Houston’s Cobra Oil & Gas Co. has been trying hard to get noticed lately, with 14 press releases from the small publicly traded E&P company in the last month alone. They range from securing $6 million in financing from a Swiss firm to expanding lease acreage in Utah.
Unfortunately one of the releases was a retraction of an earlier announcement.
On July 23 the company put out what it said was an update on its “Utah Oil Sands Prospect.” In the release the Cobra said it had “secured the use of a proprietary oil extraction process” that would be carried out by Dr. Daulat Mamora. It even included a quote from Mamora, a professor at Texas A&M:
| In Canada oil sands extration has been ongoing. In Utah, where Cobra has some leases, not quite yet.
The process, called Ii-situ combusiton, “is a very efficient and cost-effective method of getting more oil out of known fields,” said Mamora of Rocky Mountain Consulting. “It can recover more oil, at a lower cost, and in less time than most other processes when applied with proper engineering and process management, which requires skill and precision.”
But in e-mail exchanges with the Chronicle Mamora said he never worked for Cobra or Rocky Mountain Consulting
“I do not know Cobra Oil. I have never been a consultant to the company,” he said.
The company put out a press release this week acknowledging as much, but saying Mamora previously did work for a company that Cobra purchased the leases from. We haven’t been able to reach Cobra’s CEO Max Pozzoni to further explain the mistake. A receptionist at the West Loop office suites where he rents space said he hasn’t been in this week.
Cobra has also been a heavy user of third-party direct e-mail firms to push the company’s stock. The latest (which we have received repeatedly) came from James Rapholz, whose stock picking newsletter is well known among penny stock watchers. The Rapholz promotion calls Cobra a “true Small-Cap Hero” whose shares are “good as gold.” In particular the message says through its holdings in the Uintah Basin in Utah “… energy giants already joined with Cobra Oil & Gas, including Exxon ($337 billion), Pioneer ($3.5 billion), and Questar ($6 billion).”
Paul Matheny, vice president of Rockies operations for Questar said there’s a bit more to the story.
Cobra has a stake in leases to extract oil sands (or tar sands) in Utah while Questar, Pioneer and Exxon own leases to extract more conventional oil and gas in that area. The Bureau of Land Management has been sitting on requests to extract the oil sands for years, Matheny said.
“But that effort is essentially dead and has been dead for many years,” Matheny said. “They have no vehicle to go mine the oil sands until they can convince the other companies to unify the ownership of the leases between shallow oil sands and the deep [conventional] oil and gas.”
UOS Energy, which says it has acquired the rights to the oil sands leases from “the now-defunct” Enercor, filed suit against the Bureau of Land Management in federal court earlier this year contesting the blocking of the leases.
It’s not clear if Cobra’s promotional efforts have paid off. The company stock peaked on July 23 (the day of the mistaken release) at $1.55. Since then its traded between $1 and $1.40.
(note: Cobra should not be confused with Cobra Oil & Gas Corp. of Wichita Falls.)