DevMar Equities, Inc. (DEVM) company history: the story so far

History

A Mexican chocolate shell reinvented itself as La Cortez Energy, raised about $30 million in placements to build Colombian oil interests, then deregistered from SEC reporting in 2012.

2008-2009: From chocolate to oil

The company began as a gourmet chocolate business in Mexico, filed under the name DevMar Equities in a 2006 registration and later called La Cortez Energy. In March 2008 it raised $2,400,000 from a private placement of 2,400,000 shares at $1.00, announcing a new focus on energy in South America. In August 2008 it sold the chocolate business to founder Maria de la Luz, who handed back 9,000,000 shares plus her 2,250,000 existing shares, leaving 14,150,444 shares outstanding. In September it raised $5,981,000 gross through 4,784,800 units at $1.25.

The first deals followed. In December 2008 the company agreed in principle with Petronorte to take 50% of the Putumayo 4 block in southern Colombia. In February 2009 it agreed to buy 20% of the Maranta block from Emerald Energy, though it admitted it lacked the cash for all its obligations. In April 2009 it said its 2008 quarterly accounts would be restated, because 1,000,000 shares issued to a consultant had been undervalued, adding a $990,000 non-cash expense to each period.

2009-2010: Funding the Colombian bets

The funding worry was addressed in 2009. A private placement closed in stages, ending on July 31, 2009 with 5,065,000 units sold at $1.25 for $6,331,250. The company then paid $1.2285 million toward completing the Mirto-1 well in Maranta and said it believed it had enough money for its Phase 2 obligations. In October 2009 it signed the joint operating agreement for Putumayo 4. A further $2.5 million came in December 2009 from 1,428,571 units at $1.75.

2010: Avante and a bigger raise

On March 2, 2010 the company bought Avante Colombia from Avante Petroleum for 10,285,819 new shares. Avante Colombia holds a 50% operating interest in the Rio de Oro and Puerto Barco fields, where Puerto Barco production had stopped in July 2008 because of insurgent activity. Avante also paid $5,000,000 for 2,857,143 shares and warrants, and received a board seat.

On April 19, 2010 a placement begun in December 2009 closed at 8,762,264 units and $15.33 million in total, with Macquarie Bank contributing $3.0 million. Cash stood at $15,968,125, and management said it expected no need for new capital before May 2011.

Operations were mixed. Mirto-1 tested at up to 732 barrels a day, but a March 2010 workover failed to keep water out. By September 2010 it produced about 60 barrels a day at roughly 88% water. Mirto-2 reached 11,590 feet with oil and gas shows, and Agapanto-1 was expected to start by the end of October. Approval from Colombia's regulator, the ANH, for the Maranta interest was still pending, and Putumayo 4 was moving through community consultation and seismic planning.

2011-2012: A quiet end to reporting

The record for 2011 and early 2012 is quiet. Shares on issue were 46,190,910 at the end of 2010 and 46,451,182 at the end of 2011 and 2012. As of January 2012 the company had no debt, and an interim chief financial officer was still in place without a permanent hire. The outcomes of the Agapanto-1 well, the ANH approvals and the Puerto Barco restart are not shown in the record. On June 29, 2012, DevMar Equities, Inc. deregistered its securities, ending its obligation to file reports with the SEC.

Written from the 15 story beats below (2008 to 29 June 2012), 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)

201246.5m shares · US$2.0m market cap

29 June
DevMar Equities, Inc. deregistered its securities, ending its obligation to file reports with the SEC.
listing compliance notice
46.5m shUS$2.0m

2010

23 Sept
A September 23, 2010 update said Mirto-2 in Maranta reached 11,590 ft with oil and gas shows in the N and U sands and will be tested on the U sand, with the Agapanto-1 well to follow, expected to start by end of October; Mirto-1 is now producing about 60 bopd at roughly 88% water (down from ~145 bopd and 82% in April), with a second workover planned. Putumayo 4 has begun community consultations and plans about 104 km of 2D seismic by Q4 2010 and a first well in the first half of 2011, while Puerto Barco production is now planned to restart before the end of Q1 2011. The Maranta 20% assignment is still not yet filed with the ANH, which Emerald will do once the company supplies documents within about two weeks.
production update
23 Apr
On April 19, 2010 the company closed the fourth and final round of its private placement, selling 5,905,121 units at $1.75 for $10.33 million (Macquarie Bank Limited led with $3.0 million). This brings the whole placement, begun in December 2009, to 8,762,264 units and $15.33 million, up from the roughly $5 million tallied so far, and each unit includes a share plus a warrant for half a share at $3.00 until April 18, 2013. Cash stood at $15,968,125 after the closing (vs $2,376,585 at Dec 31, 2009); management says it does not expect to need more capital before May 2011 but will after that, and investors can demand registration if no registration filing or exchange listing is completed by October 16, 2010. The 10-Q-style cash figure is dated 'April 22, 2009' in the text, which appears to be a typo for 2010 (inference).
capital raising announcement
13 Apr
An April 2010 update said the Mirto-1 well in Maranta tested at up to 732 barrels of oil a day, but a workover on March 6, 2010 failed to shut out water, so it is producing about 145 barrels a day gross with 82% water. The company and Emerald still plan two appraisal wells, with Mirto-2 expected to start in late April or early May 2010. Putumayo-4 is still in preparation (103 km of seismic expected in the second half of 2010, with a $1.6 million Phase 1 program due by September 2012), and the Avante Colombia fields are being planned with partner Vetra. The 20% Maranta interest still awaits ANH approval.
production update
8 Mar
On March 2, 2010 the company bought all of Avante Colombia from Avante Petroleum for 10,285,819 newly issued shares, completing the deal outlined in the December 2009 letter of intent. Avante Colombia holds a 50% interest, as operator, in the Rio de Oro and Puerto Barco production contracts with Ecopetrol in northeastern Colombia (contracts run to the end of 2013), and Puerto Barco production stopped in July 2008 because of insurgent activity. Avante also bought 2,857,143 shares plus warrants for $5,000,000 ($1.75 per share), lock-up of 18 months applies, 1,500,000 of the shares are held in escrow for indemnification, and Avante gets a board seat (Alexander Berger) and special-committee veto rights over certain big decisions. This adds substantial new shares and gives Avante a say in governance.
asset acquisition disposition
4 Jan
On December 29, 2009 the company closed another private placement of 1,428,571 units at $1.75 each for $2.5 million, each unit with a share and a warrant for half a share at $3.00 over three years. The money is for appraising the Mirto field, the Putumayo-4 block and other Colombian opportunities, and it adds more shares (dilution). The filing also says the letter of intent to buy Avante Colombia, for company stock, was extended to January 15, 2010 so both sides can finish due diligence; that deal is not yet signed.
capital raising announcement

2009

19 Oct
On October 14, 2009 the company's Colombian subsidiary signed the joint operating agreement with Petronorte for a 50% net interest in the Putumayo 4 block, following the December 2008 MOU. This completes the definitive agreement that was due by January 30, 2009. The interest is still subject to ANH approval; Petronorte signed the exploration contract with the ANH on February 23, 2009, and the two partners agreed to spend $1.6 million on extra seismic work split 50/50, with the company paying two-thirds of the first 103 km of seismic costs.
material agreement
3 Aug
The company closed the last part of its 2009 private placement on July 31, 2009, selling 205,200 more units for $256,500 and bringing the total to 5,065,000 units and $6,331,250 gross at $1.25 per unit (each with a share and a $2.00 five-year warrant). Separately, the Mirto-1 well in the Maranta block reached its planned depth of 11,578 feet with oil and gas recorded, the company chose to take part in completing it and paid $1.2285 million (its 65% share of an estimated $1.8 million completion cost) on July 27, 2009. The company says it now believes it has enough money for all Phase 2 obligations, which resolves the funding worry raised in February 2009; the 20% interest still needs ANH approval after the final evaluation results.
capital raising announcement
22 June
The company completed an initial closing of a new private placement, selling 4,860,000 units at $1.25 for $6,075,000 gross, with a 4.8 million unit minimum and 12 million maximum, closing by June 30, 2009. Each unit includes a share and a full warrant at $2.00 for five years with anti-dilution protection, and finders received 10% commissions ($565,625) plus warrants at $1.25. The funds are meant for the Maranta block, the expected Putumayo 4 interest, and other Colombia and Peru opportunities; this is the financing the February 2009 filing said was needed, and it adds dilution.
capital raising announcement
10 Apr
The company said its quarterly financial statements for March, June and September 2008 can no longer be relied on and will be restated. 1,000,000 shares issued to a consultant on February 7, 2008 were valued at $0.01 but should have been $1.00, adding a $990,000 non-cash expense in each restated period. The filing describes it as a non-cash correction.
financial restatement
12 Feb
The company's Colombian subsidiary signed a farm-out deal with Emerald Energy for a 20% interest in the Maranta block in Colombia, paying $0.948 million of past costs (paid February 12, 2009) and agreeing to cover 65% of Phase 2 costs, with dry-hole costs estimated at about $4.875 million. The filing states the company lacks enough cash for all Phase 2 obligations and needs more financing, which is not assured, and missed payments could end the deal with a $500,000 penalty. The interest transfers only after payments are completed and subject to ANH approval.
material agreement
9 Jan
The company signed a memorandum of understanding on December 22, 2008 with Petroleos del Norte (Petronorte, a Petrolatina subsidiary) for a 50% working interest in the Putumayo 4 block in southern Colombia, which Petronorte won in the 2008 Colombian bidding round. Final farm-in and operating agreements are due by January 30, 2009, and the company will pay two-thirds of the first 103 km seismic cost, to be reimbursed by Petronorte if the first well produces. This is the first concrete use of the South America strategy funded by the 2008 raises.
material agreement

2008

16 Sept
The company closed a second private placement of 4,784,800 units at $1.25 each, raising $5,981,000 gross and about $5.85 million net. Each unit has one share plus a warrant for half a share at $2.25 for five years; Gottbetter Capital Markets was paid a 1% commission ($59,810). The money is meant for first oil and gas investments in South America, and the press release names Colombia, Peru and/or Brazil. This follows the $2.4 million raised in March 2008 and adds to the share count.
capital raising announcement
21 Aug
The company is dropping its original gourmet chocolate business in Mexico by transferring it to a new subsidiary and selling that subsidiary to founder Maria de la Luz. In return she gives back 9,000,000 shares plus her 2,250,000 existing shares, leaving 14,150,444 shares outstanding after the closing, expected around August 22, 2008. She also agrees to cover third-party claims tied to the old business, and the company is now focused on oil and gas in South America, starting with Colombia.
asset acquisition disposition
20 Mar
The company, now named La Cortez Energy (formerly La Cortez Enterprises, the successor to the DevMar Equities filer name used in the 2006 registration), closed a private placement of 2,400,000 shares at $1.00 per share for $2,400,000 with no commissions. It says the money will go toward a new focus on the energy sector in South America.
capital raising announcement