History
A shuttered web business became an India-focused oil explorer, added Israeli licences, then ran short of money and faced delisting by 2013 while selling assets.
2002-2003: From website to oil and gas
The company began life as Suite101.com, a web business. In February 2002 it laid off all staff except three officers and directors, citing limited revenues, and hired Creative Marketeam Canada, a firm owned by its former chief operating officer, to run the site for $26,000 a month. The cuts were meant to cut overhead and make a business combination or restructuring easier. In March 2002 its subsidiary i5ive Communications gave Double B Holdings an option to buy the website assets for $155,000 less option payments.
The record is then quiet until the turn. On August 29, 2003 the company bought GeoGlobal Resources (India) Inc. from Jean Paul Roy for 34.0 million shares (14.5 million delivered, 19.5 million held in escrow pending exploration results) plus a $2.0 million non-interest-bearing note. Roy became President and CEO and would hold about 69.3% if the escrowed shares were released. The business became oil and gas exploration, starting with a net 5% carried interest (its share of costs paid by others) in an offshore block on India's east coast, KG-OSN-2001/3, with GSPC as operator. It had no proved reserves and had never produced oil or gas.
2004-2007: Building an Indian portfolio
The American Stock Exchange cleared the shares for listing in May 2004, and in June the first drilling rig arrived at the KG#1 well, the first of an initial four-well programme. In September 2005 the company sold 4,252,400 units at $6.50, a share plus a half-warrant, raising about $21.1 million gross through agent Jones Gable on 3,252,400 of them, with 1,000,000 sold directly to three Canadian institutions. The same month it signed two new contracts with the Indian government: 100% of an operated onshore block in Maharashtra (DS-ONN-2003/1) and 10% of a Cambay Basin block in Gujarat.
By July 2006 the KG#15 well, the fifth of a committed 14-well programme, was being drilled. The first exploration phase had expired without all 14 wells drilled, and an extension awaited government approval. The company also agreed with GSPC to take a 20% interest in the Tarapur block, subject to Indian government consent. In March 2007 it signed four more contracts: 10% of onshore Block 28 (operated by Oil India), 25% each of Rajasthan Blocks 20 and 21, and 100% of operated Block 27. In June 2007 it completed a private placement of 5,680,000 units at $5.00, raising $28.4 million gross, more than the 5 million units first proposed.
Trouble began in 2007. In April the company said its September 2006 quarter should not be relied upon, because stock-based pay had been miscalculated. In August GSPC demanded that it pay 10% of offshore exploration costs above US$59.23 million, which GSPC put at US$44.68 million. The company said this breached its carried interest agreement and intended to defend its rights. In December auditor Ernst & Young resigned, giving no reason.
2008-2011: Restatements and a move into Israel
In January 2008 the company assigned to GSPC its 30% interest in two Egyptian blocks, with an option to reacquire them by April 30, 2008; the outcome is not recorded. In April it said it would file its 2007 annual report late because of a wider restatement of stock pay to consultants. The American Stock Exchange demanded a compliance plan, accepted on April 30, and by late May the annual report was still unfiled. Unaudited first-quarter figures showed a loss of about US$700,000 and current assets of about US$44.7 million. The record is then quiet until 2010.
In October 2010 the company sold 2,941,177 units at US$0.85, about US$2.5 million, to one institutional investor. In November it completed the US$1.2 million purchase of interests in two deepwater Israeli licences, Myra and Sara, and became operator, though other parties could remove it. In March 2011 it added a 30% interest in a third licence, Samuel, operated by Adira Geo Global.
2012-2013: Cheap money and delisting
Funding then came in small, low-priced pieces. In February 2012 the company raised US$625,000 at US$0.25 a unit, and in May about US$847,660 at roughly US$0.22 a share. Shares on issue were 82,746,933 at the end of 2011; the 2012 figure of 138,343 is not explained by the beats. In September 2012 the Sara-1 well was spud, planned to reach about 4,000 metres. GeoGlobal owned only 5% of Sara, and no result is reported.
On November 30, 2012 NYSE MKT warned of losses large enough to question whether the company could continue operating, and of a share price averaging $0.11. In December it agreed to sell 13,827,387 units to Crede CG II at US$0.067, US$926,435 in total, subject to exchange approval. In January 2013 it agreed to sell 90% of its Israeli subsidiary GeoGlobal Resources (Israel) Ltd. for a US$775,000 investor loan. On April 5, 2013 it agreed to sell its Indian Cambay assets to Sarus Energy for US$16 million, much of it contingent.
The 10-K due April 16, 2013 was not filed. On April 17 NYSE MKT said it intended to delist the stock, which closed at $0.03, and the company was evaluating an appeal. On May 7, 2013 the exchange filed to remove the securities from listing.
Written from the 29 story beats below (2002 to 7 May 2013), which come from the company's own announcements and filings.