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Gold/Mining/Energy : American International Petroleum Corp
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To: faris bouhafa who wrote (548)7/22/1997 10:01:00 AM
From: Taylor Mill   of 11888
 
Faris >>Using the 2.72 multiple of asset value that would give AIPN fair value at these levels.<<

There is no basis for this multiple other than the one you have created in your own mind. Oil exploration companies generally trade at or around a multiple of 1.0 of the true NAV of the company's proved reserves and hard assets. Premiums will exist when there is substantive likelihood in future reserves growth, but then the market is not very generous with premiums except for rare situations.

Since this company has no proved reserves and few hard assets where does that leave them other than about where they were before this "promotional" press started?

You are trying to suggest the company deserves a multiple 2.72 times an already hypothetical vaue of "unproven reserves". You are absolutely wrong and should re-evaluate your thinking on this.

As much as I know you would like to justify a high value for these shares, to conjure up these "unique" approaches to valuation serves no useful purpose but to confuse people.

And yes I "do believe" the company press releases are also misleading people. How many people would even begin to understand that the term "potential reserves " means nothing if they hadn't heard it here? Just think how many people have read the press releases without the benefit of the definition of that term. Lies ---- no; misleading to the average reader ---- YES.

And EKH's analysis is interesting reading but about as useful as his value of $9 per barrel for Exxon's reserves. i.e also "misleading".
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