Change is in the wind for Costa Mesa, California-based Force Fuels, Inc. Over the last couple months, the Company has actively pursued partners for Joint Venture agreements and had a changing of the guard at the head of the Company. Per a recent 8-K filed with the SEC, “On March 22, 2011, the Board of Directors accepted Mr. Oscar Luppi’s voluntary resignation from his positions of Chairman, President, Chief Executive Officer, and Treasurer of the Registrant. There were no disagreements or misunderstandings relating to the Registrant’s operations, policies or practices between the Board and Mr. Luppi leading to his resignation.” Mr. Luppi was replaced by Mr. Thomas C. Hemingway in all positions.
This morning, Force Fuel announced a significant debt reduction through an agreement with PEMCO, LLC to return 50% ownership to Pemco in 4 of the 13 leases that were purchased in April 2010 from Pemco. The four leases involved in this transaction are Mann, Mann AB, Bayless and Doebrook. Additionally, Force Fuels will return operatorship to Pemco and commence a Joint Venture on the remaining nine leases with Pioneer Oil Development; a relationship that appears to be blossoming.
Force Fuels announced a new agreement with Pioneer Oil Development, LLC early in March aimed at increasing oil production on 1,200 acres of Pioneer Oil’s Oklahoma properties. The property currently has approximately 100 existing oil wells, with 20 in full production. Force Fuels has agreed to jointly drill and operate additional wells, with an aim of increasing production by as many as 10 new wells during 2011.
With the new agreement, Force Fuels reduces their total debt by $1,352,265. According to new CEO Thomas Hemingway, “Our main goal is to drill and rehab the wells that are in Kansas and Oklahoma. Having PEMCO and Pioneer Oil as our service partners will allow Force Fuels to grow throughout Chautauqua and Montgomery Counties, moving south to Oklahoma. This Joint Venture partnership will help expand Force Fuel’s presence into Oklahoma, providing us a larger space (foot print) in the mid-continent market sector. By reducing our debt by over $1.35 million we will be able to invest more money in new and existing wells rather than servicing debt.”
Investors appear to be reacting positively to the news at this point as the share price has climbed 12.5 percent in the first 30 minutes of the trading day, albeit on only 39,200 shares in volume. More information on Force Fuels and the recent transactions can be found on the Company’s website at www.forcefuels.com.