PetroQuest Energy, Inc (PQUE and T.PQU) Message Board

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Gold/Mining/Energy : PetroQuest Energy, Inc (PQUE and T.PQU)

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To: Ronald J. Clark who wrote (348)	6/3/1999 10:07:00 PM
From: Ed Ajootian	Read Replies (2) of 686

Ron, The lender keeps the ORRI forever. This is his booty in exchange for taking the full risk on the well. Making a non-recourse loan on a well is more akin to buying the net revenue interest subject to a call option for the seller, rather than actually being a lender. Seller can always get the well back by paying off the loan. So to make the deal worth the risk to the lender he is given an ORRI to keep no matter what happens. The lender is not related to PQUE as far as I know. Basically after backing out mineral owner royalties and the ORRI given to the lender here, PQUE now has a 29% net revenue interest in this High Island well. The connection to the High Island well has been delayed slightly and now we are looking at another week or two before it is flowing. Maybe that is the cause of the recent deadness in the stock trading.

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