NEW ORLEANS, Nov. 11, 2014 /PRNewswire/ -- TREATY Energy Corporation (OTCQB: TECO), a growth-oriented energy company in the oil and gas industry, today reported that Chris D. Tesarski, its Executive Chairman and CEO, is pleased to distribute via this release a "Letter of Progress to Shareholders" regarding the company's Belize project and the previously announced "Colorado Acquisition" and other pertinent developments.
Letter of Progress to Shareholders:
The Board of Directors and Management of TREATY Energy Corporation (TECO) wish to make the following announcement with regard to the News Release of August 29, 2014, which stated the following:
"September 1, 2014 marks the beginning of a new chapter in the history of TREATY Energy"
Indeed it has. We wish to inform our shareholders of material changes to the company which will take place over the coming months which will allow TREATY to embark on a definitive and decisive plan forward that will in fact transform TREATY into an energy company of significance and credibility focused squarely on the tremendous opportunities that lie ahead of us, while decisively, vigorously and systematically dealing with certain legacy issues which have affected and continue to affect the company's operations.
With respect to the company's operations in Belize:
We wish to inform our shareholders that the Board of Directors has just completed an exhaustive and extensive tour of Belize and all of the company's activity in that country. We believe that it is time for the shareholders to know the truth about TREATY's endeavors there.
Firstly, Belize is a land of incredible diversity as well as opportunity in which TREATY failed to execute on many fronts. In January 2014 TREATY management performed, without reporting to shareholders, the abandonment of Belize and its opportunity platform when it assigned all of its assets to the Hackmeyer Real Estate Group in a "blanket security agreement" as collateral against funds which the Hackmeyer Group had loaned to TREATY for ironically, development in Belize, as well as some of the company's endeavors in Texas. We believe this was misguided. Clearly at that time TREATY was not able to execute on extensive opportunities available to the company to provide shareholders the ultimate return on investment that was and is indeed possible.
We are very concerned about the information leaked via "posts" on PUBLIC Bulletin Board systems;
These posts contained insider information about management involvement in Belize. They contained false information about former consultants being involved in activities on said trip. Misleading statements regarding TREATY's ownership and title to said interests and deliberate misinformation about contractual discussions and outcomes of said discussions.
We wish to inform all of our shareholders that regardless of how the fact that information regarding a trip to Belize had occurred and would have managed to slip out, most of the comments and accusations in these 'posts' are patently false. We wish to reassure our shareholders that a formal investigation has been launched. The timing of such posts on Friday, right before, by common knowledge, a major Press Release was to occur is suspect to say the least. TREATY is changing and regardless of the criticisms leveled at the company in the past, often as we will point out, for valid reasons, future events will expose the true motivation behind these attacks against the company and our stock.
Let us now lay out the facts:
- TREATY owes a debt of gratitude to our colleagues in Belize for ENSURING the safe storage and periodic maintenance of the equipment in Belize thereby allowing TREATY the opportunity to realize value on said assets. We will release pictures of the assets on our website and link to the FACEBOOK page;
- The Hackmeyer Group was fully aware of our trip to Belize and in fact fully sanctioned it occurring. The Princess Group in Belize was fully apprised of all details surrounding said agreement with the Hackmeyer Group and an agreement in principle was struck between all parties which is to be ratified subject to review by each party's respective legal counsel within 14 days;
- TREATY has received an EXPRESSION OF INTEREST with regard to sale of said equipment to a company with opportunities in the region;
- The Hackmeyer Group has agreed and TREATY has agreed to ensure that all parties in Belize are satisfied that they have been fairly compensated for all debts outstanding in the country from the sale of any of the drilling assets which remain;
- These debts include outstanding funds owing to various governmental agencies, which have a vested interest in ensuring that FULL jurisdictional assessment has been applied to TREATY and its ownership of said assets. We are thankful that even though unfortunately, there are outstanding issues relating to the relationship with the government, such issues will now be resolved subsequent to the repayment of all debts, BUT that TITLE AND OWNERSHIP to said assets is not one of those issues. TREATY is fully responsible for any and all issues it "left behind" in Belize as there is no doubt in the minds of officials that the company is in fact the sole owner of the assets after much due diligence;
- Our shareholders should rest assured that any contrary claims as have been shown above are able, by law, to be brought to bear within our Civil Court system. The company will vigorously defend our position as to our claims of ownership as to ALL documentation WE HAVE IN OUR POSSESSION that we have willingly and without hesitation provided and will continue to provide if requested. The leadership of TREATY has no patience for allegations with respect to our claim of ownership of said assets, and also no patience for the actions of any individuals who may have given rise to this unfortunate distraction for our shareholders. We trust that our position is clear and do not wish for any litigation to occur, but understand that we stand ready to defend the company if such an event occurs and will ensure that in all matters regarding this issue, justice is served;
- Upon sale of the assets, the Hackmeyer Group has agreed to remove any encumbrance to the sale of said assets by allowing the lien to be removed and proceeds to flow into escrow and then be distributed satisfactorily to all parties in Belize and allow funds to be used as a deposit on TREATY's "Colorado Acquisition" which will be further described below;
- The remaining "field service" equipment will form an opportunity platform in Central America for CORESOURCE STRATEGIES, an affiliated oilfield service company to be more fully described in the next 30 days.
What does the trip to Belize mean for TREATY and our shareholders?
- TREATY IS ABLE to convert (sell) the equipment, that was left in a less than favorable environment for such equipment, into CASH;
- With this cash, TREATY IS ABLE to retire MATERIALLY SIGNIFICANT debt with two of the company's largest creditors;
- With the retirement of the debt, TREATY IS ABLE to secure money required for the planned Colorado acquisition and operational plan for the Company.
With respect to the announced transaction in Colorado:
- TREATY is intending to close on this transaction by DECEMBER 15, 2014. The metrics for the transaction have substantially changed;
- The average daily production of the wells in the acquisition package is approximately 200 BOEPD;
- Net revenues are expected to be approximately $150-200,000 per month depending on the commodity pricing over the next 60 days, while new wells are being brought on stream. We remain confident we will reach the high end of projected revenue early in Q1-2015 and grow from there as 2015 drilling continues;
- The effective date at closing has been negotiated to June 1, 2014, and thus TREATY will receive the benefit of 5 months of cashflow that will be deducted from the purchase price of $5.78MM;
- In addition TREATY has entered into a Letter of Intent (LOI) with a separate but affiliated vendor to acquire a "royalty package" available to the company in this area which will significantly bolster the company's position in this exciting Colorado energy play;
- This is all part of a significant and aggressive financing campaign which has been able to attract to bring debt and equity into TREATY that will allow us to move beyond the hostilities which have been leveled against the company as highlighted earlier;
- TREATY has secured its first part of the financing which will come into the company on or before November 17, 2014
- As part of its commitment to its financing consortium to decisively alter the company's business activities TREATY is pleased to present to its shareholders the following material information as to the direction of the company in the coming months.
With respect to additional production:
- There has been significant discussion with respect to "getting production" on stream. While admirable it has become evident to TREATY and its financial advisors that the legacy left to current management has made it difficult to handle those "legacy issues" with cashflow generated from production under 150-200 BOPD, especially in light of the recent downturn in commodity prices;
- Today's capital markets require a commitment to growth through a mix of acquisition of strategic, conservative and CONSISTENT cashflow generating assets and lower risk infill and development drilling. The Colorado acquisition fits this model perfectly in light of recent operational strategy by the major producers who form our partner base;
- In addition THE PLAN laid out below has given our financing consortium confidence that if we proceed as outlined there will be immediate cashflow available to optimize our "existing" production base. This will generate the "rent money" TREATY needs every month to begin to gain credibility back as an organization, while building an opportunity platform for significant debt retirement and development capital from our larger cashflow to be generated from Colorado and some of the other acquisitions we are/will be pursuing as outlined below.
With respect to restructuring and renaming of the company:
TREATY, under the new management team, announces its "2,015 in 2015 Plan", meaning that we expect to utilize a series of strategic transactions to expand our production capacity to 2,015 barrels-equivalent per day and will diligently seek to accomplish this goal in the year 2015.
The methodology for achieving this goal began with the change-out of all previous officers and directors, all of whom have been replaced by action of the Board of Directors, and will be formally ratified by the company's shareholders at a Special Shareholder Meeting to be held in New Orleans, Louisiana in as soon as practical in 2015.
The proposed Board of Directors of the company will be composed of people with expertise in the areas most needed by TREATY: oil and gas operations, the marketing of energy goods and services, regulatory compliance and achievements in the business of both production and oilfield services. "TECO" will remain the ticker symbol, but the name will change to Trimerica Energy Corporation, recognizing that the company's horizons are expected to expand to include significant assets in Canada, the United States and Central America. At this very time, the company is in the process of executing significant agreements with entities in Canada, the United States and Central America which are anticipated to elevate production capacity and put oil field assets to work for the company, as previously reported to shareholders in the press release of August 29, 2014.
By the date of the Special Shareholder Meeting, these agreements will have been executed and the shareholders will be asked to ratify the Directors to be presented by "proxy" so that the Board of Directors can thereupon select and ratify the officers who will enthusiastically advance the "2,105 in 2015 Plan".
Additionally, a newly-created Oversight/Advisory Committee with independent members will be ratified by the Board to advise the Board on plans, transactions and matters involving interrelated parties as described above as well as major undertakings of the company. The initial Oversight/Advisory Committee will be chaired by Henry L. Klein, an attorney experienced in securities litigation, John Bushnell, a commercial real estate professional with over 30 years experience in mergers and acquisitions, selected by the company's largest group of shareholders in Salt Lake City, Utah, and Carl McCutcheon, a well-lettered Harvard business graduate with over $9 billion in business transactions to his credit and impressive expertise in the oilfield service technology, exploration and production, and consultation acumen.
In due course it is the goal of the company's new management team to increase production and services capabilities to a point which will make matriculation to the AMEX or the NASDAQ exchange a practical reality.
- In conjunction with the "2,015 in 2015 Plan", and the closing of its first round of significant financing, TREATY intends to present a definitive plan for the new capital structure of the Corporation by December 1, 2014, which will help ensure that TREATY has the ability to raise equity through the issuance of its common stock without raising its authorized shares;
- In light of the financing described earlier, TREATY will now proceed to not only get its filing compliant, but outsource ALL of its monthly accounting starting in fiscal year 2015 to a respected accounting firm to ensure that the compliance issues of the past are a distant memory. We will introduce to our shareholders a qualified CFO who is prepared to join the TECO team in January 2015 subsequent to the outstanding audits being completed;
- The company is also prepared to issue a series of PREFERRED SHARES to its current shareholders to be used to further its plan. We will utilize the company's email lists, website and social media presence to present the details to our shareholders by December 1, 2014.
We are striving to give you your company back. We will continue to show an unwavering commitment to that process. We regret that negativity is often pervasive, but we will not let that dissuade us from the path outlined herein and look forward to the day when we will see TECO rise as a credible, viable and financially sound energy producer.
TREATY Energy Corporation
About TREATY Energy Corporation
TREATY, an international energy company, is engaged in the acquisition, development and production of oil and natural gas. TREATY acquires and develops oil and gas leases which have "proven but undeveloped reserves" at the time of acquisition. These properties are not strategic to large exploration-oriented oil and gas companies. This strategy allows TREATY to develop and produce oil and natural gas with tremendously decreased risk, cost and time involved in traditional exploration.
TREATY Energy Corporation (TECO) trades on the OTC. Investors can find Real-Time quotes and market information for TREATY at http://www.otcmarkets.com/stock/TECO/quote
Statements herein express management's beliefs and expectations regarding future performance and are forward-looking and involve risks and uncertainties, including, but not limited to, raising working capital and securing other financing; responding to competition and rapidly changing technology; and other risks. These risks are detailed in the Company's filings with the Securities and Exchange Commission, including Forms 10-KSB, 10-QSB and 8-K. Actual results may differ materially from such forward-looking statements.
SOURCE TREATY Energy Corporation