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Gold/Mining/Energy : Canadian Oil & Gas Companies

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To: Goldberry who wrote (8562)	11/28/2001 11:59:16 PM
From: Richard Saunders	of 24923

Graham - some apples and oranges for your consideration. This doesn't really relate closely to your AVN.un question however it may also give a bit of a comparison. I don't have a position however have watched a little thing called Hawk HWK.a-cdnx for a while. The co. news released 3Q results today and let's use them for comparison's sake. Hawk is currently producing about 8,000 mcf gas and 1,015 oil on a daily basis. If 6:1 conversion is used that translates into just under 2,350 boepd. Gas weighting is not quite 57% The private situation that AVN.un bought was much gassier, something like 90% if the assumed estimated 8,300 mcf per day is converted at 6:1. Hawk - approx. 2,350 boepd with 57% gas vs Private co. bo't by AVN.un - est. 1,720 boepd with 90% gas. Hawk at Sept.30 had LT Debt & working capital deficit of just over $10.7mil There were not quite 7.9mil. shares o/s in Hawk. Stan indicated that on a per flowing basis your AVN.un appeared to be paying something like $36,000 per flowing barrel of production. Apply the same metric to the Hawk situation and you obtain a share price of something like $9.39 Hawk's stock last traded Nov.26 at $2.15. I haven't tried to go looking to see what Hawk's reserve situation consists of and it's recognized that production is much more weighted to oil. Still, I think the above does give you an idea of premium price that appears to being given to the gassy private co. if only production is being looked at. It would appear that the trust may be seeing some possible development opportunities in the reserves that they appear to be paying for....... might also be interesting to find out who's tied to the private co. as they appear to have negotiated quite an impressive price given the current commodity pricing environment....

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