NOTE: This company decided to ‘renegotiate’ with its service providers, including us, to get out of paying its debts. Read renegotiate as “opted not to pay its bills.” We decided to continue the coverage we guaranteed in our contract because we’re a professional operation, but Prospera no longer gets to approve what we write. It’s probably for the best, considering.
Prospera Energy (PEI.V) went to its borrower again this week, blowing out its $12.2 million. 2-year, 12% interest promissory note by a further $750,000 as news emerged that its oil production was slowing quickly. Previously the company hit an average production of 803 boe/d as they unloaded their tanks, but this month the average sunk to 661.
Prospera is using the expanded loan to run workovers on their wells and make repairs, fix leaks, and deal with non-compliances, according to a corporate update from January 23.
Finances continue to be in disarray. Buried in their most recent update;
Additionally, Prospera’s joint venture partner in the Brooks field is in arrears of approximately $4.2-million, and investigations into this matter are continuing [..] The company is conducting extensive reviews on the nine Horizontal wells drilled in 2023 in the Cuthbert pool as only three of the wells are preforming to expectations.
The company also slung 1.25 million shares to a ‘critical vendor’ they couldn’t pay, offering up shares for debt.
Prospera’s high interest credit is concerning given the short term they have to either refinance or pay the loan back. At a current market cap of $19 million, the lender could end up owning the majority of the company if PEI can’t turn their finances around quickly. Being as that lender, Peter Lacey, has plenty of experience in running companies and growing them quickly, perhaps the best thing PEI investors could hope for is another year of dire results, followed by a takeover of someone knoiwn for competence.
Equity.Guru has been told the company is currently in legal mediation with some creditors, though this hasn’t been announced by the company and is unconfirmed at the time of writing.
— CHRIS PARRY
FULL DISCLOSURE: Consider me conflicted, bitter, and unforgiving of being screwed by this management team after going above and beyond to assist the last management team.
