Everyone:
This is lurker Vic Hiduke. I believe that I am the first to reference this article on this thread that came out after the market close on Friday. If I am not the first, forgive. Seems to me that this article is the current driver of the price. Interesting paragraphs deep in the article. Forgive the uneven lines. Vic
Arakis (NASDAQ:AKSEF) holders optimistic over new CEO
Reuters, Friday, February 06, 1998 at 17:58
By Jeffrey Jones
CALGARY, Alberta, Feb 6 (Reuters) - Shareholders of Arakis
Energy Corp were optimistic on Friday that its selection of a
well-known Canadian oilman as chief executive would start some
upward movement in the long languishing stock.
Calgary-based Arakis, part of an international consortium
developing a 12.2 million-acre oil concession and a pipeline in
strife-torn Sudan, said on Friday it hired former Shell Canada
Ltd (TSE:SHC) executive Ray Cej as president and CEO.
Cej (pronounced "say") held numerous senior positions at
Shell Canada from 1969 until 1995 when he resigned as head of
its resources division. He was most recently chairman of
Kyrgoil Corp (TSE:KGO), a firm with operations in the Kyrgyz
Republic.
"This adds a lot of credibility to Arakis and some
competent executive ability," said Bruce Lazier, analyst with
Dallas-based San Jacinto Securities, a firm closely associated
with 11 percent Arakis owner Sands Petroleum AB (SWED:SAPE.B).
"This is the thing that we've been looking for for some
time, so I'm happy he accepted."
Sands, run by the Geneva and Vancouver-based Lundin family,
has a representative on Arakis's board and has had an often
rocky relationship with Chairman Lutfur Khan and his allies.
The position had been vacant since early November when
Khan, under pressure from shareholders like Sands to bring in
an oil veteran to lead the company, said he would relinquish
the CEO post. Arakis had four presidents in three years.
Cej said on Friday that a number of factors attracted him
to the job, including a resolution last year of controversy
over the company's board when a number of experienced oil
executives were added, and a belief in the concession's ability
to yield large volumes of oil and cash flow.
"There's no question that this is a very prolific basin and
with the reports that we continue to get, it's been a very
steady success story," Cej told Reuters. "The underlying oil as
a basis for business opportunity is clearly there."
Arakis and partners China National Petroleum Corp, Malaysia
state oil company Petronas and the Sudan government are
developing the southern Sudan concession, estimated in mid-1997
to harbor proven and probable reserves of 418 million barrels.
A new and higher reserve evaluation was expected to be
completed within the next two weeks.
Last month, the company and its partners month awarded the
engineering and construction contracts for the 900-mile
pipeline stretching to the Red Sea from southern Sudan. The
pipeline project was estimated to cost $1.2 billion.
Contractors were already moving equipment into the region
and construction was expected to start at the beginning of
April, Arakis spokeswoman Kristine Dow said.
Cej's first task is to secure about $250 million in
financing the company will need when its partners begin making
cash calls for field development and pipeline construction,
likely this July. CNPC and Petronas have made project
expenditures since they signed on last year to make up for
Arakis's spending on the concession until that time.
Dow said financing would likely be a debt deal with a small
equity sweetener with the aim of minimizing stock dilution.
Investors' holdings were diluted two years ago when the
firm struggled to raise cash after its stock slide, caused by
the collapse of a previous pipeline financing deal.
Arakis also hopes to list its shares on the Toronto Stock
Exchange, a move it hopes would be made at the same time as the
financing, Cej said.
Arakis stock on Nasdaq climbed 9/32 to 2-7/16 on volume of
1.2 million shares on Friday.
Copyright 1998, Reuters News Service |
