UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C., 20549
FORM 10-Q
þ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2009
o TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______ to ______
Commission File No. 000-51656
ECCO ENERGY CORP.
(Exact name of registrant as specified in its charter)
| Nevada | 75-2990007 | |||
| (State of other jurisdiction of incorporation) | (I.R.S. Employer Identification No.) | |||
| 3315 Marquart St., Suite 206 | ||||
| Houston, TX | 77027 | |||
| (Address of Principal Executive Office) | (Zip Code) |
Registrant’s telephone number, including area code: (713) 771-5500
Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirement for the past 90 days. Yes þ No o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
o Yes o No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. .
Large accelerated filer o | Accelerated filer o |
Non-accelerated filer o | Smaller reporting Company þ |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes o No þ
12,194,466 shares of the registrant’s common stock were outstanding as of November 16, 2009.
TABLE OF CONTENTS
| 3 | ||
| Item 1. | 3 | |
| Item 2 | 12 | |
| Item 3. | 17 | |
| Item 4. | 18 | |
| PART II—OTHER INFORMATION | ||
| Item 2. | 19 | |
| Item 6. | 19 | |
Item 1. | Financial Statements. |
PART I—FINANCIAL INFORMATION
ECCO ENERGY CORP.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
| September 30, 2009 | December 31, 2008 | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Cash and cash equivalents | $ | 71 | $ | 833 | ||||
| Accounts receivable | 27,000 | - | ||||||
| Accounts receivable – related party | 38,544 | 72,440 | ||||||
| Note receivable | 600,000 | - | ||||||
| Prepaid expenses | 7,142 | - | ||||||
| Total current assets | 672,757 | 73,273 | ||||||
| PROPERTY AND EQUIPMENT | ||||||||
| Oil and gas properties, using full cost accounting | 1,634,916 | 12,020,011 | ||||||
| Pipeline transmission properties | 1,000,000 | 1,000,000 | ||||||
| Equipment | 18,764 | 19,703 | ||||||
| Less accumulated depreciation and depletion | (322,218 | ) | (285,725 | ) | ||||
| Total property and equipment, net | 2,331,462 | 12,753,989 | ||||||
| TOTAL ASSETS | $ | 3,004,219 | $ | 12,827,262 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT) | ||||||||
| CURRENT LIABILITIES | ||||||||
| Accounts payable-trade | $ | 164,308 | $ | 197,376 | ||||
| Accounts payable-related parties | - | 444,822 | ||||||
| Accrued expenses | 606,257 | 412,096 | ||||||
| Current maturities of long-term debt | 1,493,944 | 1,432,217 | ||||||
| Total current liabilities | 2,264,509 | 2,486,511 | ||||||
| LONG-TERM LIABILITIES | ||||||||
| Long term debt | 227,131 | 227,131 | ||||||
| Long term debt – related parties | 1,174,731 | 365,479 | ||||||
| Asset retirement obligations | 125,976 | 747,709 | ||||||
| TOTAL LIABILITIES | 3,792,347 | 3,826,830 | ||||||
| SHAREHOLDERS’ EQUITY (DEFICIT) | ||||||||
| Preferred stock, 10,000,000 shares authorized: | ||||||||
| Series A, $.001 par value; 100,000 issued and outstanding | 100 | 100 | ||||||
| Series B, $.001 par value; 1,000,000 issued and outstanding | 1,000 | 1,000 | ||||||
| Series C, $.001 par value; 630,000 and 660,000 issued and outstanding | 630 | 660 | ||||||
| Series D, $.001 par value; 303,936 issued and outstanding | 304 | 304 | ||||||
| Common stock, $.001 par value; 75,000,000 shares authorized;11,994,466 and 9,424,952 shares issued and outstanding | 11,995 | 9,425 | ||||||
| Additional paid-in-capital | 11,915,656 | 10,873,721 | ||||||
| Accumulated deficit | (12,717,813 | ) | (1,884,778 | ) | ||||
| Total shareholders’ equity (deficit)_ | (788,128 | ) | 9,000,432 | |||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 3,004,219 | $ | 12,827,262 | ||||
See summary of significant accounting policies and notes to consolidated financial statements.
ECCO ENERGY CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2009 | 2008 | 2009 | 2008 | |||||||||||||
| REVENUE | $ | 16,801 | $ | 102,857 | $ | 87,034 | $ | 353,387 | ||||||||
| OPERATING EXPENSES | ||||||||||||||||
| Lease operating expenses | 15,721 | 62,144 | 119,461 | 153,583 | ||||||||||||
| General and administrative expenses | 1,018,882 | 200,484 | 1,531,063 | 637,557 | ||||||||||||
| Depreciation, depletion and accretion | 14,638 | (5,245 | ) | 116,034 | 29,533 | |||||||||||
| Impairment expense | 4,697,550 | - | 8,735,425 | - | ||||||||||||
| Loss on sale of assets | 232,526 | - | 232,526 | - | ||||||||||||
| Total operating expenses | 5,979,317 | 257,383 | 10,734,509 | 820,673 | ||||||||||||
| Net operating loss | (5,962,516 | ) | (154,526 | ) | (10,647,475 | ) | (467,286 | ) | ||||||||
| OTHER EXPENSES | ||||||||||||||||
| Legal settlements | (65,600 | ) | - | (65,600 | ) | - | ||||||||||
| Interest expense | (39,671 | ) | (21,147 | ) | (119,961 | ) | (56,693 | ) | ||||||||
| Total other expenses | (105,271 | ) | (21,147 | ) | (185,561 | ) | (56,693 | ) | ||||||||
| Net loss | (6,067,787 | ) | (175,673 | ) | (10,833,036 | ) | (523,979 | ) | ||||||||
| Dividend applicable to preferred stock | (194,893 | ) | (288,850 | ) | (587,681 | ) | (588,389 | ) | ||||||||
Net loss attributable to common shareholders | $ | (6,262,680 | ) | $ | (464,523 | ) | $ | (11,420,717 | ) | $ | (1,112,368 | ) | ||||
| Basic and diluted loss per share: | $ | (0.51 | ) | $ | (0.05 | ) | $ | (1.04 | ) | $ | (0.12 | ) | ||||
| Weighted average shares outstanding | 11,845,310 | 9,410,063 | 10,426,688 | 9,396,875 | ||||||||||||
See summary of significant accounting policies and notes to consolidated financial statements.
ECCO ENERGY CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| For the Nine Months Ended | ||||||||
| September 30, | ||||||||
| 2009 | 2008 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | (10,833,036 | ) | $ | (523,979 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation, depletion and accretion | 116,034 | 29,533 | ||||||
| Stock issued for services | 952,250 | 15,138 | ||||||
| Impairment expense | 8,735,425 | - | ||||||
| Loss on sale of assets | 232,526 | - | ||||||
| Changes in assets and liabilities: | ||||||||
| Accounts receivable | (27,000 | ) | 9,545 | |||||
| Accounts receivable – related party | (38,544 | ) | - | |||||
| Prepaid expenses | 27,357 | - | ||||||
| Accounts payable – trade | 14,526 | 172,281 | ||||||
| Accounts payable – related parties | 341,843 | 193,290 | ||||||
| Accrued liabilities | 211,866 | 77,950 | ||||||
| Net cash used in operating activities | (266,753 | ) | (26,242 | ) | ||||
| Cash flows from investing activities: | ||||||||
| Additions to oil and gas properties | (35,602 | ) | (406,528 | ) | ||||
| Proceeds from sale of oil and gas interest under farmout agreement | - | 261,000 | ||||||
| Proceeds from sale of assets | 175,000 | - | ||||||
| Purchase of equipment | - | (16,815 | ) | |||||
| Net cash provided by (used in) investing activities | 139,398 | (162,343 | ) | |||||
| Cash flows from financing activities: | ||||||||
| Proceeds from sale of common stock | 20,000 | - | ||||||
| Proceeds from refund of cancelled insurance premium financing | 5,841 | - | ||||||
| Proceeds from issuance of debt | 115,366 | 30,000 | ||||||
| Proceeds from issuance of related party debt | - | 90,000 | ||||||
| Payments made on short term debt | (14,614 | ) | (5,000 | ) | ||||
| Net cash provided by financing activities | 126,593 | 115,000 | ||||||
| Net change in cash and cash equivalents | (762 | ) | (73,585 | ) | ||||
| Cash and cash equivalents, at beginning of year | 833 | 80,355 | ||||||
| Cash and cash equivalents, at end of period | $ | 71 | $ | 6,770 | ||||
| Supplemental cash flow information: | ||||||||
| Interest paid | $ | 159 | $ | 19,799 | ||||
| Income taxes paid | - | - | ||||||
| Non cash investing and financial activities: | ||||||||
| Equipment purchased on account | - | 6,145 | ||||||
| Increase in asset retirement obligation | - | 102,037 | ||||||
| Liens assumed on oil and gas property | - | 232,526 | ||||||
| Accounts payable incurred for plugging and abandonment costs | 22,587 | - | ||||||
| Reclassification of assets held for sale | 5,636,739 | - | ||||||
| Reclassification of liabilities associated with assets held for sale | 898,864 | - | ||||||
| Note payable issued for related party accounts payable | 809,252 | - | ||||||
| Prepaid insurance premium financing cancelled | 44,866 | - | ||||||
| Note payable issued for prepaid insurance premiums | 6,925 | - | ||||||
| Series C preferred shares converted to common | 30 | - | ||||||
| Shares issued for accrued preferred dividends | 24,630 | - | ||||||
| Shares issued for accounts payable | 47,595 | - | ||||||
See summary of significant accounting policies and notes to consolidated financial statements
ECCO ENERGY CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
| 1. | BASIS OF PRESENTATION |
The accompanying unaudited interim consolidated financial statements of ECCO Energy Corp. (“ECCE”) have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission, and should be read in conjunction with the audited consolidated financial statements and notes thereto contained in ECCE’s Annual Report filed with the SEC on Form 10-K.
In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the consolidated financial statements which would substantially duplicate the disclosures contained in the audited consolidated financial statements for fiscal 2008 as reported in the Form 10-K have been omitted.
| 2. | GOING CONCERN |
As shown in the accompanying financial statements, ECCE incurred net losses applicable to common shareholders of $11,420,717 for the nine months ended September 30, 2009. In addition, ECCE had an accumulated deficit of $12,717,813 and a working capital deficit of $1,591,752 as of September 30, 2009. These conditions raise substantial doubt as to ECCE’s ability to continue as a going concern. Management is working to raise additional capital through the sale of common stock and/or oil and gas properties, and to utilize these funds to develop existing properties. The financial statements do not include any adjustments that might be necessary if ECCE is unable to continue as a going concern.
| 3. | MANAGEMENT’S FINANCING PLANS |
Since inception, ECCE’s working capital needs have been met through operating activities and from financings and loans from its principal shareholder, Sam Skipper and related entities. ECCE anticipates that additional financings and loans may be required to sustain operations in the future. Since inception, our working capital needs have been met through operating activities and from financings and loans from our President/Chief Executive Officer, Sam Skipper, and related entities. We anticipate that additional financings and loans will be required to sustain operations in the future. There can be no assurance that the Company will be successful in raising the required capital or that Mr. Skipper will continue to advance funds to the Company. Management is exploring various avenues to obtain such funding to develop our properties and pay existing debt including the issuance of new debt, issuance of securities, sales of properties, farmouts and joint ventures.
At September 30, 2009, we had a working capital deficit of $1,591,752. We will need to raise additional capital in 2009 to fund general corporate working capital needs. During 2009, the Company failed to make certain required payments (i) repay a $1,000,000 note, plus accrued interest, in connection with the acquisition of the Pipeline, (ii) a $328,578 note with Ray Nesbitt, plus accrued interest, (iii) a $25,000 note to Louisiana X Partners, plus accrued interest, in connection with the purchase of the Louisiana Shelf property, (iv) a $25,000 note to Bamco Inc, plus accrued interest, in connection with the purchase of the Louisiana Shelf property, (vi) eleven short term notes totaling $115,366 which were due in either the third quarter of 2009 or will be due during the fourth quarter of 2009. As the Company has no debt or equity funding commitments, we will need to rely upon best efforts financings. There can be no assurance that the Company will be successful in raising the required capital. There is no assurance that Mr. Skipper will continue to fund the company. The failure to raise sufficient capital through future debt or equity financings or otherwise may cause the Company to curtail operations, sell assets, or result in the failure of our business.
| 4. | RECENT ACCOUNTING PRONOUNCEMENTS |
In June 2009, the FASB issued Statement No. 168, “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles” (“SFAS 168”), which amends SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles”. SFAS 168 will become the source of authoritative U.S. GAAP recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the SEC under the authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. On the effective date, SFAS 168 will supersede all then existing non-SEC accounting and reporting standards. All other non-grandfathered non-SEC accounting literature not included in SFAS 168 will become non-authoritative. SFAS 168 is effective for financial statements issued for interim and annual periods ending after September 15, 2009. The adoption of SFAS 168 did not impact our results of operations or financial condition.
ECCO does not expect that any other recently issued accounting pronouncements will have a significant impact on the financial statements of the Company.
| 5. | OIL AND GAS PROPERTIES |
BATEMAN LAKE FIELD
On July 24, 2009, we negotiated a contract to sell the entire Bateman Lake field to an unaffiliated party for $700,000, plus assumption of the majority of the liens and liabilities related to the properties. The purchaser made a non-refundable deposit of $50,000, and agreed to complete the purchase by August 31, 2009. As the sale price is significantly below the value shown on the balance sheet, ECCE has recorded an impairment charge of $4,037,875 to adjust the book value to represent the estimated realizable value of the properties. The liabilities associated with the oil and gas properties, including liens and asset retirement obligations were transferred with the assets.232,526 The sale was completed on August 31, 2009, with $100,000 being paid to ECCE as of that date. ECCE issued a note receivable for $600,000. A payment of $433,000 was made on October 15, 2009. The remaining $167,000 was held in escrow pending settlement and payment of certain liens on the property. ECCE is working on settling these remaining items. As of November 7, 2009 we have settled $92,000 of the $167,000 designated liens, leaving a balance of $75,000 for settlement of the remaining liens. ECCE recorded a loss on sale of the Bateman Lake Field of $232,526.
ECCE sold an unused platform to a company that has oil and gas production in a field adjacent to our Bateman Lake property in the St. Mary’s Parish region of Louisiana. We sold the property in February 2009 for $75,000 to an unaffiliated operator, which was paid in full by June 30, 2009.
LOUISIANA SHELF PROPERTY – CAMERON PARISH, LOUISIANA
The Louisiana Shelf Property consists of a well completed in shallow waters offshore St. Mary’s Parish in Louisiana, East Cam Block 7, State Lease 17442 #1. Drilling was completed in 2005, but due to hurricane damage to a nearby platform as well as financial problems with the previous owners, the well was never connected to a pipeline. We acquired 75% of the property in 2007 and the remaining 25% in 2008 and have been attempting to bring the property into production. There is no oil or gas production from this field as of September 30, 2009.
During the quarter ending September 30, 2009 we determined that the value of the property is impaired, and have reduced the value from $5,197,550 to $500,000, a decrease of $4,697,550. We will continue our efforts to either find investors to help us develop the property, or to sell it.
OHIO PIPELINE
On February 27, 2009, ECCE entered into an agreement to buy oil and gas producing properties in Ohio, from Samurai Corp, an affiliated company owned by Sam Skipper. Upon further review, due to market conditions pertaining to the price of oil and gas, both Samurai and ECCE decided that the transaction was not in the best interest of shareholders of either company. Therefore, on April 13, 2009 the Board of Directors of both companies decided to terminate the transaction.
Because the failure to complete the transfer of assets from Samurai to ECCE, the covenants of the Pipeline purchase were violated. On February 28, 2009 M-J Oil Company Inc, of Paris Ohio, obtained a judgment in the amount of $1,029,808 against ECCO Energy, which includes principal and interest through February 28, 2009, for non-compliance with covenants in the original mortgage relating to the purchase of the M-J Oil Company pipeline (“Pipeline”). The judgment also requires ECCO to pay interest at 8% from February 28, 2009, until the judgment is paid in full. ECCO has recorded a total of $80,000 of accrued interest in relation to the mortgage and judgment as of September 30, 2009.
We are in negotiations with the M-J Oil Company to remove the judgment and to adjust the mortgage terms, which required full payment on September 30, 2009. As of this date, we have not reached a satisfactory agreement with the lender.
| 6. | DEBT |
Debt – Related Parties
ECCE has notes payable to related parties including a note payable to Samurai Energy LLC; a company controlled by ECCE’s CEO, and consisted of the following at September 30, 2009 and December 31, 2008.
| September 30, 2009 | December 31, 2008 | |||||||
| Promissory note to Samurai Corp - interest at 5% due January 1, 2012; unsecured | $ | 110,706 | $ | 110,706 | ||||
| Promissory note to Rick Bobigian- interest at 8% due January 1, 2012; unsecured | $ | 254,773 | $ | 254,773 | ||||
| Promissory note to Samurai Corp - interest at 5% due January 1, 2012; unsecured (1) | $ | 809,252 | - | |||||
| Less current portion | - | - | ||||||
| Total related party debt | $ | 1,174,731 | $ | 365,479 | ||||
| (1) | In June 2009, ECCE converted accounts payable into a promissory note to Samurai Corp with an interest rate of 5%, and a payment due on the maturity date of January 1, 2012 for the $809,252 balance. |
Debt – Non-Related Parties
| September 30, 2009 | December 31, 2008 | |||||||
| Promissory note - interest of 6% due September 26, 2008; not secured. (4) | $ | 25,000 | $ | 25,000 | ||||
| Promissory note - interest of 6% due September 26, 2008; not secured. (4) | $ | 25,000 | $ | 25,000 | ||||
| Promissory note - interest of 7% due July 17, 2009; not secured (1) | $ | 12,000 | - | |||||
| Promissory note - interest of 0% due on demand; not secured | - | $ | 8,000 | |||||
| Promissory note - interest of 7% due August 12, 2009; not secured (2) | $ | 9,366 | - | |||||
| Promissory note - interest of 7% due August17, 2009; not secured (1) | $ | 12,000 | - | |||||
| Promissory note - interest of 7% due August17, 2009; not secured (1) | $ | 12,000 | - | |||||
| Promissory note - interest of 7% due August17, 2009; not secured (1) | $ | 12,000 | - | |||||
| Promissory note - interest of 7% due August17, 2009; not secured. (2) | $ | 12,000 | - | |||||
| Promissory note - interest of 7% due September 10, 2009; not secured (2) | $ | 6,000 | - | |||||
| Promissory note - interest of 7% due September 14, 2009; not secured (2) | $ | 12,000 | - | |||||
| Promissory note - interest of 7% due September 17, 2009; not secured (2) | $ | 6,000 | - | |||||
| Promissory note - interest of 12% due September 30, 2009; secured by Wilson Field Properties. (3) | $ | 328,578 | $ | 328,578 | ||||
| Pipeline Mortgage –interest of 8% due September 30, 2009; secured by pipeline (5) | $ | 1,000,000 | $ | 1,000,000 | ||||
| Promissory note - interest of 7% due October 19, 2009; not secured. (2) | $ | 12,000 | - | |||||
| Promissory note - interest of 7% due December 1, 2009; not secured. (2) | $ | 10,000 | - | |||||
| Promissory note - interest of 5% due January 1, 2012; not secured. | $ | 227,131 | $ | 227,131 | ||||
| Less current portion | 1,493,944 | 1,432,217 | ||||||
| Total debt to non-related parties | $ | 227,131 | $ | 227,131 | ||||
| Total debt | $ | 2,895,806 | $ | 1,979,188 | ||||
| (1) | In June 2009, ECCE borrowed $48,000 from four different parties for general corporate purposes. Three of these notes totaling $36,000 were due on August 17, 2009, and one for $12,000 was due on July 17, 2009. None of these notes have been repaid and are in default. No demand has been made for payment. ECCE is continuing to accrue interest on these notes at the stated rate. |
| (2) | During the quarter ended September 30, 2009, ECCE borrowed $67,366 represented by seven different notes for general corporate purposes. A total of $45,366 was payable during the third quarter, with the remaining $12,000 due on October 19, 2009 and $10,000 due on December 1, 2009. None of these notes have been repaid and are in default. No demand has been made for payment. ECCE is continuing to accrue interest on these notes at the stated rate. |
| (3) | ECCE issued 35,000 warrants with the issuance of the note payable. ECCE valued the warrants using the Black-Scholes option model and calculated the relative fair value of the warrants and recorded a discount of $27,689 on the debt for the value of the warrants. The discount was amortized over the life of the note. The assumptions used in the Black-Scholes pricing model for the warrants issued with the debt include (1) discount rate of 1.75%, (2) warrant life of 2 years, (3) expected volatility of 538.77% and (4) zero expected dividends. All principal and interest became due June 30, 2009. This note has not been repaid and is in default. No demand has been made for payment. ECCE is continuing to accrue interest on this note at the stated rate. |
| (4) | The notes payable relate to the acquisition of Louisiana Shelf LP. ECCE has not been able to locate these note holders. All principal and interest became due September 26, 2008. None of these notes have been repaid and are in default. No demand has been made for payment. ECCE is continuing to accrue interest on these notes at the stated rate. |
| (5) | The entire unpaid balance of principal and accrued interest was due on September 30, 2009. No payments have been made and this mortgage note is in default. There has been a judgment rendered against ECCE in the amount of the mortgage. See footnote 5. We are in discussions with the lender to restructure the mortgage. ECCE is continuing to accrue interest on these notes at the stated rate. |
In February 2009, ECCE paid $8,000 to a third party in full payment of a short term note payable. ECCE also cancelled certain financed insurance policies resulting in a reduction of short-term debt of $44,866.
| 7. | SHAREHOLDERS’ EQUITY |
On February 10, 2009, ECCE issued for cash 200,000 common shares for $20,000.
On April 27, 2009, ECCE issued 300,000 common shares for services related to obtaining prospective financing valued at $51,000.
On July 1, 2009 ECCE issued 1,830,000 shares to be distributed to various consultants, and employees. This consists of 330,000 shares being issued to employees for retention, and 1,500,000 shares relating to payment for services. The shares were valued at $923,000.
On July 15, 2009, ECCE issued 49,514 shares of common stock to redeem 30,000 shares of ECCO Series C Preferred stock and associated accumulated dividends of $24,630. The share conversion was recorded using the book value method, in which no gain or loss is recognized by the company
On August 29, 2009, ECCE issued 100,000 common shares for legal services valued at $14,595.
On September 1, 2009, ECCE settled an ongoing lawsuit relating to the sale of ECCO Biofuels in 2007. ECCE issued 40,000 shares of restricted common stock as part of the settlement. These shares were issued on September 1, 2009 and were valued at $5,600.
On September 29, 2009 ECCE issued 50,000 shares for consulting services. The services were valued at $5,500.
The following table provides a summary of the potential dilution of common stock should our Preferred Series B, C and/or D be converted to common stock. These valuations are as of September 30, 2009, and assume a conversion of one share of preferred for one share of common at the designated valuation price of $5.00 per share.
Preferred Shares | Preferred Shares @$5.00 | Accrued Dividends | Conversion Valuation | Conversion Price | Number of Common Shares after Conversion | |||||||||||||||||||
| Series B | 1,000,000 | $ | 5,000,000 | $ | 800,000 | $ | 5,800,000 | $ | 5.00 | 1,160,000 | ||||||||||||||
| Series C | 630,000 | 3,150,000 | 444,884 | 3,594,884 | $ | 5.00 | 718,977 | |||||||||||||||||
| Series D | 303,936 | 1,519,680 | 212,755 | 1,732,435 | $ | 5.00 | 346,487 | |||||||||||||||||
| Total Common | 1,933,936 | $ | 9,669,680 | $ | 1,475,639 | $ | 11,127,319 | 2,225,464 | ||||||||||||||||
| 8. | COMMITMENTS AND CONTINGENCIES |
During the third quarter, ECCE settled an ongoing lawsuit relating to the sale of ECCO Biofuels in 2007. The settlement called for a $10,000 payment during the third quarter of 2009, which was made in September 2009. We also issued 40,000 shares of restricted common shares of ECCE stock, valued at $5,600, to the plaintiffs as part of the settlement. The settlement also calls for additional payments of $12,500 to be made on each of the following dates: December 4, 2009, March 5, 2010, June 4, 2010 and September 10, 2010. The additional payments total of $50,000 has been accrued as of September 30, 2009. Total settlement expense of $65,600 was recorded as of September 30, 2009.
| 9. | SUBSEQUENT EVENTS |
During October 2009, ECCO issued 200,000 common shares to a third party for consulting services valued at $16,000.
Item 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. |
The statements included or incorporated by reference in this Quarterly Report, other than statements of historical fact, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Act of 1934, as amended. In some cases, you can identify forward-looking statements by the words “anticipate,” “estimate,” “expect,” “objective,” “projection,” “forecast,” “goal,” and similar expressions. Such forward-looking statements include, without limitation, the statements herein and therein regarding the timing of future events regarding the operations of the Company and its subsidiaries. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. The Company’s actual results could differ materially from those anticipated in these forward-looking statements as a result of many factors including without limitation the following risk factors:
| - | the cyclical nature of the natural gas and oil industries for both product demand and pricing |
| - | our ability to obtain additional financing |
| - | our ability to successfully and profitably find, produce and market oil and natural gas |
| - | uncertainties associated with the United States and worldwide economies |
| - | substantial competition from larger companies |
| - | the loss of key personnel |
| - | depletion of our producing properties |
| - | operating interruptions (including weather, leaks, explosions and lack of rig availability) |
ECCO Energy Corp.
We are an independent oil and gas company actively engaged in oil and gas development, exploration and production with properties and operational focus in the Gulf Coast Region. Our strategy is to grow our asset base by purchasing producing assets at a discount to reserve value, increasing the production rate of reserves, and converting proved developed non-producing reserves to proved developed producing reserves. Acquisitions to date have provided both producing and non producing assets. Our principal assets are oil and gas properties.
Our shares of common stock are traded on the Over-the-Counter Bulletin Board, with the symbol ECCE.
WILSON PROPERTIES LEASE – NUECES COUNTY, TEXAS
We own 100% of the working interest in the E.C. Wilson and Wilson State Tract Leases (“Wilson Properties”) located in Nueces County, Texas. The Wilson field is currently producing oil and gas, and is the only field providing revenue to ECCE. Due to flooding of a portion of the property with salt water, production has declined significantly since the prior year. In order to increase production to prior levels, an additional well will need to be drilled. We anticipate capital expenditures of approximately $465,000 during 2009. These funds will need to be raised in order for the drilling to occur.
BATEMAN LAKE FIELD – ST. MARY’S PARISH, LOUISIANA
The lease consists of 14 non-producing oil and gas wells on Louisiana State Lease No. 1337, in St. Mary’s Parish, Louisiana. As of September 30, 2009, there is no oil and gas production from this concession.
For the past year, ECCE attempted to find drilling partners for the Bateman Lake Field. On July 24, 2009, we negotiated a contract to sell the entire Bateman Lake field to an unaffiliated party for $700,000, plus assumption of the majority of the liens and liabilities related to the properties. The purchaser made a non-refundable deposit of $50,000, and agreed to complete the purchase by August 31, 2009. As the sale price is significantly below the value shown on the balance sheet, ECCE has recorded an impairment charge of $4,037,875 to adjust the book value to represent the estimated realizable value of the properties. The liabilities associated with the oil and gas properties, including liens and asset retirement obligations were transferred with the assets. The sale was completed on August 31, 2009, with $100,000 being paid to ECCE as of that date. ECCE issued a note receivable for $600,000. A payment of $433,000 was made on October 15, 2009. The remaining $167,000 was held in escrow pending settlement and payment of certain liens on the property. ECCE is working on settling these remaining items. As of November 7, 2009 we have settled $92,000 of the $167,000 designated liens, leaving a balance of $75,000 for settlement of the remaining liens. ECCE recorded a loss on sale of the Bateman Lake Field of $232,526.
ECCE sold an unused platform to a company that has oil and gas production in a field adjacent to our Bateman Lake property in the St. Mary’s Parish region of Louisiana. We sold the property in February 2009 for $75,000 to an unaffiliated operator, which was paid in full by June 30, 2009.
LOUISIANA SHELF PROPERTY – CAMERON PARISH, LOUISIANA
The Louisiana Shelf Property consists of a well completed in shallow waters offshore St. Mary’s Parish in Louisiana, East Cam Block 7, State Lease 17442 #1. Drilling was completed in 2005, but due to hurricane damage to a nearby platform as well as financial problems with the previous owners, the well was never connected to a pipeline. We acquired 75% of the property in 2007 and the balance in 2008 and have been attempting to bring the property into production. There is no oil or gas production from this field as of September 30, 2009.
During the quarter ending September 30, 2009 we determined that the value of the property is impaired, and have reduced the value from $5,197,550 to $500,000, a decrease of $4,697,550. We are actively attempting to sell or otherwise dispose of the property.
OHIO PIPELINE
In October 2008, ECCE acquired a gas pipeline (“Pipeline”) approximately 13 miles in length located in Jefferson and Harrison Counties, Ohio. The Pipeline was purchased from M- J Oil Company of Paris, Ohio, an unaffiliated third party, by issuing a mortgage note for $1,000,000. The mortgage note bears an 8% annual interest rate. The mortgage is secured by the Pipeline assets. The entire unpaid balance of principal and accrued interest was due on September 30, 2009. No payments have been made and this mortgage note is in default. The pipeline services oil and gas properties owned by Samurai Corp, an affiliated company.
Negotiations are underway with Samurai Corp to provide compensation for the use of the ECCE pipeline. A sale or lease of the pipeline is also under discussion.
On February 27, 2009, ECCE entered into an agreement to buy oil and gas producing properties in Ohio, from Samurai Corp, an affiliated company owned by Sam Skipper. Upon further review, due to market conditions pertaining to the price of oil and gas, both Samurai and ECCE decided that the transaction was not in the best interest of shareholders of either company. Therefore, on April 13, 2009 the Board of Directors of both companies decided to terminate the transaction.
Because the failure to complete the transfer of assets from Samurai to ECCE, the covenants of the Pipeline purchase were violated. On February 28, 2009 M-J Oil Company Inc, of Paris Ohio, obtained a judgment in the amount of $1,029,808 against ECCO Energy, which includes principal and interest through February 28, 2009, for non-compliance with covenants in the original mortgage relating to the purchase of the M-J Oil Company pipeline (“Pipeline”). The judgment also requires ECCO to pay interest at 8% from February 28, 2009, until the judgment is paid in full. ECCO has recorded a total of $80,000 of accrued interest in relation to the mortgage and judgment as of September 30, 2009. We are in negotiations with the M-J Oil Company to remove the judgment and to adjust the mortgage terms, which required full payment on September 30, 2009. As of this date, we have not reached a satisfactory agreement with the lender.
RESULTS OF OPERATIONS
We have incurred recurring losses to date. We are exploring the sale or merger of the company. If we do not sell or merge the company, then over the next twelve months our strategy is to grow our asset base by acquiring producing properties and investing in working interests in non-operated properties. In addition, we plan to use innovative and sound engineering principles to enhance existing production. We will acquire operated as well as non-operated properties that meet or exceed our rate of return criteria. For acquisitions of properties with additional development, exploitation and exploration potential, our focus has been on acquiring operated properties so that we can better control the timing and implementation of capital spending. We will sell properties when management is of the opinion that the sale price realized will provide an above average rate of return for the property or when the property no longer matches the profile of properties we desire to own.
The execution of our growth strategy is dependent on a number of factors including oil and gas prices, the availability of oil and gas properties that meet our economic criteria and the availability of funds on terms that are acceptable to us, if at all. There is no assurance that these factors will occur. We will require additional capital to meet both our long and short term operating requirements.
Nine Months Ended September 30, 2009 Compared to Nine Months Ended September 30, 2008
Our net loss for the nine months ended September 30, 2009 was $10,833,036 compared to a net loss of $523,979 for the nine months ended September 30, 2008 (an increase of $10,309,057). The net loss applicable to common shareholders was $11,420,717, representing an additional loss pertaining to the dividends on three issues of preferred stock of $587,681.
For the nine months ended September 30, 2009, we generated revenue of $87,034 compared to revenue of $353,387 generated for the nine months ended September 30, 2008 (a decrease of $266,353). The decrease in revenues for the nine months ended September 30, 2009 compared to the nine months ended September 30, 2008 was affected by the volume and price we received for the sale of our gas and oil production. For the nine months ended September 30, 2009, we sold 16,827 Mcf less of gas at an average price of $3.52 per Mcf. This resulted in an average price decrease of $5.72 per Mcf. For the nine months ending September 30, 2009, we sold 155 barrels of oil, compared to 273 barrels last year. This resulted in a decline in oil revenues of $22,018 from 2008, as we received $60.42 less per barrel in 2009. It is doubtful that the Wilson Field will resume production close to the 2008 rate during the current fiscal year unless additional wells are drilled.
For the nine months ended September 30, 2009, we incurred operating expenses of $10,734,509 compared to $820,673 incurred for the nine months ended September 30, 2008 (an increase of $9,913,836). These operating expenses incurred for the nine months ended September 30, 2009 consisted of: (i) depreciation and depletion of $116,034; (ii) general and administrative expenses of $1,531,063; (iii) lease operating expenses of $119,461; (iv) impairment expense of $8,735,425; and (v) loss on sale of assets of $232,526.
General and administrative expenses incurred for the nine months ended September 30, 2009 increased $893,506 from the prior year primarily due to an increase in legal and geophysical consulting fees relating to the company’s planned expansion during the current year.
Depreciation and depletion of oil and gas properties increased by $86,501 for the nine months ended September 30, 2009. A decrease in depletion cost related to lower oil and gas production from the Wilson Field was offset by the increase in ARO accretion for our properties, as well as depreciation recorded on the Ohio pipeline.
Our lease operating expenses decreased by $34,122 during the nine months ended September 30, 2009, which reflected the comparison of normal operating expenses during 2009 as compared to the high maintenance costs on the Wilson properties incurred during 2008.
On July 24, 2009, we negotiated a contract to sell the entire Bateman Lake field to an unaffiliated party for $700,000, plus assumption of the majority of the liens and liabilities related to the properties. The purchaser made a non-refundable deposit of $50,000, and agreed to complete the purchase by August 31, 2009. As the sale price is significantly below the value shown on the balance sheet, ECCE has recorded an impairment charge of $4,037,875 to adjust the book value to represent the estimated realizable value of the properties. The liabilities associated with the oil and gas properties, including liens and asset retirement obligations were transferred with the assets. The sale was completed on August 31, 2009, with $100,000 being paid to ECCE as of that date. ECCE issued a note receivable for $600,000. A payment of $433,000 was made on October 15, 2009. The remaining $167,000 was held in escrow pending settlement and payment of certain liens on the property. ECCE is working on settling these remaining items. As of November 7, 2009 we have settled $92,000 of the $167,000 designated liens, leaving a balance of $75,000 for settlement of the remaining liens. ECCE recorded a loss on sale of the Bateman Lake Field of $232,526.
Interest expense increased by $63,268 for the nine months ended September 30, 2009 due to loans incurred during fiscal 2008 and 2009.
During the third quarter, ECCE settled an ongoing lawsuit relating to the sale of ECCO Biofuels in 2007. The settlement called for a $10,000 payment during the third quarter of 2009, which was made in September 2009. We also issued 40,000 shares of restricted common shares of ECCE stock, valued at $5,600, to the litigants as part of the settlement. The settlement also calls for additional payments of $12,500 to be made on each of the following dates: December 4, 2009, March 5, 2010, June 4, 2010 and September 10, 2010. The additional payments totaling $50,000 have been accrued as of September 30, 2009. Total settlement expense of $65,600 was recorded as of September 30, 2009.
Three months Ended September 30, 2009 Compared to Three months Ended September 30, 2008
Our net loss for the three months ended September 30, 2009 was $6,067,787 compared to a net loss of $175,673 for the three months ended September 30, 2008 (an increase of $5,892,114). The net loss applicable to common shareholders was $6,262,680, representing an additional loss pertaining to the dividends on three issues of preferred stock of $194,893.
For the three months ended September 30, 2009, we generated revenue of $16,801 compared to revenue of $102,857 generated for the three months ended September 30, 2008 (a decrease of $86,056). The decrease in revenues for the three months ended September 30, 2009 compared to the three months ended September 30, 2008 was affected by the volume and price we received for the sale of our gas and oil production. For the three months ended September 30, 2009, we sold 6,750 Mcf less of gas at an average price of $3.05 per Mcf. This resulted in an average price decrease of $5.56 per Mcf. For the three months ending September 30, 2009, we sold no barrels of oil, compared to 121 barrels last year. This resulted in a decline in oil revenues of $13,780 from 2008, as we received $113.72 per barrel in 2008.
For the three months ended September 30, 2009, we incurred operating expenses of $5,979,317 compared to $257,383 incurred for the three months ended September 30, 2008 (an increase of $5,721,934). These operating expenses incurred for the three months ended September 30, 2009 consisted of: (i) depreciation and depletion of $14,638; (ii) general and administrative expenses of $1,018,882; (iii) lease operating expenses of $15,721; (iv) impairment expense of $4,697,550; and (v) loss on sale of assets of $232,526.
General and administrative expenses incurred for the three months ended September 30, 2009 increased $818,338 from the prior year amount of $200,484, primarily due to increases in consulting fees, and costs associated with engineering fees.
Depreciation and depletion of oil and gas properties increased by $19,833 for the three months ended September 30, 2009. A decrease in depletion cost related to lower oil and gas production from the Wilson Field was offset by the depreciation recorded on the Ohio pipeline.
Our lease operating expenses decreased by $46,423 during the three months ended September 30, 2009, which reflected the end of the large maintenance expenses on the Wilson properties which we incurred during the third and fourth quarters of 2008.
On July 24, 2009, we negotiated a contract to sell the entire Bateman Lake field to an unaffiliated party for $700,000, plus assumption of the majority of the liens and liabilities related to the properties. The purchaser made a non-refundable deposit of $50,000, and agreed to complete the purchase by August 31, 2009. As the sale price is significantly below the value shown on the balance sheet, ECCE has recorded an impairment charge of $4,037,875 to adjust the book value to represent the estimated realizable value of the properties. The liabilities associated with the oil and gas properties, including liens and asset retirement obligations were transferred with the assets. The sale was completed on August 31, 2009, with $100,000 being paid to ECCE as of that date. ECCE issued a note receivable for $600,000. A payment of $433,000 was made on October 15, 2009. The remaining $167,000 was held in escrow pending settlement and payment of certain liens on the property. ECCE is working on settling these remaining items. As of November 7, 2009 we have settled $92,000 of the $167,000 designated liens, leaving a balance of $75,000 for settlement of the remaining liens. ECCE recorded a loss on sale of the Bateman Lake Field of $232,526.
Interest expense increased by $18,524 for the three months ended September 30, 2009 due to loans incurred during fiscal 2008 and 2009.
During the third quarter, ECCE settled an ongoing lawsuit relating to the sale of ECCO Biofuels in 2007. The settlement called for a $10,000 payment during the third quarter of 2009, which was made in September 2009. We also issued 40,000 shares of restricted common shares of ECCE stock, valued at $5,600, to the plaintiffs as part of the settlement. The settlement also calls for additional payments of $12,500 to be made on each of the following dates: December 4, 2009, March 5, 2010, June 4, 2010 and September 10, 2010. The additional payments total of $50,000 has been accrued as of September 30, 2009. Total settlement expense of $65,600 was recorded as of September 30, 2009.
LIQUIDITY AND CAPITAL RESOURCES
Nine Month Period Ended September 30, 2009
At September 30, 2009, our current assets were $672,757 and our current liabilities were $2,264,509, which resulted in a working capital deficiency of $1,591,752. At September 30, 2009, our total assets were $3,004,219 consisting of: (i) $607,142 in notes receivable and prepaid expenses; (ii) $65,544 in accounts receivable; (iii) $2,634,916 in oil and gas properties and a pipeline; and (iv) $18,763 in equipment less (v) accumulated depletion and depreciation of $322,218. There was a decrease of $9,823,043 in total assets from the year ended 2008, resulting primarily from decreases in Prepaid Insurance, the sale of a platform, and impairment charges of $8,735,425 relating to the adjustments on the Bateman Lake Field and the Louisiana Shelf property, which lowered the value of Oil and Gas Properties.
At September 30, 2009, our total liabilities were $3,792,347 consisting of: (i) $164,308 in accounts payable - trade; (ii) $606,257 in accrued expenses; (iii) $1,493,944 in short - term debt; (iv) $1,401,862 in long-term debt; and (v) $125,976 in asset retirement obligations.
Shareholders’ equity decreased from $9,000,432 at December 31, 2008 to a deficit of ($788,128) as of September 30, 2009. This decline of $9,788,560 was primarily due to the loss for the first nine months of 2009 which includes the impairment charges for the two properties.
Our working capital deficiency to date has been funded by advances from short term loans from individual investors and from Samurai Operating Company, a related party. Over the next twelve months, assuming funds become available from our financing efforts, we plan to extinguish our short-term debt and spend the necessary sums to begin production on either the several of the properties that we have acquired over the last year, or new properties.
Cash Flows
Cash Flows from Operating Activities
The change in net cash flows used in operating activities for the nine months ended September 30, 2009 was affected by a significant decrease in revenues from oil and gas properties, increased expenses for various operations of the company.
Cash Flows from Investing Activities
ECCE sold an unused platform to a company that has oil and gas production in a field adjacent to our Bateman Lake property in the St. Mary’s Parish region of Louisiana. We sold the property in February 2009 for $75,000 to an unaffiliated operator.
During the three months ended September 30, 2009, ECCE received $100,000 as a cash payment toward the sale of the Bateman Lake properties.
Cash Flows from Financing Activities
We have financed some of our operations from the issuance of equity and debt instruments. We received $20,000 from the sale of common stock, paid balances on a short term note payable of $14,614, and borrowed $115,366 through four separate loans to unrelated parties, with payment dates ranging from July 17, 2009 to December 1, 2009.
We expect that working capital requirements will continue to be funded through a combination of our future revenues, existing funds, loans and further issuances of securities. Our working capital requirements are expected to increase in line with the growth of our business. Since inception, our working capital needs have been met through operating activities and from financings and loans from our former President/Chief Executive Officer, Sam Skipper, and related entities. We anticipate that additional financings and loans will be required to sustain operations in the future.
There can be no assurance that the Company will be successful in raising the required capital or that Mr. Skipper will continue to advance funds to the Company. The failure to raise sufficient capital through future debt or equity financings or otherwise may cause the Company to curtail operations, sell assets, sell or merge the company or result in the failure of our business.
PURCHASE OF SIGNIFICANT EQUIPMENT
We do not intend to purchase any significant equipment during the next twelve months, unless substantial additional funds are raised to further the development of our oil and gas properties.
OFF-BALANCE SHEET ARRANGEMENTS
As of September 30, 2009, we do not have any off balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors
Item 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
Not Applicable
Item 4. | CONTROLS AND PROCEDURES |
We maintain “disclosure controls and procedures” as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “exchange Act”), that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including Samuel Skipper, our Chief Executive Officer, and Wilson Thomas, our Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. An evaluation was conducted under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as September 30, 2009. The evaluation of our disclosure controls and procedures included a review of the disclosure controls’ and procedures’ objectives, design, implementation and the effect of the controls and procedures on the information generated for use in this report. In the course of our evaluation, we sought to identify data errors, control problems or acts of fraud and to confirm the appropriate corrective actions, if any, including process improvement, were being undertaken. Based on that evaluation, management concluded that our disclosure controls and procedures were not effective as of September 30, 2009. We continue to require additional safeguards to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms. We are in the process of evaluating and enhancing such controls and procedures, and expect additional controls and procedures to be implemented.
There was no change in our internal control over financial reporting during the quarter ended September 30, 2009 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
PART II—OTHER INFORMATION
| Unregistered Sales of Equity Securities and Use of Proceeds. |
On February 10, 2009, ECCE issued for cash 200,000 common shares for $20,000.
On April 27, 2009, ECCE issued 300,000 common shares for services related to obtaining prospective financing valued at $51,000.
On July 1, 2009, ECCE issued 1,830,000 shares to be distributed to various consultants, and employees. This consists of 330,000 shares being issued to employees for retention, and 1,500,000 shares relating to payment for services. The shares were valued at $923,000.
On July 15, 2009, ECCE issued 49,514 shares of common stock to redeem 30,000 shares of ECCO Series C Preferred stock and associated accumulated dividends in arrears of $24,630. The share conversion was recorded using the book value method, in which no gain or loss is recognized by the company
On August 29, 2009, ECCE issued 100,000 common shares for legal services valued at $14,595.
On September 1, 2009, ECCE settled an ongoing lawsuit relating to the sale of ECCO Biofuels in 2007. We issued 40,000 shares of restricted common shares of ECCE stock to the litigants as part of the settlement. These shares were issued on September 1, 2009 and were valued at $5,600.
On September 29, 2009 ECCE issued 50,000 shares for consulting services. The services were valued at $5,500.
On October 19, 2009, ECCE issued 200,000 shares for consulting services valued at $16,000.
The shares were exempt from registration under Section 4(2) of the Securities Act of 1933 because they were issued in a privately negotiated transaction with persons with whom we had prior material business relations and were restricted from resale.
Item 6. | Exhibits. |
| Exhibit Number | Description |
| Certification of President pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
| Certification of CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
| Certifications pursuant to Securities Exchange Act of 1934 Rule 13a-14(b) or 15d-14(b) and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| ECCO ENERGY CORP. | |||
| Date: November 16, 2009 | By: | Jesse M. Ozbolt | |
| Jesse M. Ozbolt | |||
| Title: President and CEO | |||
| Date: November 16, 2009 | By: | /s/ N. Wilson Thomas | |
| N. Wilson Thomas | |||
| Title: CFO | |||
20