MGM Energy Corp MGMCF

RE:MGM Energy Management's Responsibility

[shambano1]

the only connection between POU and MGm is Clayton Riddell and his son Jim Riddell are on both MGM's board and POU's board.

I don't beleive Jim owns any significant amount of MGM shares but both POU and Clayton do.

it's MGM BOD responsbility to maximize shareholder value and in the current scenario which is without a JV partner to drill more wells into their Canol shale properties MGM has no possible way to raise funds to drill their own wells, and being that they don't have any produciton or CF and or credit lines, they will run out of cash in mid 2015.

so MGM's board approached POU since they own what ? 40 % of the outstanding shares and asked them if they would to make an offer for the shares they don't already own.

I don't see any conflict of interest in ths decision  and given that it came from POU and Clayton Riddell I'm sure it has been reviewed by quite a few lawyers before they made the announcement.

Now if a superior off were to come along then POU could raise their rather  low offer to meet or exceed any new offers or let the new buyer buy the complete company.

but POU has said they are willing to buy all the shares not owned for was a price of 0.20 or lower which was the trading price on the announcement date.

the biggest  problem with MGM's assets, both oil and gas is the fact that there is no way to get production to market and that could takes years before the pieplines are available.

how do you value assets if you can sell them for 5-10 years???


so now we wait to see if any long term thinking senior oil and gas companies want some really good NG assets and possibly great shale oil assets.

the plan was never to develop the shale oil assets on their own, that's impossible because of the high cost to develop these assets.

so now we are at the analysis juncture and given that there are only a handful of companies that would consider and or desire MGM's assets, hopefully it won't  take a long time to play out.

I'm long ans biased so DYODD