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Gold/Mining/Energy : International Rochester Energy Corp. (V. ROH)
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To: StockJock-e who wrote (1)2/10/1997 11:49:00 AM
From: R F B, Jr.   of 188
 
G O :

Or Anyone Else :

Find out how many shares ROR has outstanding. Also find out how they plan on repaying the cash borrowed to pay HEC the upfront money for their deal which gives them 25% of Palo Blanco.

20% of any hit comes off the top and goes to Colombia as host.

50% split of the rest between Ecopetrol and HEC.

HEC shares is thus 40% and ROR share would be 10%. This would be up to 60 mbo, over which the percentages change on an increasing scale to Ecopetrol and decreasing to HEC/ROR.

Believe oil if found is added to reserves already known as far as HEC is concerned. Once total oil from all fields exceed 150 mbo, Ecopetrol's percentage increases to about 75% of all oil, so ROR's share would go down in direct relation to HEC's overall success with their drilling program in Colombia.

Don't take all of this as a negative, because if there's enough oil there (Palo Blanco) it could be worth ROR's while and any investor's therein. I don't believe they can afford any dry holes however, as I believe their 25% take was given for drilling of the wells.

If total possible reserves are 30 mbo (figures I've heard) ROR would get 3 mbo x 3.00 = $9mm. Divide this by all outstanding shares and see what you get. I used 6 m outstanding as a guess.

However, if HEC exceeds 150 mbo (which they have - Torcaz #2), then if all 30 mbo are found in Palo Blanco, IMO, Colombia would get 20% off the top, Ecopetrol would get 75% of the remainder, HEC would get 25% of the remainder, which means ROR would get 6.25% of all oil here. This would be about 1.875 mbo x 3 divided by shares outstanding.

RFB
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