President: Shane Manning
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WSA: Good day from Wall Street. This is Juan Costello, Senior Analyst with The Wall Street Analyzer. Joining us today is Shane Manning, President for Somo Incorporated. The company trades on the OTCQB, ticker symbol is SMMO. Thanks for joining us today there, Shane.
Shane Manning: Yeah, thank you very much.
WSA: Great. So starting off, please give us a history and overview of the company for some of our listeners that are new to your story.
Shane Manning: Yeah, sure. So Somo recently acquired a private oil field which is located in Yorba Linda, California, and that asset is going to do very well for us. It was acquired at a very, very good value. It’s got excellent resources. It’s an oil and gas asset and at this time, we feel it’s the perfect time to purchase oil and gas assets with oil having a very low valuation right now. Anyone can take a look at today’s climate and see the price of oil is very low, so we feel it’s an excellent time to be taking up oil and gas assets, which positions us quite well for the next year or two to three, when we expect the price of oil to increase. So Somo picked up this asset and we feel it’s a great time.
WSA: Right, so can you give us a little bit more detail on the Enterprise Oil and Gas acquisition? How is it going to fit into your portfolio and what the strategy is on that going forward?
Shane Manning: Yeah. So Somo would like to be somewhere around 1,000 barrels to 1,500 barrels of production and this being the first asset that we’ve picked up – it basically starts the path for us. This asset has been privately held by us for a while, but now we’ve taken it public and it basically gives us the vehicle to achieve our goal of 1,500 barrels and with the valuation being so low, it’s an excellent buy for us. And we certainly feel oil is going to be going up once the supply of oil in this country starts to cut back a little bit. We should see prices increase in the future and that’s why we feel our positioning right now is excellent to get us to 1,000 to 1,500 barrels of production.
WSA: Right. So what are some of the factors that you feel make Somo Inc. unique from some of the other players in the sector and able to capitalize on some of the trends that you mentioned?
Shane Manning: Yeah, there are a lot of oil companies that carry debt and Somo right now carries no debt whatsoever. Our oil lifting costs are very low. There’s no money that’s being spent by our company that’s wasteful in any way, shape, or form. This keeps our lifting costs very low and we’re still managing to turn to profit in this environment, which I think is very rare. A lot of companies are filing for bankruptcy protection in oil and gas and we’re certainly not one of those, especially with no debt on the books, so it helps tremendously. So that’s one thing that our investors can breathe through — there is no debt on the books and it positions us well for another acquisition.
WSA: Right. So what are some of the key goals and milestones that you are hoping to accomplish over the next six to twelve months? What can investors look forward to?
Shane Manning: Yeah, what we’re doing right now is looking for other assets. We are currently looking at about four other acquisition targets that again have low lifting costs, no debt, and would be a good fit for our company. We want at least two and a half millions barrels in the ground reserves, key ones. We want relatively shallow oil and there’s a lot of that in California, which we are looking aggressively at four different fields right now which, within Somo, would be a great acquisition. So that’s where we’re focusing right now.
WSA: Great. So perhaps you can talk a little bit about your background and experience as well as some of the key management there?
Shane Manning: I started as a mechanical engineer from the university and from there, basically worked in oil and gas for the past 15 or 18 years. I’m a boots-on-the-ground engineer, so very hands-on. I understand the business from a technical point of view and from a management point of view as well. So that’s my background a little bit, just basics there. Other members also have a fair bit of experience in the business of oil and gas. Our team is comprised of another woman, Olga Chernykh. She was with Somo before, developing software — Somo now is primarily focused on oil and gas — but she was the director who led the company from its transition from software to an oil and gas company. And right now those are the key people in the company, as well as our day-to-day staff who help us run the operation.
WSA: What are some of the key drivers that you wish perhaps investors and members of the financial community better understood about the company?
Shane Manning: The key thing is, we’re a company that has no debt and we’re looking for other acquisition targets in this environment, especially ones that have reserves in the ground, so there’s an upside when it comes to drilling and workovers. And we are very knowledgeable in the California market when it comes to other oil and gas properties that are acquisition targets and that’s our focus right now — to pick up other targets in this very low price environment. It’s an excellent opportunity to get into oil and gas at this time.
WSA: Well, good. Once again joining us today is Shane Manning, President for Somo Incorporated, which trades as mentioned on the OTCQB, ticker symbol SMMO, currently trading at $3.25 a share and market cap around 20 million. Before we conclude here, Shane, to recap some of your key points, why do you believe investors should consider the company as a good investment opportunity today?
Shane Manning: I think it’s an excellent opportunity today, because Somo has positioned itself to purchase other oil and gas assets that are of excellent value in today’s market. The price of oil is very low. The valuations of other oil companies are low. So to buy other oil and gas assets at today’s price is excellent value and we’re positioned. We’ve got no debt on the books and still making a profit on the production that we produce today. So we can be picky in choosing which other fields we are interested in purchasing and because of that, it sets us up for growth when the price of oil, which is historically low now, begins to increase in price.
WSA: Well, we certainly look forward to continue to track the company’s growth and report on your upcoming progress and we’d like to thank you for taking the time to join us today, Shane, and update our investor audience on Somo, Inc. It was great having you on.
Shane Manning: Great! Thank you very much. Much appreciated, thanks.