Hello Dan: I wrote Mr Andre Arrata last week with a few question regarding the lastest news release and other things. I think you will find this to be quit informative . I have posted other letters from him so I don't think he will mind me posting this one. Enjoy :-).Good Dayyyyyyyyyy Ronald
PS: Any comments and insight appreciated from all CUX shareholders.
Nice to hear from you. I have provided some answers included in your
e-mail below.
If you have further questions or need further clarification please let me
know.
Regards.
Andre
-----Original Message-----
From: Ron (Mackers) MacDonell [SMTP:rmdonell@baynet.net]
Sent: Sunday, October 08, 2000 7:21 PM
To: arrataa@cadvision.com
Subject: News release inquires and other developments..
Good Day Mr. Arrata: With the conversion of the notes into common stock
at
.77 (2.1. million) , I veiw this as being very positive for the company. I
time permits would you mind a few questions:
1) What is your veiw on the conversion of the notes?
[Andre Arrata] I view the conversion as positive to the company. It
provides additional working capital which can be used for drilling AMZ #3
or planned drilling in Egypt. Do keep in mind that the notes which were
converted were held by insiders so we know the stock is in good hands.
2) When will the next quarterly report be released?
[Andre Arrata] Our next quarterly will be released November 25ish. The
accounting group is getting the numbers together at present.
3) Can the shareholders expect good results with the expectation of
increased oil production?
[Andre Arrata] Results will be very good, based on higher oil prices than
Q2 and increased production from AMZ #1. Unfortunately production from
AMZ#2 will have a minimal impact as it was on production for less than two
weeks.
4) Will it be cost prohibative for the company to deliver it's natural gas
reserves?
[Andre Arrata] I am assuming this is relating to our gas in Egypt. The
projects we have in Egypt are certainly economic. We have run economics
for both projects and based on our models they have an excellent return and
solid NPV. The north field, El Wastani, has been declared commercial
already and field development will begin in late October/early November.
In the south, we will need to add some gas reserves in Abu Monkar area.
Drilling is expected in December (Gelgel) to prove up possible gas
reserves. As these prospects are based on bright spot technology (direct
hydrocarbon indictors) we believe this drilling is low risk. After Gelgel
is successfully completed, we believe that commerciality will be declared
shortly thereafter.
5) How will the company fund such a project?
[Andre Arrata] Great question based on current market conditions. We
looked at the overall market and determined that financing would be
pointless at current market prices. We need to be creative and this is our
approach: seek financing through four areas - cash flow, bank loan,
service companies, mid-stream companies.
We are currently in advanced discussions with banks in Egypt regarding
financing for our pipelines, we are awaiting bids from three service
companies to drill back-to-back wells over a 12-16 month period and accept
a schedule of payments from cash flow, and a US mid-stream company has
approached Centurion as a way to enter the international market. They have
agreed to invest 10 million in facilities in Egypt and are currently
looking at purchasing our processing facilities in Tunisia.
Based on these three financing sources plus our cash flow we can readily
cover the proposed expenditures in Egypt. Remaining cash flow will be
dedicated to exploration and development in Tunisia.
6) Is the company in talks to develop a pipe line?
[Andre Arrata] Depends on what is considered big. Currently we have two
pipelines planned, both of which are in Egypt. The El Wastani field
development requires a 20-25 kilometer pipeline. The Abu Monkar field
requires a 50 kilometer pipeline.
7) Will there be any more dilution of the stock as the company moves
forward
into the year 2001?
[Andre Arrata] Centurion is not intending to raise capital at these prices
as we believe our net asset value is much higher than our current trading
price. In addition, cash flow has been strong and the requirements for
additional capital are minimal. Do keep in mind the answer to question #5
which is in a sense a form of raising capital without dilution to the
existing shareholders.
8) In regard to its off shore properties . Is the company in talks with any
majors to develop those properties?
[Andre Arrata] We have had discussions with three majors regarding the
deep Triassic prospect. Interest in the deep Triassic is high. At present
we are in discussions with our Tunisian government partner on how to
structure a deal in the future.
Regarding the Mellita Permit, we are re-processing seismic and we will
shoot additional seismic to firm up some prospects. Once this is complete
we will put together a farm-out package. No discussions at present.
9) Not to be out of line: But who took down the 2.1 million shares on the
conversion?
[Andre Arrata] The 2.1 million is held by insiders. Two directors and the
president.
10) Last but not least: How much of the stock is now held by insiders and
Institutions? [Andre Arrata]
Insiders own approximately 11% fully diluted, Delta Oil owns 25% and a US
investor owns approximately 8%. [Andre Arrata] The math on all of this
plus two other larger shareholders overseas (1.7 million shares) [Andre
Arrata] provides approximately 46%.
Thank You for your time and patience: Good Dayyyyyyyyyyyyy Ronald
>
> Centurion converts notes
>
> Centurion Energy International Inc
CUX
> Shares issued 62,743,563 Oct 5 close
$0.90
> Fri 6 Oct 2000 News
Release
> Mr. Said Arrata reports
> A total of $1.6-million (Canadian) ($1.1-million (U.S.)) of
convertible
> notes due Sept. 30, 2000, has been converted into common shares
of
> Centurion Energy.
> The convertible notes were converted at a price of 77 Canadian cents
(52
> U.S. cents) pursuant to the terms of the notes and resulted in the
issuance
> of 2,115,385 shares. Centurion Energy now has 62,743,563 shares issued
and
> 67,051,563 shares fully diluted. Conversion of the notes has
added
> $1.6-million to Centurion's working capital.
> |
