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Gold/Mining/Energy : Harken Energy Corporation (HEC)
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To: Ed Ajootian who wrote (3201)7/12/1998 5:14:00 PM
From: Zeev Hed  Read Replies (2) of 5504
 
Ed, re:" The development finance agreements give the holders a 7% interest in the Cambulos
Association prospects. Believe me, if they find oil there (which we could find out in
a couple months since they are about to spud the first well there) a 7% interest in
that prospect will be worth far more than $35 mm with 25% compounded interest!"

That is one of the things that puzzled me reading these documents, 7% of just three wells (it did not seem that it was interest in three "fields" but I may be wrong) vs 6.6% of the whole company (about $50 MM at let say $5 share, meaning after three years of monthly compounding at 15%, or 10 MM shares). I am not even assuming a decline in the price due to the floorless feature, mind you. What kind of a deal is that?

Zeev
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