I agree, William. The risk/reward ratio is very compelling. I will be at the meeting tomorrow but I don't expect the "oil experts" from this thread to be there.
I'm a bit hesitant to come up with a best case scenario until I've had a chance to hear what will be said at the meeting. Unlike some others on this thread, I look forward to more detailed information before I would venture an estimated fair-value price target....but it sure is not $3/share! Sorry, can't help you with Cohen's other recommendations.
Geanat, you said <<My feeling is that this may be a "good prospect" that is really classified as probable or proven reserves; >>
You may be right. According to the Oilgram article the Kazaks played down the reserve estimates of the License Area to protect their interests: "Reserve estimates for the tract...have been kept quiet since Soviet Union days to protect Kazakh interests". Translated, that could very well mean that the Kazak government was anxious to be in the driver's seat with regard to this tract. Once they were, they revealed only that information that could be justified by current, not past, testing and granted MSUP , which interestingly enough is partly owned by Kazak nationals, the license. It is quite possible that they knew they would be a laughing stock of the industry if they claimed "probable" or better reserves based on testing performed during the Soviet period. So, they may very well have opted for the incremental testing approach knowing full well what the final results will be. That knowledge might explain why AIPN rushed to secure an interest in MSUP by, in part, abruptly selling its interests in SA.
Douglas said <<What interests me is that fact that the Kazak government has been able to salvage a precious piece of the Caspian pie on their terms. This would have been virtually impossible dealing with one of the major multinats. The seven sisters have been in foreign diplomatic relations for decades. They know how to put the squeeze on countries who don't play by their rules. The sole reason for the existance of OPEC is because of this very reason.
So the Kazakstani government is in the driver seat on this one, and AIPN is just the servant albeit a grateful and ambitious one. So if you were the CEO of a small international oil co, and you had the opportunity to swim in the same waters as the big boys, what would you do? Take the chance. >>
Thanks, Douglas. This is not a Bre-X, my friends. This is about national pride in the wake of new-found independance, economic opportunism, and a desire to keep a larger percentage of the revenue from the sale of Kazak oil in Kazak hands. The Kazaks know there is oil in this tract. The geologist who did seismic testing in the area as part of the State Commission for Mineral Reserves told Oilgram " there could be two or three billion barrels' worth there". My gut says that he knows what he is talking about.
Cheers...Faris |
