I will ask a couple of questions….
Q – Why did/do the past and current directors of CTR say absolutely squat about all of this?
A – It seems to be the nature of the beast, ignore it for long enough and it will eventually go away.
Q – Why did they make walking away and retaining the potential to pay to retain a small percentage sound like a good deal?
A – Because what else could they say?
To quote someone…
“Here we had a
very experienced company in oil exploration [or something else?] in South America and controlling the actual drilling of the well, linking up with a new company with limited funding and managed by an "investment company" run by lawyers in Australia!!!!!”
T Winnifrith had his finger on this 2 years ago. [Dec-2013] and I know this has been posted before.
I cannot vouch for his figures, but the following gives a viable opinion.
http://www.shareprophets.com/views/2904/range-resources-greg-smith-guatemala-and-citation
“Smith is a busy man because he is not only working hard for Latin American (LAR) but he has also remained a very well paid consultant to this day to Range Resources.” [written in Dec-2013]
“Anyhow, By July 2012, an Australian listed Shell company Citation which had nothing else of substance within it had agreed to buy a 70% stake in LAR for $1 million – payable back to Quetzal, c150 million Citation shares (worth cA$3 million), a royalty on any output and an agreement to fund all of that $25 million capex programme. So within months LAR has turned an asset worth $1.5 million into one where its 30% stake is on a read through basis worth $15 million plus. Bonza!
But that is not the end of it because Citation is just a joke penny stock and needs help to fund this huge capex commitments. Step forward Range Resources which in January 2013 suddenly announces that it had – at some unspecified stage after July 2012 leant Citation A$2 million which it was converting into a 19.9% stake in the ASX listed company.
And as a bonus Range bought a 10% stake in LAR (run by Greg Smith) for $2 million! Bonza (for Greg) once again.
Now I remind you that these Guatemalan assets were first acquired by Petrolatina in September 2005. To date they have been vast cash consumers year in and year out for more than EIGHT years. The assets require at least another $22 million which MUST be spent or they are lost and neither Citation nor Range has that cash available.
Oddly Range does not seem to think that the $22 million is an issue, telling its own shareholders in January 2013:
“With that view, Range believes the stake in Citation to be a cost effective growth opportunity with minimal further funding required in the near term.””
What gassed says could cover the eventual failure, the above covers the whole play, over the years.
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Also Petrolatina, once run by Smith, was chasing unpaid money from Quartzel [Smith] enter LAR [Smith]
Petrolatina Energy Limited –
“Guatemalan Assets
Further to the sale of our assets (Licences A7-2005 and A-6-93) in Guatemala to Quetzal Energy Inc. (“Quetzal”) in July 2007, PetroLatina retained a 20% carried interest in the first three wells to be worked over, and a 20% working interest in future wells.
We understand that Atzam-2 is currently producing and have approached Quetzal on a number of occasions regarding our carried interest in this well.
To date, no satisfactory responses have been received and we intend to continue to pursue Quetzal and to seek recovery of our share of production revenues.”
“From the announcement made by Quetzal, we understand that estimated total oil production for QEG was approximately 6,000 bbls for the fiscal year ended 31 December 2011 (2010: 3,850 bbls) (2009: 5,905 bbls).”
Page 11
http://www.petronorte.com/archivos/reports/2011 Petrolatina Financial Statements.pdf
Sound familiar?
(20min delay)