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Gold/Mining/Energy : KOB.TO - East Lost Hills & GSJB joint venture -- Ignore unavailable to you. Want to Upgrade?

To: Salt'n'Peppa who wrote (3522)	7/15/1999 8:27:00 PM
From: grayhairs	Read Replies (2) \| Respond to of 15703

Hi S&P, <<I must point out that I think we are splitting hairs (any colour!!) here>> While that may be your opinion (and of course you are certainly entitled to think that if you wish), I am of the opinion that utilizing a 12.13% interest for HTP (versus their actual 9.5% ELH APO interest) results in a serious overstatement of the value of HTP's ELH asset by some $210.4 million in the case of an 8 TCF reserve. Now, on a fully diluted basis I know that that only amounts to roughly $7.25 per share. My value system is such that relative to the current share price (in the order of $3.20) this overstatement of value is more than splitting hairs, but I do apologize if you feel I'm wasting the threads time\space in pointing that out. <<I think that the EJ tables provide close enough figures for most investors to be able to comfortably establish their positions in ELH according to their own risk/greed tolerances.>> Well, I admit to having done some things that I would not have done had I clearly comprehended that the interests used in the table were not all APO interests. Some are. Some aren't. But anyway as good luck would have it, my ignorance has rewarded my greed. <gg> <<I have not read any APO figures for Hilton. I have only seen those figures quoted on their latest NR, stating 12.13% interest in ELH. I am assuming for myself that this is "gross working interest".>> Well, the 12.13% interest is neither their BPO interest nor their APO interest in ELH. Their BPO interest is, I believe, 14.63% while their APO interest is only 9.5% (but you must read several documents to be able to deduce that.... it certainly is not made easy for shareholders). As you know, it is common industry practice to use the after payout (APO) interest in appraising net asset values as any interests in excess of APO interests exist only during a period of capital recovery, not during the period of profit\value generation. <<The KOB understatement in the EJ table requires a +1.4% correction>> Yes that is why I indicated that it was "very slightly understated". On the other hand HTP's overstatement is about 28% !! Well, must run for now. Later, grayhairs