We forgot to mention it in our previous update (it should teach us not to write about four companies in a single post anymore!), but they did a financing deal. And a pretty large one. First the details:

• 24M shares at $1.40
• 12M warrants at #2.25
• No registration, so these shares have a lock-up period (usually a year, but details were not provided)

Now, a couple of observations, but first look at the share price over the last twelve months:

Now, what can we say about this finance deal?

1. If you consider the share price over the last year than 1.40 is a pretty good deal
2. What we especially like is that it is no convertible, which usually have in-build incentives to lower the share price (those financing houses get more shares that way)
3. Instead, we have warrants, but these are exercisable at a good $2.25, and will bring in added resources ($27M)
4. These are good conditions for such a small company and it shows that there is a lot of faith in the company
5. Yes, it means significant dilution. Large dilution actually. It will create 36M added shares, counting the outstanding convertibles, we will come close to 100M shares.
6. Somewhat surprising, the stock price hasn’t suffered from the announcement. Usually, there are at least a couple of finance houses who junk their existing holdings to make room for the cheaper new ones. This is a positive sign.

We would have preferred a partnership with a bigger company, as development would move at a faster pace. However, having said that, with an immediate $33M or so, they have money for drilling more, and partnering up is still very much possible (and this will give them a little bit more leverage in negotiations).

What does bother us at this moment is that Triangle has a German listing. We are hard-pressed to name even a single advantage of such a listing, and we know of previous situations in which such a listing was abused as a back-door shorting venue (Rancher energy comes to mind).

These shares cannot be registered in the US, but it wouldn’t be a terrible surprise if these shares show up in Germany, somehow. We think it would be in the company’s best interest to end the listing there. We will contact the company about this and we’ll keep you posted.