CHAIRMAN NEWS
From: John W. Adair
To: ADAIR INTERNATIONAL OIL & GAS, INC. SHAREHOLDERS
Date: April 11, 2001
Subject: Chairman’s Update.
Dear Shareholders,
Pursuant to the subject of this letter, I respectfully submit to you the following information relating to the companies recent activities:
1. ADAIR has recently received a STRONG BUY RECOMMENDATION from EQUITY Research, Inc. which stated its impression of the strong management team and current business model. I would like to add the following relating to investing in ADAIR.
A. INVEST FOR THE LONG TERM
Despite periodic market downturns, common stocks have, an average, historically outperformed virtually every other asset class over the long term. According to Ibbotson Associates, from 1926 to 1999 (the last year for which data are available), company stocks, as measured by the S&P 500, provided an average annual total return of 11.3%, compared with a 5.1% return from long-term government bonds. One dollar invested on a hypothetical basis in the S&P 500 at the beginning of 1926 would have grown to over $2,800 by the end of 1999. That same dollar invested in government bonds would have been worth only about $40.
B. TIME IS ON YOUR SIDE
Many investors make the mistake of attempting to capitalize on short-term market trends. In general, timing the market is not nearly as important as time in the market. Over the past 70 years, the S&P 500 Index has provided a positive average annual return in every 20-year period. And, over every 10-year period, this Index produced a negative average annual return only twice. Although stocks, as measured by the S&P 500, exhibit higher year-to-year fluctuations than bonds or Treasury Bills, this volatility decreases as the holding period lengthens. Of course, past performance is no guarantee of future results. But, with this type of track record, you can see why common stocks can be one of your best tools for building long-term wealth.
2. SUPERIOR Geophysical, Inc. the wholly owned subsidiary of ADAIR INTERNATIONAL OIL & GAS, INC. is very busy processing 2-D and 3-D seismic as well as organizing a major 3-D shoot on the Texas Gulf Coast with ADAIR operating and a major independent participating.
3. The ADAIR Yemen operations are in full swing with the seismic program and ADAIR is anticipating expanding the shoot to over 500 sq. km. This expanded shoot would be one of the largest 3-D shoots in Yemen. ADAIR anticipates its first well to be drilled in the fourth (4th) quarter of this year.
4. ADAIR Power, LLC. Continues to evaluate additional sites as well as assist in the development of the 600-mw power plant in Southern California where ADAIR has a substantial interest. It is anticipated that the permitting will be complete during the fourth (4th) quarter with construction beginning shortly thereafter. ADAIR continues to have a dialogue with major power companies relating to its operations and other opportunities.
5. The sugar/co-generation project with ARKEL as a partner is progressing with ADAIR receiving a large number of inquiries from major companies on the possibility of participating in the project. ADAIR is currently evaluating these interests.
6. Your interest in ADAIR is appreciated and I feel the market in 2001 will rebound and with our major projects the future of ADAIR appears very bright.
7. Summary: The projected future cash flow from the above projects is estimated to exceed $450 million USD and the estimated recoverable reserves from the Yemen Block 20 is 360 million barrels.
Respectfully,
John W. Adair
This news letter contains forward looking statements within the meaning of Securities Litigation Reform Act that involves risk and uncertainties, including exploration, development, operational, marketing, and implementation risks, other facts described from time to time in the company’s public available SEC reports which could cause results to differ materiality.
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