July 24, 2007
VIA EDGAR AND OVERNIGHT COURIER
Anne Nguyen Parker, Branch Chief
United States Securities and Exchange Commission
Division of Corporation Finance
100 F Street NE
Washington, D.C. 20549
| Re: | Rock City Energy Corp. (formerly Vallenar Holdings, Inc.) | |
| Amendment No. 1 to Registration Statement on Form SB-2 | ||
| Filed June 8, 2007 | ||
| File No. 333-139312 |
Dear Ms. Parker:
This letter is in response to your letter dated June 27, 2007 regarding the SB-2 Registration Statement (the “Registration Statement”) filed by Rock City Energy Corp. (formerly Vallenar Holdings, Inc.). We are also filing Pre-Effective Amendment No. 2 to the Registration Statement (the “Amendment”) with this letter.
Amendment No. 1 to Form SB-2
General
1. We note your disclosure regarding your assignments of your leases to Chesapeake Exploration Limited Partnership on June 9, 2006. Please file this assignment. In addition, please discuss the material terms of the assignment, including the rights you have retained, the obligations of both you and Chesapeake under the assignment, when and under what circumstances the assignment changes, expires or terminates, and the rights retained by you and by Chesapeake upon such change, termination or expiration. Disclose in better detail how the initiation of drilling of two wells during January and February 2007 extended the terms of either of the leases. Do the leases cover the same land, such that two wells would relate to eight leases?
We have revised the disclosure as you requested. Please see the pages 12 through 14 of the prospectus.
Anne Nguyen Parker, Branch Chief
United States Securities and Exchange Commission
July 24, 2007
Page 2
2. In addition, explain in better detail the portion [of] your agreement with Chesapeake that relates to the following: “If Chesapeake successfully completes a well capable of producing hydrocarbons in commercial quantities, the assignment of the leases will become permanent and our net interest in the deep acreage will reduce to 2,155 acres.” Explain the term in the agreement that gives rise to this result. If Chesapeake is successful in its endeavor, why would you not re-assume the lease(s) and take over the production? What consideration would you receive for having the assignment become permanent and for the reduction in your net interest in the deep acreage?
In response to your comment we have changed the disclosure to better describe our agreement with Chesapeake. Please see pages 19 and 20 of the prospectus.
3. Please explain in better detail your interest in the ninth lease that Chesapeake did not initiate drilling on but instead top-leased. Explain the relevance of the 68.75% undivided interest in mineral rights obtained by Chesapeake and what your interest is in this mineral right, given your business plan of oil and gas exploration.
In response to this comment, we have revised the discussion of this matter as you requested. Please see pages 19 and 20 of the prospectus.
Management, page 21
4. Please provide us with the order issued by the British Columbia Securities Commission on April 24, 2007 prohibiting Mr. Jeffs from engaging in investor relations activities for a period of five years from the date of the order. Tell us the circumstances that gave rise to this order. We may have further comment.
In response to this comment, we have included a copy of the Order and Settlement Agreement entered into between the British Columbia Securities Commission and Mr. Jeffs. We believe that the circumstances that gave rise to the Order are plainly set forth in the Settlement Agreement. If, however, after reviewing the Settlement Agreement you would like further information, we will provide it to you.
Index to Financial Statements, page F-1
5. We have considered your response to our prior comment number 20 in our letter of January 11, 2007. As Vallenar Energy Corp. is the predecessor organization, as defined in Regulation C, paragraph 405, audited financial statements of the predecessor entity are required for all periods prior to its acquisition to provide two full years of income statements, changes in stockholders’ equity and cash flows. The unaudited interim period of the predecessor as of March 31, 2006 should also be provided. This will require an audited balance sheet as of August 24, 2006 for Vallenar Energy Corp, along with its audited statements of operations, cash flow and changes in equity for the year ended December 31, 2005 and the period ended August 24, 2006. Clearly label the Vallenar Energy statements to explain the inclusion of the predecessor financial statements. Please remove any other unaudited interim or unaudited year-end financial statements of Vallenar Energy Corp. from your filing. Please contact us if you have any questions about these requirements.
Anne Nguyen Parker, Branch Chief
United States Securities and Exchange Commission
July 24, 2007
Page 3
We have revised the Vallenar Energy Corp. financial statements as you requested. Please see pages F-1 through F-18.
In making this response to your comments, we acknowledge that:
(1) we are responsible for the adequacy and accuracy of the disclosure in our filings;
(2) staff comments or changes to disclosure in response to staff comments do not foreclose the Securities and Exchange Commission from taking any action with respect to the filing; and
(3) we may not assert staff comments as a defense in any proceeding initiated by the Securities and Exchange Commission or any person under the federal securities laws of the United States.
Please do not hesitate to contact the undersigned with any additional comments you may have.
Very truly yours,
Vallenar Holdings, Inc.
By: /s/ Richard Jeffs
RICHARD JEFFS, President
cc: Gary Newberry, April Sifford and Jason Wynn (w/encl.)
