This is becoming truly surreal!!! Sorry, Taylor, but my prior analysis was right using "estimated pre-tax present value of proved reserves" of $815.4 million as of 12/31/95 and as reported by Value Line. In 1996 Triton shares traded as high 60.3 and as low as 45.3/share. All I did was take the high for that year using an approximate number of 37 million shares outstanding. In other words, at one point in 1996 the market valued Triton at $2.22 billion or 2.72 times the NAV of $815 million. I made a simple point...using a point in time example (1996) and it holds up within that context.
Now it seems that after the size of the reserves published in Value Line (as of 12/31/95), a JS Herold up-graded the reserve estimate to $1.939 billion. That's fine but it doesn't have anything to do with the context of my example. Also, you refer to JS Herold as "one prominent evaluator of oil/gas reserves". I'm curious, is JS Herold as respected, less respected, or more respected than Huddleston & Co.?
<<If you managed my portfolio and recommended AIPN, you would no longer be my portfolio manager. If you recommended Triton, I would be very happy.>>
I seriously doubt that you would have fired me as your portfolio manager if I had recommended AIPN at.40/share as did a broker friend of mine from a major firm who has followed AIPN for 4 years (my guess is that you have followed the company for all of 4 weeks, but I may be wrong on that). On the other hand, if I had waited until Triton had drilled the wells, analyzed the samples, completed the flow analysis, etc. before recommending it to you, you probably would have paid close to $52/share (the high for 1991). No, at the current price of $42/share I doubt seriously that you would be very happy.
<<Your prior comments were not selectively ignored. I did not know what to make of them since they were so factually inaccurate>>
Really? My "comments" have actually been more like questions which you have pretty much ignored. Let's start with your claims that the company is engaging in "hype". Company A (AIPN) secures an interest in an oil field and hires Company B (Huddleston) to do seismic testing of the field. Company B does its job and reports to Company A that, as per its survey, the field contains 1.1 billion barrels of "potential" reserves. Company A takes that data and reports it accurately in a press release. If AIPN had changed the word "potential" to "probable" or "proven" I would agree that they would have been misleading the financial community but they did not. Where's the hype, Taylor?
Also, you do not seem to be very interested in exploring how it is that AIPN/MED secured the license, whether or not the fact that MED includes Khazak nationals with close ties to the government might have given this small company an edge over the Chevrons of the world whom I've been told are well known for their arrogance and insensitivity to foreign cultures...but then anyone reading this thread would already know that, wouldn't they? Furthermore, we have heard nothing from you regarding EHKMSMBA's description of the process of seismic testing ( his $100/share prediction may be off the wall but I and others did find discussion of seismic testing interesting and apparently well-informed).Any comments? Also, you have claimed that the company has no money. Well, in an earlier post, I gave you some data re: cash equivalents worth approximately $6 million which you ignored. You also have conveniently failed to mention the asphalt refinery which AIPN is re-tooling to meet year 2000 Federal standards, a project that they have sunk $2 million into. While it is true that the company does not currently have cash flow, they will in the 4th Q of this year or earlier. Having read the latest 10Q, do you remember an estimate of annual initial revenues from the asphalt project? Let me help you...it was between $25 and $50 million a year with a reportedly high profit margin. Do you think that cash flow might help with the costs of exploration which is what the company intends to use it for? And speaking of money, how is it that you had no comment on the company's assertion that the MED deal will be fully paid for by July 28 including a cash payment of $400,000?...not bad for a company that is broke. Now, I realize that, as one who has not had an even guardedly positive comment about AIPN, you are not likely to explore questions that might challenge your seemingly relentless derision of this company. We all know that this is a speculative play just as Triton probably was in 1987 and just as every development stage biotech firm is, as well as every high-tech start-up in Silicon Valley. That's not the point. The interesting thing about this speculation is that the odds of it turning out to be rewarding increased the day Huddleston reported the results of their siesmic tests. The odds got even better when the Khazak government transferred the license to a company partly owned by its own nationals. The odds of there being something real here (aside from the fact that Khazakstan is reportedly floating on oil---you may not believe it but the Chinese government seems to)increased again when the company decided to face the usually skeptical financial community in NYC next week. That shows confidence wouldn't you say?...providing , of course,that you actually believe the meeting will take place.
Taylor, there may not be 1.1 billion barrels or there might be more but, as far as I can tell, there is reason to believe that there is some quantity of oil down there. Right now that justifies speculation in AIPN at these prices. If you want to wait until the oil is out of the ground and analyzed that's your perogative. Those of us who are more risk-oriented will, hopefully, gladly sell part of our position in AIPN to you at about the same price you would have paid for Triton under similar circumstances.
Cheers...Faris
PS It is a truly sorry state of affairs when "due diligence" in this company has been reduced to calling Banquet Managers at the University Club. |
