Speculative buy of EERG

[Justo]

I have been looking at a company for a friend who just invested and she really wanted me to invest in it as well. After going through EERG's financial statements it seems they had a really good year with over $5,000,000 in net sales and an EPS of 0.06. I thought that was extremely well seeing as their stock is only trading at .35ish.

But regardless on how well their stock is doing I think there is money to be made with their merger with AMZG. When the merger goes through AMZG will be absorbed by EERG, but AMZG shareholders will keep 80% of their shares and EERG will keep 20% of their shares. At first I thought that EERG shareholders were going to lose money, but by working with the numbers I think they will make money. Currently EERG trades at about 0.35 and AMZG trades at about 2.42.

80% of 2.42 is 1.936 and 20% of .35 is 0.07. Adding those two numbers up only gives us 2.006. So first off that 2.006 should increase at least back up to 2.42 (although I think it will go higher). Which means that anyone who buys EERG will make money even though their stock is being reversed 5 to 1 (which is where our 80% and 20% come in). For example, if you invested $1000 at 0.35/share you would have 2857 shares of EERG. With the reverse stock split you would have 2857/5 which is 571 shares. Multiply this by 2.42 and you have $1382. That is a gain of over 38%!

This stock has performed well since February, climbing from a low of 0.05 to a high of 0.42! Currently it is trading at about 0.35, but with oil prices skyrocketing due to conflicts in Libya and the nuclear meltdown in Japan, this stock should soar in the next couple of months due to the upcoming merger, the higher demand for oil, and (which I have not mentioned yet) the plan for EERG to jump up to a senior stock exchange. Good luck investors!

[gmarini]

Do you know when the merger is going to take place

[Justo]

According to EERG's Notes in their financial sheets they willl enter into a definitive agreement for the merger shortly after American Eagle files its Annual Reports on Form 10-K for our most recent fiscal year ended December 31, 2010. AMZG submitted their 10-K on March 23rd, 2011. They should be in the negotiating process as of March 23rd. You can check this at American Eagle Energy Inc | Investors. It is the fourth item down.

[gmarini]

Thanks Justo ..... I'll put it on my radar.

[Justo]

EERG has just announced that it will be merging with AMZG and EERG will be the surviving entity. This increases EERG’s leverage in the Bakken properties in both Alberta and Saskatchewan, meaning that the company has greater opportunity to strike an oil well. The company has also declared that it will be applying to move into a senior stock exchange.

Making it onto a senior stock exchange and out of the pink sheets signifies a great company. By merely being on a senior stock exchange tells people that this is a well ran company and lowers the risk considerably. This is a great time to buy EERG stock, as the company is making some big plays right now.

The company has said that it will buy back some of the stock to jump to the senior stock exchange. All this means is that you will have less stock but the price of each share will increase proportionately. Now is the time to buy in, as the jump to the senior exchange will drive the price higher than normal.