FIDELIS ENERGY INC (FDEI) company history: the story so far

History

A small explorer that began with Alberta leases, built a spread of North American oil and gas interests funded by debt and convertibles, then deregistered from SEC reporting in 2010.

2003-2005: Building a portfolio

The company, then called Eagle Star Energy Group, began its oil and gas push in November 2003 by buying two farm-in leases in Alberta, Canada (the Buffalo Lake and Lake Island prospects). The seller was one that Chairman William Marshall also helps manage, so he may have profited personally. Marshall bought 35,000 shares at $1.00 and lent the company $45,000, lifting his stake to 41%. The company bought back and retired 400,000 shares for $150,000, and the board approved a 38-for-1 forward split, leaving 5,092,000 shares outstanding.

A filing made late in 2005 disclosed further deals. These were an 80% working interest in Comanche Point in California (falling to 30% once the company recouped its investment), stakes in the North Franklin Project in California bought from Silver Star Energy, and a 50% interest in the Hidalgo Prospect in Texas. A $5 million convertible credit line from Chunuk Financial Corp., agreed in October 2004, helped fund this early asset base.

In October 2005, now named Fidelis Energy, it signed a data sharing agreement with Silver Star, Cascade Energy and 1048136 Alberta Ltd. This gave it a 25% working interest in using airborne survey data covering about 1,000,000 acres of central Kansas. The partners were to pay for leases and for drilling the first two wells. The filing described this as data and drilling rights, not producing assets.

2005-2010: New financing and a quiet end

In November 2005 the Chunuk credit line was replaced by a $2,050,000 note at 6%, due in two years. The company also agreed a $2,500,000 convertible debenture deal, with $1,250,000 issued at once and the same amount due when a registration statement was filed. Warrants over 9,000,000 shares at $0.2708 came with it. Because conversion could happen at 80% of recent trading prices, more shares could be issued if the price fell, which would dilute existing holders.

By mid-2006 the company had moved its headquarters to Beverly Hills, California, was pursuing a listing on the AMEX, and had issued 750,000 shares to consultants and agreed 6,000,000 shares as director compensation. The Kansas wells and the second debenture payment were still pending.

The record then goes quiet. In February 2010 Fidelis Energy deregistered its securities, ending its obligation to file reports with the SEC.

Written from the 5 story beats below (2003 to 23 Feb 2010), 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.

2010

23 Feb
FIDELIS ENERGY INC deregistered its securities, ending its obligation to file reports with the SEC.
listing compliance notice

2005

28 Nov
The $5 million Chunuk credit line was replaced by a $2,050,000 promissory note at 6%, due in two years, which was the amount outstanding. The company also agreed a $2,500,000 convertible debenture deal with an institutional investor (Yorkville is named as fee recipient): $1,250,000 issued now, another $1,250,000 when a registration statement is filed, plus warrants over 9,000,000 shares at $0.2708. Conversion is at the lower of $0.2708 or 80% of recent average trading price, so more shares could be issued if the price falls, which dilutes existing holders (inference).
capital raising announcement
19 Oct
Filed late in October 2005, this report discloses earlier deals: a $5 million convertible credit line from Chunuk Financial Corp. (October 25, 2004, expiring October 25, 2006; convertible into Series A preferred shares that convert to 20% of the common stock then outstanding); an 80% working interest in Comanche Point, Kern County, California (March 2004, for $305,000 and $200,000, falling to 30% after the company recoups its investment); 15% plus 20% more in the North Franklin Project, California, from Silver Star for $250,000 each; and a 50% interest in the Hidalgo Prospect, Texas (January 2005, $260,000). It sets out the company's early asset base and its debt.
asset acquisition disposition
3 Oct
Now named Fidelis Energy, the company signed a Data Sharing Agreement (dated August 10, 2005) with Silver Star Energy, Cascade Energy and vendor 1048136 Alberta Ltd. It gets a 25% working interest in using airborne survey data covering about 1,000,000 acres of central Kansas; the partners pay for leases on up to two sections and for drilling the first two wells, with Wildes Exploration keeping a 5% overriding royalty. The filing describes this as acquiring data and drilling rights, not producing assets.
asset acquisition disposition

2003

17 Nov
Then called Eagle Star Energy Group, the company bought two oil and gas farm-in leases in Alberta, Canada (Buffalo Lake and Lake Island prospects) from a seller that Chairman William Marshall also helps manage, so he may personally profit. Marshall bought 35,000 shares at $1.00 and lent $45,000 at 6%, raising his stake to 41%; the company bought back and retired 400,000 shares from Robert and Thomas Feneziani for $150,000 ($70,000 cash plus an $80,000 note due March 15, 2004); and the board approved a 38-for-1 forward split, giving 5,092,000 shares outstanding.
asset acquisition disposition