|Date Published||November 14, 2013|
|Company||Stormhold Energy Ltd.|
|Article Author||Chadd Radke|
|Article Type||November 2013 Issue|
|Tags||Deeper Formation Exploration, Land Position, Shallow Zone Development|
I have always been a strong opinionated person to say the least, so in reading this, you may be offended. However, you may realize the truth behind the person, and possibly understand my position, as President/ CEO of Stormhold Energy Ltd. Leadership starts with full comprehension of what that specific term means as CEO and how you can employ it to protect the company and yourself.
Back in 2009, when Stormhold Energy Ltd. was founded, our small startup company emerged instantly as a major land holding entity in east central Alberta. At that time, our brilliant Premier Mr. Ed Stelmach, who held this title in Alberta from 2006 to 2011, raised the royalties that oil and gas producers would owe the government from producing wells. This strategy was an effort to capture more of the revenue that was being lost through the tax optimized energy trusts.
However, the energy producing establishment banded together to boycott the provinceâ€™s land sales in 2009 in an attempt to force a revision in the policy by depriving the government of any revenue from land sales.
Our story, which will certainly become part of Canadian history based on our land position, was outside of our partners in Calgary due to the fact we were not the â€œgumâ€ under the shoe of the so-called Calgary Oil Industry Leaders. We took the opportunity and ran with it, angering a lot of our colleagues and business associates along the way. Needless to say, I didnâ€™t give a crap due to my competitive nature and willingness to succeed.
At the time, Stormhold Energy Ltd. acquired 295 sections of mineral rights over 188,800 acres of prime resource opportunity. As of today, having released some 65 sections, Stormhold Energy Ltd. still holds over 230 sections and over 150,000 acres with 19 plus zones in the same area of Halkirk and Stettler, Alberta.
I have been asked many questions, and with hesitation, I have answered honestly and to the best of my ability. But frankly, I didnâ€™t care to answer or share our story until today, with outsiders.
In all honesty, I enjoy looking into the eyes of competitors who have over paid and have followed the so-called â€˜Industry Leadersâ€™ with deep pockets of Shareholder capital, who do not care whether they followed the corporate Governance or company policies.
Having said that, I have been asked and gracefully answered:
- Who raised $13.5 million?
- How could more oil exist right under the noses of the established major producers in an area that has had over 4,500 wells drilled and produced 900 million barrels of oil?
- How was this land position acquired without debt, banking relationships, and any external financial help?
- How could the price of our land position increase from $1.3 million in 2009 to todayâ€™s going rate of $300 plus million in 2013?
- How is it that a tiny company, with no banking relationships to speak of, could be in a position to become a medium sized oil and gas producer in such a short period of time?
Pondering whether to answer or not, I hesitate trying my best to make the person asking the question as nervous and uncomfortable as possible. This strategic approach as I call it, is to get the edge on our opponent and gain additional joint venture interest from the geologists, geophysicists, and CEOs who know everything there is to know in the area. At the same time, they look star struck while reviewing our technical data we have worked so hard to compile.
I believe companies should surround themselves with hardworking industry influences, dedicated professionals, and technical experts, which we have within our contract consulting personnel. Stormhold Energy Ltd. seized the opportunity to acquire a substantial land position in east central Alberta, even though we made a lot of people mad during the process of obtaining a great land package. We are amidst companies producing upwards of 100,000 BOED, such as crescent Point, Apache, Harvest Energy, Encana, Devon, PennWest and Husky to name a few.
Keep in mind, two of the above companies made us an offer we had to refuse due to the fact they requested all of our acreage and data at a price far below industry standard. That kind of deal was not in our best interest.
In 2010, we implemented a strategic drilling program targeting deeper formations based on years of technical data acquired and industry expert opinions. We think of ourselves as a â€˜deep playâ€™ with low hanging fruit â€“ low cost shallow Viking and Mannville targets as well. It is safe to say we have more technical data in the area than most, if not all, privately held companies of mutual interest.
Looking back, what was exciting for Stormhold Energy Ltd. at the time, turned into a challenge as our past partners did not meet the drilling obligations they committed to. As President and CEO, I had the harsh job to not only end the tarnished relationships with the joint venture partners, but I also had to inform our shareholders.
In one of the most challenging economic environments in decades, we acted swiftly and decisively to adjust our cost structure and working capital to market conditions, while continuing to invest in our future.
We did this to make sure we emerge as a stronger, well positioned company to capitalize on future economic growth, while at the same time raising additional capital to expedite our drilling program. The effects of our actions became increasingly visible as we dissolved our joint venture partnerships, which consolidated our land position.
Despite our efforts of advancing our business plan to produce from multiple zones potential and sell our assets, we ran into what I call a â€œminority challenged shareholder dispute.â€ Let me say this: everyone is an expert in business, but yet most donâ€™t have an entrepreneurial bone in their body, or they would have done what we did themselves years ago.
What frustrates me the most, is the lack of respect the work and dedication of taking our small company from $375.00 to the potential of $300 million has earned. Not to mention the $110 million offer to purchase the company outright, just months ago. I tell most, if not all, our critics to feel free going to the local Alberta Registries and give it a go on your own; I would be happy to invest in your opportunity and criticize every move you make.
These criticisms take away from our day to day activities and become a distraction at most. These experts who criticize daily, or even yearly during Annual General Meetings (AGM), donâ€™t realize the capital involved to battle constantly, nor the capital involved moving the company forward while fighting their stupidity.
At times, my response is simply: NO. The $20,000.00 you invested in 2010 is not still in our account and did not drill our first well. These experts seem to think our technical team and management seek only minimal compensation working 16 hour days and countless weekends to feed our families. They do not realize the dedicated man hours involved and the countless struggles it takes to increase the companyâ€™s position, while being rewarded with criticism.
That being said, we move forward and welcome more positive comments that assist our vision and mandate. Our team and legal counsel are second to none, and are truly dedicated professionals who always work in the best interest of all.
Today, Stormhold Energy Ltd. is a simpler and more agile company. compared to previous years, our position has strategically increased due to our ongoing technical data and resource development our team continuously calculates on a weekly and monthly basis.
We have tackled many hurdles without sacrificing our longer term strategic ambitions. We continued to invest in technical support and innovation that reassess our resources within our area of mutual interest. We continue to work with industry leaders and technical specialists who complement our position.
As a sign of confidence in our future, we have evaluated our large land position and continued to grow our resources. Our goal, which we have never strayed from, is to provide a sustainable company that brings the best value to our shareholders, while respecting our industry partners.
Our board and shareholders have set our mandate to develop and increase our asset base that will bring the upmost value to our team. Overcoming challenges in the oil and gas industry in Calgary, Alberta comes with rewards and frustration, yet determination prevails.
I enjoy the stresses of Calgary business, and I will always fight for what I believe in. Protecting our team from outside distractions weighs heavily on a person, yet a positive outcome is very rewarding. Our industry is damaged and corrupted to say the least, and I have experienced it firsthand. Please follow my column next month as I will touch on the Calgary elite oil and gas leaders, and how they influence market conditions and company stock transactions.