Here is another good one by Taylor
To: faris bouhafa (714 )
From: Taylor Mill
Saturday, Jul 26 1997 9:56AM EST
Reply # of 6197
Faris --- Your rude treatment of QDOG is inexplicable in my mind --- I might add I
also heard the report of the "Yemeni ownership of Mars" on NPR. It's a widespread
humorous news story of the past few days.
AIPN press releases were the humorous news of the preceding week.
This is likely to be my last comments here too. They clearly no longer serve the board
any value. I wish you well. It's clear you don't want to learn or understand the realities
of the oil industry. I think I will join Razor and others and find a better use for my time
than potentially be degraded by yourself and others for offering you the benefit of my
industry experience. And I still remain neither long nor short this stock.
Regarding the "cohen" report
>> I don't know how that line found it's way into the press release (sloppy work,
probably) but it is nowhere to be found in the report itself.<<
This whole AIPN affair is a lot of sloppy "PR" work in my opinion. I don't know
Bossey or his firm. I wish him no ill-will but he's not an oil analyst -- the last "opinion"
of his I saw was on a hi-tech firm. By any chance do you think he might participate in
the common practice of "valuation opinions for hire" as do many lesser tier and/or self
serving financial firms?? I certainly am aware this is a widespread practice, particularly
when "penny stocks" and Vancouver type promotions are going on. BTW, despite not
having seen Mr. Bossey's report I bet "I" could write a much more "credible" "positive
opinion" on AIPN if someone would pay for it.
Maybe AIPN and their PR firm should contact me??? I could even have it ready in
time for Monday's meeting.
(2) >>Has it occurred to you that the .50/barrel already takes into account the factors
that you mention? <<
You can't have it all ways Faris. No I don't believe it takes into account AIPN's need:
(a) to dilute shares for financing ,
(b) nor dilute concession ownership via jioint venture,
(c) nor pay the govt share of any proceeds.
To do the above he would have to use more likely about $.01 per "potential" barrel
and "his $10 value" then becomes about $.50/per share. Previously you indicated that
$.50 was this guy's way of valuing "potential" reerves. For this purpose alone it is
already generous, don't suggest it also relieves all the company's other remaining
problems.
(3) >>Huddleston, by reputation, discounts their estimates by 85% to be on the very
safe side...that's why thay have a reputation for conservative estimates.<<
Maybe they do --- maybe they don't. It doesn't matter. I certainly doubt it would be a
reserves firm's "reputation" that dictates such a decision. The reality of the matter when
you are dealing with an outright hypothetical number such as "potential" reseves where
the likelihood of them even existing is 10% or less ---- reducing the original "estimate"
by 15% is rather meaningless. It would not in my opinion be indicative of
"conservatism" at all. This approach to "conservatism" would not even begin to adjust
for any weak or faulty assumptions or parameters used in the estimating methodology.
Or even the quality of very old seismic data which must be the major basis of any study
like this to begin with.
So you can put the concept of "potential reserves into perspective, here's some
definitions:
Proved reserves - Reserves that have been proved to a high degree
of certainty by analysis of the producing history of a reservoir
and/or by volumetric analysis of adequate geological and engineering
data. Commercial productivity has been established by actual
production, successful testing, or in certain cases by favorable core
analyses and electrical-log interpretation when the producing
characteristics of the formation are known from nearby fields.
Volumetrically, the structure, areal extent, volume and
characteristics of the reservoir are well defined by a reasonable
interpretation of adequate subsurface well control and by known
continuity of hydrocarbon-saturated material above known fluid
contacts, if any, or above the lowest known structural occurrence of
hydrocarbons.
Probable reserves - Reserves susceptible of being proved that are
based on reasonable evidence of producible hydrocarbons within the
limits of a structure or reservoir above known or inferred fluid
contacts but are defined to a lesser degree of certainty because of
more limited well control and/or the lack of definitive production
tests. Probable reserves may include extensions of proved reservoirs
or other reservoirs that have not been tested at commercial rates of
flow or reserves recoverable by enhanced recovery methods that have not yet been
tested in the same reservoir or where there is
reasonable uncertainty that the program will be implemented.
Possible reserves - Reserves that may exist but are
less well defined by well control than probable reserves. These include those based
largely on log interpretation and other
evidence of hydrocarbon saturation in zones behind the pipe in
existing wells, possible extensions to proved and probable reserve
areas where indicated by geophysical or geological studies, and those to be recovered
by enhanced recovery methods where the data are insufficient to classify the reserves
as proved or probable.
Includes hydrocarbons in fields which have been discovered but need further
delineation, ownership extension or some combination of lower development costs and
higher prices (and, therefore, are not
currently commercial) before they can be considered proved or
probable reserves.
(4) Potential reserves ----- whatever weak data is left over that can't even qualify for
Possible. <vbg> In other words very very low likelihood of occurring. |
