RE: September 2017 - Letter to Shareholders
Dear Shareholders:
The purpose of this monthly letter is to bring BNP shareholders up to date, on issues and news, since the last letter.
- The following is a summary of activities over the past month:
- Met with our management team on Friday, September 22, 2017, at SunLife Plaza in Calgary. This included our funding agent, our nominee for upstream CEO (oil and gas) and our power generation partners. We discussed the difficulties in raising money in the current business climate. The brokers are no longer able to raise equity funds for the junior explorers and producers, which is one reason for initially raising debt financing. The previous financing deal that we had worked on was not successful, as our previous contact had a heart attack, is still recovering, and is not back in the business. An equity raise for BNP will follow, after the debt financing and property acquisition are completed, and the shares are trading again. Even with a 10% cost to obtain the capital, this is offset by the ability to purchase $1.25 in assets for just $1.00.
- Our agent is working with a new debt financing company, based in the UK, and with a representative in Calgary. This company is agreeable to funding $150 million, based on our business plans, but requires an initial down payment of 10%. The group is credible and is currently being vetted on another deal.
- The 10% financing was discussed and we have been advised by the UK financier, that it can be done in the following stages:
- $500,000 deposit, to raise $5 million.
- Reinvesting $3 million of the $5 million raise, to borrow an additional $30 million.
- Reinvesting $15 million of the $30 million raised, to borrow $150 million.
- It is our intention to raise the initial $500,000+ from an “Angel Investor”. The “Angel” would receive a 24% - 30% annual return, but it is anticipated that the money will be returned within 6 months.
- Once an Angel Investor is found, we can kick off the application process which includes business plans, proof of life, etc. The funds are transferred to the UK financial company at the term sheet stage. At the term sheet stage, the amount of the loan and the interest rate are confirmed.
- The loan will be unsecured, but funds are drawn on an AFE format, for the purchase and development of assets. For example, if $100 million is allocated for an acquisition, these funds could be drawn, with a cheque payable to the seller.
- If an Angel Investor is found and was willing to put up $15 million, we could close on the $150 million term loan more quickly. The “Angel” is always paid off first, upon receipt of the debt financing.
- Business development activities:
We’re talking with other junior companies which are potential acquisition targets. We hope to have serious discussions, once the funding is raised, and we are working towards re-listing the shares for trading. We are also looking at potential farm in opportunities at South Ferguson, a production acquisition at Chin Coulee, and the Reagan field.
Our agent is working on potential “Angel” investors. We’re also talking with others in our network, and will also talk with a few Wall Street agents.
Any shareholders that can introduce us to an “Angel” investor, will be eligible for a 5% commission, up to a maximum of $250,000, for amounts of $500,000 - $15 million. Commissions would be payable upon receipt of the final debt financing.
Oil prices are holding steady in the $51.64 US for WTI crude. I remain very confident and believe that we have one of the best financing agents in Calgary. I’m also convinced that as a conglomerate, our oil & gas, environmental, pipeline, power generation and transmission businesses will be successful. Our business partners and executives are some of the best people in the industry. All that we need now, is a wee bit of capital.