven producers in the past. But how to complete this vertical well is yet to be determined. The drilling costs of vertical well is very cheap when compared to those long deep lateral bores.
The Perm formations (may be Cherokee group) are known to have more than 20% porosity, but could be water logged as preventing the flow of oil from adjacent reservoirs. These formations are below the salt washouts, which the Spirit of America test well did not achieve. If these Permian formations can produce, it's icing on the cake.
While cheap producing test wells earn revenues, drill more cheap vertical test wells to de-risk the leases from 2P to 1P. A good plan in place.
The formation pressure needs 9.4 ppg mud to stablize, while 2080 psi was recorded. The surface blowout preventer (Christmas tree) kept the gusher from blowing out. The formation fluid entered the well could be oil, gas, water or a mixture of them, under high pressure .
Prior to the mud losss and kick, oil shows in mud from 8000', 8430' and 8650' were recorded. We hope it's the oil and gas under high pressure now capped by the blowout preventer. A gusher in the making.
Fall 2009, PPS = $0.25. SSN stsrted drilling in Bakken bowl. Got 150K shares.
Spring 2010, PPS= $0.55, the Bakken NSY wells started to come in. Public offering @ $0.57. Got more shares. The PPS stayed around $0.6 for the year.
Jan 2011, PPS started to take off, reached $4 in 3 months. SSN sold part of WY Goshen leases for $73M to CHK. CHK later sold 1/3 of its SE WY leases to CNCC from China.
Sold most of mine between $3 and $4. More than $600K profits, nice little chunk of wealth for more beer and chips.
The newer quick and easy sliding sleeves has failed many times in Bakken bowl. They always fix it with old powerful but slow plug and perf, refrack it. 5 out of 30 stages are producing, after the plg & perf, 1500 BOPD peak rate can be expected.
The 23' Dokata/Lakota and 3' Morrison are still in lower Cretaceous and Jerussic. Going deeper they might find the Permian age Lyons SS group (Wolfcamp). Where Cassa (Spirit of America finished), 10'. Then Wykert, 15', all have oil shows. But watch out for the 40' and 50' layers of salt washouts. That have to be conquered (if encountered) before they get into the rich Admire (A, B & C benches) of 45' pay zones wherelateral bores are hopeful.
Then they may go deeper into Penn aged Mamoo group, where 20' of bleeding Marmaton and 45' of verious Chrokees may be good for lateral bores. Then the 5 formations in Atoka can be reacoed where oil stains were detected.
From 1960 to 1980s, numerous test wells were drilled within 50 miles, many oil shows, but the old vert well tech could not get the oil out, nor the 2-D seismic graph could pin point the migrated oil pockets, chambers and traps. Armed with the new technologies, the mystry of WY SE Hartsville uplift (1.8M acres) might be unvealed soon.
Such as frac line leaks, boots leaks, lateral cement liner failed, or the containment zones (upper Bakken & lower Bakken tight shales) has large nartural fractures, etc. I believe Slawson can easily find the problem and fix it. Worse come to worst, insert a sleeve from stage 5 thru 7, by-pass 6. The remaining stages still can produce normaly.
Other subject : Malay Air flight MH 370 search ended after two months of SNAFU (Situation normal, all F'ed up). Now they say the search areas are discounted, the Pings detcted were from the search vessels, #$%$.
I still say some crooks in Malay found the real WW II Yamashida Treasure, worth $300 billions or more. They contracted SSN to drill lateral bore and got the treasures from the underground vaults (may be 3-D images were used). Then loaded on MH370 as cargo, tail-gate a low altitude small plane thru Indonisia and Singapore rada screens. Then landed in one of those old US WW II B-29 air bases in the south Pacific islands. 8000' ft concrete runways from 1944 are just as good as any airport. Now the big jet probably is covered by palm tree leaves. Of the 239 persons on board, $10 millions each will buy their silence. Hmmmmmmmm....
I guess this im712 guy does not know his butt hole from a hole in the ground, as far as FDIC and banking bizness are concerned.
Blu, here is some info for you.
BEXP/Stat oil leases in Rooosvelt cnty are within 30N56E then go SE to 25N58E, near state line of MT & ND. The closer to ND, more oil from mid Bakken, at the tip of Elm Coulee fields. SSN leases are 2 townships west of BEXP, or 20+ miles away.
But CLR has some good wells closer to SSN's eastern portion of its FPEC leases. They may find 3-Fork benches to be more productive than MT Bakken group in that areas, just west of the Brockton fault system's eastern shear plane. I expect 500 BOPD IP rate in the 3-Fork group top benches.
in Eagle Ford plays, FST is mainly oil in Gonzales cnty with 688 drill sites @ 80-acre spacing. Avg 650 BOPD @ 30-day production. Sabine is NG/NGL heavy in Dewitt cnty, 43% liquids. A total of 65,000 net acres in the Eagle Ford plays.
While FST & Sabine both have large NGL heavy Cotten Valley Sands (CVS) and Hynsville shale leases in NE TX (Sabine uplifts), 207,000 acres. These areas are very low risk proven fields, more than 90% of central Eagle Ford, CVS and Hynsville drillings are economic wells. Thus the Sabine financial connection can provide much needed drilling capitals in the remainder of 2014, at very low risk for the bond investors. Wall St will like that, such as Moody upgraded this merger and bond prices reached record high.
The reason to delay the IPO of the new SABO stock to the end of 2014, might be a strategical move to wait until more 2014 wells come in as economical, increase the production flowing BOEPD rate when EV is used for the new PPS price evaluation.
D-J basin SE WY leases that are potentially up for grab, the leasers are in destress situations.
Just to name a few.
12K acres near SSN leases in Hartsville uplifts area. Cordell, Admire, Greehorn, Wykert, Cassa, leo, etc. pay zones from many groups.
54K acres near Chugwater (close to famous Silo fld), Niobrara, Codell, Grennhorn, 4 J-sands and all Permian and Penn groups.
53K acres near WY/NE stateline and 30K Pine Bluff near by, all pay zones like Silo, except for Niobrara and above.
14K acres near Wilke for all pay zones under Niobrara.
Under $200/acre are possible at places, needs exploration vertical test wells.
when proven, sell for big profits. We have seen that drama before, SSN was diluted to $0.25 in fall 2009, then sold CHK some Goshen leases for $73M cash, based on rumors from other's exploration wells. Hmmmmm.....
The forgotten conventional vertical wells.
Before the popularity of the unconventional lateral bore horiz wells started in the 2000s, the major on-land oil producers were the old fashion vertical wells. It's cheap and quick, $1--2M each Vs $7--8M horiz well. From spud to completion, can be as quick as 21 days. Where the trap, chamber, pocket, pool and columns were found on 2-D or 3-D seismic images, pin point the location is the most critical element.
Some older D-J basin conventional wells have multi-pay zone columns up to 400' total length, a simple perf job can start oil flows from various pay zones to the vertical well. Frac is only an option. The best part of the conventional targets is the very closely spaced (10 acres or less) drill sites are allowed by the states. Thus multi-well pad drilling can cut costs further down to dirty cheap (when compaerd to the horiz wells). Once a target is proved by the exploration well, many wells can be drilled closely to drain the entire field. Some 200 MBO (1000 BO) to 300 MBO EUR vertical wells spaced at 40 acres are possible in a rich field. The Hartville uplifts has been estimated by many big oilers to have more than 30 MMBO recoverable in Goshen county alone.
When CLR founder H Hamm flew all over west ND and drilled numerous test wells to find that mid Bakken blanket pay zone, he was laughed at by the Wall St idiots. Now the 40 billion BO west ND recoverable oil has put USA back in the energy producer driver seat.
...... The largest Torington field has one well which produced 70K BO from 1982 till 2005, from only 15' of J-sand pay zone. The Hawk Spring well produced 10K BO from 1983 to 1987, from 12' of Muddy sand pay zone. These old wells were cheap vertical wells which drain oil from one pay zone in very limited volume.
The later Niobrara lateral bore wells of Devon (5) and SSN (1) were the only completed unconventional wells. There are not gental blanket rich thick pay zones like those Bakken and 3-Fork in west ND. So where did the oil migrated to??
The modern 3-D seismic imaging may provide much better clues than those 1970s vintage 2-D images. There should be plenty of traps, pockets, chambers, pools, trenches, etc. (conventional targets) which have collected the migrated oil. If a target is proven economical in several pay zones, say 5 zones, then a million BO EUR well is quite possible. This 1.4M acres high potential pwetro reserves is a true wildcater's playground.
The Rocky Mtn Front Range movements and the Hartville Uplift have created the huge basin SE of these uplifts. The ancient movements have lifted the relatively flat older Inland Sea sediments to 4000” + above current ocean level from 6000' below current ocean level. This NW basin wall rose more than 10,000' from the bottom of the very thick ancient hydrocarbon rich formations. The most interesting part is the NE-SW direction Hartville uplift made this sharp rise within 12 miles width. This deep underground ancient trench is the spot where Hawk Springs is located among other fields.
Location: From T30N R60W to T20N R70W, approx 110 miles long, with more than 60 townships (or 2160 sq miles, or 1.4 M acres) of immidiate drainning plain to the east.
Petro rich geological groups:
Starts from the shallow Upper Cretaceous age which includes Smoky Hills, Fort Hays, Niobrara, Codell sand, Carlie shale, Greenhorn lime and Mowry shale. Then the Lower Cretaceous which has Muddy and J sands, Skull Creek shale, Dakota then Lakota sands.
Under the Cretaceous is the poor Tri-Jurassic era which has only one thick Morrison sand but it is rich in hydrocarbon.
Then comes the Permian age rich groups. There are Leonardian and Wolfcamp which include Chase, Council Grove, Wykert and Admire formations.
The deeper Pennsulvanian age has even more richer formations. There are Marmo, Marmaton, Cherokee and Atoka.
The total thickness of these petro rich formations exceeds 500'. But due to the past violent gelogical movements and the mobile salt formations, they have been re-arranged and their contents have migrated. Now all the oilmen ask the same question “ Where is the oil ??” Not much exploartion has been done. Only 4 conventional fields and 3 unconventional fields have been found by the few serious exploration wells (less than 100). The largest Torington field has one well which produced 70K BO from 1982 till 2005, from only
To all, buying on the dips is the best stratege. When the PPS go back to $0.85+, by year end, you will thank yourselves.
I will share some info about Hawk Springs later. Rainbow is a sure bet, CLR to drill 4 wells and SSN to drill 4 wells. The Rainbow leases will rival North Stockyard.
The total commons increased from 127M to 142.5M while the market cap increased from $58.4M to $64M. Thus the PPS droped from $0.46 to 64M / 142.5M = $0.449 by the private placement. Or a 1- (0.449 / 0.46) = 2.75% dilution. If we can buy it at $0.4 PPS in the morning, it would be good.
The new investors (not real deep pockets) got them @ $0.375, if they sell the 15.5M added shares @ $0.45, then they would pocket 15.5M x (0.45-0.375) = $1.16M in less than a week. But I guess the placement may have a clause that prohibits them to sell within certain days, say 180 days. Hmmmmmmmmm........