EFLO ENERGY, INC. company history: the story so far

History

EFLO Energy moved from shell company to owning about 53.67% of the Yukon's Kotaneelee gas project, funded by share issues, convertible notes and a 2015 loan.

2011: Leaving shell status

The company, then filing as EFL Overseas, Inc., set out to build an oil and gas business. On March 31, 2011 it signed a farmout (a deal to earn an interest by drilling) with Dyami Energy LLC and Eagleford Energy Inc. It could earn 21.25% of the 2,629-acre Matthews Lease in Zavala County, Texas, rising to 42.5% with up to $1,050,000 of spending. The lease had no proven reserves or production. The company paid its way with private placements of $191,100 in December 2010 and $1,123,200 in March 2011, and warned its plan could fail without more financing. It also had an accepted offer for a 22.989% interest in the Kotaneelee gas field in the Yukon. The record then goes quiet until mid-2012.

2012: Building the Kotaneelee stake

On June 29, 2012 the company agreed to buy Devon Canada's Kotaneelee interest for cash plus Devon's share of cleanup liabilities, estimated at USD$7-8 million. Two backers made this possible: Holloman Corporation gave a CAD$10 million guarantee for 3,250,000 shares, and Pacific LNG Operations provided letters of credit for 4,000,000 shares. The deal closed July 18. The company also sold shares at $1.20 and issued 122,312 shares to settle $146,774 of consulting fees owed to an entity controlled by the CEO.

A second purchase followed. On October 17 it bought Nahanni Energy's 30.664% interest for CAD$400,000 cash plus subsidiary shares exchangeable into 1,614,767 company shares, and took on cleanup liabilities estimated at USD$9-10 million. This lifted its stake to about 53.67%. The next day it raised $1,200,000 by selling 1,000,000 shares at $1.20.

2013-2015: Borrowing to carry on

On October 30, 2013 the company sold $2,255,000 of convertible notes to 22 investors. They carried 10% interest and could convert at $1.00 a share, and investors also received warrants for 1,127,500 shares. This was its first debt-like financing. Shares on issue rose from 20,895,708 in 2014 to 34,835,699 in 2015, though the beats do not explain the full increase.

On March 2, 2015 it borrowed CAD$600,000 from Fundacion Inversiones Barroco at 10%, unsecured, due by February 1, 2016. The lender can call it on 30 days' notice if a Kotaneelee deal provides cash. Al Conrad Kerr, Jr. signed as CEO, replacing Keith Macdonald, with no reason given. As of March 2015, the company still held its Kotaneelee stake and the large cleanup indemnities, the notes were due around April 2015, and it still needed financing.

Written from the 7 story beats below (2011 to 4 Mar 2015), 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)

201532.2m shares

4 Mar
On March 2, 2015 the company borrowed CAD$600,000 from Fundacion Inversiones Barroco, a Panamanian corporation, at 10% interest, unsecured, due on or before February 1, 2016. If the company signs an acquisition, sale or joint venture deal on the Kotaneelee Project that provides enough cash to repay it, the lender can call the loan on 30 days' notice. The filing is signed by Al Conrad Kerr, Jr. as CEO, a change from Keith Macdonald in earlier filings.
material agreement
32.2m sh

201319.5m shares

31 Oct
On October 30, 2013 the company sold $2,255,000 of convertible notes to 22 accredited investors. The notes mature in 18 months, convert at $1.00 per share and pay 10% interest (in cash or shares at $1.25 per share). Interest rises to 12.5% or 15% if the company has not moved to a senior stock exchange within 9 or 12 months. Investors also received warrants for 1,127,500 shares at $1.25 for three years, and the company paid $176,400 in finder's fees. This is the company's first disclosed debt-like financing, after earlier share-only private placements, and 3,382,500 shares are reserved for conversion and warrants, which could dilute existing holders.
capital raising announcement
19.5m sh

201217.5m shares

22 Oct
On October 17, 2012 the company closed the Nahanni purchase, paying CAD$400,000 cash plus subsidiary shares exchangeable into 1,614,767 shares of its restricted stock, and taking on Nahanni's share of cleanup liabilities, which early estimates put at USD$9-10 million. With the earlier Devon deal, it now generally owns a 53.67% interest in the Kotaneelee assets. It also sold 1,000,000 shares at $1.20 on October 18 for $1,200,000 gross. This resolves the Nahanni thread; the exchangeable and new shares add to the share count.
asset acquisition disposition
17.5m sh
20 Sept
On September 14, 2012 the company signed a conditional agreement to buy Nahanni's 30.664% interest in the Kotaneelee lands for CAD$400,000 cash plus CAD$4.1 million in shares of a subsidiary exchangeable into the company's restricted stock. It would also take on Nahanni's share of cleanup liabilities, which early estimates put at USD$9-10 million. This turns the July letter of intent into a signed deal; closing was expected in early October 2012 and would bring the company's stake to about 53.67%, subject to conditions including Nahanni shareholder approval.
material agreement
17.5m sh
24 July
On July 18, 2012 the company completed the Devon Canada purchase of the Kotaneelee Gas Project interest (22.989% generally), paying CAD$293,700 in cash and taking on Devon's share of abandonment and cleanup liabilities, which early estimates put at USD$7-8 million. Holloman Corporation provided the CAD$10 million guarantee for 3,250,000 shares, and Pacific LNG Operations provided the letters of credit for 4,000,000 shares, so existing holders are diluted by those issuances. The filing also discloses a July 7 letter of intent to buy Nahanni Energy's 30.664% interest for CAD$400,000 cash plus CAD$4.1 million in shares, and small share sales and a share issue of 122,312 to settle $146,774 of accrued consulting fees owed to an entity controlled by the CEO.
asset acquisition disposition
8.6m sh
5 July
On June 29, 2012 the company signed a conditional deal with Devon Canada to buy its 22.989% working interest in the Kotaneelee area of the Yukon (including a 69.337% interest in one producing gas well, about 3.5 MMCFD) for CAD$270,000 in cash plus taking on Devon's share of cleanup liabilities, which early estimates put at USD$7-8 million. This follows through on the Kotaneelee offer first disclosed in April 2011. The deal needs a CAD$10 million guarantee, expected from largest shareholder Holloman Corporation for 3,250,000 shares, and CAD$5 million of letters of credit, expected from Pacific LNG Operations for 4,000,000 shares; PLNG's president Henry Aldorf is the company's Chairman. Closing was scheduled for July 18, 2012 and depended on financing and other conditions. The filing also reports a further 575,000 shares sold at $1.20 for $690,000.
capital raising announcement
7.3m sh

2011

6 Apr
On March 31, 2011 the company (filing as EFL Overseas, Inc.) signed a farmout with Dyami Energy LLC and Eagleford Energy Inc. to earn a 21.25% working interest in the 2,629-acre Matthews Lease in Zavala County, Texas by drilling a test well, with the option to reach 42.5% by spending up to $1,050,000. The lease has no proven reserves or current production. The filing says this moves the company out of shell status and begins oil and gas operations. It also discloses a contingent offer (accepted, but needing a definitive agreement) for a 22.989% interest in the Kotaneelee gas field in Canada's Yukon, and private placements of $191,100 (December 2010) and $1,123,200 (March 2011); the filing warns the business plan may fail if more financing is not raised.
asset acquisition disposition