As
filed with the Securities and Exchange Commission on October 3, 2006
Registration No. 333-133839
UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
___________________
PRE-EFFECTIVE AMENDMENT
NO. 3
TO
FORM
SB-2
REGISTRATION
STATEMENT
UNDER
THE
SECURITIES ACT OF 1933
___________________
Calibre
Energy, Inc.
(Name
of
small business issuer on its charter)
|
Nevada
(State
or Other Jurisdiction of Incorporation or Organization)
|
1311
(Primary
Standard Industrial
Classification
Code Number)
|
88-0343804
(I.R.S.
Employer
Identification
Number)
|
1667
K Street, NW, Suite 1230
Washington,
D.C. 20006
(202)
223-4401
(Address
and telephone number
of
principal executive offices and principal place of business)
___________________
Oliver
Pennington
1667
K Street, NW, Suite 1230
Washington,
D.C. 20006
(202)
223-4401
(Name,
address and telephone number
of
agent
for service)
___________________
Copy
to:
Michael
C. Blaney
Vinson
& Elkins L.L.P.
1001
Fannin, Suite 2300
Houston,
TX 77002
(713)
758-2222
___________________
Approximate
date of commencement of proposed sale to the public:
As soon
as practicable after the effective date of this registration statement.
If
the
securities being registered on this form are to be offered on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act of 1933, check
the following box: x
If
this
form is filed to register additional securities for an offering pursuant to
Rule
462(b) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering: o
If
this
Form is a post-effective amendment filed pursuant to Rule 462(c) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same
offering: o
If
this
Form is a post-effective amendment filed pursuant to Rule 462(d) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same
offering: o
If
delivery of the prospectus is expected to be made pursuant to Rule 434, check
the following box: o
___________________
The
registrant hereby amends this registration statement on such date or dates
as
may be necessary to delay its effective date until the registrant shall file
a
further amendment that specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act or until this registration statement shall become effective
on
such date as the Securities and Exchange Commission, acting pursuant to said
Section 8(a), may determine.
Calibre
Energy, Inc.
71,433,306
Shares of Common Stock
This
prospectus relates to the resale from time to time by the selling stockholders
of up to 71,433,306 shares of our common stock, including 53,475,806 shares
of
common stock previously issued and 17,957,500 shares of common stock issuable
upon the exercise of common stock purchase warrants. The selling stockholders
may sell the shares of common stock from time to time in the principal market
on
which the stock is traded at the prevailing market price or in negotiated
transactions.
Shares
of
our common stock are traded on the NASD OTC Bulletin Board under the symbol
“CBRE.OB.” On September 30, 2006, the last reported sales price for our
common stock on the OTC Bulletin Board was $ 2.53 per
share.
We
will
not receive any proceeds from the sale of the shares of our common stock covered
by this prospectus.
___________________________________
Investing
in our common stock involves a high degree of risk. You should read carefully
this entire prospectus, including the section captioned “Risk Factors” beginning
on page 2, before making a decision to purchase our stock.
___________________________________
Neither
the Securities and Exchange Commission nor any state securities commission
has
approved or disapproved of these securities or passed upon the accuracy or
adequacy of this prospectus. Any representation to the contrary is a criminal
offense.
The
information in this prospectus is not complete and may be changed. Holders
may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an
offer
to sell these securities and is not soliciting an offer to buy these
securities in any jurisdiction where the offer or sale is not
permitted.
The
date
of this prospectus is ____, 2006.
TABLE
OF CONTENTS
You
should rely only on the information contained in this prospectus. We have not
authorized anyone to provide you with information that is different. This
prospectus may only be used where it is legal to sell these shares of our common
stock. The information in this prospectus may only be accurate as of the date
of
this prospectus.
This
prospectus is part of a registration statement that we filed with the Securities
and Exchange Commission for a continuous offering. Under this prospectus, the
selling stockholders may, from time to time, sell the shares of our common
stock
described in this prospectus in one or more offerings. This prospectus may
be
supplemented from time to time to add, update or change information in this
prospectus. Any statement contained in this prospectus will be deemed to be
modified or superseded for the purposes of this prospectus to the extent that
a
statement contained in a prospectus supplement modifies such statement. Any
statement so modified will be deemed to constitute a part of this prospectus
only as so modified, and any statement so modified will be deemed to constitute
a part of this prospectus.
The
registration statement containing this prospectus, including the exhibits to
the
registration statement, provides additional information about us, the selling
stockholders and the shares of our common stock offered under this prospectus.
The registration statement, including the exhibits, can be read on the SEC
website or at the SEC offices mentioned under the heading “Where You Can Find
More Information.”
i
The
following summary highlights selected information from this prospectus and
does
not contain all of the information that you should consider before investing
in
our common stock. This prospectus contains information regarding our businesses
and detailed financial information. You should carefully read this entire
prospectus, including the historical financial statements and related notes,
before making an investment decision.
In
this prospectus, “Calibre Energy, Inc.,” the “company,” “we,” “us” or “our”
refer to Calibre Energy, Inc., a Nevada corporation, and its subsidiaries,
except where otherwise indicated or required by context.
Our
Business
We
are an
independent natural gas and oil exploration and production company concentrating
on growing reserves and production through the exploration, development,
exploitation and acquisition of natural gas and oil reserves in North America
and in Kurdistan, Iraq. We have initially concentrated on the acquisition,
exploitation and development of producing and non-producing shale gas and
oil
properties in the Barnett Shale in Texas. Our oil and gas business was
commenced
in August 2005. We specialize in acquiring oil and gas interests involved
in
extracting hydrocarbons from known gas-shale source rocks. We intend to
focus
on: a) shales that are laterally extensive; b) basins where the target
zones
have been previously penetrated; and c) shales that have been successfully
fraced and commercially produced. In September 2006, we expanded into Iraqi
Kurdistan, a country with the world's fourth largest proven oil
reserves.
Our
Executive Offices
Our
principal executive and administrative office facility is located at 1667 K
Street, N.W., Suite 1230, Washington, D.C. 20006 and our telephone number is
(202) 223-4401 and we have an operations office at Ashford VI, 1155 Dairy
Ashford South, Fourth Floor, Houston, TX 77079. We maintain a website at
www.calibreenergy.com
, however
the information on our website is not part of this prospectus, and you should
rely only on information contained in this prospectus when making a decision
as
to whether or not to invest in shares of our common stock.
1
The
shares offered hereby have not been approved or disapproved by the SEC or the
securities regulatory authority of any state, nor has any such regulatory body
reviewed this Prospectus for accuracy or completeness. The shares offered hereby
are speculative, involve an unusually high degree of risk and should only be
purchased by those who can afford to lose their entire investment. Therefore,
prospective investors should carefully consider the following risk factors
before purchasing the shares offered hereby.
The
following factors affect our business and the industry in which it operates.
The
risks and uncertainties described below are not the only ones we face.
Additional risks and uncertainties not presently known or that we currently
consider immaterial may also have an adverse effect on our business. If any
of
the matters discussed in the following risk factors were to occur, our business,
financial condition, results of operations, cash flows, or prospects could
be
materially adversely affected.
Risks
Related to Our Business
We
have a limited operating history and limited revenues.
Our
oil
and gas business commenced in August of 2005 and, accordingly, is subject to
substantial risks inherent in the commencement of a new business enterprise.
Consequently we have limited assets and operations. To date, we have generated
limited revenue from our operations., no business history and may not be able
to
successfully identify, develop and operate oil and gas leases, generate
revenues, or operate profitably that investors can analyze to aid them in making
an informed judgment as to the merits of an investment in us. Any investment
in
us should be considered a high risk investment because the investor will be
placing funds at risk in a company with unforeseen costs, expenses, competition,
and other problems to which new ventures are often subject. Investors should
not
purchase our stock unless they can afford to lose their entire investment.
We
will need additional capital to execute our business plan, and our ability
to
obtain the necessary funding is uncertain.
We
expect
that we will require additional capital to implement our business plan
successfully. The timing and degree of any future capital requirements will
depend on many factors, including:
| · |
the
accuracy of the assumptions underlying our estimates for our capital
needs
in 2006;
|
| · |
the
number of prospects we identify;
|
| · |
the
terms on which we can obtain rights to those prospects;
|
| · |
the
cost of exploring and developing the prospects;
and
|
| · |
our
success rate in developing economically successful prospects.
|
We
have no
immediate internal sources of funds, and we do not have any committed sources
of
capital. Additional financing through partnering, public or private equity
financings, lease transactions or other financing sources may not be available
on acceptable terms, or at all. Additional equity financings could result in
significant dilution to our stockholders. If sufficient capital is not
available, we may be required to delay or reduce the scope of our exploration,
development and/or production activities which could have a material adverse
effect on our business and financial results.
2
Several
of our officers are also employed as officers and directors for another company
which may lead to conflicts of interest for these officers.
Several
of
our officers, including our President and CFO, are also employed as officers
and/or directors of Standard Drilling, Inc., a company engaged in the business
of drilling services. There exists a substantial possibility of a conflict
of
interest for those officers employed by Standard Drilling. arising from their
employment by both us and Standard Drilling. As officers, these individuals
will
have a duty of loyalty to both companies, and a conflict will arise if we
enter
into any arrangements with Standard Drilling or if we and Standard Drilling
engage, or attempt to engage, in the same businesses. In such cases, the
officers may not be able to make decisions or take action that satisfies
their
obligations to both companies.
Employment
of some of our officers by another company may limit the time they have
available to devote to managing our business.
As
noted
above, several of our officers, including our President and CFO, are also
employed as officers and/or directors of Standard Drilling, Inc. Our employment
agreements with these officers require them to devote such time to managing
our
business as is reasonably necessary to perform their duties under the employment
agreement but do not specify a specific number of hours or percentage of
time. Further, the officers have significant discretion on a day to day
basis as to whether to devote time to the management of our business or
management of Standard Drilling's business. Because of the time required
of
these officers to manage Standard Drilling's business, they may not devote
sufficient time to managing our business, and as a result our business
and
financial results could be adversely affected. These officers also serve
on our
Board of Directors, and they also directly or indirectly control the voting
of
approximately 38% of our outstanding common stock.
There
is a high demand for leases and drilling rigs in the areas of our operation
and
we may not be able to obtain leases or access to rigs at rates that permit
us to
be profitable or at all.
Increases
in oil and natural gas prices have resulted in a significant increase in
demand
for both oil and gas leases and drilling rigs. As a result, the cost of both
leases and rigs has increased substantially. In particular the demand for
rigs
has made it difficult in some instances to obtain such services without
significant advance scheduling. If we cannot obtain leases to oil and gas
properties and rigs when needed and at reasonable rates, or at all, we may
not
be able to complete exploration and development and commence production in
a
timely manner. As a result, our associated costs could be substantially higher,
we may lose our rights to some leases and our business and financial results
may
be adversely affected.
We
will face intense competition in our industry, and we may not have the capacity
to compete with larger oil and gas companies also investing in oil and gas
prospects.
Identifying
and realizing attractive investments in the energy sector are highly
competitive, involve a high degree of uncertainty and often require significant
capital. There are many companies with more resources in the oil and gas
industry, competing to identify and acquire the most desirable oil and gas
prospects. If we cannot acquire high quality oil and gas prospects, at a cost
which allows us to earn a profit, due to such competition, our business and
financial results will be adversely affected.
The
selection of prospects, ownership and operation of oil and gas wells, and the
ownership of non-operating oil and gas properties are highly speculative
investments.
Prospects
may not produce oil or natural gas, or drilling or development on a prospect
may
not take place at all. Operations on the interests we acquire may be
unprofitable, not only because a well may be non-productive “dry hole,” but also
because the producing life and productivity of wells are unpredictable. Wells
may not produce oil and/or gas in sufficient quantities or quality to recoup
the
investment, let alone return a profit. Further, weather-related and other delays
may affect the ability to drill for hydrocarbons, produce hydrocarbons, or
to
transport hydrocarbons. Development and transportation may be made impracticable
or impossible by weather, ground conditions, inability to obtain appropriate
easements, ground water, or other conditions or delays. If any of our prospects
or wells fails to produce at anticipated levels or if their completion or
operation is delayed or limited, our business and financial results may be
adversely affected.
3
The
experts on whom we rely to analyze potential acquisitions may not make accurate
conclusions about prospects.
We
will
rely on our management and personnel, experts, our partners and other third
parties to analyze potential prospects in which we invest. If the analysis
is
inaccurate, the prospects may not result in productive wells and our business
and financial results will be adversely affected.
Third
parties may operate some of the prospects in which we invest
and
thus we may be unable to control their operations in a manner as we believe
will
yield the best results.
Third
parties manage and control the properties in which we invest. Also, third
parties may act as the operator of some of our prospects, and in most cases,
we
will acquire less than a 100% ownership position in our oil and gas properties.
Accordingly, third parties may manage and control the drilling, completion
and
production operations on the properties. As a result, a prospect may not be
drilled or operated in the manner we desire. Additionally, we could be held
liable for the joint activities of other working interest owners of our
investment properties, including nonpayment of costs and liabilities arising
from the other working interest owners’ actions. Moreover, if other working
interest owners do not, or cannot, pay their share of drilling and completion
costs for a prospect, that prospect might not be fully developed.
Leasehold
interests in which we invest may revert before the interest is profitable.
Many
leases and mineral interests contain provisions that allow ownership to revert
back to the original owners after a certain period of time and under certain
circumstances. Because we may not have control of the majority of the interest
in a particular lease block or because of a lack of funds or availability of
equipment, we will have little or no control over the development or drilling
that takes place, and leases may therefore expire before any commercialization
of the lease takes place.
Drilling
wells is speculative, unpredictable, and
we
will lose our entire investment in wells that do not produce in commercial
quantities.
We
will be
required to pay our pro rata share of drilling expenses on a prospect where
we
own a working interest. Drilling involves high risk, and the probability is
high
that no oil and gas will be discovered in commercial quantities. In most
instances for any given prospect, a dry hole will result in a total loss of
any
amounts invested in the drilling of the prospect, including the amount invested
in the mineral lease.
Production
and marketing conditions may cause production delays.
Some
of
the prospects we acquire may be remote from transportation facilities. Drilling
wells in areas remote from transportation facilities may delay production from
those wells until sufficient reserves are established to justify construction
of
necessary pipelines and production facilities. The inability to complete wells
in a timely fashion on a prospect may also result in production delays. In
addition, marketing demands (which have historically been seasonal) may reduce
or delay production from wells. The wells on the prospects in which we invest
may have access to only one potential market. Local conditions, including
closing businesses, conservation, shifting population, pipeline maximum
operating pressure constraints, local supply levels and delivery problems could
halt or reduce sales from the wells in which we invest. The occurrence of any
of
these adverse conditions may adversely affect our ability to produce and/or
market oil and gas from the affected wells.
4
Political
and economic instability in Iraq could aversely affect our investment in
projects in Iraq
We
have entered into an agreement to invest in an exploration and production
project in Iraq. Our investment in Iraq is subject to a variety of political
and
economic risks due in part to insurrection and instability in Iraq,
including:
| · |
loss
of property and equipment as a result of events like acts of
war,
insurrection, terrorism, expropriation, or
nationalization.
|
| · |
increases
in import, export and transportation regulations and tariffs,
taxes and
governmental royalties;
|
| · |
renegotiation
of contracts with governmental entities that result in
less favorable
terms for us;
|
|
·
|
changes
in laws and policies governing operations of foreign-based
companies in
Iraq that increase our costs or otherwise adversely
affect our
operations;
|
|
·
|
changes
in exchange controls and other laws that affect our ability
to transfer
funds to the United States;
|
| · |
changes
in the laws and policies of the United States affecting
foreign trade,
taxation and investment; and
|
| · |
the
possibility of being subject to the exclusive jurisdiction
of foreign
courts in connection with legal disputes and the possible inability
to
subject foreign persons to the jurisdiction of courts in the
United
States.
|
As
a result of any of the foregoing we may lose some or all of our investment
in
Iraq or control over the investment or its returns. Our business and financial
results would be adversely affected by any such event.
Oil
and gas markets have historically been unstable
and
their fluctuation may adversely affect the value and marketability of our
investments.
Global
economic conditions, political conditions and other factors create an unstable
market for the price of oil and natural gas. Oil and gas prices may fluctuate
significantly in response to supply, demand, political, economic, weather and
other factors. Such price fluctuation may affect the value of cash flow from
producing properties and the value and marketability of our investments.
We
may
not be able to be both cost-efficient and geographically diversified.
While
we
will diversify our investments among different properties, prospects, and,
possibly, geographic regions, the cost to acquire interests in and develop
oil
and gas prospects varies greatly in different geographic locations.
Consequently, if we make investments in a limited geographic area, it may lower
our cost per investment but would limit the diversity of our portfolio.
Conversely, if we make investments in a number of different areas, our diversity
would increase but at a greater cost to us.
The
profitability of any investment will be subject to the risk of loss due to
damage to people or property arising from the hazards of drilling and operating
prospects and wells.
We
intend
to invest in leaseholds, titles, mineral interests, working interests, royalty
interests and other energy exploration related assets. Numerous potential
hazards accompany the development of these interests, including unexpected
or
unusual ground formations, pressures, blowouts, and pollution. Any of these
hazards could injure or kill people or damage property, including causing
surface damages, equipment damage, reservoir damage and reserve loss. If any
of
these potential hazards occur, the associated damages could exceed the value
of
our assets and any insurance coverage.
Our
activities will be subject to substantial environmental laws and regulations
and
the cost of complying with those laws and regulations
may
be significant.
We
will be
subject to federal, state and local environmental laws, regulations and
ordinances that may impose liability for the costs of cleaning up, and damages
resulting from, past spills, disposals and other releases of hazardous
substances. In particular, under applicable environmental laws, we may be
responsible for certain costs associated with investigating and remediating
environmental conditions and may be subject to associated liability, including
lawsuits brought by private litigants, relating to prospects in which we own
working interests. These obligations could arise regardless of whether the
environmental conditions were created by us, a partner or by a prior owner
or
tenant. If we incur any such costs, our business and financial results may
be
adversely affected.
Risks
Related to Our Stock
There
is currently a limited market for our common stock, and any trading market
that
develops in the common stock may be highly illiquid and may not reflect the
underlying value of
our
net assets or business prospects.
There
is
currently a limited market for our common stock and an improved market for
our
common stock may not develop.. Accordingly, purchasers of the shares offered
hereby will be required to bear the economic consequences of holding such
securities for an indefinite period of time. An active trading market for our
common stock may not ever develop. Any trading market that does develop may
be
volatile, and significant competition to sell our common stock in any such
trading market may exist, which could negatively affect the price of our common
stock. As a result, the value of our common stock may decrease. Additionally,
if
a trading market does develop, such market may be highly illiquid, and our
common stock may trade at a price that does not accurately reflect the
underlying value of our net assets or business prospects. Investors are
cautioned not to rely on the possibility that an active trading market may
develop or on the prices at which our stock may trade in any market that does
develop in making an investment decision.
5
If
our
share price is volatile, we may be the target of securities litigation, which
is
costly and time-consuming to defend.
In
the
past, following periods of market volatility in the price of a company’s
securities, security holders have often instituted class action litigation.
If
the market value of our common stock experiences adverse fluctuations and we
become involved in this type of litigation, regardless of the outcome, we could
incur substantial legal costs and our management’s attention could be diverted
from the operation of our business, causing our business to suffer.
Our
“blank
check” preferred stock could be issued to prevent a business combination not
desired by management or our current majority shareholders.
Our
articles of incorporation authorize the issuance of “blank check” preferred
stock with such designations, rights and preferences as may be determined by
our
board of directors without shareholder approval. Our preferred stock could
be
utilized as a method of discouraging, delaying, or preventing a change in our
control and as a method of preventing shareholders from receiving a premium
for
their shares in connection with a change of control.
Future
sales of our common stock in the public market could lower our stock
price.
We
may
sell additional shares of common stock in subsequent public or private
offerings. We may also issue additional shares of common stock to finance future
acquisitions. Such sales or issuances may be at prices less than the public
trading price. We cannot predict the size of future issuances of our common
stock or the effect, if any, that future issuances and sales of shares of our
common stock will have on the market price of our common stock. Sales of
substantial amounts of our common stock (including shares issued in connection
with an acquisition), or the perception that such sales could occur, may
adversely affect prevailing market prices for our common stock.
We
presently do not intend to pay cash dividends on our common
stock.
We
currently anticipate that no cash dividends will be paid on the common stock
in
the foreseeable future. While our dividend policy will be based on the operating
results and capital needs of the business, it is anticipated that all earnings,
if any, will be retained to finance the future expansion of the our business.
Therefore, prospective investors who anticipate the need for immediate income
by
way of cash dividends from their investment should not purchase the shares
offered in this offering.
This
Prospectus contains forward-looking statements. These statements relate to
future events and/or future financial performance and involve known and unknown
risks, uncertainties and other factors that may cause the actual results, levels
of activity, performance or achievements of our business or the industry in
which it operates to be materially different from any future results, levels
of
activity, performance or achievements expressed or implied by the
forward-looking statements. These risks and other factors include those listed
under “Risk Factors” and those described elsewhere in this
prospectus.
In
some
cases, you can identify forward-looking statements by the Company’s use of terms
such as “may,” “should,” “expects,” “plans,” “anticipates,” “believes,”
“estimates,” “predicts,” “potential,” or the negative of these terms or other
comparable terminology. These statements are only predictions. Actual events
or
results may differ materially. In evaluating these statements, you should
specifically consider various factors, including the risks outlined under “Risk
Factors.” These factors may cause the Company’s actual results to differ
materially from any forward-looking statement.
Although
we believe that the expectations reflected in the forward-looking statements
are
reasonable, we cannot guarantee future results, levels of activity, performance,
or achievements. Moreover, neither we nor any other person assumes
responsibility for the accuracy and completeness of these forward-looking
statements. We do not intend to update any of the forward-looking statements
after the date of this Prospectus to conform prior statements to actual
results.
7
The
selling stockholders will receive all of the proceeds from any sales of shares
of our common stock. We will not receive any of the proceeds from any such
sale
by any selling stockholder. See “Selling Stockholders.”
We
will
receive proceeds upon the exercise of the warrants. Any proceeds we receive
upon
exercise of the warrants will be used for evaluating, acquiring, drilling and
completing prospects and to pay salary and administrative expenses.
Shares
of
our common stock are traded on the National Association of Securities Dealers
Inc. Over the Counter Bulletin Board under the symbol “CBRE.OB.” Our common
stock trades on a limited, sporadic and volatile basis. As of September 30,
2006, the last reported sales price of our common stock on the OTC Bulletin
Board was $2.53. As of September 18, 2006, there were 56,600,806 shares
of our
common stock outstanding that were held of record by 405
persons.
The
following table sets forth, for the periods indicated, the range of high and
low
bid information for our common stock. These quotations reflect inter-dealer
prices, without retail mark-up, mark-down or commission, and may not represent
actual transactions.
|
Price
Ranges
|
|||||||
|
High
|
Low
|
||||||
|
Fiscal
Year Ended December 31, 2003
|
|||||||
|
First
Quarter
|
0
|
0
|
|||||
|
Second
Quarter
|
0
|
0
|
|||||
|
Third
Quarter
|
0
|
0
|
|||||
|
Fourth
Quarter
|
0
|
0
|
|||||
|
Fiscal
Year Ended December 31, 2004
|
|||||||
|
First
Quarter
|
0
|
0
|
|||||
|
Second
Quarter
|
0
|
0
|
|||||
|
Third
Quarter
|
0
|
0
|
|||||
|
Fourth
Quarter
|
0
|
0
|
|||||
|
Fiscal
Year Ended December 31, 2005
|
|||||||
|
First
Quarter
|
0
|
0
|
|||||
|
Second
Quarter
|
0
|
0
|
|||||
|
Third
Quarter
|
0
|
0
|
|||||
|
Fourth
Quarter
|
2.00
|
1.42
|
|||||
|
Fiscal
Year Ended December 31, 2006
|
|||||||
|
First
Quarter
|
3.00
|
1.55
|
|||||
|
Second
Quarter
|
2.90
|
1.80
|
|||||
|
Third
Quarter
|
2.80
|
1.81
|
|||||
Holders
of
shares of common stock will be entitled to receive cash dividends when, as
and
if declared by our Board of Directors, out of funds legally available for
payment thereof. However, if dividends are not declared by our Board of
Directors, no dividends shall be paid. We have not paid any dividends on our
common stock since our inception.
We
do not
anticipate that any cash dividends will be paid in the foreseeable future.
While
our dividend policy will be based on the operating results and capital needs
of
the business, we anticipate that all earnings, if any, will be retained to
finance our future expansion. Therefore, prospective investors who anticipate
the need for immediate income by way of cash dividends from their investment
should not purchase the shares offered by this prospectus.
8
OF
FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
The
following discussion of our financial condition and results of operations should
be read together with the consolidated financial statements and related notes
that are included elsewhere in this prospectus. This discussion may contain
forward-looking statements based upon current expectations that involve risks
and uncertainties. Our actual results may differ materially from those
anticipated in these forward-looking statements as a result of various factors,
including those set forth under “Risk Factors,” “Disclosure Regarding
Forward-Looking Statements” or in other parts of this prospectus. We undertake
no obligation to update any information in our forward-looking statements except
as required by law.
Overview
We
are
engaged in oil and natural gas exploration and exploitation activities in the
Barnett Shale development in Ft. Worth Basin located northern Texas, the Bakkan
Shale development in the Williston Basin located in Montana and North Dakota,
and the Fayetteville Shale development in the Arkoma Basin located in Arkansas.
We have a limited operating history as our predecessor company for financial
reporting purposes was formed on August 17, 2005. We are engaged in the
acquisition, exploitation and development of producing and non-producing oil
and
gas-shale (source rock) properties in selected producing basins in North
America. Our oil and gas business was commenced in August 2005. Most of our
current activities are focused on the exploration and production of natural
gas
in the Barnett Shale development in Northern Texas and the Fayetteville Shale
development in Arkansas.
Our
current goals are to expand and develop our exploration and production business
and our reserves by initially emphasizing the identification and development
of
shale gas opportunities in the Barnett Shale and the Fayetteville Shale. We
believe both the Mississippian development of the Barnett Shale in the Ft.
Worth
Basin and the Fayetteville Shale development in the Arkoma Basin provides the
greatest near term economic value to us.
We
evaluate opportunities to purchase or sell oil and natural gas properties in
the
marketplace and could participate as a buyer or seller of properties at various
times. We seek acquisitions that utilize our technical expertise or offer
opportunities to expand our existing core areas.
Acquisition,
exploration and development.
We
follow
the full cost method of accounting for oil and gas properties. Accordingly,
all
costs associated with acquisition, exploration, and development of oil and
gas
reserves, including directly related overhead costs and related asset retirement
costs, are capitalized.
General
and administrative.
General
and administrative expenses consist primarily of salaries and benefits, office
expense, professional services fees, and other corporate overhead costs. We
anticipate increases in general and administrative expenses as we continue
to
increase our staff to expand our operations.
9
Results
of Operations
We
commenced our oil and gas operations in August 2005. Prior to that time we
did
not have any significant activities or assets. Consequently, we are not able
to
compare results of operations for the quarter ended June 30, 2006, for the
quarter ended March 31, 2006 or the period ended December 31, 2005 to any
earlier period.
Selected
Financial History
|
Calibre
Energy, Inc.
|
||||||||||
|
Selected
financial history for the period from August 17, 2005 (inception)
to
December 31, 2005
and
for the three months ended March 31, 2006 and
|
||||||||||
|
for
the six months ended June 30, 2006
|
|
|
Six
months ended
June
30, 2006
(Unaudited)
|
Three
months ended March 31, 2006
(Unaudited)
|
|
August
17
(inception)-
December
31, 2005
(Audited)
|
|
|||||
|
|
|
|
|
|||||||
|
Oil
and Gas Revenue
|
$
|
129,899
|
$
|
39,342
|
$
|
20,778
|
||||
|
Loss
from operations
|
(1,328,295
|
)
|
(697,726
|
)
|
(1,943,885
|
)
|
||||
|
Net
loss
|
(1,260,633
|
)
|
($673,612
|
)
|
(1,901,651
|
)
|
||||
|
Earnings
per share:
|
|
|
|
|||||||
|
Basic
and diluted
|
(0.02
|
)
|
(0.01
|
)
|
(0.05
|
)
|
||||
|
|
|
|
|
|||||||
|
Total
assets
|
18,794,006
|
13,498,242
|
7,938,869
|
|||||||
|
Total
long-term liabilities
|
-
|
-
|
-
|
|||||||
|
Total
liabilities
|
2,531,836
|
1,474,102
|
1,065,964
|
|||||||
|
Common
stock; $.001 par value; 100,000,000 authorized; 56,600,806,
53,980,806,
and 47,000,000 issued and
outstanding
|
$
|
56,601
|
$
|
53,981
|
$
|
47,000
|
||||
|
Preferred
stock; $.001 par value; 10,000,000 authorized; none issued
|
-
|
-
|
-
|
|||||||
|
Dividends
declared per common share
|
-
|
-
|
Results
of Operations
for Six Months Period Ended June 30, 2006
We
commenced our oil and gas operations in August 2005. Prior to that time we
did
not have any significant activities or assets. Consequently, we are not able
to
compare results of operations for the six months ended June 30, 2006 to any
earlier period.
Net
Sales.
For
the
six months ended June 30, 2006, our oil and gas net sales were $129,899.
During
the majority of the period, we had only two wells on production. However,
at the
end of the period, three new wells started commercial production. We are
still
in the operational development stage of our exploration program. Accordingly,
we
do not expect to generate substantial revenues during the majority of 2006
until
the completion of the initial stages of our drilling program.
General
and Administrative Expenses.
10
For
the
six months ended June 30, 2006, general and administrative expenses were
$1,346,222. A total of $315,132 was for costs associated with our general
and
administrative expenses, $420,810 was for professional fees principally
associated with capital raising activities, and $610,280 was for compensation
expense.
Net
Loss.
For
the
six months ended June 30, 2006, we had a net loss of $1,260,633. The net
loss is
primarily attributable to minimal operating revenues to support general and
administrative costs until such time as we achieve operating results from
our
drilling program.
Results
of Operations for Three Months Period Ended June 30, 2006
We
commenced our oil and gas operations in August 2005. Prior to that time we
did
not have any significant activities or assets. Consequently, we are not able
to
compare results of operations for the three months ended June 30, 2006 to
any
earlier period.
Net
Sales.
For
the
three months ended June 30, 2006, our oil and gas net sales were $90,761.
Three
additional wells began producing at the end of period which resulted in an
increased revenue rate in the three month period ending June 30, 2006. We
are
still in the operational development stage of our exploration program.
Accordingly, we do not expect to generate substantial revenues during the
majority of 2006 until the completion of the initial stages of our drilling
program.
General
and Administrative Expenses.
For
the
three months ended June 30, 2006, general and administrative expenses were
$641,060. A total of $171,086 was for costs associated with our continuing
general and administrative expense, $219,245 was for professional fees
principally associated with capital raising activities, and $250,729 was
for
compensation expense for employees. During the period, we incurred higher
professional expenses as a result of higher third party investor relation
fees
and higher legal and accounting fees due to the preparation and filing of
our
registration statement on Form SB-2 with the Securities and Exchange Commission.
Net
Loss.
For
the
three months ended June 30, 2006, we had a net loss $587,020. Lower compensation
expense and a slight improvement in revenues reduced the loss rate versus
the
prior period. The net loss is primarily attributable to minimal operating
revenues to support general and administrative costs until such time as we
achieve operating results from our drilling program.
Liquidity
and Capital Resources
As
of June
30, 2006, we had cash of $4,649,432 and working capital of $2,235,623. We
expect
to have monthly overhead costs of approximately $200,000 per month for the
next
twelve months. Since our inception, our primary sources of liquidity have
been
generated by the sale of equity securities (including the issuance of securities
in exchange for goods and services to third parties and to pay costs of
employees). To date, the net proceeds from the sales of securities have been
used to fund our exploration programs and our general and administrative
costs
including substantial costs for the registration of our securities. Our future
liquidity and our liquidity in the next twelve months depend on the success
of
our exploration programs and our continued ability to obtain sources of capital
to fund our continuing development.
11
On
October
31, 2005, we raised an aggregate of $8,000,000 ($7,243,056 net of offering
costs) through the sale of 20,000,000 shares of common stock and warrants
to
purchase 10,000,000 shares of common stock at an exercise price of $0.75
and a
term of 2 years. As of June 30, 2006, 400,000 warrants to purchase our common
stock have been exercised on a cashless basis.
In
March
and April 2006, we raised an aggregate of $11,560,000 ($10,629,394 net of
offering costs) through the sale of 5,780,000 shares of common stock and
warrants to purchase 5,780,000 shares of common stock at an exercise price
of
$2.75 and a term of 2 years.
Cash
flow from operating activities
For
the
six month period ended June 30, 2006, cash flow from operating activities
was
$308,594 primarily attributed to a net loss of $1,260,633 in the period offset
by an increase in accounts payable of $1,433,603.
Cash
flow from investing activities
For
the
six month period ended June 30, 2006, net cash used in investing activities
was
$8,394,305, driven primarily by our investment in oil and gas properties
in the
Ft. Worth Basin and an initial investment in properties in the Arkhoma
Basin.
Cash
flow from financing activities
For
the
six month period ended June 30, 2006, net cash provided by financing activities
was $10,629,394, which was attributed to our sale of common stock and purchase
warrants. At June 30, 2006, Calibre had received net proceeds from stock
issuances of $10,629,394 (gross proceeds of $11,560,000 less $930,606 of
offering costs).
Related
Party Transactions
We
are
party to a letter agreement with Kerogen Resources pursuant to which we are
participating in the Reichmann project. During the six month period ending
June
30, 2006, pursuant to such agreement we have paid $3,068,182 to Kerogen,
including $1,706,539 in the three month period ending June 30, 2006. Kerogen
then paid such amount to Reichmann Petroleum Corporation as reimbursement
of
operating expenses.
We
have
entered into a Participation Agreement with Kerogen Resources for the
exploration and development of prospects in the South Fort Worth Basin. Pursuant
to this agreement we are obligated to pay Kerogen Resources $597,000 for
its
identification of prospects; we have paid Kerogen Resources $500,000 of such
amount to date, although no payments were made in the six months ending June
30,
2006 under this agreement. Additionally, during the six month period, we
have
advanced $1,184,154 to Kerogen for participation in leases in the Hill County
area of Texas, including $517,517 in the three months ending June 30, 2006.
We
have
entered into a Participation Agreement with Kerogen Resources for the
exploration and development of prospects in the Williston Basin. Pursuant
to
this agreement we are obligated to pay Kerogen Resources $638,600 for its
identification of prospects; we have paid Kerogen Resources $550,000 of such
amount to date. However, we made no payments to Kerogen during the six months
ending June 30, 2006 in respect to this agreement.
12
We
believe
all of the transactions with related parties have been on terms no less
favorable to us than those terms which may have been obtained from unrelated
third parties.
Quarter
Ended March 31, 2006
Oil
and Gas Revenues.
For
the
quarter ended March 31, 2006, our oil and gas sales were $39,342, the majority
of it coming from our first two producing wells in the Reichmann project. Oil
and gas revenues are derived from our proportionate share of working interests
in oil and gas properties.
General
and Administrative Expenses.
For
the
three months ended March 31, 2006, general and administrative expenses
were
$713,440. A total of $311,866 was for actual costs associated with our
general
and administrative expense, $246,568 was for professional fees, $155,006
was for compensation expense.
Net
loss.
For
the
three months ended March 31, 2006, we had a net loss of $673,612 or ($0.01)
per
share (basic and diluted). The net loss is primarily attributable to minimal
operating revenues to support general and administrative costs until such time
as we achieve operating results from our drilling program.
Liquidity
and Capital Resources
As
of
March 31, 2006, we had cash of $4,308,654 and working capital of $3,230,269.
Since our inception, our primary sources of liquidity have been generated by
the
sale of equity securities (including the issuance of securities in exchange
for
goods and services to third parties and to pay costs of employees). To date,
the
net proceeds from the sales of securities have been used to fund our exploration
programs and our general and administrative costs. Our future liquidity depends
on the success of our exploration programs and our continued ability to obtain
sources of capital to fund our continuing development.
On
October
31, 2005, we raised an aggregate of $8,000,000 ($7,243,056 net of offering
costs) through the sale of 20,000,000 shares of common stock and warrants to
purchase 10,000,000 shares of common stock at an exercise price of $0.75 and
a
term of 2 years. As of March 31, 2006, 400,000 warrants to purchase our common
stock have been exercised.
In
March
and April 2006, we raised an aggregate of $11,560,000 ($10,668,000 net of
offering costs) through the sale of 5,780,000 shares of common stock and
warrants to purchase 5,780,000 shares of common stock at an exercise price
of
$2.75 and a term of 2 years.
Cash
flow from operating activities
For
the
three month period ending March 31, 2006 cash provided by (used in) operating
activities was (141,946), primarily attributed to a net loss of $673,612 in
the
period and to an increase in accounts payable of $397,885.
13
Cash
flow from investing activities
For
the
three month period ending March 31, 2006, net cash provided by (used in)
investing activities was ($3,469,743), driven primarily by our investment in
oil
and gas properties in the Ft. Worth Basin.
Cash
flow from financing activities
For
the
three month period ending March 31, 2006, net cash provided by (used in)
financing activities was $5,814,594, which was attributed to our sale of common
stock and purchase warrants. At March 31, 2006, Calibre had received net
proceeds from stock issuances of $5,814,594 (gross proceeds of $6,320,000 less
$505,406 of offering costs).
Period
Ended December 31, 2005
Oil
and Gas Revenues.
For
the
period from inception (August 17, 2005) to December 31, 2005 our oil and gas
net
sales were $20,778, Oil and gas revenues are derived from our proportionate
share of working interests in oil and gas properties.
General
and Administrative Expenses.
For
the
period from inception (August 17, 2005) to December 31, 2005 general and
administrative expenses were $1,893,602. A total of $273,585 was for actual
costs associated with our general and administrative expense,
$115,517
was for salary and wages for employees,
and
$1,504,500 since inception was a non-cash compensation expense associated with
stock and options granted to our founders and management who we believe are
key
to the development of our business.
Net
loss.
For
the
period from inception (August 17, 2005) to December 31, 2005, we had a net
loss
for the year ended December 31, 2005, of $1,901,651 or ($0.05) per share (basic
and diluted).
Liquidity
and Capital Resources
Since
our
inception, our primary sources of liquidity have been generated by the sale
of
equity securities (including the issuance of securities in exchange for goods
and services to third parties and to pay costs of employees).
On
October
31, 2005, we raised an aggregate of $8,000,000 ($7,243,056 net of offering
costs) through the sale of 20,000,000 shares of common stock and warrants to
purchase 10,000,000 shares of common stock at an exercise price of $0.75. The
terms of the warrants are described in this prospectus under “Description of
Securities.” As of June 15, 2006, 400,000 warrants to purchase our common stock
have been exercised. As of December 31, 2005, we had cash of $2,105,749. In
March and April 2006, we raised an aggregate of $11,560,000 ($10,668,000 net
of
offering costs) through the sale of 5,780,000 shares of common stock and
warrants to purchase 5,780,000 shares of common stock at an exercise price
of
$2.75. The terms of the Warrants are described in this prospectus under
“Description of Securities.”
14
Cash
flow from operating activities
For
the
period from August 17, 2005 to December 31, 2005, cash provided by operating
activities was 566,352 which consists of our net loss of $1,901,651, the
adjustment to for the non-cash expense of stock options granted for services
and
an increase in accounts payable of $1,045,482.
Cash
flow from investing activities
For
the
period from August 17, 2005 to December 31, 2005, net cash provided by investing
activities was ($5,730,659), driven primarily by our investment in oil and
gas
properties in the Ft. Worth Basin.
Cash
flow from financing activities
For
the
period from August 17, 2005 to December 31, 2005, net cash provided by financing
activities was $7,270,056, which was attributed to our sale of common stock
and
purchase warrants. On
October
31, 2005, we raised an aggregate of $8,000,000 ($7,243,056 net of offering
costs) through the sale of 20,000,000 shares of common stock and warrants to
purchase 10,000,000 shares of common stock at an exercise price of $0.75.
Future
capital expenditures and commitments
Expenditures
for exploration and development of oil and natural gas properties and lands
costs related to the acquisition of non-producing leasehold are the primary
use
of our capital resources. Our budgeted capital and exploration and development
expenditures are expected to be approximately $19.5 million in 2006 as follows
(in millions):
|
|
Amount
|
|||
|
General
& Administrative and Capital Costs
|
$
|
3.0
|
||
|
Exploration
& development drilling
|
9.5
|
|||
|
Land
costs
|
6.5
|
|||
|
Seismic
|
.5
|
|||
|
Total
|
$
|
19.5
|
As
of
August 15, 2006, we believe that our remaining cash balance and revenues
from
existing projects will be sufficient to cover our current liabilities,
obligations and contractual commitments for 2006 but will not be sufficient
to
fund all budgeted development and drilling of our existing projects, or to
fund
the acquisition of all budgeted land costs, as discussed above in our 2006
capital budget. We will need to raise additional capital through the sale
of
equity and/or debt securities to fully meet our 2006 capital budget. Failure
to
raise necessary capital or generate sufficient cash flow from operations
in 2006
will cause us to curtail or eliminate certain development and drilling of
existing and planned projects as well as a curtail the acquisition of land
costs
as highlighted in our 2006 capital budget.
As
a
result, the actual amount and timing of our capital expenditures may differ
materially from our estimates. Some of the other factors which may prevent
us
from meeting our 2006 capital budget are among other things, actual drilling
results, cost overruns, the availability of drilling rigs and other services
and
equipment, regulatory, technological and competitive developments, and all
such
other assumptions referenced in this report.
15
Hedging
We
did not
hedge any of our oil or natural gas production during 2005 and have not entered
into any such hedges from January 1, 2006 through the date of this
filing.
Contractual
Commitments
|
|
|
Payments
Due By Period
|
|||||||||||
|
|
Total
|
Less
Than 1 Year
|
1-3
Years
|
3-5
Years
|
|||||||||
|
Contractual
Obligations
|
|||||||||||||
|
Operating
Lease
|
|||||||||||||
|
Contract
Obligations
|
$
|
522,817
|
$
|
190,257
|
$
|
195,253
|
$
|
137,307
|
|||||
|
Drilling
Wells in Progress
|
$
|
3,490,000
|
$
|
3,490,000
|
|
||||||||
|
Total
|
$
|
4,012,817
|
$
|
3,680,257
|
$
|
195,253
|
$
|
137,307
|
|||||
As
of
August 1, 2006, all of our drilling well obligations are associated with the
Reichmann Petroleum project. Our contract obligations are associated with our
office leases in Washington, D.C. and Houston, TX. We
had no
long-term debt obligations, capital lease obligations, purchase obligations
or
other long-term liabilities reflected on the balance sheet.
Off-Balance
Sheet Arrangements
As
of June
15, 2006, we had no off-balance sheet arrangements.
Related
Party Transactions
For
more
information on these transactions, please read “Certain Relationships and
Related Party Transactions” in this prospectus.
Critical
Accounting Policies
Our
discussion and analysis of our financial condition and results of operations
is
based on our financial statements, which have been prepared in accordance with
accounting principles generally accepted in the United States of America. The
preparation of these financial statements requires us to make estimates and
judgments that affect the reported amounts of assets, liabilities and expenses.
We base our estimates on historical experience and on various other assumptions
that we believe to be reasonable under the circumstances, the results of which
form the basis for making judgments about the carrying values of assets and
liabilities that are not readily apparent from other sources. Actual results
may
differ from these estimates under different assumptions or conditions. We
believe the following critical accounting policies affect our most significant
judgments and estimates used in preparation of our consolidated financial
statements.
Reverse
Acquisition.
We
treated the merger of Calibre Energy, Inc., a Delaware corporation, into a
subsidiary of Hardwood Doors and Milling Specialties, Inc. as a reverse
acquisition. Pursuant to the guidance in Appendix B of SEC Accounting Disclosure
Rules and Practices Official Text, the “merger of a private operating company
into a non-operating public shell corporation with nominal net assets typically
results in the owners and management of the private company having actual or
effective operating control of the combined company after the transaction,
with
the shareholders of the former public shell continuing only as passive
investors. These transactions are considered by the staff to be capital
transactions in substance, rather than business combinations. That is, the
16
transaction
is equivalent to the issuance of stock by the private company for the net
monetary assets of the shell corporation, accompanied by a recapitalization.”
Accordingly, the reverse acquisition has been accounted for as a
recapitalization. For accounting purposes, the original Calibre Energy, Inc.
is
considered the acquirer in the reverse acquisition. The historical financial
statements are those of the original Calibre Energy, Inc. Earnings per share
for
periods prior to the merger are restated to reflect the number of equivalent
shares received by the acquiring company.
Revenue
recognition.
We
derive substantially all of our revenues from the sale of oil and natural gas.
Oil and gas revenues are recorded in the month the product is delivered to
the
purchaser and title transfers. We generally receive payment from one to three
months after the sale has occurred. Each month we estimate the volumes sold
and
the price at which they were sold to record revenue. Variances between estimated
revenue and actual amounts are recorded in the month payment is
received.
Oil
and Gas Properties.
We
follow the full cost method of accounting for oil and gas properties.
Accordingly, all costs associated with acquisition, exploration, and development
of oil and gas reserves, including directly related overhead costs and related
asset retirement costs, are capitalized.
All
capitalized costs of oil and gas properties, including the estimated future
costs to develop proved reserves, are amortized on the unit-of-production
method
using estimates of proved reserves. Investments in unproved properties and
major
development projects in progress are not amortized until proved reserves
associated with the projects can be determined and are periodically assessed
for
impairment. If the results of an assessment indicate that the properties
are
impaired, such impairment is added to the costs being amortized and is subject
to the ceiling test.
Sales
of
proved and unproved properties are accounted for as adjustments of capitalized
costs with no gain or loss recognized, unless such adjustments would
significantly alter the relationship between capitalized costs and proved
reserves of oil and gas, in which case the gain or loss is recognized in
income.
Abandonments
of properties are accounted for as adjustments of capitalized costs with no
loss
recognized.
Oil
and Gas Properties Not Subject to Amortization.
We are
currently participating in oil and gas exploration and development activities.
As of December 31, 2005, substantially all of our activities are in a
preliminary exploration and drilling stage. Upon completion of development
of
each property, we make an estimate of proved producing reserves associated
with
such property. Until such time, property, development and exploratory costs
are
excluded in computing amortization.
Calibre
is
currently participating in oil and gas exploration and development activities.
At December 31, 2005, a determination could not be made about the extent of
oil
reserves that should be classified as proved reserves. Consequently, all the
property, development and exploratory costs have been excluded in computing
amortization. Calibre will begin to amortize these costs when these projects
are
evaluated, which is currently estimated to be at the end of 2006
17
Depreciation,
depletion and amortization, or DD&A, of capitalized drilling and development
costs of oil and natural gas properties are generally computed using the unit
of
production method on an individual property or unit basis based on total
estimated proved developed oil and natural gas reserves. Amortization of
producing leasehold is based on the unit-of-production method using total
estimated proved reserves. In arriving at rates under the unit-of-production
method, the quantities of recoverable oil and natural gas are established based
on estimates made by our geologists and engineers and independent engineers.
Service properties, equipment and other assets are depreciated using the
straight-line method over estimated useful lives of 5 to 40 years. Upon sale
or
retirement of depreciable or depletable property, the cost and related
accumulated DD&A are eliminated from the accounts and the resulting gain or
loss is recognized.
Non-producing
properties consist of undeveloped leasehold costs and costs associated with
the
purchase of certain proved undeveloped reserves. Undeveloped leasehold cost
is
expensed over the life of the lease or transferred to the associated producing
properties. Individually significant non-producing properties are periodically
assessed for impairment of value and a loss is recognized.
Oil
and natural gas reserves and standardized measure of future cash
flows.
Our
independent engineers and technical staff prepare the estimates of our oil
and
natural gas reserves and associated future net cash flows. Current accounting
guidance allows only proved oil and natural gas reserves to be included in
our
financial statement disclosures. The SEC has defined proved reserves as the
estimated quantities of crude oil and natural gas which geological and
engineering data demonstrate with reasonable certainty to be recoverable in
future years from known reservoirs under existing economic and operating
conditions. Even though our independent engineers and technical staff are
knowledgeable and follow authoritative guidelines for estimating reserves,
they
must make a number of subjective assumptions based on professional judgments
in
developing the reserve estimates. Reserve estimates are updated at least
annually and consider recent production levels and other technical information
about each field. Periodic revisions to the estimated reserves and future cash
flows may be necessary as a result of a number of factors, including reservoir
performance, new drilling, oil and natural gas prices and cost changes,
technological advances, new geological or geophysical data, or other economic
factors. We cannot predict the amounts or timing of future reserve revisions.
If
such revisions are significant, they could significantly alter future DD&A
and result in impairment of assets that may be material.
Impairment
of Long-Lived Assets.
We
review long-lived assets and certain identifiable assets for impairment whenever
events or changes in circumstances indicate that the carrying amount of an
asset
may not be recoverable. If the sum of the expected future undiscounted cash
flows is less than the carrying amount of the asset, further impairment analysis
is performed. An impairment loss is measured as the amount by which the carrying
amount exceeds the fair value of assets.
Employee
Stock Plan.
In
December 2004, the FASB issued SFAS No.123R, “Accounting for Stock-Based
Compensation” (“SFAS No. 123R”). SFAS No.123R establishes standards for the
accounting for transactions in which an entity exchanges its equity instruments
for goods or services. This Statement focuses primarily on accounting for
transactions in which an entity obtains employee services in share-based payment
transactions. SFAS No.123R requires that the fair value of such equity
instruments be recognized as
expense
in the historical financial statements as services are performed. Prior to
SFAS
No.123R, only certain pro forma disclosures of fair value were required. SFAS
No.123R shall be effective for small business issuers as of the beginning of
the
first interim or annual reporting period that begins after December 15, 2005.
Calibre will adopt SFAS No. 123R as of January 1, 2006.
We
have a
stock-based compensation plan, which is described more fully in Note 6. As
permitted under generally accepted accounting principles, we account for the
plan under the recognition and measurement principles of APB Opinion No. 25,
Accounting for Stock Issued to Employees, and related interpretations.
Accordingly, stock-based employee compensation cost has been recognized, as
all
options granted under the plan had an exercise price less than the market value
of the underlying common stock on the date of
18
grant,
see
note 5 for more information. There would be minimal effect on the net loss
had
compensation cost for the stock-based compensation plan been determined based
on
the grant date fair values of awards (the method described in FASB Statement
No.
123, Accounting for Stock-Based Compensation).
Consolidation
of Variable Interest Entities.
In
January 2003, the FASB issued Interpretation No. 46(R) (“FIN 46”), Consolidation
of Variable Interest Entities. FIN 46 addresses consolidation by business
enterprises of variable interest entities (formerly special purpose entities).
In general, a variable interest entity is a corporation, partnership, trust
or
any other legal structure used for business purposes that either (a) does not
have equity investors with voting rights nor (b) has equity investors that
do
not provide sufficient financial resources for the entity to support its
activities. The objective of FIN 46 is not to restrict the use of variable
interest entities, but to improve financial reporting by companies involved
with
variable interest entities. FIN 46 requires a variable interest entity to be
consolidated by a company if that company is subject to a majority of the risk
of loss from the variable interest entity’s activities or entitled to receive a
majority of the entity’s residual returns or both. The consolidation
requirements are effective for the first period that ends after March 15, 2004;
we elected to adopt the requirements effective for the reporting period ending
December 31, 2005. The adoption of FIN 46 had no effect on our consolidated
financial statements.
Change
of Accountants
Effective
April 7, 2006, our Board of Directors, determined to change our independent
accountants and dismissed Jones Simkins, PC as our independent registered public
accounting firm. The Audit Committee of the Board of Directors and the Board
of
Directors approved the decision to change independent auditors. Jones Simkins,
PC had served as our Independent Registered Public Accountant since June 1,
2001
and audited our financial statements for the period June 1, 2001 through
December 31, 2005.
During
our
two most recent fiscal years, ending December 31, 2004 and 2005, (i) there
were
no disagreements between us and Jones Simkins on any matter of accounting
principles or practices, financial statement disclosure or auditing scope or
procedure which, if not resolved to the satisfaction of Jones Simkins would
have
caused Jones Simkins to make reference to the matter in its reports on our
financial statements, and (ii) Jones Simkins’ report on our financial statements
did not contain any adverse opinion or disclaimer of opinion, and was not
qualified or modified as to uncertainty, audit scope, or accounting principles
with the exception of the following “going concern” qualification:
“As
of
December 31, 2005, the Company’s revenue generating activities are not in place,
and the Company has incurred losses since inception. These factors raise
substantial doubt about the Company’s ability to continue as a going concern.
Management intends to seek additional funding through business ventures. There
can be no assurance that such funds will be available to the Company or
available on terms acceptable to the Company. The financial statements do not
include any adjustments that might result from the outcome of these
uncertainties.”
On
April
4, 2006, our Audit Committee recommended the engagement of Malone & Bailey,
PC as our independent registered public accounting firm. Our Board of Directors
appointed Malone & Bailey as our Independent Registered Public Accountant
effective April 7, 2006.
19
Industry
US
Gas
Market
Demand
for
natural gas in the United States has grown significantly in recent years. The
Energy Information Administration in its Annual Energy Outlook 2004 estimates
that natural gas demand in the United States could be 31.41 trillion cubic
feet
(“tcf”) by the year 2025. That is an increase of 40 percent over 2004 demand
levels of 22.8 tcf. That is compared to an expected total energy consumption
increase from all sources of 40 percent increasing from 97.7 quadrillion British
thermal units (“BTU”) to 136.5 quadrillion BTUs by 2020. The Energy Information
Administration predicts a 1.6 percent annual increase in total domestic energy
demand over the next 21 years.
In
2006,
total domestic energy demand is projected by Energy Information Administration
to increase at an annual rate of about 1.4 percent, despite continued concerns
about tight supplies and projected high prices for oil and natural gas. Prices
for crude oil, petroleum products, and natural gas are projected to remain
high
through 2006 because of continuing tight international supplies and
hurricane-induced supply losses.
History
of Gas Shale Development
The
first
shale gas production in the United States came from the Appalachian Basin,
where
by 1926 the Devonian shale gas fields were the world’s largest known occurrence
of natural gas. Presently, commercial gas shale production in North America
is
limited to the Barnett Shale in the Ft. Worth Basin, the Caney/Woodford and
Fayetteville shales in the Arkoma Basin in Oklahoma and Arkansas, the Devonian
shales in the Appalachian Basin, the Antrim shale in the Michigan Basin, the
Floyd shale in the Black Warrior Basin, the Lewis shale in the San Juan Basin,
the Bakkan shale in the Williston Basin, and the Mississippian/Devonian shales
in the Delaware Basin. Numerous other basins with prospective shale gas exist,
many of which are currently being explored.
Gas
shales
are currently one of the most active drilling plays in the United States as
a
result of high gas prices, the success of such wells in the Barnett Shale in
the
Fort Worth Basin, technological advancements in drilling and completions, and
predicted near-term shortages of natural gas. Furthermore, gas shale development
may also be supported by the fact current wells are often behind pipe in
developed basins where conventional production is declining, an underutilized
gathering infrastructure exists and markets are accessible.
The
Barnett Shale serves as source, seal, and reservoir to a world-class,
unconventional natural-gas accumulation in the Ft. Worth Basin of north-central
Texas. The formation is a lithologically complex interval of low permeability
that requires artificial stimulation to produce. Shale depths range from
3,500
to 9,000 feet, with 200 to 400 feet of gross pay, 85% of which may be
productive. Initial production was confined to a limited portion of the northern
basin where the Barnett Shale is relatively thick (in excess of 300ft), organic
rich (present-day total organic carbon in excess of 3.0%), thermally mature
(vitrinite reflectance in excess of 1.1%), and enclosed by dense limestone
units
able to contain induced fractures. However, the area of production has expanded
into Tarrant, Johnson, Hill, Sommerville, Hood, and Bosque Counties. Thermal
maturities are key to economic viability with oil-bearing shales in the
northwest of the basin grading to dry gas towards the southeast. As of the
end
of 2005, there have been more than 4,600 wells drilled and completed in the
Barnett Shale that produce more than 1.2 billion cubic feet (“bcf”) of gas per
day. Cumulative gas production from Barnett Shale wells through 2004 was
about
1.2 tcf of gas.
20
Business
Strategy
Our
goal
is to expand and develop our exploration and production business and our
reserves by initially emphasizing the identification and development of oil
and gas opportunities in the Barnett Shale, the Fayetteville Shale and
Kurdistan Iraq. We believe that both the Mississippian developments of the
Barnett Shale in the Ft. Worth Basin and the Fayetteville Shale development
in
the Arkoma Basin provide the greatest near term economic value to us. Calibre's
expansion into Iraqi Kurdistan, a country with the world's fourth largest
proven
oil reserves, builds on the Company's drilling and leasing activities focused
in
the Barnett Shale in North Texas initiated in 2005.
Because
the experience of our current management team and project partners, we have
the
potential to execute quickly in identifying opportunities and capturing a land
position. Some exploration and production companies take up to one year to
obtain rights to the land and an additional year to evaluate the land for the
first well. We believe we can shorten the total time for obtaining rights and
evaluation to one year and then commence development in the second
year.
Our
Projects
Currently
our growth depends heavily on the performance of our operating partners, to
execute drilling and completion programs in an environment where shortages
of
equipment and talent are resulting in the escalation of costs. We have no
current capability to act as an operator at this time as additional legal,
land,
drilling, and completion personnel will also be required for us to expand our
operations and to act as an operator. Our senior management team will have
to
hire additional expertise in operations and finance to make a successful
transition into a full operating company. However, in the future we will seek
to
operate wells in which we own an interest as we believe that by controlling
operations, we will be able to more effectively manage the cost and timing
of
exploration and development of our properties, including the drilling and
fracture stimulation methods used.
Projects
with Kerogen Resources
We
are
currently participating in three projects with Kerogen Resources, Inc., a small,
privately held, recently formed exploration and production company, located
in
Houston, Texas. These are as follows:
Reichmann
Petroleum Corporation Project
The
first
project is a joint venture with Kerogen Resources, Crosby Minerals and Reichmann
Petroleum Corporation to explore, acquire and develop properties located in
the
Barnett Shale in the Ft. Worth Basin of North Texas. In October 2005 we
acquired, through Kerogen Resources, a 12.5% working interest in 6,190 net
acres
of leasehold interests in Parker, Tarrant, Denton, and Johnson Counties, Texas.
Subsequent
to the initial acquisition, we purchased a 25% working interest in 443 net
acres
of leasehold interests from Reichmann Petroleum in Johnson County, Texas.
Kerogen Resources provides the technical guidance for the project and in
exchange will receive 12.5% of our working interest in each well drilled. As
of
June
15,
2006, we have paid Kerogen a total $6,708,758, of which
$3,529,098 was for the 12.5% working interest in the initial 6,190
acres,
prepayment of drilling costs on 12
wells and
for the 25% working interest in the leasehold interest in Johnson County and
$1,655,401 was for operating costs (ie, drilling and completion costs) of the
JV
since the original payment. Kerogen
then paid such amounts to Reichmann Petroleum Corporation as reimbursement
of
leasehold costs, drilling and operating expenses.
As of
June 15, 2006, our net acreage position subject to the Reichmann agreement
is
773.94 net acres. As of June 15, 2006, we owed of $1,910,667 as our share of
the
development and operating costs for the wells in this joint
venture.
21
As
of June
15, 2006, Calibre has participated in 22 gross wells. Four wells are currently
producing, nine wells have been drilled, completed and fraced and are waiting
to
be hooked up to a pipeline, four wells have been drilled, completed and are
cleaning up after being frac prior to being hooked up to a gas gathering line,
three wells have been drilled to total depth, completed and are waiting to
be
fraced, and two wells are currently drilling. “Frac” or Fracture stimulation is
a method of stimulating production by opening new flow channels in the rock
surrounding a production well by pumping proppant, a granular substance that
is
carried into the formation by the fracturing fluid and helps keep the cracks
open after a fracture treatment, and fluid into the well at high pressure and
volume.
South
Ft. Worth Basin Project
In
October
2005, we entered into a Participation Agreement for the exploration and
development of wells in a portion of the South Ft. Worth Basin with Kerogen
Resources, Wynn Crosby Energy, Inc. (“Crosby”), and Triangle USA (“Triangle”).
The agreement covers a five county area of approximately 1.5 million acres
and
consists of all lands in these counties outside areas of mutual interest covered
by the Reichmann project. Kerogen Resources is expected to generate shale gas
prospects in the area subject to the agreement. Calibre is obligated to pay
Kerogen Resources $597,600 for its generation of shale gas prospects within
the
five county area. As of June 15, 2006 Calibre has paid $500,000 of this amount
and the balance is due upon the delivery of Kerogen Resources’ technical report.
The
Participation Agreement is for a two year term. Kerogen Resources, as the
technical partner in charge of generating the prospect areas, pays 10% of the
costs in exchange for a 16% working interest. Each of Triangle and us will
pay
30% of costs for a 27% working interest and Crosby, as operator, will pay 30%
of
costs for a 30% working interest. Crosby intendes to purchase three drilling
rigs, which are to be dedicated to this project. The agreement would bind all
parties to the same area of mutual interest. Each party is permitted to obtain
oil and gas leases in the territory, but must offer to assign to the other
parties the percentage interest in the leases described above. Prospects are
defined by agreement of the parties. The operator of a lease may require the
other parties to advance payments for their respective percentages of the costs
for leases or drilling of the lease.
Crosby
has
engaged 12 independent land brokers to identify leases for purchase. As of
June
15, 2006, Crosby has leased approximately 11,710.87 net leasehold acres. Our
net
leasehold position pursuant to this agreement is 3,161.93 acres. We have
advanced $1,184,154 to Kerogen for participation in these leases in the Ft,
Worth Basin of Texas. We anticipate Calibre will acquire an additional 5,000
to
7,500 net leasehold acres under the Participation Agreement in the next six
months. Additionally, Kerogen has acquired a 12 square mile 3D seismic program
over part of our joint leasehold position and we have elected to participate
for
our share of the costs of the seismic program. We anticipate that we will
acquire additional 3D seismic over our other leasehold interests in
2006.
Williston
Basin Project
On
September 20, 2005 we entered into a Participation Agreement with Kerogen
Resources covering all of the Williston Basin. Under this agreement, we are
obligated to pay Kerogen Resources the sum of $638,600 for generation of shale
gas prospects in the Williston Basin. As of June 15, 2006 Calibre has paid
$550,000 to Kerogen Resources and the balance is due upon the delivery of
Kerogen Resources’ technical report. As of June 15, 2006 no acreage has been
leased pursuant to this agreement. Kerogen Resources, as the technical partner
in charge of generating the prospect areas, will pay 70% of the costs for a
73%
working interest in the leasehold interests acquired subject to the agreement,
and we pay 30% of the costs for a 27% working interest. Each party will control
their own leases with obligations to offer any leases acquired to the rest
of
the group pro-rata. Prospects are defined based on land and range from 25,000
to
45,000 acres each. The operator on a lease may required participating parties
to
advance funds for leases or drilling.
22
Additional
Acreage
In
addition to the three joint venture projects with Kerogen Resources, as of
June
15, 2006, we have acquired 5,318 gross leasehold acres and 3,417 net acres
in
the Barnett Shale outside of the areas covered by the Reichmann Petroleum JV,
the South Ft. Worth Basin project and the Williston Basin project. We anticipate
that we will commence development activities on these leases in the third
quarter of 2006. Additionally, as of June 15, 2006, we have acquired 2,636
gross
leasehold acres and 1,771 net leasehold acres in the Fayetteville Shale
development in the Arkoma Basin in Arkansas.
“Gross
leasehold acres” means the total number of acres in which we have a working
interest. “Net leasehold acres” means the sum of the fractional working
interests we have in the gross leasehold interests.
Bina
Bawi
Project
On
September 13, 2006, we entered into a Novation and Amendment Agreement
("Novation Agreement") among Hawler Energy, Ltd. ("Hawler Energy"), a Cayman
Islands company, A & T Petroleum Company, Ltd. ("A & T"), a Cayman
Islands company, and Hillwood Energy, Ltd. ("Hillwood"), a Cayman Islands
company. Pursuant to the Novation Agreement we became parties to the
Exploration and Production Sharing Agreement ("the EPSA") dated March 29,
2006
between A&T. Hawler and the Oil and Gas Petroleum Establishment of the
Kurdistan Regional Government (the "OGE"). Our admission as a party to
the EPSA
is subject to the approval of the OGE. We have applied to the OGE for such
approval.
The
Bana-Bawu structure (also known as Bina Bawi) structure is a 30 kilometer
by 10
kilometer surface anticline, which may contain primary oil reserves within
the
Triassic reservoir objective and secondary reserve potential in the Lower
Cretaceous and Jurassic sections of the structure. An initial exploration
well
(Bina Bawi-1) is expected to be drilled to a target depth of 3,050
meters.
Pursuant
to the terms of the EPSA, the OGE grants the other parties the right to
explore
and produce oil and natural gas from certain territory that includes the
Bana-Bavu. Upon receipt of the OGE's approval of our becoming a party to
the EPSA, we will have a 10% participating interest in the wells drilled
pursuant to the EPSA. The EPSA requires the parties to conduct certain
survey
work, drill one exploratory well and, if the exploratory well is determined
to
be sufficiently profitable, to conduct certain seismic surveys. The total
estimated cost for all parties in the EPSA of the initial survey work and
the
exploratory well is $2.7 million; the estimated cost of the seismic surveys
is
approximately $4.0 million. The EPSA requires the parties thereto to pay
OGE a
bonus of $2.5 million upon a "Commercial Discovery," as defined in the
EPSA, and
to pay other cash bonuses and royalties upon achieving certain production
levels.
We
have entered into a separate letter agreement with Hawler Energy pursuant
to which, in consideration of Hawler Energy's assignment to us of the 10%
working interest through the Novation Agreement, we agreed to pay Hawler
Energy
$2 million on execution of the letter agreement and $1 million upon completion
of the first well under the EPSA, whether it is capable of production or
a dry
hole. In addition we agreed to pay 20% of all billings, including cash
calls,
made to Hawler Energy by A&T, as operator, after August 1, 2006 and we
further agreed to pay Hawler Energy the remaining 80% of all such billings
until
the total of such payments equals $2.5 million. Upon OGE approval of the
assignment to us and payment of $2.5 million as provided in the prior sentence,
we will be obligated to pay the future costs properly payable by the holder
of a
10% participating interest in the project.
We
also
have entered into a letter agreement with Hawler Energy pursuant to which
each
party grants the other party the right to participate in the next acquisition
by
the party of any rights or interests for the exploration or production
of oil
and gas in the area of the Kurdistan Regional Government of Iraq; provided
however such area does not include that area pursuant to which Hawler Energy
has
already granted certain rights to other third parties. Pursuant to this
letter
agreement we will have the right to obtain a 9% interes in such an acquisition
by Hawler Energy and Hawler Energy will have the right to obtain a 91%
interest
in such an interest by us.
Employees
As
of June
15, 2006 we employed five people, none of which are subject to a collective
bargaining agreement. We consider our relations with our employees to be
good.
Properties
Reserves.
As of
June 15, 2006, we have 4 producing wells in which we have an interest and have
recently commenced production. Our net working interest in each of these wells
is 10.9375%.
The
following table presents summary data with respect to our estimated net proved
oil and natural gas reserves as of the dates indicated. Our reserve estimates
as
of December 31, 2005 are based primarily on reserve reports prepared by Ryder
Scott Company, L.P., our independent reserve engineers In preparing its reports,
Ryder Scott Company, L.P. evaluated properties representing approximately 100%
of our PV-10 as of December 31, 2005. All calculations of estimated net proved
reserves have been made in accordance with the rules and regulations of the
Securities and Exchange Commission, or the SEC.
|
Gas
(Mcf)
|
Oil
(MBbls)
|
||||||
|
Total
Proved Reserves:
|
|||||||
|
Balance,
August 17, 2005
|
—
|
—
|
|||||
|
Extensions,
discoveries and improved production
|
69,000
|
||||||
|
Production
|
(3,000
|
)
|
—
|
||||
|
|
|||||||
|
Balance,
December 31, 2005
|
66,000
|
—
|
|||||
23
Well
Status Summary.
The well
status of our drilling operations is as follows:
|
Number
of Gross Wells
|
||
|
Producing
|
4
|
|
|
Fraced
& Waiting on Gas Line Hookup
|
9
|
|
|
Drilled,
Completed, Fraced and Cleaning Up
|
4
|
|
|
Waiting
on Fracture Treatment
|
3
|
|
|
Drilling
|
2
|
|
|
Total
|
22
|
|
In
addition, we have interest in four wells that are currently producing, nine
wells that have been drilled, completed and fraced and are waiting to be hooked
up to a pipeline, four wells that have been drilled, completed and are cleaning
up after being frac prior to being hooked up to a gas gathering line, three
wells that have been drilled to total depth, completed and are waiting to be
fraced, and two wells that are currently drilling. Our gross and net gas well
ownership position is as follows:
|
Gross
Wells
|
Net
Wells
|
||||||
|
Reichmann
Petroleum Corporation Project
|
22
|
2.54
|
|||||
During
the
period ending December 31, 2005, the average sales price per unit of gas
produced was $6.63 and the average lifting costs was $4.30. Our production
has
only recently commenced.
Developed
and Undeveloped Leasehold.
As of
June 15, 2006, We have the following developed and undeveloped leasehold
interests:
Developed
Acreage
|
Gross
Leasehold
|
Net
Leasehold
|
||||||
|
Reichmann
Petroleum Corporation Project
|
303
|
33
|
|||||
|
Total
|
303
|
33
|
|||||
Undeveloped
Acreage
|
Gross
Leasehold
|
Net
Leasehold
|
||||||
|
Reichmann
Petroleum Corporation Project
|
6,330
|
741
|
|||||
|
So.
Ft. Worth Basin Project
|
11,711
|
3,162
|
|||||
|
Other
Ft. Worth Basin
|
5,316
|
3,417
|
|||||
|
Williston
Basin Project
|
0
|
0
|
|||||
|
Arkoma
Basin
|
2,636
|
1,771
|
|||||
|
Total
|
25,993
|
9,088
|
|||||
Our
oil
and gas properties consist primarily of working interests in oil and gas wells
and our ownership of interests in leasehold acreage, both developed and
undeveloped. The table above summarizes our gross and net developed and
undeveloped oil and natural gas acreage under lease or option as of June 1,
2006. A developed acre is considered to be an acre spaced or assignable to
productive wells. A gross acre is an acre in which a working interest is owned.
A net acre is the result that is obtained when our fractional
24
ownership
working interest is multiplied by gross acres. The number of net acres is the
sum of the factional working interests owned in gross acres expressed as whole
numbers and fractions thereof. Undeveloped acreage is considered to be those
lease acres on which wells have not been drilled or completed to a point that
would permit the production of commercial quantities of oil or natural gas,
regardless of whether that acreage contains proved reserves, but does not
include undrilled acreage held by production under the terms of a lease. As
is
customary in the oil and gas industry, we can generally retain our interest
in
undeveloped acreage by drilling activity that establishes commercial production
sufficient to maintain the leases or by paying delay rentals during the
remaining primary term of leases. The oil and natural gas leases in which we
have an interest are for varying primary terms, and if production under a lease
continues from our developed lease acreage beyond the primary term, we are
entitled to hold the lease for as long as oil or natural gas is
produced.
Office
Lease.
Calibre
Energy, Inc. also leases 2,360 square feet of office space in Washington, D.C.
that serves as its corporate office. The lease is at market rates and expires
in
October 2008. Additionally, Calibre has an operations office of 4,000 square
feet in Houston, Texas.. The lease is at market rates and expires in August
30,
2011.
Government
Regulation
Regulation
of transportation of oil
Sales
of
crude oil, condensate and natural gas liquids are not currently regulated and
are made at negotiated prices. Nevertheless, Congress could reenact price
controls in the future.
Our
sales
of crude oil are affected by the availability, terms and cost of transportation.
The transportation of oil in common carrier pipelines is also subject to rate
regulation. The Federal Energy Regulatory Commission, or the FERC, regulates
interstate oil pipeline transportation rates under the Interstate Commerce
Act.
In general, interstate oil pipeline rates must be cost-based, although
settlement rates agreed to by all shippers are permitted and market-based rates
may be permitted in certain circumstances. Effective January 1, 1995, the FERC
implemented regulations establishing an indexing system (based on inflation)
for
transportation rates for oil that allowed for an increase or decrease in the
cost of transporting oil to the purchaser. A review of these regulations by
the
FERC in 2000 was successfully challenged on appeal by an association of oil
pipelines. On remand, the FERC in February 2003 increased the index slightly,
effective July 2001. Intrastate oil pipeline transportation rates are subject
to
regulation by state regulatory commissions. The basis for intrastate oil
pipeline regulation, and the degree of regulatory oversight and scrutiny given
to intrastate oil pipeline rates, varies from state to state. Insofar as
effective interstate and intrastate rates are equally applicable to all
comparable shippers, we believe that the regulation of oil transportation rates
will not affect our operations in any way that is of material difference from
those of our competitors.
Further,
interstate and intrastate common carrier oil pipelines must provide service
on a
non-discriminatory basis. Under this open access standard, common carriers
must
offer service to all similarly situated shippers requesting service on the
same
terms and under the same rates. When oil pipelines operate at full capacity,
access is governed by prorationing provisions set forth in the pipelines’
published tariffs. Accordingly, we believe that access to oil pipeline
transportation services generally will be available to us to the same extent
as
to our competitors.
Regulation
of transportation and sale of natural gas
25
Historically,
the transportation and sale for resale of natural gas in interstate commerce
have been regulated pursuant to the Natural Gas Act of 1938, the Natural Gas
Policy Act of 1978 and regulations issued under those Acts by the FERC. In
the
past, the federal government has regulated the prices at which natural gas
could
be sold. While sales by producers of natural gas can currently be made at
uncontrolled market prices, Congress could reenact price controls in the future.
Deregulation of wellhead natural gas sales began with the enactment of the
Natural Gas Policy Act. In 1989, Congress enacted the Natural Gas Wellhead
Decontrol Act. The Decontrol Act removed all Natural Gas Act and Natural Gas
Policy Act price and non-price controls affecting wellhead sales of natural
gas
effective January 1, 1993.
FERC
regulates interstate natural gas transportation rates and service conditions,
which affects the marketing of natural gas that we produce, as well as the
revenues we receive for sales of our natural gas. Since 1985, the FERC has
endeavored to make natural gas transportation more accessible to natural gas
buyers and sellers on an open and non-discriminatory basis. The FERC has stated
that open access policies are necessary to improve the competitive structure
of
the interstate natural gas pipeline industry and to create a regulatory
framework that will put natural gas sellers into more direct contractual
relations with natural gas buyers by, among other things, unbundling the sale
of
natural gas from the sale of transportation and storage services. Beginning
in
1992, the FERC issued Order No. 636 and a series of related orders to implement
its open access policies. As a result of the Order No. 636 program, the
marketing and pricing of natural gas have been significantly altered. The
interstate pipelines’ traditional role as wholesalers of natural gas has been
eliminated and replaced by a structure under which pipelines provide
transportation and storage service on an open access basis to others who buy
and
sell natural gas. Although the FERC’ s orders do not directly regulate natural
gas producers, they are intended to foster increased competition within all
phases of the natural gas industry.
In
2000,
the FERC issued Order No. 637 and subsequent orders, which imposed a number
of
additional reforms designed to enhance competition in natural gas markets.
Among
other things, Order No. 637 effected changes in FERC regulations relating to
scheduling procedures, capacity segmentation, penalties, rights of first refusal
and information reporting. Most pipelines’ tariff filings to implement the
requirements of Order No. 637 have been accepted by the FERC and placed into
effect.
Gathering
service, which occurs upstream of jurisdictional transmission services, is
regulated by the states on shore and in state waters. Although its policy is
still in flux, FERC has reclassified certain jurisdictional transmission
facilities as non-jurisdictional gathering facilities, which may increase our
costs of getting gas to point of sale locations.
Intrastate
natural gas transportation is also subject to regulation by state regulatory
agencies. The basis for intrastate regulation of natural gas transportation
and
the degree of regulatory oversight and scrutiny given to intrastate natural
gas
pipeline rates and services varies from state to state. Insofar as such
regulation within a particular state will generally affect all intrastate
natural gas shippers within the state on a comparable basis, we believe that
the
regulation of similarly situated intrastate natural gas transportation in any
states in which we operate and ship natural gas on an intrastate basis will
not
affect our operations in any way that is of material difference from those
of
our competitors. Like the regulation of interstate transportation rates, the
regulation of intrastate transportation rates affects the marketing of natural
gas that we produce, as well as the revenues we receive for sales of our natural
gas.
Regulation
of production
The
production of oil and natural gas is subject to regulation under a wide range
of
local, state and federal statutes, rules, orders and regulations. Federal,
state
and local statutes and regulations require permits for drilling operations,
drilling bonds and reports concerning operations. Such regulations govern
conservation matters, including provisions for the unitization or pooling of
oil
and natural gas properties, the establishment of maximum allowable rates of
production from oil and natural gas wells, the regulation of well spacing,
and
plugging and abandonment of wells. The effect of these regulations is to limit
the amount of oil and natural gas that we can produce from our wells and to
limit the number of wells or the locations at which we can drill, although
we
can apply for exceptions to such regulations or to have reductions in well
spacing. Moreover, each state generally imposes a production or severance tax
with respect to the production and sale of oil, natural gas and natural gas
liquids within its jurisdiction.
26
The
failure to comply with these rules and regulations can result in substantial
penalties. Our competitors in the oil and natural gas industry are subject
to
the same regulatory requirements and restrictions that affect our operations.
Environmental,
health and safety regulation
General.
Our
operations are subject to stringent and complex federal, state, local and
provincial laws and regulations governing environmental protection, health
and
safety, including the discharge of materials into the environment. These laws
and regulations may, among other things:
| · |
require
the acquisition of various permits before drilling
commences;
|
| · |
restrict
the types, quantities and concentration of various substances that
can be
released into the environment in connection with oil and natural
gas
drilling, production and transportation
activities;
|
| · |
limit
or prohibit drilling activities on certain lands lying within wilderness,
wetlands and other protected areas;
and
|
| · |
require
remedial measures to mitigate pollution from former and ongoing
operations, such as requirements to close pits and plug abandoned
wells.
|
These
laws
and regulations may also restrict the rate of oil and natural gas production
below the rate that would otherwise be possible. The regulatory burden on the
oil and gas industry increases the cost of doing business in the industry and
consequently affects profitability. Additionally, Congress and federal and
state
agencies frequently revise environmental, health and safety laws and
regulations, and any changes that result in more stringent and costly waste
handling, disposal and cleanup requirements for the oil and gas industry could
have a significant impact on our operating costs.
The
following is a summary of the
existing material
environmental, health and safety laws and regulations to which our business
operations are subject.
Waste
handling.
The
Resource Conservation and Recovery Act, or RCRA, and comparable state statutes,
regulate the generation, transportation, treatment, storage, disposal and
cleanup of hazardous and non-hazardous wastes. Under the auspices of the federal
Environmental Protection Agency, or EPA, the individual states administer some
or all of the provisions of RCRA, sometimes in conjunction with their own,
more
stringent requirements. Drilling fluids, produced waters and most of the other
wastes associated with the exploration, development and production of crude
oil
or natural gas are currently regulated under RCRA’s non-hazardous waste
provisions. However, it is possible that certain oil and natural gas exploration
and production wastes now classified as non-hazardous could be classified as
hazardous wastes in the future. Any such change could result in an increase
in
our costs to manage and dispose of wastes, which could have a material adverse
effect on our results of operations and financial position.
27
Comprehensive
Environmental Response, Compensation and Liability Act.
The
Comprehensive Environmental Response, Compensation and Liability Act, or CERCLA,
also known as the Superfund law, imposes joint and several liability, without
regard to fault or legality of conduct, in connection with the release of a
hazardous substance into the environment. Persons potentially liable under
CERCLA include the current or former owner or operator of the site where the
release occurred and anyone who disposed or arranged for the disposal of a
hazardous substance to the site where the release occurred. Under CERCLA, such
persons may be subject to joint and several liability for the costs of cleaning
up the hazardous substances that have been released into the environment,
damages to natural resources and the costs of certain health studies. In
addition, it is not uncommon for neighboring landowners and other third parties
to file claims for personal injury and property damage allegedly caused by
the
hazardous substances released into the environment.
We
own and
lease, and may in the future operate, numerous properties that have been used
for oil and natural gas exploitation and production for many years. Hazardous
substances may have been released on, at or under the properties owned, leased
or operated by us, or on, at or under other locations, including off-site
locations, where such substances have been taken for disposal. In addition,
some
of our properties have been or are operated by third parties or by previous
owners or operators whose handling, treatment and disposal of hazardous
substances were not under our control. These properties and the substances
disposed or released on, at or under them may be subject to CERCLA, RCRA and
analogous state laws. In certain circumstances, we could be responsible for
the
removal of previously disposed substances and wastes, remediate contaminated
property or perform remedial plugging or pit closure operations to prevent
future contamination. In addition, federal and state trustees can also seek
substantial compensation for damages to natural resources resulting from spills
or releases.
Water
discharges.
The
Federal Water Pollution Control Act, or the Clean Water Act, and analogous
state
laws, impose restrictions and strict controls with respect to the discharge
of
pollutants, including oil and other substances generated by our operations,
into
waters of the United States or state waters. Under these laws, the discharge
of
pollutants into regulated waters is prohibited except in accordance with the
terms of a permit issued by EPA or an analogous state agency. Federal and state
regulatory agencies can impose administrative, civil and criminal penalties
for
non-compliance with discharge permits or other requirements of the Clean Water
Act and analogous state laws and regulations.
The
Safe
Drinking Water Act, or SDWA, and analogous state laws impose requirements
relating to underground injection activities. Under these laws, the EPA and
state environmental agencies have adopted regulations relating to permitting,
testing, monitoring, record keeping and reporting of injection well activities,
as well as prohibitions against the migration of injected fluids into
underground sources of drinking water.
Air
emissions.
The
Federal Clean Air Act and comparable state laws regulate emissions of various
air pollutants through air emissions permitting programs and the imposition
of
other requirements. In addition, EPA and certain states have developed and
continue to develop stringent regulations governing emissions of toxic air
pollutants at specified sources. Federal and state regulatory agencies can
impose administrative, civil and criminal penalties for non-compliance with
air
permits or other requirements of the Federal Clean Air Act and analogous state
laws and regulations.
The
Kyoto
Protocol to the United Nations Framework Convention on Climate Change became
effective in February 2005. Under the Protocol, participating nations are
required to implement programs to reduce emissions of certain gases, generally
referred to as greenhouse gases, that are suspected of contributing to global
warming. The United States is not currently a participant in the Protocol,
and
Congress has not acted upon recent proposed legislation directed at reducing
greenhouse gas emissions. However, there has been support in various regions
of
the country for legislation that requires reductions in greenhouse gas
emissions, and some states have already adopted legislation addressing
greenhouse gas emissions from various sources, primarily power plants. The
oil
and natural gas industry is a direct source of certain greenhouse gas emissions,
namely carbon dioxide and methane, and future restrictions on such emissions
could impact our future operations.
28
National
Environmental Policy Act.
Oil and
natural gas exploration and production activities on federal lands are subject
to the National Environmental Policy Act, or NEPA. NEPA requires federal
agencies, including the Department of Interior, to evaluate major agency actions
that have the potential to significantly impact the environment. In the course
of such evaluations, an agency will prepare an Environmental Assessment that
assesses the potential direct, indirect and cumulative impacts of a proposed
project and, if necessary, will prepare a more detailed Environmental Impact
Statement that may be made available for public review and comment. All
exploration and production activities on federal lands require governmental
permits that are subject to the requirements of NEPA. This process has the
potential to delay the development of oil and natural gas projects on federal
lands.
Health,
safety and disclosure regulation.
We are
subject to the requirements of the federal Occupational Safety and Health Act
(OSHA) and comparable state statutes. The OSHA hazard communication standard,
the Emergency Planning and Community Right to Know Act and similar state
statutes require that we organize and/or disclose information about hazardous
materials stored, used or produced in our operations.
We
expect
to incur capital and other expenditures related to environmental compliance.
Although we believe that our compliance with existing requirements will not
have
a material adverse impact on our financial condition and results of operations,
we cannot assure you that the passage of more stringent laws or regulations
in
the future will not have an negative impact on our financial position or results
of operation.
Legal
Proceedings.
We
are not
currently a party to any legal proceedings.
29
The
following table sets forth certain information regarding our current directors
and executive officers.
Our
executive officers are elected by the board of directors and serve at the
discretion of the board. All of the current directors serve until the next
annual stockholders’ meeting or until their successors have been duly elected
and qualified.
|
Name
|
Age
|
Position
|
|||
|
Prentis
B. Tomlinson, Jr.
|
63
|
President,
CEO and Chairman of the Board
|
|||
|
Edward
L. Moses, Jr.
|
67
|
Vice
Chairman, Director
|
|||
|
O.
Oliver Pennington
|
35
|
Vice
President and Chief Financial Officer
|
|||
|
Peter
F. Frey
|
63
|
Controller
|
|||
|
W.
Richard Anderson
|
50
|
Director
|
|||
| Derek L. Buntain |
64
|
Director | |||
The
following biographies describe the business experience of our executive officers
and directors. Each of our officers and directors were appointed to their
positions on January 27, 2006 in connection with the merger of our subsidiary,
Calibre Acquisition Co., with the predecessor of our business.
Prentis
B. Tomlinson, Jr.,
President, Chairman and CEO. Mr. Tomlinson has over 30 years of experience
in
the energy industry, and is a second-generation oil and gas man who traces
his
roots back to Tomlinson Geophysical Service, founded in 1937 by P. B. Tomlinson,
Sr. Mr. Tomlinson has founded a number of companies in the energy sector,
including exploration and production companies, a crude trading company and
an
oilfield service company, TGS Geophysical, Inc., which merged with Nopec
in 1997
to form TGS Nopec (OSE: TGS). Since 2001 Mr. Tomlinson has been a private
investor. In 2004 Mr. Tomlinson helped to found, and remains a significant
shareholder in, a drilling technology company based in Houston, Texas, Particle
Drilling Technologies, Inc. (www.particledrilling.com) (Nasdaq: PDRT). Since
February 2006, Mr. Tomlinson has also served as Chairman and CEO of Standard
Drilling, Inc, a privately held land drilling company based in Houston, Texas.
See “Certain Relationships and Related Party Transactions.”
Edward
L. Moses, Jr.,
Vice
Chairman and Director. Mr. Moses has over 40 years experience in the oil
and gas
industry beginning as a roustabout and roughneck for drilling contractors
while
studying for his B.S. in Petroleum Engineering at Texas A&M University.
After receiving his engineering degree in 1958, Mr. Moses joined The Superior
Oil Company where he was Manager of Domestic and International Drilling
Operations. He left Superior Oil in 1976 to work as an independent consultant
where he and his partners provided consulting and turnkey drilling services
throughout the Gulf Coast, South Texas, and North Sea areas as well as
India and
Central America. Mr. Moses joined Deep Tech companies in 1989 as Vice President,
Engineering. Before leaving Deep Tech in 1998, he served as Senior Vice
President of North Atlantic Pipeline Partners, L.P.; Senior Vice President
of
Tatham Offshore Canada, Limited; Managing Director of Deepwater Production
Systems, Inc.; and Executive Vice President of RIGCO North American, L.L.C.
From
1998 until 2000, Mr. Moses was the Chairman and Chief Executive Officer
of Prime
Natural Resources, Inc. a Houston based exploration and production company.
From
1998 until 2005 he was a Director of Horizon Offshore (Nasdaq: HOFF). Since
2000
Mr. Moses has been a private investor. He is a Professional Engineer in
Texas
and Louisiana, member of Society of Petroleum Engineers, Texas Society
of
Professional Engineers, and a Director of Spindletop (Association). Since
February 2006, Mr. Moses has also served as Vice Chairman of Standard Drilling.
30
O.
Oliver Pennington,
III, Vice President and Chief Financial Officer. Mr.
Pennington has over 11 years of experience in the financial industry and
can
trace his roots in the oil and gas business through his grandfather, Arthur
Buzzini, back to the mid-1930s. From July 2005 until December of 2005 Mr.
Pennington was a private investor. From January 2003 until June 2005, Mr.
Pennington was employed as a partner and senior member of the investment
team of
Sthenos Capital Limited, a hedge fund based in London. From September 2002
until
January 2005, Mr. Pennington was a private investor. From August 1996 until
September of 2002 as the Head of International Trading, analyst and member
of
the international investment team at Kingdon Capital Management Corp.,
a hedge
fund based in New York. Mr. Pennington started his career as a trader for
AIM
Management, an asset management company based in Houston. Since February
2006,
Mr. Pennington has also served as CFO of Standard Drilling. See "Certain
Relationships and Related Party Transactions."
Peter
F. Frey,
Controller. Mr. Frey has over 39 years of experience in accounting, banking
and
finance. After serving in the U.S. Air Force, Mr. Frey, began his financial
career at Buffalo Savings Bank, later known as Goldome FSB where he was
Assistant Vice President for Budgeting and Planning for the $16 billion
bank.
Since retiring from Goldome FSB, Mr. Frey has worked for various financial
and
banking institutions including FDIC - Resolution Trust Corporation, which
assisted with the Savings and Loan Association crisis of the early 90’s. From
there he joined ESL Federal Credit Union as Controller, which was successfully
separated from the Eastman Kodak Company and was launched as an independently
managed financial institution. From March 1997 until December 2001 Mr.
Frey was
employed as the Director of Accounting Operations by Superior Bank FSB,
managing
the accounting operations for the bank and a coast-to-coast lending operation.
From December 2001 to August 2003 Mr. Frey was the Director of Accounting
Operations at the Nasdaq Stock Market where he developed and implemented
the
accounting operations and payroll functions for the impending separation
from
the parent company, NASD. From August 2003 until January 2004 Mr. Frey
worked as
a private consultant. From January 2004 to December 2005 Mr. Frey was employed
by Rose Financial Services, LLC as project manager. Mr. Frey joined Calibre
Energy in December 2005. Mr. Frey served as Controller of Standard Drilling
from
February 14, 2006 until August 1, 2006 and as Treasurer since August 1,
2006.
W.
Richard Anderson,
Director
for Calibre Energy, Inc. Since 2002, Mr. Anderson has served as President and
Chief Executive Officer of Prime Natural Resources, Inc. and was formerly its
Chief Financial Officer (1998-2002). Prime Natural Resources www.primenri.com
is
a closely held exploration and production company. Prior to his employment
at
Prime, he was employed by Hein & Associates, LLP, a certified public
accounting firm, where he served as a partner from 1989 to January 1995 and
as a
managing partner from January 1995 until October 1998. Since 1999, Mr. Anderson
has served as a Director of Boots & Coots International Well Control
www.bootsandcoots.com (AMEX: WEL), Chairman the Audit Committee, and member
of
the Compensation Committee. Mr. Anderson also formerly served as a Director
and
Chairman of the Audit Committees of Grant Geophysical, Inc www.grantgeo.com.,
and its subsidiary Solid State Geophysical, Inc.(TSE), Professional Geophysics,
Inc., and Seis Pros, Inc. www.seispros.com.
Derek
L. Buntain, Director for Calibre Energy, Inc. Mr. Buntain currently
serves as the President of the Dundee Bank, a deposit taking institution
which
manages funds and trusts, provides mutual fund administration services
to the
offshore mutual and hedge fund industries, and operates a merchant banking
portfolio. Mr. Buntain also serves as the President of Goodman & Company
Limited (Bermuda) which structures tax efficient vehicles for international
clients, manages their investments and provides investment management to
mutual
funds. Over his 40 year career, Mr. Buntain has served as the Vice Chairman
of
Targa International Limited (1993-1996), a venture capital firm. Chairman
of
Pythonic Trading Company Limited (1989-1993), which traded physical food
commodities world-wide. President of Canadian Express Limited (1987-1989).
Director of Institutional Sales and Trading for Merrill Lynch Canada Inc.
(1974-1984) and Director of Corporate Finance for Merrill Lynch Canada
Inc.
(1984-1987). Mr Buntain began his career in 1964 at Burns Bros. and Denton
Lt.
as a research analyst, rose to Director of Research from 1970-1972 and
served as
Director of Equity Trading from 1972-1974. In addition, Mr. Buntain holds
a
number of directorships in both public and private companies and has served
on
audit, pension, human resource, corporate governance, compensation and
stock
buy-back committees of those companies.
Committees
of the Board of Directors
We
currently have an audit committee, a compensation committee, and a nominating
and corporate governance committee.
Audit
Committee.
The
audit committee selects, on behalf of our board of directors, an independent
public accounting firm to be engaged to audit our financial statements, discuss
with the independent auditors their independence, review and discuss the
audited
financial statements with the independent auditors and management and recommend
to our board of directors whether the audited financials should be included
in
our Annual Reports to be filed with the Securities and Exchange Commission.
The
Audit Committee operates pursuant to a written charter, which was adopted
February 3, 2005. The current member of the audit committee are Mr.
Anderson and Mr. Buntain.
31
All
of the
current members of the Audit Committee are non-employee directors who: (1)
meet
the criteria for independence set forth in Rule 10A-3(b)(1) under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”); (2) have not participated
in the preparation of our financial statements or the financial statements
Hardwood Doors and Milling Specialties, Inc.; and (3) are able to read and
understand fundamental financial statements, including a balance sheet, income
statement and cash flow statement. The board has determined that Mr. Anderson
qualifies as an “Audit Committee Financial Expert” as defined by item 401(e) of
Regulation S-B of the Exchange Act.
Compensation
Committee.
The
compensation committee reviews and either approves, on behalf of our board
of
directors, or recommends to the board of directors for approval (1) the annual
salaries and other compensation of our executive officers and (2) individual
stock and stock option grants. The compensation committee also provides
assistance and recommendations with respect to our compensation policies
and
practices and assists with the administration of our compensation plans.
The
members of our Compensation Committee are independent directors as defined
in
the applicable rules and regulations promulgated by the SEC, and are neither
an
officer nor employee of us or our subsidiary. The Compensation Committee
operates pursuant to a written charter, which was adopted August 11, 2004.
The
current members of the compensation committee are Mr. Anderson and Mr.
Buntain.
Nominating
and Corporate Governance Committee.
The
nominating and corporate governance committee assists our board of directors
in
fulfilling its responsibilities by: identifying and approving individuals
qualified to serve as members of our board of directors, selecting director
nominees for our annual meetings of shareholders, evaluating the performance
of
our board of directors, and developing and recommending to our board of
directors corporate governance guidelines and oversight with respect to
corporate governance and ethical conduct. Mr. Anderson and Mr. Buntain are
the
current members of the Nominating and Corporate Governance Committee, who
have
been found by the Board of Directors to be “independent directors” pursuant to
the applicable rules and regulations promulgated by the SEC. Mr. Tomlinson
is
also a member of the committee. This committee operates pursuant to a written
charter adopted on April 4, 2006.
Compensation
Committee Interlocks And Insider Participation.
During
the year ended December 31, 2005, we did not have a Compensation Committee
because Luke Frazier served as our sole officer and director. Following our
acquisition of Calibre Energy, Inc. in January 2006 and the appointment of
our
current Board of Directors, our Board of Directors formed a Compensation
Committee comprised of Mr. Anderson. The committee member has never been an
employee of Calibre Energy, Inc. None of our executive officers serve as a
member of the board of directors or compensation committee of any entity that
has any executive officer serving as a member of our Board of Directors or
Compensation Committee.
Compensation
of Directors
On
April
4, 2006, the Compensation Committee (the “Committee”) of our Board of Directors
recommended that the Board approve new compensation for Board members to be
effective as of January 1, 2006. The new compensation was approved by the Board
on April 25, 2006. Under the Package, non-employee directors will receive an
annual retainer of $20,000 and $1,500 for each formal Board meeting attended.
In
addition, each non-employee director who is also a committee member will receive
an annual committee retainer fee of $2,500 and $750 for each formal committee
meeting attended. Each non-employee director who is also a committee chair
will
receive an additional annual retainer of $2,500. In addition, each non-employee
director will be granted 20,000
32
shares
of
restricted common stock and an option for 25,000 shares of common stock. In
addition, any new non-employee directors will be granted 20,000 shares of
restricted common stock an option to purchase 25,000 shares of the common stock
at the market price at the time of grant as a one time award upon joining the
Board. All option awards will be non-qualified stock options and, together
with
all awards of restricted stock, will be issued pursuant to equity compensation
plans in effect at the time of the award and will be exercisable for a ten-year
period from the date of grant of the award. The restricted stock and option
awards will vest in 50% installments on each December 31.
The
following tables set forth certain information regarding our CEO and each of
our
most highly-compensated officers whose total annual salary and bonus for the
period ending December 31, 2005 exceeded $100,000.
Summary
Compensation Table
|
Annual
Compensation
|
Long
Term Compensation Awards
|
|||||||||||||||
|
Name
and
Principal
Position (1)
|
Year
|
Salary
($)
|
|
Bonus
($)
|
|
Securities
Underlying
Options
(#)
|
|
All
Other
Compensation
($)
|
|
|||||||
|
Prentis
B. Tomlinson(2)
|
2005
|
$
|
15,000
|
-
|
4,000,000
|
-
|
||||||||||
|
President
and Chief Executive Officer
|
2004
|
-
|
-
|
-
|
||||||||||||
|
2003
|
-
|
-
|
-
|
|||||||||||||
|
O.
Oliver Pennington, III (2)
|
2005
|
-
|
-
|
1,000,000
|
-
|
|||||||||||
|
Chief
Financial Officer
|
2004
|
-
|
-
|
-
|
||||||||||||
|
2003
|
-
|
-
|
-
|
|||||||||||||
|
Peter
F. Frey (2)
|
2005
|
$
|
4,166
|
-
|
200,000
|
-
|
||||||||||
|
Controller
|
2004
|
-
|
-
|
-
|
||||||||||||
|
2003
|
-
|
-
|
-
|
-
|
||||||||||||
|
Edward
L. Moses (2)
|
2005
|
$
|
8,333
|
-
|
750,000
|
-
|
||||||||||
|
Vice
Chairman
|
2004
|
-
|
-
|
-
|
||||||||||||
|
2003
|
-
|
-
|
-
|
-
|
||||||||||||
33
(1) Luke
Frazier was the sole officer for Hardwood Doors and Milling Speciality during
2003, 2004, and 2005, and received no compensation during those years. Mr.
Frazier resigned as an officer and director on January, 27, 2006.
(2) Each
executive served for less than a full year in 2005. See “Executive Employment
Contracts” for a discussion of Annual Salary and options.
Option
Grants in Fiscal Year Ending December 31, 2005
(Individual
Grants)
|
Name
|
Number
of Securities Options Granted
|
%
of Total Options Granted to Fiscal Year
|
Exercise/Base
Price ($/Share)
|
Expiration
Date
|
|
Prentis
B. Tomlinson
|
4,000,000
|
62%
|
$0.05
|
August
2015
|
|
Edward
L. Moses
|
750,000
|
12%
|
$0.05
|
August
2015
|
|
O.
Oliver Pennington
|
1,000,000
|
16%
|
$0.24
|
December
2015
|
|
W.
Richard Anderson
|
400,000
|
6%
|
$0.05
|
August
2015
|
|
Peter
F. Frey
|
200,000
|
3%
|
$0.24
|
December
2015
|
Options
Exercises and First Quarter 2006 Quarter End Values
|
Number
of Shares
|
Value
of Unexercised
|
|||||||||||||||
|
Underlying
Unexercised
|
In-the-Money
Options
|
|||||||||||||||
|
Options
at March 31 2006
|
at
March 31 2006 (1)
|
|||||||||||||||
|
Name
|
Exercisable
|
Unexercisable
|
Exercisable
|
Unexercisable
|
||||||||||||
|
Prentis
B. Tomlinson (1)
|
4,000,000
|
0
|
$10,800,000
|
$0
|
|
|||||||||||
|
Edward
L. Moses (1)
|
750,000
|
0
|
$2,025,000
|
$0
|
|
|||||||||||
|
O.
Oliver Pennington, III (2)
|
500,000
|
500,000
|
$1,255,000
|
$1,255,000
|
||||||||||||
|
W.
Richard Anderson (1)
|
400,000
|
0
|
$1,080,000
|
$0
|
||||||||||||
|
Peter
F. Frey (2)
|
100,000
|
100,000
|
$251,000
|
$251,000
|
||||||||||||
| (1) |
The
value of “in-the-money” stock options represents the difference between
the $0.05 exercise price of such options and the fair market value
of
$2.75 per share of common stock as of March 31, 2006, the closing
price of
the common stock reported on the OTC Bulletin
Board.
|
| (2) |
The
value of “in-the-money” stock options represents the difference between
the $0.24 exercise price of such options and the fair market value
of
$2.75 per share of common stock as of March 31, 2006, the closing
price of
the common stock reported on the OTC Bulletin
Board.
|
No
options
were exercised during the fiscal year ended December 31, 2005. No stock
appreciation rights were outstanding at the end of the 2005 fiscal
year.
Executive
Employment Contracts
During
the
fiscal years ended December 31, 2003, 2004, 2005 and through January 27, 2006,
neither Luke Frazier, our sole director and officer during such years and period
, received any compensation from us. Set forth below is a summary of the
material terms of the compensation and employment agreements made between us
and
our executive officers.
34
Prentis
B. Tomlinson, Jr.
Mr.
Tomlinson entered into an employment agreement effective October 1, 2005. The
agreement has a three year term and provides that Mr. Tomlinson will serve
as
President and CEO. Mr. Tomlinson receives an annual base salary of $180,000,
which may be further increased at our discretion. Not withstanding the above,
the base salary of Mr. Tomlinson shall be increased to $360,000 on the third
anniversary date from the effective date of the agreement. Mr. Tomlinson has
also received the following stock options pursuant to the agreement:
non-statutory options to purchase 4,000,000 shares of our common stock at a
price of $.05 per share, which options are fully vested and shall survive Mr.
Tomlinson termination date. Mr. Tomlinson is entitled to participate in any
employee benefit plans that are made available to our employees.
Edward
L. Moses, Jr.
Mr.
Moses entered into an employment agreement effective October 1, 2005. The
agreement has a three year term and provides that Mr. Moses will serve as Vice
Chairman. Mr. Moses receives an annual base salary of $120,000, which may be
increased at our discretion. Mr. Moses has also received the following stock
options pursuant to the agreement: non-statutory options to purchase 750,000
shares of our common stock at a price of $0.05 per share, which options are
fully vested. Mr. Moses is entitled to participate in our employee benefit
plans
are made available to our employees.
O.
Oliver Pennington, III.
Mr.
Pennington entered into an employment agreement effective December 28, 2005.
The
agreement has a three year term and provides that Mr. Pennington will serve
as
Vice President and Chief Financial Officer. Mr. Pennington receives an annual
base salary of $200,000, which may be increased at our discretion. Mr.
Pennington has also received the following stock options pursuant to the
agreement: non-statutory options to purchase 500,000 shares of our common stock
at a price of $.24 per share, which options are fully vested and has received
incentive stock options to purchase 500,000 shares of our common stock at a
price of $.24 pursuant to our qualified stock option plan that shall vest over
a
four year period. Mr. Pennington is entitled to participate in our employee
benefit plans are made available to our employees.
Peter
F. Frey.
Mr. Frey
entered into an employment agreement effective December 21, 2005. The agreement
has a three-year term and provides that Mr. Frey will serve as Controller.
Mr.
Frey receives an annual base salary of $135,000, which may be increased at
our
discretion. Mr. Frey also received the following stock option pursuant to the
agreement: non-qualified options to purchase 100,000 shares of our common stock
at a price of $.24 per share. Such options are fully vested, and (2) incentive
stock options to purchase 100,000 shares of our common stock at a price of
$.24
pursuant to our qualified stock option plan that shall vest over a four year
period. Mr. Frey is entitled to participate in other employee benefit plans
that
we may adopt.
Other
Employment Agreement Terms.
Each of
the foregoing employment agreements also include the following terms:
During
the
term of the agreement, we may terminate the employee’s employment at any time by
giving three months written notice. Additionally, we may terminate the
employee’s employment for cause upon written notice by the company. The employee
may terminate his employment for “Good Reason” when there is a decrease in his
base salary, or a materially adverse diminution of the overall level of his
responsibilities, or a material breach by us of any term or provision of the
employment agreement or after a change of control, or any personal reason that
the Board or the Compensation Committee of the Board in its discretion
determines shall constitute “Good Reason.”
In
the
event of a “Change of Control” (as defined below), if the employee is terminated
without cause or he terminates his employment for good reason at any time during
the three year period following the Change of Control, the employee will be
entitled to the following: all outstanding stock options granted on or prior
to
the Change of Control shall become immediately exercisable and shall remain
exercisable for a period of three years, a lump-sum payment equal to three
times
the employee’s then current base
35
salary,
a
lump-sum payment equal to three times the highest annual bonus allowed under
the
Executive Bonus Plan during the three year period preceding the date of the
Change of Control, and continued medial and dental coverage for three years
from
the termination date at no cost to the employee.
For
purposes of the agreement, a “Change of Control” means: a tender offer for more
than 25% of the outstanding voting securities of the company; the company is
merged or consolidated with another corporation, and as a result of the
transaction, less than 75% of the outstanding voting securities of the resulting
corporations are beneficially owned by stockholders of the company immediately
prior to the transaction; the company sells all or substantially all of its
assets to another entity that is not a wholly-owned subsidiary; during any
15-month period, individuals who at the beginning of such period constituted
the
board of directors of the company (including any new member whose election
was
approved by at least 2/3 of the members of the board of directors then still
in
office who were members at the beginning of such period) cease for any reason
to
constitute at least a majority of the board of directors; the Compensation
Committee of the Board of Directors determines, in its sole discretion, that
a
change of control has occurred; or 80% or more of the outstanding voting
securities of the company are acquired by any person or entity other than the
company, its subsidiaries or its affiliates.
The
employment agreement with each of these employees requires them to devote
such
of his business time, attention and energies to the business of the Company
as
are reasonably necessary to perform his duties under this Agreement. The
agreements also restrict the employee from engaging in any other business
activity, whether or not pursued for gain, profit or other pecuniary advantage,
which would impair his ability to fulfill his duties to the Company under
this
Agreement, without the prior written consent of the Board. As disclosed
herein, each of these officers and employees is concurrently serving as an
officer or employee of Standard Drilling, Inc. Such service has been approved
by
the Company's Board of Directors.
Mr.
Tomlinson, Mr. Moses, Mr. Pennington and Mr. Frey are also employed by Standard
Drilling, Inc. and serve as its Chairman, President, CFO and controller,
respectively. As a result, each of these officers devotes some of their business
time to the management of Standard Drilling, Inc. The amount of time devoted
to
the management of our business or Standard Drilling's business by each of
these
officers fluctuates from day to day and week to week. An officer may devote
his
time exclusively to the management of our business or Standard Drilling for
a
period of time. Each of the officers has significant discretion as to whether
to
devote time to management of the Company's business or to management of Standard
Drilling's business.
36
The
following table sets forth the number of shares of our common stock beneficially
owned as of June 15, 2006 by:
| · |
those
persons or groups known to beneficially own more than 5% of our common
stock;
|
| · |
each
of our executive officers and directors;
and
|
| · |
all
of our directors and executive officers as a
group.
|
For
purposes of this table, beneficial ownership is determined in accordance with
Rule 13d-3 promulgated under the Securities Exchange Act of 1934. Except as
indicated below, the security holders listed possess sole voting and investment
power with respect to the shares beneficially owned by that person.
|
Name
and Address(1)
|
Common
Stock
|
Ownership
(%)(2)
|
|
||||
|
Prentis
B. Tomlinson, Jr.(3)
|
20,060,000
|
35.4
|
%
|
||||
|
Edward
L. Moses, Jr. (4)
|
1,500,000
|
2.65
|
%
|
||||
|
W.
Richard Anderson (4)
|
400,000
|
*
|
|||||
|
O.
Oliver Pennington, III (4)
|
500,000
|
*
|
|||||
| Derek L. Buntain |
-
|
*
|
|||||
|
Peter
F. Frey (4)
|
100,000
|
*
|
|||||
|
All
executive officers and directors as a group
(5
persons):
|
22,560,000
|
39.84
|
%
|
||||
|
*
|
Represents
less than 1% of the issued and outstanding shares of common
stock.
|
|
(1)
|
Except
as otherwise noted, the street address of the named beneficial owner
is
1667 K Street, NW, Suite 1230, Washington, DC
20006.
|
|
(2)
|
Based
on a total of (i) 56,600,806 shares of common stock issued and outstanding
on June 30, 2006, plus (ii) shares that may be issued upon exercise
of
options that are exercisable within 60
days.
|
|
(3)
|
Includes
(i) 540,000 shares of stock owned directly, (ii) 15,250,000 shares
of
stock held by Calibre Energy Partners, LLC., which Mr. Tomlinson
controls,
(iii) 270,000 shares of common stock to be issued upon the exercise
of
warrants, and (iv) 4,000,000 shares of common stock that may be issued
upon the exercise of options exercisable in the next 60
days.
|
|
(4)
|
Represents
shares of common stock that may be acquired upon exercise of options
in
the next 60 days.
|
|
(5)
|
Includes
296,025 shares that may be acquired upon exercise of warrants in
the next
60 days. The address for the beneficial owner is 202 Melrose Avenue,
Toronto, Ontario, Canada.
|
|
(6)
|
Includes
250,000 shares that may be acquired upon exercise of warrants in
the next
60 days. The address for the beneficial owner is 40 Bassano Rd.,
Toronto,
Ontario, Canada M2N 2K1.
|
37
No
stockholder may offer or sell shares of our common stock under this prospectus
unless such stockholder has notified us of his or her intention to sell shares
of our common stock and this prospectus has been declared effective by the
SEC,
and remains effective at the time such selling stockholder offers or sells
such
shares. We are required to amend this prospectus to reflect material
developments in our business, financial position and results of operations.
Each
time we file an amendment to this prospectus with the SEC, it must first be
declared effective prior to the offer or sale of shares of our common stock
by
the selling stockholders.
The
common
stock covered by this prospectus is to be offered for the account of the selling
stockholders in the following table. The selling stockholders may from time
to
time sell all, some or none of the shares of common stock offered by this
prospectus.
The
following table, which we have prepared based on information provided to us
by
the applicable selling stockholder, sets forth the name, the number of shares
of
common stock beneficially owned by the selling stockholders intending to sell
our common stock and the number of shares of common stock to be offered. Unless
set forth below, none of the selling stockholders selling in connection with
the
prospectus has held any position or office with, been employed by, or otherwise
has had a material relationship with us or any of our affiliates during the
three years prior to the date of the prospectus.
|
Name
of Selling Stockholder
|
Footnote
|
Number
of
Shares of Common Stock Beneficially Owned (1) |
Number
of Shares
of Common Stock Offered Hereunder |
Number
and % of
Outstanding Shares of Common Stock Owned After Completion of Offering |
|
|
Number
|
%
(2)
|
||||
|
Calibre
Energy Partners, LLC
|
15,250,000
|
15,250,000
|
0
|
*
|
|
|
International
Capital Advisory, Inc.
|
(3)
|
1,796,025
|
1,796,025
|
0
|
*
|
| Greg Reid | 15,000 | 15,000 | 0 | * | |
| Ross Geiger | 20,000 | 20,000 | 0 | * | |
| Tracy Black | 20,000 | 20,000 | 0 | * | |
|
Jonpol
Investments, Ltd.
|
(4)
|
1,500,000
|
1,500,000
|
0
|
*
|
|
Sherrie
Ann Pollock
|
1,500,000
|
1,500,000
|
0
|
*
|
|
|
Rob
Pollock
|
1,500,000
|
1,500,000
|
0
|
*
|
|
|
Mark
Monaghan
|
500,000
|
500,000
|
0
|
*
|
|
|
Laura
Bester
|
500,000
|
500,000
|
0
|
*
|
|
|
Richard
D. Hutcheon
|
(5)
|
375,000
|
375,000
|
0
|
*
|
|
Maynard
Young
|
(6)
|
187,500
|
187,500
|
0
|
*
|
|
Hybrid
Investments, Ltd.
|
(7)
|
750,000
|
750,000
|
0
|
*
|
|
BMO
Nesbitt Burns ITF Sheldon Taerk a/c 405-110005-29
|
(8)
|
112,500
|
112,500
|
0
|
*
|
|
Beads
A. D'Cruz
|
(9)
|
75,000
|
75,000
|
0
|
*
|
|
Blue
Sky Private Equity, Inc.
|
(10)
|
937,500
|
937,500
|
0
|
*
|
38
|
Name
of Selling Stockholder
|
Footnote
|
Number
of
Shares of Common Stock Beneficially Owned (1) |
Number
of Shares
of Common Stock Offered Hereunder |
Number
and % of
Outstanding Shares of Common Stock Owned After Completion of Offering |
|
|
Number
|
%
(2)
|
||||
|
|
|||||
|
Donald
R. Hutcheon
|
(11)
|
37,500
|
37,500
|
0
|
*
|
|
G.
Scott Paterson
|
(12)
|
187,500
|
187,500
|
0
|
*
|
|
Danya
Ossip-Richmor
|
(13)
|
37,500
|
37,500
|
0
|
*
|
|
Amanda
Lisus
|
(14)
|
462,500
|
462,500
|
0
|
*
|
|
David
Meyerowitz
|
(15)
|
150,000
|
150,000
|
0
|
*
|
|
Peter
Turk
|
(16)
|
225,000
|
225,000
|
0
|
*
|
|
Gail
Cooper
|
(17)
|
187,500
|
187,500
|
0
|
*
|
|
Philip
Turk & Nanci Turk
|
(18)
|
187,500
|
187,500
|
0
|
*
|
|
Daniel
Rappaport
|
(19)
|
93,750
|
93,750
|
0
|
*
|
|
Joseph
H. Levitan
|
(20)
|
225,000
|
225,000
|
0
|
*
|
|
Haywood
Securities Inc ITF Laura Bester Acct. #TM12210C
|
(21)
|
750,000
|
750,000
|
0
|
*
|
|
Stephen
Bloom
|
(22)
|
93,750
|
93,750
|
0
|
*
|
|
Art
Heller Enterprises
|
(23)
|
187,500
|
187,500
|
0
|
*
|
|
Barbra
H. Miller
|
(24)
|
75,000
|
75,000
|
0
|
*
|
|
Investor
Company ITF Acct. #5N0843F
|
(25)
|
1,028,018
|
1,028,018
|
0
|
|
|
Gundyco
ITF The K2 Principal Fund
|
(26)
|
450,000
|
450,000
|
0
|
*
|
|
Investor
Company ITF Acct. #5J5047C
|
(27)
|
97,500
|
97,500
|
0
|
*
|
|
Royal
Trust ITF AIG Global Investment Corp.
|
(28)
|
1,500,000
|
1,500,000
|
0
|
*
|
|
Jennifer
MacKenzie
|
(29)
|
375,000
|
375,000
|
0
|
*
|
|
Sean
Cleary
|
-
|
67,788
|
67,788
|
0
|
*
|
|
NBCN
Clearing, Inc. ITF Acct. #4NA066E
|
(30)
|
1,500,000
|
1,500,000
|
0
|
*
|
|
Brant
Investments Ltd, Acct. #108483245
|
(31)
|
600,000
|
600,000
|
0
|
|
|
Systems
on Time Inc.
|
(32)
|
225,000
|
225,000
|
0
|
*
|
|
NBCN
Clearing Inc. ITF 1395515 Ontario Ltd. Acct 4NRE91E
|
(33)
|
100,500
|
100,500
|
0
|
*
|
|
Eric
Abecassis
|
(34)
|
93,750
|
93,750
|
0
|
*
|
|
The
Stuart Copelovitch Family Trust
|
(35)
|
93,750
|
93,750
|
0
|
*
|
|
The
Melger Family Trust
|
(36)
|
93,750
|
93,750
|
0
|
*
|
|
The
Jalary Family Trust
|
(37)
|
93,750
|
93,750
|
0
|
*
|
|
D.
Robb English
|
(38)
|
18,750
|
18,750
|
0
|
*
|
|
Maxsamm
Holdings Inc.
|
(39)
|
93,750
|
93,750
|
0
|
*
|
39
|
Name
of Selling Stockholder
|
Footnote
|
Number
of
Shares of Common Stock Beneficially Owned (1) |
Number
of Shares
of Common Stock Offered Hereunder |
Number
and % of
Outstanding Shares of Common Stock Owned After Completion of Offering |
|
|
Number
|
%
(2)
|
||||
|
Lony
Gropper
|
(40)
|
150,000
|
150,000
|
0
|
*
|
|
Kerry
Salsberg
|
(41)
|
60,000
|
60,000
|
0
|
*
|
|
Richard
Elder
|
(42)
|
300,000
|
300,000
|
0
|
*
|
|
Patrick
Mark Whitman
|
(43)
|
30,000
|
30,000
|
0
|
*
|
|
Allan
Weinbaum
|
(44)
|
112,500
|
112,500
|
0
|
*
|
|
Leslie
Amoils
|
(45)
|
150,000
|
150,000
|
0
|
*
|
|
Coldstream
Capital Ventures
|
(46)
|
93,750
|
93,750
|
0
|
*
|
|
Mitch
Aidelman
|
(47)
|
45,000
|
45,000
|
0
|
*
|
|
Steven
Graff
|
(48)
|
75,000
|
75,000
|
0
|
*
|
|
J.
Russell Starr
|
(49)
|
75,000
|
75,000
|
0
|
*
|
|
Kevin
Everingham
|
(50)
|
105,000
|
105,000
|
0
|
*
|
|
Trevor
M. Born
|
(51)
|
93,750
|
93,750
|
0
|
*
|
|
Brian
Udashkin
|
(52)
|
375,000
|
375,000
|
0
|
*
|
|
Richard
Epstein
|
(53)
|
18,750
|
18,750
|
0
|
*
|
|
Joel
Goodman
|
(54)
|
18,750
|
18,750
|
0
|
*
|
|
David
Shiller
|
(55)
|
18,750
|
18,750
|
0
|
*
|
|
Lawrence
Allen Dentistry Professional Corporation
|
(56)
|
150,000
|
150,000
|
0
|
*
|
|
The
Tobin Family Trust
|
(57)
|
1,750,000
|
1,750,000
|
0
|
*
|
|
Sigmund
Soudack
|
(58)
|
1,750,000
|
1,750,000
|
0
|
*
|
|
Jennifer
Goldman
|
(59)
|
75,000
|
75,000
|
0
|
*
|
|
Mary
Sinclair
|
(60)
|
300,000
|
300,000
|
0
|
*
|
|
Mary
Sinclair ITF Christopher Sinclair
|
(61)
|
300,000
|
300,000
|
0
|
*
|
|
Mary
Sinclair ITF Candice Sinclair
|
(62)
|
300,000
|
300,000
|
0
|
*
|
|
Bruce
Kagan
|
(63)
|
75,000
|
75,000
|
0
|
*
|
|
Mark
Monaghan
|
(64)
|
150,000
|
150,000
|
0
|
*
|
|
Charles
Berger
|
(65)
|
93,750
|
93,750
|
0
|
*
|
|
Hsin-Yuan
Su
|
(66)
|
225,000
|
225,000
|
0
|
*
|
|
Steve
Shinoff
|
(67)
|
56,250
|
56,250
|
0
|
*
|
|
RBC
Dominion Securities Inc. ITF Stephanie Shields a/c
4113029922
|
(68)
|
37,500
|
37,500
|
0
|
*
|
|
Tracie
Graff
|
(69)
|
93,750
|
93,750
|
0
|
*
|
|
RBC
Dominion Securities Inc. ITF Melvin M. Gilbert Acct
#4214855316
|
(70)
|
93,750
|
93,750
|
0
|
*
|
|
JMM
Trading LP
|
(71)
|
375,000
|
375,000
|
0
|
*
|
40
|
Name
of Selling Stockholder
|
Footnote
|
Number
of
Shares of Common Stock Beneficially Owned (1) |
Number
of Shares
of Common Stock Offered Hereunder |
Number
and % of
Outstanding Shares of Common Stock Owned After Completion of Offering |
|
|
Number
|
%
(2)
|
||||
|
Placements
Peloton, Inc.
|
(72)
|
187,500
|
187,500
|
0
|
*
|
|
David
Turk
|
(73)
|
112,500
|
112,500
|
0
|
*
|
|
Pat
and Rosa Dicerbo
|
(74)
|
562,500
|
562,500
|
0
|
*
|
|
NBCN
Clearing Inc, FBO a/c 2QE027F
|
(75)
|
56,250
|
56,250
|
0
|
*
|
|
Frank
Davis
|
(76)
|
75,000
|
75,000
|
0
|
*
|
|
Michael
Bowen
|
(77)
|
37,500
|
37,500
|
0
|
*
|
|
Brant
Investments Ltd, Acct. #108483245
|
(78)
|
750,000
|
750,000
|
0
|
*
|
|
Robert
Pollock
|
(79)
|
600,750
|
600,750
|
0
|
*
|
|
Andrew
Martyn
|
(80)
|
150,000
|
150,000
|
0
|
*
|
|
Scott
Kelly
|
(81)
|
150,000
|
150,000
|
0
|
*
|
|
Royal
Trust ITF Acct. #110748003
|
(82)
|
562,500
|
562,500
|
0
|
*
|
|
Royal
Trust ITF Acct. #110455171
|
(83)
|
281,250
|
281,250
|
0
|
*
|
|
Joel
Leonoff
|
(84)
|
375,000
|
375,000
|
0
|
*
|
|
Robert
Metz
|
(85)
|
60,000
|
60,000
|
0
|
*
|
|
NBCN
Clearing Inc ITF Angelo Comi Acct. #3ME239F
|
(86)
|
150,000
|
150,000
|
0
|
*
|
|
Prentis
B. Tomlinson, Jr.
|
(87)
|
20,060,000
|
810,000
|
19,250,000
|
34.01%
|
|
Gary
D. May
|
(88)
|
375,000
|
375,000
|
0
|
*
|
|
Ross
J. Jicomelli
|
(89)
|
150,000
|
150,000
|
0
|
*
|
|
Ann
W. Mullen
|
(90)
|
37,500
|
37,500
|
0
|
*
|
|
Donald
F. Farley
|
(91)
|
375,000
|
375,000
|
0
|
*
|
|
Kenneth
D. Cushman, MD
|
(92)
|
225,000
|
225,000
|
0
|
*
|
|
Edmund
Wylie Johnson and Margaret E. Johnson
|
(93)
|
375,000
|
375,000
|
0
|
*
|
|
Allan
Tissenbaum
|
(94)
|
93,750
|
93,750
|
0
|
*
|
|
Kevin
A. Wechter
|
(95)
|
75,000
|
75,000
|
0
|
*
|
|
Jennifer
Siverston
|
(96)
|
75,000
|
75,000
|
0
|
*
|
|
Myro
Louis Panas
|
(97)
|
566,250
|
566,250
|
0
|
*
|
|
William
Todd Isaac
|
(98)
|
581,250
|
581,250
|
0
|
*
|
|
Marc-Andre
Lavoie
|
(99)
|
93,750
|
93,750
|
0
|
*
|
|
Ronald
Kopas
|
(100)
|
37,500
|
37,500
|
0
|
*
|
|
Kenneth
Ari Weinstein
|
(101)
|
2,073,125
|
2,073,125
|
0
|
*
|
|
Infogroup
Ltd.
|
(102)
|
93,750
|
93,750
|
0
|
*
|
|
Powdersmart.com
SRL
|
(103)
|
375,000
|
375,000
|
0
|
*
|
41
|
Name
of Selling Stockholder
|
Footnote
|
Number
of
Shares of Common Stock Beneficially Owned (1) |
Number
of Shares
of Common Stock Offered Hereunder |
Number
and % of
Outstanding Shares of Common Stock Owned After Completion of Offering |
|
|
Number
|
%
(2)
|
||||
|
Balmoral
Holdings Ltd
|
(104)
|
843,750
|
843,750
|
0
|
*
|
|
Danjor
Holdings Inc.
|
(105)
|
375,000
|
375,000
|
0
|
*
|
|
Sam
Segal
|
(106)
|
375,000
|
375,000
|
0
|
*
|
|
Michael
Regan
|
(107)
|
75,000
|
75,000
|
0
|
*
|
|
Luke
Frazier
|
(108)
|
425,000
|
425,000
|
0
|
*
|
|
Dundee
Securities Corp. ITF Quest Securities Acct #862854A
|
(109)
|
875,000
|
875,000
|
0
|
*
|
|
Kystie
Finance Ltd.
|
(110)
|
3,184,150
|
3,184,150
|
0
|
*
|
|
Susan
Tobin
|
(111)
|
599,250
|
599,250
|
0
|
*
|
|
Steve
Graff
|
(112)
|
8,000
|
8,000
|
0
|
*
|
|
Ritchie
Epstein
|
(113)
|
13,100
|
13,100
|
0
|
*
|
|
Gerry
Tissenbaum
|
(114)
|
49,000
|
49,000
|
0
|
*
|
|
Steve
Blustein
|
(115)
|
2,000
|
2,000
|
0
|
*
|
|
NBCN
Clearing ITF 4N-A081-E
|
(116)
|
175,000
|
175,000
|
0
|
*
|
|
3813983
Canada Inc.
|
(117)
|
50,000
|
50,000
|
0
|
*
|
|
Alcina
Corporation
|
(118)
|
50,000
|
50,000
|
0
|
*
|
|
Bill
Kemp
|
(119)
|
75,000
|
75,000
|
0
|
*
|
|
Bob
Richardson
|
(120)
|
22,000
|
22,000
|
0
|
*
|
|
Boyd
Roberton
|
(121)
|
20,000
|
20,000
|
0
|
*
|
|
T
Finn & Co.
|
(122)
|
3,000,000
|
3,000,000
|
0
|
*
|
|
UBS
AG
|
(123)
|
500,000
|
500,000
|
0
|
*
|
|
Carter
H. Compton
|
(124)
|
8,500
|
8,500
|
0
|
*
|
|
Fred
Dulock
|
(125)
|
50,000
|
50,000
|
0
|
*
|
|
Galen
R. Logan
|
(126)
|
5,000
|
5,000
|
0
|
*
|
|
Gary
Uptmore
|
(127)
|
8,000
|
8,000
|
0
|
*
|
|
George
Kubala
|
(128)
|
16,000
|
16,000
|
0
|
*
|
|
Irwin
Zeiniker
|
(129)
|
100,000
|
100,000
|
0
|
*
|
|
Isaac
Hamaoui
|
(130)
|
25,000
|
25,000
|
0
|
*
|
|
Jeff
Kilburn
|
(131)
|
5,000
|
5,000
|
0
|
*
|
|
Jim
Phillips
|
(132)
|
25,350
|
25,350
|
0
|
*
|
|
Joe
Dillon
|
(133)
|
10,000
|
10,000
|
0
|
*
|
|
Joel
Milgram
|
(134)
|
100,000
|
100,000
|
0
|
*
|
|
John
Korence
|
(135)
|
10,000
|
10,000
|
0
|
*
|
|
Johnny
KM Chan
|
(136)
|
200,000
|
200,000
|
0
|
*
|
42
|
Name
of Selling Stockholder
|
Footnote
|
Number
of
Shares of Common Stock Beneficially Owned (1) |
Number
of Shares
of Common Stock Offered Hereunder |
Number
and % of
Outstanding Shares of Common Stock Owned After Completion of Offering |
|
|
Number
|
%
(2)
|
||||
|
Khatchig
Aghazarian
|
(137)
|
100,000
|
100,000
|
0
|
*
|
|
Kodiak
Metals LLC
|
(138)
|
500,000
|
500,000
|
0
|
*
|
|
L.S.J.
|
(139)
|
100,000
|
100,000
|
0
|
*
|
|
Michael
Stroll
|
(140)
|
50,000
|
50,000
|
0
|
*
|
|
Pasquale
DiCerbo
|
(141)
|
100,000
|
100,000
|
0
|
*
|
|
Peter
Rebmann
|
(142)
|
25,000
|
25,000
|
0
|
*
|
|
Philip
Turk
|
(143)
|
37,500
|
37,500
|
0
|
*
|
|
Pierre
Gabison
|
(144)
|
100,000
|
100,000
|
0
|
*
|
|
Rick
Shelton
|
(145)
|
20,000
|
20,000
|
0
|
*
|
|
Ricky
D. Thompson
|
(146)
|
5,000
|
5,000
|
0
|
*
|
|
Ross
Hunt
|
(147)
|
25,000
|
25,000
|
0
|
*
|
|
Sam
X. Eyde
|
(148)
|
440,000
|
440,000
|
0
|
*
|
|
Stanley
Gill
|
(149)
|
50,000
|
50,000
|
0
|
*
|
|
William
R. Brewer
|
(150)
|
30,000
|
30,000
|
0
|
*
|
|
ING
Bank S.A.
|
(151)
|
2,500,000
|
2,500,000
|
0
|
*
|
|
Larry
R. Cramer
|
(152)
|
20,000
|
20,000
|
0
|
*
|
|
Kathryne
S. Cramer
|
(153)
|
5,000
|
5,000
|
0
|
*
|
|
Douglas
R. Hamilton
|
(154)
|
10,000
|
10,000
|
0
|
*
|
|
Owen
G. Anderson
|
(155)
|
5,000
|
5,000
|
0
|
*
|
|
GLG
North American Opportunity Fund
|
(156)
|
2,500,000
|
2,500,000
|
0
|
*
|
|
JMM
Trading LP
|
(157)
|
100,000
|
100,000
|
0
|
*
|
|
Continental
Trust Corporation Ltd.
|
(158)
|
100,000
|
100,000
|
0
|
*
|
|
Inversiones
y Negocios Estrategicos SA
|
(159)
|
125,000
|
125,000
|
0
|
*
|
|
Edward
L. Moses
|
(160)
|
1,500,000
|
750,000
|
750,000
|
1.33%
|
| 2829916 Canada Inc. |
(161)
|
25,000 | 25,000 | 0 | * |
| Mida Investements |
(162)
|
20,000 | 20,000 | 0 | * |
|
(1)
Beneficial ownership is determined in accordance with the rules of
the
Securities and Exchange Commission
and generally includes voting or investment power with respect to
securities. Shares of common
stock subject to options or warrants currently exercisable within
60 days
of May 5, 2006 are
deemed outstanding for computing the percentage of the person holding
such
option or warrant are
deemed outstanding for computing the percentage of the person holding
such
option or warrant but
are not deemed outstanding for computing the percentage of any other
person.
|
|
(2)
Percentage is based on 56,600,806 shares of common stock
outstanding.
|
|
(3)
International Capital Advisory, Inc. Includes 296,025 shares of
common
stock underlying warrants for placement agent activities. Tracey
Tobin has
the power to vote and dispose of the Calibre Energy common stock
owned by
International Capital Advisory,
Inc.
|
43
|
(4)
John A. Pollock and Barbara C. Pollock exercise voting and dispositive
power over all of the shares beneficially owned by Jonpol Investments,
Ltd.
|
|
(5)
Includes 125,000 shares of common stock underlying
warrants.
|
|
(6)
Includes 62,500 shares of common stock underlying
warrants.
|
|
(7)
Robert Green exercises voting and dispositive power over all of the
shares
beneficially owned by Hybrid Investments, Ltd. Includes 250,000 shares
of
common stock underlying warrants.
|
|
(8)
Sheldon Taerk exercises voting and dispositive power over all of
the
shares beneficially owned by BMO Nesbitt Burns ITF Sheldon Taerk
a/c
405-110005-29. Includes 37,500 shares of common stock underlying
warrants.
|
|
(9)
Includes 25,000 shares of common stock underlying
warrants.
|
|
(10)
Gregory Wolfond exercises voting and dispositive power over all of
the
shares beneficially owned by Blue Sky Private Equity, Inc. Includes
312,500 shares of common stock underlying
warrants.
|
|
(11)
Includes 12,500 shares of common stock underlying
warrants.
|
|
(12)
Includes 62,500 shares of common stock underlying
warrants.
|
|
(13)
Includes 12,500 shares of common stock underlying
warrants.
|
|
(14)
Includes 162,500 shares of common stock underlying
warrants.
|
|
(15)
Includes 50,000 shares of common stock underlying
warrants.
|
|
(16)
Includes 81,250 shares of common stock underlying
warrants.
|
|
(17)
Includes 62,500 shares of common stock underlying
warrants.
|
|
(18)
Includes 62,500 shares of common stock underlying
warrants.
|
|
(19)
Includes 31,250 shares of common stock underlying
warrants.
|
|
(20)
Includes 75,000 shares of common stock underlying
warrants.
|
|
(21)
Laura Bester exercises voting and dispositive power over all of the
shares
beneficially owned by Haywood Securities Inc ITF Laura Bester Acct.
#TM12210C. Includes 250,000 shares of common stock underlying
warrants.
|
|
(22)
Includes 31,250 shares of common stock underlying
warrants.
|
|
(23)
Jodi Heller exercises voting and dispositive power over all of the
shares
beneficially owned by Art Heller Enterprises. Includes 62,500 shares
of
common stock underlying warrants.
|
|
(24)
Includes 25,000 shares of common stock underlying
warrants.
|
|
(25)
Dean Curtis exercises voting and dispositive power over all of the
shares
beneficially owned by Investor Company ITF Acct.
#5N0843F.
|
|
(26)
Shawn Kimel exercises voting and dispositive power over all of the
shares
beneficially owned by Gundyco ITF The K2 Principal Fund. Includes
150,000
shares of common stock underlying
warrants.
|
|
(27)
Richard Kung exercises voting and dispositive power over all of the
shares
beneficially owned by Investor Company ITF Acct. #5J5047C. Includes
32,500
shares of common stock underlying
warrants.
|
|
(28)
Steven Palmer exercises voting and dispositive power over all of
the
shares beneficially owned by Royal Trust ITF AIG Global Investment
Corp.
Includes 500,000 shares of common stock underlying
warrants.
|
44
|
(29)
Steven Palmer exercises voting and dispositive power over all of
the
shares beneficially owned by Jennifer MacKenzie. Includes 125,000
shares
of common stock underlying
warrants.
|
|
(30)
Glenn Pountney exercises voting and dispositive power over all of
the
shares beneficially owned by NBCN Clearing, Inc. ITF Acct. #4NA066E.
Includes 500,000 shares of common stock underlying
warrants.
|
|
(31)
Cecilia M. Kershaw exercises voting and dispositive power over all
of the
shares beneficially owned by Brant Investments Ltd, Acct. #108483245.
Includes 200,000 shares of common stock underlying
warrants.
|
|
(32)
Joseph Bensadoun exercises voting and dispositive power over all
of the
shares beneficially owned by Systems on Time Inc. Includes 75,000
shares
of common stock underlying
warrants.
|
|
(33)
Ross McMaster exercises voting and dispositive power over all of
the
shares beneficially owned by NBCN Clearing Inc. ITF 1395515 Ontario
Ltd.
Acct 4NRE91E. Includes 33,500 shares of common stock underlying
warrants.
|
|
(34)
Includes 31,250 shares of common stock underlying
warrants.
|
|
(35)
Stuart Copelovitch exercises voting and dispositive power over all of
the shares beneficially owned by The Stuart Copecovitch Family
Trust.
Includes 31,250 shares of common stock underlying
warrants.
|
|
(36)
Gerald Isaac Weinstein and Edward Glen Weinstein exercise voting
and
dispositive power over all of the shares beneficially owned by The
Melger
Family Trust. Includes 31,250 shares of common stock underlying
warrants.
|
|
(37)
Jacob Weinstein and Gerald Isaac Weinstein exercise voting and dispositive
power over all of the shares beneficially owned by The Jalary Family
Trust. Includes 31,250 shares of common stock underlying
warrants.
|
|
(38)
Includes 6,250 shares of common stock underlying
warrants.
|
|
(39)
Andrew Prenick exercises voting and dispositive power over all of
the
shares beneficially owned by Maxsamm Holdings Inc. Includes 31,250
shares
of common stock underlying
warrants.
|
|
(40)
Includes 50,000 shares of common stock underlying
warrants.
|
|
(41)
Includes 20,000 shares of common stock underlying
warrants.
|
|
(42)
Includes 100,000 shares of common stock underlying
warrants.
|
|
(43)
Includes 10,000 shares of common stock underlying
warrants.
|
|
(44)
Includes 37,500 shares of common stock underlying
warrants.
|
|
(45)
Includes 50,000 shares of common stock underlying
warrants.
|
|
(46)
Daniel Pharand exercises voting and dispositive power over all of
the
shares beneficially owned by Coldstream Capital Ventures. Includes
31,250
shares of common stock underlying
warrants.
|
|
(47)
Includes 15,000 shares of common stock underlying
warrants.
|
|
(48)
Includes 25,000 shares of common stock underlying
warrants.
|
|
(49)
Includes 25,000 shares of common stock underlying
warrants.
|
|
(50)
Includes 35,000 shares of common stock underlying
warrants.
|
|
(51)
Includes 31,250 shares of common stock underlying
warrants.
|
45
|
(52)
Includes 125,000 shares of common stock underlying
warrants.
|
|
(53)
Includes 6,250 shares of common stock underlying
warrants.
|
|
(54)
Includes 6,250 shares of common stock underlying
warrants.
|
|
(55)
Includes 6,250 shares of common stock underlying
warrants.
|
|
(56)
Lawrence Allen exercises voting and dispositive power over all of
the
shares beneficially owned by Lawrence Allen Dentistry Professional
Corporation. Includes 50,000 shares of common stock underlying
warrants.
|
|
(57)
Morrie Tobin exercises voting and dispositive power over all of the
shares
beneficially owned by The Tobin Family Trust. Includes 250,000 shares
of
common stock underlying warrants.
|
|
(58)
Includes 625,000 shares of common stock underlying
warrants.
|
|
(59)
Includes 25,000 shares of common stock underlying
warrants.
|
|
(60)
Includes 100,000 shares of common stock underlying
warrants.
|
|
(61)
Mary Sinclair exercises voting and dispositive power over all of
the
shares beneficially owned by Mary Sinclair ITF Christopher Sinclair.
Includes 100,000 shares of common stock underlying
warrants.
|
|
(62)
Mary Sinclair exercises voting and dispositive power over all of
the
shares beneficially owned by Mary Sinclair ITF Candice Sinclair.
Includes
100,000 shares of common stock underlying
warrants.
|
|
(63)
Includes 25,000 shares of common stock underlying
warrants.
|
|
(64)
Includes 50,000 shares of common stock underlying
warrants.
|
|
(65)
Includes 31,250 shares of common stock underlying
warrants.
|
|
(66)
Includes 81,250 shares of common stock underlying
warrants.
|
|
(67)
Includes 18,750 shares of common stock underlying
warrants.
|
|
(68)
Stephanie Shields exercises voting and dispositive power over all
of the
shares beneficially owned by RBC Dominion Securities Inc. ITF Stephanie
Shields a/c 4113029922. Includes 12,500 shares of common stock underlying
warrants.
|
|
(69)
Includes 31,250 shares of common stock underlying
warrants.
|
|
(70)
Melvin Gilbert exercise voting and dispositive power over all of
the
shares beneficially owned by RBC Dominion Securities Inc. ITF Melvin
M.
Gilbert Acct #4214855316. Includes 31,250 shares of common stock
underlying warrants.
|
|
(71)
Glenn Hunt and Richard Hennig exercise voting and dispositive power
over
all of the shares beneficially owned by JMM Trading LP. Includes
125,000
shares of common stock underlying
warrants.
|
|
(72)
Mark Dichter exercises voting and dispositive power over all of the
shares
beneficially owned by Placements Peloton, Inc. Includes 62,500 shares
of
common stock underlying warrants.
|
|
(73)
Includes 43,750 shares of common stock underlying
warrants.
|
|
(74)
Includes 187,500 shares of common stock underlying
warrants.
|
|
(75)
John Cooke and Andrea Cooke exercise voting and dispositive power
over all
of the shares beneficially owned by NBCN Clearing Inc, FBO a/c 2QE027F.
Includes 18,750 shares of common stock underlying
warrants.
|
|
(76)
Includes 25,000 shares of common stock underlying
warrants.
|
46
|
(77)
Includes 12,500 shares of common stock underlying
warrants.
|
|
(78)
Cecilia M. Kershaw exercises voting and dispositive power over all
of the
shares beneficially owned by Brant Investments Ltd, Acct. #108483245.
Includes 250,000 shares of common stock underlying
warrants.
|
|
(79)
Includes 200,250 shares of common stock underlying
warrants.
|
|
(80)
Includes 50,000 shares of common stock underlying
warrants.
|
|
(81)
Includes 50,000 shares of common stock underlying
warrants.
|
|
(82)
Malvin Spooner exercises voting and dispositive power over all of
the
shares beneficially owned by Royal Trust ITF Acct. #110748003. Includes
187,500 shares of common stock underlying
warrants.
|
|
(83)
Malvin Spooner exercises voting and dispositive power over all of
the
shares beneficially owned by Royal Trust ITF Acct. #110455171. Includes
93,750 shares of common stock underlying
warrants.
|
|
(84)
Includes 125,000 shares of common stock underlying
warrants.
|
|
(85)
Includes 20,000 shares of common stock underlying
warrants.
|
|
(86)
Angelo Comi exercises voting and dispositive power over all of the
shares
beneficially owned by NBCN Clearing Inc ITF Angelo Comi Acct. #3ME239F.
Includes 50,000 shares of common stock underlying
warrants.
|
|
(87)
"Number
of Shares of Common Stock Beneficially Owned" includes (i) 270,000
shares
of common stock underlying warrants exercisable in the next 60 days,
(ii)
4,000,000 shares of common stock underlying options that are exercisable
in the next
60 days and (iii) 15,250,000 shares of common stock owned by Calibre
Energy
Partners, LLC of which Mr. Tomlinson is the manager and has voting
and
dispositive power; the "Number and % of Outstanding Shares of Common
Stock
Owned
After Completion of Offering" include the shares underlying the options
and the shares owned by Calibre Energy Partners,
LLC.
|
|
(88)
Includes 125,000 shares of common stock underlying
warrants.
|
|
(89)
Includes 50,000 shares of common stock underlying
warrants.
|
|
(90)
Includes 12,500 shares of common stock underlying
warrants.
|
|
(91)
Includes 125,000 shares of common stock underlying
warrants.
|
|
(92)
Includes 75,000 shares of common stock underlying
warrants.
|
|
(93)
Includes 125,000 shares of common stock underlying
warrants.
|
|
(94)
Includes 31,250 shares of common stock underlying
warrants.
|
|
(95)
Includes 25,000 shares of common stock underlying
warrants.
|
|
(96)
Includes 25,000 shares of common stock underlying
warrants.
|
|
(97)
Includes 188,750 shares of common stock underlying
warrants.
|
|
(98)
Includes 193,750 shares of common stock underlying
warrants.
|
|
(99)
Includes 31,250 shares of common stock underlying
warrants.
|
|
(100)
Includes 12,500 shares of common stock underlying
warrants.
|
|
(101) Includes
773,125 shares of common stock underlying warrants. Kenneth Ari
Weinstein
acquired 98,125 shares of common stock underlying warrants for
placement
agent activities.
|
|
(102)
Maitland Cates and Jason Chapnik exercise voting and dispositive
power
over all of the shares beneficially owned by Infogroup Ltd. Includes
31,250 shares of common stock underlying
warrants.
|
47
|
(103)
David Ades exercises voting and dispositive power over all of the
shares
beneficially owned by Powdersmart.com SRL. Includes 125,000 shares
of
common stock underlying warrants.
|
|
(104)
Derek H.L. Buntain exercises voting and dispositive power over all
of the
shares beneficially owned by Balmoral Holdings Ltd. Includes 281,250
shares of common stock underlying
warrants.
|
|
(105)
Bruce Gornitsky exercises voting and dispositive power over all of
the
shares beneficially owned by Danjor Holdings Inc. Includes 125,000
shares
of common stock underlying
warrants.
|
|
(106)
Includes 125,000 shares of common stock underlying
warrants.
|
|
(107)
Includes 25,000 shares of common stock underlying
warrants.
|
|
(108)
David Elkington exercises voting and dispositive power over all of
the
shares beneficially owned by Luke
Frazier.
|
|
(109)
Dundee Securities Corp. ITF Quest Securities Acct #862854A acquired
875,000 shares of common stock underlying warrants for placement
agent
activities. Robert Pollock has the power to vote and dispose of
the
Calibre Energy common stock owned by Dundee Securities Corp. ITF
Quest
Securities Acct #862854A.
|
|
(110)
Mario Staggl exercises voting and dispositive power over all of
the shares
beneficially owned by Kystie Finance Ltd. Kystie Finance Ltd.
acquired 684,150 shares of common stock underlying warrants for
placement agent activities.
|
|
(111)
Susan Tobin acquired 199,250 shares of common stock underlying
warrants
for placement agent activities.
|
|
(112)
Steve Graff acquired 8,000 shares of common stock underlying
warrants.
|
|
(113)
Ritchie Epstein acquired 13,100 shares of common stock underlying
warrants
for placement agent
activities.
|
|
(114)
Gerry Tissenbaum acquired 49,000 shares of common stock underlying
warrants.
|
|
(115)
Steve Blustein 2,000 shares of common stock underlying
warrants.
|
|
(116)
NBCN Clearing ITF NA081-E acquired 175,000 shares of common stock
underlying warrants for placement agent activities. Glenn Pountney
has the
power to vote and dispose of the Calibre Energy common stock owned
by NBCN
Clearing ITF 4N-A081-E.
|
|
(117)
Antonio Merulla exercises voting and dispositive power over all of
the
shares beneficially owned by 3813983 Canada Inc. Includes 25,000
shares of
common stock underlying warrants.
|
|
(118)
David Brady, George Brady, Douglas Brady, Paul Brady, and Lara Brady
exercise voting and dispositive power over all of the shares beneficially
owned by Alcina Corporation. Includes 25,000 shares of common stock
underlying warrants.
|
|
(119)
Includes 37,500 shares of common stock underlying
warrants.
|
|
(120)
Bob Richardson acquired 22,000 shares of common stock underlying
warrants for placement agent
activities.
|
|
(121)
Includes 10,000 shares of common stock underlying
warrants.
|
|
(122)
Danny Guy and Brad White exercise voting and dispositive power over
all of
the shares beneficially owned by T Finn & Co. Includes 1,500,000
shares of common stock underlying
warrants.
|
|
(123)
Brad White and Brian Trenholm exercise voting and dispositive power
over
all of the shares beneficially owned by UBS AG. Includes 250,000
shares of
common stock underlying warrants.
|
|
(124)
Includes 4,250 shares of common stock underlying
warrants.
|
48
|
(125)
Includes 25,000 shares of common stock underlying
warrants.
|
|
(126)
Includes 2,500 shares of common stock underlying
warrants.
|
|
(127)
Includes 4,000 shares of common stock underlying
warrants.
|
|
(128)
Includes 8,000 shares of common stock underlying
warrants.
|
|
(129)
Includes 50,000 shares of common stock underlying
warrants.
|
|
(130)
Includes 12,500 shares of common stock underlying
warrants.
|
|
(131)
Includes 2,500 shares of common stock underlying
warrants.
|
|
(132)
Includes 8,750 shares of common stock underlying warrants. Jim
Phillips
acquired 7,850 shares of common stock underlying warrants for placement
agent activities.
|
|
(133)
Includes 5,000 shares of common stock underlying
warrants.
|
|
(134)
Includes 50,000 shares of common stock underlying
warrants.
|
|
(135)
Includes 5,000 shares of common stock underlying
warrants.
|
|
(136)
Includes 100,000 shares of common stock underlying
warrants.
|
|
(137)
Includes 50,000 shares of common stock underlying
warrants.
|
|
(138)
David Jackson and Peter Rebmann exercise voting and dispositive power
over
all of the shares beneficially owned by Kodiak Metals LLC. Includes
250,000 shares of common stock underlying
warrants.
|
|
(139)
Ilias Kaperonis exercises voting and dispositive power over all of
the
shares beneficially owned by L.S.J. Includes 50,000 shares of common
stock
underlying warrants.
|
|
(140)
Includes 25,000 shares of common stock underlying
warrants.
|
|
(141)
Includes 50,000 shares of common stock underlying
warrants.
|
|
(142)
Peter Rebmann acquired 25,000 shares of common stock underlying
warrants
for placement agent
activities.
|
|
(143)
Includes 18,750 shares of common stock underlying
warrants.
|
|
(144)
Includes 50,000 shares of common stock underlying
warrants.
|
|
(145)
Includes 10,000 shares of common stock underlying
warrants.
|
|
(146)
Includes 2,500 shares of common stock underlying
warrants.
|
|
(147)
Includes 12,500 shares of common stock underlying
warrants.
|
|
(148)
Includes 220,000 shares of common stock underlying
warrants.
|
|
(149)
Includes 25,000 shares of common stock underlying
warrants.
|
|
(150)
Includes 15,000 shares of common stock underlying
warrants.
|
|
(151)
Philippe Jabre exercises voting and dispositive power over all of
the
shares beneficially owned by ING Bank S.A. Includes 1,250,000 shares
of
common stock underlying warrants.
|
|
(152)
Includes 10,000 shares of common stock underlying
warrants.
|
|
(153)
Includes 2,500 shares of common stock underlying
warrants.
|
49
|
(154)
Includes 5,000 shares of common stock underlying
warrants.
|
|
(155)
Includes 2,500 shares of common stock underlying
warrants.
|
|
(156)
Noam Gottesman, Pierre Lagrange, and Emmanuel Roman exercise voting
and
dispositive power over all of the shares beneficially owned by GLG
North
American Opportunity Fund. Includes 1,250,000 shares of common stock
underlying warrants.
|
|
(157)
Glenn Hunt and Richard Hunnig exercise voting and dispositive power
over
all of the shares beneficially owned by JMM Trading LP. Includes
50,000
shares of common stock underlying
warrants.
|
|
(158)
Dudley R. Cottingham, S. Arthur Morris, Colin G. Hames, R. Craig
Christensen, June I. Morris, and Christopher C. Morris exercise voting
and
dispositive power over all of the shares beneficially owned by Continental
Trust Corporation Ltd. Includes 50,000 shares of common stock underlying
warrants.
|
|
(159)
Inversiones y Negocios Estrategicos SA acquired 125,000 shares of
common stock underlying warrants for placement agent activities.
Malcolm P. Burke has the power to vote and dispose of the Calibre
Energy
common stock owned by Inversiones y Negocios Estrategicos SA.
|
|
(160)
Includes 750,000 options that are vested with an exercise price of
$0.05.
|
| (161) Marc Wilchesky exercises voting and dispositive power over all of the sahres beneficially owned by 2829916 Canada Inc. |
| (162) Bruce Bronfman exercises voting and dispositive power over all of the shares beneficially owned by Mida Investments. |