Fulucai Productions Ltd. company history: the story so far

History

A small film company tried to move into oil and gas, failed in Alabama, changed direction, then bought a New Mexico oil stake and in 2014 agreed to seek an Indonesian one.

2011-2012: From film to a failed Alabama bid

Fulucai Productions was a Nevada company based in Calgary. It held the rights to a film, 'All the Wrong Reasons', bought in October 2011 from James Durward, who was entitled to a 20% gross overriding royalty (a share of revenue) on it. It also had a $40,000 contract for a trailer, whose status is unknown. Shares on issue stood at 90,000,000.

In April 2012 the company took over an option to acquire mineral rights, including oil and gas, on about 142,000 acres in five Alabama counties. It was the first move away from film. The terms were heavy: 75,000,000 shares in escrow, a $1,000,000 escrow payment and $77,000,000 due within 180 days of May 15, 2012, with a planned $3,000,000 raise. The deal missed its May 15 closing date, was extended to May 30, and was in default by June 8, with talks said to be continuing.

2012-2013: A new direction, then a quiet spell

On June 29, 2012 the company agreed to buy Equine Venture Group from Jennifer Serek for 5,000,000 shares. Its existing assets would go to Durward in return for him handing back 15,000,000 shares. Closing was expected around July 31, 2012, with Durward and Gordon Rix resigning. The filings seen do not confirm that it closed or what became of the film assets. The record is then quiet until autumn 2013.

2013-2014: New Mexico and Indonesia

In October 2013 Fulucai agreed to buy Blue Sky NM, Inc., with Mohammad Fazil now signing as chief executive. Payment was 65,000,000 shares, reducible if reserves were valued under $40 million. The company also had to cancel an existing 65,000,000-share control block. The deal closed on November 13, 2013, and Blue Sky NM holds a 65% interest in New Mexico properties with 299 wells on about 14,000 acres. Shares on issue rose to 155,000,000 by the end of 2013, in line with the issue. Whether the control block was cancelled is not confirmed, and the acquired business's financial statements were still due.

On June 11, 2014 Fulucai signed a binding MOU for a 15% working interest in the Langsa offshore concession in North Sumatra, Indonesia, for $918,568 plus 15% of 2014 work costs. It is a related-party deal, since the controlling shareholder is President of the seller. A formal agreement and approvals were still pending.

Written from the 7 story beats below (2012 to 11 June 2014), 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)

2014155m shares · US$62.0m market cap

11 June
Fulucai signed a binding MOU with Blue Sky Langsa Ltd. to acquire a 15% working interest in the Langsa offshore concession in North Sumatra, Indonesia, for $918,568 plus 15% of 2014 work program costs (about $1,331,550 on an $8.877 million estimate; the press release says $9.55 million and $1,432,000). A formal Participation Agreement and approvals are still needed. It is a related-party deal: Fulucai's controlling shareholder is President of Blue Sky Langsa.
material agreement
155m shUS$62.0m

201390.0m shares · US$49.5m market cap

14 Nov
The New Mexico acquisition closed on November 13, 2013: Fulucai issued 65,000,000 shares for all of Blue Sky NM, Inc., which owns a 65% interest in producing and non-producing New Mexico properties with 299 wells on about 14,000 acres. The filing names the seller as Blue Sky Energy & Power, Inc. (the October filing named Canyon E&P Inc.) and gives about 14,000 acres versus 26,160 earlier; financial statements were still to come within 70 days. Completes the October 2013 deal.
asset acquisition disposition
90.0m shUS$49.5m
7 Oct
On October 3, 2013 Fulucai announced a Share Purchase Agreement with Canyon E&P Inc. to buy Blue Sky NM, Inc., which owns a 65% interest in New Mexico oil and gas properties including 299 wells. Payment is 65,000,000 Class A shares, reducible (minimum 40 million) if the reserve valuation is under $40 million, and the company must cancel an existing 65,000,000-share control block so that 90,000,000 shares are outstanding after closing. Closing was targeted by October 30, 2013; Mohammad Fazil now signs as CEO.
material agreement
90.0m shUS$18.0m

201290.0m shares · US$67.5m market cap

2 Aug
This board-change notice for the Equine deal says closing was expected around July 31, 2012. Durward and Rix would resign and Jennifer Serek would become sole director and all officers; 90,000,000 shares were outstanding and Serek would hold about 1.31% after closing. It also says Durward had an offer from a Hong Kong company to buy 50,000,000 of his shares, which would give that buyer 65.79% (not a closing condition). Continues the Equine acquisition.
business combination
90.0m shUS$67.5m
6 July
On June 29, 2012 Fulucai agreed to buy all of Equine Venture Group, Inc. from its sole shareholder Jennifer Serek for 5,000,000 restricted shares (1,000,000 at closing and 1,000,000 on each anniversary). Current directors would resign in favor of Equine's appointees, and the company's existing assets would go to James Durward in exchange for him returning 15,000,000 shares to treasury. This follows the failed Alabama option and moves the company in a new direction.
material agreement
90.0m shUS$91.8m
8 June
The Alabama option deal with SFT/Orion fell into default: closing was due by May 15, 2012, the option was extended to May 30, and by the June 8, 2012 filing the company could not proceed unless a definitive agreement or new option was signed. Negotiations were said to be ongoing. This sets back the April 2012 oil and gas plan.
material agreement termination
90.0m shUS$91.8m
11 Apr
On April 4, 2012 Fulucai took an assignment from SFT Diversified Global LLC of an option to acquire mineral rights (including oil and gas) on about 142,000 acres in five Alabama counties from Orion Oil & Gas Properties. The deal required 75,000,000 shares placed in escrow (65,000,000 from Durward, 10,000,000 newly issued), a $1,000,000 escrow, and $77,000,000 payable within 180 days of May 15, 2012, with a planned $3,000,000 raise and a name change to Cherokee Minerals Inc. This is the company's first move from film into oil and gas.
material agreement
90.0m shUS$9.0m