International Rochester Energy Corp. (V. ROH) Message Board

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Gold/Mining/Energy : International Rochester Energy Corp. (V. ROH)

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To: peter hogan who wrote (22)	2/17/1997 3:39:00 PM
From: R F B, Jr.	of 188

Peter : HSBC James Capel back in November placed this asset value on HEC's US asset base. The assets are valued on the basis of proven reserves only with no value to any exploration acreage in the US or Colombia. Momemtum - $42 mm Four Corners - $27.4 mm Enervest - $15.9 mm Yellowhouse - $3.8 mm Search - $1.00 mm Balance Sheet - $8.00 mm Total = $98.1 mm divided by 92 mm shares out (at that time) = $1.067 Fadel Gheit of Fahnestock has a similar model as of June 1996 with price of $1.08. Proved Oil $17.5 mm Proved Gas $23.4 mm US acreage $20.0 mm Co.acreage $38.1 mm Work Cap. $ 5.6 mm Total $104.6 mm Less Debt -$15.5 mm NAV = $89.1 mm divided by 82.4 mm shares out (at that time) = $1.08. Believe domestic operations are adding to NAV on a daily basis and believe that the strength of the Colombia Program in terms of acreage, quality, and management warrants a premium of at least 2 times NAV and probably higher. 2 x would be $2.16 now add in HEC's share of Torcaz #2 ($1.82) = $3.98. Those buying at $4 and over may be putting a much higher premium on the colombian picture than I am due to my limited knowledge and fear of overstating values. NAV times premium of 3 = $3.24 + Torcaz = $5.06 per share. I can easily buy this approach as being fair. Don't forget that HEC is being taxied all over the place and is spending other peoples money to drill. They continue to build NAV without increasing debt. Every barrel they find (their share of it anyway) adds directly to their NAV. From this point forward, they have alot of acreage to be drilled which is not figured in any of these models. RFB

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