I try to write an update on the Meridian Energy Group, the company that wants to put an oil refinery next to Theodore Roosevelt National Park, when there’s some news to report about them. Today’s news comes from the United States Securities and Exchange Commission (SEC).
Meridian filed an amended report on its offering of securities with the SEC on October 13. There were just two changes from the report they filed back in April. I’m guessing one of those two things made it necessary to file a new report.
The first was they have sold another $54,000 worth of stock in their company since the end of April. That brings their total stock sales to $11,287,516 of the $60 million offering since 2018. That’s something. Pretty good news.
But the bad news (for them) is that they sold ONLY $54,000 worth of stock this year. Considering the price tag on the proposed refinery is almost a billion dollars, they’re not going to build a refinery any time soon if that’s the best they can do.
The second piece of news is that they’ve moved their offices in California. Included in the filing is a change of address from their fancy digs listed on their website at 2070 Business Center Drive, Suite 160, in a corporate business park in the Los Angeles suburb of Irvine, to a strip mall a half mile away.
Their new address listed on the SEC report is 92 Corporate Park, Suite C-333, Irvine, CA, 92606. Still a nice-sounding address, until you drive over and look at it. Suite C is one of ten storefronts in a strip mall. It’s a pretty cool strip mall though. Their neighbors:
Suite A – Drips Creamery Ice Cream store
Suite B – Yummy Yummy Chinese Restaurant
Suite D – Ding Tea Taiwanese Tea House
Suite E – Wynn Nails and Spa
Suite F – House of Kabob Persian restaurant
Suite G – Janny’s Donuts
Suite H – Siam Station Thai Restaurant
Suite I – 9Round Fitness
Suite J – Mr. Sandwich Sandwich Shop
When company executives were in Bismarck last month to meet with state regulators about keeping their North Dakota Department of Environmental Quality Permit to Construct active, they convinced the folks here they were closing in on a deal to bring the Wall Street firm Morgan Stanley or some similar investment bank onboard to finance their billion-dollar refinery. So this is going to be great! When the investment bankers show up in California with their checkbooks to write the billion-dollar check, they’ll have plenty of choices of places to chow down after they sign the papers!
Well, not exactly.
Because Suite C is not exactly the corporate offices of Meridian Energy Group. Suite C is home to Mailboxes & More, a mail drop and FedEx/UPS dropoff spot. And 333 is Meridian’s box number at the maildrop store, hence their address, Suite C-333.
It seems that’s what they’ve come to. Their high-flying offices in Houston (according to the property manager for the office building there, 16770 Imperial Valley Drive, in which they have been renting Suite 220, an 8,000 square foot luxury office suite which rents for $96,000 per year, which they list as their “Project Execution Office” on their website), is vacant and available for lease. Likewise for their Los Angeles office, more modest at just 1,500 square feet, which rents for about $35,000 per year. Cost of a box at Mailboxes and More? Under $50 a month.
Having spent pretty much all the money they’ve raised from unwitting investors, many of them senior citizens investing their retirement funds, they’re now operating out of a dropbox in a southern California strip mall. Ouch.
The thing is, if it weren’t for the SEC filing with the new address, no one would know that they aren’t still over in the corporate business park. Their website still lists three offices for the company. In addition to the California and Texas offices mentioned above, they list their corporate headquarters as 13252 37th St. SW, in Belfield, ND. That’s a big metal building housing the grain drying operation of Greg Kessel, on whose land they plan to build the refinery, just across the road. They’ve got a little cubbyhole in a corner of Greg’s building with a sticker affixed to the window on the door, which has been locked for months now.
The meager $54,000 in stock sales in the last six months is likely reflected in the company’s continued inability to pay its bills and salaries. I reported here last May that Lance Medlin, the company’s former COO, and Chad Hope, the former CFO, both left the company last spring, as did Julia Olguin, the firm’s Marketing EVP, who was one of seven plaintiffs in the $600,000 lawsuit filed against the company in the summer of 2020 seeking back pay. That suit has apparently been settled out of court, but I asked one of the other plaintiffs this week what the status of that was. The response: “For our settlement agreement, we have yet to see 1 cent.”
Somebody who hasn’t left the company yet, however, is Frank Goseco, who’s still listed as the Executive Vice President and Board Secretary of the company on the new report filed with the FEC. You’ll remember him—I’ve written about him before. He’s the disbarred California lawyer with a rap sheet a mile long, including multiple convictions for drunk driving, burglary and leaving the scene of an accident. His law license was suspended a number of times over the last 20 years, and he was finally disbarred in 2019, while he was serving as Executive Vice President of Meridian Energy Group. The California Bar Association maintains a 486 page file on him (Case Number 1 8-N-12368-DFM), with references to various crimes and instances “which may or may not involve moral turpitude.”
My favorite part of the report is the story of Goseco breaking into an apartment, opening the refrigerator, taking out some salami, and sitting down to have a midnight snack (actually, 1:30 a.m.). When the resident of the apartment heard someone in his kitchen, he got out of bed and confronted Goseco, who then fled the apartment. The resident called the police, and when they arrived, they found Goseco lurking in the trees beside the apartment building with, as the police officer described him, “. . . a strong odor of alcohol coming from his breath and person.”
Goseco was arrested and eventually convicted of burglary, one of a string of incidents including multiple drunk driving arrests and probation violations, that led to his disbarment. You can read the story on page 126 of the Bar Association report. I’m not sure if the folks at the SEC who read and file these reports have seen the Bar Association file. The investors who bought the $54,000 worth of stock reported to the SEC this year might be interested in who is managing those stocks for them though. Seems to me the Morgan Stanley folks might be interested as well.
Meanwhile, in an interview with the Williston Herald earlier this month, Meridian’s CEO William Prentice said the company is “six to eight months away from complete financing” for the project. “Morgan Stanley is starting that effort this coming Monday (Oct.4),” Prentice said.
I haven’t talked to anyone at Morgan Stanley about their commitment to this project, but I’ll be disappointed if they take it on. Although the giant investment bank is one of the top fossil fuel financing banks in the world, they’ve recently shown some signs that their enthusiasm for that is waning.
Last year the company announced a commitment to reach net-zero financed emissions by 2050, drawing at least faint praise from environmental groups like the Sierra Club. Their financing of a refinery would seem to be a step away from that.
In any case, if they should team up, the Morgan Stanley/Meridian Energy team in southern California will be well fed while they work out the details. Yummy Yummy. I hear the coconut pudding is getting rave reviews.