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 “Non-Consolidated”
version of Eagle and Hohle Oil (both) so as to reflect the transfer of funds
from Eagle to Hohle for the field operations, only for the first 3 months of
2009. These statements are not audited at this time, but the working copies
that are available from the company reports. Past contracts reflected the
agreements 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 had the agreement with Hohle as
Hohle had the bonds posted with the State of
During the year, the Company relinquished all trading of its shares. The SEC is requiring a full extensive document called the “Form 10” to be filed. This document requires an audit of the previous two years, and an extensive Management Analysis of the operations of the company. Although we have been delayed on our re-entry to the market, future audits, as contemplated by the Company 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.
After April 30, 2009, the Company sold the subsidiary, Eagle Oil Holding Company to Ford-Spoleti Holdings, for stock and control of Ford. The oil interests were transferred to the subsidiary which put the oil business in a public entity for future capital raising and operations. The Company retains a substantial holding in the subsidiary and will continue to maintain the holding after a portion of the stock received from Ford is distributed to the Eagle Environmental Tech shareholders.
Production
Continuous production from the wells that had commenced on February 28, 2008, is still suspended from August 2008 as the Company was unable to fund the needed well repairs. The problem with Steve Siler and Davis Oil and Gas, who had dug 3 deep Gas wells to 12000’ and proceeded to cut 20 of Eagle’s Salt Water Injection lines is still an ongoing suit. No resolution is expected soon, and may continue to 2011. With the State’s severance (inability to pump or sell oil)we had an original total of 17 wells that were on the State list. We had completed 5, when the State added 3 more. Since that addition, the State has added 8 more to be tested. At this time, we are still testing additional wells. The current amount, we believe is 33 total wells in need of service on the “A” lease.We shall continue the testing to show the State our good intentions on fixing questionable wells. Some of the wells to be tested are the same ones we intend to put “on line” and therefore will not be a particular burden on the Company.
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 2009, 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. The Company will be reconsidering the marketing plan after the Oil Company stock holdings gain enough value to warrant the development of 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 no new loan debt during the year, and as of the end of December, approximately $404,748 had been received from loans to the Company. However, of that amount, $100,000 had been secured for oil field bond securities, and those funds have been returned to the lenders, leaving a balance of loan debt at $304,748 plus any interest amounts due. Other debts are from normal business activities. Accounts payables may show differences from 2008 as subsequent adjustments have been done to reflect corrections in the amounts. Since the Company does not do the well operations or funding anymore, it is not expected to obtain any additional substantive debt in the near future.
Management
With the completion of the year, there have been director’s changes. Officer/Director Mark Wayne resigned. Remaining directors are Judy Wilmot and Brian Wilmot. Brian Wilmot came back as President and director. Management continues to believe that with the further development of the environmental units, management and directors duties may change and other personnel will be added or replaced.
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
Respectively submitted:
Brian Wilmot
President