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Gold/Mining/Energy : Canadian Oil & Gas Companies

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To: Goldberry who wrote (2242)	2/4/1997 3:54:00 PM
From: Kerm Yerman	of 24937

Graham / Prize Energy No, it is not unusual for companies to start other concerns. The first one I remember was the Czar Resources/Orbit Oil & Gas combo. Lexxor Energy which I mentioned is tied to Blue Range Resources. Morrison Petroleums helped finance Morrison Middlefield. Canrise Resources I believe was financed by Rising Resources. There are also a few mining companies which financed oil & gas operations. Noranda and Norcen comes to mind. In the case of Prize Energy, equity was raised to explore and develope Canadian 88 Energy acreage. That was funding which was desired by Canadian 88 to meet this objective, but not at the expense of EEE's shareholders via stock dilution. I think this is one of the primary reasons for this tactic. Eventually, Prize will become involved with other properties as cash flow will allow. But for the time being, why not work on solid properties of Canadian 88 Energy. By the way, I posted an interesting article this morning regarding Canadian 88 Energy and Morrison Petroleums. The thing that caught my eye were the comments on land positions. Greg Noval said EEE had a good land position which wasn't listed on their books. At one point, Morrison Petroleum made an inquiry on lands that were controlled by EEE and Morrison wasn't aware of that. This could relate to private companies Canadian 88 controls or to properties held by Prize Energy. There were no specifics. I like Lexxor Energy for identical reasons as Prize Energy. Key personel resigned from Blue Range in order to manage Lexxor. I talked with CEO just before they began trading on the Alberta Exchange. At that time he thought shares would trade at a dollar or a little bit more. Initial shares opened at $1.50 and edged up to $2.00 in time. Their early drilling with Blue Range was not really good and shares have dropped primarily in the $1.10 to $1.30 range. Since early drilling with Blue Range, they have acquired additional acreage. I think Blue Range ventures will be kinder in the future. It will be a speculative investment on my behalf, but I believe they have quite a little going for them in direct comparison to their peers of this size.

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