O/S 64,502,781 as of August 1, 2007
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Insider Owner****p
Insiders own at least 50% of the O/S... Float is Tiny, that is why it
moves so easy
http://yahoo.brand.edgar-online.com/fetchFilingFrameset.aspx?FilingID=5219126&Type=HTML
(GRANT MAXWELL DONALD 22,030,253 shares)
http://yahoo.brand.edgar-online.com/fetchFilingFrameset.aspx?FilingID=5135974&Type=HTML
(GORDON ROBERT WILLIAM 5,484,800 shares)
http://yahoo.brand.edgar-online.com/fetchFilingFrameset.aspx?FilingID=5126915&Type=HTML
(FISCHER BRADLEY W 3,037,751)
http://yahoo.brand.edgar-online.com/fetchFilingFrameset.aspx?FilingID=5126928&Type=HTML
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Acquisition of Caldwell Oil and Gas Assets
On April 16, 2007, we closed the acquisition of assets from Caldwell,
consisting of 48 mineral leases with 631 wells, of which approximately
100 are producing wells and 531 inactive well bores equipped with
necessary production equipment, and related operating facilities and
equipment including an office warehouse facility, ten pickup trucks,
three pulling rigs, a backhoe, a winch and a water truck. The purchase
price for the mineral leases was $5,000,000, and for the equipment
$291,000.
The oil and natural gas leases purchased are on approximately 8,000
acres in Gray and Carson Counties, Texas, with a well spacing of 10
acres, and are in the Panhandle Field, discovered in 1920. This field
produces from Pennsylvanian and Permian age granite wash and brown
dolomite. The field covers 200,000 acres in eight Texas counties.
Three Months Ended September 30, 2007 Compared to Three Months Ended
September 30, 2006
We had no production operations in calendar year 2006. Our oil
production operations began April 16th, 2007 with an effective date of
April 1st, 2007. During the three month period ending September 30th,
2007 we produced and sold 9,131 barrels of oil and produced and sold
23,689 mcf gas, generating $1,048,032 revenues after royalties, with a
one month lag in receipt of revenues for the prior months sales. Start
up expenditures, included debt origination expenditures, and the
required prepaid hedge were $251,456. We had 84 wells actually
producing oil and gas on April 16th and restored an additional 82
wells by September 30th.
Our primary focus is will be to operate our properties and to restore
10-20 wells per month to production. A typical well restoration we
estimate will cost $2,500 to $5,000. To supplement our growth, we may
also consider mergers and acquisitions, although we have no
acquisitions contemplated or under discussion at this time.
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Appointment of Officers and Election of Directors
Effective October 16, 2007, Mr. Thomas H. Grantham was appointed as
our President and Chief Financial Officer.
Mr. Grantham, age 59, is a Certified Public Accountant and received
his BAA degree in accounting from West Texas A&M University. Mr.
Grantham has extensive oil and gas experience, for the past two years
having managed a four-lease, 18-well neighboring property in Gray
County Texas. After working for Peat Marwick Mitchell, a major
accounting firm and a large firm in the financial services sector, Mr.
Grantham, for the past 21 years, has been a partner in Grantham, Cory
and Hare, P.C., Pampa, Texas, a full-service accounting firm.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Peter Harris, age 54, has a Bachelor of Business Administration degree
from the Royal Melbourne Institute of Technology University and is
completing his Master's of Business Administration at the same
university. He is Executive Director of the Uranium Club of Australia,
a member of the Advertising Federation of Australia and has been a
director of Recycle (Australia) since 1996. He is currently overseeing
the planning and implementation of exploration for metals under an
exploration license issued by Minerals Tasmania, the minerals arm of
the Tasmanian Government in Australia, and is currently in charge of
strategy and development for a Melbourne-based investor relations firm
specializing in publicly-traded oil and gas companies.
Effective May 23, 2007, Mr. Maxwell Grant was appointed as our
Chairman and a director of the Company to fill a vacancy on the Board.
Maxwell Grant, 69, whose company, Koala Pictures, is Chancellor's
largest shareholder, has a business degree and a journalism diploma in
1960 from Melbourne University. A former international journalist and
university lecturer in the early 1960's in labor relations at Monash
University, Melbourne, his New York-published novels have been
translated into several languages. His wide range of interests include
TV and film production, film financing and more recently oil and gas.
For the last three years, Mr. Grant has primarily concentrated on
locating a suitable acquisition for the Company and worked on several
other film and investment projects. He co-founded in the late 1990's
and was a 19% shareholder of Majestic Film Management Limited,
Melbourne, Australia, which raised several million dollars for
international feature films for Village Roadshow Pictures. The film
JOEY, which he conceived and on which he was Associate Producer, was
sold internationally to MGM. Mr. Grant devoted his time and efforts to
locate for Chancellor its recently-acquired producing oil and gas
property, which was purchased from Caldwell Production Company, in
Texas. He participated in negotiations on behalf of the Company for
the purchase of the property and identified the sources of financing
for the Company to complete the acquisition.
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Oil and Gas Reserves estimate:
http://img172.imageshack.us/img172/2226/engineeringre****tkr9.gif
Chart:
http://stockcharts.com/c-sc/sc?s=chag&p=D&yr=0&mn=3&dy=0&i=p200543049...
2008 Cash Flow Projections:
http://img507.imageshack.us/img507/3897/2008cashflowvh4.gif
First off it's BK and trades on the greys for now, so if you can't
look past that then forget about it...
Pros:
1. Tight O/S(65 million) with insiders owning almost 50%
2. Producing oil and gas play(Company purchased an oil field in April
2007 that had fallen on bad times and had run out of cash, purchase
price of $5 million, a total steal!)
3. Reserves of over $200 million at current oil and gas prices
4. Via BK Court docs we now have an updated shareholder list, an
estimated reserves re****t, 2008 cash flows and a BK exit plan that
clearly states commons "3.07. Class Seven. The equity security holders
of common stock in Chancellor Group,
Inc. shall retain all of their owner****p interest."
5. Company is re****ting and 2007's 10K is due out before the end of
the month
6. New CEO Tom is very down to earth and easy to talk to, he is also
an accountant who is from the same area CHAG is located. Also the
largest shareholder Maxwell Grant(Chairman) is a real tightass and
likes the low share structure and the 22 million shares he owns...
7. Company is not diluting but would like to do a small PP upon
uplisting, uplisting to the OTC should happen ASAP after the BK
exit...
8. Last 10Q Three Months Ended September 30, 2007 Compared to Three
Months Ended September 30, 2006
We had no production operations in calendar year 2006. Our oil
production operations began April 16th, 2007 with an effective date of
April 1st, 2007. During the three month period ending September 30th,
2007 we produced and sold 9,131 barrels of oil and produced and sold
23,689 mcf gas, generating $1,048,032 revenues after royalties, with a
one month lag in receipt of revenues for the prior months sales. Start
up expenditures, included debt origination expenditures, and the
required prepaid hedge were $251,456. We had 84 wells actually
producing oil and gas on April 16th and restored an additional 82
wells by September 30th.
9. I have not been able to find one seriously producing O&G company
that trades for anywhere near the $6 million Market Cap CHAG currently
trades
10. CEO Tom is hoping the BK exit will happen as early as May or as
late as September.
Cons: in bankruptcy reorganization currently, and trades on the grey
sheets
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Why she is BK and Grey...
CHAG brought in a big name CEO Brad Fischer in April who used to run
CMS(multibillion $ oil company that he ran from 1997-2002) Of course
Brad got into it with the largest shareholder and Chairman of the BOD
Maxwell Grant about spending issues, which led to the Brad's
resignation in October of 2007... CEO's departure also caused the BK,
when the CEO resigned unfortunately the two loans we took out for the
purchase of the feilds had stipulations that the CEO stay put, of
course the banks called the loans in, not because we couldn't make the
payments but because of the CEO's resignation. We went Ch 11 in Nov
2007. CHAG has been trading on the Grey's since 2001 when the company
turned into a shell.
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