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Show National Enterprise Page Three Marry for Money: Joint Venture Joint formidable and more tempting current fiscal year on May 31, entrepreneurs share their than in probably any other said Marvin Small, president, risks and some of their profits field. We have oil and gas sales of with other companies or priThe technique is especially more than $3 million, on which vate investors-- is an essential attractive to smaller, we should earn about $1 in this financing technique independent oil and million after tax. Galaxy has high-coera. gas producers, such as Galaxy added far more oil and gas Its widely used and has Oil Company of Wichita Falls, reserves than we are currently notably vocal advocates in the Texas, and Merchants Petro- producing. This achievement, he notes, energy business, where the leum Company of Los Angeles ratio is both more By the end of Galaxys will cost Galaxy more than $2 million in drilling activity and about $1 million in lease acquisition expenses. More than half the money committed to acreage and drilling will have been allocated to seven FINANCIAL SPECIALISTS exploration prospects in which the company has retained 31 FOR CORPORATIONS, 11 percent to 83 percent working interests. ACCOUNTANTS AND Small says the company is ATTORNEYS venturing-where- by fast-growin- g, st risk-rewa- rd rp Valuations (ESOTs, Estate, Stock) e geology, then retain 50 percent interests when the drilling is financed. He then emphasized that we could not possibly drill and develop all the prospects we generate with our own resources. To cut our risks. a Galaxy must number of projects to spread the risks. Observing that joint-ventu- them and that, he adds, probably on an impro-derisk base. nt "We arc not alone, he noted that even the petroleum giants must joint venture. Graphically, company exploration-oriente- d joint-venturi- red gas leases in Clay County, West Virginia. These have now been put into a joint venture whose partner drills totally at his cost. When these wells reach the production stage, Bozman explained, Merchants reserves are overriding royalty, which, after repaying all costs to the drilling partner, gives Merchants a 50 percent reversionary interest. re He noted that about 15 years ago the company acqui two of Offerees Representative first-stag- Small with others. Galaxy would have undertaken only one or Financial Consulting and the explained the rationale for joint venturing: Galaxy is an exploration drilling program, he stressed, would have been beyond Galaxys commitment goals had we not these prospects joint-ventur- ed Private Placements their early stages. Generally we fund the initial acquisitions Merchants Petroleum also makes "effective use of joint venturing, said J.R. Bozman, president. The company is notable in a number of ways. Founded some 58 years ago and traded on the Pacific Coast Stock Exchange continuously for the last 52 years, Merchants has expanded in the last two years under the direction of Mr. Bozman. It now has an impressive stake in coal leaseholds as well as oil and gas, and utilizes three basic techniques. enjoying exceptional growth in building its oil and gas reserves and that its profit margins are quite satisfactory. Galayss current seven-we- ll Mergers, Acquisitions with sufficient resources to acquire good prospects in ng N. In a variation of venture technique, said, Merchants the joint Bozman obtains exclusivity on prime prospective lands from major oil companies. Merchants then sells these lands to another oil an indepencompany-usua- lly dent with the well to be drilled at the partners cost. Merchants usually obtains an override. We did this recently in Utah, on the 20,000-foo- t well which we drilled on a 25,000-acr- e Bozman said. block, Disclosing that the well is owned by Phillips Petroleum Company, which retains a 50 percent interest, he said, Our drilling partner pays all costs, receives the other 50 percent and Merchants gets a 1.05 percent override. Reorganization Tarnishes Once Glamourous Oil Stock of the insolvent King Resources Co. of Denver will vote for or d against a plan of reorganization for the former glamor oil and gas firm, but present shareholders will be left with worthless souvenirs. Charles A. Baer, trustee of the company, reported to creditors that the reorganization plan had been approved DENVER-Credit- ors court-approve- First Corporate Finance Corporation INVESTMENT BANKERS Kearns Bldg., Salt Lake City, Utah 84101 (801) 532-797- 9 2001 Bryan Tower, Dallas, Texas 75201 651-12- 21 (214) -- by U.S. Dist Court Judge Fred M. Winner. Copies of the proposed plan the ballots indicating whether they accept or reject the of reorganization will be reorganization plan;, to Baer mailed to all creditors by April by July 20. A positive vote by of the creditors is 20, according to Baer. Copies of the plan also will be mailed required before the final step to holders of foreign subor- can be taken in the reorgandinated debentures, if the ization. The final step is a hearing bearers of the debentures respond to notices that will be for confirmation of the plan in foreign that will be held before Judge printed Winner on Sept 30. newspapers. M two-thir- I I I I I I I I I I you Covered to know what's going on in the industry--frocorporate board rooms to changing securities laws and regulations. m behind closed doors of We'll keep you posted on the latest developments and abreast of current trends. The National Enterprise gives your investments the kind of coverage they deserve. Please send me a one-yea- r subscription to the National Enterprise. Enclosed is $18.00. NAME. ADDRESS. I CITY STATE. ZIP- - I I (continued on page 12) I I I I I I I I Mail to: THE NATIONAL ENTERPRISE P.O. BOX 11778 SALT LAKE CITY, UTAH 84147 Under the proposed plan, King Resources, once the heart of the financial empire of Denver oilman John M. King, will continue business as an active company. The reorganized firm, according to Baer, will be an reorganessentially debt-fre- e ized company which will manage the producing properties and maintain an ongoing drilling and development program. Although the debts of the company have been accounted for in the plan and all creditors will receive at least a portion of the money thait they are owed, he added, the present holders of the old King Resources common stock will get nothing. He explained that the court had ruled that the company was insolvent and its stock was worthless. The ruling had been made some time ago, but the stock I With over 1600 stock quotations, news articles, earnings reports, corporate profiles, market columns and feature stories, the National Enterprise covers the OTC securities market from coast to coast. ds Continue Business I I We make it our business The creditors must return I |
