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Gold/Mining/Energy : International Rochester Energy Corp. (V. ROH)
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To: R F B, Jr. who wrote (165)5/4/1997 5:02:00 PM
From: Ed Ajootian   of 188
 
RFB,

I discussed the Ecopete issue with the same ROR person that I got the
other above info from. He said ROR is looking at it as a can't lose
situation. If Ecopete doesn't back in they get double the cash flow
that they thought they'd get. If Ecopete backs in, they get half of
their investment back on the spot --- which will go to good use since
they otherwise have to dilute the hell out of current shareholders to
raise more cash to meet Harken's cash calls. Plus they can say that
they have discovered a field that was _so _large that Ecopetrol decided
to back into it.

Unfortunately the fact that Ecopetrol doesn't back in will probably
never get factored into ROR or PKC's price, since folks will always
assume the worst, which is that Ecopete could back in any time in the
future. Harken is another story, of course. Folks just seem more liberal
with valuing that stock.

Agree that there are many ways that Ecopete could structure future deals
in order to avoid a cash crunch such as the one they are in now. But
a deal's a deal, and I doubt very highly that Harken and its partners
would be very interested in renegotiating the Alcavaran Contract with
Ecopete right now.

The Parkcrest folks are talking actively with Harken about future farm-ins.
They have about $2 mm cash in the bank and its burning a hole in their
pocket. Maybe they will farm in to Cambulos.

A key factor in the timing of drilling wells in Columbia is getting all
the environmental permits, etc. Do you know how far along Harken is at getting
this for the company-maker wells they are trying to line up this year?
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