Callan Power LLC, the subsidiary Callan JMB announced Aug. 6 to bring transformer manufacturing to the Atlas Complex in Marion, has agreed to buy oil and gas leases in the Williston Basin of North Dakota and Montana, will be run by the founder of Northern Oil and Gas, and will be renamed Reger Energy LLC within six months of closing, according to the company’s filings with the Securities and Exchange Commission.
Under an asset purchase agreement signed Aug. 19 and announced the next day from Spring Branch, Texas, and Wayzata, Minn., Callan Power will acquire about 130 leases and the right to use a seismic data library from Reger Oil Inc., a Nevada corporation, in exchange for 1,000 shares of newly created Series A preferred stock with a stated value of $10 million and $2 million in cash due by Dec. 31. The preferred stock converts into common shares at $2.10 a share, or about 4.76 million shares, which the company says would dilute existing stockholders by about 54 percent if fully converted. Closing is expected by Sept. 22, and either side may walk away if the deal has not closed by Oct. 31.
The company says the leases anchor a planned 23-well drilling program in the Red River formation, at one well a month from May 2027 through March 2029, with Chandler Energy LLC as operator holding a 25 percent working interest and Callan Power holding 75 percent. Callan JMB projects about $252 million in cumulative net operating cash flow over the life of the wells, including $25 million in 2028 and $42 million in 2029. The release says those figures assume a flat oil price of $75 a barrel, are internal estimates, and have not been audited or prepared by an independent reserve engineer.
The company’s SEC filings show the oil deal was in the works before Callan Power was ever announced as a transformer maker. A preliminary information statement filed July 31 identified Callan Power as the buyer of Reger Oil’s Williston Basin portfolio and said CEO Wayne Williams and Chief Medical Officer David Croyle, who together hold 55.9 percent of the voting stock, had signed a written consent approving the transaction that day.
Six days later, Callan JMB announced the formation of Callan Power to manufacture transformers at the Atlas Complex, with no mention of oil and gas. The Aug. 11 announcement of a $60 million transformer plant in Brewton with Bia Power Systems and Alabama State University did not mention it either.
A revised information statement filed Aug. 17 changed the consent date to Aug. 8. Between the two drafts the consideration changed from preferred stock alone to preferred stock plus $2 million in cash, and the description of the assets narrowed from Reger Oil’s entire Williston Basin portfolio, including wells and residential properties in North Dakota and Wyoming, to the leases and the right to use the seismic library. Because the majority holders acted by written consent, no stockholder meeting or vote will be held.
At closing, Michael Reger will become president of Callan Power and join the Callan JMB board to fill an existing vacancy. Both drafts of the information statement had described the role as co-chief executive officer of Callan JMB. A current director will resign after closing, and the holders of the preferred stock will elect the replacement and keep the right to seat two directors for as long as any preferred shares remain outstanding.
The filings note that Williams’s employment agreement entitles him to 50,000 shares of common stock upon the closing of each acquisition, and state that the company and Reger Oil had no prior dealings before the deal talks began.
The company describes Reger as the founder, former chief executive and chairman emeritus of Northern Oil and Gas, a Minnesota company it says is now valued at about $2.9 billion, and as a third-generation Williston Basin landman. The information statement says he founded Reger Oil in June of this year; the Aug. 20 release says the seismic library at the center of the deal was consolidated and fully acquired by Reger Oil in 2015.
Not mentioned in the releases or in the biography in the information statement is the rest of the public record.
Northern Oil’s board fired Reger as chief executive in August 2016, within a week of his telling the board that the SEC had notified him it intended to bring an enforcement action over Dakota Plains Holdings, a Wayzata oil rail-loading company he had co-founded with Northern Oil co-founder Ryan Gilbertson.
That November, Reger consented to an SEC order finding that he had received undisclosed payments and had concealed his ownership stake in Dakota Plains around its 2012 public offering. He paid nearly $8 million, including $6.5 million in disgorgement and a $750,000 penalty, without admitting or denying the findings, and the order did not bar him from serving as an officer or director of a public company.
Reger sued Northern Oil for wrongful termination, settled in 2017, returned as chief executive in May 2018 and left the company in July 2019 with the title of chairman emeritus. Gilbertson was convicted of fraud in 2018 and sentenced to 12 years in federal prison.
In June 2022, a federal jury in Manhattan found Reger liable for securities fraud and as a controlling person of Dakota Plains in a class action brought by the company’s shareholders, finding the stock had been inflated by 57 percent; the jury found him not liable on an insider trading claim.
Reger said at the time that he believed he “did not do anything wrong” and would appeal. The court entered a judgment of about $235,000 against him in October 2023 after offsets for settlements paid by other defendants, and court records show it was paid in full in January 2024.
The biography in Callan JMB’s information statement says Reger served as Northern Oil’s chairman, chief executive and president from 2006 through August 2019.
On Tuesday the company announced that Andy Weigman, who it said spent 14 years in the Williston Basin including nine at Northern Oil and Gas, will become senior vice president of land and acquisitions at Callan Power upon closing. Williams said in that release that Weigman had sourced more than $1 billion in potential acquisition opportunities across more than 900 wells.
A company post Monday said Callan Power still plans to establish its headquarters at the Atlas Complex, with manufacturing operations in Brewton.
The purchase agreement, the 8-K and the information statements do not mention Marion, the Atlas Complex or transformers, and the description of Callan Power at the bottom of the Aug. 20 release calls it a domestic oil and gas exploration and development platform focused on the Williston Basin. As of Tuesday the company had made no further announcements about the Brewton venture since Aug. 11.
The deal comes as Callan JMB’s quarterly report, filed Aug. 14, showed second-quarter revenue of $1.4 million, down 17 percent from a year earlier, a net loss of $1.2 million for the quarter and $4.4 million for the first half, and $860,273 in cash at June 30.
The filing says those conditions raise substantial doubt about the company’s ability to continue as a going concern within a year. On Aug. 18 the company expanded an equity line with an institutional investor from $25 million to $75 million, allowing it to sell stock at a discount to the market price as long as its shares close above $1.
Callan JMB said Aug. 17 that Nasdaq had confirmed it regained compliance with the exchange’s $1 minimum bid price after the stock closed at or above that level for more than 10 consecutive business days.
Shares that traded for about 86 cents in mid-July have more than doubled since, trading near $2.25 Tuesday morning. The company remains below Nasdaq’s $2.5 million stockholders’ equity requirement, the subject of a separate deficiency notice in April; stockholders’ equity stood at $681,863 at June 30.
Callan JMB went public in February 2025 at $4 a share as a holding company for Coldchain Technology Services, a cold chain logistics firm. Since then it has announced ventures in compounded GLP-1 weight loss drugs, pharmaceutical manufacturing and higher education partnerships at the Atlas Complex, first with Troy University and then with ASU, transformer manufacturing in Marion and Brewton, and now oil and gas development in North Dakota and Montana.
The filings do not say where the $2 million cash payment to Reger Oil will come from, which director will resign, or what part of Callan Power’s work, if any, will take place in Marion.
