FORWARD LOOKING INFORMATION
Certain of the statements contained in all parts of this document including, but not limited to, those relating to our production plans, the effect of changes in strategy and business discipline, future tax matters, future general and administrative expenses on a per unit of production basis, changes in wells operated and reserves, future growth and expansion, future exploration, future seismic data (including timing and results), expansion of operation, our ability to generate additional prospects, review of outside generated prospects and acquisitions, additional reserves and reserve increases, replace production and manage our asset base, enhancement of visualization and interpretation strengths, expansion and improvement of capabilities, integration of new technology into operations, credit facilities, re-determination of our borrowing base, attraction of new members to the technical team, future compensation programs, new focus on core areas, new prospects, new alliances, future capital expenditures (or funding thereof) and working capital, sufficiency of future working capital, borrowings and capital resources and liquidity, projected rates of return, retained earnings and dividend policies, projected cash flows from operations, future commodity price environment, expectation or timing of reaching payout, outcome, effects or timing of any legal proceedings or contingencies, the impact of any change in accounting policies on our financial statements, the number, timing or results of any wells, the plans for timing, interpretation and results of new or existing seismic surveys or seismic data, future production or reserves, future acquisition of leases, lease options or other land rights, any other statements regarding future operations, financial results, opportunities, growth, business plans and strategy and other statements that are not historical facts are forward-looking statements. These forward-looking statements reflect our current view of future events and financial performance. When used in this document, the words “budgeted,” “anticipate,” “estimate,” “expect,” “may,” “project,” “believe,” “intend,” “plan,” “potential,” “forecast,” “might,” “predict,” “should” and similar expressions are intended to be among the expressions that identify forward-looking statements. These forward-looking statements speak only as of their dates and should not be unduly relied upon. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise. Such statements involve risks and uncertainties, including, but not limited to, those set forth and with other factors, detailed in this document and our other filings with the Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes may vary materially from those indicated. All subsequent written and oral forward-looking statements attributable to us or to persons acting on our behalf are expressly qualified in their entirety by reference to these risks and uncertainties.
AVAILABLE INFORMATION
Our website address is www.egvr.com. We make our website content available for information purposes only. It should not be relied upon for investment purposes, nor is it incorporated by reference in this MD & A. We make available on this website under “Investor Relations – SEC Filings, and general news items and information” free of charge, our annual reports, quarterly reports, current reports and amendments to those reports as soon as reasonably practicable after we electronically file those materials with, or furnish those materials to, the Securities and Exchange Commission (“SEC”). The SEC also maintains a website at www.sec.gov that contains reports, proxy statements and other information regarding SEC registrants, including us.
ITEMS 1 AND 2. BUSINESS AND PROPERTIES
The current financial statements are a “Consolidated”
version of Eagle and Hohle Oil (both) to reflect the transfer of funds from
Eagle to Hohle for the field operations. These statements are not audited at
this time, but the working or draft copies that are available from the company
reports prior to the accountant’s reports that will be available when they are
completed in 2008. Current contracts reflect the agreement with Hohle Oil
Services Company Inc., (on operating Lease “A”) and Hohle Oil Energy Services
Company Inc. (on operating Lease “B” and “C”) to operate the wells on Eagle’s
behalf. Eagle has the agreement with Hohle as Hohle has the bonds posted with
the State of
During the year, the Company requested to file a new “15C2-11”, which is a document used to get trading on the Over the Counter “OTC” Pink Sheets market. It is the same market we had been on when the SEC revoked our trading ability in February 2006. The ruling received from the SEC was that a full extensive document called the “10 SB” would have to be filed. This document requires an audit of the previous two years, and probably the first quarter of 2008, and an extensive Management Analysis of the operations of the company. The new auditors are in the process of reviewing the previous years. The Management Analysis has been completed and is pending the final audit information for the attorney. We have no set time for the final filing to be done, but expect it to be by early May. Although we have been delayed on our re-entry to the market, the audits will allow us to upgrade immediately to the OTCBB or better trading market. That means a broker can solicit new investors and not have to wait for a random call to come to him.
Management has considered other factors that may have influence on the value of the stock when it goes back on the market. Those factors are; the idea of a name change to remove the stigma of a “de-listed” company from the brokers, and a stock consolidation program (sometimes called a “reverse split”) to reduce the amount of float in the market while raising the value of the stock that would be available. In the document being submitted to the SEC, form 10 SB, the stock consolidation program is listed as an item to be voted on at the shareholders meeting in June. The idea is generally supported by the stockbrokers as it cuts the amount of stock that may be “dumped” or sold on the market on the first few days of trading. If the stock was listed at ten cents with the amount of shares currently outstanding, (135 million) a 10 to 1 consolidation would price that same share at $1.00. That would do two things: 1) Reduce the chances of someone dumping a lot of stock on the market, 2) Placing our stock on a higher trading market with better visibility and potential. With the current assets of twelve (12) million barrels of oil and the related equipment owned by the company, plus our continuing oil sales, our shares should reflect a better pricing structure.
A company name change to reflect the current efforts toward the energy development would work better for the stock brokers and assist the company in better new shareholder recognition and direction. The environmental side would still be within the company but listed as a “division” of the company. As the technologies become available for sale, we can boost the division name while maintaining our company recognition in the energy market.
Production
Continuous production from the wells commenced on February
18, 2007, but the State of
CryoYcix
During the year, no further development on the technology
was completed. We have preliminary drawings completed by the engineers, but no
product construction has yet begun. The engineers agree that up to two units
will be needed for testing and demonstration, but the funds to pursue that
cost, estimated at $500,000, have not been available. It is expected that with
the oil field revenue being to develop in early 2008, the funds can be used to
begin the CryoYcix development. These units will be similar to the original Zawcad models, but many changes have been designed into
them which will require new patents and copyrights to be obtained. Some items
may or may not conflict with the original models patented by INEEL in
WaterClear
The Company stopped selling and installing WaterClear units in 2007. Although a very good quality unit, the pricing and cost of installing a unit for a home was not within the costs the public was prepared to pay. The average unit installed cost the buyer about $15,000 or more. Future units may be more economical if the market changes on needs or requirements. With water becoming more of a political issue, the Company feels that the technology may be able to overcome the cost problems with a better benefit program.
CycloMills
The Company has not done any marketing on the equipment, but has two units in storage at this time. The Company will be marketing the equipment after the oil field gets into production as this equipment is designed to operate in oil fields and the Company would be able to demonstrate it at our own field. The ability to recycle the drilling mud and waste from the wells, would be a big advantage to the oil companies that have disposal problems.
Zawmet
The Company expects to be able to begin the marketing of the Zawmet technology when the CryoYcix equipment is ready for demonstration. Since it is the same basic idea with modifications for the oil refining industry, we should be able to show the benefits of the technology to many of the same customers that will need the CryoYcix equipment.
Zawmet is a process for the continuous removal of contaminant metal from refinery FCCU (Fluid Catalyst Cracking Unit) by removal of metal from the catalyst. In general this is highly beneficial to the petroleum refining industry since metal build-up causes excess hydrogen production and drastically lowers product liquid yields. Zawmet can be used by refiners to reduce contaminant metal concentrations in existing catalysts, instead of purchasing fresh catalyst at $1800/ton. FCCU operating costs will be reduced and spent catalyst minimized while production yields will be improved. In addition, by recycling catalyst instead of replacing it, an expensive and difficult hazardous waste disposal problem is avoided.
The most successful competitive process currently on the market is the Coastal Refining Company DEMETä process, which uses serial contact of catalyst with 1400° F hydrogen sulfide and chloride in high alloy pressure vessels followed by water wash and drying. Based on Eagle’s experience with other applications, it is anticipated that metal contaminants will be separated from the Zeolite and other catalysts in the form of sub-micron size particles that will be pneumatically conveyed by nitrogen vapor into a high-efficiency filters for periodic collection.
Finances
The Company incurred new debt during the year, and as of the end of December, approximately $269,563 has been received from loans to the Company. Other debts are from normal business activities. Accounts payables may show differences from 2006 as subsequent adjustments have been done to reflect corrections in the amounts. With the success of the Company obtaining up to 10 wells operating or 50 barrels of oil per day, the Company should be fully self sufficient with adequate revenues to proceed with the field development. The Company has been able to hold expenses down during the year due to the extensive capital investment completed in 2005 and 2006. Most of the equipment requirements have been met and only pumps and tubing for the future wells being put into production will be added to the capital expenses.
Management
With the completion of the year, there have been director’s changes. Director, Ronald Bender, elected last June, resigned as a director. All other directors remained with the Company. New Management of Mark Wayne as President and director, has been added. Management continues to believe that as production increases in the oil field and the further development of the environmental units, management and directors duties may change and other personnel will be added or replaced.
Mark N. Wayne, President(Appointed), Director (appointed until Shareholders Meeting in June of 2008) WORK HISTORY, Sep 1965 to Jun 1998 Instructor/Department head C.I.S Chabot College Hayward,CA. Taught lecture/laboratory classes, developed curriculum, constructed budgets, formulated teaching schedules, designed computer labs for the Computer Information Systems department, wrote textbooks in COBOL, FORTRAN and Flowcharting and Coached the Intercollegiate Tennis team. Jul 1972 to Mar 1995 Owner/Operator Supreme Courts/Salinas Athletic Club Northern California, CA. Opened, owned and operated various Athletic Clubs/concessions in Nine locations in the Bay area/Salinas CA. Helped develop "SportsMed" a computer software package with a PhD Exercise Physiologist to evaluate and prescribe workouts and measure progress of fitness EDUCATION: Sep 1960 to Jun 1965 San Jose State University, San Jose, CA, BS Marketing MS Marketing. While attending San Jose, worked for the college as a computer operator, computer programmer and systems analyst and was in charge of the college computer laboratory 1961-1964; Tennis team 1958-1959, 1961-1962; Mt San Antonio College 1959-1960; Michigan State University 1958-1959 MEMBERSHIPS: International Racquetball Association; California State Chairman-IRA 1975-1979; Member of the National Board of Directors-IRA 1980-1982; National Racquetball Doubles Champion 74',80',84',89',93' ; Sponsored by AMF Voit, HEAD, Black Knight SOFTWARE/SYSTEM SKILLS: Taught Computer languages including Autocoder, COBOL, FORTRAN, BASIC, RPG and Applications including Visicalc, LOTUS, EXCEL, dBASE, rBase, Wordstar, WORD
Brian D. Wilmot, Chairman/CEO: Graduate of University of Minnesota 1966, Formed Eagle Environmental Technologies Ltd., in June of 1990, serving as Founder/Director and CEO during the development phase to present condition; directed merger of Public Company and Eagle creating the current Eagle configuration and continued as the lead officer and director; 1981-1986, Managing Partner of a gold mining project, wrote ERI report, designed the mining operation, facilitated the management organization of Limited Partners. 1979-1980, Organized and co-founded the New Central Sierra Bank, served as the Chairman of the Board, directed all State and Federal approval processes, recruited the directors and President, Currently the bank has five branches. No pay was offered or received for the work on this bank and no stock was given or purchased in the operation; 1977 to Present, a Real Estate Broker within California; 1973-1979 co founded Office Supply Store and Leasing company in California; 1966-1973 Area Supervisor for Texaco Inc. in Minneapolis, top sales representative in the Midwest Region, second in the Nation 1971.
Judith A. Wilmot, Secretary/Treasurer/Director: Co-Founder Eagle Environmental Technologies
LTD.; Graduate of the
Heather J. Walsh, Director, CryoYcix committee: B.S. Chemical Engineering, University of Washington, 1983; Specialized on-the-job training: Project Management; High and Intermediate Pressure Safety; Test Engineering; Hydrostatic Test Supervisor; Radiological Controls Requisition Writing, Radioactive Material Handling; SARA/OSHA Training for Hazardous Waste Treatment, Storage, and Disposal Facilities Workers; Additional, Hazardous Material Management courses work through University of California, Berkley Extension, SECURITY CLEARANCE DOE “Q” (1983 to present - Idaho National Engineering Laboratory [INEL], Lawrence Livermore National Laboratory [LLNL]), EXPERIENCE, over 22 years; Corporate Affiliations, International Business Machines (IBM) Chemical Engineering Intern, 1981; Westinghouse Electric Corporation, Navel Reactors Facility, contract to INEL, Engineer, Test Engineer and Hydrostatic Test Supervisor, 1983-1989; Stone and Webster Engineering, contract to LLNL, Lead Procedure Engineer and Procedure Writer, 1989-1994; Comtech, contact to LLNL, Team Leader, Deputy Group Leader, Process Engineer and Chemical Analyst, 1989-1998; LLNL, Division Thrust Leader, Process Engineer and Chemical Analyst,1998 to present.
Connie Helwig, Director, Audit
Committee, Graduate of
Julia
Thompson, Director, CryoYcix Committee, Professional experience began at the county
level counseling for delinquent, then dependent children, progressed into Peace
Officer positions within the California Department of Corrections working with
adult male felons during two decades of prison construction and population
growth. Since retiring from State service she served as a substance abuse
counselor; CFO of a family business, Thompson Industries LLC, founder and CEO
of Lake Solano Investors Group; and most recently as a Program Coordinator for
the Vacaville Police Department. Associate of Arts Degree- Public
Service & Administration/ Criminal Justice Administration- Solano
Community College 1971; Correctional Peace Officer PC 832 Academy – Modesto
Junior College (Class 50 - 1977); Certificate in State Management –
California Department of Personnel Administration (1985); Qualifications
Appraisal Chairperson Certification - California Department of Personnel
Administration (1985) Anti-Sniper and Survival Certification – Federal
Bureau of Investigation 1980; Hostage Negotiations Academy – California
Department of Corrections 1987; Personnel Investigator Certification –
Modesto Junior College 1999 Inter-Governmental Management Certificate,
Marconi Center, Marin County, CA 1998 Volunteer Programs. November 2006-Present. Lake Solano Investors
Group: Founder & Chief Executive Officer, 2001-Present; Thompson
Industries, LLC dba Sonora Auto Parts; Managing
Partner, 2003-2005 AK. Bean Foundation –
Substance Abuse Counselor, Solano County: 2002-2003; California Department of
Corrections: December 13,1976 – January 1, 2001; County of Solano, Fairfield,
CA: Group Counselor I & Supervising Group Counselor II: Solano County
Children’s Shelter & Juvenile Hall
1971-1977 Correctional Administrator:
Associate Warden Custody Operations Calipatria
State Prison Budgets and Special Projects Coordinator, Correctional Education
and Inmate Programs Unit, Institutions Division, Sacramento, CA.
Gail Durst, Director, Audit committee Attended American River College in Sacramento, Ca. Worked at McClellan AFB in Sacramento for 20 years, titles included Electronic Technician - Certify test equipment Electro-Mechanical Gyroscopic instrument repair; Technical Orders Drafting - Writing technical orders for various, craft.; Working with private companies such as Rockwell and Northrup.; Precision Measurement Equipment Lab. Tech. - Certified equipment under the guidelines set by the National Bureau of standards. In 1981, built a full line vending company from the ground up. Today that company, D&H Vending Service , Inc., operates 200 vending machines at 50 different locations. As Secretary/Treasurer, I facilitate all aspects of running a company, concentrating on; banking and accounting. Member of National Automatic Merchandising Association and National Federation of Independent Business.
Richard LaMantain, Director, Audit Committee: National Marketing,
Respectively submitted:
Mark Wayne
President