"List of caveats increased"??? Not sure what you mean by that. I read the full report and had a good conversation with Keith this morning. Yes, the report is very interesting but I don't see the "caveats" that you refer to other than the expected ones about this being a speculative buy, there being no assurances of political stability, reliance on government data (which Keith is in no position to verify), and lack of current earnings visibility (but we already know that). Pretty "boiler-plate" stuff if you ask me.
What I did find were some interesting statements that pretty much contradict the negative views of some on this thread. If anyone out there has a scanner I would be happy to FAX the report so that it can be scanned onto the thread. In the meantime, here are some quotes:
"On July 10, 1997, the company announced that potential recoverable reserve estimates from its Kazakstan license area were boosted from 458 million barrels to 1.1 billion barrels. These estimates represent only seven of the approximate sixteen structures on the 4.7 million acre concession area and have been discounted to represent only a 15% recovery rate (over 7 billion barrels potentially in the ground)"
"Lack of Wall Street analyst coverage and a skeptical investing public present an excellent buying opportunity in AIPN shares"
"Over the last few years, investors in American International Petroleum Company have endured numerous fits and starts...(talks about SA properties, failed Indonesia deal, problems with refinery)...Against this historical background, it is hard to believe that AIPN could now be in a position to move forward and deliver on their promised growth, but this is exactly the case."
"Small exploration company finds world-class resource property. Stock volume balloons, price explodes. Sounds a lot like a few recent gold mining companies (i.e Bre-X). Many investors and analysts alike have been burned recently by stories similar to AIPN's. This presents a tremendous opportunity for investors in AIPN. While we do admit that the information obtained to date is limited, as more data is furnished, the upside potential will diminish exponentially".
"Without the benefit of the exploration business, the refinery business in and of itself can justify today's price. Using the industry average of 2.48 price/sales ratio and applying it to 1998 estimated revenues of $30 million, we arrive at a price of $1.80. While we certainly are not buying AIPN for its refining business, it provides us with somewhat of a comfortable base off of which we can speculate."
"With the upcoming analyst's meeting occurring later this month, Wall Street should become more of a believer as well."
Anyway, those are a few samples. Hope I hear from someone with a scanner so that everyone can get to see the report.
From talking to Keith, I gather that the meeting on Monday will go a long way towards addressing some of the skepticism out there and will clarify AIPN's business plan. Look for confirmation of the fact that 31 gravity oil was sampled at the blow-out site prior to its being sealed. There are obvious questions some of which may not be able to be answered at this time. If the company is negotiating with major oil producers I would not expect them to name the companies they are talking to for obvious reasons. I will be satisfied with convincing evidence that they are in talks along with an outline of the deal terms that they are looking for. Another interesting question will concern the nature of the relationship of MED (which includes Kazak nationals with close ties to the gov't) to the Kazakstan government. I'd also be interested in an outline of AIPN's best scenario deal with the Kazak gov't and its chances of achieving that kind of a deal. Another question that is likely to come up is "how did a small company like MED outmanoever the Exxon's of the world to get this seemingly valuable concession". I think I know the answer to that question and, if I am right, we will probably have to read between the lines of AIPN's response as I hope you are doing with respect to what I just said. As a possible hint ask yourselves the following question: Would Kazak government officials with close ties to Kazak principals of MED Shipping grant that company a concession in an area that was full of dry holes? Highly doubtful! In my opinion, the Kazaks know that there is plenty of oil in the concession but this time they've arranged for themselves to be in the driver's seat.
Cheers...Faris |
