Harken Energy Corporation (HEC) Message Board

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Gold/Mining/Energy : Harken Energy Corporation (HEC)

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To: Zeev Hed who wrote (3203)	7/12/1998 8:08:00 PM
From: drjoedoom	of 5504

Zeev -- << 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? >> I'm still perplexed that you don't simply read the Development Finance Agreement. The agreement makes it clear that the earnings interest applies to a an entire prospect area. For example, << the term "Cambulos A Prospect" shall mean . . . that portion of the lands covered by the Cambulos Association Contract which are included within the Commercial Field surrounding the Initial Cambulos A well. . . . >> [page 1] This supports Ed's conclusion that if the exploratory wells are successful, HEC will buy out the investors in a heartbeat at ONLY a 25% per annum premium. What kind of deal is that? Sounds like a win-win deal. Investors get 25%-plus; HEC finances the exporation for an elephant and suffers minimal dilution. Joe p.s. Steve & Ed -- Great commentary. Thanks.

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