Croff 2006 Proxy
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14A
Proxy
Statement Pursuant to Section 14(a) of
the
Securities Exchange Act of 1934
(Amendment No. 3)
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Filed
by the
Registrant x
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Filed
by a Party other than the
Registrant o
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Check
the appropriate box:
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Preliminary
Proxy Statement
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Confidential,
for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
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Definitive
Proxy Statement
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Definitive
Additional Materials
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x
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Soliciting
Material Pursuant to §240.14a-12
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Croff
Enterprises, Inc.
(Name
of
Registrant as Specified In Its Charter)
(Name
of
Person(s) Filing Proxy Statement, if other than the Registrant)
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Payment
of Filing Fee (Check the appropriate box):
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No
fee required.
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Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
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(1)
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Title
of each class of securities to which transaction
applies:
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(2)
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Aggregate
number of securities to which transaction applies:
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(3)
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Per
unit price or other underlying value of transaction computed pursuant
to
Exchange Act Rule 0-11 (set forth the amount on which the filing
fee is
calculated and state how it was determined):
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(4)
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Proposed
maximum aggregate value of transaction:
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(5)
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Total
fee paid:
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x
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Fee
paid previously with preliminary materials.
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Check
box if any part of the fee is offset as provided by Exchange Act
Rule
0-11(a)(2) and identify the filing for which the offsetting fee
was paid
previously. Identify the previous filing by registration statement
number,
or the Form or Schedule and the date of its filing.
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(1)
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Amount
Previously Paid:
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(2)
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Form,
Schedule or Registration Statement No.:
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(3)
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Filing
Party:
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(4)
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Date
Filed:
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Persons
who are to respond to the collection of information contained in
this form
are not required to respond unless the form displays a currently
valid OMB
control number.
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2007
PROXY STATEMENT
SPECIAL
MEETING OF SHAREHOLDERS
A
Special
Meeting of Shareholders of
Croff
Enterprises, Inc.
will
be
held at:
3773
Cherry Creek Drive North
Meeting
Room, Second Floor, Room 280
Denver,
Colorado
Telephone:
(303) 383-1555
on
_________
___, 2007, at 11:00 A.M.
GENERAL
INFORMATION & INCORPORATION BY REFERENCE
THIS
PROXY STATEMENT IS BEING MAILED ON
APPROXIMATELY _______ ___, 2007 TO ALL CROFF COMMON AND PREFERRED “B”
SHAREHOLDERS OF RECORD IN CONNECTION WITH THE SOLICITATION OF YOUR VOTE
BY THE
BOARD OF DIRECTORS OF CROFF ENTERPRISES, INC. (“the Company” or “Croff”) with
regard to a Special Meeting of shareholders to be held on ______ ___, 2007
at
11:00 a.m. at 3773 Cherry Creek Drive, North Meeting Room 208, Denver,
Colorado
80209, Telephone: (303) 383-1555. This meeting is called to discuss
and vote upon the following described transfer of Croff’s assets pledged to the
preferred “B” shares, (oil and gas assets) to a private corporation to be owned by the
preferred “B” shareholders, after the preferred “B” share
exchange. Common shareholders also will be asked to vote upon the
election of directors and ratification of the auditors in the same manner
as at
a general shareholder meeting. This Proxy Statement should be
reviewed in connection with the copy of the Croff Annual Report filed on
SEC
Amended Form 10-K/A dated December 31, 2006 and as restated and filed on
August
___, 2007.
VARIOUS
ITEMS OF IMPORTANT INFORMATION
AND ACCOUNTING FOR THE COMPANY RELATED TO THIS PROXY STATEMENT, SUCH AS
“DESCRIPTION OF THE BUSINESS”, ARE SET-OUT IN THE ANNUAL REPORT CONCURRENTLY
DELIVERED TO SHAREHOLDERS ON AMENDED FORM 10-K/A. (SEE OTHER
INFORMATION PARAGRAPH OF THIS PROXY AT PAGE ___). SUCH DETAILED
INFORMATION MAY BE RELEVANT IN REVIEWING THIS PROXY STATEMENT, BUT IS NOT
REPEATED IN THIS DOCUMENT. ACCORDINGLY, EACH SHAREHOLDER SHOULD
REFER TO THE AMENDED 2006 FORM 10-K/A BEFORE COMPLETING THEIR
PROXY BALLOT.
Proxies
voted in accordance with the
accompanying ballot form, which are properly executed and received by the
Secretary to the company prior to the Special meeting, will be voted.
Shareholder Proposals are discussed at Page ___.
TABLE
OF CONTENTS
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General
Information & Incorporation by Reference
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1
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Glossary
of Selected Commonly Used Terms
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3-5
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General
Description of Transaction and Proxy
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6-11
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Common
Shareholder Vote & Ballot Form
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11-14
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Preferred
Shareholder Vote & Ballot Form
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14-15
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Voting
Procedures & Terms
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15-17
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Principal
Shareholders and Parties Having a Substantial Interest
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17-19
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Executive
Compensation
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19-21
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Certain
Relationships and Related Transactions
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21-22
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Management’s
Stock Rights and Options
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22
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Corporate
Governance
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23-25
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Corporate
Performance Graph
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25
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Matters
Subject to Shareholder Vote:
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25
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Election
of Directors
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25
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Summary
Information as to Directors/Principal Officers
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26
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Executive
Compensation
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27-28
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Ratification
of Appointment of Independent Accountants
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29
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Vote
on Division of Company and Related Items
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29-38
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Management’s
Discussion and Analysis of Financial conditions of Result of
Operations
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39
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Croff
Financial Analysis
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39-42
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Tax
Considerations
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42
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Auditors
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43-44
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Risk
Factors
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44-47
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Dissenting
Shareholder Rights
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48
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Other
Matters
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49
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Stockholder
Proposals
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49
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Section
16(A) Beneficial Ownership Reporting Compliance
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49
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Other
Information
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49
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Exhibit
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GLOSSARY
OF SELECTED COMMONLY USED TERMS
The
following terms are frequently used in this Proxy and may be important
to you in
understanding and interpreting various provisions of the overall Proxy
Statement. While your Board has attempted to briefly define each of
these terms in the context of where first used, it was believed that a
general
and centralized glossary of these selected terms as more extensively defined
may
also be helpful to shareholders in reviewing this proxy
information:
Croff
& Croff Oil.
As
used herein Croff or the Company, shall mean and include only the public
entity
known as Croff Enterprises, Inc. Whenever reference is made to the
proposed private company which will own the Croff preferred “B”
assets, it shall be designated Croff Oil or described as “the private
company”.
Croff
Majority Shareholders.
For
the purposes of this proxy, the Croff majority common shareholders shall
mean
and include the common shares held by both the Croff principal shareholders,
as
defined below, in combination with Mr. Julian D. Jensen, who is an independent
director of this company and a holder of approximately 5.7% of the common
shares. As to the preferred “B” shares, the principal shareholders,
defined below, are also the majority shareholders.
Dissenting
Shareholder Rights.
Dissenting shareholder rights as used in this proxy shall refer to those
provisions of Utah law (Utah Code Annot. §16-10a-1301 et. seq.)
which would require or allow the corporation in certain forms of reorganization
or transfer of assets to offer to shareholders an option to “cash-out” their
shares for a proffered monetary consideration rather than for them to
continue
on in the reorganized company as a shareholder. The specific terms of
the dissenting shareholder rights as employed in this proxy are separately
set-out in the following sections, but will essentially provide a fixed
price to
be paid to all common and preferred “B” shareholders not wishing to continue on
and vote in favor of the current proposed plan of asset transfer and
corporate
division. The company will offer a fixed redemption price per share
and if the shareholder is not satisfied with that price, they can propose
an
alternative price and see if the company will accept the alternative
proposal. If the company and the shareholder do not reach an agreed
upon resolution, then Croff will be required to institute an action in
a Utah
district court seeking a judicial determination of the fair valuation
of the
shares.
Independent
Director.
Croff,
because of its relatively small size and limited trading market, has
not been
subject to any institutional definition of an independent director by
any
national securities exchange, such as the New York Stock Exchange or
the
American Stock Exchange. Further, because the company has a very
limited trading market for its shares, it has not deemed itself subject
to any
mandated definition of an independent director by the National Association
of
Securities Dealers (NASDAQ). Croff has adopted and applied internally
the following definition of an independent
director:
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A
director who is not an officer or employee of the company, is
not
in
a position to exercise control over other directors or
shareholders
and
who holds less than 10% of the voting stock of the
company.
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General
Notice Requirement to Shareholders.
The
term notice requirement to shareholders is primarily used in this proxy
statement in reference to procedures to be followed by the company in attempting
to notify shareholders related to their interest as previous preferred
“B”
shareholders, but now holding common shares pursuant to the anticipated
close of
the corporate division. The Utah Revised Business Corporation Act
(URBCA) provides that the company must continue to provide notice to
shareholders for all notice purposes, including notice of meeting and voting,
until and unless the company receives back two attempted mailings to such
shareholders indicating the address is “undeliverable”. Croff has
undertaken by this proxy to attempt to notify all shareholders of record
of the
present proxy process and the division of the existing Croff Enterprises
into
two separate entities. The management of the company will attempt, in
the normal course of shareholder communications, to notice shareholders
that the
company has not been able to contact them prior to determining that the
company
has exhausted its notice requirements to that shareholder under Utah corporate
law. In the event that the company is no longer required to attempt
notice to any shareholder, it will hold the common shares as converted
from
preferred “B” shares under the Utah provisions for unclaimed property for a
period not to exceed five years and deem that it may tender any unclaimed
shares
to the state of Utah as unclaimed property, pursuant to Utah Code Annot.
§67-4a-208, which also requires providing the last known address of that
shareholder. Utah lost or abandoned property procedures , (once
stock or other valuable assets are tendered to the state as lost or abandoned
property) are relatively complex; but, in short, provide for the state
to
continue to attempt public notice for a prescribed period of time in an
attempt
to locate the holder of that property and after a prescribed period of
time and
series of published notices and public lists, depending on individual
circumstances, to deem that such location is not possible and allow
the property or proceeds to revert (escheat) to the state of Utah.
Preferred
“B” Assets..
The
preferred “B” assets, which would be assigned to a separate corporation owned by
the preferred “B” shareholders, constitute the present oil and gas properties,
lease interests and related bank accounts, receivables, production equipment
and
intangibles and all related liabilities pledged to the preferred “B”
shares. These assets are more particularly itemized and set-out in
the 2006 Amended 10-K/A report and Schedule A to the Plan of Corporate
Division. Upon the close of the corporate division plan, there will
be no further oil and gas assets or liabilities left in Croff.
Plan
of Corporate Division and Asset Transfer.
The
plan of corporate division is the principal proposal for which this proxy
is
being solicited. The plan essentially proposes that all preferred “B”
assets of Croff are to be transferred to a new private corporate entity
to be
known as Croff Oil. Each current preferred “B” shareholder of Croff
Enterprises, Inc. would receive one share in Croff Oil for each issued
preferred
“B” share, which preferred “B” shares would then be cancelled of
record. All common shareholders would continue on without change.
Croff would essentially become, for an interim period, a shell company
with only
cash assets, seeking further acquisition or merger opportunities.
Principal
Shareholders.
The
principal shareholders of Croff shall mean and include Mr. Gerald L.
Jensen,
Jensen Development Company, and CS Finance, LLC. all of which are business
entities fully controlled by Mr. Gerald L. Jensen, and which entities
collectively own 67.2% of the preferred “B” shares outstanding and approximately
47% of the common stock, as more particularly described in these proxy
materials. Mr. Gerald L. Jensen is also the current chairman and
president of Croff.
Public
Shareholders.
Public
shareholders of Croff, as used generically in this proxy statement, are
meant to
include all shareholders who are not defined as part of the principal
shareholders; or, except as may be explicitly noted, are not members
of the
board of directors. The public shareholders presently hold
approximately 44% of the issued and outstanding common shares and approximately
32% of the preferred “B” shares.
Record
Date.
The
record date refers to the official date upon which Croff will determine
the
common and preferred “B” shareholders entitled to vote on the proxy matters in
this proxy statement. The record date set-out in these proxy
materials is a date thirty days prior to the date upon which the SEC
review of
the proxy will be completed and the proxy determined effective by the
board of
directors for mailing purposes to all shareholders of record as of that
date. The actual record date, as determined, will be inserted
in this proxy prior to mailing.
GENERAL
DESCRIPTION OF PROXY
On
June 1, 2007, Croff
officially terminated a proposed Share Exchange plan
with
Taiyuan Rongan Business Trading Company Limited (hereafter
“TRBT”). TRBT was engaged in operating retail shopping malls in
the
People’s Republic of China. That exchange, if closed, would have
resulted in TRBT owning a preponderant majority of the issued and outstanding
shares of Croff and the company assuming the operation of such malls in
the
People’s Republic of China as its principal business. The board
terminated this Share Exchange prior to a proxy solicitation to its shareholders
due to a failure of performance by TRBT, particularly related to timely
providing adequate financial statements.
Subsequent
to the termination of the
proposed transaction with TRBT, Croff’s board of director’s appointed an
independent committee to review the strategic direction of Croff, including
whether to go forward with the transfer of the preferred “B” assets to a new
entity and to cancel the preferred “B” shares. The independent
committee determined and the full board adopted a plan to “split” the existing
Croff into two entities and transfer the Croff preferred “B” assets to the new
entity, Croff Oil, and issue one common share in the new entity for each
preferred “B” share outstanding. Croff Enterprises would continue as
a public company and continue to seek a strategic reorganization through
acquisition or merger with an, as yet, undetermined business
entity. The oil and gas assets of Croff which are pledged
to the preferred “B” shareholders would be transferred, subject to approval of
this proxy, to a new private entity to be known as Croff Oil Company, owned
by
the preferred “B” shareholders.
Each
current preferred “B”
shareholder would be entitled to one common share of Croff Oil for each
Croff
Enterprises preferred “B” share presently held of record. It is
intended that Croff oil would be operated as a private company with the
existing
management of Croff Enterprises constituting its initial
officers. Croff Oil’s initial board of directors would be Mr. Gerald L.
Jensen, Mr. Richard Mandel and Mr. Julian Jensen. All preferred “B”
shares would be cancelled of record after the exchange to common shares
as
holder described above. Existing preferred “B” shareholders, not
tendering for exchange, would continue to be entitled to the common share
exchange right until such time as the exchange common may be surrendered
to the
state of Utah as lost or abandoned property.
Under
the Utah Dissenting Share
Rights Statute, any shareholder not approving the division of the company
and
asset transfer will be afforded an opportunity to tender his, her or its
common
or preferred shares for cash in lieu of remaining as a shareholder in the
public
or intended private company. The board has determined to offer
$4.25/share for each preferred “B” share and $1.00/share for each common share
under the dissenting shareholder rights provisions of this proxy. The preferred
“B” purchase amounts will be paid by Croff from the preferred “B” accounts or by
the Croff principal shareholders, which have agreed to provide all additional
amounts needed. The common shares will be purchased from corporate
funds. Each shareholder will also have a right under the Utah statute
to challenge these offered redemption prices and to require a judicial
determination if a compromise is not reached. The specific terms of Utah
Dissenting Shareholder Rights are more fully set-out and described under
a
following section of this proxy headed as such.
The
independent committee has
determined that the simplified capital structure existing after and in
the event
of the transfer of oil and gas assets will more likely allow Croff to grow
and
gain more scalable oil and gas assets and that the company should have
greater
flexibility and success in going forward to acquire new oil and gas assets
or
other business opportunities if the existing assets are
transferred.
In
the event of the conclusion of the
corporate division, making a hypothetical assumption that all current public
shareholders of Croff will retain their common shares rather than elect
the
dissenting rights for a cash payment, the public shareholders of Croff
would own
approximately 44% of the issued and outstanding common shares in Croff
and, the
Principal Shareholders would own approximately 56% of the issued and outstanding
shares, including the shares held by other members of the board of
directors.
In
the private company, Croff Oil,
the Croff principals would hold approximately 67.2% of the common stock
and the
other prior Croff shareholder’s would own 32.8%, assuming no dissenting shareholder rights
are exercised.
Croff
has determined that if the cash
redemption demand for its common shares exceeds $250,000, then Croff will
reserve the right to terminate the plan of corporate division based upon
Croff’s
perception of the minimal amount of capital required by Croff to remain
viable.
Croff
has determined, through its
board of directors, to attempt to continue as an oil and gas company subsequent
to the completion of the corporate division, so far as possible, and intends
to
seek out new oil and gas assets as part of its ongoing business
plan. It is anticipated that the nature of oil and gas assets to be
acquired in the future by Croff will be more “scalable” in nature, that is that
they will be primarily acquired, so far as possible with potential for
additional drilling and expansion opportunities.
The
proposed plan of corporate
division is subject only to an affirmative majority common and preferred
shareholder vote at the meeting. Estimates or projections of the
effect of the transaction upon the valuation of the Croff shares or stock
price
of the shares cannot and will not be made by Croff as part of the
exchange.
Each
shareholder is further advised
that the Croff principal shareholders intend to vote in favor of the corporate
division and all related matters and hold sufficient Croff common in conjunction
with Mr. Julian Jensen, a director, to constitute a common share
majority. As to the preferred “B” shares, the principal shareholders
currently hold a majority sharehold position. The analysis and basis
of the Board’s recommendation of each specific proxy proposal will be more fully
set-out and explained under the following section on “Specific Matters to be
Voted Upon”.
General
Meeting Agenda.
In
addition to the special items to be
voted upon as generally described above, the board will present the current
directors, and new director, as nominees for re-election and the ratification
of
the reappointment of the current independent auditor for Croff for an annual
term by the common shareholders as part of general meeting
agenda. These matters are more fully discussed below:
Summary
of the Plan of Corporate Division and Asset
Transfer.
The
primary terms of the plan of
corporate division and asset transfer are as set-out below. However,
each shareholder, or other interested party, is encouraged to review the
complete plan as previously outlined and the availability of which is set-out
in
the forepart of this proxy statement.
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The
essential terms of the plan simply provide for the transfer, without
other
consideration, of all oil and gas assets of Croff Enterprises to
the newly
created Utah corporation known as Croff Oil Company. The
shareholders of Croff Oil will be the current “B” preferred shareholders
of Croff Enterprises who will receive one restricted common share
in Croff
Oil in exchange for each preferred “B” share currently
held. The preferred “B” shares subsequently will be cancelled
of record. The transferred assets constitute approximately $1,500,000
of
the total approximate $1,800,000 book value of Croff and will constitute
the sole assets of the new private entity. Croff Enterprises
would essentially continue as a shell corporation with a book value
of
approximately $320,000 almost all of which would be in cash or
cash
equivalents. All preferred “B” shares would be cancelled of
record and all “B” shareholders would be issued one share of restricted
common stock in the private entity, Croff Oil Company, for each
preferred
“B” share previously held in
Croff.
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The
common shares to be issued in the new entity, Croff Oil, would
be
restricted securities in a private company. That is, the shares
would not be registered under federal or state securities laws
or
regulations for distribution or trading; and, therefore, would
not be free
trading, but could only be resold upon the consent of counsel for
the
issuer. The exemption from registration claims are subsequently
discussed herein at page 38. Croff Oil Company intends to repurchase any shares
offered for sale, except for private sales between shareholders
at a price
to be subsequently determined based upon a projected value of the
company
at the time of purchase. It is believed this procedure prevents
a further distribution of the Croff Oil stock. As a result,
there will be some decrease in liquidity with reference to the
new
restricted common shares of Croff Oil versus the preferred “B” shares in
Croff Enterprises. However, it should be noted there is, at
present, no active trading market for the preferred “B”
shares. Croff is of the opinion, based upon the advice of its
counsel, that the restricted shares may be repurchased by the Company
without the company engaging in a registration or distribution
of shares,
since the only parties allowed to participate in the exchange would
be
those who are already restricted shareholders of record in the
Issuer. The potential reduction in liquidity, as discussed
above, along with other Risk Factors, are more fully treated at
page ____
of this proxy.
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It
is intended that the board of directors of Croff Oil would be three
members of the existing board of directors of Croff, as identified
above,
will be submitted pursuant to this proxy for reelection in
Croff. Each shareholder should understand, however, that they
may propose on the common ballot form, as supplied with this proxy,
alternative nominees and cast their votes in favor of such alternative
nominees as part of the ballot process. Because majority
shareholders have indicated their intent to vote for the present
board
members, it is deemed that the present proposed board nominees
will be
elected as part of the
reorganization.
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Croff Oil will continue managing the existing
oil and gas
assets, presently under management in Croff, and will attempt to
build or
expand those assets for the benefit of the shareholders. It is
possible, though not warranted, that the board may consider future
dividends to shareholders in Croff Oil
Company. |
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Croff
will continue as a publicly held company with the same common
shareholders
as presently exists prior to the proposal of corporate division
as set-out
in this proxy statement. It is anticipated that Croff will be,
for an interim period, essentially a shell corporation with approximately
$325,000 of capitalization and will continue to seek opportunities
including merger or acquisition possibilities with individuals
and/or
entities to advance its business purposes. The company intends
primarily, though not exclusively, to focus upon various oil
and gas
opportunities which may result in new assets being acquired which
are more
expandable and more readily fit into the model of a public
corporation. It should be understood that in these anticipated
endeavors, the public company will have limited financial resources
presently available and may not be able to fully implement a
plan of
acquisition and growth without further capitalization, either
from
subsequent equity or debt financing. Neither equity or debt
financing is anticipated at this time. This limited capitalization
is more
further explained under the Risk Factor Section of this
proxy.
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Croff
will, as a condition of the plan of division and asset transfer
closing,
amend its Articles of Incorporation to cancel all preferred “B” shares
outstanding. All “B” preferred shares will be cancelled and
terminated of record. Croff will distribute common shares in
the new subsidiary, Croff Oil Company, with one common shares issued
to
each former “B” shareholder in Croff. Any subsequent presentation of “B”
preferred shares will entitle the holder to receive a common share
for
each “B” share for which the holder has not previously been delivered
common shares. Preferred “B” shareholders who cannot be located
under applicable notice provisions of the Utah Revised Business
Corporation Act (“URBC”), essentially being defined as those whose address
on the company records are designated as “undeliverable” after two
consecutive mailing efforts, may subsequently have any unclaimed
common
shares to which they would otherwise be entitled tendered to the
State of
Utah as unclaimed property. Typically, common shares
issued but which remain unclaimed, may be deemed lost or abandoned
and
tendered to the state of Utah if still unclaimed after a period
of five
years. Upon the closing of the plan of corporate division,
Croff will have outstanding and issued only common shares. The
state of Utah provides various notice and public listing procedures
to
owners of unclaimed property after delivery to the state before
the
property or proceeds of sale can be tendered (escheat) to the
state. These procedures and requirements are beyond the scope
of this disclosure, but are set out in Utah Code Annot. §67-4a-101
et.seq.
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Since
Croff is essentially dividing the assets of the Company between
its
preferred “B” and common shareholders, there is no change of value for the
“B” shareholders. For any dissenting preferred “B” or common
shareholders, the company has valued such shares for dissenting
shareholder rights purposes at $4.25 per each preferred “B” share and
$1.00 per common share, based upon the company’s analysis of a reasonable
value as discussed
subsequently.
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The
company will amend its Articles of Incorporation to increase
the
authorized class of Preferred “A” shares, no par, from five million shares
to ten million shares to facilitate potential future funding
by
Croff. No preferred “A” shares are presently issued and no
distribution is contemplated.
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·
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Croff does not believe there are or will be any anti-takeover implications of increasing the authorized class of preferred "A" shares. In point of fact, the number of such shares authorized was directed by the board to actually enhance the capacity of the company to complete a merger or acquisition by having a more "reasonable" number of such shares available for these purposes. There are no special rights or terms attached to such shares which would discourage the issuance or holding of such shares by any party seeking to gain control of Croff. It should be noted that certain shares in security transactions by unrelated parties have at times been created and authorized in such a manner that their issuance would discourage potential take-overs by creating special cash payments or stock options to existing officers, directors and/or affiliates upon issuance (so called "golden parachutes") or which issuance may cause excessive dilution by triggering other stock rights or entitlement by the issuance of other shares or cash payments to existing management to discourage take-over offers (so called "poison pills"). No such right or devices exist as to the proposed increased authorized shares and the company's general orientation is to encourage acquisition opportunities upon a reasonable basis.
|
|
·
|
The
company will amend its Articles of Incorporation to increase
the
authorized Common shares, $0.10 par, from twenty million shares
to fifty
million shares to facilitate potential future funding by
Croff.
|
|
·
|
There are no anti-takeover rights or devices associated with the proposed increase in the common stock as discussed in the preceding section.
|
|
·
|
It
should be noted that the current principal shareholder, Mr.
Gerald L.
Jensen, and a co-director, Mr. Julian Jensen, hold and intend
to vote a
majority block of common shares in favor of the exchange
plan. Mr. Gerald L. Jensen, individually and through his
controlled entities, owns a majority of the preferred B shares
which he
also intends to vote in favor of the exchange
plan.
|
The
foregoing is only intended to be a general description of the primary
terms of
the plan of corporate division. Any interested party should review
carefully the following sections of this proxy more fully describing
the
proposal, as well as the actual plan of corporate division and exchange
attached
as Exhibit “A” to this Proxy.
Analysis
of Plan of Corporate Division and Asset Exchange.
The
preferred “B” shares were created
by board authorization and shareholder approval in 1996. The purpose
was to create a class of preferred shares which would preserve to
all
shareholders, prorata, their interest in the oil and gas assets of
the company while allowing management to more easily consider diversification
opportunities. Since 1996 most, but not all, subsequently acquired
oil and gas assets have been acquired with assets and proceeds belonging
to the
preferred “B” shares and pledged to those shares. A more particular
itemization of these oil and gas assets is attached as an Exhibit to the plan
which can be reviewed by any interested shareholder as outlined
above. The plan fully preserves preferred “B” shareholder interest
and valuation in the preferred “B” assets. Valuation should only be
an issue to shareholders considering dissenting rights. The
company does obtain annual reserve reports of its oil and gas interests
and has
made informal internal projections of the possible range of value
for its oil
and gas assets based upon those reserve reports which are included,
in summary
form, as part of Croff’s annual 10-K reports. It should be noted,
however, that potential oil and gas recovery valuations do not directly
correspond to possible “selling prices” or actual “market valuations” for oil
and gas assets.
The
board took no position on valuation
or making a recommendation in 2005 incident to the tender offer for
preferred
“B” shares at $3.00 per share by Mr. Gerald Jensen, the president, and
certain
entities controlled by him.
In
the event of the closing of the plan
of corporate division and asset exchange, the remaining assets in
Croff on its
books and the separated Preferred “B” Book Value is shown on Exhibit A to the
Plan of Corporate Division.
Summary
Description of Matters to be Voted Upon
The
following constitutes a general
description and analysis of the matters to be voted upon by both the
common and
preferred “B” shareholders with the reason for the Board’s recommendation as to
each item. Each shareholder is reminded that the current Croff
majority shareholders hold a majority of both the common and preferred
“B” stock
with regard to the matters outlined for voting purposes; and, therefore,
are
believed to have sufficient votes to insure that the following matters
are
approved by majority shareholder vote at the meeting to which this
proxy
pertains. However, the Board, rather than simply providing an
Information Statement, has deemed it is in the interest of shareholders
to
review and be entitled to vote upon these matters or to exercise dissenting
rights if not voting in favor of the proposal. Further, the
election of directors cannot be accomplished by a majority shareholder
consent
resolution.
It
is believed the preferred “B”
shareholders are only entitled under the Articles of Incorporation of
Croff to
vote upon the transfer of assets to Croff Oil, but are also voting upon
the
termination of the “B” shares by the direction of the board.
The
following is a summary outline of
the items presented in this proxy statement for voting
purposes. A more detailed analysis of the items to be
voted commences on page ___ of this proxy:
ITEMS
TO BE VOTED UPON BY COMMON SHAREHOLDERS
The
common shareholders will vote upon
the following matters:
Special
Meeting Items
|
1.
|
Item
1 – Approval of Plan of Corporate Division and Asset
Exchange. You will be asked to vote upon the plan of
corporate division which transfers the Croff oil and gas assets
and
liabilities into Croff Oil in exchange for common
shares. Details of the plan of corporate division are outlined
in the preceding section and are more fully discussed subsequently
in this
proxy statement with a complete copy of the plan of corporate division
attached hereto as Exhibit “A” as previously filed by the company as an exhibit to the 10-Q for the nine
months ending September 31, 2007. A copy may
also be viewed through the SEC online EDGAR filing system at
www.sec.gov. A copy may also be reviewed on the company
website www.croff.com. The board recommends the approval of the plan of
corporate division for essentially the following
reasons:
|
|
·
|
In
prior discussions and proposals with other potential merger or
acquisition
companies dating back to 2005, each of the entities discussing
some type
of merger or acquisition transaction with Croff indicated that
they had no
interest in the existing oil and gas assets of Croff and would
request
their elimination from the company, along with the class “B” preferred
shares, as part of the overall merger or acquisition
transaction. This position was also true in discussing
transactions with companies in related oil and gas development
or
marketing activities.
|
|
·
|
The
entire board has determined for some period of time that the present
oil
and gas assets of Croff, which consist of very small royalties
or
non-operated working interests scattered over a significant geographically
diverse number of states, is difficult to value or develop independently
as part of a public company structure. In
particular, even with additional funding, the company would have
little or
no control over expanding or creating additional oil and gas interest
relevant to these existing assets which are essentially small non-operated
interests in leases or wells. As a result, the board is
convinced the future growth potential of the company, whether it
be in
alternative oil and gas development activities or unrelated business
activities, would be enhanced by the sale and disposal of these
assets and
the elimination of the preferred “B” shares which were solely created to
represent the ownership interest in these oil and gas assets as
part of an
earlier restructuring
effort.
|
|
·
|
The
board of directors feels that the interest of shareholders is
significantly safeguarded under the plan, because the interest
of all
shareholders in the preferred “B” assets remains
unchanged. Further, any shareholder not wishing to be a
shareholder in a private company holding the preferred “B” assets will
have dissenting shareholder rights under a Utah law to accept a
cash
payment as outlined in this proxy for those shares; or, alternatively,
to
suggest an alternative evaluation requiring the company to agree
or seek a
judicial valuation of the
shares.
|
|
·
|
The
board of directors determined that the cost of obtaining a formal
independent appraisal of these types of oil and gas assets would
not be
cost effective for the company or to its shareholders since it
would only
be relevant to the dissenting shareholder nor would it likely produce
a
highly reliable evaluation based upon the diverse nature of the
oil and
gas assets involved and their relatively limited aggregate
value.
|
|
·
|
The
board also determined that because the Sarbanes-Oxley Act, Section
404
would apply to the company beginning in 2008, that the company’s net
income is estimated to drastically decline as a result of the increased
costs of compliance, based on the diverse small assets of the company
and
its small size and small total revenues. The only source of
paying these new expenses would be the income from the preferred
“B”
assets, thus substantially lowering the value of the preferred
“B” shares
if the company is not
divided.
|
For
all
of the foregoing reasons, the board of directors has agreed to adopt, subject
to
majority shareholder review and approval of both the common and the class
B
shares, the plan of corporate division, as well as the proposal for dissenting
shareholder rights.
|
Board
of Directors’ Position on Item 1. The board urges your vote
in favor of the plan of corporate division and asset
exchange. The board believes, but cannot warrant, that the
approval of the plan may subsequently enhance shareholder value
and result
in enhanced capacity of the company to complete a subsequent merger
or
acquisition. The potential reduction in liquidity and other
“Risk Factors” are discussed beginning at page ____ of this proxy
statement.
|
|
2.
|
Item
2 – Increase of Authorized Common Shares. It will be
proposed as part of this proxy solicitation and as part of the
plan of
corporate division and asset exchange, that the company’s common stock be
increased from the existing 20,000,000 to 50,000,000 shares
at $0.10 par value to provide increased possibility for future
funding and
potential reorganization activities by Croff. The board of directors
believes that this change is appropriate and in the best interest
of Croff
going forward to have potential capitalization that may be necessary
to
complete proposed merger or other reorganization
possibilities. Each shareholders should understand in this
regard that the mere increase in the authorized capital will not
in any
way affect the issued and outstanding shares which will remain
the same
immediately after the completion of the plan of corporate division
and
asset exchange and that the board has an ongoing responsibility
to ensure
no shares are issued other than for a fair and adequate consideration
in
the opinion of the Croff board of
directors.There are no anti-takeover provisions associated with this proposal as previously discussed.
|
|
Board
of Directors’ Position on Item 2. The board urges your vote
in favor of this proposal, because it is believed beneficial to
future
potential funding or reorganization efforts. There is no
present intent to issue additional common
shares.
|
|
3.
|
Item
3 – Increase in the Number of Authorized Preferred “A”
Shares. It will be proposed that the current class of
non-voting preferred “A” shares, no par, be increased from 5 million to 10
million shares. The board believes it may enhance future
funding or reorganization efforts to have a larger potential class
of
preferred “A” shares. No “A” shares have been issued or are
presently contemplated to be
issued.There are no anti-takeover provisions associated with this proposal as previously discussed.
|
|
Board
of Directors’ Position on Item 3. The board is recommending
your approval of Item 3 to provide a broader number of preferred
“A”
shares for future financing or reorganization purposes consistent
with the
proposed increase in authorized common shares. There is no
present intent to issue any preferred “A”
shares.
|
|
4.
|
Item
4 – Election of Board. The present board believes that it
would be extremely difficult, if not impossible, to solicit and
adequately
retain and pay independent management, for Croff following the
assignment
of the preferred “B” assets. As a result, the four present
board of directors of Croff Enterprises have agreed to submit
their
nomination for reelection as directors of Croff Enterprises for
shareholder vote as part of this proxy solicitation. Three
members of the current board have agreed to serve on the new
board of
Croff Oil Company, Gerald L. Jensen, Richard Mandel and Julian
Jensen. Present management believes it is in the best interest
of the company for shareholders to vote in favor of three members
of the
existing board of Croff Enterprises to also act as the board
of directors
of Croff Oil for the reasons that the existing board has experience
and
knowledge of the assets and business operations being transferred
to the
private company, as well as a willingness to serve for the same
minimal
compensation presently received for their services to Croff
Enterprise. It is also anticipated that the new Croff Oil board
would most likely appoint, on an interim basis, the same executive
officers to operate Croff Oil as are presently serving
Croff.
|
|
The
present nominees and currently serving board members for Croff
Enterprises
are as follows with their biographical and other information as
set-out
subsequently in this proxy
material:
|
|
Board
of Directors’ Position on Item 4. The current board serving
Croff has nominated itself for reelection and as a result, we would
urge
your vote in support of those nominees. You should also
understand that voting for those nominees that you would essentially
be
voting for appointment of the same persons to serve as the initial
board
of directors of Croff Oil which the board believes advisable for
the
reasons set-out above. The proxy ballot will provide each
voting shareholder the right to nominate and vote for alternative
members
for board positions.
|
|
5.
|
Item
5 – Ratification of Independent Auditor. As part of the
general meeting provisions, the board of directors has appointed
Mr.
Ronald C. Chadwick, P.C. of 2851 South Park Rd., Suite 720, Aurora,
CO 80014 as the independent Certified Public Accountant for the
company for the calendar year ending December 31st,
2008
subject to shareholder ratification. Mr. Chadwick has served
the company for the past year after an interim appointment for
the
calendar year 2007. The board as well as the audit committee
have been pleased with the cooperation and services provided by
Mr.
Chadwick and would recommend ratification of this
appointment. If the shareholders fail to ratify Mr. Chadwick,
then the board will seek appointment of an alternative impendent
auditor
for the company based upon recommendations and nominations of the
independent audit committee of the board. The present audit
committee supports the nomination of Mr. Chadwick for the reasons
set-out
by this paragraph.
|
|
Board
of Directors’ Position on Item 5. The board of directions,
including the audit committee of the board, recommends the reappointment
of Mr. Chadwick as the independent auditor for the company based
upon his
past performance, fees and services and urges your vote in favor
of this
ratification.
|
The
foregoing items 4 & 5 constitute all of the general meeting matters in which
the board intends to bring before the shareholder meeting being noticed
by this
proxy. The board has received no further or additional written
request for other matters to be considered at the board of directors meeting
and
therefore, has not scheduled or included within this proxy any shareholder
proposals. See section on Shareholder Proposals at page
____. Should any other matters come before the meeting, they will be
considered if appropriately brought in accordance with the requirements
of the
By-laws of the corporation. No such shareholder or other proposal is
known or anticipated at the shareholders meeting.
ITEMS
TO ALSO BE VOTED UPON BY PREFERRED “B” SHAREHOLDERS
The
transfer of preferred “B” assets to
a separate company for share consideration is deemed to require the vote
of the
majority of the preferred “B” shareholders. The board has also
determined that preferred “B” shareholders should vote upon the conversion of
all preferred “B” shares to common shares in the new company and subsequent
cancellation of the preferred “B” class of shares. The current
preferred “B” principal shareholders of Croff plan to vote their majority
position in favor of these proposals, along with the common shareholder
matters
outlined above.
The
preferred “B” shareholders will vote on the following:
Item
1
- Vote to Transfer Oil and Gas Assets. The Preferred B shareholders
hold non-voting shares, except as to the sale or exchange of oil and
gas
assetspledged to the “B” shares which requires majority approval of the
preferred “B” shares. ThePreferred B shares were created under the
amendment to the Articles of Incorporation of Croff in 1996 which afforded
voting rights for any transfer of oil and gas assets pledged to the class
B
shares. As a result, all preferred “B” shareholders will be eligible
to vote on the transfer of the oil and gas assets for the cash and share
consideration as outlined above.
Item
2
– Conversion of Preferred “B” Shares to Common Shares. It should
also be understoodthat under the transfer agreement, if approved and
after the
transfer of oil and gas assets andpursuant to the Amendment of the Articles
of
Incorporation, the preferred B shares will be cancelled and thereafter
constitute the right to one common share of Croff Oil for each cancelled
“B”
share held. Because the Board believes this proposal is inextricably
tied to the transfer of oil and gas assets and fundamentally effects
the
preferred “B” shareholder, they are also being asked to vote on this conversion
item.
Again,
you are reminded that the present majority shareholders of Croff as to
the
commonshares and theprincipal shareholders, alone, as to preferred “B” shares
hold sufficient shares toinsure the approval of the foregoing
proposals. The “B” shares will not vote upon any other matters
outlined above for common shareholders and the conversion of common shares
to
the B shareholders will occur prior to the
closing.
Board
of Directors’ Position as to “B” Shareholders - Items 1 &
2. The Board urges your votein favor of these tworelated
proposals, because they are an integral part of the corporate reorganization,
and integral to its completion as previously discussed. The board
notes that it believes the situation of prior “B” shareholders will be little
affected by the reorganization since they will simply own the same relative
percentage of the same assets in a new private entity, but with voting
rights. Further, any “B” shareholder who does not approve the plan
will still be entitled to exercise dissenting shareholder
rights
VOTING
PROCEDURES & TERMS
Effective
Date/Closing Date
The
effective date for all matters
voted upon will be the closing date which will occur as soon as possible
after
the anticipated approval of all matters to be voted upon in this proxy
solicitation, but in no event later than 30 days after the shareholder
approval. The closing date will be deemed the effective date for all
transaction described by this proxy.
Record
Date and Notice Date
The
Utah
Revised Business Corporation Act (URBCA) provides in §16-10a-707 that the
company shall establish a “record” date for determining from the official
shareholder list a date certain for certifying the shareholders entitled
to vote
at any shareholder meeting. The foregoing statute provides that such
date should be determined in accordance with the corporate by-laws;
or, absent a
specific by-law provision, by the board but no more than seventy (70)
days prior
to the meeting date under the proxy. The Croff by-laws provide for
determination by its board, but require a record date within fifty
(50) days of
the vote date. As a consequence, your board has determined to set the
record date at or around the nearest business day occurring thirty
(30) days
prior to the meeting date, but which date cannot be finally set prior
to the
completion of the SEC proxy review process and final determination
of a meeting
date. The board anticipates setting a meeting date in the final
proxy, as approved, within thirty (30) days of the mailing date of
the proxy and
a “record date” to determine shareholders entitled to vote at the closest
month’s end at least, thirty (30) days prior to such mailing
date. The mailing date will be fixed within two days of receiving
final comments on the proxy from the SEC and will be noted in the final
version
of this proxy.
Utah
law (URBCA, §16-10a-705) provides
that notice of the meeting in which votes are solicited must occur not
more than
60 days or less than 10 days prior to such meeting as the company may
determine. Your board has determined to notice the meeting for the
closest legal weekday not more than thirty (30) days after the proxy
is
determined effective, which date will be included in the definitive version
of
this proxy statement as mailed.
Revocability
of Proxy
A
shareholder returning the enclosed
proxy ballot has the power to revoke it at any time before it is exercised
and
may do so by written notice to the Secretary of the company at the address
set
forth above, effective upon receipt of such written notice prior to the close
of
voting, or by voting in person at the special meeting. Attendance at
the special meeting, in and of itself, will not constitute revocation of a
proxy.
Solicitation
and Voting Procedures
The
record date for the determination of shareholders entitled to vote at the
Special meeting is currently expected to be the close of business on
____________, 2007. There were issued, outstanding and entitled to
vote on such date one class of Common Shares, each of which is entitled
to one
vote. Croff does not have cumulative voting. Accordingly,
each shareholder must vote all of his shares on each separate ballot proposal
or
nominee, or abstain from voting on that item or person. The company
will bear all costs of this proxy solicitation.
Croff
has two classes (“A” & “B”)
of generally non-voting preferred shares as discussed previously. No
“A” shares have been issued, nor is there any present proposal, plan or
intention, written or oral, to issue preferred “A” shares.
Each
holder of common stock, as of
1996, was issued one share of “B” preferred stock for each common share owned.
At the same time, the company pledged all of its oil and gas assets existing
at
that time to the “B” preferred stock. In 2005, the Croff principals
tendered for the balance of the preferred “B” shares and now hold 67.2% of the
issued and outstanding preferred “B” shares. The preferred “B” shares
are non-voting as to general corporate matters, but are entitled to vote
upon,
and will be counted separately in this proxy solicitation, as to the disposition
of the preferred “B” assets of the company.
Common
shares and preferred “B” shares entitled to vote will be determined based upon
the official shareholder record of September 30, 2007. Actual
votes cast will be determined by the physical counting of votes in person
or
proxy by the Inspector of Elections to be appointed prior to the meeting
by the
Board of Directors. Any dispute as to votes or entitlement to vote
will be decided by majority vote of the Board of
Directors. Abstentions and broker non-votes will not be counted for
either quorum or ballot purposes.
As
to each item to be voted upon in
this proxy, a numerical majority of the issued and outstanding shares
must be
present or voted by proxy at the meeting. Each proposal to be voted
upon will only be adopted by a majority vote of shares voted at the meeting,
provided a quorum is present. That is, a quorum will be established
by the presence in person or by proxy of 275,622 common shares and 270,330
preferred “B” shares. Each item will be adopted by an affirmative
vote of a majority of the common shares present in person or by proxy,
as
determined by the Inspector of Elections. Provided, however, the
proposal dealing with the sale and transfer of the preferred “B” assets will
also require majority approval of the outstanding preferred “B”
shares.
There
are no matters to be voted upon
as described by this Proxy upon which management will proceed absent majority
shareholder approval as described above.
Dissenting
Shareholders Rights
Any
dissenting shareholder’s rights of Croff shareholders are deemed to arise under
Utah Law. In essential terms, dissenting shareholder rights afford minority
shareholder’s the right to “dissent” from certain corporate actions approved by
the majority of shareholders if they do not believe the economic treatment
they
are to receive from such company actions are fair or equitable. In
most cases this would involve situations where the shareholder is receiving
compensation derived from or for the shareholder’s shares as a result of a
merger, share exchange, or sale of assets. The dissenting shareholder
rights are more fully discussed at page ____.
As
to the matters to be voted upon in
this Special Meeting, each common and preferred “B” shareholder will be given
dissenting shareholder rights as more fully discussed under that section of
this
Proxy Statement.
This
Proxy is solicited on behalf of
Board of Directors who urge your vote in favor of the matters
proposed.
PRINCIPAL
SHAREHOLDER AND PARTIES HAVING A SUBSTANTIAL INTEREST
The
company knows of no person or
group, except the following, which as of the date of this Proxy Statement
beneficially owns and has the right to vote more than 5% of the Croff’s common
stock or holds shares as a director or officer. The following
principal shareholders, as well as principal officers and directors, as of
September 30, 2007 should be deemed to be persons who have a substantial
interest and influence as to the matters proposed in this
Proxy:
COMMON
SHARES
Names
and Address of Beneficial Owner
|
|
Beneficially
Owned
|
|
Percent
of Class |
|
|
|
|
1. Jensen
Development Company (1)
|
|
132,130
|
|
|
24.0%
|
3773
Cherry Creek Drive North #1025
|
|
|
|
|
|
Denver,
Colorado 80209
|
|
|
|
|
|
|
|
|
|
|
|
2. Gerald
L. Jensen
|
|
126,748
|
|
|
23.1%
|
3773
Cherry Creek Drive North #1025
|
|
|
|
|
|
Denver,
Colorado 80209
|
|
|
|
|
|
|
|
|
|
|
|
3. Julian
D. Jensen
|
|
31,663
|
|
|
5.7%
|
311
S. State Ste. 380
|
|
|
|
|
|
Salt
Lake City, UT 84111
|
|
|
|
|
|
|
|
|
|
|
|
4. Richard
Mardel, Jr.
|
|
18,100
|
|
|
3.2%
|
3773
Cherry Creek Drive North #1025
|
|
|
|
|
|
Denver,
Colorado 80209
|
|
|
|
|
|
|
|
|
|
|
|
5. Harvey
Fenster
|
|
0
|
|
|
0%
|
3773
Cherry Creek Drive North #1025
|
|
|
|
|
|
Denver,
Colorado 80209
|
|
|
|
|
|
|
|
|
|
|
|
Directors
as a Group
|
|
307,641
|
|
|
56%
|
(1)
Includes shares held by Jensen Development Corporation (132,130) which is wholly
owned by Gerald L. Jensen.
Summary
Information as to Current Directors/Principal
Officers
NAME
|
Director
Since
|
Compensation
|
Terms
|
Gerald
L. Jensen
Chairman of the Board President
|
1985
|
Salary
as President: $54,000 -
Inside
Director Compensation - See
Executive
Compensation Below
|
Elected
in annual meeting in December 2006 to serve until next regular
meeting or
resignation
|
Richard
Mandel, Jr.
Independent
Director
|
1985
|
Outside
Director Stipend Only
(See
Executive Compensation Below)
|
Elected
in annual meeting in December 2006 to serve until next regular
meeting or
resignation
|
Julian
D. Jensen
Independent
Director
|
1990
|
Outside
Director Stipend Only
(See
Executive Compensation Below)
|
Elected
in annual meeting in December 2006 to serve until next regular
meeting or
resignation
|
Harvey
Fenster
Independent
Director
|
Dec.
2006
|
Outside
Director Stipend Only
(See
Executive Compensation Below)
|
Elected December,
2006 to serve until next regular meeting or
resignation
|
Security
Ownership of Certain Beneficial Owners and Management
The
following table sets forth the
beneficial ownership of common stock and preferred B stock of the Company
as of
March 1, 2007 by (a) each person who owned of record, or beneficially, more
than
five percent (5%) of the Company’s $.10 par value common stock, its common
voting securities, and (b) each director as of March 1, 2007 and all directors
and officers as a group.
|
|
Shares
of
|
|
|
|
|
|
Shares
of
|
|
|
|
|
Owners
&
|
|
Common
|
|
|
Percentage
|
|
|
Preferred
B
|
|
|
Percentage
|
|
Addresses
|
|
Class
Owned
|
|
|
Stock
Owned
|
|
|
Class
B Owned
|
|
|
Stock
Owned
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred
B Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gerald
L. Jensen
|
|
|
258,878 |
(1) |
|
|
47.1 |
% |
|
|
363,535 |
(1) |
|
|
67.2 |
% |
3773
Cherry Creek Drive N, #1025
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denver,
CO 80209
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Richard
H. Mandel, Jr.
|
|
|
18,100
|
|
|
|
3.2 |
% |
|
|
8,000
|
|
|
|
1.5 |
% |
3333
E. Florida #94
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denver,
Colorado 80210
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Julian
D. Jensen
|
|
|
31,663
|
|
|
|
5.7 |
% |
|
|
0
|
|
|
|
0 |
% |
311
South State Street, Suite 380
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salt
Lake City, Utah 84111
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
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|
|
|
|
|
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|
Harvey
Fenster (4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
0 |
% |
3773
Cherry Creek Drive N, #1025
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denver,
CO 80209
|
|
|
|
|
|
|
|
|
|
|
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|
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|
Directors
as a Group
|
|
|
308,641
|
|
|
|
56 |
% |
|
|
371,535
|
|
|
|
68.7 |
% |
(1)
|
Includes
132,130 shares of Common held by Jensen Development Company and
363,535
shares of preferred B held by CS Finance LLC and Jensen Development
Company which companies are owned by Gerald L.
Jensen.
|
EXECUTIVE
COMPENSATION
Summary
of Compensation
Certain
additional information
concerning remuneration, other compensation and ownership of securities by
the
directors and officers of Croff is set-out in the annual report on Form 10-K/A
for 2006 concurrently being delivered to shareholders with this proxy
information and incorporated by this reference. Directors currently receive
$350
for each half-day session of meetings of the Board and $500 for each full
day
meeting. The Audit Committee Chairman receives $500 per quarter and
each member receives $350 per quarter. The company has only one compensated
principal officer, its president and CEO, Mr. Gerald L. Jensen, who is currently
paid at the rate of $54,000 per year.
Compensation
Discussion and Analysis
In
the sections and tables that follow, Croff has attempted to clearly delineate
the
present compensation structure to existing management. As a
preparatory section to the actual compensation disclosure, we will discuss
management’s analysis of compensation under the following
heading:
|
·
|
Objectives
of Croff Compensation Program. Historically, and currently,
Croff has only had one compensated principal officer, its president,
CEO
and chairman of the board, Mr. Gerald L. Jensen. Mr. Jensen
serves the company utilizing a substantial amount of his time,
but
also is an officer in various private companies, and thus is
essentially a
part-time officer. As a result, an independent majority of the
board on an annual basis have reviewed the compensation to Mr.
Jensen. Independent members of the board have determined since
2003 that $54,000 as an annual compensation salary for the services
rendered by Mr. Jensen were a reasonable and adequate salary
based upon
the size and nature of the company, the size of its revenues
and income,
and the part-time nature of the position. Within these
considerations, it was also determined that there should be no
collateral
benefits or indirect compensation extended to the president or
the board
members, except that the board did agree to make an annual IRA
(Individual
Retirement Account) contribution in the amount of $1,620 per
year for the
periods subsequent to 2003, to the president. There have been
no stock options to directors since they were last exercised
or expired in
2002. Croff currently does not have a Chief Financial Officer
(CFO), but employs a chief accounting officer. This employee is
paid on a part-time basis through a third party contract
arrangement.
|
|
·
|
Services
to be Rewarded. Historically, the Croff board had
determined that the chief executive officer should be given a salary
to
reward him for the day-to-day management and operation of the oil
and gas
business of the company and completing other administrative duties
and
governmental filings. As subsequently noted, the chief
executive officer in the existing management structure also had
the
responsibilities to do initial reviews and screening of any merger
or
other acquisition proposals and to determine what, if any, of those
proposal would be suitable for further board review and due
diligence. As also noted previously, an independent
majority of the board, excluding Mr. Gerald L. Jensen, determined
and set
the salary for the president and believes that the compensation
is
reasonable for the size and the nature of the company and the services
performed. The board also determined, acting as a committee of
the whole, that no annual compensation would be paid to board members
as
such; but that they would be reimbursed for meeting attendance
as
previously described. Further, there has been no stock
rights, warrants or other options granted as part of compensation
for
management in any capacity or for other purposes, since the last
exercised
options in 2002.
|
|
·
|
Elements
of Compensation. As noted above, as to historical
management there were no stock options, rights, benefits, or other
collateral benefits paid to the single compensated officer of the
corporation or to any director since 2002. In addition to the
base salary, the company did pay a small annual IRA contribution
as
outlined above to the president. The board of directors are
compensated only for meeting on a stipend basis. This
compensation pattern and the absence of any collateral or indirect
compensation is fully set-out in the summary compensation
below.
|
|
·
|
Compensation
After Corporate Division. Mr. Gerald L. Jensen has agreed
to serve both Croff and Croff Oil as their respective president
with all
compensation being paid by Croff
Oil.
|
Within
the context of the foregoing
discussion and analysis of current and prospective compensation, this
information is also set-out in tabular format as follows for all current
and
prospective executive officers. The board has agreed it will continue
paying directors for attendance at board meetings on a per diem
basis at the current rate. Further, the board has asked the president to
investigate the cost and procedures for obtaining liability insurance for
board
members.
SUMMARY
EXECUTIVE COMPENSATION TABLE
CURRENT
MANAGEMENT 1
Name
and Principal Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock
Awards
($)
|
Option
Awards
($)
|
Non-
Equity
Incentive
Plan
Compen-
Sation
($)
|
Change
in
Pension
Value
and
Nonquali-
Fied
Deferred
Compensation
Earnings
($)
|
All
Other
Compen-
Sation
($)
|
Total
($)
|
Mr.
Gerald
L.
Jensen:
President,
CEO
and
Chairman of the Board
|
2004
2005
2006
2007¹
|
$54,000
$54,000
$54,000
$54,000
|
None
None
None
None
|
None
None
None
None
|
None
None
None
None
|
None
None
None
None
|
None
None
None
None
|
Annual
IRA
Contribution
$1,620
For
Each
Year
|
$55,620
$55,620
$55,620
$55,620
|
¹
Compensation would terminate as of closing date if plan of division is approved,
with final payments prorated through the closing
month.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
Historically,
as well as will be the situation after the effective date of the closing
of the
proposed corporate division and resulting reorganization, there has existed
and
will continue to exist various control relationships in Croff which have
resulted in transactions which cannot be considered as true “arm’s-length”
transactions between fully independent parties. Historically, Mr.
Gerald L. Jensen and affiliated entities have been the majority and controlling
shareholder of Croff. While the board has independently passed upon
various proposals and transactions related to Mr. Jensen and related entities,
as previously reported, these transactions could not be considered as fully
independent arm’s length transactions between independent parties in all
situations.
Present
management cannot foresee or predict all potential conflicts or related
party
transactions that may arise in the future, but believe that the following
may
constitute some of the more significant historical and potential future
related
party conflict transactions, as well as procedures which have been developed
to
limit the impact of such conflicts or potential
conflicts:
|
·
|
Historically,
the Board has adopted a policy that as to any proposal or transaction
which involves any interest of a director or officer, such proposal
or
transaction must be independently reviewed and adopted, with or
without
modification, or rejected by a majority of independent board
members. After presentation, such review is conducted and a
determination made outside the presence of the interested
party. This same procedure has been followed in considering
management compensation. The board is not aware of any incidence
where shareholder ratification was believed required or sought
relative to
this procedure.
|
|
·
|
During
2005, pursuant to a tender offer and required public filings, Mr.
Gerald
L. Jensen and related entities (principal shareholders) acquired
in a
tender offer to all preferred “B” shareholders approximately 110,344
additional “B” shares or an additional 20.4% of the preferred “B” shares
at $3.00 per share bringing their total holdings to 67.2 % or 363,535
shares. There was no independent fairness opinion obtained and
Croff’s Board of Directors (absent Mr. Gerald Jensen) acting as an
independent committee referred such terms and conditions to the
shareholders without recommendation. It should be understood
that no independent determination of fairness by a fully independent
individual or group was employed due to cost considerations and
the
board’s independent determination of the unreliability of such estimates
for the type of assets held by
Croff.
|
|
·
|
As
to the aspects of the present transfer agreement dealing with the
proposed
corporate division and transfer of assets, there has been no independent
fairness opinion or review. The company’s board believes that
such terms are reasonable based upon the fact that each present
‘B”
shareholder will receive the same relative interest in the current
Croff
oil and gas assets in the new company but with voting
rights. From the basis of its annual reserve report and current
prices of oil and gas, the company believes a price of $4.25/share
for
each preferred “B” share is fair for those dissenting shareholders seeking
a cash settlement. The common redemption price at $1.00/share
is more subjectively projected as the maximum perceived value of
Croff as
a public shell, and approximates the current limited trading
range. However, each shareholder exercising dissenter’s rights
should consider the lack of such independent fairness opinion or
review as
an essential risk factor as it pertains to this or any related
party
transaction.
|
|
·
|
Mr.
Gerald Jensen’s compensation has been determined and set by the other
board members voting
independently.
|
|
·
|
Historically,
Croff has employed a policy and procedure that all non-operated
oil and
gas production opportunities known to any member of the board will
be
first made available for consideration by the Croff board before
being
privately pursued for
development.
|
|
·
|
Historically,
Croff has reported other related party transactions as part of
its current
10-K/A filing which is incorporated by this reference; but does
not
believe such disclosures relevant to its ongoing activities following
the
plan of division.
|
MANAGEMENT'S
STOCK RIGHTS AND OPTIONS
As
previously noted, there are no and will be no remaining stock options, warrants
or other stock rights held by existing as of the closing of
the transfer agreement. However, as noted above, in the
future management may determine and create various forms of executive stock
rights or options with or without shareholder approval and subject only to
public disclosure.
CORPORATE
GOVERNANCE
Audit
Committee.
Prior
to 2004, Croff did not have an Audit Committee. However, under existing
statutory requirements, the company implemented, as of January 1, 2004,
an audit
committee believed to be compliant with the requirements of the Sarbanes-Oxley
Act. From 2004 through his resignation on December 12, 2006, Mr. Dilworth
Nebeker acted as Chairman of this committee and Mr. Ed Peiker served
as the
other member on the audit committee. After December 5, 2006, Mr. Harvey
Fenster,
an independent board member, was appointed as Chairman and Mr. Richard
Mandel as
an independent board member. The audit committee has met three times
during 2007.
Board
of Directors & Conflict Avoidance.
The
company is governed by its board of
directors consisting of Mr. Gerald L. Jensen who is also the President
of the
company. The other current directors are deemed independent
directors, as that term has been previously defined in these proxy materials,
and include: Mr. Richard Mandel, Jr., Mr. Julian D. Jensen, who is the
brother
of the president, and Mr. Harvey Fenster who was recently appointed in
December,
2006 after the resignation of Mr. Dilworth A. Nebeker and Mr. Edwin W.
Peiker,
Jr. Further information as to each of these directors and the sole
executive officer of the company will be set-out in these proxy materials,
including compensation and sharehold positions, and are further described
in the
enclosed and incorporated Form 10-K/A information.
Mr.
Harvey Fenster and Mr. Richard
Mandel currently constitute the two members of the audit committee for
the
corporation.
Potential
conflicts that may exist
between Mr. Gerald L. Jensen as the sole executive officer and the company
and
due to his majority shareholder position have been set-out and treated
in the
preceding section on Potential Conflicts and Related Party Transactions.
Potential conflicts are further treated as part of the enclosed and disseminated
10-K/A materials. At all times in setting Mr. Jensen’s compensation
or considering any transaction or proposal in which he had an interest,
the
other board members would consider and decide such matters without the
participation of Mr. Gerald L. Jensen.
Independent
Board Members.
As
noted previously, all of the
directors, except Mr. Gerald L. Jensen, are deemed to be independent
based upon
the definition employed by the company as previously described in the
glossary;
which essentially provides for determination of independence if the director
is
not a principal officer or employee of the company, is not in a position
to
exercise actual control over the board or the company and if such person
holds
less than 10% of the issued and outstanding voting stock. All of the
directors, other than Mr. Gerald L. Jensen, are believed to meet this
criteria. Even though Mr. Julian D. Jensen is a brother of the
president, Mr. Gerald L. Jensen, Mr. Julian D. Jensen and the other members
of
the board believe that he acts in an independent capacity and has not,
and does
not, act under direction, authority or control of Mr. Gerald L.
Jensen. The definition of independent director, as adopted by the
company and as stated above, has also been posted on the company’s
website.
Attendance
at Meetings.
During
calendar year 2007 to date,
there have been seven board meetings of the company, the company records
reflect
that of these board meetings, each were attended either in person or by
telephone by each of the directors. The audit committee met on three
occasions and was attended by each of its members on each
occasion. The audit committee submitted two reports to the board of
directors. The independent committee of the board met three
times. The company does not, at present, have any formal policy on
attendance at board of directors meetings, but would anticipate that any
director who is not able to attend on a consistent basis would so inform
the
board and consider resigning his position if his other responsibilities
did not
allow a consistent attendance.
Director
Compensation.
The
compensation to directors has been
determined by a committee of the whole of the board. Because directors are
only
paid a flat stipend and any required per diem for attendance at meetings,
the
company has felt there was no reason to have an independent compensation
committee for directors or officers to this point.
Audit
Committee Charter.
The
audit
committee as formed in December, 2002 adopted an audit committee charter
basically establishing procedures to deal independently with the company’s
auditors and to report to or receive independent reports from the auditors
as
required under the Sarbanes-Oxley Act. The charter also contains
ethical standards to avoid conflicts of interest.
Code
of Ethics.
The
company has not to date adopted a
formal code of ethics, though the board periodically reviews and discusses
the
necessity of observing fidelity and fiduciary standards to the company and
its
shareholders, avoiding conflicts and apparent conflicts, avoiding any form
of
insider dealing, trading or favoritism, or violating the corporate opportunity
doctrine.
Other
Committees.
The
company does not have other
standing committees, including a nominating or compensation committee, a
diversity committee or an executive committee. The company believes
that such independent committees are presently unnecessary due to the extremely
small size of the company and its board of directors; and, because, on any
material matter involving acquisitions, compensation or nomination, the
disinterested members of the board have met as committee of the
whole.
Nominating
Process.
Because
of the small size of the
company the board of directors simply acts as a committee of the whole for
nominating purposes. The company does not have any prescribed
criteria for qualification of those sitting on the board of directors, but
believes that its present board is qualified to act upon the matters and
areas
in which the company presently operates. The board would entertain
any outside nomination for a directorship and would attempt to propose for
nomination the best qualified applicant. To date, there have been no
outside nominees.
Shareholder
Information.
Croff
is aware of the general rules and
regulations of the Securities and Exchange Commission regarding shareholder
comments and proposals. In all prior proxy statements, Croff has
included direction to shareholders in each annual proxy for, at least, the
past
five years generally outlining their right and the procedures to file any
shareholder statements or proposed resolutions. Historically, Croff
has not received any shareholder proposals or suggested resolutions and does
not
anticipate any shareholder proposals related to the present proxy matters
at
issue.
CORPORATE
PERFORMANCE GRAPH
Normally
contained in this section would be a graph comparing the company’s common stock
performance to the performance of the general market on which it trades,
as well
as comparisons to the relevant industry segment of that
market. However, because during the last year, Croff had only a very
limited trading market on the Electronic Bulletin Board, it is deemed such
presentation could be potentially misleading. Croff continues to have
very limited trading activity. The trading range during the last year
has ranged from approximately $1.40 per share to $3.00 per
share.
MATTERS
SUBJECT TO SHAREHOLDER VOTE
I.
ELECTION
OF DIRECTORS
The
current Croff Board and nominee consist of Gerald L. Jensen, Richard H.
Mandel,
Jr., Harvey Fenster and Julian D. Jensen. Please review particularly
the following biographical information on nominees and the sections on
Potential
Conflicts and Related Party Transactions and Risk Factors.
GERALD
L.
JENSEN, 67, PRESIDENT AND CHAIRMAN OF THE BOARD OF DIRECTORS
President
of Croff Oil Company since October 1985. Mr. Jensen has been an
officer and director of Jenex Petroleum Corporation, a private oil and
gas
company, for over ten years, and an officer and director of other subsidiary
or
related companies. In 2000, Mr. Jensen became Chairman of Provisor
Capital Inc., a private finance company. Mr. Jensen was a director of
Pyro Energy Corp., a public company (N.Y.S.E.) engaged in coal production
and
oil and gas, from 1978 until it was sold in 1989. Mr. Jensen is also
an owner of private real estate, finance, and oil and gas
companies.
RICHARD
H. MANDEL, JR., 78, DIRECTOR
Mr.
Mandel has been a director of Croff
Enterprises, Inc. since 1986. Since 1982, Mr. Mandel has been President
and a
Board Member of American Western Group, Inc., an oil and gas producing
company
in Denver, Colorado. From 1977 to 1984, he was President of Universal
Drilling Co., Denver, Colorado. Prior to 1977, Mr. Mandel worked for
The Superior Oil Co., Honolulu Oil Co., and Signal Oil and Gas Co. as engineer
and in management.
JULIAN
D.
JENSEN, 59, DIRECTOR
Mr.
Jensen is the brother of the Company’s president and has served as legal counsel
to the Company for the past eight years. Mr. Jensen has been a
director since 1991. Mr. Jensen has practiced primarily in the areas
of corporate and securities law, in Salt Lake City, Utah, since
1975. Mr. Jensen is currently associated with the firm of Jensen,
Duffin & Dibb L.L.P., which acts as legal counsel for the
Company.
HARVEY
FENSTER, 66, DIRECTOR
Mr.
Harvey Fenster has been a director since 2006. Mr. Fenster currently
is the President of BA Capital Company, a financial advisory services
company. From 1991 to 1994, he served as Senior Vice President and
Chief Financial Officer of The Katz Corporation, a public international
media
representation firm. Previously, Mr. Fenster was Executive Vice
President and Chief Financial Officer of Pyro Energy Corp., a New York
Stock
Exchange listed public company engaged in coal mining, oil and gas exploration
and development. Mr. Fenster has also served as a director of Uranium
Resources, Inc., a public company engaged in uranium exploration and
production. Mr. Fenster, a Certified Public Accountant is retired
from public practice.
SUMMARY
INFORMATION AS TO DIRECTORS/PRINCIPAL OFFICERS
NAME
|
Director
Since
|
Compensation
|
Gerald
L. Jensen (1)
|
1985
|
Salary
as President: $54,000 -
Inside
Director Compensation - See Below*
|
Richard
Mandel, Jr.
|
1985
|
Outside
Director Stipend Only
(See
Below)
|
Julian
D. Jensen
|
1991
|
Outside
Director Stipend Only
(See
Below)
|
Harvey
Fenster
|
2006
|
Outside
Director Stipend Only
(See
Below)
|
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND DIRECTORS
The
following table sets forth the
beneficial ownership of common stock and preferred B stock of the Company
as of
September 30, 2007 by (a) each person who owned of record, or beneficially,
more
than five percent (5%) of the Company’s $.10 par value common stock, its common
voting securities, and (b) each director and nominee and all directors
and
officers as a group.
|
|
Shares
of
|
|
|
|
|
|
Shares
of
|
|
|
|
|
Owners
|
|
Common
|
|
|
Percentage
|
|
|
Preferred
B
|
|
|
Percentage
|
|
|
|
of
Class of
|
|
|
Stock
Owned
|
|
|
of
Class B
|
|
|
|
|
|
|
Beneficially
|
|
|
|
|
|
|
|
|
Preferred
Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gerald
L. Jensen
|
|
|
258,878 |
* |
|
|
47.1 |
% |
|
|
363,535 |
* |
|
|
67.2 |
% |
3773
Cherry Creek Drive N, #1025
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denver,
CO 80209
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Richard
H. Mandel, Jr.
|
|
|
18,100
|
|
|
|
3.2 |
% |
|
|
8,000
|
|
|
|
1.5 |
% |
3333
E. Florida #94
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denver,
Colorado 80210
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Julian
D. Jensen
|
|
|
31,663
|
|
|
|
5.7 |
% |
|
|
0
|
|
|
|
0 |
% |
311
South State Street, Suite 380
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salt
Lake City, Utah 84111
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Harvey
Fenster
|
|
|
|
|
|
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25
Oak Meadow
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Evansville,
IN 47725
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Directors
as a Group
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308,641
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56 |
% |
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371,535
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68.7 |
% |
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* Includes
132,130 shares of Common and 132,130 shares preferred B held by
Jensen
Development Company which is owned by Gerald L.
Jensen.
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At
present there are no management or director stock options or
rights.
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EXECUTIVE
COMPENSATION
Certain
additional required information
concerning remuneration, other compensation and ownership of securities
by the
Directors and Officers is set-out in the enclosed 10-K/A Report and incorporated
by this reference. Directors currently received $350 for each half-day
session
of meetings of the Board. The Audit Committee Chairman receives $500 per
quarter
and each member receives $350 per quarter.
Remuneration
During
the fiscal year ended December
31, 2005, there were no officers, employees or directors whose total cash
or
other remuneration exceeded $80,000.
Summary
Executive Compensation Table
2003-2006
Compensation Gerald L. Jensen, President. (No other executive
salaries)
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2003
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2004
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2005
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2006
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YTD |
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Annual
Compensation
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Salary
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$ |
54,000
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$ |
54,000
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$ |
54,000
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$ |
54,000
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Bonus
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$ |
0
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$ |
0
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$ |
0
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$ |
0
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Other
Annual Compensation
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$ |
0
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$ |
0
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$ |
0
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$ |
0
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Long
Term Compensation
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Awards
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Restricted
Stock Awards
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$ |
0
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$ |
0
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$ |
0
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$ |
0
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Payouts
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No.
Shares Covered by Option Grant
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0
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0
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0
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0
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Long
Term Incentive Plan Payout
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$ |
0
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$ |
0
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$ |
0
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$ |
0
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All
Other Compensation
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$ |
1,620 |
(1) |
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$ |
1,620 |
(1) |
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$ |
1,620 |
(1) |
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$ |
1,620 |
(1) |
1 Mr.
Gerald Jensen
also receives an IRA contribution from the Company of $1,620 (3% of salary)
per
year.
Gerald
L. Jensen is employed as the
President and Chairman of Croff Enterprises, Inc. Mr. Jensen commits
a substantial amount of his time, but not all, to his duties with the
Company. Directors, excluding the President, are not paid a set
salary by the Company, but are paid $350 for each half-day board meeting
and
$500 for each full-day board meeting.
DIRECTOR COMPENSATION TABLE 2006
Name |
Fees earned or paid in cash $ |
Stock awards $ |
Option awards $ |
Non-equity incentive plan compensation $ |
Non-qualified deferred compensation earnings $ |
All other compensation $ |
Total $ |
Gerald L. Jensen |
None |
0 |
0 |
0 |
0 |
0 |
0 |
Richard H. Mandel, Jr.* |
Paid Per Mtg.-
$2,900
2006 |
0 |
0 |
0 |
0 |
0 |
$2,900 |
Julian D. Jensen |
Paid Per Mtg.-
$2,600
2006 |
0 |
0 |
0 |
0 |
0 |
$2,600 |
Harvey Fenster* |
Paid Per Mtg.-
$500
2006 |
0 |
0 |
0 |
0 |
0 |
$500 |
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1 Mr. Julian D. Jensen receives compensation as legal counsel to the company which is separately reported as part of
professional fees.
2 The board authorized retirement payments to former board members Edward Peiker and Daniel Nebeker of $10,000 each in
2006.
* Includes Audit Committee meeting payments.
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Options,
Warrants or Rights
The
company had no outstanding stock options, warrants or rights presently
or as of
December 31, 2005.
THE
BOARD URGES YOUR VOTE IN FAVOR OF
EACH OF THE CURRENT DIRECTORS WHO WILL APPEAR ON THE PROXY BALLOT FORM
AS THE
NOMINEES. As previously explained, the ballot will allow you to vote
for one or more, but less than all nominees, if you elect as common
shareholders. Further, space is provided to “write in” an additional
nominee or nominees and to cast your ballot for such alternatives if you
elect. Board members will consist of those receiving the highest
number of votes for each board position.
II.
RATIFICATION
OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
Auditors
The
Board of Directors has appointed
Ronald C. Chadwick, P.C. of 2851 South Parker Road Suite 720, Aurora, Colorado
80014 as independent certified public accountants for the Company to examine
the
financial statements of the Company for the fiscal year ending December
31, 2007
and ask for ratification of his further appointment through December 31,
2008. The appointment of Ronald Chadwick, P.C. is subject to
ratification of the shareholders and a resolution for such ratification
will be
offered at the Special Meeting as is contained in the enclosed proxy
ballot. Ronald Chadwick has been acting as independent accountant for
the Company for the past year. Mr. Ronald R. Chadwick, P.C. has been proposed
as
the replacement auditor by virtue of his familiarity with the Company's
affairs,
his lower cost and his ability, and is considered by the Board and the
Independent Audit Committee as best qualified to perform this
audit. Croff has no disagreement over accounting information,
policies or presentation with is prior auditors or Mr. Chadwick. The
present Board of Directors recommends adoption of a resolution appointing
Mr.
Chadwick as the independent auditor for the Company. The foregoing
accountant may be present at the Annual Meeting and has agreed to respond
directly to any shareholder accounting questions sent to his
office.
Audit
Fees
Aggregate
fees for professional services rendered by Ronald Chadwick (“Auditor”) in
connection with its last audit of the company’s consolidated financial
statements as of and for the year ended December 31, 2006 aggregated
$10,250. The limited reviews of the company’s unaudited condensed
consolidated interim financial statements paid to Ronald Chadwick aggregated
$3,000 for the calendar year 2007 to date.
THE
PRESENT BOARD URGES YOUR VOTE IN
FAVOR OF THE RATIFICATION OF THE CURRENT PROPOSED
AUDITOR.
III.
VOTE
ON DIVISION OF COMPANY AND RELATED ITEMS
Approval
of Share Transfer. After the termination of the TRBT share
exchange plan in June, 2007 the board of directors met and determined that
the
company should still attempt to go forward with a reorganization whereby
the oil
and gas assets could possibly be transferred to a private entity leaving
Croff
Enterprises essentially as a public reporting shell corporation which the
board
believe may be in a better position to engage in future merger or reorganization
activities, but without prejudice to the interest or rights of the minority
shareholders previously holding preferred “B” shares which evidenced interest in
existing
oil and gas assets.
The
board then appointed a special
committee consisting of the three outside directors of the company,
independently of Mr. Gerald L. Jensen, the president and inside director,
to
explore various options, opportunities and reorganization opportunities and
report back to the board as a whole as to recommendations going
forward. In essential terms, the findings and recommendations of the
independent committee were as follows:
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1. Consider
transferring the oil and gas assets out of the existing public
entity to a
private entity in such a way as to preserve the equivalent interest
in
such private entity of the present “B” shareholders (to which the oil and
gas assets were pledged) and to provide voting rights to all shareholders
by having a common class of
stock.
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2. Continue
to attempt to find suitable merger, acquisition or other types
of
reorganization possibilities for Croff Enterprises, Inc. subsequent
to
filing a proxy statement obtaining shareholder approval of the
transfer of
the assets to a private
entity.
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3. As
part of the overall plan of reorganization to convert each issued
and
outstanding “B” share to one common share in the new private oil and gas
entity, Croff Oil. To provide notice through the proxy process
to shareholders of this conversion upon majority approval and to
provide
an ongoing mechanism whereby the preferred “B” shares would be cancelled
of record and prior holders of preferred “B” shares would receive one
common share of Croff Oil for each former preferred “B”
share.
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4. To
charge the president to actively engage in seeking out and discussing
merger or acquisition
possibilities.
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5. To
consider the future acquisition of personal liability insurance
for
members of the board of
directors.
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6. To
simplify the corporate structure and assets to allow implementation
of
financial review procedures and accounting practices at a reasonable
cost,
in conforming with Section 404 of Sarbanes-Oxley or to consider
the
ramifications of becoming a “pink sheet”
company.
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7. To
increase the common shares for future financing or reorganization
purposes
from 20 million shares at $.10 par value to 50 million shares at
$.10 par
value and to increase the authorized but un-issued class “A” shares from 5
million shares common no par to 10 million shares, no
par.
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8. To
review and include within this proxy solicitation required dissenting
shareholder rights provisions to all shareholders and to determine
a
suggested valuation of the preferred “B” shares for dissenting shareholder
rights purposes at $4.25 per share and for the common shares at
$1.00 per
share.
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Because
the company has set-out with some details the proposed terms of the asset
transfer and corporate division in the forepart of this proxy statement,
the
mechanical terms of the proposed transfer, the board of directors’ position and
resulting capitalization and structure are not repeated and restated in
this
detail section. However, the board has included within the following
materials various considerations, risk factors and further information
concerning the proposed corporate division and class “B” share cancellation that
may be relevant and significant to the consideration of the proxy materials
and
your voting on the recommendations of the board as to these items.
Each
party reviewing this Proxy
may wish to review the Plan of Corporate Division attached as Exhibit “A”
hereto. Management of the company is further willing to discuss any
terms and provisions of this Plan in more detail with any shareholder,
prospective shareholder or other interested party.
The
following constitutes the
board’s outline of the essential terms and certain risks of the Plan of
Corporate Division:
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Summary
of Transfer. As previously set-out, in the
event of the successful majority common and class “B” shareholder approval
of the asset transfer, all of the oil and gas assets of Croff will
be
transferred to Croff Oil, a Utah corporation wholly owned
by Croff. Each existing preferred “B” shareholder in Croff will
be issued one common share in the new Croff Oil such that their
relative
rights in the oil and gas assets should remain the same as their
current
percentage of ownership of preferred “B” shares. Mr. Gerald L.
Jensen, with associated business entities, will continue to hold
and
control approximately 67.2% of the voting stock and ownership of
the new
corporation and the other preferred “B” shareholders will own the
remaining 32.8%, but will have an ongoing voting rights as common
shareholders in the new corporation. There will be no change in
the common shareholders. The percentage shareholders actually
holding shares in the new entity may decrease in accordance with
the
number of preferred “B” shareholders who elect to exercise dissenting
shareholder rights in lieu of receiving common shares in Croff
Oil. No anticipation or projection of what percentage of
shareholders may exercise dissenting shareholder rights can be
made by the
company, but it is anticipated that the numbers should relatively
insignificant.
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·
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No
Oil and Gas Assets. In the event of majority
shareholder approval of the asset transfer and corporate division
as
described earlier in this proxy, Croff will have essentially no
oil and
gas assets and should have cash or cash equivalents left of approximately
of $300,000. As previously indicated, Croff would then attempt
to actively go forward to seek some form of merger or acquisition
transaction which hopefully will increase shareholder value, provide
working assets and create an active trading company upon completion
of
such transaction. The board realistically anticipates that any
acquisition or merger will result in the present shareholders of
Croff
holding a very small minority position most likely in the range
of 5-10%
in the event of the completed acquisition or merger. Except for
the completion of a future merger or acquisition, Croff would have
no
active business purpose or assets and will be required to employ
and
expand its limited cash reserves and assets primarily for compliance
work
as a ongoing public company, as well as ordinary overhead expenses
as
detailed in its 10-K/A
report.
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·
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Share
Ownership after Closing. Subsequent to the
closing of the corporate split and asset transfer, Croff would
essentially
have the same existing ownership as presently extant in the
company. That is, Mr. Gerald L. Jensen and affiliated entities
would own approximately 47% of the issued and outstanding common
stock and
all other shareholders would own approximately 53%. If shares
held by the board of directors are separated from the other shareholders
not affiliated with Mr. Gerald L. Jensen, this remaining group
of public
shareholders would constitutes approximately 46% and the board,
collectively, excluding Mr. Gerald L. Jensen, would hold approximately
8%. The ownership in Croff Oil has been earlier set-out and
described in the preceding
sections.
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Principal Management. Immediately
following the approval of the corporate division, three of the
existing
board of Croff would also constitute the interim board and is anticipated
to appoint management of Croff Oil. It is anticipated that
after an interim period of approximately 6 months to a year, there
will be
a shareholder election and changes proposed to the board of Croff
Oil and
anticipated subsequent appointment of management. It is anticipated,
though not warranted, that during this interim period Croff Enterprises
most likely will be able to complete a merger or acquisition, which
would,
in turn, almost certainly result in a totally unrelated proposal
to
substitute and elect new directors having no prior affiliation
with the
existing Croff board and
management. |
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Shell
Company. In the event of and subsequent to the
shareholder approval of the stock split and asset transfer, Croff
will
become what is essentially known as “shell” public
corporation. That is a corporation which continues to report as
a publicly owned and held entity under the Securities and Exchange
Act of
1934 (’34 Act), but without any active business assets or purpose pending
a subsequent merger or acquisition. The status of Croff as a
shell company may impose certain limitations and other reporting
requirements on Croff that may be adverse to shareholder
interest. While not intended as an exhaustive listing of events
related to becoming a shell company, the following are believed
to be some
of the more significant reporting requirements and
limitations:
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§
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Croff
will have to report on the first page of its 10-Q and 10-K filings
that it
is a shell company.
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§
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In
the event of any merger or acquisition, shell companies are required
to
report any merger or acquisition proforma financials
concurrently with the filing of the notice of the definitive agreement
of
the merger or acquisition and do not have the time allowed to non-shell
companies to provide subsequent proforma financial
information.
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§
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Broker/dealers
trading shares in shell companies are required to provide particular
high
risk notices related to such companies to various persons purchasing
stock
in a shell company from a broker/dealer and to qualify those who
may
invest.
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In
any public disclosure document, the company will most likely
have to list
and described various risk factors inherent in acquiring of and
owning
stock in a shell
company.
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·
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No
Dividends. At present, there is no commitment
or undertaking of Croff, after the anticipated corporate division
closing,
to commence the payment of dividends from anticipated earnings
and no one
should continue to hold or acquire stock in Croff Oil upon any
assurance
or expectation of dividends as it is most likely that the company
will
continue to retain any earnings for growth or development purposes
for the
foreseeable future. Further, it is anticipated Croff will not
pay any dividends for the foreseeable
future.
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No
Warranty of Future Earnings. Croff cannot, as
it becomes a shell company, make or proffer any warranty or assurance
that
there will be future earnings or future trading value in its stock
and its
entire future will be dependent upon the success of the present
board in
seeking out and finding a suitable acquisition or merger
candidate.
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Conversion
of Preferred “B” to Common. As a result of
the transactions outlined above, the company will have no preferred
B
shares or assets. All preferred “B” shares will be cancelled
prior to the closing and one new common share in Croff Oil will
have been
issued for each preferred “B” share. The company may treat any
undeliverable new common shares as lost or abandoned property after
the
appropriate time period under applicable laws for lost or abandoned
property in the state of Utah and after giving the minimum required
notice
of exchange through this Proxy or as subsequently determined appropriate
by the company under Utah law as previously
described.
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·
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Current
Majority Control. It should be noted that two
directors of the company, Mr. Gerald. L. Jensen and Mr. Julian
D. Jensen,
intend to vote a majority of the common shares held between them
in favor
of the transactions described by this proxy and for the election
of the
new directors; thereby assuring its passage, subject only to dissenting
shareholder rights as previously and subsequently explained in
this
proxy. Mr. Gerald L. Jensen, individually or through
controlled entities, also holds a majority of the preferred B shares
and
has committed to vote those shares in favor of the
transaction. As a result, while the company is interested and
does solicit your vote in favor of the propositions, it should
be
understood that the exchange plan will be approved based upon the
committed votes to date and that if any shareholder is dissatisfied
with
the terms of this transaction, the sole practical remedy of any
such
dissenting shareholder will be the exercise of the dissenting shareholder
rights as provided under Utah law and as more fully described in
this
Proxy material. Further, election of directors cannot be
completed under Utah law by majority shareholder consent, but requires
an
actual vote of all
shareholders.
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Background
of and Purposes for Transaction
Since
approximately 1995, the board of
Croff had authorized its chief executive officer to actively search out and
seek
potential favorable merger or acquisition possibilities for the
company. The creation of the preferred “B” class of stock and
assignment of oil and gas assets in 1996 to enhance this process has been
earlier explained. This general decision was made by the board after
review of the company’s status as an on ongoing small public
company. Croff premised its decision to seek reorganization
opportunities essentially upon the following principal
considerations:
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The
consideration that the company may be able to increase shareholder
value
by obtaining an alternative business or asset which might have greater
growth potential.
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The
increasing cost and complexity of maintaining the company as a
small
public company, which became more onerous after passage of the
Sarbanes-Oxley Act.
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The
understanding that the small, fractional and widely disbursed assets
of
Croff were difficult to scale into a larger more liquid
company.
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The
realization that it was costly and difficult to value and dispose
of the
oil and gas assets, because of their very fractionalized and dispersed
nature.
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The
consideration that the company did not presently have any additional
capital to materially increase its existing preferred “B” oil and gas
assets.
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The
fact that recent merger or acquisition discussions, including the
recently
terminated share exchange with TRBT, have required the company
selling or
somehow spinning out existing oil and gas
assets.
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·
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The
advancing age of present management of the company and their desire
to
step-down from active management of a public company in the near
future.
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As
a result of these and related
factors, the board authorized its president to seek out and to present to
the
board various potential business acquisition, merger or reorganization
possibilities that would meet most of the objectives outlined
above. Mr. Gerald L. Jensen was informally granted broad discretion
by the board to complete initial “screenings” of proposals and to determine
what, if any, proposal merited full board review. Mr. Gerald L.
Jensen, and to a lesser degree other members of the board, at various times
presented various merger or reorganization opportunities.
Most
recently, in June, 2007, the
company terminated a majority share acquisition with a Chinese company described
herein as TRBT after reaching a definitive Share Exchange plan and commencing
the proxy filing process. The transaction was terminated because of a
failure of performance by TRBT, particularly related to timely provide adequate
financial statements.
Significant
Historical Reorganization Proposals.
As
generally noted above, during the
period from approximately 1995 through the agreement with TRBT, various
proposals for asset acquisition, share exchange, merger or other forms of
reorganization were
presented by various enterprises or individuals to Croff. Most of
these were deemed to be inconsistent with Croff’s direction, intent or involved
various provisions that would not seem to be compatible with going forward
as a
public company. As a result, most of these proposals were screened by
the president and not formally presented to the board; as to these proposals
no
extant record exist.
Of
the proposals which were ultimately
reviewed by the board of directors, there are approximately four proposals
which
were given serious consideration and with some level of due diligence
completed. Following is a general description of the proposals
substantively reviewed by the Croff board with the reasons for not going
forward
with any form of definitive agreement. Croff has taken the position
that it would have been inappropriate to make any public announcement of
any
type of reorganization or acquisition consideration absent a definitive and
binding agreement. No such agreements were ever reached as to the
following, except for the final one, the TRBT Agreement. As a result,
only board minutes or a preliminary letter of intent exist as to the other
following reviewed proposals.
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·
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The
company entered into acquisition discussions with a group from
Calgary,
Canada during 1996 and 1997 known as Agra Fiber Industries, Inc.
Agra
Fiber Industries had presented their business plan to Croff and
it had
been reviewed by the president and later by the Board of Directors.
Agra
Fiber essentially created fiber board utilizing straw and fescue
grass
fibers, rather than the standard wood chips. After some discussions
by
telephone, the president of Croff went to Calgary, Canada, and
met with
the initial management and some of the board of directors of Agra
Fiber.
Agra Fiber was seeking funding to build plants which would cost
approximately 30 million dollars, and was seeking initial private
funding
followed by a secondary offering which might be facilitated by
a merger
with a public company. After several meetings and a review by the
board of
directors of Croff, Agra Fiber was able to secure a commitment
for debt
financing. Croff’s president and the president of Agra Fiber
met with the Principal Group, an investment banking firm, in Houston,
Texas, with respect to this financing. Croff provided only its
public
information, and received the Agra Fiber financials and business
plan. In
mid-1997, negotiations ceased when Agra Fiber reported that it
was
obtaining equity funding from a private Canadian investor which
was not
interested in a public merger. No formal agreement or letter of
intent was entered.
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|
·
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In
1997 and 1998 the Board reviewed two proposals from a Mr. William
Becker,
a Canadian owner of cable television, real-estate, and oil and
gas
interests. Mr. Becker was developing several high tech companies
and was
interested in a possible reverse-merger with Croff. The first company,
which was discussed with Mr. Becker, was Sky Connect, Inc. Sky
Connect was
an existing company in the development stage which provided telephone
service from aircraft prior to the widespread use of cell phones.
Croff
management received and evaluated an appraisal of this development
stage
company from the Madison Group, an investment company in Chicago,
Illinois. After a number of management meetings with Sky Connect,
no
agreement was reached on an acquisition by Croff, and the Board
was not
presented with any proposal. Croff management then entered into
discussions on another company founded by Mr. Becker, known as
Telehub
Communications Corporation. Telehub Communications Corporation
was an
early stage internet phone company using digital information packets
over
fiberoptic lines which was at an early stage of development in
1998. This
company was headquartered
north of Chicago, Illinois. Telehub was obtaining bond
financing as part of its capital raising program and would then
propose a
reverse-merger with Croff to become a public corporation. The President
met with representatives and advisors of Telehub at their headquarters
near Chicago, and later in San Francisco. Following the last meeting
with
Coopers and Lybrand, Telehub’s public accounting firm in San Francisco, it
was determined that Telehub would incur material adverse tax consequences
if the reverse-merger into Croff took place. Therefore, the negotiations
were dropped by Telehub. Again, there was no definitive
agreement or letter of
intent.
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|
·
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Croff
had a number of other discussions from 1999 - 2002 with potential
acquisition targets, but none of these potential
acquisitions progressed past the early discussion stage. In 2004,
the
president met with Trinity Capital Corporation in Toronto, Canada,
with
respect to raising capital for Croff which could be used in the
company’s
oil and gas reentry program in Dewitt County, Texas, and for other
expansion purposes. The president flew to Toronto and met with
the
principals of Trinity Capital and arranged for a discussion with
the other
members of the board of directors by conference call. After a period
of
negotiations, it was agreed that Trinity Capital would attempt
to raise
equity money for Croff. These efforts were terminated even before
any
formal offering memorandum was prepared. Instead, Croff
entered into a joint development agreement on the Dewitt
County, Texas Properties with Tempest Energy Resources, LP, which
was duly
reported in the Company’s filings on Form 10-K and
10-Q.
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|
·
|
In
August of 2005, Several of the principals of Trinity Capital, who
had met
with the Croff, after consulting with the Trinity board, informed
management that they had formed an oil and gas company, Canary
Resources,
Inc. and would be interested in a reverse merger with
Croff. Canary was primarily involved in coal methane gas
development. Canary’s management proposed utilizing the Dewitt
County properties and possible Michigan properties of Croff, with
the
remaining assets pledged to the preferred “B” properties to be purchased
by the Croff principal shareholders who had just finished the tender
offer
for the Preferred “B” shares. Croff’s president then engaged in
negotiations with Bill Chandler, the President of Canary Resources.
These
negotiations continued during the fourth quarter of 2005 and first
quarter
2006. The Canary assets were essentially coal-bed methane leases
in
eastern Kansas and Western Missouri. Canary was a development stage
company in which there was no current production from any of the
wells.
Canary’s business plan was to acquire a large acreage position and develop
funding to begin the actual drilling program. Canary had successfully
completed a seven million dollar private investment of its convertible
preferred shares. The Board of Directors of Croff, on November
4, 2005,
authorized a non-exclusive letter of intent with Canary, agreeing
all
information would be kept confidential. Croff provided Canary its
public
filings and its oil and gas reserve report. Canary provided a reserve
report and business plan information to Croff. After due diligence
on the
financial situation of Canary and examination of a lawsuit in which
Canary
was involved with respect to these assets, the president of Croff
after
discussion with the Croff board sent a letter on December 13, 2005,
revoking the letter of intent with Canary. Management continued
to have
negotiations with Canary during the year 2006, at the same time
it was
discussing the potential acquisition of TRBT. In September of 2006,
the
Board made a final review of the Canary financial statements
and determined not to proceed any further with negotiations with
Canary,
but to proceed with the proposal from
TRBT.
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In
December 2005, Croff was approached by Mr. Ed Wong, an agent for
a number
of Chinese companies which were seeking access to the US public
markets.
He stated that he represented himself and Mr. Sam Liu, who together
would
be interested in arranging the acquisition of a Chinese company
by Croff.
Sam Liu and Ed Wong, hereafter “agents,” stated that they were interested
in a debt free, active, fully reporting public company, and that
Croff had
been referred to them. They also stated that there was no interest
in its
oil and gas assets or
operations.
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The
president then visited China in April, 2006, meeting in Beijing
China with
an independent law firm to review aspects of Chinese law in this
type of
transaction and then traveling to Taiyuan, China, to meet with
the
officers and directors of TRBT and to inspect each of the shopping
malls. While in Taiyuan, Mr. Jensen also met with the staff and
accountants for TRBT. Following this trip, the President reported
to the
Croff board on April 25, 2006, that he was satisfied that the
companies in China were conducting a well run real-estate business,
that
the shopping malls had a high occupancy rate and the staff seemed
professional and competent. During October and November, 2006,
it was determined that in order to eliminate the remaining “B” shares, the
Articles of Incorporation of Croff would be amended to convert
each
preferred “B” share to two shares of common stock and to cancel all
authorized preferred “B” shares. The cash consideration, except
for a dividend to common shareholders of Croff and a retirement
bonus to
resigning directors, would remain in the company. Julian
Jensen, legal counsel, informed the board in detail about the Utah
Dissenting Shareholder Rights Statute, and the rights of any dissenting
Preferred “B” shareholders to obtain a cash settlement, rather than two
common shares. In November 2006, the board received preliminary
September 30, 2006, financial statements and Croff completed its
September
30, 2006, 10-Q. The board then met on December 5, 2006 and approved
the
Acquisition Agreement. This approval required that certain
editing and refining changes be made in the Agreement prior to
its signing
and announcement. The Exchange Agreement was signed on December
14, 2006 and 8-K filed with the SEC on December 14, 2006. There
were no
other documents exchanged. The Stock Exchange plans, including
all
exhibits, are included in their entirety as an attachment to the
earlier
filed 8-K.
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By
early 2007, it had become apparent to the Croff board that TRBT
was having
problems in timely providing adequate audited financial information
meeting GAAP requirements and disclosure under SEC Regulation
and other
SEC rules governing financial disclosures in financial
statements.
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After
various late negotiations and attempts to complete the transaction,
the
Croff board in June, 2007 finally gave formal notice to TRBT of
the
termination of the proposed share exchange for the reasons outlined
above. The board subsequently has entered into negotiations
with another oil and gas company, but no agreement has been reached,
and
no announcement made.
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Exemption
Claims for Shares Issued
Croff will exchange its oil and gas assets for the common shares of Croff Oil. Croff will then exchange the Croff Oil restricted common shares on a one-to-one ratio to its preferred "B" shareholders and cancel the preferred "B" class. Because no consideration or commission is being paid and the exchange is exclusively limited to Croff shareholders, Croff is claiming an exemption for this stock exchange pursuant to section 3(a) (9) of the Securities Act of 1933 (33' Act).
Secondarily, Croff has historically taken the position, since the issuance of its preferred "B" shares in 1996 to all its common shareholders, that the issuance of the preferred "B" shares was exempt from registration under the 33' as a "no sale" transaction under existing SEC guidelines and staff legal bulletin, since no consideration or change in position was required of the shareholders receiving this stock dividend. As a result, the Preferred "B" shares were deemed to be a gratuitous stock dividend for which no registration was required. Further, there was no intent for any public trading market to exist or to develop for the Preferred "B" shares and they were accordingly issued with a legend and have always remained as restricted securities, subject only to voluntarily redemption by the company or other shareholders on a case-by-case basis over time as shareholders have elected and offered shares back to the company or other shareholders on a limited basis through the company's website. It is not anticipated that any public market would, nor has one ever been, developed for the Preferred "B" shares. The current transaction is believed to be an extension of the no sale treatment of these shares in that the existing and outstanding Preferred "B" shares are simply being exchanged on a one-to-one basis for restricted common shares in Croff Oil without consideration and are based upon the same assets for which the Preferred "B" shares were issued. As a result, it has been the position of the company and the opinion of its legal counsel that the present exchange of the Preferred "B" for Croff Oil common in additional to the exemption claim under section 3(a)(9) constitutes a continuation and completion of the no sale transaction and does not require registration of its shares for issuance, or a formal exemption claim.
Finally, the resulting Croff Oil will have less than 500 shareholders and substantially less than $10M in assets so that it is not deemed that it will require any registration under section 12g of the Securities Exchange of 1934 (34' Act) and Rule 12g-1 promulgated pursuant thereto. The Croff Oil shares will be issued with a restrictive legend and no trading market is anticipated in any manner for the shares.
The Preferred "B" shares which had no CUSIP number were never traded in a public market. The Croff Oil common shares, are not intended to be traded outside the company. The New Croff Oil Company shares will not have a CUSIP number and will be redeemed only by the company.
As a result, the company does not intend to file for registration for any of the securities being issued by Croff Oil under the 33' Act or to register the company under the 34' Act, and the securities will be issued as unregistered restricted securities with a standard restrictive legend. Restricted securities are more fully discussed under the applicable risk factor section of this proxy.
Description
of Croff Properties to be Transferred
The
specific preferred “B” oil and gas assets to be transferred to Croff Oil with
assumption of all oil and gas liabilities, are set-out in detail in Schedule
“__” to the Plan of corporate division. These oil and gas properties
consist primarily of non-operated oil and gas and working and royalty interest
primarily located in Utah, with additional interest in the states of Alabama,
Montana, Wyoming, Oklahoma, North Dakota, Michigan, New Mexico and Texas,
along
with affiliated bank accounts, receivables, payables, and all liabilities,
except Croff tax liabilities, including any plugging and abandoning costs.
A
more complete description of these oil and gas assets, including revenues
and
reserves, are set-out in Croff’s 10-K/A for the reporting period ending December
31, 2006 as incorporated by this reference, and Exhibit “A” to this
proxy.
In
July 2006, the company sold directly
to unrelated parties its principal oil and gas leases in DeWitt County,
Texas. The DeWitt County, Texas oil and gas assets belonged to the common
stock account. Please review the Croff 10-K in the Annual Report for 2006
for a
more complete discussion of the common stock assets in Dewitt County, Texas.
The
common stock account was unable to sell and had to retain two non-operated
natural gas wells, and some tubing in Dewitt County at a book value of $82,873.
The board agreed to transfer these assets to the preferred “B” shareholders, who
have agreed to acquire these miscellaneous oil and gas assets at the company’s
cost, as well as assuming all plugging and other liabilities, if the company
does not sell them at a higher price before closing.
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF
FINANCIAL
CONDITIONS AND RESULT OF OPERATIONS
Croff
Enterprises, Inc. Critical Accounting Policies and
Estimates
The
company’s discussion and analysis
of its financial condition and results of operation are based upon financial
statements, which have been prepared in accordance with accounting principles
generally accepted in the United States of America. The preparation
of these financial statements requires the company to make estimates and
judgments that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
year. The company analyzes its estimates, including those related to
oil and natural gas revenues, oil and natural gas properties, marketable
securities, income taxes and contingencies.
The
company bases its estimates on
historical experience and various other assumptions that are believed to be
reasonable under the circumstances. Actual results may differ from
these estimates under different assumptions or conditions. Assuming
this acquisition closes, the company’s past oil and gas accounting practices
will have little relevance on the future real estate business of the company.
The company accounts for its oil and natural gas properties under the successful
efforts method of accounting. Depletion, depreciation and
amortization of oil and natural gas properties and the periodic assessments
for
impairment are based on underlying oil and natural gas reserve estimates and
future cash flows using then current oil and natural gas prices combined with
operating and capital development costs. Historically, oil and natural gas
prices have experienced significant fluctuations and have been particularly
volatile in recent years.
CROFF
FINANCIAL
ANALYSIS
Liquidity
and Capital Resources
At
June
30, 2007, the Company had assets of $1,924,495 and current assets totaled
$1,170,118 compared to current liabilities of $49,420. Working
capital at June 30, 2007 totaled $1,120,698 an increase of 13% compared
to
$995,498 at December 31, 2006. The Company had a current ratio at
June 30, 2007 of approximately 24:1. During the six month period ended
June 30,
2007, net cash provided by operations totaled $88,045, as compared to $127,072
for the same period in 2006. This decrease was primarily due to reduction
of
current liabilities in 2007. The Company’s cash flow from operations
is highly dependent on oil and natural gas prices. The Company had no
short-term or long-term debt outstanding at June 30, 2007.
Capital
expenditures in the second quarter included $22,845 paid for completion
of the
Shriners II well which was started in 2006. This well is currently
producing. The Company’s plans for ongoing development, acquisition
and exploration expenditures, and possible equity repurchases over and
beyond
the Company’s operating cash flows will depend entirely on the Company’s ability
to secure acceptable financing, and reasonably priced
opportunities. Bank borrowings may be utilized to finance the
Company’s 2007 capital budget. In addition, the Company will utilize
its internal operating cash flows. Future
cash flows are subject to a number of variables, including the level of
production and oil and natural gas prices. There can be no assurance
that operations and other capital resources will provide cash in sufficient
amounts to maintain planned levels of capital expenditures or that increased
capital expenditures will be undertaken.
The
Company believes that borrowings
from financial institutions, projected operating cash flows and the cash
on hand
will be sufficient to cover its working capital requirements for the next
12
months, if continuing its current oil and gas activities. In
connection with consummating any significant acquisition or funding an
exploratory or development drilling program, additional debt or equity
financing
will be required, which may or may not be available on terms that are acceptable
to the Company.
While
certain costs are affected by the
general level of inflation, factors unique to the oil and natural gas industry
result in independent price fluctuations. Over the past five years, significant
fluctuations have occurred in oil and natural gas prices. Although it is
particularly difficult to estimate future prices of oil and natural gas,
price
fluctuations have had, and will continue to have, a material effect on
the
Company. Overall, it is management’s belief that inflation is
generally favorable to the Company since it does not have significant operating
expenses.
Results
of Operations
The
year ended December 31, 2006 compared to year ended December 31,
2005.
The
company had net income for 2006
which totaled $373,015 compared to net income of $289,887 for the same
period in
2005. This increase in income in 2006 was primarily due to the gain
on the sale of the leases in Dewitt County, Texas.
Revenues
for 2006 totaled $1,005,274, a
significant increase from revenues in 2005 of $968,085 primarily because
of the
gain from the sale of the Edward Dixel Grips lease in Dewitt County. Oil
and
natural gas sales in 2006 totaled $842,400, a 10% decrease from $934,525
in the
same period in 2005. A decrease in oil prices and natural gas prices were
the
factors causing this decrease in oil and natural gas sales compared to
the same
period in 2005. Interest income rose from $12,057, which was categorized
under
other income in 2005 to $49,671, which is categorized under interest income
in
2006. The interest income increased because there was an increase in deposits
and interest rates, and from the settlement of the Parry v. Amoco Production
case. The interest income attributable to the bank deposits is
$35,818 and
the interest income received from the settlement totaled $13,853 yielding
a
combined total of $49,671.
For
2006, lease operating expenses,
which include all production related taxes, totaled $205,371 compared to
$272,129 incurred for the same period in 2005. In 2006, the company
did not have any expenditure on the Yorktown drilling program which decreased
expenditures from 2005 to 2006. Estimated depreciation and depletion
expense for 2006 were $48,500 compare to 2005 at $45,000.
General
and administrative expense,
including overhead expense paid to a related party, for 2006, totaled $262,520
compared to $215,766 for the same period in 2005. The increase in the general
and administrative expense and overhead is due to an increase in legal,
accounting and other expenses related to
the
Exchange plan and annual report printing fees. Accretion expense for the
Asset
Retirement accrual was $10,187 in 2005 compared to $5,868 in 2006. The
reason
for this decrease is the company established an accretion expense account
in the
third quarter of 2005, and accrued a higher amount to establish the reserve.
The
amount reflected in the third quarter of $1,467 is the average quarterly
amount
of the accretion expense.
Provision
for income taxes for 2006 totaled $110,000 compared to $82,478 in
2005. This increase is primarily attributable to an increase in net
income for the year.
One
Year Ended December 31, 2005 compared to year ended December 31,
2004.
Revenues
for 2005 totaled $968,085,
an increase of 68% from $576,162 in 2004. Net income for 2005 totaled $289,887
compared to $142,116 for 2004. The increase in revenue was due almost entirely
to major increases in oil and natural gas prices. Production was relatively
constant and reserves increased by about the same amount as the amount
produced.
. Other income, which is composed primarily of interest and dividend income
as
well as lease bonus payments, and sale of equipment increased approximately
440%
during 2005 to $33,560 from $6,196 in 2004.
Lease
operating expenses for 2005,
which includes all production related taxes, totaled $272,129 compared
to
$192,187 for 2004. This was due to three major increases in expenses. Production
related taxes rose to approximately $67,000 due to higher prices. Increased
workover expenses were incurred as prices increased work on marginal wells.
The
Company also had a full year of production from working interest in wells
such
as the State Forest in Michigan, which run higher lease operating
expenses.
Lease
operating expenses for 2005, which includes all production related taxes,
totaled $272,129 compared to $192,187 for 2004. This was due to three major
increases in expenses. Production related taxes rose to approximately $67,000
due to higher prices. Increased workover expenses were incurred as prices
increased work on marginal wells. The Company also had a full year of production
from working interest in wells such as the State Forest in Michigan, which
run
higher lease operating expenses
General
and administrative expense, including rent for 2005, totaled $215,766 which
was
$55,609 higher than in 2004, when general and administrative expense totaled
$160,157. This increase was due to higher fees for accounting, legal, and
similar costs incurred in pursuing the strategic alternatives for the Company
and increased compliance costs.
Six
Months Ended June 30, 2007 Compared with Six Months Ending June 30,
2006.
Revenues
for the six months ended June
30, 2007 totaled $ 447,309 essentially equal with revenues of $448,985
at June
30, 2006. Net income for the six months ended June 30, 2007 and 2006 totaled
$119,818 and $136,123 respectively. This decrease in the net income was
primarily due to a higher provision for income
taxes.
Oil
and
gas sales for the six months ended June 30, 2007 totaled $422,121 a 3%
decrease
from the $435,106 for the same period in 2006. This slight decrease in
oil and
gas sales in 2007 compared to 2006 is primarily attributed to a decrease
in
natural gas prices.
Lease
operation expense which includes
all production related taxes for the six months ended June 30, 2007 totaled
$138,423 an 11% increase from $123,158 in 2006. This increase was primarily
due
to higher oilfield service costs in 2007.
Depletion
and depreciation expense for
the six months ended June 30, 2007 totaled $25,000 from the sum of $24,500
incurred for the same period in 2006. This increase was due to the small
increase in producing assets in 2007.
General
and administrative expenses,
including overhead expense paid to related party, for the six months
ended June
30, 2007 totaled $108,841 compared to $123,270 for the same period in
2006.
Overhead expense paid to related party for the six months ended June
30, 2007
totaled $24,180 compared to $24,444 incurred for the same period in 2006.
The
decrease in overhead expenses is primarily attributed to timing of professional
fees in the cancelled TRBT acquisition. The Company has also incurred
additional costs during both 2006 and 2007 with respect to strategic
planning.
Provision
for income taxes for the six
months ending June 30, 2007 totaled $52,000 compared to $39,000 from
the same
period in 2006. This increase is primarily attributable to the expiration
of
offsetting tax loss carry forwards in 2007 and being in a higher tax
bracket.
TAX
CONSIDERATIONS
The
individual or corporate shareholder is advised to contact their own tax
counsel
with respect to the tax considerations of this transaction. Each
person’s tax considerations are different and the following is provided solely
to provide general information on the background of this
transaction.
Tax
Consequences to Preferred “B”
Shareholders.
The
issuance of the one new common shares in Croff Oil for each Croff preferred
“B”
share cancelled, should be a tax free exchange of shares and the receipt
of the
Croff Oil Company common shares should not trigger any tax consequence
to the
Preferred “B” shareholder. The Preferred “B” shares were initially distributed
for no additional consideration on the basis of one Preferred “B” share issued
for each common share held to each common shareholder in 1996. It is anticipated
the cost basis in each Preferred “B” share for most shareholders would be zero,
but a percentage of the original cost basis in each common share could
be
allocated to the Preferred “B” share. For example, if allocated equally, a $3
basis in the common share at the time of distribution in 1996 could be
allocated
$1.50 to the common share and $1.50 to the Preferred “B” share. Only
shareholders exercising dissenting shareholder rights under Utah law would
have
tax consequences. They would owe tax on the amount of cash received
for each share over the amount of basis of the shareholder in that
share.
There
may
be other potential tax consequences, based upon the individual taxpayer
status
and tax bracket of the Preferred “B” shareholder. For example,
whether the shareholder is a non-resident or a partnership, domestic
or a
foreign corporation, whether the shares were acquired from an estate
or through
a gift. This discussion does not include any individual shareholder’s tax
situation, but is intended to provide general tax guidance to any Preferred
“B”
shareholder of his basis in receiving new common
shares. In all events, shareholders should contact their
individual tax advisor to determine their actual tax
results.
Tax
Consequence to the Common Shareholders
The
issuance of new restricted common
shares in Croff Oil and cancellation of the preferred “B” shares should not
result in any tax consequences to the existing common
shareholders.
Tax
Consequences to Croff
With
respect to Croff Enterprises, Inc., the Corporation expects that the
assignment
of its oil and gas assets into a new company entitled “Croff Oil Company”, in
exchange for distributing the common shares received to its preferred
“B”
shareholders will be a tax free exchange.
The
tax
discussion set forth above is a greatly abbreviated, generalized discussion
of
the anticipated applicable federal and state income tax consequences,
and may
not apply to all common or Preferred “B” shares acquired under different
circumstances or under different facts. No information is provided herein
as to
the contemplated state, local, or foreign tax consequences for individual
shareholders in the transactions contemplated in this Proxy.
Shareholders are urged to consult their own tax advisers to
determine
the particular federal, state, local, and foreign tax consequences to
them if
the proposed transaction is
approved.
AUDITORS
The
independent outside accountant conducting the current audit for Croff
Enterprises, Inc. is Ronald Chadwick, of 2851 South Parker Road, Ste 720,
Aurora, Colorado 80014, (303)306-1967. Ronald Chadwick was appointed
the independent outside auditor for the company for the calendar year 2006
by
the Board of Directors on recommendation by the audit committee, and ratified
at
the December 2006 shareholders’ meeting. Mr. Chadwick reviewed each of the
quarterly filings of Croff Enterprises, Inc. in 2006 and conducted the
audit of
the year ending December 31, 2006, and the quarter reviews in
2007. The current appointment for which ratification is sought, would
be the audit for the calendar year 2007.
Prior
to 2006, the independent outside
accountants conducting the audits for Croff Enterprises, Inc, for a period
in
excess of ten years, was the firm of Causey, Demgen & Moore, of 1801
California Street, Suite 4650, Denver, CO 80202, (303) 296-2229.
There were no disputes between the company and Causey, Demgen & Moore,
during their engagement. Causey, Demgen & Moore, declined to stand for
reappointment due to restrictions imposed by section 208(a) of the
Sarbanes-Oxley Act of 2002 and the rules and regulations of the Securities
and
Exchange Commission that prohibit partners on the audit engagement
team from providing audit services to the issuer for more than five (5)
consecutive years and from returning to audit services with the same issuer
within five years.
RISK
FACTORS
1. New
Management to be Appointed and Control Position.
Shareholders
and Croff should not recognize any change in their relative sharehold position
or the management of the company. The only significant change will be
that there will be no further preferred “B” shares in Croff and that all issued
and outstanding shares will be common with full voting rights in the new
Croff
Oil Company. Mr. Gerald L. Jensen in connection with his brother, Mr.
Julian D. Jensen, and other member of the board will continue to hold a
slight
majority of the common shares issued and outstanding within Croff during
the
going forward period as a shell corporation seeking various merger or
acquisition opportunity. In Croff Oil Company, Mr. Gerald L. Jensen
and affiliated business entities will hold a preponderate majority of 67%
of the
issued and outstanding common shares and will control both the direction
and
managment for that company for the foreseeable future. Each
shareholder must independently recognize and assess risk factors inherent
in
having a minority position in either a private or public
company. Essentially, minority shareholders will usually not be in a
position to affect any change in direction of the business of the company
or to
block any proposed merger or acquisition or alter any business purpose
due to
their minority status. These should be considered risk factors of
continuing on as a shareholder in one or both entities. As previously
noted, the initial managment of Croff Oil will be same as the Croff Enterprises
and all oil and gas activities will continue to be conducted in the same
manner
as presently conducted by Croff Enterprises. For an anticipated
interim period, the managment of Croff will be the same, though it is
anticipated if the company is successful in any merger, acquisition or
related
type of reorganization, most likely a new and unknown management group
will gain
control of Croff through the issuance of new shares relative to such type
of
reorganization. Again, it is highly unlikely that present common
shareholders in Croff Enterprises will be able to exert or maintain any
control
position in the future.
2. “Shell”
Corporation.
A
shell corporation is essentially a company that remains public, but does
not
have any defined business or purpose or business assets. Being an
investor in a shell corporation imposes certain significant risk to
shareholders, such as an undetermined business future and difficulty in
evaluating the worth of the company going forward. Each public
shareholder in Croff must understand and realize that the company will
attempt
to find a suitable merger or acquisition candidate to create an active
business
purpose and future for Croff as a public entity; however no assurance can
be
given that Croff would be successful in this regard. If, in the
interim period and certainly over a longer period, Croff does not successfully
find a merger or acquisition participant, its assets will be wasted without
incoming revenues to pay ongoing compliance cost of maintaining the company
as a
public company. Eventually, if the company is not successful after a
reasonable period of time in attempting to find a merger or acquisition
candidate, it may no longer be able to maintain itself as a public company
and
would become a privately held company with shareholders losing any potential
advantage of having shares that may be traded in a public
market. Moreover, there are certain disclosure and other limitations
placed upon a shell company by the mere status of being a public shell
company
as generally discussed previously. The Croff board does not believe
that these limitations will have an immediate adverse impact on public
shareholders, but could adversely impact their position and particular
if merger
or acquisition candidate is not found in the near
future.
3. Sarbanes-Oxley
Compliance – Particularly Section 404.
The
Sarbanes-Oxley Act (hereafter “SOX”) has placed significant financial and
management cost and burdens upon small public companies, such as
Croff. In particular, the company is required to bear the costs and
fees related to maintaining an independent audit committee at the present
time. Commencing with the calendar year starting 2008, the company
would need to establish procedures for guaranteeing certain internal management
and financial controls and procedures under Section 404 of
SOX. Management believes that complying with Section 404 of SOX will
cost more than 50% of existing net income of the company. This is one
reason for dividing the company. A public company with only liquid
assets can comply at a substantially lower cost. It is believed that
this compliance will be complex and impose substantial new costs upon the
company. The company believes that it can comply with such
requirements on a short-term interim basis if it has no producing cash and
only
liquid assets, but will need to find a suitable merger or acquisition candidate
producing cash flows to be able to afford long-term compliance. If the company
is not, after reasonable period of time able to find a suitable merger or
acquisition candidate, it will most likely have to de-list as a public company
and shareholders will lose the ability to have a potential free trading market
for their shares or will be forced to trade on a more limited unofficial
“pink
sheet” basis.
4. Nature
of Business Entity.
As
previously discussed, the assets pledged to the preferred “B” shareholders will
become the assets of Croff Oil Company. It will be a private Utah
corporation, in which shareholders will not be able to freely trade their
restricted common shares. Further, management will be substantially
controlled by Mr. Gerald L. Jensen and affiliated entities holding a
preponderate majority of the issued and outstanding common
stock. However, the minority shareholders will have voting rights and
other minority shareholder rights as provided under Utah law. It is
further anticipated that this company will continue on with the operation
or
management of the existing oil and gas assets presently held and operated
by
Croff Enterprises and may be able to do so at a lower cost of operation,
due to
its nature as a private company. However, there is no immediate
commitment or expectation that dividends or other distributions can or will
be
paid. Croff, as noted above, will continue to incur substantial risk
factors by being a shell company by having very limited trading markets and
by
the substantial cost of compliance with SOX. Finally, there can be no
assurance or warranties that Croff will be successful in its anticipated
efforts
to find a suitable merger or acquisition candidate or as to the terms of
such
acquisition is successful. All of the foregoing constitutes going
forward risk for investors wishing to remain in the entity as
shareholders.
5.
Lack of Future Capital Commitments.
If
Croff
is not able to find a suitable merger or acquisition candidate, it will
be
significantly pressed to maintain a status as a public company due to
its
minimal retained cash reserves and capitalization. Further, there is
no going forward assurance that Croff can or will attempt to raise additional
capital or funding if it is not successful a finding a suitable merger
or
acquisition candidate. Finally, as to Croff there is a risk that any
merger or acquisition candidate may not have sufficient capital to ensure
the
success of the business going forward or be in a position to raise additional
capital either by debt or equity financing. While it is believed that
Croff Oil will be a self sustaining enterprise upon the transfer of the
assets,
it may not be able to obtain any future capital, either through equity
or debt
to expand financing, or further develop its assets or increase
revenues. Over time, oil and gas assets are a wasting asset and will
result in declining revenues to the company if not replaced.
6. There
Will Be No Independent Fairness Opinion or Review of the
Exchange.
Because
the Croff Oil assets are being transferred to a new entity with the same
ownership by existing claimants to those assets, Croff does not deem
it
necessary to complete any independent appraisal of the transferred
assets. However, the lack of an independent appraisal report for the
transferred assets may be significant to those wishing to exercise dissenting
shareholder rights to receive cash payments for their “B” shares or common
shares in lieu of the shares in Croff Oil Company or remaining as a common
shareholder in Croff Enterprises. Croff has determined it is not
realistic or cost justified to obtain an independent appraisal report
for the
purposes of possible dissenting shareholders. Croff believes its estimated
valuation of the preferred “B” shares is within a range of reasonableness as
determined by the board of directors based upon the last reserve report
and
current pricing of the oil and gas assets as internally computed. No
precise values can be given for a shell corporation, such as Croff Enterprises,
in the event of the asset transfer considering that the book value of
Croff,
after the transfer is about $325,000, and the market value at $1.00 per
share is
$606,000, the $1.00 per share presumes a value of $306,000 for the cash
and
$300,000 for the “going concern” value of the shell. It is believed
that the $4.25 per preferred “B” share and the $1.00 per common share to the
dissenting shareholder is reasonable and fair based upon limited market
transactions that exist for Croff common and the fact that there will
be few
cash assets and no income producing interest left in the public shell
after the
asset transfer.
7.
No Public Market for Croff
Stock.
For
various of the reasons previously set-out in these Risk Factors, there can
be no
absolute assurance or warranty that a future market will exist for the new
Croff
shares as an ongoing public company.
8.
Absence of Dividends.
Each
prospective investor should understand that there is no commitment or assurance
that Croff or Croff Oil will pay any dividends. At present it is
anticipated that any net profits in Croff Oil would be retained for business
development. In the absence of dividends, shareholders must look
exclusively to potential capital appreciation for a return on investment,
which
appreciation cannot be warranted.
9. Rule
144 Sales and Restricted Securities.
As
otherwise explained in this Proxy Statement, all of the securities being
issued
pursuant to the asset transfer will be restricted stock; that is to say,
the
Croff Oil common shares will not be registered with the Securities and
Exchange
Commission (SEC) or any state securities regulatory agency. The
shares are primarily issued upon claimed exemptions from
registration. As to Croff Oil, it is not anticipated a public market
will ever develop. Croff presently has only a very limited trading
market, and no assurance of a more active market can be made. As a
result, all of the new shares will have significant limitations and holding
periods before they can be transferred. While the primary rule
governing resales of restricted securities in public companies is SEC Rule
144,
it is not claimed to be an exclusive means of compliance for resales of
restricted securities. However, it is noted that most restricted
stock sellers currently rely upon Rule 144 as a Safe Harbor in the resales
of
restricted securities in public companies. In essential terms, Rule
144 requires a holding period of at least one year before restricted securities
can be sold. After that one year period, sales can only occur if
there is an active public trading market for the shares and the shares
must be
sold in unsolicited brokerage transactions where current public information
is
available. There is also a volume limitation imposed typically on the
amount of sales which can occur in any three month period. Each
investor should consider the nature of restricted securities and whatever
risk
factor this may impose upon their holding of such securities for future
sale.
10. Penny
Stock..
Croff
shares may be considered a “penny
stock” within the meaning of Rule 3a-51-1 of the Securities Exchange Act which
will affect your ability to sell your shares; “penny stocks” often suffer wide
fluctuations and have certain disclosure requirements which make resale
in the
secondary market difficult.
Croff
shares will be subject to the
Penny Stock Reform Act, which will affect your ability to sell your shares
in
any secondary market, which may develop. If our shares are not listed
on a nationally approved exchange or the NASDAQ, do not meet certain minimum
financing requirements, or have a bid price of at least $5.00 per share,
they
will likely be defined as a “penny stock”. Broker-dealer practices,
in connection with transactions in “penny stock”, are regulated by the
Sec. Rules associated with transactions in penny stocks include the
following:
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the
delivery of standardized risk disclosure
documents;
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the
provision of other information such as current bid/offer quotations,
compensation to be provided broker-dealer and sales person, monthly
accounting for penny stocks held in the customers
account;
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written
determination that the penny stock is suitable investment for
purchaser;
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written
agreement to the transaction from purchase;
and
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a
two-business day delay prior to execution of a
trade.
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These
disclosure requirements and the
wide fluctuations that “penny stock” often experience in the market may make it
difficult to sell your shares in any secondary market, which may
develop.
DISSENTING
SHAREHOLDER RIGHTS
Croff
has
determined that the foregoing asset transfer requires the offering of dissenting
shareholder rights under Utah Law, Utah Code Annot. §16-10a-1301 to
1331. Essentially any shareholder who does not believe that the Share
Exchange is fair and equitable to the shareholders may elect, under Utah
law, to
become a dissenting shareholder. It should be noted by each
prospective dissenting shareholder that the election to be a dissenting
shareholder will not constitute a vote against or in any way invalidate
the
completion of the asset transfer, but will provide such dissenting shareholder
with a potential alternative valuation and payment option for their
shares.
In
essential terms, any dissenting shareholder under the Utah statutory provisions
will have the right within a prescribed time limit set-out in the enclosed
packet to accept the company’s determination of the fair value of their Common
and Preferred “B” shares and to exchange all shares for a cash payment as
previously described; or to propose to the company what they deem to be
an
alternative fair and adequate consideration for their shares, along with
the
methodology at which they arrive at their alternative valuation. The
company would then attempt to negotiate a resolution or may simply refuse
to
recognize the alternative valuation. It should be noted to each
prospective dissenting shareholder that the company believes the present
redemption proposal is fair and reasonable based upon current market conditions
and valuation of the company; and, as a result, Croff is not likely to
voluntarily alter or amend its proposed redemption payments for the
shares.
If
the company and the shareholder
are not able to agree upon a stipulated alternative valuation, then the
company
will have the obligation to proceed with a court proceeding in Utah to
attempt
to force a valuation for the shares through a judicial process.
THE
FOREGOING CONSTITUTES ONLY A GENERAL DESCRIPTION OF DISSENTING SHAREHOLDER
RIGHTS. EACH PROSPECTIVE DISSENTING SHAREHOLDER IS ENCOURAGED TO REVIEW,
WITH
LEGAL COUNSEL OF THEIR OWN CHOICE, THE ATTACHED AND ENCLOSED DISSENTING
SHAREHOLDER RIGHTS PACKAGE AND BALLOT, SEE EXHIBIT D, WHICH CONTAINS THE
COMPANY’S EXPLANATION AND THE UTAH STATUTORY MATERIAL ON DISSENTING SHAREHOLDER
RIGHTS AS EXTRACTED FROM THE UTAH CODE.
Any
shareholder wishing to exercise
dissenting shareholder rights should fill out and complete the dissenting
shareholder rights ballot and return it promptly to the company in the
enclosed
envelope so that they may be listed as dissenting shareholder and the company
will then proceed in accordance with applicable law to treat such claim
in
accordance with the statutory provisions and as generally outlined
above. Please note that if you vote in favor of the Share
Exchange you are not entitled to be a dissenting shareholder. If you
elect to be a dissenting shareholder you must
not execute the standard proxy
ballot
(white ballot), but you must execute and return
only the dissenting shareholder
election form (blue ballot).
OTHER
MATTERS
The
Special Meeting is called for the
purposes set forth in the notice thereof. The Board of Directors does
not intend to present, and has not been informed that any other person intends
to present, any matters for action at the Special Meeting other than those
specifically referred to in the Notice of Meeting and this Proxy
Statement. If any other matters are properly brought before the
Special Meeting, it is the intention of the proxy holders to vote on such
matters in accordance with their judgment.
STOCKHOLDER
PROPOSALS
There
were no stockholders proposals
submitted for consideration at this Special Meeting. Stockholder
proposals intended to be considered at the next meeting of Stockholders must
be
received by the company no later than March 31, 2008. Such proposals
may be included in the next proxy statement if they comply with certain rules
and regulations promulgated by the Securities and Exchange
Commission.
SECTION
16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under
Section 16(a) of the Securities
Exchange Act of 1934, as amended, Croff’s directors, its executive officers, and
any persons holding more than 10% of the common stock are required to report
their ownership of the common stock and any changes in that ownership to
the
Securities and Exchange Commission. Specific due dates for these
reports have been established, and we are required to report in this proxy
statement any failure to file by such dates during 2007. To our
knowledge, all of these filing requirements were satisfied by our directors,
officers and 10% percent holders. In making these statements, Croff
has relied upon the written representations of its directors, officers and
its
10% percent holders and copies of the reports that they have filed with the
Commission.
OTHER
INFORMATION
Financial
Reports & Other Important Documents
The
financial reports for Croff’s
operations ended December 31, 2006 filed as Form 10-K/A are considered an
integral part of this Proxy Statement and are incorporated by this
reference. See also, "Management's Discussion and Analysis of
Financial Condition and Results of Operations" in the Form
10-K/A. The report is also available at Croff’s website at
www.croff.com, or from the Securities and Exchange Commission at
www.sec.gov/edgar . A hardcopy of the Form 10-K/A if not enclosed may
also be obtained without cost by calling the company’s offices at
303-383-1555.
Documents
Incorporated by Reference
1. Croff
incorporates the Plan of Corporate Division dated October ___, 2007, with
priorreference to accessibility from Croff, and including the following
Exhibits:
(A)
Plan of Corporate
Division
(B)
Articles of Incorporation of
Croff Oil Company.
(C)
Oil and Gas Assets of Croff
(Preferred “B” Assets)
(D)
Dissenting Shareholder
Rights Package
(E)
Croff 10-K/A dated June 30,
2007
2. Croff’s
Current 10-K/A Report for the period ending December 31, 2006 is as enclosed
with these
proxy materials.
Dated: November
_____, 2007.
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BY
ORDER OF THE BOARD OF DIRECTORS: |
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/S/ Gerald L. Jensen |
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Gerald
L. Jensen, Chairman of the Board |
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DISSENTING
SHAREHOLDER RIGHTS
PACKAGE
Dated
__________ ____, 2007
As
a shareholder in Croff Enterprises,
Inc., the Company has determined to extend to you what are known as “Dissenting
Shareholder Rights” in relationship to the proposed Plan of Corporate Division
and Reorganization (the “Plan”) and related issues described in the accompanying
Proxy Statement and Ballot.
In
essential terms, dissenting
shareholder rights provide to you, as a shareholder, the right to dissent
from
participation in the Plan described in the attached proxy materials; and,
in
lieu of voting to approve such Plan, to receive back from the Company a
determined cash equivalent value for your shares upon the return of those
shares
to the Company. IF YOU ARE GOING TO EXERCISE DISSENTING
SHAREHOLDER RIGHTS, YOU SHOULD NOT VOTE
ON ANY MATTERS RELATED TO THE PLAN IN THE ENCLOSED PROXY BALLOT NOTICE
AND
ELECTION, BUT SHOULD RETURN ONLY THE
ENCLOSED DISSENTING SHAREHOLDER RIGHTS FORM TO THE COMPANY IN THE ENCLOSED
ENVELOPE.
There
are significant matters which you
should understand before determining to exercise dissenting shareholder
rights. The Company has attempted to summarize what it believes to be
the most important and essential provisions of those dissenting shareholder
rights considerations below. However, the Company is required and has
included with this dissenting shareholder rights package the portions of
the
Utah Statute governing or controlling dissenting shareholder
rights. Should you believe that anything contained in this summary
statement is not in agreement or accord with the statutory provisions,
you
should rely upon and follow the statutory provisions. If you are
confused or do not understand dissenting shareholder rights, you are more
than
welcome to call CROFF at the telephone and address indicated in the enclosed
proxy materials and to speak with Mr. Jerry Jensen, the president, who
is also
the shareholder liaison for this matter. Further, if you have any
questions, you are encouraged to discuss them with your own legal or other
financial advisors for further explanation. With this general
statement, we would draw your attention to the following factors to consider
with regard to dissenting shareholder rights:
(1) If
you are going to exercise your dissenting shareholder rights, you should
not vote on the proxy materials related to the Exchange, but should
instead complete, sign and return only the enclosed dissenting
shareholder rights form.
(2) The
Company has determined dissenting shareholder rights valuations based upon
an
examination of the current net worth of the Company, present limited market
trading range, and other subjective factors. Based upon all of these
considerations, management of the company has determined that a fair valuation
for dissenting shareholder rights would be $4.25 per each preferred “B” share
and $1.00 per each common share. That is, if you elect to exercise
your dissenting shareholder rights, the Company would pay you $4.50 per
each
preferred “B” share and $1.00 per each common share upon return of your shares
in negotiable form. You are advised, before you make this decision,
to examine the current trading market price for the shares to see if you
may not
receive a higher price for your shares in the market if you do not wish
to
remain a shareholder in the Company. It is not necessary to return
both preferred “B” and common shares and you may tender one class and not the
other. However, you must tender all shares in that class to be
entitled to dissenting shareholder rights.
(3) The
Dissenting Shareholders form also allows you the option to return your
shares,
but to demand
an
alternative price. If the alternative price is not acceptable, there
may be a judicial remedy to have the price set. CROFF does not
presently intend to pay in excess of $4.50 per preferred “B” share or $1.00 per
common share.
(4) You
should read and review, with your advisors if necessary, the enclosed statutory
materials pertaining to dissenting shareholder rights.
(5) You
are advised that you must return your dissenting shareholder rights notice
not
more than thirty-five (35) days after the date appearing on this notice
statement in order for you to exercise such rights. If returned
subsequent to that date, the Company will not recognize any dissenting
shareholder rights. As a result, you would remain a common
shareholder in Croff Enterprises, Inc. and become a common shareholder
in Croff
Oil.
(6) If
you decide to exercise dissenting shareholder rights, you must return your
corporate certificate for your shares in negotiable form with signature
guaranteed along with the attached and incorporated dissenting shareholder
rights election form to the Company in the enclosed envelope within the
thirty-five (35) day period.
(7) You
are further advised that a Special Shareholder Meeting is planned for
__________ ___, 2007 to vote upon and approve the Plan as more fully
set-out in the enclosed proxy. The vote on the Plan was approved by
the Board of Directors of CROFF and was authorized to be submitted for
shareholder vote as explained in the attached proxy material. Your
dissenting shareholder rights do not provide any right for you to block
or stay
the implementation of the Plan, if approved by majority shareholder vote
as
anticipated. The notice address for the corporation and to
which you should return any dissenting shareholder rights, notice and form,
along with your certificate, is contained in the address appearing on the
enclosed proxy materials and is 3773 Cherry Creek Dr N #1025, Denver, CO
80209. You may also telephone the Company at (303)
383-1515.
(8) If
you are a beneficial owner, that is it is “you”, not the name appearing on the
certificate, who has the actual beneficial ownership rights to these shares,
then Croff must obtain back from you not only your signature, but the signature
and consent of the actual name holder on the certificate and which party
must
endorse the certificate as returned. See particularly the provisions
of enclosed Utah Code Annotated §16-10(a)13-03(3). Again, if you have
any questions regarding signature rights or procedures, please feel free
to call
the Company at your earliest convenience.
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Sincerely, |
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/S/
Gerald L.
Jensen |
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Chairman
of the Board and
President |
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UT
ST § 16-10a-1302
§
16-10a-1301.
Definitions
§
16-10a-1302. Right to dissent
(1)
A
shareholder, whether or not entitled to vote, is entitled to dissent from,
and
obtain payment of the fair value of shares held by him in the event of,
any of
the following corporate actions:
(a)
consummation of a plan of merger to which the corporation is a party
if:
(i)
shareholder approval is required for the merger by Section 16-10a-1103
or the
articles of incorporation; or
(ii)
the
corporation is a subsidiary that is merged with its parent under Section
16-10a-1104;
(b)
consummation of a plan of share exchange to which the corporation is a
party as
the corporation whose shares will be acquired;
(c)
consummation of a sale, lease, exchange, or other disposition of all, or
substantially all, of the property of the corporation for which a shareholder
vote is required under Subsection 16-10a-1202(1), but not including a sale
for
cash pursuant to a plan by which all or substantially all of the net proceeds
of
the sale will be distributed to the shareholders within one year after
the date
of sale; and
(d)
consummation of a sale, lease, exchange, or other disposition of all, or
substantially all, of the property of an entity controlled by the corporation
if
the shareholders of the corporation were entitled to vote upon the consent
of
the corporation to the disposition pursuant to Subsection
16-10a-1202(2).
(2)
A
shareholder is entitled to dissent and obtain payment of the fair value
of his
shares in the event of any other corporate action to the extent the articles
of
incorporation, bylaws, or a resolution of the board of directors so
provides.
(3)
Notwithstanding the other provisions of this part, except to the extent
otherwise provided in the articles of incorporation, bylaws, or a resolution
of
the board of directors, and subject to the limitations set forth in Subsection
(4), a shareholder is not entitled to
dissent and obtain payment under Subsection (1) of the fair value of the
shares
of any class or series of shares which either were listed on a national
securities exchange registered under the federal Securities Exchange Act
of
1934, as amended, [FN1] or on the National Market System of the National
Association of Securities Dealers Automated Quotation
System, or were held of record by more than 2,000 shareholders, at the
time
of:
(a)
the
record date fixed under Section 16-10a-707 to determine the shareholders
entitled to receive notice of the shareholders' meeting at which the corporate
action is submitted to a vote;
(b)
the
record date fixed under Section 16-10a-704 to determine shareholders entitled
to
sign writings consenting to the proposed corporate action; or
(c)
the
effective date of the corporate action if the corporate action is authorized
other than by a vote of shareholders.
(4)
The
limitation set forth in Subsection (3) does not apply if the shareholder
will
receive for his shares, pursuant to the corporate action, anything
except:
(a)
shares of the corporation surviving the consummation of the plan of merger
or
share exchange;
(b)
shares of a corporation which at the effective date of the plan of merger
or
share exchange either will be listed on a national securities exchange
registered under the federal Securities Exchange Act of 1934, as amended,
or on
the National Market System of the National Association of Securities Dealers
Automated Quotation System, or will be held of record by more than 2,000
shareholders;
(c)
cash
in lieu of fractional shares; or
(d)
any
combination of the shares described in Subsection (4), or cash in lieu
of
fractional shares.
(5)
A
shareholder entitled to dissent and obtain payment for his shares under
this
part may not challenge the corporate action creating the entitlement unless
the
action is unlawful or fraudulent with respect to him or to the
corporation.
§
16-10a-1303. Dissent by nominees and beneficial
owners
(1)
A
record shareholder may assert dissenters' rights as to fewer than all the
shares
registered in his name only if the shareholder dissents with respect to
all
shares beneficially owned by any one person and causes the corporation
to
receive written notice which states
the dissent and the name and address of each person on whose behalf dissenters'
rights are being asserted. The rights of a partial dissenter under this
subsection are determined as if the shares as to which the shareholder
dissents
and the other shares held of record by him were registered in the names
of
different shareholders.
(2)
A
beneficial shareholder may assert dissenters' rights as to shares held
on his
behalf only if:
(a)
the
beneficial shareholder causes the corporation to receive the record
shareholder's written consent to the dissent not later than the time the
beneficial shareholder asserts dissenters' rights; and
(b)
the
beneficial shareholder dissents with respect to all shares of which he
is the
beneficial shareholder.
(3)
The
corporation may require that, when a record shareholder dissents with respect
to
the shares held by any one or more beneficial shareholders, each beneficial
shareholder must certify to the corporation that both he and the record
shareholders of all shares owned
beneficially by him have asserted, or will timely assert, dissenters' rights
as
to all the shares unlimited on the ability to exercise dissenters' rights.
The
certification requirement must be stated in the dissenters' notice given
pursuant to Section 16-10a-1322.
§
16-10a-1320. Notice of dissenters' rights
(1)
If a
proposed corporate action creating dissenters' rights under Section 16-10a-1302
is submitted to a vote at a shareholders' meeting, the meeting notice must
be
sent to all shareholders of the corporation as of the applicable record
date, whether or not they are entitled to vote at the meeting. The notice
shall state that shareholders are or may be entitled to assert dissenters'
rights under this part. The notice must be accompanied by a copy of this
part and the materials, if any, that under this chapter are required to
be given the shareholders entitled to vote on the proposed action at the
meeting. Failure to give
notice as required by this subsection does not affect any action taken
at the
shareholders' meeting for which the notice was to have been
given.
(2)
If a
proposed corporate action creating dissenters' rights under Section 16-10a-1302
is authorized without a meeting of shareholders pursuant to Section 16-10a-704,
any written or oral solicitation of a shareholder to execute a written
consent to the action contemplated by
Section 16-10a-704 must be accompanied or preceded by a written notice
stating
that shareholders are or may be entitled to assert dissenters' rights under
this
part, by a copy of this part, and by the materials, if any, that under
this
chapter would have been
required to be given to shareholders entitled to vote on the proposed action
if
the proposed
action were submitted to a vote at a shareholders' meeting. Failure to
give
written notice as provided by this subsection does not affect any action
taken
pursuant to Section 16-10a-704 for which the notice was to have been
given.
§
16-10a-1321. Demand for payment--Eligibility and notice of
intent
(1)
If a
proposed corporate action creating dissenters' rights under Section 16-10a-1302
is submitted to a vote at a shareholders' meeting, a shareholder who wishes
to
assert dissenters'rights:
(a)
must
cause the corporation to receive, before the vote is taken, written notice
of
his intent to demand payment for shares if the proposed action is effectuated;
and
(b)
may
not vote any of his shares in favor of the proposed action.
(2)
If a
proposed corporate action creating dissenters' rights under Section 16-10a-1302
is authorized without a meeting of shareholders pursuant to Section 16-10a-704,
a shareholder who wishes to assert dissenters' rights may not execute a
writing
consenting to the proposed
corporate action.
(3)
In
order to be entitled to payment for shares under this part, unless otherwise
provided in the articles of incorporation, bylaws, or a resolution adopted
by
the board of directors, a shareholder must have been a shareholder with
respect
to the shares for which payment is demanded as of the date the proposed
corporate action creating dissenters' rights under Section 16-10a-1302
is
approved by the shareholders, if shareholder approval is required, or as
of the
effective date of the corporate action if the corporate action is
authorized other than by a vote of shareholders.
(4)
A
shareholder who does not satisfy the requirements of
Subsections
(1)
through (3) is not entitled to payment for shares under this
part.
§
16-10a-1322. Dissenters' notice
(1)
If
proposed corporate action creating dissenters' rights under Section 16-10a-1302
is authorized, the corporation shall give a written dissenters' notice
to all
shareholders who are entitled to demand payment for their shares under
this
part.
(2)
The
dissenters' notice required by Subsection (1) must be sent no later than
ten
days after the effective date of the corporate action creating dissenters'
rights under Section 16-10a-1302, and shall:
(a)
state
that the corporate action was authorized and the effective date or proposed
effective date of the corporate action;
(b)
state
an address at which the corporation will receive payment demands and an
address
at which certificates for certificated shares must be
deposited;
(c)
inform holders of uncertificated shares to what extent transfer of the
shares
will be restricted after the payment demand is received;
(d)
supply a form for demanding payment, which form requests a dissenter to
state an
address to which payment is to be made;
(e)
set a
date by which the corporation must receive the payment demand and by which
certificates for certificated shares must be deposited at the address indicated
in the dissenters' notice, which dates may not be fewer than 30 nor more
than 70
days after the date the dissenters' notice required by Subsection (1) is
given;
(f)
state
the requirement contemplated by Subsection 16-10a-1303(3), if the requirement
is
imposed; and
(g)
be
accompanied by a copy of this part.
§
16-10a-1323. Procedure to demand payment
(1)
A
shareholder who is given a dissenters' notice described in Section 16-10a-1322,
who meets the requirements of Section 16-10a-1321, and wishes to assert
dissenters' rights must, in accordance with the terms of the dissenters'
notice:
(a)
cause
the corporation to receive a payment demand, which may be the payment demand
form contemplated in Subsection 16-10a-1322(2)(d), duly completed, or may
be
stated in another writing;
(b)
deposit certificates for his certificated shares in accordance with the
terms of
the dissenters' notice; and
(c)
if
required by the corporation in the dissenters' notice described in Section
16-10a-1322, as contemplated by Section 16-10a-1327, certify in writing,
in or
with the payment demand, whether or not he or the person on whose behalf he
asserts dissenters' rights acquired beneficial ownership of the shares
before the date of the first announcement to news media or to shareholders
of the terms of the proposed corporate action creating dissenters' rights
under Section 16-10a-1302.
(2)
A
shareholder who demands payment in accordance with Subsection (1) retains
all
rights of a shareholder except the right to transfer the shares until the
effective date of the proposed corporate action giving rise to the exercise
of
dissenters' rights and has only the right to receive payment for the shares
after the effective date of the corporate action.
(3)
A
shareholder who does not demand payment and deposit share certificates
as
required, by
the
date or dates set in the dissenters' notice, is not entitled to payment
for
shares under
this part.
§
16-10a-1324. Uncertificated shares
(1)
Upon
receipt of a demand for payment under Section 16-10a-1323 from a shareholder
holding uncertificated shares, and in lieu of the deposit of certificates
representing the shares, the corporation may restrict the transfer of the
shares
until the proposed corporate action is taken or the restrictions are released
under Section 16-10a-1326.
(2)
In
all other respects, the provisions of Section 16-10a-1323 apply to shareholders
who own uncertificated shares.
§
16-10a-1325. Payment
(1)
Except as provided in Section 16-10a-1327, upon the later of the effective
date
of the corporate action creating dissenters' rights under Section 16-10a-1302,
and receipt by the corporation of each payment demand pursuant to Section
16-10a-1323, the corporation shall
pay
the amount the corporation estimates to be the fair value of the dissenter's
shares, plus interest to each dissenter who has complied with Section
16-10a-1323, and who meets the requirements of Section 16-10a-1321, and
who has
not yet received payment.
(2)
Each
payment made pursuant to Subsection (1) must be accompanied
by:
(a)(i)(A)
the corporation's balance sheet as of the end of its most recent fiscal
year, or
if not available, a fiscal year ending not more than 16 months before the
date
of payment;
(B)
an
income statement for that year;
(C)
a
statement of changes in shareholders' equity for that year and a statement
of
cash flow for that year, if the corporation customarily provides such statements
to shareholders; and
(D)
the
latest available interim financial statements, if any;
(ii)
the
balance sheet and statements referred to in Subsection (i) must be audited
if
the corporation customarily provides audited financial statements to
shareholders;
(b)
a
statement of the corporation's estimate of the fair value of the shares
and the
amount of interest payable with respect to the shares;
(c)
a
statement of the dissenter's right to demand payment under Section 16-
10a-1328;
and
(d)
a
copy of this part
§
16-10a-1326. Failure to take action
(1)
If
the effective date of the corporate action creating dissenters' rights
under
Section 16-10a-1302 does not occur within 60 days after the date set by
the
corporation as the date by which the corporation must receive payment
demands as provided in Section 16-10a-1322, the corporation shall return
all
deposited certificates and release the transfer
restrictions imposed on uncertificated shares, and all shareholders who
submitted a demand for payment pursuant to Section 16-10a-1323 shall thereafter
have all rights of a shareholder as if no demand for payment had been
made.
(2)
If
the effective date of the corporate action creating dissenters' rights
under
Section 16-10a-1302 occurs more than 60 days after the date set by the
corporation as the date by which the corporation must receive payment
demands as provided in Section 16-10a-1322, then the corporation shall
send a
new dissenters' notice, as provided in Section 16-10a-1322,
and the provisions of Sections 16-10a-1323 through 16-10a-1328 shall again
be
applicable.
§
16-10a-1327. Special provisions relating to shares acquired after announcement
of proposed corporate action
(1)
A
corporation may, with the dissenters' notice given pursuant to Section
16-10a-1322, state the date of the first announcement to news media or
to
shareholders of the terms of the proposed corporate action creating
dissenters' rights under Section 16-10a-1302 and state that a shareholder
who
asserts dissenters' rights must certify in writing, in or with the payment
demand, whether or not he or the person on whose behalf he asserts
dissenters' rights acquired beneficial ownership of the shares before that
date. With respect to any dissenter who does not certify in writing, in or
with the payment demand that he or the person on whose behalf the
dissenters' rights are being asserted, acquired beneficial
ownership of the shares before that date, the corporation may, in lieu
of making
the payment provided in Section 16- 10a-1325, offer to make payment if
the
dissenter agrees to accept it in full satisfaction of his
demand.
(2)
An
offer to make payment under Subsection (1) shall include or be accompanied
by
the information required by Subsection 16-10a-1325(2).
§
16-10a-1328. Procedure for shareholder dissatisfied with payment or
offer
(1)
A
dissenter who has not accepted an offer made by a corporation under Section
16-10a-1327 may notify the corporation in writing of his own estimate of
the
fair value of his shares and demand payment of the estimated amount, plus
interest, less any payment made under Section 16-10a-1325,
if:
(a)
the
dissenter believes that the amount paid under Section 16-10a-1325 or offered
under Section 16-10a-1327 is less than the fair value of the
shares;
(b)
the
corporation fails to make payment under Section 16-10a-1325 within 60 days
after
the date set by the corporation as the date by which it must receive the
payment
demand; or
(c)
the
corporation, having failed to take the proposed corporate action creating
dissenters' rights, does not return the deposited certificates or release
the
transfer restrictions imposed on uncertificated shares as required by Section
16-10a-1326.
(2)
A
dissenter waives the right to demand payment under this section unless
he causes
the corporation to receive the notice required by Subsection (1) within
30 days
after the corporation made or offered payment for his shares.
§
16-10a-1330. Judicial appraisal of shares--Court
action
(1)
If a
demand for payment under Section 16-10a-1328 remains unresolved, the corporation
shall commence a proceeding within 60 days after receiving the payment
demand
contemplated by Section 16-10a-1328, and petition the court to determine
the
fair value of the shares and
the
amount of interest. If the corporation does not commence the proceeding
within
the 60-day period, it shall pay each dissenter whose demand remains unresolved
the amount demanded.
(2)
The
corporation shall commence the proceeding described in Subsection (1) in
the
district court of the county in this state where the corporation's principal
office, or if
it has
no principal office in this state, the county where its registered office
is
located. If
the
corporation is a foreign corporation without a registered office in this
state,
it shall commence the proceeding in the county in this state where the
registered office of the domestic corporation merged with, or whose shares
were
acquired by, the foreign corporation was
located.
(3)
The
corporation shall make all dissenters who have satisfied the requirements
of
Sections 16-10a-1321, 16-10a-1323, and 16-10a-1328, whether or not they
are
residents of this state whose demands remain unresolved, parties to the
proceeding commenced under Subsection (2) as an action against their shares.
All
such dissenters who are named as parties must be served with a copy of
the
petition. Service on each dissenter may be by registered or certified mail
to
the address stated in his payment demand made pursuant to Section 16-10a-1328.
If no address is stated in the payment demand, service may be made at the
address stated in the payment demand given pursuant to Section 16-10a-1323.
If
no address is stated in the payment demand, service may be made at the
address
shown on the corporation's current record of shareholders for the record
shareholder holding the dissenter's shares.
Service may also be made otherwise as provided by law.
(4)
The
jurisdiction of the court in which the proceeding is commenced under Subsection
(2) is plenary and exclusive. The court may appoint one or more persons
as
appraisers to receive evidence and recommend decision on the question of
fair
value. The appraisers have the powers described in the order appointing
them, or in any amendment to it. The dissenters
are entitled to the same discovery rights as parties in other civil
proceedings.
(5)
Each
dissenter made a party to the proceeding commenced under Subsection (2)
is
entitled to judgment:
(a)
for
the amount, if any, by which the court finds that the fair value of his
shares,
plus interest, exceeds the amount paid by the corporation pursuant to Section
16-10a-1325; or
(b)
for
the fair value, plus interest, of the dissenter's after-acquired shares
for
which the corporation elected to withhold payment under Section
16-10a-1327.
§
16-10a-1331. Court costs and counsel fees
(1)
The
court in an appraisal proceeding commenced under Section 16-10a-1330 shall
determine all costs of the proceeding, including the reasonable compensation
and
expenses of appraisers appointed by the court. The court shall assess the
costs
against the corporation, except
that the court may assess costs against all or some of the dissenters,
in
amounts the court finds equitable, to the extent the court finds that the
dissenters acted arbitrarily, vexatiously, or not in good faith in demanding
payment under Section 16-10a-1328.
(2)
The
court may also assess the fees and expenses of counsel and experts for
the
respective parties, in amounts the court finds equitable:
(a)
against the corporation and in favor of any or all dissenters if the court
finds
the corporation did not substantially comply with the requirements of Sections
16-10a-1320 through 16-10a-1328; or
(b)
against either the corporation or one or more dissenters, in favor of any
other
party, if the court finds that the party against whom the fees and expenses
are
assessed acted arbitrarily, vexatiously, or not in good faith with respect
to
the rights provided by this part.
(3)
If
the court finds that the services of counsel for any dissenter were of
substantial benefit to other dissenters similarly situated, and that the
fees
for those services should not be assessed against the corporation, the
court may
award to those counsel reasonable fees
to
be paid out of the amounts awarded the dissenters who were
benefited.
DISSENTING
SHAREHOLDER NOTICE
AND
ELECTION FORM
The
undersigned
_______________________________________________ of
(Print
Name)
___________________________________________________________________
is the
(Print
Address)
certificate
holder of ___________________ shares of Croff Enterprises, Inc. (“Croff”)
common stock and ___________ shares of preferred “B” stock;
represented by certificate(s) no(s) for the common and for the preferred
“B”. The undersigned agrees that the above is a current address to be
used for return of any funds to him by Croff.
The
undersigned hereby represents and
notices to Croff, pursuant to having reviewed the dissenting shareholder
rights
packet, as indicated below by initialing the appropriate
blanks:
|
·
|
_____ The
undersigned has read and reviewed the Dissenting Shareholder
Rights Packet
including the statutory material and has discussed such matters
with his
legal and/or accounting advisors or knowingly waived such
right.
|
|
·
|
_____ The
undersigned is the legal holder of the shares described above,
or is the
beneficial holder, but has obtained the consent of the legal
holder
signing below and endorsing the
shares.
|
|
·
|
_____ The
undersigned has not voted upon the current Proxy Proposal to
redeem all
preferred “B” shares for a transfer of all current business assets of
Croff; and understands that voting on such matters will void this
notice and election.
|
|
·
|
_____ The
shares submitted for redemption and payment must be received
no later than
35 days after the date of the within Notice of Dissenting Shareholder
Rights ___________ ____,
2007.
|
Choose
only
one of the
following:
1.
_____ The undersigned wishes to have the company purchase his, her or
its preferred “B” shares listed above at $4.25/share and encloses the
certificate duly signed and in negotiable form to complete such
sale.
2.
_____ The undersigned wishes to have the company redeem his, her or
its enclosed preferred “B”, but objects to the proffered price of $4.25/share
and requests a payment of $_____/share/(attach further explanation as
required).
3.
_____ The undersigned wishes to have the company purchase his, her or
its common shares listed above at $1.00/share and encloses the certificate
duly
signed and in negotiable form to complete such sale.
4.
_____ The undersigned wishes to have the company redeem his, her or
its enclosed common shares, but objects to the proffered price of $1.00/share
and requests a payment of $_____/share/(attach further explanation as
required).
DO
NOT USE THIS FORM |
|
IF
YOU ARE RETURNING |
Print
Name (Beneficial Owner) |
THE
PROXY BALLOT |
|
|
|
|
|
|
Sign |
|
|
|
|
|
-If
Separate Legal Owner- |
|
|
|
|
|
|
|
Print
Name (Legal Owner) |
|
|
|
|
|
|
|
Sign |
|
|
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|
|
Date |
Mail
Election form to: |
Elections
Croff
Enterprises, Inc.
3773
Cherry Creek Dr N #1025
Denver,
CO 80209
|
COMMON
SHARE BALLOT
CROFF
ENTERPRISES, INC. PROXY BALLOT
SPECIAL
MEETING, ____________ ___, 2007
Please
complete, sign and provide any additional information on this Proxy Statement
and return it to the Company by mailing it back prior to ______________ ___,
2007 in the enclosed envelope.
FOR
|
AGAINST
|
ABSTAIN
|
PROPOSAL
|
|
|
|
Election
of all nominees to the Board of Directors. If voting against
election of all, indicate below your individual
vote.
|
YOU
MAY VOTE FOR ALL CURRENT NOMINEES ABOVE; OR
YOU
MAY VOTE INDIVIDUALLY AS TO EACH PROPOSED DIRECTOR
BELOW
|
|
|
Mr.
Gerald L. Jensen
|
|
|
|
Mr.
Edward Peiker, Jr.
|
|
|
|
Mr.
Julian D. Jensen
|
|
|
|
Mr.
Harvey Fenster
|
OTHER
MATTERS
|
|
|
Vote
on Plan to divide Croff Enterprises (“Croff”) and transfer all oil and gas
assets and liabilities to Croff Oil for the issuance of common
shares of
Croff Oil payable to Croff Enterprises preferred “B” shareholders on a
one-to-one ratio; and then cancel all Croff preferred “B”
shares.
|
|
|
|
Vote
on ratifying the Independent Auditor, Ronald Chadwick,
C.P.A.
|
|
|
|
Vote
to increase the Class “A” authorized preferred shares from 5 million to 10
million shares, no par.
|
|
|
|
Vote
to increase the Common shares from 20 million to 100 million shares,
$0.10
par.
|
Check here if you plan
to
attend meeting.
Print
Shareholder Name(s) exactly
|
|
|
as
they appear on your Certificate:
|
|
|
|
|
Complete
If Known:
|
|
|
Certificate
#:
|
|
|
|
No.
of Shares: |
|
|
Date |
|
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|
Do
not execute this form if you are submitting the Dissenting Shareholder
Rights
form.
PREFERRED
“B” BALLOT
CROFF
ENTERPRISES, INC. PROXY BALLOT
SPECIAL
MEETING, ___________ ___, 2007
Please
complete, sign and provide any additional information on this Proxy Statement
and return it to the Company by mailing it back prior to ____________ ___,
2007
in the enclosed envelope.
FOR
|
AGAINST
|
ABSTAIN
|
|
|
|
|
Vote
on Plan to divide Croff Enterprises (“Croff”) and transfer all oil and gas
assets and liabilities to Croff Oil for the issuance of common
shares of
Croff Oil payable to Croff Enterprises preferred “B” shareholders on a
one-to-one ratio; and then cancel all Croff preferred “B”
shares.
|
Check here if you plan
to
attend meeting.
Print
Shareholder Name(s) exactly
|
|
|
as
they appear on your Certificate:
|
|
|
|
|
Complete
If Known:
|
|
|
Certificate
#:
|
|
|
|
No.
of Shares:
|
|
|
|
|
|
|
|
|
|
|
|
|
Date |
|
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|
Do
not execute this form if you are submitting the Dissenting Shareholder
Rights
form.
PLAN
OF CORPORATE DIVISION AND REORGANIZATION
OCTOBER
25, 2007
Plan
of Corporate Division and
Reorganization adopted by the Croff Enterprises, Inc. (“Croff”) Board of
Directors, pursuant to unanimous approval by resolution of the board of
directors on September 27, 2007.
1.0
Name and General Description of Plan.
This
Plan of Corporate Division and
Reorganization (hereafter the “Plan”), as adopted, involves the creation of a
related private Utah corporation to be organized and known as Croff Oil Company
(“Croff Oil”). The Plan calls for the transfer of all preferred “B”
pledged assets (oil and gas assets of Croff Enterprises as more particularly
set-out in the attached and incorporated Schedule “A”), and liabilities to Croff
Oil for the consideration of each existing preferred “B” shareholder of Croff
being entitled to receive one restricted common share of Croff Oil for each
preferred “B” shares currently held. Three of the current directors
of Croff, Mr. Gerald L. Jensen, Mr. Richard Mandel, Jr. and Mr. Julian D. Jensen
have agreed to be named and to serve on the initial interim board of directors
for Croff Oil and to designate managment of the new entity primarily from their
own membership. The Croff preferred “B” shares would then be
cancelled of record. Each preferred “B” shareholder would be given a
notice of this Plan pursuant to the shareholders list as of November, 2007,
and
will be afforded an opportunity and request to tender “B” shares for Croff Oil
restricted common shares on a one-to-one basis. All further transfers
of preferred “B” shares will be cancelled as of that date. The Plan
also provides, as more particularly set-out below, a provision for future
exchange of cancelled preferred “B” shares rights for Croff Oil common shares
and subsequent treatment of all preferred “B” shares not exchanged in 2007 to
remain as a right to exchange within the designated period of time provided
under the Utah statutes. Croff Enterprises would continue on as a
public “shell” corporation seeking various merger or acquisition or other
reorganization opportunities. This Plan of Corporate Division and
Reorganization will subsequently be designated for the purposes of this document
simply as “The Plan”. The Plan will become effective and close
pursuant to a submitted proxy statement which will be distributed to all
shareholders of record for majority approval, along with reelection of the
Croff
Enterprises Board and ratification of its selection of an independent auditor
(“The Proxy”). Upon majority shareholder approval, the Plan will be
immediately effective. This paragraph is intended to constitute only
a general description of the Plan, which is more fully set-out
below.
2.0
Dissenting Shareholder Rights.
The
Board has determined, in
consultation with its legal counsel, that all Croff Enterprises shareholders
will be entitled under Utah law, Utah Code Annotated §16-10a-1301-1331, to an
opportunity to exercise dissenting shareholder rights under the Utah Code
provisions. In essential terms, these dissenting shareholder rights
will include:
|
·
|
A
determination to value the Croff preferred “B” shares for cash redemption
purposes by the Board at
$4.25/share.
|
|
·
|
A
determination to value the common Croff shares for dissenting shareholder
redemption purposes at $1.50/share.
|
|
·
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A
preparation and dissemination to all Croff shareholders of a standard
form
dissenting shareholder notice packet and election form to be included
as
part of the proxy materials with applicable code provisions attached
and
as further outlined below.
|
The
Board
further understood and includes as part of this Plan its’ understanding that if
a Croff shareholder wishes to dissent, the proxy materials should clearly
describe that any such shareholder should not vote upon or approve the balance
of the Plan dealing with the corporate division, asset transfer and the
termination of the preferred “B” shares. Thereafter, dissenting
shareholders may elect to exercise their dissenting shareholder rights for
cash
which would be paid by Croff within the prescribed time limits and manner under
Utah law. Should any shareholder not agree to the valuation of the
preferred “B” and/or common shares determined by the Board, as described above,
the shareholder package will describe their right to proffer an alternative
valuation and the right of the Croff to either accept and reject such
alternative valuation and with an ultimate right to seek judicial determination
concerning valuation of the shares. All of these provisions will be
set-out in the dissenting shareholder packet and also include the required
provisions under the Utah Code to be attached. The Board has
determined, as part of the Plan, that the president of the company in
consultation with legal counsel may prepare the dissenting shareholder package
as part of the proxy process without further direct Board review, so long as
prepared and distributed in accordance with this Plan.
3.0
Preferred “B” Redemption Rights and Procedures.
As
part of the Plan, the Board has
determined that the proxy materials will contain a notice and request for
preferred “B” shareholders to return their restricted cancelled preferred “B”
shares, if not exercising dissenting shareholder rights, in exchange for the
Croff Oil restricted common shares. The common shares will be
restricted as they will not be subject to any registration and are believed
by
the Board, upon consultation with its legal counsel, to be issued pursuant
to
this reorganization as shares exempt from registration under federal and state
law. Any preferred “B” shares, after the closing of the Plan of
Reorganization, shall be exchanged one-to-one without cost to shareholders
for
restricted common shares of Croff Oil. However, if “B” preferred
shares are not received within a period as prescribed by Utah law for “lost and
abandoned” property (generally being a period of five (5) years); Croff may then
tender any remaining preferred “B” redemption rights and resulting common shares
of Croff Oil to the State of Utah for further notice to shareholders and
potential escheat to the State of Utah. A general notice and
description of this process as part of the proxy statement, shall be to be
mailed to all shareholders of record, but will not require any further or
subsequent notice to shareholders who cannot be found based upon the current
official shareholder (common and preferred “B” lists) of Croff
as
employed for the proxy solicitation. Reasonable efforts, using online
search firms, to find such shareholders will continue, until there is sufficient
evidence of not less than two non-deliveries to any shareholder of
Croff.
4.0
Adoption of and Implementation the Plan.
This
Plan will not be executed until
after receiving a majority shareholder approval of both the Croff common and
preferred “B” shareholders as more particularly set-out in the intended proxy
solicitation. The Board will separately review and approve by
resolution the proxy solicitation to be prepared in accordance with this Plan
along with the proxy ballots to be employed and the notice provisions to be
utilized. The Board confers on its president, in consultation with
Croff’s legal counsel, the right to organize and file the Articles of Croff Oil
Company, to issue shares to be distributed and to sign related documents and
to
take all other reasonable and necessary steps to implement the Plan consistent
with the terms set-out herein without further Board review.
5.0
Board Intent.
It
is the intent of the Board by the
adoption this Plan to transfer the oil and gas assets to a private entity with
the same relative ownership percentage interest of the Croff preferred “B”
shareholders as currently exists in Croff Enterprises. The shareholders of
Croff
Enterprises holding preferred “B” shares would continue to hold their common
shares in the same proportion as held previous to the Plan and are not believed
to be diluted or otherwise adversely affected by this Plan. In
addition, it is the position of the Board that the transfer of the oil and
gas
assets may enhance and improve the probability of Croff Enterprises finding
more
suitable and appropriate merger, acquisition or reorganization candidates to
go
forward with its intended business purpose of finding such a candidate and
in
completing a acceptable Plan of Merger, acquisition or other reorganization;
but, without any reduction to or diminution of Croff shareholder rights or
value
in the oil and gas assets or voting control in Croff Enterprises.
It
is the further intent of the Board
in adopting this Plan that the closing of the Plan of Reorganization be
completed and assets transferred legally and beneficially of record as soon
as
possible after the proxy solicitation and assuming majority approval of such
proxy solicitation is obtained. The President/CEO of the company, Mr.
Gerald L. Jensen, will be given broad discretion to notice the closing and
to
sign all documents or other evidence of transfer or assignment on behalf of
Croff Enterprises consistent with the terms and provision of this Plan as
previously set-out. The president, without further Board approval or
review, may prepare and have approved all ancillary documents of assignment,
transfer and closing, including bills of sale or other provisions consistent
with this Plan as approved.
6.0
Distribution of Plan.
This
Plan, as signed, shall be deemed
fully adopted and is intended to be attached to and be part of the proxy
solicitation sent to shareholders of record of Croff Enterprises and may be
filed without further board review or approval as one of the exhibits to the
proxy solicitation.
7.0
Miscellaneous.
7.1 This
Plan shall be applied and construed in accordance with Utah law.
7.2 The
president/CEO of Croff shall have broad discretion and authority to implement
this Plan and execute such other documents as reasonably consistent with
theterms and provisions of this Plan.
7.3 The
Plan may also be amended or modified by board approval as may be necessary
to
the proxy solicitation approval process with a copy of any amendment
orsupplement being attached.
7.4 Should
there be required any interpretation or application of this Plan, it is
theintent of the Board that all terms be given reasonable construction and
the
Plan beimplemented so far as possible notwithstanding any error in syntax,
grammar, gender or other usage, or any conflicting, void or voidable provisions
or ambiguity.
7.5 The
Plan shall fully incorporate and be subject to all provisions of Utah
law,whether specifically cited or not, and its terms shall be deemed amended
as
necessarywithout further board approval to conform with any Utah statutory
provision.
ADOPTED
this 25th day
of October, 2007.
By
the Board of Directors:
/s/
Gerald L. Jensen____________________________
Gerald
L.
Jensen, Director and Chairman of the Board
/s/
Richard Mandel, Jr.
Richard
Mandel, Jr., Director
/s/
Julian D. Jensen_____
Julian
D.
Jensen, Director
/s/
Harvey Fenster_____
Harvey
Fenster, Director
Schedule
A
Summary
Description of Croff
Oil
and Gas Assets to be Transferred
October
22, 2007
Croff
Preferred B Assets
The
Croff
Preferred B assets shall consist of all tangible and intangible oil and gas
assets and liabilities belonging to Croff Enterprises, Inc. These shall include
all perpetual mineral interests, all leases, all producing and non-producing
wells on those leases, and all intangible rights connected to such properties
including the banking accounts for the Preferred B assets and the accounts
receivable and other intangible rights and assets in connection therewith,
and
all liabilities, debts, encumbrances, payables, and liabilities of any nature
whatsoever, directly or indirectly connected with the above assets. A list
of
the wells and counties in which leases are located, constituting substantially
all of the existing wells, are attached hereto as Schedule A-1 and Schedule
A-2.
Schedule
A-1
All
leases, all producing and non-producing wells on those leases, and all
intangible rights connected to such properties in the following states and
counties including but not limited to:
|
STATE
|
LAMAR
|
AL
|
LA
PLATA
|
CO
|
ROUTT
|
CO
|
RIO
BLANCO
|
CO
|
WASHINGTON
|
CO
|
OTSEGO
|
MI
|
OSCEOLA
|
MI
|
INGHAM
|
MI
|
CHEBOYGAN
|
MI
|
DAWSON
|
MT
|
GLACIER
|
MT
|
BILLINGS
|
ND
|
BURKE
|
ND
|
MCKENZIE
|
ND
|
MOUNTRAIL
|
ND
|
WILLIAMS
|
ND
|
LEA
|
NM
|
RIO
ARRIBA
|
NM
|
BEAVER
|
OK
|
KINGFISHER
|
OK
|
LE
FLORE
|
OK
|
MAJOR
|
OK
|
WOODWARD
|
OK
|
MIDLAND
|
TX
|
DE
WITT
|
TX
|
HARDEN
|
TX
|
NUECES
|
TX
|
WHARTON
|
TX
|
CARBON
|
UT
|
DUCHESNE
|
UT
|
WASATCH
|
UT
|
UINTAH
|
UT
|
LINCOLN
|
WY
|
SUBLETTE
|
WY
|
CAMPBELL
|
WY
|
CROOK
|
WY
|
NATRONA
|
WY
|
SUBLETT
|
WY
|
SWEETWATER
|
WY
|
CARBON
|
WY
|
Schedule
A-2
All
perpetual mineral interests, all leases, all producing and non-producing wells
on those leases, and all intangible rights connected to such properties in
the
following states and counties including but not limited to:
NAME
|
STATE
|
COUNTY
|
WI
|
NRI
|
ORRI
|
RI
|
BRADFORD
E L 19-15
|
AL
|
LAMAR
|
0.0052084
|
0.0044148
|
N/A
|
N/A
|
BURNS
1-29
|
CO
|
WASHINGTON
|
0.1875
|
0.1640625
|
N/A
|
N/A
|
LONGKNIFE
|
CO
|
WASHINGTON
|
|
|
|
CRAIG
K GU/A/1 APO,2
|
CO
|
LA
PLATA
|
N/A
|
N/A
|
N/A
|
0.0035578
|
CRAIG
K GU/A/1 APO,2
|
CO
|
LA
PLATA
|
N/A
|
N/A
|
N/A
|
0.0035578
|
EVERETT
JONES GU #1, #2
|
CO
|
LA
PLATA
|
N/A
|
N/A
|
N/A
|
0.0009205
|
EVERETT
JONES GU #1, #2
|
CO
|
LA
PLATA
|
N/A
|
N/A
|
N/A
|
0.0024427
|
GROFF
GU /A/#2
|
CO
|
LA
PLATA
|
N/A
|
N/A
|
N/A
|
0.0022273
|
GROFF
GU /A/SEC 29
|
CO
|
LA
PLATA
|
N/A
|
N/A
|
N/A
|
0.0022273
|
JONES
1-11
|
CO
|
ROUTT
|
0.05
|
N/A
|
N/A
|
N/A
|
KELLY,
ROGER D GU/#1
|
CO
|
LA
PLATA
|
N/A
|
N/A
|
N/A
|
0.0023438
|
KELLY,
ROGER D GU/#1
|
CO
|
LA
PLATA
|
N/A
|
N/A
|
N/A
|
0.0023438
|
KELLY,
ROGER D GU/#2
|
CO
|
LA
PLATA
|
N/A
|
N/A
|
N/A
|
0.0023438
|
KELLY,
ROGER D GU/#2
|
CO
|
LA
PLATA
|
N/A
|
N/A
|
N/A
|
0.0023438
|
LINDNER
SLATEN GU/A/1,2
|
CO
|
LA
PLATA
|
N/A
|
N/A
|
N/A
|
0.0010326
|
LINDNER
SLATEN GU/A/1,2
|
CO
|
LA
PLATA
|
N/A
|
N/A
|
N/A
|
0.0010326
|
TURNER
SECURITIES GU/A#1
|
CO
|
LA
PLATA
|
N/A
|
N/A
|
N/A
|
0.0023438
|
TURNER
SECURITIES GU/A#1
|
CO
|
LA
PLATA
|
N/A
|
N/A
|
N/A
|
0.0023438
|
TURNER
SECURITIES GU/A#2
|
CO
|
LA
PLATA
|
N/A
|
N/A
|
N/A
|
0.0023438
|
TURNER
SECURITIES GU/A#2
|
CO
|
LA
PLATA
|
N/A
|
N/A
|
N/A
|
0.0023438
|
ZELLITTI
GU/A 1,2
|
CO
|
LA
PLATA
|
N/A
|
N/A
|
N/A
|
0.0023438
|
ZELLITTI
GU/A 1,2
|
CO
|
LA
PLATA
|
N/A
|
N/A
|
N/A
|
0.0023438
|
CHARLTON
EAST
|
MI
|
OTSEGO
|
0.0032376
|
0.0026097
|
0.0078463
|
N/A
|
MARION
1-36
|
MI
|
OSCEOLA
|
0.0081389
|
0.0067289
|
N/A
|
N/A
|
MARION
2-36
|
MI
|
OSCEOLA
|
0.0019116
|
0.0015959
|
N/A
|
N/A
|
SCHEFFLER
1-29
|
MI
|
INGHAM
|
0.5225
|
0.406175
|
N/A
|
N/A
|
ST
FOREST 1 14
|
MI
|
CHEBOYGAN
|
0.2
|
0.175
|
N/A
|
N/A
|
SUNBELT
INVESTMENTS 1-28
|
MI
|
INGHAM
|
0.5053125
|
0.3927688
|
N/A
|
N/A
|
BN
A #1
|
MT
|
DAWSON
|
0.0627812
|
0.0511739
|
N/A
|
N/A
|
BRATCHER
FORTHUN 1-5R
|
ND
|
-
|
0.0437507
|
0.0343713
|
0.0003685
|
N/A
|
BRENNA
42-14
|
ND
|
MCKENZIE
|
0.0625
|
0.0427734
|
N/A
|
N/A
|
DOLAN
7-28
|
ND
|
MOUNTRAIL
|
N/A
|
N/A
|
0.0036562
|
N/A
|
GLASS
BLUFF UNIT
|
ND
|
-
|
N/A
|
N/A
|
N/A
|
0.0001895
|
LEE
1-21
|
ND
|
-
|
N/A
|
N/A
|
0.0080666
|
N/A
|
NOVAK
25-11
|
ND
|
MCKENZIE
|
0.097084
|
0.079737
|
N/A
|
N/A
|
STENEHJEM
L M #1
|
ND
|
MCKENZIE
|
0.0014605
|
0.001209
|
N/A
|
N/A
|
HAGER
#1
|
NM
|
LEA
|
N/A
|
0.0046875
|
N/A
|
N/A
|
HAGER
#1
|
NM
|
LEA
|
0.0058594
|
0.0046875
|
N/A
|
N/A
|
SAN
JUAN 29-7 63C-DK
|
NM
|
RIO
ARRIBA
|
N/A
|
N/A
|
0.000375
|
N/A
|
SAN
JUAN 29-7 DAKOTA TR 2
|
NM
|
RIO
ARRIBA
|
N/A
|
N/A
|
0.003
|
N/A
|
SAN
JUAN 29-7 DK: TR 11 GAS
|
NM
|
RIO
ARRIBA
|
N/A
|
N/A
|
0.003
|
N/A
|
SAN
JUAN 29-7 DK: TR 11 OIL
|
NM
|
RIO
ARRIBA
|
N/A
|
N/A
|
0.005
|
N/A
|
SAN
JUAN 29-7 FRT COAL TR 11
|
NM
|
RIO
ARRIBA
|
N/A
|
N/A
|
0.005
|
N/A
|
SAN
JUAN 29-7 FRT COAL TR 2
|
NM
|
RIO
ARRIBA
|
N/A
|
N/A
|
0.005
|
N/A
|
SAN
JUAN 29-7 MESAVERDE TR 11
|
NM
|
RIO
ARRIBA
|
N/A
|
N/A
|
0.005
|
N/A
|
SAN
JUAN 29-7 MESAVERDE TR 2
|
NM
|
RIO
ARRIBA
|
N/A
|
N/A
|
0.005
|
N/A
|
SAN
JUAN 29-7 PC: TR 11
|
NM
|
RIO
ARRIBA
|
N/A
|
N/A
|
0.005
|
N/A
|
SAN
JUAN 29-7 PC: TR 2
|
NM
|
RIO
ARRIBA
|
N/A
|
N/A
|
0.005
|
N/A
|
SAN
JUAN 29-7 UNIT 82B-DK GAS
|
NM
|
RIO
ARRIBA
|
N/A
|
N/A
|
0.0015124
|
N/A
|
SAN
JUAN 29-7 UT 155
|
NM
|
RIO
ARRIBA
|
N/A
|
N/A
|
0.0025
|
N/A
|
SAN
JUAN 29-7 UT 37A
|
NM
|
RIO
ARRIBA
|
N/A
|
N/A
|
0.00375
|
N/A
|
SAN
JUAN 29-7 UT 67A
|
NM
|
RIO
ARRIBA
|
N/A
|
N/A
|
0.0075
|
N/A
|
SAN
JUAN 29-7 UT NP 561
|
NM
|
RIO
ARRIBA
|
N/A
|
N/A
|
0.0011875
|
N/A
|
DICKERSON
1-34
|
OK
|
WOODWARD
|
0.3013683
|
0.2563415
|
N/A
|
N/A
|
DUNCAN
1-21
|
OK
|
LA
FLORE
|
0.3294784
|
0.243857
|
N/A
|
N/A
|
DUNCAN
2-21
|
OK
|
LA
FLORE
|
0.49
|
0.3601383
|
N/A
|
N/A
|
DURFEY
1-14
|
OK
|
BEAVER
|
0.0693359
|
0.0579253
|
N/A
|
N/A
|
HARPER
1-20
|
OK
|
WOODWARD
|
0.1301756
|
0.0945202
|
N/A
|
N/A
|
ISAAC
1-7
|
OK
|
BEAVER
|
0.0231193
|
0.0174695
|
N/A
|
N/A
|
MILLER
1-29
|
OK
|
WOODWARD
|
0.1631522
|
0.1255946
|
N/A
|
0.000883
|
MILLER
OSWEGO 1-29
|
OK
|
WOODWARD
|
0.1871843
|
0.1443242
|
N/A
|
0.000883
|
MUEGGENBORG
1C
|
OK
|
KINGFISHER
|
0.4331419
|
0.32995
|
N/A
|
N/A
|
OLSON
1-24
|
OK
|
MAJOR
|
0.0255
|
0.0223803
|
N/A
|
N/A
|
KEISHA
#1
|
TX
|
-
|
0.005
|
0.004375
|
N/A
|
N/A
|
KEISHA
#1
|
TX
|
-
|
N/A
|
0.004375
|
N/A
|
N/A
|
KRIS
#1
|
TX
|
-
|
0.01
|
0.00875
|
N/A
|
N/A
|
KRIS
#1
|
TX
|
-
|
N/A
|
0.00875
|
N/A
|
N/A
|
LAY
A
|
TX
|
MIDLAND
|
N/A
|
0.0031641
|
N/A
|
N/A
|
LAY
A
|
TX
|
MIDLAND
|
0.0031641
|
0.0031641
|
N/A
|
N/A
|
LAY
B #1
|
TX
|
MIDLAND
|
N/A
|
0.0031641
|
N/A
|
N/A
|
LAY
B #1
|
TX
|
MIDLAND
|
0.0031641
|
0.0031641
|
N/A
|
N/A
|
PATOS
GAS UNIT #1
|
TX
|
-
|
N/A
|
N/A
|
0.0052119
|
N/A
|
PICA
D-1
|
TX
|
-
|
0.1
|
0.075
|
N/A
|
N/A
|
STRAWN
#1
|
TX
|
-
|
0.01
|
0.0075
|
N/A
|
N/A
|
ALEX
MUELLER
|
TX
|
DE
WITT
|
0.6
|
N/A
|
N/A
|
N/A
|
MARY
KORTH
|
TX
|
DE
WITT
|
0.6
|
N/A
|
N/A
|
N/A
|
RESPONDEK#1
|
TX
|
DE
WITT
|
0.6
|
N/A
|
N/A
|
N/A
|
WEISCHWILL
#1
|
TX
|
DE
WITT
|
0.6
|
N/A
|
N/A
|
N/A
|
WIGGINS,
A C
|
TX
|
DE
WITT
|
0.2446229
|
0.1755179
|
N/A
|
N/A
|
WILSON
EST 1
|
TX
|
-
|
0.063
|
0.04725
|
N/A
|
N/A
|
ALBERT
SMITH 2-8C5
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.000684
|
BELCHER
2-33B4
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.003277
|
BISEL
GURR 1-11A1
|
UT
|
UINTAH
|
N/A
|
N/A
|
N/A
|
0.0002787
|
BISEL
GURR 2-11A1
|
UT
|
UINTAH
|
N/A
|
N/A
|
N/A
|
0.0002787
|
BLEAZARD
2-18 B4
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0018187
|
BODRERO
1-15B3
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0003906
|
BODRERO
2-15B3
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0003906
|
BOLTON
2-29A1E
|
UT
|
UINTAH
|
N/A
|
N/A
|
N/A
|
0.0005951
|
BOREN
1-14A2
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.000897
|
BOREN
1-24A2
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.000256
|
BOREN
3-11A2
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.000897
|
BOREN
3-15A2
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.001025
|
BOREN
4-23A2
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.001547
|
BOREN
4-9A2
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0007291
|
BOREN
5-22A2
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.002243
|
BOWEN
BASTIAN 1-14
|
UT
|
UINTAH
|
N/A
|
N/A
|
N/A
|
0.0004052
|
BOWMAN
5-5A2
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0014475
|
BROTHERSON
2-10 B4
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0012153
|
BROTHERSON
2-22 B4
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0006076
|
BROTHERSON
2-2B5
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0006222
|
BROTHERSON
2-35B5
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0002886
|
CHANDLER
2-5B4
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0004361
|
CHANDLER
UNIT 1-5 B4
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0004361
|
CHAPMAN
2-4B2
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.001946
|
CHRISTENSEN
2-29A4
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0004559
|
CHRISTENSEN
2-8B3
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0009398
|
CLYDE
MURRAY 1-2A2
|
UT
|
DUCHESNE
|
0.0036253
|
0.0031721
|
N/A
|
0.0013654
|
CORNABY
2-14A2 (RECOMP)
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.000897
|
COX
2-36A2
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.002535
|
CROOK
UNIT 1-6B4
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0004735
|
CWU
|
UT
|
UINTAH
|
N/A
|
N/A
|
0.0021375
|
N/A
|
CWU
|
UT
|
UINTAH
|
N/A
|
N/A
|
0.0021375
|
N/A
|
DASTRUP
2-30A3
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.000346
|
DAVID
3-7B2
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0013072
|
DILLMAN
2-28A2
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.001828
|
DOYLE
UNIT 1-10 B3
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.000647
|
DR
LONG 2-19A1E
|
UT
|
UINTAH
|
N/A
|
N/A
|
N/A
|
0.0008878
|
DUMP
2-20 A3
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0005127
|
DUNCAN
3-1A2-K
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0007433
|
DUNCAN
4-2A2
|
UT
|
DUCHESNE
|
0.0037207
|
0.0039435
|
N/A
|
N/A
|
ELLSWORTH
1-20 B4
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0024305
|
ELLSWORTH
2-16 B4
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0009115
|
ELLSWORTH
2-17 B4
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0018229
|
ELLSWORTH
2-19 B4
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0035257
|
ELLSWORTH
2-8B4
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.00227
|
ELLSWORTH
2-9B4-K
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0009114
|
ELLSWORTH
3-20B4
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0024305
|
ELLSWORTH
UNIT 1-16 B4
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0009114
|
ELLSWORTH
UNIT 1-17 B4
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0018229
|
ELLSWORTH
UNIT 1-8 B4
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.00227
|
ELLSWORTH
UNIT 1-9 B4
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0009114
|
FARNSWORTH
1-7B4
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0006073
|
FARNSWORTH
2-7 B4
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0006073
|
FARNSWORTH
UNIT 1-12 B5
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0003038
|
FARNSWORTH
UNIT 1-13 B5
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0002986
|
FEE
14-05
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
0.0005208
|
N/A
|
GALLOWAY
1-14B2
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.000513
|
GALLOWAY
1-14B2
|
UT
|
DUCHESNE
|
0.0379783
|
0.0327894
|
N/A
|
N/A
|
GOODRICH
2-2B3
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0025505
|
GOODRICH
ENTERPRISE 1-2
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0025504
|
GRIFFITH
1-33B4
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.003277
|
HAMBLIN
2-26A2
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.000482
|
HANSEN
1-16B3
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0011961
|
HANSEN
1-23B3
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0010254
|
HANSEN
1-24 B3
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0012817
|
HANSON
2-9 B3-R
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0009399
|
HANSON
TRUST 1-5 B3
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0010263
|
HANSON
TRUST 2-5 B3
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.001026
|
HORROCKS
2-5B1E
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0003438
|
HUNT
1-21 B4
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0018229
|
HUNT
2-21B4
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0018229
|
IORG
2-10B3
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.000647
|
J.
ROBERTSON 1-1-B1
|
UT
|
UINTAH
|
N/A
|
N/A
|
N/A
|
0.001757
|
JENKINS
2-1 B3-R
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0014513
|
JENKINS
2-12 B3-R
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0013448
|
JENKINS
UNIT 1-1 B3
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0014514
|
JESSEN
1-17A4
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.002539
|
JESSEN
2-21 A 4
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.003125
|
JOHN
2-3B2
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.001945
|
JOHN
2-7B2
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.001307
|
LABRUM
2-23A2
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.001547
|
LAMB
2 16A2
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.000677
|
LAMICQ
1-20A2
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.004075
|
LAMICQ
2-20A2
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.004075
|
LAMICQ
2-5 B2
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0012866
|
LAMICQ
2-6B1
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.001158
|
LAMICQ
ROBERTSON 1-1B2
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.001443
|
LAMICQ
ROBERTSON 2-1B2
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.001443
|
LAMICQ
URRUTY 3-17A2
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.001746
|
LAMICQ
URRUTY 4-17A2
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.001746
|
LAMICQ
URRUTY 4-5A2
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.001411
|
LANDY
1-30A1E
|
UT
|
UINTAH
|
N/A
|
N/A
|
N/A
|
0.0008878
|
LANDY
2-30A1E
|
UT
|
UINTAH
|
N/A
|
N/A
|
N/A
|
0.0008878
|
LAZY
2-11B3
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.000647
|
LINMAR
1-19B2
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0024473
|
LORANGER
2-24A2
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.000256
|
LORANGER
6-22A2
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.002243
|
MCFARLANE
1-4D6
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0004549
|
MECCA
2-8A2
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0024806
|
MECHAM,
VIRGIL B 1-11A2
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.000897
|
MEEKS
3-8B3
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0009399
|
MILES
2-1B5
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0008366
|
MONSEN
2-22 A3
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0011393
|
MONSEN
3-27A3
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0006494
|
MONSEN
UNIT 1-21 A3
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0003418
|
MURDOCK
2-34 B5-R
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0001104
|
MURRAY
3-2A2
|
UT
|
DUCHESNE
|
0.0036253
|
0.0036253
|
N/A
|
0.0009122
|
NELSON
1-31A1E
|
UT
|
UINTAH
|
N/A
|
N/A
|
N/A
|
0.0016452
|
OMAN
2-32A4
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0009113
|
OWL
3-17C5
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0005127
|
PEARSON
2-11B2
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.000684
|
POTTER
1-2 B5
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0006222
|
POTTER
2-6B4
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0004735
|
POWELL
2-33 A3
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0013776
|
PRESCOTT
1-35Z1
|
UT
|
UINTAH
|
0.005354
|
0.0053306
|
N/A
|
N/A
|
R
LLOYD 1-24A1E
|
UT
|
UINTAH
|
N/A
|
N/A
|
N/A
|
0.0019916
|
REARY
2-17A3
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0005024
|
RHOADES
MOON 1-35B5
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0002928
|
ROBB
2-29 B5-R
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0002991
|
ROBERTSON
UTE ST 1-12B1
|
UT
|
UINTAH
|
N/A
|
N/A
|
N/A
|
0.001538
|
RUDY
UNIT 1-11 B3
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.000647
|
RUST
3-4 B3
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0021724
|
RUST
UNIT 1-4 B3
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0021724
|
SAM
H U MONGUS 1-15A1
|
UT
|
DUCHESNE
|
0.0005469
|
0.0005469
|
N/A
|
0.0001025
|
SAM
HOUSTON 24-4
|
UT
|
UINTAH
|
N/A
|
N/A
|
0.000875
|
N/A
|
SHRINERS
2-10C5
|
UT
|
DUCHESNE
|
1.473019
|
1.473
|
|
|
SLB
1-35A1
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.000234
|
SMB
UNIT 1-10A2
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.000128
|
SMITH
1-31 B5
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0006836
|
SMITH,
ALBERT 1-8C5
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.000684
|
SQUIRES
3-8A2
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0024806
|
STATE
1-10A2
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.000128
|
STEVENSON
3-29A3
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0011108
|
SUNDANCE
4 15A2 (BOREN)
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.001025
|
SWYKES
2 21A2
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.002433
|
TAYLOR,
MAUREL FEE 1-36A2
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.002535
|
TEW
1-1 B5
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0008365
|
TEW
1-15 A3
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0008373
|
TODD
2-21A3
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0003418
|
UTE
1-29A1E
|
UT
|
UINTAH
|
N/A
|
N/A
|
N/A
|
0.0008168
|
UTE
1-30Z1
|
UT
|
DUCHESNE
|
0.0027255
|
0.0027255
|
N/A
|
N/A
|
UTE
3-12B3
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0013448
|
WADE
COOK 2-14
|
UT
|
UINTAH
|
N/A
|
N/A
|
N/A
|
0.0004053
|
WALKER
1-14A1E
|
UT
|
UINTAH
|
N/A
|
N/A
|
N/A
|
0.0016063
|
WHITEHEAD
1-22 A3
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0011393
|
WINKLER
2-28 A3
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0006836
|
WINKLER,
DUNCAN 1-28 A3
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0006836
|
WISSE
3-35A2
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0020508
|
YOUNG
2-15A3
|
UT
|
DUCHESNE
|
N/A
|
N/A
|
N/A
|
0.0008373
|
ANDERSON
CANYON 10-29
|
WY
|
LINCOLN
|
0.0015
|
0.0012825
|
N/A
|
N/A
|
ANDERSON
CANYON 11-29
|
WY
|
LINCOLN
|
0.0015
|
0.0012825
|
N/A
|
N/A
|
ANDERSON
CANYON 20-29
|
WY
|
LINCOLN
|
N/A
|
N/A
|
0.0003938
|
N/A
|
ANDERSON
CANYON 22-29
|
WY
|
LINCOLN
|
|
|
|
|
ANDERSON
CANYON 41-29
|
WY
|
LINCOLN
|
|
|
|
|
ASH
FIELD MINNELUSA UNIT
|
WY
|
-
|
0.0248114
|
0.04125
|
N/A
|
N/A
|
HANSON
FED 20-01
|
WY
|
SUBLETTE
|
0.0075
|
0.0060375
|
N/A
|
N/A
|
KUEHNE
RANCH UNIT SE
|
WY
|
CAMPBELL
|
0.0018064
|
0.0013773
|
0.0001083
|
N/A
|
KUEHNE
RANCH UNIT SE
|
WY
|
CAMPBELL
|
0.0018064
|
0.0013773
|
0.0001083
|
N/A
|
LOST
SOLDIER TR 9
|
WY
|
SWEETWATER
|
N/A
|
N/A
|
0.0001094
|
N/A
|
MAHONEY
DOME UNIT
|
WY
|
CARBON
|
N/A
|
N/A
|
0.0006837
|
N/A
|
RENTUER
1-32
|
WY
|
CAMPBELL
|
N/A
|
0.1299744
|
N/A
|
N/A
|
RENTUER
1-32
|
WY
|
CAMPBELL
|
0.1299744
|
0.1069438
|
N/A
|
N/A
|
WOLF
DRAW UNIT 41-24
|
WY
|
-
|
0.0001023
|
-
|
N/A
|
N/A
|
- 5 -