Here's a farcical example of some of the press releases that are arriving at our editors' desks daily from a multitude of new E&P-company wannabes. John F. Doe, newly appointed chairman and chief executive of Ain't This A Great Oil Co. (stock symbol: NOT), has announced the company's acquisition of new office furniture, two Persian rugs and a copier. The mahogany office suite with Georgian styling will be installed on the ninth floor of the Boomer Building in Houston, some time in the second quarter. The furniture was funded by a blank check provided by Cold Hard Cash IV LP, with 60%, and We're In The Money Fund I with 40%. Cold Hard is a Cayman Islands-based hedge fund formed by investor groups based in Brooklyn, Palm Beach, Laguna Niguel, California and Nome, Alaska. The copier was purchased at a 50% discount off wholesale from the cousin of an undisclosed board member, sold to a subsidiary at retail, and leased back in an off-balance-sheet, tax-free transaction. This press release, which is Ain't's 24th this year, was issued before legal counsel approval, so that the company's name would appear again on Internet searches using the key words oil, gas, investing or energy demand in China. By issuing a constant stream of press releases on every conceivable action or proposed action within the company, the stock should continue its meteoric rise. It recently hit an intraday high of $1.34 per share, up from just 48 cents two weeks earlier. Separately, Ain't reports drilling progress on the Gusher #1 well outside Scottsdale, Arizona. Ain't has a 1% overriding royalty interest and the operator is AKA Corp., fka TBD Inc. The drillbit is at 652 feet. Target depth is 6,350 feet and may be reached in March 2007. Associated reserves from the well are anticipated to be 150 billion cubic feet equivalent net to Ain't's interest, based on similar reserves being discovered in a well in Colorado that used the same type of drillbit. In the interest of full disclosure, in a conference call yesterday, Mr. Doe reiterated that at the present time, Ain't has no material oil or gas reserves, production, acreage, seismic data or PUDs. The firm does, however, hold the 1% overriding interest in the Gusher #1 and 2.2% nonoperated working interests in two shallow, coalbed-methane wells in Argentina. Desorption results may be available in 2006. And, dewatering is expected to continue for 18 months. "There is no pipeline infrastructure or gas market in the area. However, this fits in well with our overall strategy, because stranded gas is all the rage these days," Mr. Doe says. In the quarter ended March 31, cash flow from operations was provided by the company's part-time geologist's weekly poker game with a few "industry friends." The furniture transaction follows a private placement of $252,000 of perpetually convertible, preferred, inflation-protected, non-taxable, guaranteed-to-go-up common stock and warrants. These are subordinated to the CEO's pending divorce settlement, which will be appealed. Ain't was formed in December through a reverse merger of Mr. Doe's privately held lawn-care company, Green Turf Inc., and publicly held Bo Jack's Casino (BJXX). "We have combined the synergies of overturning sod and rolling the dice to create what we think will become one of North America's premier cash flow machines in oil and gas," Doe says. Upon recommendation of a consulting firm, the board has approved a contrarian strategy that includes these key elements: to pay too much for tired assets that produce too little, and to lease too few acres to be meaningful. The focus will be on highly scattered plays out of the mainstream that are not amenable to 3-D seismic, stimulation, horizontal drilling or waterflood. "We seek short-lived plays where we are not sure there is any oil or gas that is economic to produce. If there is none, we'll just buy someone out. Our board of directors has instructed us to deploy capital as fast as possible," Mr. Doe says. A new subsidiary devoted to developing 8-D seismic imaging is in the early stages of seeking capital. The road show will begin as soon as the consulting engineer figures out how to fix the PowerPoint presentation. Meanwhile, Mr. Doe reports a heavy schedule of corporate presentations in May-two charity golf tournaments in Florida, one Louisiana crawfish boil, a deep-sea fishing tournament off California, and a wild-boar hunt in South America. Further, pursuant to a pre-announcement, the company announced that it has hired Susie Jones as officer manager and appointed her to the board. Her duties include making sure the in-office gourmet coffee machine is stocked at all times, especially when analysts call. Jones was a vice president of trading for BBall Partners LLC, a group of retired professional baseball players with more money than sense. For more details on the company, please see aintitgreat.com or contact Top Touters, an investor-relations firm based in a WiFi-equipped Starbucks in Orlando. Disclaimer: The SEC has neither confirmed nor denied that Ain't is a real oil company.
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