American International Petroleum Corp Message Board

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Gold/Mining/Energy : American International Petroleum Corp

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To: Cathi Wierzbicki who wrote (4037)	10/24/1997 7:57:00 PM
From: Laserbones	Read Replies (2) of 11888

Nothing ever posted to me in a message thread puts me on the defensive, but thanks for the nicety. Here's another angle on the problem: A large oil company with deep pockets must immediately partner with the holders of a concession because "supposedly" there is "potentially" several billion barrels of oil that are "believed" to exist and these "estimated" potential reserves might have a value of "somewhere" between $0.50 and a buck because that is a typical range that analyst "guess" it's worth and if this co doesn't ink the deal right away another co is going to swoop in and grab the golden egg. Now, this is exactly what I want to happen! If everything you mentioned is iron clad, the valuation of the aipn's land holding is being severely discounted. Why? What's missing from the equation? In my opinion its concrete data which takes time to accumulate. I never said there wouldn't be a JV. I am saying that in my opinion these cos feel less pressure on making a partnership then us individual investors do in hoping to see the stock jump. But since you are focusing so much on my mention of "a few hundred million" I will respond to your specific question of my nonspecific wording. If aipn's concession is valued as you say it should be then aipn must be asking for at least a billion if the whole lot is to be dealt, or at least hundreds of millions depending on the slice(s). A real major can either hand over the cash in the before mentioned range now, only to find that the oil just doesn't want to come out and they've just wrote off hundreds of millions to a billion, or wait for the data and then use the leverage described below. Now, does the co wait to start building infrastructure before any exploratory drilling and confirmed flow rates are established? Absolutely they wait. Why? Well, why not, it makes sense to know what's in the ground that's recoverable. And here is where your argument has big problems. "Proven" does not mean "recoverable." Recoverable may only be a percentage of "Proven." In fact, it can be a rather small percentage. Your #'s may take a serious downward slide as this hypothetical company evaluates what they might actually get out of the ground. This can be serious leverage against little ole' aipn. And, of course, remember that aipn must return the great majority of the license in a couple years to the gov't for bidding. Greg

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