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Gold/Mining/Energy : ARAKIS: HIGH RISK OIL PLAY (AKSEF)
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To: Razorbak who wrote (5424)5/1/1997 8:55:00 PM
From: Zeev Hed   of 9164
 
Razorbak: Few comments, first from that exchange between Lundin and Khan, we learned that the SG&A this year is going down to $3.6 MM. Lundin must have known that the historical results were from pre JV deal and thus Arakis carried all the SG&A on its own. Since the Calgary office will address all aquisition of materiel in the North American continent for the venture, somce of this SG&A will be charged to the partnership as well. Lundin was unhally wwhen told that Calgary stays open, he really wanted to chase everyone to Khartum, so they do not get in the way of Lundin's machinations. I think we are at the start of a long struggle here between Khan and Lundin's side.

Second Arakis has already "sold" close to a million barrels (was that a real or hypothetical number?) to the Sudanese Government, and this will come off the share of the Sudan government once the field is commercial.

Anyone heard the name of the company McLeod is going to, is Khan involved with it as well? If it a public company, I may want to investigate it a little to see what kind of prospects it have, I'll bet with McLeod on another deal.

I think McLeod, the "Oil Explorer" was booted because of Lundin's interest in Arakis doing only Sudan. I think that The Lundin group is not too happy to have to compete with Arakis in the worldwide exploration arena for deals and McLeod might have been cooking something. In Lundin's shoes, I would try and eliminate potential aggressive competitors, and Arakis with McLeod at the helm and a war chest of $50 MM is a formidable exploration competitor. Now we will have to see if Khan yields more or just gave the Lundin's a bone to keep them happy.

Zeev
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