Posted: Wednesday Jul 6 8:47:53AM 2016
I sold shortly after my last post. Drank way too much Koolaid for way too long. :(
Posted: Monday Jul 4 9:01:14AM 2016
Gave up on QXP.v today. Drank the Kool Aid a few weeks ago at the Small Cap Conference. Projecting 3,000 boepd at 6/30/16 and 6,000boepd by 12/31/16. But no announcements of either financing, acquisition or drilling. Doubt they made anything close to 3,000 and 6,000 looks like the moon. Gold and silver are booming. Will take my lumps and use the remaining money to buy more gold and silver stocks.
Posted: Thursday Jun 2 6:53:28AM 2016
Well, audited financials were a disaster. They had negative cash flow for the year and formally have a huge working capital deficit.
What I found particularly disturbing was the disconnect between the Operating Expenses from the nine months reported in Q3 and the year-end numbers. Digging in the MD&A, they state "Total expenditures included production and operating expenses for the year ended December 31, 2015 of $10,977,810 of which $2,730,069 where nonreoccurring operating and capital expenses that were not recovered from partners". In addition to that $2,730,069 not recovered from partners, they claim an additional charge of Impairment in accrued receivables of $2,327,139. So a total of more than $5 million in money people owed them but could not pay, because all their partners are on sinking ships, or figure they should not toss their money onto a sinking ship.
IMO, these two items should have been considered material information that should have been disclosed months ago.
Posted: Wednesday May 25 6:54:19AM 2016
CALGARY, Alberta, May 24, 2016 (GLOBE NEWSWIRE) -- Quattro Exploration and Production Ltd. (the "Corporation") (QXP.V) provides an update regarding the filing of its financial statements and corresponding management discussion and analysis for the year ended December 31, 2015 (the "Financial Statements"). As noted in the Company's press release dated May 4, 2016, the Company was unable to file the Financial Statements prior to the filing deadline of April 29, 2016 and at the request of the Company, Management Cease Trade Orders applicable to Leonard Van Betuw, President and Chief Executive Officer of the Company, Stacey LePla-Martin, Chief Financial Officer of the Company, and the Company’s directors were issued by applicable securities commissions in accordance National Policy 12-203. As noted previously, Quattro was unable to file the Financial Statements prior to the aforementioned filing deadline due to the fact that it had experienced delays in the receipt of its 2015 reserves evaluation from its independent reserves evaluator and the need for additional accounting information related to the acquisition of Quattro (SRD) Innovations Inc. (the wholly owned subsidiary of the Corporation) which occurred in December 2015.
Company management was able to receive the information necessary with respect to Quattro Innovations Inc. on May 20, 2016 and now has the necessary financial information required to complete the Financial Statements. Management expects that the Financial Statements will be completed and filed on or before May 30, 2016. Quattro further re-affirms that it intends to satisfy the provisions of the alternative information guidelines of National Policy 12-203 for so long as the default remains in effect.
Posted: Wednesday May 11 9:33:35PM 2016
I bought some shares today for .16. I talked to Leonard Van Betuw a couple days ago and was impressed with his answers. But as you point out, they have to execute now. The very optimistic presentation calls for a double in production, which in today's environment borders on outrageous. I asked him what happens if Canadian natural gas goes near zero because of pipeline charges and low demand from the US. Much of the increase is supposed to come from two Montney ngas wells. He said if prices for ngas don't recover, he will switch to drilling multiple low risk oil wells that produce 100bpd oil instead of 2,000boepd each for the two big gas wells. The ending production level at 12/16 might be closer to 4,000 boepd than 6,000 but the cashflow would be close because of the higher prices for oil.
I was concerned about how they are going to raise the money for drilling. He said they hope to raise the money in a non dilutive fashion fairly soon. We'll see if they can raise the necessary funds. He said the cost of drilling wells has dropped significantly and that has helped the well economics and reduced the amount of the needed raise.
I forgot to ask about the financials.
I asked about why they could drill wells in well known areas when others aren't. He said there are companies still drilling and mentioned several that I didn't write down. He also mentioned that the company's low debt levels is important to allowing them to drill when others can't or won't.
I especially like the financing angle that they have taken but as you say, it calls into question the value of the assets being purchased.
I am already a little underwater and expect the share price will keep dropping unless they can report increasing production and cashflow by year end. Financing first and then drill results.
Posted: Wednesday May 11 9:24:25AM 2016
Bob, I don't really have any questions that I have not already answered. I was more interested in the style/tone of any answers rather than the content. For me, this is presently a bagholder. The company seems to have enormous potential and seems to be trading at very reasonable prices. Here are my dilemmas:
-to my knowledge, the company has not drilled an exploration well in a year and half, the last one they drilled was a dud. On the plus side, holding back on risky exploration is exactly the correct thing to do in the present environment. On the minus side, there is no evidence to give me confidence on their ability to explore once the environment changes.
-the company came up with an innovative preferred share structure to make acquisitions. The preferred shares pay 3% and can convert to common shares at a common share price equivalent to $2/common share (company is presently trading at 16 cents). On the plus side, this is a very innovative way to pay for acquisitions when there is no cash and no equity currency. On the minus side, this seems like a gimmic. Whoever is taking these shares as payment either has nothing to lose by doing so (questioning the quality of the assets being bought), or is heavily discounting the face value of these preferred shares (questioning the true value of the assets being bought).
-the company continuously puts out unrealistic projections for future production rates. On the plus side, they have managed to increase production over the last year. On the minus side, I do not have a good sense of what they can realistically achieve.
-the company is late in reporting annual results two years in a row. Last year this resulted in a cease trade order.
-While I am far from an expert on the O&G business, they seem to be more than willing to acquire assets which look old and tired to me. They seem to be proficient at getting the most out of these assets, through workovers etc., but these assets seem to come with heavy asset retirement obligations which weigh down the balance sheet. Not sure what the end game is for this company if Guatemala does not pan out.
-on the plus side, they have heavy inside ownership, they seem to be careful about not giving away the company through spewing out common shares, they seem to be prudent about how they are growing their business, they seem to be positioning themselves for high impact growth in Guatemala. They claim they have a huge drilling inventory.
-on the plus side, they have survived quite well in the last year and a half. They still seem to be generating cash, their debt level is still quite low, they have grown production. That speaks a lot for any management team in this environment.
Posted: Friday May 6 1:55:26PM 2016
no time for question and answers during presentation. I didn't ask any questions at the table but was definitely interested in researching some more after the presentation. IF they can pull off that big an increase and increase cashflow, they should attract some interest. Will try to call company after I get comfortable with presentation info and report.
Do you have specific questions? I take it you are a shareholder? Or is it bagholder?
Posted: Friday May 6 12:52:19PM 2016
Any impressions of Quattro from the small cap conference? Were there any hard questions asked and how were they answered? The PPT is all blue sky, 3000 boepd by June, 6000 boepd by December... Was disappointed that once again they could not meet their filing deadline.