Follow up to Bayside Corp.’s press release on July 23, 2013 for heavy fuel oil exports

Date: 23.02.2014 | admin | Updates

Bayside Corp. follow up

Follow up to Bayside Corp.’s press release on July 23, 2013 for heavy fuel oil exports

In a follow up to Bayside Corp.’s press release on July 23, 2013 “ Bayside Corp. Receives Heavy Fuel Oil Purchase Orders for 1,200,000 M/T Annually”

Through Bayside Petroleum Company, Inc. a subsidiary of Bayside Corp. the company specializes in the profitable business of reworking and re completing ‘marginal’ oil and gas wells located in the thousands of mature oil and gas producing fields across much of the United States.

In the spring of 2013 the Bayside management team began negotiations with a Chinese based importer of petroleum products. The negotiations started because of the company’s desire to diversify its business model. In the negotiations Bayside would supply 1,200,000 M/T of heavy fuel oil annually to the Chinese based company.

After a few months of successful negotiations, and then on July 19, 2013 Bayside Corp. announced that it had received and accepted a purchase order from the Chinese based importer for the purchase of 100,000 M/T of heavy fuel oil for 12 months (1,200,000 M/T annually). The terms and conditions of the deal including the procedures for payment, banking, and the transfer of money was outlined in the purchase order and agreed to by signature from both parties.

To continue, a secondary purchase agreement was signed several days later to provide an additional 400,000 M/T for a total of 6,000,000 M/T annually of heavy fuel oil to affiliates of the Chinese based importer, upon the successful completion of the trial period that was defined in the first purchase order.

On July 24, 2013 Bayside also completed negotiations on the shipping and payment procedures with its supplier for the heavy fuel oil exports. Shortly thereafter, on August 12, 2013 Bayside signed a formal contract with its supplier for a monthly supply of 500,000 M/T of heavy fuel oil and simultaneously completed export financing for the shipment of heavy fuel oil.

The trial phase that was outlined by the first purchase order called for a one time shipment of 50,000 M/T first, then upon the successful completion of the trial run, the regular amount of 100,000 M/T would be required every month thereafter for the defined period on the purchase order.

The first shipment of 50,000 M/T of heavy fuel oil was slated to depart around the beginning of September 2013 and expected to land into the Chinese port towards the beginning of October 2013.

Towards the end of August 2013 the Chinese importers wanted to renegotiate the original payment procedures that were originally agreed to. Citing that they would not be able to comply with the specific banking instruments that were required of them and as a result they needed to renegotiate the payment procedures.

Bayside did its best to accommodate their request and after several months both sides agreed to new payment procedures that were conducive to both parties. However, Bayside had to subsequently renegotiate its contract with its supplier and expected to begin the shipment of heavy fuel oil at the start of 2014.

Towards the end of 2013, Bayside was notified again that due to a shift in market prices that the companies selling price for heavy fuel oil was no longer acceptable and that the company’s contracted price needed to be renegotiated.

Bayside continued to do its best to renegotiate the price of the heavy fuel oil in order to satisfy both parties, however presently the Bayside management team has determined that the negotiations have failed and an acceptable price can not be met by both parties.

Since the negotiations have come to a halt, the Bayside management team has made a decision to pursue and focus on other options that are available to the company. The company has since notified the Chinese importer that it would no longer be proceeding with any negotiations for the export of heavy fuel oil.

Currently, Bayside Petroleum Company, Inc. still continues to move forward and has restrategized its plan on how to take advantage of the potential oil and gas lease acquisitions that it’s targeted. The company is also in the process of re-branding its image and expects to launch its new website, updated with the most current information, events, changes and goals in the upcoming weeks.

In 2014, Bayside Corp. celebrates 30 years of business success, innovation and vision. At Bayside, we believe that the future is now because our efforts to build shareholder value for the future will have a positive impact on the world around us today.

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