Weekly News Week of Feb 12- Mar 31, 2003

I've been pretty tied up the last 6 weeks and have not allocated much time to updating this web site.  However here goes the latest news:

I've been working on programming the parallel port on the laptop as this is the preferred future choice for accessing data from my Sercel 338B.  I'm afraid my Amiga computers are becoming obsolete as I compare performance of the 20-40 Mhz machines to my 2.4 Ghz laptop.  In fact the laptop runs an emulator for the Amiga computer faster than my fastest real Amiga.  The only hitch is that Microsoft Visual C++ does not directly support the parallel port, nor does the Amiga Emulator, so it leaves me in lurch for hooking the laptop to the Sercel 338B.  Also for years I have been plagued by slow data transfer times from my 338B parallel interface to the computer hard drive, as well as demuxing and viewing the shot record, a process that takes 2-3 minutes.  As the shooters can shoot a shot every 3 minutes, it generally leaves them waiting on the computer while they stand out in the field getting colder.  I am making good progress and hope to have the basic computer software to open communications with the port done this week.

The OCC did decide retroactively to file contempt charges on 3 disposal wells.  Total fines possible are only $48,000,000.  That's $5,000/day for 3 wells for 8 years.  In practice however, to make the EPA satisfied, they have to file these charges to cover the UIC department, the reality of the violation should be any where from a letter of reprimand to an administrative fee of $500 or so, or so they say, as I am still waiting to see what exactly they are going to do, I should find out more this week about whether I will really have to go to court.  The field rep is on my side and thinks I should not have to be fined or charged at all.  And the District office is at odds with the OKC office.  Anyway this whole thing has been very disturbing to me as I walk the line of poverty to save the company, and my personal butt.  Especially since I am down from a starting list of 23 wells in April of 2002 to one well left to go in April of 2003.  I am so broke now that I am just kind of waiting to see how I can pay to fix the last one.

John & I have been working out okay in handling the work, while Dale is off to pursue other interests and more money.  I don't get as much done as I used to, but I am hoping my overhead is coming more in line with the income.  Of great concern to me is handling the debt, and trying to muster up enough cash to do something good.

Oil prices have saved my butt, they have been the best we have seen since I have been in this business.  I don't know how much longer they will last, but as long as they last, I have hope of fixing some of the more immediate problems and getting ready to think a bit longer term.

Cindy is progressing along with her Leukemia.  We found out yesterday that her brother Casey is a match for a donor for a bone marrow transplant.  This is good news as it is an option which gives hope for a complete cure.  The Glevec medicine she is on at $2,150/month is doing the job of keeping her alive, but not without side effects that are not nice.  In fact they are so unpleasant that it increases the desire to go for the cure, even though there is a 30% chance of dying by making the attempt.  Between Cindy's cancer and the OCC my old  body has had about as much stress as it can muster, not including the day to day stresses of keeping wells going and fighting all the varieties of opposition to a small independent oil man.

My farm-out negotiations with K&E on the Akin & Khan went south.  I thought we were getting close to having a four well program over 2 years, but they were stuck on drilling one well and tying up the entire 770 acres for 2 years and perhaps drilling 3 more at the end of 2 years with lots of if, ands, or buts.  As much as I wanted to get some wells drilling, I decided their proposal was not good enough.  So I'll keep shopping around for another deal.

As I think about it the past year has been about as tough of year as I have ever imagined could happen.  I don't suppose much more could happen than it has without resulting in a death.  I mean one key salvo could sink the company, or perhaps my health will fail, how much stress can one human bear?  When the contempt charges came from the OCC, I thought well this is it, this is how it is going to end.  However, I got on the phone and did my best to stop the proceedings that could kill Gateway.  I decided that the death of Gateway at this time will have to come from an external source, something else will have to kill it, as for me I have proven that it won't be me quitting, as long as I have strength.

I pretty much walk alone right now.  For the most part the shareholders have gone away, my wife is working for another company, and battling her cancer, she has no energy for anything else.  I can only afford to hire John Gallie part time who is mentally disabled and his health is failing, don't know how much longer he will be there.  I have a mountain of debt and a pile of financial needs.  I suppose things are about as bleak as they have ever been for me.  If oil prices go low again in the near future it will be over for Gateway.  There will be little I can do to stop it.

That said, at least for today oil prices are not low, and I am still empowered to make a fight, I have not lost my health, strength, or will to fight.  I still have hope that I can find ways to win when winning seems impossible, in that respect it is a challenge.  I still fantasize that perhaps some day a shareholder, or a friend will call me up and in stead of judging me as a failure, and criticize my every move, will actually say "what could I do to help?"  That's the way it was when this company was started, it wasn't full of shareholders who stood off worrying about "what's in it for me" and "I don't want my money to help another besides myself".  Throughout all of this I have been the one constant, the one thing that never changed, that is my willingness to fight and not give up.  Obviously to others it seems this is not a virtue worth supporting. 

I really don't know if in the end I will make it or not.  If I had to forecast, I'd say there is a 40% chance Gateway will not be there in one years time.  If I make it a year I may make it ten more.  Well I've got to go.  If you've read this, thanks for taking time.  If you want to lend a hand of support or confidence drop me a line.  If you want to tell me what I am doing wrong, keep it to your self.