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Gold/Mining/Energy : Harken Energy Corporation (HEC)
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To: oilstks who wrote (3056)6/29/1998 2:14:00 PM
From: Arktic  Read Replies (1) of 5504
 
Good point. Proved reserves have to meet very stringent geologic and economic criteria to meet SEC standards. Probable and possible reserves are incrementally discounted based upon risk factors. Even without the Cambulos, I think we're going to get some very big surprises regarding actual reserves produced from the Columbian concessions. The Cambulos may be a huge layer of frosting on an already big cake. We'll see.

My take on the financing issue is that HEC had to make a decision whether they wanted to be explorationists or exploitationists as well. They have chosen both and are putting the finances in place in order to accomplish this goal. They could just discover and sell out as SEV is rumored to be moving toward. Or they can put in the necessary production equipment and pipelines and bring product to market. Although the later is capital intensive, it also is extraordinarily profitable and can turn a small Independent into a Major (e.g., ARCO's discovery of Prudhoe around 1969).

I'm in this one for the long haul and have no question that they have proveable reserves despite the fact they can't book them all as "proved" at present and that they have the managerial moxy to make this company grow profitably over the next several years.

Paul L. Craig
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