We were organized under the laws of the State of Nevada on January 7, 1982.
We are authorized to issue 47,500,000 shares of common stock par value $0.001
per share. On January 12, 2012 we implemented a 50:1 reverse stock split of
our common stock.
Prior to May 3, 2006 we operated under the name Victory Capital Holdings Corporation
among other corporate names.
Our common stock is quoted under the ticker symbol VYEY on the OTCQB, operated
by OTC Markets Group.
We are the managing partner of Aurora Energy Partners, a Texas general partnership
that we refer to as Aurora, and we hold a 50% partnership interest in Aurora.
Aurora is our consolidated subsidiary for financial statement purposes. The
Second Amended Partnership Agreement of Aurora, which we refer to as the Aurora
Partnership Agreement, gives us control over Aurora. Article XI of the Aurora
Partnership Agreement cannot be modified without the approval of all (100%)
of the partners of Aurora; therefore, we cannot be removed as a managing member
of Aurora regardless of the percentage partnership interest held by the other
partners of Aurora. Accordingly, consolidation is appropriate for all reporting
periods. We currently conduct all of our oil and natural gas operations through,
and hold all of our oil and natural gas assets through, Aurora. Aurora is the
record title holder to substantially all of the oil and natural gas properties,
wells and reserves referred to in this annual report. Through our partnership
interest in Aurora, we are the beneficial owner of 50% of the oil and gas properties,
wells and reserves held of record by Aurora.
Victory is one of two partners in Aurora, which was established in January 2008.
The second partner in Aurora is the Navitus Energy Group, which we refer to
as Navitus. Navitus is also a Texas general partnership. We work together with
Nativus to increase proved reserves and the valuation of Aurora. We plan to
eventually consolidate 100% of the ownership of Aurora under Victory and thereafter
move to a national securities exchange such as the NYSE or NASDAQ.
Navitus Partners, LLC, a partner in the Navitus general partnership, continues
to raise capital for contribution through Navitus to the Aurora partnership,
the net proceeds of which will generally be used to fund Auroras operations,
as well as for the potential acquisition and development of targeted oil and
gas opportunities. The investors in this offering will receive a 10% preferred
return through their indirect interest in the Navitus partnership for five years
and one warrant to purchase one share of Victory common stock for every dollar
invested and additional benefits. Under the terms of the offering, Navitus has
the right to contribute up to $15 million into Aurora and Victory is obligated
to match the capital contribution amount of Navitus resulting from the offering.
Victory is also required to match previous contributions made by Navitus. Under
the agreement, Victory may also raise funds from other sources. Substantially
all producing oil and natural gas assets are held in the Aurora partnership
during the five year term of the Aurora Partnership Agreement which ends in
October 2017. As of December 31, 2016, Navitus has contributed an aggregate
of $9.4 million into Aurora.
We are independent growth-oriented oil and gas exploration and production company
based in Austin, Texas. We have historically been focused on the acquisition
and development of unconventional resource play opportunities in the Permian
Basin, the Eagle Ford shale of South Texas and other strategically important
areas that offer predictable economic outcomes and long-lived reserve characteristics;
however we will also pursue opportunistic acquisition in other areas of the
country. Our current asset portfolio includes both vertical and horizontal wells
in prominent formations such as Eagle Ford, Austin Chalk, Woodbine, Spraberry,
Wolfcamp, Wolfberry, Mississippian, Cline, Fusselman and Ellenberger. We are
focused on creating stockholder value by rapidly growing conventional oil and
liquids-rich natural gas reserves and cash-flow via continued low-risk vertical
well development on existing properties, as well as through the acquisition
of new economically strong producing properties. This focus on returns is achieved
by targeting predictable conventional and resources plays that provide favorable
operating environments and lifting costs.
We have carefully assembled a management team with direct and relevant oil and
gas experience, who also hold extensive industry relationships to help grow
the Company. Management is supported by a team of third-party professionals
on an interim and as-needed basis. This team includes geologists for prospect
evaluation and assessment, reservoir engineering resources for the analysis
of current and new properties, and a finance executive for accounting, financial
reporting and other back-office support. Reserve reporting is performed by a
third-party engineer located in Midland, Texas. Each independent operator utilized
by the Company also has their own array of experts tailored for the specific
formations and well completion techniques of each property in which the Company
holds an interest. We strategically utilize both internal capabilities and strategic
industry relationships to acquire non-operated, high-grade working interest
positions in predictable, low-to-moderate risk oil and gas prospects. To help
grow the Company and lower field level operating expenses, we also plan to build-out
an internal operating team in the near-future.
As of December 31, 2016, we had 30 gross wells on production. Our portfolio
of producing assets now includes the following properties: the Eagle Ford Property,
the Fairway property, the Bootleg Canyon Ellenberger Field, the Adams-Baggett
Gas Field, the Morgan property, the Uno-Mas property and the Clear Water Wolfberry
resource property. Proved commercial accumulations of hydrocarbons now occur
in multiple horizons, at depths ranging from 4,700 to 13,100 feet, with the
majority of proved reserves being located on properties in the Permian Basin
of Texas and New Mexico.
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