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Gold/Mining/Energy : American International Petroleum Corp

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To: qdog who wrote (4228)	10/28/1997 7:56:00 AM
From: Cathi Wierzbicki	Read Replies (1) of 11888

Hi Qdog: Thank you for the information on a previous deal. Did the company you are referring to buy the rights to the concession outright for $40 million or was that for a percentage interest in the concession? Was there anything about that specific concession that added or detracted from it's relative attractiveness? And, in your opinion, is that price range ($.04 per barrel for "potential" reserves) typical for deals at this stage of exploration? I am not saying that $.50 is "holy grail." I don't have any way of knowing that. I am NOT an oil industry expert...:-) I have read one analyst's report that mentions that figure as typical.....Faris Bouhafa has also quoted one industry source who used those figures for deals done at the "potential reserves" stage. I am very anxious to get all the information I can about deals done at a similar stage. But, my point was that if one believed the figures you sited would represent a good deal ("win-win") for AIPN, then the stock would be currently overvalued at $7. I assume you didn't sell then, so I wondered if I might be missing something in your analysis. I understand your point "How is it AIPN and it's partners got this block cheap?" I wonder the same thing. My current thinking on the matter is that either (1) It wasn't "cheap".....the price represents it's current full value -- it which case we should all be selling the stock, or (2) Faris Bouhafa is right that the former oil minister dealt himself a good hand...:-)...kept what he believed to be an attractive concession for himself and is using AIPN as his vehicle. But, it does enter one's mind that even if all the concession is worth is the upfront 40 million you mentioned, how did AIPN get this block for only a few million? That would suggest companies (and more important, corrupt political elites...:-) can and do acquire licenses for below current value. I sure do agree with you about the "markets decline and the resulting loss of wealth, ...could make things less attractive." I hope this panic sell off abates soon before it creates long term global economic damage. Thanks for your information, Qdog. I would appreciate hearing about any and all oil deals you are familiar with at the "potential" stage. Even the ones that turned out well....:-) (just a little humor, there.) Cathi

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