Thursday, January 05, 2006

Strata Oil & Gas--La Brea Tar Pits?

The 10Q Detective received this 'confidential' letter delivered to our Post Office Box yesterday from the desk of Ian Chambers:

  • A Massive Price Spike is Imminent...Buy Strata Oil & Gas, Inc. (SOIGF.OB - $2.22) now to lock in ten-bagger profits.
  • Behind closed doors, MASSIVE blocks of oil-rich properties are being turned over to select companies like Strata , who are picking them up for peanuts and turning them into MULTI-BILLION dollar oil projects.
  • Imagine my excitement when I discovered that Strata is quietly putting together a serious oil sands portfolio in [Northern Alberta] an area teaming with multi-billion dollar oil projects.
  • Strata is sitting on a vast underground lake of oil...estimated to contain 94 BILLION barrels of oil....that translates into a gross value of up to $4.7 TRILLION.
  • This stock could easily blast through $25 per share.

--Ian Chambers, Editor, OUTSTANDING PROFITS

Strata Oil & Gas is a company founded on shaky ground. The Company, formerly known as Stratabase, previously generated revenues by selling databases of sales leads and mailing lists, and providing technical services aimed to customize and improve the quality of the databases sold. Stratabase had an open source software that was designed to allow users to interface with and manage these databases, and customer relationships. It was the expectation of management that by giving the software away for free and making it open source, a demand could be created for the Company's database and technical services.

Unfortunately--for shareholders--this business plan did not work. Therefore, the decision was made by management to alter Stratabase's business model to focus on proprietary software. In 2004, the Company began charging a monthly fee for use of its software. Simultaneously, management sought to develop CRM Software, which was designed to enable corporations to save time and money by improving the efficiency of its workers. Sifting through Stratabase's June 30, 2004, SEC filing, however, revealed that this proprietary software, called "Relata," was released in beta form in June 2003, but never got past the testing phase! Interesting--in the first six-months of 2004, the Company generated ZERO dollars in revenue, yet had general & administrative expenses of $266,627. As Stratabase did not have an active sales staff to sell its database services (!!!), this means that G&A expenses consisted primarily of depreciation and amortization of databases and domain names, and salaries paid to the eight company employees.

Courtesy of Stocklemon.com, the 10Q Detective has also uncovered that Trevor Newton, CEO, CFO, Secretary, and Treasurer [NO KIDDING!] and Fred Coombes, Director of Business Development, were both former stock promoters. Epilogue: On August 19, and August 23, 2005 respectively, Trevor Newton and Fred Coombes resigned from each of their respective positions as directors and officers of the Company. [ed. note. sorry, at press time we were unable to determine how many--if any--Strata Oil shares these two guys might still own]

And this brings us to the present. In 2005, the company underwent further changes, acquiring four wells drilled on land for gas exploration. The property is in the Wabasca oil sands in Northern Alberta. That year, Strata Oil & Gas underwent a major management reorganization as well.

The editor of Outstanding Profits, Ian Chambers, touts that Strata is on its way to being a $25 stock. If that were so, why did insiders file, in September and October 2005, to sell approximately $2.0 million worth of company shares? Did the 10Q Detective fail to mention, too, that Tucker Banks Publishing, the owner of Outstanding Profits, was paid the sum of $210,000 to enhance investor awareness of Strata Oil & Gas!

Albeit we admit to not being qualified geologists, in the opinion of the 10Q Detective, Strata Oil & Gas owns the equivalent of sticky sand. This small-cap company is focused on the exploration and development of heavy oil / oil sands in Western Canada: (i) Oil sands are substantially heavier than other crude oils, are very viscous and do not flow easily, and (ii) no economic criteria has been applied to the analysis of drillings and the company has not determined how much if any of the resource may be recoverable with existing technology.

Do not be like a dinosaur and get stuck in this La Brea Tar Pit of a stock.

9 comments:

Nick Migliaccio said...

As a matter of course, I Google a lot of stuff when I look up a stock issue. Whomever Trevor Newton and Fred Coombes were, I guess they are not now, at least as concerns Strata Oil. I did find it odd that Yahoo Finance showed only Planned Sales when I checked it to see if the insiders were buying.
The recent run this stock executed in April has me concerned, BUT I Googled and DogPiled all the Mgmt, and found nothing negative. I guess I will simply put a diagonal line under it and if it violates the support to any extent, I will kick it out the door. Shame tho, it looked like so much fun

Anonymous said...

Special thanks to 10Q Detective for giving me a heads up and an interest to look into this further. When I received a letter from Ian Chambers, along with a newsletter from Tucker Banks, my initial thought was... who are these guys? It is always interesting when you are unable to find substance about investor gurus on the internet, despite their self-appointed knowledge in the area. If you take a look at the stock history of Strata, SOIGF OTC symbol, you'll find that the stock suddenly jumped significantly in the month of Sept, 2005, from a few cents to a couple of bucks per share. This explains why insiders sold around this time. Not to mention that within days before this event, you'll find that on the same day that Trevor Newton resigned (Aug 19, 2005), Manny Dhinsa, a 34 yr old with a mere undergrad in Geology, was appointed as Chairman, CEO, President, CFO, Treasurer, and Director of the company. Talk about a 1 man band. Boy, the things you can do with an undergrad in Geology. Then on Aug. 24, 2005, Strata borrowed $1 million payable in 1 year from Paul Uppal at a company seemingly put together for this purpose by the name of Pacific World Enterprises. In collateral, 60 million common shares were provided. You'll find this under SEC filings http://www.secinfo.com/dsWxw.zk6.htm

The idea that one can go from a mailing software package to oil drilling, assemble a few people and get the public excited by leveraging a past history in mailing software and a healthy payout to a newsletter company, just blows me away.

Pro-10Q

Anonymous said...

It is understandable that there is some uncertainty with a start-up like strata. Rumor has it, however, that Bill Gates' investment company "Cascade" is going to take a stake in strata in order to fund their oil drilling project. Wth backers like this the sky is the limit for this oil company with 27000 acres of black gold.
It doesn't hurt either that the tiny 11m o/s are owned 70% by insiders.

Malibu said...

AUG 31, 2006 THIS COMPANY IS THE NEXT ENRON - SELL WHILE YOU CAN BEFORE IT NOSEDIVES. There has been supposedly good news about Strata Oil all over the companies website and in news that get published on Yahoo, etc. The stock has run up in a short time from under a $1 to over $7. I predict a "mass-slaughter" of anybody in this stock. The company had no revenue in 2003 thru 2005, has no employees(per their Investor Relations), hundreds of thousands of dollars of negative cash flow - over $2 million in 2005(spent on stock marketing advertising campaigns, mailers and “buying off” brokers to taut their stock) and keeps putting out press releases of acquiring new leases in the oil sands territory of Alberta, Canada that “significantly increases" their holdings. If one looks at the acquisitions they total about $1.6 million of the total of over $1.250 Billion! of acquisitions by other companies in the oil sands areas of Alberta during this year. This is a puny 0.14% (that’s right a little more than 1/8th of 1 percent)! And, they are all, with the exception of 2 lease properties, the lowest value of leases in all of Alberta. (If one wants to see the players in the oil sands market check who the major players are besides Shell at the Energy website for Alberta http://www.energy.gov.ab.ca/177.asp ). This company is a sham and an Enron in waiting. The outstanding shareholders who value the sham company at $98 million based on its share price deserves to know what it's probable future value is. I am a small investor, who I admit made a few dollars trading the company stock, but just got out when I found out that Strata wasn't even a minute player in the market. They even sent out a $ 1/2 million brochure to "fish for investors" making it sound like they were a big company with big potential. The investment public needs to know. DO YOUR FUNDAMENTAL DUE DILLIGENCE IF YOU PLAN TO HOLD OR BUY THIS COMPANY!

andys said...

This is my 10K lesson, the cost of not doing due dilegence. Unfortunately, the company seems to be run by scam artists, not management. Tucker Banks should be ashamed of himself.

waldipup said...

With all due respect (and thanks) to all , isn't the operant point whether or not the leases held by Strata valuable or not , as opposed to anything else?

And nothing I have read here discusses that.

I bought shares of CanWest Petroleum years ago for .35 sh. , which holds oilsand leases in Saskachewan , not even in "proven" Alberta , and they rose to 9 bucks before leveling off at 3-4.

Until we can ascetain the value of the Strata leases , we really cannot comment accurately on the value of the company.

The fact that there is no income I must point out is meaningless.

The value (if there is any) would be based on potential resources/reserves only at this point , and that could be substantial.

I don't understand how the $mil. loan from Paul Uppal could be backed by 60mil. sh. as that is more than the total shares of the company.Were they unissued shares? What happened with that loan?

Anonymous said...

GREAT post WALDIPUP.
New post 3/29/07

Oil exploration is a crap shoot. I go with my gut feelings after doing a lot of DD.

My gut says that GREAT news is coming soon about the testing that Strata has been performing on their fields. I am also looking at the decrease in reserves and rising price of oil. News today is $4 oil is around the corner.

Worse case the heavy oil will be removed from the ground at a higer price, but that higher production price will be more than offset by rising oil prices. Best case the testing currently in progress finds light sweet crude and the stock jumps over $25.

As I said my gut tells me that GREAT news is coming soon. I have found NO negative information about the management as other are posting (without examples). I believe these bashers are trying to get the stock cheaper before the news is released.

The dice are shaking in the hands of the roller and he is getting ready to come out. Place your bets everyone.

JP said...

So what's buzz with the August 7, 2008 "important update"?
Anyone know?

Anonymous said...

Fred coombes is a shady promoter. He has been involved varous pump and dump schemes.He was involveded with yuma copper and used his insider previledges to exploit selling stock held by nominee accounts.He would manipulate the market by selling into nominee accounts and buying the same stock miltiple times on the same day either to drive the market up or down, depending on what benefits him.Beware !!!