This column is strictly my personal opinion regarding one or more of the Special Situations I follow. I will be replacing this column each time one of these companies has reached what I feel is an important milestone. Many of you told me the Web has lots of facts, but is almost totally lacking in opinion. You asked me to give my personal interpretation of what is happening. That's what this column does.

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Current Opinion:

Date Posted: 05/05/08

Monogram Energy, Inc. (Other OTC: MGRN)

I just began looking at this emerging growth company. This is my first impression. Because of the present energy situation in the U.S., I am looking at oil & gas companies, especially some of those that appear to have a good chance of doing well. After I interview the CEO at Monogram, I will do additional coverage.

What MGRN Is & Does

MGRN is an independent energy company. It acquires, develops, & exploits prior producing oil & gas leases with proven reserves that have the potential for increased production. It intends to enhance the recovery rates of those wells by using improved chemical treatments, new equipment, new technology, & chemical fracture stimulation systems. From my experience, using these methods has produced excellent results.

Comment

My thinking is that we should do whatever we can to increase oil & gas production right here in the U.S. That’s probably one of the best ways to reduce our dependence on Middle East energy sources, & reduce the number of price increases, such as we’ve recently seen. Actually, the high price of oil is one of the elements that have made it easier for domestic oil companies to increase their operations here in the U.S., but we’re really at the mercy of OPEC as far as additional price increases are concerned. We’ll probably not see a reduction in gasoline prices for a long time, but if we substantially increase our domestic oil production, we may be able to slow down some of the future price increases that would otherwise certainly continue.

I understand it’s been reported that the Bush administration has removed barriers to drilling on a net 45 million acres in 12 western states & has lifted environmental protections & emphasized drilling on lands already open to oil & gas development. This type action opens the doors for domestic oil & gas companies, including Monogram Energy.

Recent News

4/30/2008 -- MGRN announced it generated its first sale from the five wells on its T.W. Martin Lease. It expects continued increases in revenue from the ongoing sale of its successful work-over projects & from future lease acquisitions. This sale, in the amount of $18,000, represents the first round of oil to be sold, & additional sales are expected within the next 30 - 45 days. CEO Billy King said: "We are extremely pleased to get this first sale under our belts -- it's just the beginning for us. The company is looking to acquire another six to eight leases by year's end.”

4/24/2008 -- Apr 24, 2008 – MGRN announced it accelerated its acquisition plan by acquiring the Lacy Rice Lease in Corsicana Shallow (Navarro County, TX), which comprises 100.74 acres & three wells, as well as the M.L. Rice Lease, which comprises eight acres & four wells in the same region. It officially acquired the Rice leases on 3/19/2008. Management estimates it will cost $25,000 - $30,000 to bring the wells back into production, & expects the workover on the Rice leases to begin within the next 30 - 45 days, & to be completed within a 2 - 3 week period, for a total of seven wells (six oil wells & one injection well). Once the workovers are complete, the Rice leases & the T.W. Martin Lease currently in progress are estimated to produce 450 barrels per month. The T.W. Martin lease comprises 70 acres with 12 wells & is also located in Navarro County. The county produces about 600,000 barrels annually. "We are extremely pleased to have made this recent acquisition, & it should help provide us with the ability to continue our acquisition plan," stated CEO Billy King.

My Opinion

I like the fact that MGRN plans to reinvest from its net operating cash flows to expand existing production, & plans to acquire new producing properties through a balanced mix of debt & equity.

I like the company’s acquisition strategy. It’s acquisitions will preferably be completed by private negotiations & not via competitive bidding, making the price to more accurately reflect value. The purchase price actually reflects the value of proven producing category reserves only, with only a small value being paid for exploration upside potential. The objective is to achieve payback on capital in three months or less on funds invested. I also like the fact that the company is acquiring ownership of multiple production leases & wells, which of course reduces production risks.

With oil prices reaching as high as $119 a barrel, MGRN is positioning itself to capitalize from a growing domestic industry.

I am impressed with the backgrounds of the key people. For example, CEO Billy King graduated from St. Mary’s University School of Law, & has been in the field of oil & gas law for more than 30 years. He became interested in the production of oil & gas during his 10 years of employment as an attorney for the Halliburton Company, & with his representation of independent oil companies during his years as a private practitioner. His goal for MGRN is to maintain a high risk/reward profile, to return the most value to its shareholders.

I suggest that you look into this situation. There are 251,322,305 shares outstanding, & 25,517,160 in the float. The price at the close on 5/2/2008 was $0.07 on a volume of 48,188 shares. Stay tuned for more details as I continue my investigation.

Monogram Energy is located at 3320 FM 359, Richmond, TX 77469. Call 281-341-5255 or email: info@monogramenergy.com.

For more information, please contact MicroCap Management LLC, 1768 Park Center Drive, Suite 325, Orlando, FL 32835 at 407-822-1110. Their Email: info@themicrocaptimes.com
Their Website: http://www.microcapmanagement.com

My comments in this column are strictly my personal opinion. At times, I will include forward-looking information as that term is defined in the Private Security Reform Act of 1995. Such information & the related company are subject to many risks & uncertainties. There can be no assurance that actual results, business conditions, business developments, losses & contingencies, local & foreign factors, & other matters will not differ materially from those suggested in any of my forward-looking statements. Such differences are the result of all sorts of factors (some examples: market conditions, competition, advances in technology, acquisitions, mergers, potential litigation, personnel changes, market changes, capital availability, etc., etc.).

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