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Gold/Mining/Energy : American International Petroleum Corp

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To: qdog who wrote (4281)	10/28/1997 11:21:00 PM
From: Zeev Hed	Read Replies (1) of 11888

qdog, but I am, in my evaluation, the current discounted value of a proven barrel is about $3 (assuming crude going at $20/barrel). This is based on production costs of $6/barell (including low estimated finding costs of $2/barrel(, transportation at $3/bbl, leaves us with $13/bbl. AIPN gets only 70% leaving us with $9/bbl. Discounting at %12 for five years (wich is generous, probably should take average of 7 years) yields $ 4.5 and aditional partners take 30% leaving us with $3. Thus a potential barrel should be worth, IMO, best case $.3/bbl. This still gives me a stock "fair valuation" of about $6/share. Add to that speculative juices that there are much more than 1.1 potential barrels, or the posibility that more than 10% conversion to proven will occur during the years,, and we can justify speculative runs to the high single digit. Zeev

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