Another construction season has come and gone in North Dakota. It’s about the fourth construction season that Meridian Energy Group has promised (threatened?) to build an oil refinery three miles from Theodore Roosevelt National Park. So far, we’ve dodged a bullet.
The company has been plagued by financial problems. They’ve had a two million dollar lien placed against them in North Dakota and a lawsuit seeking hundreds of thousands of dollars in back wages filed against them in Texas.
I’m puzzled by what’s going on –or not going on—in the Texas lawsuit. In July of this year, six current and former (although the current may be former now) employees filed a lawsuit seeking more than $600,000 in back wages. I’ve checked the Harris County Clerk of Court’s website from time to time and Meridian has not yet filed a response with the court.
I’ve been told the company has made an offer to pay the six employees, but nobody’s talking about an amount or a schedule. I’ve called the employees’ law firm a few times and left messages, but no one calls me back. I can only guess that Meridian’s offer includes an agreement not to talk to the media.
Meridian’s fundraising, on a small scale, is ongoing. You’ll recall last spring I wrote an article here about a fellow I called Richard who has invested his 401(k) in Meridian stock. When I wrote that in April he had invested his entire retirement account, more than $100,000, in amounts of $25-35,000 over a three year period, beginning in 2017. As of April he had received no return on his investment except for stock options and warrants.
I talked to Richard again last week. He said he got another phone call from Steve Gjolme, the leader of Meridian’s boiler room operation, and after their phone conversation Richard sent him another $35,000 from his personal savings in September of this year. He was a little concerned, he said, because he had not received any stock certificates yet.
I asked him if he was troubled by not receiving any cash dividends on an investment that now approaches $150,000. “Well, a little,” he said. “I’m 77 years old. The clock is running out.”
He said he’s been reassured by Gjolme that there’s going to be some action now that all the environmental lawsuits have been settled. And he said he thinks they’re going ahead with building another refinery in Texas.
Meridian has, indeed, announced plans to build a refinery there, but they’re no further along there than they are in North Dakota. And there are no environmental lawsuits standing in their way down there. They’re telling the Texas folks they’ll build that one after they’ve got their North Dakota refinery running.
I was out in western North Dakota, by the way, a few weeks ago, and decided to stop by the place the company advertises as its “Corporate Offices” at 13252 37th St. SW, in Belfield. You might recall I tried sending a letter to the company at that address last spring but it was returned saying there was no such address. Well, I found it.
Turns out that Greg Kessel, the Belfield farmer on whose land the refinery is supposed to be built, has a farm just west of Belfield, and across the road from his farm is a big grain cleaning and storage operation. There, tucked away in a corner of a big steel pole barn type building which Greg uses for maintenance and storage, is a little cubbyhole of an office with a 4-inch high sticker on the door that says “Meridian Energy Group” and has a company logo on it. That’s their corporate office. No one home, of course. The fellow who used to man that office, Todd Tooley, is one of the plaintiffs in the lawsuit over back pay. I don’t know if Todd still works for them or not.
Meanwhile, I keep getting phone calls and e-mails from others who have connections to the company, offering me little tidbits of information. Most of them call or write to tell me they’re read my blog posts about Meridian and that I’m right about them being a sleazy company and that they don’t think the refinery is ever going to be built. I hope they’re right.
This week I got an e-mail from someone whose connection to the company I’m not sure of, with an attached video, the one the company produced some years ago to send out to prospective investors. It makes some promises the company can’t keep, so they pulled it from their website. It’s about three minutes long. You can look at it here if you want to. It’s pretty slick. The e-mail said,
Here is the removed Meridian Oil video showing their top execs and Frank Edward Goseco (the disbarred lawyer who is their general counsel) who is still there, they are paying these guys a luxury lifestyle mint worth of investor funds. They are going to be moving dirt around and tearing up more land, and building some buildings… I foresee a disaster.
They’re a bunch of crooks.
DO NOT USE MY NAME OR EMAIL please
I think these people are dangerous
Keep an eye on them and publish more.
Another one of my recent callers told me he knew something about the finances of this refinery and about the oil refinery business, and offered to write a story for my blog. I told him I’d welcome that. So here’s what he sent me. I don’t think I need to comment on it. It speaks for itself.
“You probably are aware by now that Meridian got a favorable ruling on their 2nd of two cases pending before the ND Supreme Court. Though I believe the court found properly on the issues before it, it was a split decision none the less. Among other things, they were only asked to decide on the narrow issue of if Meridian had followed the law and permit process properly in making their applications, and if they legally COULD build the Davis refinery on the designated site.
“In an odd sort of way, that decision was a gift to the taxpayers of North Dakota. Here’s why;
“This deal is economically unfeasable in the current environment. The numbers simply don’t work (more on that in a future post). While they MIGHT have, back when the idea was first hatched in 2013, and the days of $100 oil, they don’t in what seems to be our current trading range of $35-$55 oil. The margins simply aren’t there any more, despite any location advantage this facility might enjoy.
“Those US refineries that can (such as Dakota Prairie in Dickinson) are converting from hydrocarbon conversion to biodiesel—much more profitable. Existing refineries (such as the Martinez refinery near San Francisco) are being sold at 1/3 the per refining capacity barrel cost of the “to be built” Davis/Meridian one.
“Their financing plan has more band-aids and zippers on it than Frankenstein. Not the “Puttin’ on the Ritz” one from Young Frankenstein, but the REAL one. Tons more problems lurk ahead. Their management is a collection of souls from the island of misfit boys. Not to mention our friend Frank Goseco (the disbarred attorney who does their legal work—I wrote about him earlier this year). Can anyone say; “Pass the salami please?”
“Staff is quitting by the bushel, and according to the July lawsuit, nobody is getting paid by these guys. Lawsuits, liens, and unpaid bills abound. And now they want to pretend this “just ain’t so,” and raise a BILLION dollars from sophisticated wall street institutions? HA!! Let’s get real.
“Institutional investment money is the most cowardly of all commodities. One whiff of a bad odor and it heads for the hills, and doesn’t look back. No institution in their right mind is going to give these guys a billion dollars on this Rube Goldberg business plan that was just cobbled together, to find out if they can make things work. Nobody.
“And, last I heard, “Fantasyland” is not a location that wants to expand its footprint to Dickinson.
“Had the ND Court held that Meridian needed to find someplace new, that might have given them an excuse to file bankruptcy and launch a counter-suit against the state for wrongful denial of their project permit. It could have gone on for years. As these things go, at the least, the state might have found a way to settle it. And, knowing how these things go, it probably would have been a number equal to the amount of money that’s been frittered away by the company, and their outstanding liabilities. Somewhere in the $60MM range is my guess.
“So there you have it. The emperor is standing there with no clothes in the middle of the street, with yet another winter coming soon to ND. The High Court has done us a favor by calling them out on it. North Dakotans should count their blessings.
“Stay Tuned. The end is coming soon.”
Well, that is interesting insight from someone who knows the business, and apparently knows Meridian as well.
One last observation. Meridian, from the very first day they set foot here, tried to establish some credibility by touting the fact they were from South Dakota. Here’s what it says on their website’s Investment page:
Meridian Energy Group, Inc. is a privately held South Dakota corporation focused on developing oil refineries in strategic locations. Meridian also partners with capable entities to develop related infrastructure opportunities.
You can look at their investor page here if you want to get rich.
I tried to figure out long ago where their South Dakota office is located. Turns out they don’t have one, not even in a cubby hole in a pole barn like the one in Belfield. It looks to me like they just incorporated there for tax purposes. South Dakota has some pretty friendly business tax laws.
But to be a “South Dakota corporation,” They have to have a registered agent there. So they hired this front group called InCorp to be their registered agent in South Dakota, since they have no office there.
I Googled InCorp. Here’s what I learned.
- We are located in all 50 states, Washington D.C., Puerto Rico and the United States Virgin Islands (USVI), ensuring accessibility and convenience to each client–regardless of state/jurisdiction.
3773 Howard Hughes Parkway
Suite 500 s
Las Vegas, NV 89169
P.O. Box 94438
Las Vegas, NV 89193
Corporation and LLC Formation Services Online!
InCorp prices starting at $99 plus applicable state fees. InCorp is the low-cost cutting edge leader in forming your new Corporation, Limited-Liability Company (LLC), or any other type of business entity in all US states and DC.
Well. Las Vegas.
The state of South Dakota requires LLCs and corporations filed in South Dakota, such as Meridian, to have a Registered Agent, and the Registered Agent must be located and available at a physical street address, within the state of South Dakota, during normal business hours. So that’s the extent of Meridian’s business operations in South Dakota. For just $99 a year, it’s quite a bargain.
By the way, although InCorp is a Las Vegas company, it looks like, according to their registration with the South Dakota Secretary of State, they have an office address in Sioux Falls, South Dakota. The address they list there, though, is for the office of a company called Walker Global Investments, a small shop operated by a fellow named Jonathan Walker, who I am guessing is, in turn, InCorp’s agent in South Dakota. My, what tangled webs we weave . . .