Redwater Energy Corp RDWEF

Red Star

[leakeybill]

I continue to buy Red Star prior to the merger with Great Plains because of this, 34 million shares, no debt, 4 million dollars in the bank, more then 1000 boe of daily produciton, resonable management cost, Seismic asset they will likely add 7-8 million dollars to the companies cash with the sale of some seismic.

Sask properties that have not been reported on and they are still being drilled up as we speak, NE BC JV agreement with a major with significant over ride potential and has a life that could potentially go forware 8 years. Where does that show up on the balance sheet. 

Redstar could sell this company in pieces for a lot more then their value that they are getting to merge with Great plains.

However look at the great plains side, a nisku well tested and waiting for tie in with the potential of 1000 boe a day (400 net), 10 more drill locations seismicly defined, a new great leduc discovery, the randell growth. I don't believe in my opinion that the real produciton numbers have been shared with the shareholders and when they come together I would expect the combined produciton to be more around 2500 boe or higher.

They both have some poor hedges in place and that will take them a while to clean up. However the way I see it is this, they will sell off a few assets, become debt free, focus on their core areas Randel, Pembina, NE BC and do just fine.

The only problem they have is can they keep their focus.

The resulting company will have first class assets in prime areas, however Bruce Mitchell who will own 10% of the combined company is a pretty sharp investor and looks like he is hanging in there and he is over 10% on both sides of the deal.