By Tom Winnifrith, The Sheriff of AIM | Sunday 26 June 2016
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.
The excitement which caused the Bulletin Board Morons to cream themselves as they bought shares in Highlands (HNR) at a mammoth premium to NAV was caused by speculation about the DT Ultravert deal. Perhaps it is time for a history lesson. Kerboom!
The DT deal was a related party deal in that the owners of DT were Highlands CEO Robert Price and Highlands boffin Paul Mendell. Highlands issued stacks of shares and warrants to DT - which we assume it sold - even though it was only a start up. But we are told Mendell had been working on his IP for some time. I should cocoa.
I now bring you a document from 2001 in which Mendell tried to raise cash from other folks to support a company with a new technology for extracting oil. Sound familiar?
You can view the SEC filing HERE.
Ooooooh er missus, do the health warnings look big to you?
It appears that this POS did not make it onto Nasdaq - the next time one can find it on google is when a Nasdaq listed enterprise NuWay bought Mendell Energy in an all share deal in early 2002 - the release is HERE. Now look at what it says about Mendell Energy:
Mendell Energy is a highly specialized oil & gas exploration firm located in Denver, Colorado. Mendell looks for large reserves of oil and gas in unconventional ways. The Company's major asset consists of approximately 95,000 acres of leases in Hill County, Montana. The company recently made a discovery of natural gas on these leases; the newly discovered field is called Atlantis. Mendell owns a 40% interest in the project along with its joint-venture partners including Stealth Oil & Gas, Inc. (Houston).
Atlantis is regionally located near two giant gas fields; Medicine Hat Field in Alberta, Canada (estimated reserves of 9 trillion cubic feet of gas or TCF) and Tiger Ridge Field in Montana (estimated reserves of 1 TCF). Mendell Energy Technologies recently built a 3-mile gathering line that connects into Havre Pipeline Company, (a subsidiary of Ocean Energy NYSE: OEI). Atlantis holds potentially vast reserves of biogenic methane gas at shallow depths between 900-1400 ft.
NuWay welcomes Kyle Swingle, who will become the company's Chief of Engineering....
Says Mr. Swingle, "I am excited about Mendell's (NuWay) technological approach to extract oil & gas and look forward to the challenges ahead."
Atlantis holds potentially giant reserves of natural gas according to the Chairman of Mendell Energy Technologies, Paul Mendell, "Our scientific concept with respect to Atlantis is unique and compelling. We are definitely on the edge of a major breakthrough regarding how our industry understands the role that hydrodynamics play in the trapping of hydrocarbons."
Yeah right on Paul baby how is that Atlantis with its vast reserves hanging now fourteen years later? Surely with all your breakthroughs and those vast reserves and those two mega producers either side its a cash cow? Er...
Check out the Iofina (IOF) website here. Hey who was a co founder of that AIM Disaster story? None other than Paul Mendell. What a small world. Anyhow fourteen years down the track and Atlantis really does not seem to be producing yet. Maybe it needs some technology input from DT Ultravert?
So what happened to NuWay? God only knows? As it happens it was once a casino business, after Mendell it seems to have gone into health. It is just one of those shite little Nasdaq small caps that needs a "story" for a promote to issue equity to keep paying the promoters. Mendell was one such story.
One thing we do know is that NuWay was involved in fraud big time even back in 2002, the year it hooked up with Mendell Energy though naturally there is no suggestion that Mr Mendell himself was involved. But this article from Forbes HERE on serial fraudster Mark Roy Anderson is an illuminating hoot.
On the basis of all of this I think we can safely say that anyone owning shares in Highlands on the basis of DT Ultravert excitement is bonkers. Fair value for the shares is sub cash, the stock is a storming sell and stinks to high heaven.
Never miss a story.
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