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Gold/Mining/Energy : Red Sea Oil Corporation (RSO)
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To: Bart Hoenes who wrote (267)1/17/2000 3:33:00 PM
From: Greywolf  Read Replies (1) of 332
 
Good question!

With 78,866,458 shares issued in RSO itïs pure maths. To put a fair price on our shares I would want to know if the development plans are set. The two drills this spring are ofcourse of interest.

I must say that my first reaction is I have no interest in selling my shares to Lundin Oil! I have stuck with this company for a very long time and to give it away when it is on the brink of real return feels wrong. Yet the cost of developing in Libya is going to be a factor so perhaps itïs for the better.

The "take over" price has to be more than the value of the company today for it to be fair. The span that AL put on the price ie $1.5 to $2 per share is simply not enough, yet the deal is probably already done. The oil in the ground at 74 mmbo more than likely around 90 mmbo is worth at say $3 per barrel $222 million against the market cap of $90 million today.

I could live with $4 per share but would take $3 if the pinch was made. Yet unless something else happens we are to receive $2 tops.. And the warrant owners what will be the deal there?

I dont very much like this. And it is because the stock would be listed with more weight in Stockholm. Tax on capital there is 30% also the market there is not resource compliant to put it nicelly. So the conversion of RSO stocks will have to made to the Nasdaq listing of LOILY.

The terms of the deal will be the proof in the pudding. Until then itïs all academic.

One reflection is that I can not see why anyone is selling the stock at below $1.50 at least.
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