Unheralded

JIM FUGLIE: View From The Prairie — Like Rats On A Sinking Ship …

Meridian Energy Group, the troubled startup company that has announced plans to build an oil refinery next to Theodore Roosevelt National Park, has closed all of its offices and three of its top executives have left the company, leading energy industry watchdogs to question the future of the company.

The company lists three offices on its website, one each in North Dakota, California and Texas. In North Dakota, the company says its corporate offices are located at 13252 37th St. SW in Belfield. It’s pretty much a made-up address. (I sent them a letter there once, and it came back saying “no such address.”) There’s a small office in the corner of a steel building in Greg Kessel’s grain hauling operation a couple of miles west of Belfield with a sticker on the window with the company logo on it.

It’s a pretty impressive looking address on a website. A friend of mine says you know you are in rural North Dakota when your address is bigger than your cousin’s in Minneapolis. I’ve stopped there a number of times just to see if anybody really works there, but there’s never been a light on. I’ve tried calling the phone number listed, but the calls get automatically transferred to the company’s Finance and Administration Office phone in California, answered by a machine.

The Finance and Administration Office address is in Irvine, Calif., but the company has moved out. I talked to the property manager who’s trying to rent the space the company formerly occupied, which rents for about $75,000 a year, but he has no information about where they went.

The third office listed on the website is the Engineering and Operations Office in Houston, but that office space is listed for rent by the property manager as well. A machine answers all its phones.

There’s a fourth phone number listed on the website, labeled “Investment Opportunity.” No office address, just a phone number and fax number. Fax? Really? Still, they might just return your phone call if you call that number. I didn’t bother.

The website still has photos and biographies of 10 vice presidents of the company. I have no idea where they are working, if at all.  What I know is that three top executives have left the company in the past few months, including one of the big dogs, Lance Medlin, the company’s chief operating officer. Medlin is now listed as director of Construction for a company called Nacero, another company that says it is going to build a refinery that makes gasoline out of natural gas. He joined Nacero in April after nearly four years at Meridian, the past two as COO.

Also gone are Chad Hope, who had been Meridian’s CFO for the past four years — I don’t know where he’s landed, if anywhere — and Julia Olguin, the company’s executive vice president for Marketing and Strategy for seven years, who’s now CEO of a company called White River Holdings, an oil exploration company in Louisiana and Mississippi. The company’s announcement of her hiring in February listed her extensive background in the energy industry but made no mention of Meridian. Little wonder. She was one of the seven plaintiffs in the lawsuit against Meridian claiming more than $600,000 in unpaid salaries, and in fact is claiming the largest amount, nearly $250,000.

That lawsuit, which I wrote about last summer, has apparently been settled out of court. One of the plaintiffs I’ve talked to said the company agreed to pay the employees, and the case was dismissed in January. But as of this week, there’s been no payment. “Zero money and it looks like we all just get screwed out of it,” one of the plaintiffs told me this week.

One of the rats who hasn’t jumped off the sinking ship is this fellow Frank Goseco, the disbarred former California attorney who lists himself on the company’s most recent SEC filing as Meridian’s Executive Vice President and Board Secretary, although he doesn’t show up on the company’s website in either of those positions. The company took him off the site a couple of years ago after I started writing about him.

Goseco’s drunken run-ins with police and several criminal convictions (including hit-and-run and criminal trespass), led to several probationary periods, required treatment programs that he failed to complete, a suspended jail sentence, the suspension of his law license back in 2015 and eventual disbarment in 2019, while he was working for Meridian. You can read more about him here.

His two most recent SEC filings on behalf of the company showed the company had sold $9.5 million in stock from a $60 million offering as of March 4, 2020, and $11.2 million in stock as of April 29, 2021.

So, apparently the company was able to raise $1.7 million in capital during the past year, which is probably not even enough to pay 10 vice presidents listed on their website. Certainly not enough to start building their billion-dollar refinery — looks like they need another $989,000,000 to get that done. A little bit of that $1.7 million came from my friend, Richard, the old fellow out on the East Coast who invested “every penny of my 401(k)” in the company beginning back in 2017. He took some more out of savings this past fall and bought some more stock. He says he now has 47,000 shares, and he’s still pretty sure it’s a good investment. He just wishes the company would get the refinery built — he says he’s “running out of time.”

Still listed “in memoriam” on the company’s website among its executives is John Cloward, the company’s former senior risk manager, who died unexpectedly of a heart attack this past September. One of the company’s employees told me Cloward had pulled his 401(k) and invested it in the company before he died, leaving his wife and disabled daughter without access to those funds. I wasn’t able to find out if the company had bought back what is now his worthless stock. Cloward was a well-liked employee, who served as a Mormon missionary and was a Boy Scout leader for more than 40 years.

I don’t know what all this means for the future of the company or its proposed refinery. I think that their “Permit to Construct” issued by the North Dakota Health Department in 2018 and renewed for 18 months in late 2019 is going to expire next month if they have not started construction. There’s no evidence at the site that anything else is about to happen there. I suppose they can apply for another extension. I’ve asked the State Health Department if it has applied to renew again and am waiting for a response. I’ll let you know when I hear from them. I’ll be curious to see how long our state officials put up with this bunch before they just scrap the permit. I hope not much longer.




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