"Glori Energy is a Houston-based energy technology and oil production company that deploys its proprietary AERO(TM) System to increase the amount of oil that can be produced from conventional oil fields. Glori owns and operates oil fields onshore U.S. and additionally provides its technology as a service to E&P companies globally. Only one-third of all oil discovered in a typical reservoir is recoverable using conventional technologies; the rest remains trapped in the rock. Glori's proprietary AERO System recovers residual oil by stimulating a reservoir's native microorganisms to sustainably increase the ultimate recovery at a low cost". From the LinkedIn Profile.
Glori Energy is a tiny oil production company which also has a proprietary technology (AERO) for enhancing flow from wells. The Company has been around since 2005 and is public, which results in substantial financial disclosure. However, the Company is on its last legs due to the oil price drop, and de-leveraging the balance sheet. IIIQ 2016 results had quarterly sales at $1.1mn and Adjusted EBITDA at ($0.75mn). The AERO technology did not bring in a dime of revenue in the quarter. Most of the remaining resources of the Company-and management-are focused on funding and opening a new Phoenix oil field to demonstrate the AERO technology in action, and an ongoing effort to raise capital from the Department of Energy. Hope springs eternal but with cash down to under $2mn and no other existing funding source, the picture is bleak.
Two BDCs have exposure to the Company, aggregating just under $2mn. Hercules Capital (HTGC) has a small common stock investment of $165,000, left over from a larger financing provided years ago. Stellus Capital (SCM) has a $1.6mn stake in the Company's $10mn Term Loan that matures in March 2017 and is secured by oil wells. That's been worked down-thanks to repayments-from close to $3mn. The common has been written down to zero and any recovery is highly unlikely. SCM's debt,though, is carried at close to par thanks to the collateral involved. No material loss is expected.
The BDC Credit Reporter has a Corporate Credit Rating of 4 on Glori because- despite its ever-worsening business and financial conditions- obligations have been met. Still the credit trend is down for the Company after reviewing the November 9th 2016 financial statements even if the impact on the two BDCs involved might be negligible. Bankruptcy seems almost certain.