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Gold/Mining/Energy : ARAKIS: HIGH RISK OIL PLAY (AKSEF)
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To: g.w. barnard who wrote (7724)2/9/1998 9:38:00 AM
From: lawrence smith  Read Replies (1) of 9164
 
the actual amount of money that they need is a little less than 200mm dollars. the 250mm figure includes capitalized interest costs.much of this can be paid off in the first year. arakis gets the first 100mm dollars in revenues from the pipeline. also,the sudanese gov't will owe arakis millions of dollars for their portion of funding that arakis will carry for them, plus money for the oil that is trucked on a daily basis to the refinery in sudan. lastly, the jv partners are getting all their investment back on the pipeline with interest(15-18%) . that alone is about 200mm for arakis. so the funding required is basically a bridge loan. so, you can now buy into a company( that has about a 200mm market cap) that has the potential(my opinion) to control 25% of a multi billion barrel oil reserve. i'm buying at these price levels..
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