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Gold/Mining/Energy : Harken Energy Corporation (HEC)
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To: Zeev Hed who wrote (3130)7/7/1998 3:32:00 PM
From: R F B, Jr.  Read Replies (1) of 5504
 
Zeev :

According to the 10K (in part), HEC received $31.5mm from "Institutional Investors" to finance the drilling of the "initial wells on three unexplored oil and gas prospects in the Middle Magdalena Basin of Colombia.... In exchange, the Institutional Investors received the right to receive future payment from Harken equal to 6.4% of the net profits that Harken Colombia may derive from the sale of oil and gas produced from each of the three prospects if the planned drilling ....is successful".

Now, beginning in October 1998, either party can force conversion for a two year period according to guidelines you mention in your post #3062.

Maybe the Institional Investors are counting on their share of the profits on the wells. As I recall, at the time HEC received this $31.5 mm, it was thought that it was a great deal for the company. 6.4% for $31.5mm. IMO this is still a great deal for HEC. If the wells (prospects) do not produce, and the stock dips (tanks) to $2/S, and the investors decide to convert, HEC still has the option of paying cash.

It's my hope that oil is found and then any issues raised by unclear press releases or what appear to be uncertain financing terms will all mean nothing.

I'm long and as confident as ever.

RFB
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