Panaco Corp (PANA) Message Board

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Gold/Mining/Energy : Panaco Corp (PANA)

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To: Author51 who wrote (51)	4/22/2000 10:44:00 AM
From: Ed Ajootian	of 115

Good point. I've given this whole situation some more thought and I believe its time for PANA management to step up to the plate and shake things up. Its clear that the "steady as she goes" routine is not working. Here's what I would do. When they announce 1Q, they should also announce two other things: 1) a 1:2 reverse stock split, and 2) a $3 million stock buyback. They are going to be getting a $1 million check for an insurance settlement, which is basically found money. Take that and chip in the "bonus" cash flow they will be getting in 2Q because natgas prices will have averaged over $3.00 instead of the $2.50 they had probably used in their initial projections, and you get at least $3 million total. So they can do the stock buyback for that much $$ and still keep to their $30 million drilling budget that was set in November. Now as we've already seen, the stock is so thinly traded that anyone going in to buy significant amounts of stock will drive the price up very easily. So that's where the reverse split comes in. Tons of stock will come on the market when they announce the reverse split. This will create the mechanism whereby PANA will be able to buy millions of shares without driving the price up. The reverse split would also accomplish another thing. It would get the price up to the point where they stand a realistic chance of getting up to the $3/share mark so they can get on the Amex. There is not a realistic chance of the stock getting there at this point (the stock price would have to quintuple). It is critical to announce the reverse split well before this next round of wells comes in. This is because you want the inevitable backlash (of people dumping the stock solely because you declared the reverse split) to have totally worked itself out by the time these wells are hitting TD. This way, all the negative karma will be outta the stock and when the good news starts coming out there will be nothing holding it back.

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