14 Dec 2020listing compliance notice▼ BadMajor
FOOTHILLS EXPLORATION, INC. deregistered its securities, ending its obligation to file reports with the SEC.
Announcements, explained
Each one in plain English, with the numbers worked through for a shareholder.
28 May 2020capital raising announcement▼ BadMajor
On May 28, 2020 the company created Series A Preferred Stock (10,000,000 shares designated, each convertible into 200 common shares) and issued all 10,000,000 shares. Beijing Gas Blue Sky Holding Limited, described as a related party, received 5,000,000 shares for $50,000 cash under an April 6, 2020 agreement. Executive Chairman Kevin Sylla received 5,000,000 shares in exchange for $100,000 of debt owed to him. The filing states these shares convert into 2,000,000,000 common shares and vote alongside common holders on an as-if-converted basis. After a change of control (as defined), the preferred holders can elect a majority of the board. For existing common shareholders this is very large potential dilution and a shift in voting power (inference from the stated terms), set against the 475M authorized common noted earlier.
15 Oct 2019material agreement termination▼ BadMajor
On October 9, 2019 the company decided not to go ahead with either Montana acquisition (the 87-well deal signed May 23 and the 12-well deal signed June 26). The filing cites extra financial requirements, including additional bonding, that the Montana oil and gas regulator asked for on the shut-in wells, plus other reasons it does not disclose. This resolves both pending Montana deals as not closing, so the growth plan built around them in 2019 is dropped.
26 Sept 2019capital raising announcement▼ Bad
On September 19, 2019 the company closed a $115,000 convertible note with an unnamed lender (net $115,000), 12% interest payable in stock, due September 19, 2020. After 180 days it converts at 55% of the lowest trading price over 20 days, and unpaid principal rises 10% if not repaid at maturity. Proceeds are to retire two convertible notes and for working capital, continuing the cycle of replacing older notes with new discounted ones.
26 July 2019material agreement● Neutral
The company closed two more convertible notes: $78,000 from Power Up Lending on July 22 (12%, due July 17, 2020, converts at 61% of the lowest price) and $110,000 from GS Capital on July 24 (net $100,000, 10%, due July 23, 2020, converts at 55%). It also reported paying down older debt: the first $45,500 Crown Bridge tranche was retired in full on July 12; $350,000 has been paid on the Labrys note, with one final $55,000 payment remaining under an extension; and $25,000 has been paid on the $58,300 Jefferson Street note under an extension. This largely resolves the open Labrys question of repayment past May 31, but the Labrys and Jefferson Street notes are still not fully repaid, and the company is replacing old notes with new ones.
17 July 2019capital raising announcement▼ Bad
On July 11, 2019 the company closed a $236,250 convertible note with an unnamed lender (net $236,250), 12% interest payable in stock, due July 11, 2020. After 180 days it converts at 55% of the lowest trading price over 20 days, and unpaid principal rises 10% if the note is not paid at maturity. Proceeds are to retire two existing convertible notes and for working capital, so this is partly refinancing older short-term debt and the largest recent single raise.
2 July 2019material agreement● NeutralMajor
On June 26, 2019 the company's subsidiary signed a second Montana letter agreement, for 12 shut-in wells and about 5,769 acres (four gas wells plus pipelines, gathering and compression facilities in Stillwater and Golden Valley counties), at an undisclosed price. A non-refundable deposit was paid (amount not stated), the company assumes the seller's liabilities for the assets, closing is due within 60 days of full execution, and completion is not assured. The company also said it is marketing 60 units at $50,000 each in Foothills Production II, LLC, to raise up to $3,000,000. Investors would get a net profits interest (50% for four years, then 25% for four more), plus 50,000 company shares and A- and B-warrants (50,000 each at $0.20 and $0.40) per unit. The wells are shut-in, so no production is stated. This is separate from the May 23 87-well Montana letter agreement, and it makes the FP2 vehicle a funding route for Montana, though the filing does not tie the raise to a specific deal (inference).
26 June 2019material agreement▼ Bad
On June 19, 2019 the company closed a $113,000 convertible note with an unnamed lender (no discount; net $113,000), due June 17, 2020, with 12% interest payable in stock. After 180 days it converts at 61% of the lowest trading price over the prior 20 days, and early repayment costs 125-145% of principal. Proceeds are for general corporate and working capital purposes. It continues the series of small discounted convertible notes.
10 June 2019capital raising announcement▼ Bad
On June 4-6, 2019 the company closed four more small convertible loans from unaffiliated lenders, totalling $249,825 principal and $230,750 net. The three notes whose terms appear (GW Holdings $86,625, JSJ Investments $57,000, GS Capital $60,000) are due in late May 2020, convert after 180 days at 45-55% of the lowest recent trading price, and carry 10-12% interest; GW also gets warrants for 160,000 shares at $0.50. The filing text is cut off before the fourth loan (LG Capital Funding) is described. This continues the pattern of deeply discounted notes and adds share reserves of 2.7M, 1.8M and 1.7M shares, which points to more dilution (inference).
30 May 2019material agreement● NeutralMajor
On May 23, 2019 the company's Wyoming subsidiary signed a letter agreement to buy 87 Montana wells and acreage from an unrelated seller, as foreshadowed in the May 20 filing: 29 gas wells (10 producing, 19 shut-in) in Sweet Grass and Stillwater counties and 58 oil and injection wells in Musselshell and Rosebud counties, with about $1.1 million annual gross oil revenue. Closing is due within 60 days of full execution, and is subject to Montana Board of Oil and Gas Conservation approval and financing. No price is disclosed, and the filing says closing is not assured.
20 May 2019capital raising announcement▼ BadMajor
The company closed a $131,250 convertible note on May 15, 2019 (net $125,000, 12% interest, due May 15, 2020), convertible after 180 days at 55% of the lowest recent trading price. To cover the required share reserve, Executive Chairman Kevin Sylla lent 1.4 million of his shares, to be returned once shareholders' April 18 approval to raise authorized common stock from 100 million to 475 million shares takes effect. The company also said it is in advanced discussions to buy Montana oil and gas assets (87 wells, about $1.1 million annual gross oil revenue, about 106 barrels/day gross), through a new vehicle, with no assurance it will close. The authorized share increase is a sign of expected further dilution (inference).
8 May 2019material agreement▼ Bad
On May 3, 2019 the company and lender Labrys Fund extended the maturity of the $380,000 November 1, 2018 note to May 31, 2019. The remaining balance is $295,751.25, and the lender cannot convert until May 31 unless a default occurs. If the balance is not repaid by then, the principal is deemed to increase by $2,928.23 and the lender's full conversion rights return. This pushes back the original May 1 due date and leaves the note unrepaid.
4 Apr 2019capital raising announcement▼ Bad
Two more small convertible financings closed March 28, 2019: a $52,250 note from Jefferson Street Capital (net $47,500, 10%, due December 19, 2019, conversion at 60% of the lowest recent price, warrants for 83,078 shares at $0.50), and a second tranche of $40,018 under the December 2018 Crown Bridge note (net $36,500, 12%, 50% discount conversion, warrants for 80,036 shares at $0.50). This continues the pattern of small deeply discounted notes and funds the previously unfunded Crown Bridge tranche.
29 Mar 2019material agreement▲ GoodMajor
On March 28, 2019 the company closed the purchase of about 16,387 net acres of undeveloped leases in Wyoming's Wind River Basin (Fremont County) from an affiliate of American Shale Energy, for an undisclosed sum plus a reserved overriding royalty. This gives it 100% working interest and 82.5% net revenue interest. This is the second deal of 2019 after the Green River Basin gas wells. Federal leases of 16,066 net acres carry about $128,584 in delay rentals over four years, and about 320 net acres of fee leases may be lost if not renegotiated. A finder, Geopinion, gets restricted shares (the filing text reads '125,00', apparently a typo). The acreage is undeveloped, with no production stated.
14 Mar 2019capital raising announcement▼ Bad
The company closed another convertible loan, a $380,000 note dated March 6, 2019 (10% discount, $342,000 proceeds, 12% interest, due September 6, 2019), plus five-year warrants for 608,000 shares at $0.50. The lender can convert at 50% of the lowest recent trading price, and the filing itself warns shareholders could be materially diluted and a change in control could occur. Of the proceeds, $110,000 went to partially repay the November 1, 2018 note and $40,000 to the auditor; the rest is for field optimization of the recently acquired gas wells and working capital.
12 Mar 2019capital raising announcement● NeutralMajor
On March 6, 2019 the company closed the Wyoming gas acquisition flagged in the November 2018 letter of intent (agreement dated December 11, 2018): 22 natural gas wells on about 18,214 gross acres in the Greater Green River Basin, 78% held by production, for about $700,000 cash. The wells produce around 900 Mcf/d, and title transfer awaits the BLM process. It was funded by a $705,882 senior secured convertible note (proceeds $600,000, 10% interest, due September 1, 2019, convertible at $0.50) with warrants for 1,125,000 shares at $0.50 and a guarantee from Sylla. The note is secured by the acquired assets, and the lender also gets a 10% net profits interest from September 2, 2019 to September 1, 2022, with $20,000 monthly payments under a cash management agreement. This resolves the letter of intent but adds short-term debt due in about six months.
2 Jan 2019capital raising announcement▼ Bad
On December 19, 2018 the company issued a $58,300 convertible note (funded December 21 for net $53,000, after a $5,300 original issue discount) at 10% interest, due September 19, 2019. After 180 days the lender can convert at 60% of the lowest recent trading price (a 40% discount), so conversions could dilute shareholders. Proceeds are for general corporate and working capital purposes. This is another small financing in the series since November 2018.
12 Dec 2018capital raising announcement▼ Bad
On December 6, 2018 the company agreed to a convertible note of up to $136,500, funded in three tranches; the first tranche of $45,500 closed December 7 for net proceeds of $41,500. Interest is 12%, each tranche matures 12 months after funding, and after 180 days the lender can convert at 50% of the lowest recent trading price. Each funded tranche also carries warrants for up to 227,500 shares at $0.20 over 5 years. Only the first tranche is funded, and the filing says there is no assurance the others will be. This is another small, heavily dilutive financing following the November 2018 note.
13 Nov 2018capital raising announcement▼ BadMajor
On November 1, 2018 the company issued a $380,000 convertible note (10% original issue discount, 12% interest, due May 1, 2019) for $342,000 of proceeds, plus 650,000 restricted shares and two 5-year warrant tranches (687,500 and 2,062,500 shares) at $0.20. The lender can convert at 50% of the lowest recent trading price, and the filing itself warns shareholders could be materially diluted and a change in control could occur. Proceeds are to retire certain loan obligations currently due, plus working capital. Separately, a subsidiary signed a letter of intent to buy producing natural gas properties in Wyoming (about 18,000 gross acres, mostly stripper gas production), subject to due diligence, definitive agreements and financing; no price is given. The company's address has moved to Los Angeles from Denver. The terms are much harsher than the 2017 notes (conversion at $0.665 and warrants at $1.00), a point the filing's own figures support.
29 Nov 2017capital raising announcement▼ Bad
The company borrowed on a $267,500 senior convertible note from an unaffiliated investor (named in the press release as FirstFire Global Opportunities Fund), receiving about $250,000 before costs. The note carries 8% interest and is due August 17, 2018, and the lender can convert it to shares at $0.665. The company also issued 60,000 restricted shares and warrants for 267,500 shares at $1.00 (18 months). Executive Chairman Sylla guaranteed the note, as he did the September 2017 $250,000 note. The company can avoid conversion by repaying 115% of principal within six months. The proceeds are for general corporate and working capital purposes. This continues the pattern of small financings with dilutive terms. The press release also says the company is working with a placement agent on a reserve-based financing and exploring options with its Hong Kong stakeholders; these are intentions, with no agreement stated.
5 Oct 2017capital raising announcement▼ BadMajor
On September 29, 2017 the company issued a $250,000 note to an unaffiliated investor, due January 2, 2018 (interest-free if paid on time, 15% afterward), along with warrants for 375,000 shares at $0.665 (to 2019), 375,000 at $1.25 and 185,000 at $2.00 (both to 2020). Executive Chairman Kevin Sylla personally guaranteed the note. Because of price-protection terms in earlier unit sales, it will also issue 136,015 shares and matching warrants to earlier investors (100,752 to Wilshire), with warrant prices reset to $0.665, which dilutes existing holders. The proceeds are for general operating purposes.
3 Aug 2017asset acquisition disposition● Neutral
This is Amendment No. 2 to the original May 27, 2016 report on the Key Link / Foothills Petroleum share exchange. It restates the earlier facts (6,003,759 shares to Wilshire and Alternus, about 8,363,759 shares outstanding, 700,000 Wilshire warrants, ~$1,000,000 of 8% Alternus notes, 38,120-acre Springs Prospect) and business description. The visible text shows no new transaction, and the reason for the amendment is not shown in the excerpt.
17 May 2017material agreement▲ GoodMajor
On May 11, 2017 the company signed a purchase agreement with an undisclosed seller for Utah and Colorado assets: 67,330 gross acres (49,600 net), 85 wells (31 producing, 54 shut-in), of which it would operate 66. It expects to close by June 30, 2017 and says it would bring total Rockies acreage above 100,000 acres. The filing gives no price or financing details, and closing is subject to conditions with no assurance it will happen.
22 Feb 2017drilling progress report▲ Good
The company said it reworked two wells in the Duck Creek project (acquired with Tiger Energy Partners International on December 30, 2016) and sold 560 barrels of oil in January 2017. It plans to rework two more shut-in wells over the next 60 days and expects February production to at least match January. This is the first reported oil sales, following the Utah acquisition; the volume is small and the forecasts are management's expectations.
11 Jan 2017material agreement▼ BadMajor
The company borrowed $1,000,000 from Full Wealth Investment Hong Kong (January 5, 2017) and $1,250,000 from Berwin Trading (January 6, 2017) on unsecured debentures at 9% interest, each due in 120 days (11% if overdue). Proceeds are meant for obligations under the Total Belief purchase, working capital and target drilling. This is the financing the Total Belief deal required, adds $2,250,000 of short-term debt, and Berwin is the same investor that bought shares in 2016.
6 Jan 2017material agreement● NeutralMajor
On December 30, 2016 the company (through a subsidiary) bought Utah and related interests from Total Belief Limited, a subsidiary of Hong Kong-listed New Times Energy, for $10,750,000: $75,000 cash at closing, $675,000 cash within 10 business days, 2,083,334 restricted shares valued at $4,000,000 ($1.92 each), and a $6,000,000 no-interest note due in 18 months. It gets an entry into the Uinta Basin, six shut-in Natural Buttes wells it plans to rework, a 55.63% stake in Grey Hawk Exploration (non-operated interest in two producing wells), and the remaining 25% of Tiger Energy Partners International from Green Stone. The press release says the deal also lifts its Ladysmith interest from 35% to up to 75% and that it must raise at least $2,250,000 within 10 business days of closing, with only non-binding assurances of funding. This is the company's first producing-type asset after being pre-revenue, and it adds new shares and a large debt; a related party (Kevin Sylla, tied to principal holder Wilshire) introduced the deal.
16 Dec 2016material agreement▲ GoodMajor
On December 12, 2016 the company agreed with Magna Operating, LLC to take part in the Labokay prospect (about 240 acres, Calcasieu Parish, Louisiana), its first Gulf Coast project. Its subsidiary owed Magna $144,000 for land, lease and admin costs, will drill and operate a test well, and earns 100% before payout with Magna backing in for 20% after; the company expects to start drilling in early Q1 2017 and gets a five-year area of mutual interest with access to Magna's 3D seismic data.
14 Nov 2016material agreement▲ GoodMajor
Now named Foothills Exploration, Inc. (FTXP), the company signed a farmout with Koch Exploration Company on the Ironwood and Paw Paw prospects in Wyoming's Big Horn Basin (about 10,583 acres combined). It gets 100% of the first Paw Paw well until payout, after which Koch backs in for 25%, and can earn 75% of Ironwood by paying all costs of a test well by July 1, 2017. The company says it plans to drill its first well before the end of 2016; the 7 million barrel figure is a possible recoverable estimate, not proven reserves.
26 July 2016auditor change● Neutral
This amendment corrects the audit years referenced in the July 22 notice (now 2015 and 2014) and gives the board approval date for RBSM as July 15, 2016. The auditor change itself (LBB out, RBSM in, no disagreements) is unchanged.
22 July 2016auditor change● Neutral
On July 18, 2016 the board dismissed its auditor LBB & Associates and hired RBSM LLP. The filing says there were no disagreements, and LBB's earlier reports carried a going-concern doubt; this followed the Foothills Petroleum takeover. The filing contained wrong year references that were corrected in the next amendment.