American Energy Development Corp. company history: the story so far

History

A shell-like company tried to build oil and gas positions in Michigan and the UK, funded by share issues, then handed back its Michigan prospect and stopped SEC reporting in 2013.

2011: Michigan and a UK option

The company, then called LJM Energy Corp. and later American Energy Development Corp., began 2011 with Oklahoma working interests and little else. In June it bought leases and seismic data (underground survey images) in Ingham County, Michigan, from Range Michigan LLC for 400,000 shares. It agreed to a 30-for-1 forward share split, to drill three required wells in the Dansville Prospect, and to pay about 70% of costs for a 43.75% interest. It also paid a $100,000 fee for an option on three more prospects. The filing said the company no longer believed it was a shell company.

In September it agreed to buy Reservoir Resources Limited, holder of a UK exploration licence, for 12,500,000 new shares. It also set its Magnolia Prospect working interest at 1.4% and pushed its deadline to join the Range wells to July 1, 2012.

In October it signed an agreement to sell up to $7,800,000 of stock with warrants over two years, at its own option. It drew $200,000 straight away, selling 500,000 shares at $0.40. As a condition, CFO Joel Felix cancelled 85,000,000 of his shares, leaving 86,667,100. Drilling began on the Brown #2-12 well at Dansville.

2012: Expansion in the UK and Michigan

On March 12, 2012 the UK purchase closed. Reservoir held, through another company, a 95% share of licence PEDL236, a 24,700 acre block in the Weald Basin, plus 2D seismic data. The company had to start drilling a 400 metre well by December 31, 2012, or the seller could cancel the deal and take the company back, keeping 6,250,000 of the shares. A 2.5% royalty went to the seller.

Funding continued through the facility. On March 20 the company drew $1,000,000, issuing 1,282,052 shares at $0.78 with warrants at $0.94. Year-end shares rose to 101,752,506, reflecting these issues, including the UK shares.

In June it took a 43.75% interest in Range's White-tail Prospect, about 4,000 acres in northern Michigan, paying $87,500 in cash and 476,191 shares. It also took on up to $200,000 of seismic survey costs.

2013: Retreat

On February 5, 2013 the company handed its White-tail interest back to Range for $10, effective January 22, and ended the agreements. The filing gave non-payment of seismic costs as the reason. It did not say what happened to the cash and shares already paid.

Shares stood at 102,331,448 at the end of 2013. In December 2013 the company suspended its duty to file periodic reports with the SEC. The record shows no drilling results or UK well start.

Written from the 9 story beats below (2011 to 5 Dec 2013), which come from the company's own announcements and filings.

Beat by beat

The events that changed the company's story, in plain English, each written against everything known about the company at the time. The dot shows whether it was good, bad or neutral for shareholders.

shares on issue market cap (log scale)

2013102m shares · US$4.1m market cap

5 Dec
American Energy Development Corp. suspended its duty to file periodic reports with the SEC.
listing compliance notice
102m shUS$4.1m
6 Feb
On February 5, 2013 the company gave back its entire 43.75% working interest in the White-tail Prospect to Range Michigan for $10, effective January 22, 2013, and terminated the June 2012 lease acquisition and operating agreements. The filing states the reason as the company's non-payment of seismic program costs, and no material early termination penalties. This ends the White-tail deal from June 2012; the shares and cash already paid are not addressed in the filing.
asset acquisition disposition
102m shUS$10.2m

2012101m shares · US$47.7m market cap

21 June
On June 15, 2012 the company acquired a 43.75% working interest in Range Michigan's leases on the White-tail Prospect (about 4,000 acres in northern Michigan), with Range as operator. It paid $87,500 cash (paid March 20, 2012) plus 476,191 shares valued at $200,000 ($0.42 each), and agreed to pay 100% of the cost of a 3D seismic survey up to $200,000. This is a new Range deal beyond the Dansville prospect; the seismic payment obligation is a new commitment.
asset acquisition disposition
101m shUS$47.7m
22 Mar
On March 20, 2012 the company drew $1,000,000 under the October 2011 Securities Purchase Agreement, issuing 1,282,052 shares at $0.78 plus 1,282,052 five-year warrants exercisable at $0.94. This is the first drawdown reported since the initial $200,000 and is a larger one, and it dilutes existing holders.
capital raising announcement
87.3m shUS$84.7m
16 Mar
The company closed its purchase of Reservoir Resources Limited from Pepper Canister Nominees Limited on March 12, 2012, paying 12,500,000 new shares. Reservoir holds, through Fairfax Shelfco 307, a 95% share in UK licence PEDL236 (a 24,700 acre block in the Weald Basin) plus 2D seismic data. This completes the UK deal announced in September 2011. The company must spud a 400 meter well by December 31, 2012 (extendable to March 13, 2013 for force majeure), or the seller can cancel the deal and take back the company, keeping 6,250,000 shares and returning 6,250,000 for cancellation. A 2.5% overriding royalty to the seller is also agreed. The press release says the UK regulator (DECC) gave assurance it does not intend to revoke the license, and that the first well is planned for the second half of 2012. The share issue dilutes existing holders.
asset acquisition disposition
87.3m shUS$84.7m

2011171m shares

7 Oct
The company signed an agreement letting it sell up to $7,800,000 of stock with warrants to an investor over two years at the higher of $0.40 or 80% of the recent average price, at its own option and subject to the investor accepting its use of proceeds. It drew $200,000 immediately (500,000 shares at $0.40 plus warrants at $0.48), and as a condition Joel Felix agreed to cancel 85,000,000 of his shares, leaving 86,667,100 shares outstanding. A press release also said drilling began on the Brown #2-12 well at the Dansville prospect, the first of the wells under the Range deal.
capital raising announcement
171m sh
22 Sept
The company set its working interest in the Magnolia Prospect at 1.4% under an agreement with operator Crown Energy Company, tied to payments earlier made via Mid-OK Energy Partners. It also extended its deadline to join the Range Michigan wells from December 31, 2011 to July 1, 2012, and agreed that Range can withhold the first $100,000 of production proceeds from the first well to cover the option fee (otherwise due by early 2012). It appointed Des Oswald as an advisor for $900 per meeting and 90,000 vesting shares. The Range extension continues the June 2011 Michigan deal.
capital raising announcement
171167.10bn sh
20 Sept
American Energy Development Corp. agreed to buy Reservoir Resources Limited from Pepper Canister Nominees Limited, which holds an oil and gas exploration license in the United Kingdom, for 12,500,000 new shares. Closing happens 10 days after the UK Department of Energy and Climate Change (the filing writes 'Control') agrees not to revoke the license; the company must spud a well of at least 400 meters by December 31, 2012 or the seller can cancel the deal and keep 50% of the shares, and the seller also gets a 2.5% overriding royalty. This adds a UK exploration asset alongside the Michigan acreage and would dilute existing holders by the shares issued.
material agreement
171167.10bn sh
20 June
The company, then named LJM Energy Corp. (the name in this filing; later American Energy Development Corp.), bought interests in oil and gas leases and seismic data in Ingham County, Michigan from Range Michigan LLC for 400,000 shares of its common stock. It must also do a 30-for-1 forward stock split within 30 days, drill three required wells in the Dansville Prospect by December 31, 2011 (paying about 70% of costs, for a 43.75% interest), and paid for an option on three further prospects ($100,000 option fee). The filing says the company no longer believes it is a shell company, citing these deals plus its Oklahoma working interests.
asset acquisition disposition