1191359--1/8/2009--ARKANOVA_ENERGY

related topics

{gas, price, oil}

{stock, price, share}

{acquisition, growth, future}

{loss, insurance, financial}

{loan, real, estate}

{debt, indebtedness, cash}

{control, financial, internal}

{personnel, key, retain}

{cost, regulation, environmental}

{competitive, industry, competition}

We have had a history of losses and no revenue from incorporation to the year ended September 30, 2008, which trend may continue and may negatively impact our ability to achieve our business objectives. We have a limited operating history, which may hinder our ability to successfully meet our objectives. Our proposed operations will require significant capital expenditures for which we may not have sufficient funding and if we do obtain additional financing, our existing shareholders may suffer substantial dilution. The successful implementation of our business plan is subject to risks inherent in the oil and gas business, which if not adequately managed could result in additional losses. Our future performance is dependent upon our ability to identify, acquire and develop oil and gas properties, the failure of which could result in under use of capital and losses. We have a very small management team and the loss of any member of our team may prevent us from implementing our business plan in a timely manner. Future growth could strain our personnel and infrastructure resources, and if we are unable to implement appropriate controls and procedures to manage our growth, we may not be able to successfully implement our business plan. Market conditions or operation impediments may hinder our access to natural gas and oil markets or delay our production. We might incur debt in order to fund our exploration and development activities, which would continue to reduce our financial flexibility and could have a material adverse effect on our business, financial condition or results of operations. We will have substantial capital requirements that, if not met, may hinder our growth and operations. Our properties in Arkansas, Colorado and Montana and/or future properties might not produce, and we might not be able to determine reserve potential, identify liabilities associated with the properties or obtain protection from sellers against them, which could cause us to incur losses. We are subject to ongoing obligations under our Acquisition and Development Agreement. If we or our operators fail to maintain adequate insurance, our business could be materially and adversely affected. The oil and gas industry is highly competitive, and we may not have sufficient resources to compete effectively. Complying with environmental and other government regulations could be costly and could negatively impact our production. Shortages of rigs, equipment, supplies and personnel could delay or otherwise adversely affect our cost of operations or our ability to operate according to our business plans. To the extent that we establish natural gas and oil reserves, we will be required to replace, maintain or expand our natural gas and oil reserves in order to prevent our reserves and production from declining, which would adversely affect cash flows and income. The geographic concentration of all of our other properties in eastern Arkansas, Colorado and Montana subjects us to an increased risk of loss of revenue or curtailment of production from factors affecting those areas. The oil and gas exploration and production industry historically is a cyclical industry and market fluctuations in the prices of oil and gas could adversely affect our business. Our ability to produce oil and gas from our properties may be adversely affected by a number of factors outside of our control which may result in a material adverse effect on our business, financial condition or results of operations. We may be unable to retain our leases and working interests in our leases, which would result in significant financial losses to our company. Title deficiencies could render our leases worthless which could have adverse effects on our financial condition or results of operations. A decline in the price of our common stock could affect our ability to raise further working capital and adversely impact our ability to continue operations If we issue additional shares in the future, it will result in the dilution of our existing shareholders. Trading of our stock may be restricted by the Securities Exchange Commission s penny stock regulations, which may limit a stockholder s ability to buy and sell our stock. The Financial Industry Regulatory Authority, or FINRA, has adopted sales practice requirements which may also limit a stockholder s ability to buy and sell our stock. Our common stock is illiquid and the price of our common stock may be negatively impacted by factors which are unrelated to our operations

Full 10-K form ▸

1191359--1/8/2009--ARKANOVA_ENERGY_CORP.