Vince: You indeed know some secrets from a higher authority (Barron's?) As for the agenda:
Supporting an independent Board of Directors:
That comes under "Ther flag and apple pie". Always good to have.
Developing this concession ASAP with no distractions
Here I do not completely agree. Arakis has $50 MM on hand, they will not need this for at least 24 months (give or take six monthsd) I think they should scout other fruitful properties, maybe go after some joint venture with a cash poor entity (ABACF might be an opportunity, or XCL in China or even IRPPF in Malaysia).
Building a bigger pipeline than the one proposed
What for?, they are already planning on 250,000 which will be sufficient for any oil of their own and the 5A blkock. And right now, it seems as if IRPPF is not planning to start drilling there for two years, so we will have idle capacity. Money may be better used in additional medium risk exploration.
Taking a hard look at how to raise $150 - 200 M needed for the pipeline.
I calculate that after the JV put in all their money we will need between $300 MM to $350 MM divided by 4, or about $85 MM forArakis. Frankly, if IRPPF can get $100 to $150 MM in the form of straight bank debt (not convertibel, or at least not variable conversion rate), why shouln'dt the Joint venture borrow a little. Within 18 months of this borrowing the cash flow to Arakis should be $100 MM (they get the first $100 MM), so borrowing $85 or at least part is quite "prudent".
Addressing the rebel situation objectively
I do not have any particular "love" for Muslim fundamentalists, or any kind of "fundamentalists, but a foreign company should keep itself out the soup of internal affairs of a country in which it operates, best is be nice to all. Their humanitarian activities are actually a very good sign that Khan knows when to be a softie and when to fight hard.
As for the barron's, well if the story comes this weekend, it explains the suddenabortion of the last rally. Someone always knows these things before we, or at least I, know it.
Have a good weekend.
Zeev |
