History
A Nevada shell with a small Kansas oil lease turned to Montana Bakken exploration in 2013, funding it with convertible notes and farming out its properties to partners.
2012-2013: From Kansas shell to Bakken bet
Norstra Energy was set up as a Nevada shell and sought to raise up to $60,000 in a share offering, backed only by a small working interest in a Kansas oil and gas lease. In May 2012 the SEC's first review of its registration filing found text apparently recycled from unrelated companies, plus inconsistencies: the Kansas interest was described two different ways, and the 12-month expense estimates showed both $60,000 and $85,000.
In March 2013 the founder, Dallas Kerkenezov, and director Sasha Heredia stepped back, and geologist Glen Landry, with nearly 40 years of oil and gas experience, became chief executive. Days later Norstra signed a farmout (an agreement to earn an interest by paying for drilling) with Summit West Oil on the South Sun River Bakken Prospect, about 10,000 acres in northwest Montana. It required $200,000 of early exploration and three $5 million wells, about $15.2 million in all, far beyond Norstra's means. Kerkenezov and Heredia cancelled 35,513,100 of their own shares to make the company more attractive to financiers, which helps explain the fall in shares on issue from 73,763,100 at the end of 2012 to 38,250,000 a year later.
An independent geologist estimated 9.5-16.7 million barrels of oil in place per drilling section, though that was not a proved reserve. The annual report for the year to February 2013 showed cash of $99,550, mostly from a $100,000 convertible note, and a shift away from the Kansas lease.
2013-2014: More acreage, more partners
In September 2013 the Summit West deal was widened to 13 leases of about 12,988 acres, with later drilling deadlines and an option to buy the leases for 10,000,000 Norstra shares instead of drilling. Funding came from three secured convertible notes from Jackson Bennett, LLC: $180,000, $250,000 and $150,000. The last was convertible at $0.25 a share, against $0.50 for the first two. Losses grew as activity picked up, and the company repeatedly filed its reports late.
In March 2014 Norstra farmed out its separate Milford Colony leases, about 10,000 acres in Montana, to Super Nova Minerals, which could earn 80% by drilling evaluation wells. In June 2014 it disclosed that Kerkenezov had resigned as chief financial officer effective March 20, and that BNV Energy could earn 60% of about 5,382 Milford Colony acres by drilling two gas wells for about $1 million, with warrants over 4,000,000 shares tied to funding the first well by September 2014.
As of July 2014 Norstra had no revenue, had named no new chief financial officer, and the BNV funding deadline had not been resolved.
Written from the 8 story beats below (2012 to 23 June 2014), which come from the company's own announcements and filings.