Small-cap Dune Energy Inc.‚ (OTC BB: DENG) has been busy lately. Formerly a quiet and little-known company, it has completed a series of moves to become an E&P company currently focused on drilling in south Texas. Since mid-May the Houston company changed its trading symbol to the current one, did a 1-for-2 reverse stock split, closed a $12-million common equity financing and acquired working interests in Los Mogotes Field in Zapata County, south Texas. It also brought in a new president and chief operating officer, Amiel David. The petroleum engineer most recently was an executive with 1Duke Capital Partners ZL in Houston before it was dissolved by its parent, Duke Energy Corp. Dune has applied for listing on the American Stock Exchange. Its financing closed in May through Amsterdam-based holding company 1Itera Holdings BV. Itera is engaged in gas marketing, transportation and production in Russia, the Baltic states and other nations of the former Soviet Union. It is one of the largest gas companies in Russia behind behemoth Gazprom Éü .Dune issued Itera 70.9 million common shares for $12 million prior to the stock split. Itera now owns 78% of Dune's 45 million shares, and has the right to name four directors to the company's board. The stock's split-adjusted trading range has been $1.20 to $3.80 per share. "Longer-term, with Itera as a partner, Dune hopes to become a good-sized independent producer, growing organically and through select acquisitions," says Alan Gaines, Dune chairman, chief executive officer and founder. Gaines is a long-time New York investment banker who in 1998 sold 1Gaines, Berland , which specialized in small-cap oil and gas companies. Dune first entered into an agreement to acquire the interests in the 17,500-acre development at Los Mogotes for $874,500 in cash, in April 2003. Since then, Dune believes the value of the proved developed producing reserves have more than tripled to about $1.8 million, using a price deck of $4.50 per thousand cu. ft. of gas. The field is operated by Pogo Producing Co. Óg , Houston. In the past year Pogo hiked the drilling pace from two to four rigs on this property. Using current pricing, Dune estimates its annualized operating cash flow from its Los Mogotes interest will be about $1 million this year. That cash flow will be used to fund organic growth opportunities at its core property, an 85% working interest in 8,200 acres on the Welder Ranch in Victoria County, south Texas. Dune has a right of first refusal to lease additional acreage on the ranch, which is surrounded by significant Wilcox gas production held by Rincon Oil & Gas LLC "? , 1El Paso Production !=Œ and 1Union Gas Ltd. ÷ At press time, Dune and partner Vaquero Oil & Gas ÀÚ (15%) were completing one well on Welder Ranch and had just spud another. Targets in this prospect are the Frio and Wilcox formations with total depth of about 9,000 feet. Dune estimates the risk-adjusted upside potential on the 8,200 acres could be up to 60 billion cu. ft. of gas. At year-end 2003, a third-party engineering report said the leased acreage contains at least $30 million in SEC net present value.