Why I’m Not Buying Sun Cal Energy

According to Sun Cal Energy's (SCEY.OB) recent 10Q:

Sun Cal Energy, Inc. (the “Company”), was incorporated in the State of Nevada on July 20, 2004 under the name Host Ventures, Inc. On November 6, 2006, the Company changed its name to Sun Cal Energy, Inc. The Company is currently in the exploratory stage as defined in FASB Statement 7 with its principal activity being the exploration of mining properties for future commercial development and production.

Effective March 12, 2007, the Company acquired all of the outstanding shares of Sun Cal Energy Corporation (”SCEC”) in exchange for issuing 26,925,000 of its common stock. SCEC was incorporated in the state of Nevada on June 2, 2006, For financial reporting purposes, the acquisition was treated as a reverse acquisition whereby SCEC’s operations continue to be reported as if it had actually been the acquirer.

The company has no revenue, and just enough cash on the balance sheet to last for another nine months at the current burn rate. According to the 10Q:

Even if we are successful in obtaining equity financing to fund our exploration program, there is no assurance that we will obtain the funding necessary to pursue any advanced exploration of our properties. If we do not continue to obtain additional financing, we will be forced to abandon our properties and our plan of operations.

Still, this hasn’t stopped someone identified as Pinnacle Energy Investments from paying a whopping $900,000 to NatCon Publishing to blast mail a glowing report on the company touting its investment prospects.

The report’s author, who claims he is “becoming the greatest oil & gas stock-picker of all time” (move over, Boone Pickens and Richard Rainwater!) says the shares, now trading at $3.26, could be on their way to $55 because they have “75 million barrels of potential oil reserves x $60 per barrel of oil = $4.5 billion, or $55 per share.” Yet even ExxonMobil trades at a valuation far below its proven (let alone potential) oil reserves. And Exxon has financed its exploration program and is actually getting oil out of the ground and to market.

Anyway, if I were confident my $3.26 stock was headed to $55, I would be using my $900,000 to buy up all the shares I could, not to pay somebody to write a newsletter about it.

SCEY.OB 1-yr chart:

Disclosure: author is long UNITED STS OIL FD LP UNITS (USO) at time of publication.

Comments

[jimmy Turano:]

HALE WILLIAM TRENT!
I RECEIVE E-MAILS DAILY WITH THE SAME KIND OF PROMISE AS THIS PARTICULAR STOCK SUN CAL, AND
I STRONGLY BELIEVE ALL THIS TOUTING AND MANIPULATION IS A LICENSE LITERALLY TO COMMIT A CRIME.
BASED ON YOUR STATISTICAL INFORMATION ON THIS COMPANY, THE SAME RESULTS CAN BE FOUND WITH 100'S OF OTHER STOCKS AS WELL. I READ ON MESSAGE BOARDS THAT FUNDAMENTALS DO NOT MATTER AND THE COMPANY'S STATISTICS DO NOT MATTER, BUT WHEN SOMEONE TOUTS A POORLY RATED COMPANY, WITH EVEN A POOR TRACK RECORD OF 24 YEARS, IT MAKES NO INVESTMENT SENSE AT ALL. RECENTLY EVEN A T.V. CELEBRITY TOUTED A PARTICULAR STOCK 14X'S TO DATE SINCE MARCH. AND YET THIS STOCK'S PERFORMANCE FOR 24 YEARS HAS RESEMBLED THE PERFECT CRIME ON WALL STREET TODAY. MANAGEMENT HAS PROSPERED MONTHLY, YEARLY, FOR 24 YEARS ALREADY, WHILE SHAREHOLDERS HAVE LOST $100'S OF THOUSANDS OF DOLLARS. IF YOU LOOK AT THE COMPANY'S NUMBERS AND FUTURE PROSPECTS, THE REALISTIC PROSPECTIVE OF AN INFLATED STOCK PRICE AND OVER FINANCED ONE PRODUCT COMPANY, IT MAKES YOU WONDER WHY IS A T.V. PERSONALITY TOUTING THE HELL OUT OF THIS COMPANY OVER 14X'S IN 4 MONTHS.
YES I APPLAUD YOU FOR STANDING UP AND SPEAKING OUT BECAUSE THE LITTLE GUY IS NEVER HEARD!
BY THE WAY THE STOCK I'M REFERRING TO ABOVE IS"NSTK".

2007 Jul 14 09:39 AM

[z24andyz24:]

Is IPWG.OB one of these scam stocks. I have a feeling it is...but I would like other opinions. This company has no revenue as of yet, but says it will have a 20 million dollar revenue by the end of the year. There are also rumors of bashers/pumpers in the forums which makes me believe this is makes the stock shady, but i believe in the concept of the company and hope it is for real. How can you tell if a developmental stage company like this is a scam or the real thing...PLEASE HELLLLLP

2007 Jul 14 11:14 AM

[HERMANNE:]

SCEY IS JUST ANOTHER PUMP AND DUMP OPERATION
THERE ARE HUNDREDS OF THEM OUT THERE
H

2008 Aug 02 02:37 PM

[HERMANNE:]

JUST ANOTHER BIG FKN SCAM
STOP LOOKING FOR TE BIG FIND HERE ON THIS BULLSHIT BLOG

2008 Aug 02 02:37 PM

[HERMANNE:]

A NEW YEAR JUST MORE PUMP AND DUMP
SCEY IS BASICALLY WORTHLESS
UNLESS ITS OPERATING
TAKING OIL ,MINERALS OR ANYTHING OF VALUE OUT OF GROUND
JUST TELLTHEM GO FK OFF
PLENTY GOOD JUNIOR GOLD STOCS OUT THERE

Jan 30 06:00 AM