Here are some interesting posts from AOL regarding the refinery and the sale of the South American venture:
Subj: Re:About That Refinery...
Date: 97-07-18 00:29:13 EDT
From: DARTH6847
I have been an off again an on again shareholder of this stock for a few years. I will provide you with some history on the refinery as I remember and that which can be backed up by press releases and or annual reports. The refinaery is located in Lake Charles, La and sits on the intracoastal waterway. Both of which is very important. This years annual meeting was held their, a first.
About three years ago (probaly before this), I can't remember and neither do I have the press releases from back then, AIPN started getting yearly contracts to sell jet fuel to the military. AIPN leased the jet fuel portion of the refinery to GOLD LIne. Gold Line was suppose to pay lease fee's based on the number of barrels refined. Initially it was .20 a bbl and migrated to .50 a bbl. This allowed AIPN to concentrate on their South American fields. At the same time, AIPN started shopping the refinery for sale. This would provide the company with cash, which is always something to have in the oil exploration business. Gold Line was having problems of its own arranging money ( almost constantly) to buy the feed stock to make the jet fuel. AIPN located a buyer and signed a contract to sell the refinery at 17 million. The buyer backed out and AIPN sued. Meanwhile, Gold Line got the money and started making jet fuel (1996). At first they were paying AIPN. AIPN was exploring upgrading the refinery to make gasoline (very high profit margins). Then last fall they signed the deal with Coastal to start making asphalt and Coastal would be the sole buyer. The contract was estimated to be in excess of 50 million a year (press release). But AIPN was not able to complete construction in time for this year's asphalt season. Phase one should be nearing completion and phase two will add additional storage and refining will be completed this winter. As it stands now, Coastal is interested in any asphalt produced, which can begin as soon as phase one is completed. The company had planned on starting production at around 10,000 bbls a day. I was told that in asphalt production, AIPN would receive more than 1.00 for each barrel produced. Eventrally production was to reach close to 20,000 bbls a day. The 1.00 figure is low. I think it was closer to 3.00 a bbls, but this old mind, forgets stuff... I had figured it all out at some point and compared my numbers with another investor and mind came in high. I was estimating profit of better than .56 for the fiscal year based on them averaging 20,000 bbls a day and running from april 1 to nov1. His numbers were closer to .30 for the year. Our numbers left out the jet fuel royalties from Gold Line. As it turned out, good thing. In Feb 97, AIPN served notice to Gold Line that they were behind in Their payments. In March AIPN sued and had Gold LIne evicted. In May (I think, its in a press release), AIPN won their law suit and Gold Line ws ordered to pay 1.5 million in back fees to AIPN. AIPN is pouring more than 6 million dollars into upgrading the refinery to make asphalt (PR). Thats another reason they wanted to sell those south american fields. They were taking out a loan to upgrade the refinery. But with cash in the bank, you can be a little more flexible.
AIPN has talked about leasing out the jet fuel portion of the refinery again. But I think after their last Lesse, Gold Line shafted them, they may be a little leary....One more thing about that asphalt. According to the company (press release), The EPA ( Ithink..the feds) have recently mandated a type of asphalt that this plant will be capable of producing. If I remmeber correctly, it will be the only refinery within 200 miles making this type! A nice niche to fill. Thats why I am always asking about the refinery.. The profits are just so good. Being on the intracoastal will enable them to move their products to other markets by barge to New Orlearns and the rest of the country and for that matter, maybe SOuth America. When it is not Asphaly season in THe U.S. it is some where in the world. Imvvho
Subj: Re: South American Sale
Date: 97-07-18 00:40:33 EDT
From: DARTH6847
AIPC sold the South American assetts for about 20 million. A little less than 10 million was in cash and the rest in stock. If you search this folder back about Feb (I think) then you will find the press release. I might have it on my hard disk. Or you can call investor relations. Chevron has a good site about the oil business......
No cash!!!....what about that $10 million???
Cheers...Faris |
