Chimera Energy Corp., which had seen its stock price increase substantially this summer based on its claims of a deal with Mexico’s state-owned petroleum company, has since lost both its CEO and almost all of its stock value in the wake of concerns about the accuracy of many of the company’s statements.

In August Chimera said Petroleos Mexicanos (Pemex) had agreed to use the Houston-based company’s extraction system in the Chicontepic Basin (see Shale Daily, Aug. 27). The system was designed to replace hydraulic fracturing without using water, natural gas “or the pumping of anything hot into the well,” Chimera said. In a flurry of subsequent press releases, Chimera also said it was in the process of reengineering the method for mass production, relicensing and sales, and would present the system at the North American Prospect Expo to be held in Houston in February. Chimera said it was keeping details of the process under wraps “until the company has their patent in hand…” (see Shale Daily, Aug. 2).

The company’s stock, which had been trading below 15 cents/share in June, increased in value during the summer, hitting a high of $1.84/share on Aug. 10. Since then its value has plummeted, reaching a low of 3 cents/share last week.

Chimera become embroiled in controversy after a pair of scathing reports published at claimed the company is not actually in business with Pemex and has “no tangible value” (see Shale Daily, Sept. 13). In September, an NGI’s Shale Daily review of more than 65,500 contracts — including nearly 2,700 Pemex contracts — published at, an online system where all Mexican federal government entities publish their contracts with third parties, found no mention of Chimera.

Chimera had a single employee, tangible equity of just $4,549 and virtually no revenue, but it had collected an estimated $8.2 million through sales of its shares, according to the anonymous authors of the Seeking Alpha articles, who acknowledged that they were short shares of Chimera “but stress that the amount of shares is insignificant as a percentage of our assets.”

In an Aug. 28 letter to shareholders CEO Charles Grob — Chimera’s only employee — said the “shorters” campaign was spreading “blatant lies” about his company.

Last month Grob resigned from all positions he had held at Chimera. “There was no disagreement between the company and Mr. Grob at the time of his resignation,” according to documents Chimera filed with the Securities and Exchange Commission (SEC). Concurrent with Grob’s resignation, Baldemar Rios, who had previously headed a Houston engineering services company, became Chimera’s CEO, sole director and corporate secretary, according to the documents.

In a letter to shareholders posted on the Chimera website, Rios said the company continued to work to finalize an agreement with Pemex, but was still fighting the “shorters” campaign.

“Despite countless hours in discussion with a variety of securities attorneys and broker/dealers we continue to be mystified by the unabashed short campaign being carried out against our stock,” Rios said. “While it seems obvious that a very aggressive short campaign exists against the stock, nobody we’ve contacted seems to be able to identify the individual(s) responsible for the campaign nor the methodology being utilized to continue the short indefinitely. The methodology has been described as ‘naked shorting,’ an activity that is manipulative and generally illegal.”

According to Rios, Grob held 46 million of a total of 66 million outstanding shares of Chimera stock on Sept. 30.

On Oct. 25 the SEC announced the temporary suspension of trading of Chimera shares until Nov. 7 “because of questions that have been raised about the accuracy and adequacy of publicly disseminated information concerning, among other things, the statements by Chimera in press releases to investors about the company’s business prospects and agreements.”

Neither Chimera nor Grob responded to a request for comment.