Since abandoning their previous business models involving the opening of restaurants and concentrating on becoming an oil and gas exploration and production company Breezer Ventures Inc. (PINKSHEETS: BRZV) has established some level of stability. Whether or not that stability translates into a concrete foundation for success or quickly crumbles has yet to be seen but BRZV will certainly have their work cut out for them if they are to meet their identified goals.
It’s not as if BRZV has been in the oil and gas exploration and production game very long; as pointed out in their most recent quarterly report they had no plan of operations at the end of 2011. Their failure to follow through with their restaurant businesses led them to the decision, quite naturally one would suppose, to become an oil and gas exploration and production company.
So now BRZV considers itself “engaged in oil production and its associated activities including: exploration, extraction, processing, and reclamation” and says the company “specializes in sustainable, low-cost oil and gas production which delivers value from efficiency.” Of course that sounds nice but since they haven’t generated any real results from their activities it may be a stretch to say they specialize in any of those areas.
On Wednesday investors got a first look at the progress BRZV has made as an oil and gas exploration and production company thanks to a press release providing an operations update for Well #6 of the Jackson production area. Well #6, located in the Jackson Oil and Gas leases in Texas, is owned and operated by Breezer.
In this update BRZV said they were “successful in drilling into the top two meters of a ten meter thick Moran Sand oil rich formation. The Company had good initial production of oil and gas and is now seeking to increase the oil flow through hydraulic stimulation.” That’s pretty much it as far as the update was concerned. While it’s understandable that a company may want to hold back on providing too much information, the vagueness of BRZV’s statement only calls into question their progress.
BRZV stated in that same release they were “also looking to test the potential of the Winchell Lime and the Patio segment of the Palo Pinto formation that are located above the Moran Sand in the Jackson #6. Historical data indicates that the Patio Sand has an initial potential of 20 to 40 barrels per day oil production plus associated gas. The Winchell Lime has not been tested in this area and could possibly be a new wildcat discovery for the Company. The Company is in the immediate process of assembling the necessary resources to proceed with drilling into these other oil rich zones.”
Assembling the necessary resources to proceed with drilling may be a bit problematic for BRZV as they have no source of revenue outside of equity financing. In addition, even if they had the resources it would still take a considerable amount of time before they would be able to reach the level of production that would make them a viable business operation.
All of this said, BRZV shares climbed to a high of 0.110 on Wednesday, a significant improvement over the 0.0450 level they hit last Thursday. Shares are currently trading around the 0.0910 range which is above their 50-day moving average of 0.0755. Additionally, BRZV has boosted their trading volume with today’s press release, already pushing past the 2.3 million mark after closing yesterday with just over 239,000 shares traded.
Oil and gas exploration and production companies are a dime a dozen right now and very few of these have the properties capable of generating meaningful output let alone the financial resources to even get started with production. The financial condition of BRZV puts their future in considerable doubt and the fact they remained guarded about any details in their only press release this year may be telling.