SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Gold/Mining/Energy : International Rochester Energy Corp. (V. ROH)
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: R F B, Jr. who wrote (14)2/16/1997 8:37:00 PM
From: Greg Burton   of 188
 
Dear Mr. Ball:

I venture to break in on your colloque with Mr. Hogan because I see that you are grappling with a problem that has been perplexing me and which applies equally to Harken.

There seems to be concensus on the final percentages to be enjoyed by HEC and ROR in any finds but there is a deal breaking difference of opinion about the dollar value per barrel which inures to each. Mr. Hogan says $15 dollars a barrel and Mr Ball says $3 to $4. If Mr. Ball is corect I am selling my shares of HEC monday morning because I calculate that a billion barrel find would be worth only $4+ a share: 1B x$3 = $3B x 15% (25% - ROR'S 10% = 15%) or $450mm divided by 110mm shares = $4.09. So, a 2 billion barrel find would be worth only $8 a share. But I have been troubled for some time that Mr. Ball is in fact corect so I asked a representative of Rochester last week just what a barrel is worth. He said that the absolute cost, including everything like insurance, does not exceed $10 a barrel leaving $12 profit from the current cost of West Texas crude. This value is a lot closer to Mr. Hogan's number, $15, and means that a 1 billion barrel find would be worth $16 a share. I have seen nothing published corroborating this and remain very skeptical of this optimistic number.

I find the most difficult part of this game is arriving at the sell decision and the most ellusive advice is good sell advice. Critical to that decision for these two stocks is the answer to this query. Do you have any insights?

Greg Burton


Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2026 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News