Quattro Exploration and Production Ltd QEXXF

Um... What?

[elgaveeno]

So according to the 2013 MD&A:

 

On April 16, 2013, CRL filed a claim against Quattro claiming that a “partnership” existed between CRL and Quattro in purchasing certain assets from the receiver to Trafina Energy Ltd. located in the Divide, Rangeview and Katherine areas of Southern Saskatchewan (the “Divide Assets”) and the McMullen and Wetaskiwin areas of Northern Alberta (the “McMullen Assets”) and in selling to CRL certain exploratory assets located in the Wood Mountain area of Saskatchewan (the “WM Assets”) and that Quattro has breached its duties to CRL under such arrangements. It further claims that Quattro failed to conduct operations on certain assets, overcharged for operations on certain assets and failed to register CRL’s ownership in the Divide, McMullen and WM Assets in a timely fashion or at all. As set out in the court documents, CRL is seeking a judgment in the amount of $2,370,000 for breach of partnership, breach of duties to CRL and unjust enrichment, punitive damages of $250,000 and an order declaring the Divide, McMullen and WM Assets be held in trust by Quattro pending conveyance of CRL’s interest in such assets (which CRL claims to be 62% of the Divide Assets, 80% of the McMullen Assets and 50% of the WM Assets). Quattro has filed a statement of defence in the matter strenuously denying the claims. No further material steps have been taken on this action since the last financial reporting period. No adjustment has been made to the consolidated financial statements to reflect the possible impact that an unfavourable resolution of this matter may have on the financial position or performance of the Company as the outcome of the claim is currently not determinable.

So 40 out of their 60 wells are going to be drilled into a heavy oil sands lease, where they hold title to ony 20% of the lands... That's a big chunk of thier future growth, tied up in a legal battle. The really funny part obout that is that it appears that the majority of their acreage is in a structural low, and the Waiskaw is wet... not a smart investment.

No mention of any $ for Guatemala...

They willl not meet their production targets.

[rizac]

Perhaps you should look at the open hole logs.  They are public.  Gas caps and oil legs are not in the low and wet.

[elgaveeno]

Based on induction logs, core data and structure, the land they are in despute with CDR over is oil over water trending to wet. . The wells to the north are more reasonably, all oil.  If you looked at it independantly as I did, you would take a large pass on the majority of the acreage. I would chalange you or the company to provide what most real companies do: acreage maps, type well

[ROIcrusader]

Interesting commentary on the oil over water and acreage. Duely noted. Where in SK are you from elga? Just a guess, but here's a handshake from Stoon for ya. As for the multi-year capital budget, while not common, it's good to have a plan, no? I've heard of other boards approving multi year plans. You don't need to have the funds for a well you're planning to drill in 3 years,

[elgaveeno]

Corporate governance is regulated so that capital spending that is authorized by a board does not exceed the capacity of the corporation. If you have $100 in the kitty, you cannot authorize a $1000 expenditure. Boards can get sued. This authourization for a multi-year plan would then be a 3 year plan. If you  had a 3 or 5 year plan, you could use it internally, but you would never be allowed

[ROIcrusader]

To the best of my knowledge there's no regulation stipulating the release of corporate plans (if so please educate me). There are regulations stating you can't mislead the public, which would result in a shareholder suit, no doubt, I've been a party to as much (ABX Pascua Lama). I think the release was fairly specific about how Phase I of the plan would be funded. Feel free to report

[elgaveeno]

Nice post. Thank you. Yes, on could deduce that they have approved a $13.5M 2014 Capex, for 23 net wells. That's not exactly how it reads (See the 2 net/ 1 gross ellerslie horizontals - WHAAAT?) I think what they are saying is they are drilling 23 out of 60 wells that they will be responsible for 100% of the costs. In the Ellserslie example then they plan on drilling 2 of 3 total Ellerslie HZ&

[ROIcrusader]

Yeah that 2/1 Ellerslie thing is wonky, someone missed a typo I would think. No arguing it could have been written a little better. 23/60=38.3%  "QUATTRO's net cost being approximately $13.5 million" ... Net cost is the key here, so the 13.5m is only 38% of the funds used to drill. Unless this is some type of farm in agreement (which is mentioned no where), Quattro is

[elgaveeno]

Will check out PXT. QXP does not appear to have any partners on these wells. They are 100%. so they are drilling 100% of 23 wells of a 60 well program, if I read the release (in)correctly. They could not get to their production numbers at ony a 38% The backbone of the whole growth program is the Wabiskaw (8/40). Let's see how long it takes for them to show investors the economics on that play.

[mickina]

Elgaaveeno, You keep bashing QXP while you ignored my several comments why you care so much about QXP when you admittedly sold your position in it months ago. Are you a Good Samaritan to help others? I suspect you are not and suspect that you have likely some ulterior motives doing this bashing. Either shut up or let us all know what your motivation is.