Formation Minerals Stock Price, News & Analysis

Formation Minerals, Inc. (OTCQB: FOMI) is described as a pure play oil and gas company based in Jacksboro, Texas. According to the company’s public statements, Formation is engaged in the acquisition and management of mineral and royalty interests in lower risk, onshore oil and gas properties located within major oil and gas plays in the United States.

The company states that its growth strategy relies primarily on leveraging management’s expertise to grow through the strategic acquisition of high quality, revenue-producing royalty interests, together with active management of its portfolios. Formation also refers to strategic and opportunistic divestitures of non-core or non-producing mineral interests as part of its approach to portfolio management.

Business focus and asset base

Formation describes itself as a growing oil and gas company with a focus on minerals and royalties. It reports that it owns producing mineral, royalty, and overriding royalty interests in several established U.S. basins and shale plays. These include the DJ Basin of Colorado and Wyoming, the Haynesville Shale of Louisiana, the Delaware and Permian Basin of Texas, the Marcellus and Utica shales in West Virginia, and the Anadarko Basin in Oklahoma. The company characterizes these properties as lower risk, onshore oil and gas assets.

In its communications, Formation highlights a portfolio that includes revenue-producing interests across multiple wells operated by various third-party operators. The company notes that it has made multiple acquisitions of revenue-producing properties and that it evaluates both acquisitions and divestitures as part of its ongoing portfolio management.

Stated strategy and portfolio management

Formation indicates that its business model centers on acquiring cash-flowing oil and gas minerals and royalties and managing them over time. The company has discussed a strategy of acquiring quality, revenue-generating assets and, when appropriate, selling non-core or lower-performing properties to reinvest proceeds into higher growth or better-performing royalty properties.

In its updates, Formation has described actions such as selling non-core, lower-performing assets to a private buyer and marketing additional non-core properties. It has also referenced a pipeline of potential acquisitions that it is evaluating, including properties in areas where it already holds interests.

Geographic emphasis and basins

Formation’s public disclosures emphasize exposure to several key U.S. oil and gas regions. The company reports ownership of producing mineral, royalty, and overriding royalty interests in:

• DJ Basin in Colorado and Wyoming
• Haynesville Shale in Louisiana
• Delaware and Permian Basin in Texas
• Marcellus and Utica shales in West Virginia
• Anadarko Basin in Oklahoma

Formation also notes that it has focused on properties in what it describes as major oil and gas plays in the United States, with references to both oil-focused and gas-focused basins and shales.

Capital access and corporate developments

The company has announced several financing-related agreements intended to provide access to capital. Formation disclosed an Equity Financing Agreement with GHS Investments, LLC, under which it has the right, but not the obligation, to sell shares of its common stock to GHS over a defined period, subject to conditions and limitations described in the agreement and related registration requirements.

Formation has also announced a Common Stock Purchase Agreement with Alumni Capital, LP, providing the company with the right, but not the obligation, to sell common stock up to a stated commitment amount, again subject to conditions, limitations, and registration requirements. In connection with that agreement, Formation issued a warrant to Alumni with terms based on a stated company valuation and the number of outstanding shares as of a future exercise date.

In addition, the company has discussed prior capital raises and has referenced a merger transaction involving the acquisition of Verde Bio Holdings, Inc., after which it shifted its business focus and adopted the name Formation Minerals, Inc. The company has also mentioned an uplist to the OTCQB and has indicated that it has retained an investment banking firm and securities counsel as it explores strategic alternatives, including a possible listing on a national securities exchange.

Acquisition and divestiture activity

Formation has reported multiple acquisitions of revenue-producing properties, including interests in wells operated by various third-party operators. It has also announced a definitive purchase and sale agreement with a private seller to acquire certain producing mineral interests in Bienville Parish, Louisiana, located in the Haynesville Shale, for a stated cash consideration, subject to customary closing conditions and financing.

On the divestiture side, the company has disclosed the sale of five non-core, lower-performing assets to a private buyer for a stated amount, describing this as part of its effort to manage its portfolio by monetizing out-of-favor assets and reinvesting proceeds into better-performing royalty properties.

Stated objectives and investor focus

In its communications, Formation repeatedly emphasizes a focus on creating long-term stockholder value. It describes an approach that includes strategic acquisitions of high quality, revenue-producing royalty interests, active portfolio management, and opportunistic divestitures. The company also refers to responsible capital raising to support acquisitions and to the potential benefits of broader market visibility through possible future exchange listings.

Formation’s disclosures present it as an energy sector company in the oil and gas exploration and production space, with an emphasis on minerals and royalties rather than direct operation of wells. Its activities, as described, center on acquiring, holding, and managing interests in producing and development-stage oil and gas properties in several U.S. basins and shales.