Question:
"Ladies and Gentlemen,
I have some questions concerning UPDA, which you should please absolutely as fast as possible answer to me. The information politics of the company are cruel. E-mails are not no more answered since many weeks. Except the weekly production numbers of Canyon Creek and Catlin Oil, on 09/05/2006 the first Presse Release appeared for 2 months . If you compares all reports with one another, very much contradictions are contained. Nearly all of The German investors believe meanwhile that there is somewhat putrid, and the doubts are justified according to my opinion. The share quotation follows these uncertainties completely substantial, and it is meanwhile on a level, at which already panic sales take place. In the following are questions of all German investors, which must be urgently clarified:
- why does production from Canyon Creek go down from week to week ?
- what about the Pemex Deal ?
- why are no production numbers of Texas published ?
- why are no numbers published concerning gas production ?
- why does the web page sleep for months? ( why don\'t Catlin Oil and Ambient Wells appear under Subsidiaries ? No further informations, nothing)
- what about the bank credit ?
- which is with the independent resource appraisal (should be finished at the end of of July ) ?
And now the most important question: the share structure is very obscurely, nobody knows exact as conditions are. In the first half-year 2006 282 Convertible Preferred Shares with a rate of conversion of 1:500.000 !!! were changed to 141.000.000 Common Shares. 338.297 is still "outstanding" and 500.000.000 authorized. What is with the old "Procore Preferred Shares" (rate of conversion) ? When and how many may be still conversioned ? When is conclusion with the further transformation or expenditure of shares? How long is the share quotation to be still further "watered" ?
Because I and all German investors already lost much money, I would be grateful to get still today an answer from you"
-------------------------------------------------------------------------------------------------------
"The 10 Qs have properly disclosed the company\'s treatment of preferred stock. The estimates of billions and trillions of shares flodding the market as rumored are unfounded and impossible. If you review the Ks and Qs it doesn\'t appear that there could be more than 270-300 million total shares resultant from conversions,but the total would be much less than that given that the UPDA management team owns more than a third of the shares that could be converted."
Managing Director Ed Belak von Ernst Communications Group:
Answer:
"Let me try to respond to some of the the concerns you have raised.
First let me say that UPDA is a developing company that just began production in 2006 with a well-thought out business plan that is focused on implementing this plan for the benefit of all its shareholders and management are considerable shareholders.The implementation of this business plan will take time
Secondly,in the U.S. any publicly traded company has to abide by SEC rules,chief among them being Reg. FD which basically states that all shareholders have to receive material information simultaneously so as not to give any unfair advantage to any shareholder,or shareholder group by providing them selective disclosure. So you cannot and will not receive special information from the Company that hasn\'t been previously disclosed.
Canyon Creek - As you may rememeber UPDA entered into a joint venture to develop production in this field but the partner did not deliver up to expectations and UPDA formed its own well services company,Ambient Well Services to maximize production.Poor work by the previous contractor caused a casing collapse which reduced production and will require a major re-work. UPDA announced that it had placed the equivalent of a performance bond with the Railroad Commission which regulates the issuance of P4s which are conveyance permits that allow a new operator to remediate a well and improve production. UPDA is only 2-3 weeks away from receiving this conveyance permit to repair the well.
Pemex - A contractor , PIPSA,was receiving condensate from PEMEX but couldn\'t deliver and the Mexican election put negotiations on hold.As you know,this was recently settled. As time occured,it became clear that UPDA was really becoming exclusively an E&P company. Presently UPDA is evaluating the combination of a transportation and storage entity but nothing has been finalized.
Texas Energy - This was another j.v.with Sundial that was not operated by UPDA.The present operator is not communicating production numbers. And there have been ongoing discussions between the two partners about their ownership interests and what the future should entail.Nothing has been announced.
The Company\'s ability to borrow additional funds is dependent upon the completion of the independent reserve report.As you know this would be a non-dilutive source of capital and to the benefit of all shareholders. Management has pressed the independent company performing the reserve report,but has no direct control over when the report will be completed,but it has been expected.
Gas production numbers will be instituted when the Company\'s proposed real time monitoring system has been tested and implemented.
The 10 Qs have properly disclosed the company\'s treatment of preferred stock. The estimates of billions and trillions of shares flodding the market as rumored are unfounded and impossible. If you review the Ks and Qs it doesn\'t appear that there could be more than 270-300 million total shares resultant from conversions,but the total would be much less than that given that the UPDA management team owns more than a third of the shares that could be converted.
I hope this was helpful."
