Rio Bravo Oil, Inc.

On September 26, 2013 the company agreed to farm out its Hal Brown Acreage leases in Caldwell County, Texas, to 0947388 BC, Ltd., a Canadian partnership, which would pay for the drilling. The partner is to pay $200,000 on or before September 30, 2013 and every 30 days after until $1,000,000 is paid, spud a salt water disposal well by November 30, 2013, and drill Edwards horizontal wells (six wells and two disposal wells within two years) plus $5,000,000 cash at the end, to earn 70% of the working interest. The company would keep an overriding royalty (leaving the partner a 52.5% net revenue interest), and the partner's spending is shared 70/30 once it has spent $10,000,000. The filing text describes two agreements (Hal Brown and Buda), but the text is cut off before the Buda terms. This reduces the company's share of the Hal Brown leases if the partner performs; payments are retained if it does not.

material agreement

The company completed the two deals it had been planning. On June 1, 2012 it got Numa Luling's 25% working interest in Caldwell and Guadalupe Counties, Texas, for 3,250,000 Series B convertible preferred shares valued at $1.00 each. On May 25, 2012 it bought an 80% working interest in the Caltex leasehold from Eagle Ford Oil Co., Inc. for $2,225,000 ($2,000,000 cash plus a $225,000 note due December 31, 2012) and assumed $1,295,000 of Eagle Ford liabilities, which is above the $1,800,000 price previously planned. It funded this with a $750,000 3% subordinated convertible debenture to Del Mar Financial S.a r.l. (due April 30, 2017, convertible at $0.75) and a $300,000 6% note to Virtus Trust Limited (due December 31, 2012). It also created Series B preferred (5,000,000 shares authorised, converting at 1 share per 0.75 common) and approved a 2012 stock plan capped at 15% of outstanding shares. Item 3.02 mentions 3,200,000 Series B shares, which conflicts with the 3,250,000 stated elsewhere. Financial statements for the acquisitions are to follow.

asset acquisition disposition

This amends the February 14 report on the Pan American deal. It now says the Bateman field option was not exercised and has expired, so the company's stated assets are the Luling Edwards interests. It also discloses that between February 7 and March 13, 2012 the company sold units of 4,208,333 common shares plus warrants over 2,104,166 shares at $1.50 each to eight purchasers for gross proceeds of $3,156,250. Petrina Advisors, Inc. cancelled 66,500,010 of its common shares effective March 28, 2012; it had held 69.75%, and the filing says no party now effectively controls the company.

business combination

On February 24, 2012 the company issued two 8% convertible notes totalling $2,500,000, $1,000,000 to Personalvorsorge der Autogrill Schweiz AG and $1,500,000 to Hohenplan Privatstiftung, due by December 31, 2014. The proceeds are for working capital and general corporate purposes. The holders can convert into common stock, and the notes convert automatically if the stock trades above $2.50 for more than 30 consecutive trading days after March 1, 2013, which would dilute existing shareholders.

debt financing

The company, formerly Soton Holdings Group, changed its business plan to oil and gas and on February 13, 2012 bought Pan American Oil Company, LLC by issuing 5,500,000 Series A convertible redeemable preferred shares and assuming $2,667,250 of its debt plus about $350,000 of short-term liabilities. This gives it at least a 63.5% working interest in the Luling Edwards fields in Texas (each interest subject to a 20% third-party carried interest) and an option on 15% of the Bateman field. The Series A shares convert one-for-one into 5,500,000 common shares (after a planned 30-for-1 forward split) and must be redeemed on January 31, 2019. Further deals are planned but not yet done: a 25% interest from Numa Luling, LLC for Series B preferred shares, and an 80% interest in the Caltex leasehold from Eagle Ford Oil Co., LLC for $1,800,000. Management also changed on February 10, 2012: Thomas D. Bowman became President and CEO, Carlos E. Buchanan II Treasurer and CFO, and Lynden Rose Secretary, with Paul Vassilakos and Miles Leahy resigning. This ends the company's earlier shell-style status, and the filing also carries a Change in Shell Company Status item.

business combination