Blue Star Energy wants to go public

Colorado Springs-based Blue Star Energy Inc., an oil and natural gas exploration and development company, wants to go public to give its investors a way to sell their shares, according to a registration statement filed last week with the Securities and Exchange Commission.

Blue Star initially will not raise money by going public, although the company is nearly out of cash, according to the filing.

An existing 9.66 million shares that have been sold to investors would be offered for 50 cents a share, according to the SEC filing. All of the 2.47 million shares owned by Raymond E. McElhaney, company president and chief executive officer, would be offered for possible sale, as would all of partner Bill Conrad’s 2.32 million shares.

If the filing is approved, the shares will be traded on the National Association of Securities Dealers’s OTC electronic bulletin board of so-called “penny stocks.”

The company hopes to have SEC approval within 90 days, McElhaney said.

“Being public will help existing shareholders have a trading market for their securities with liquidity in the marketplace and will allow us to acquire additional properties,” McElhaney said in an interview Monday. “Going public gives you some basis of an asset value to look to when raising money.”

Blue Star has had no revenue since its May 2005 founding and has accrued losses totaling $635,729, the filing said. As of June 30, the company had $55,972 of working capital.

The company, with three full-time employees, plans to buy interests in oil and gas properties, the filing said. It already owns a 21.75 percent interest in an oil and natural gas well, the Stroh Prospect, in the Denver-Julesburg Basin near Fort Morgan. The company is considering installing a natural gas-fired generator on the site to produce electricity and sell it to utilities, the SEC filing said.

McElhaney and Conrad previously owned New Frontier Energy Co., a coal bed methane exploration company, which in 2002 merged with publicly held oil and gas company Wyoming Oil & Minerals Inc.

McElhaney and Conrad then spun off New Frontier Energy into its own public company, which continues to trade on the OTC bulletin board. McElhaney and Conrad have resigned from the staff.

“Most of the investors that invest with us privately and raise money with us like to have investments in public companies, so we thought it was best to get into that mode so investors will have a means of trading their stock,” McElhaney said.

CONTACT THE WRITER: 636-0235 or debbie.kelley@gazette.com