American Energy Development Corp.: announcements explained, share price

Announcements, explained

Each one in plain English, with the numbers worked through for a shareholder.

5 Apr 2012capital raising announcement● Neutral

On March 30, 2012 the company drew a further $120,000 under the October 2011 financing agreement, issuing 162,163 shares at $0.74 plus warrants at $0.89 for five years. A press release also said the second Dansville well, Cremer 1-1, about a mile from the Brown 2-12 well, was planned to spud in April 2012, with the rig expected in the second week of April. The press release calls Brown 2-12 successful, but the filing gives no production figures.

What it means for a shareholder

162,163 new shares at $0.740 to raise about $120,000. That's 0.16% dilution: every existing holder's slice gets 0.16% smaller. If you held $1,000 of shares (1,351 at the issue price), your slice goes from 0.00133% to 0.00133% of the company. To keep it you'd need 2 more shares - about $1 at the issue price.

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22 Mar 2012capital raising announcement● NeutralMajor

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.

What it means for a shareholder

1.3m new shares at $0.780 to raise about $1.0m. That's 1.4% dilution: every existing holder's slice gets 1.4% smaller. If you held $1,000 of shares (1,282 at the issue price), your slice goes from 0.00147% to 0.00145% of the company. To keep it you'd need 19 more shares - about $15 at the issue price.

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18 Oct 2011capital raising announcement● Neutral

The company reported issuing 500,000 shares at $0.40 plus warrants at $0.48 for $200,000 on October 12, 2011 under the October 3 Securities Purchase Agreement. This appears to be the same $200,000 first drawdown described in the earlier filing (the dates differ, so it is unclear if it is a reporting update or a separate issuance); the filing adds no new amounts.

What it means for a shareholder

500,000 new shares at $0.400 to raise about $200,000. That's 0.291% dilution: every existing holder's slice gets 0.291% smaller. If you held $1,000 of shares (2,500 at the issue price), your slice goes from 0.00146% to 0.00146% of the company. To keep it you'd need 7 more shares - about $3 at the issue price.

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7 Oct 2011capital raising announcement● NeutralMajor

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.

What it means for a shareholder

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22 Sept 2011capital raising announcement● NeutralMajor

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.

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