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Gold/Mining/Energy : Centurion Energy Intl Inc -- Ignore unavailable to you. Want to Upgrade?

To: Dan Hamilton who wrote (236)	10/10/2000 10:04:29 PM
From: JUNIORSPECULATOR	Read Replies (2) \| Respond to of 350

Hello Dan: I wrote Mr Andre Arrata last week with a few question regarding the lastest news release and other things. I think you will find this to be quit informative . I have posted other letters from him so I don't think he will mind me posting this one. Enjoy :-).Good Dayyyyyyyyyy Ronald PS: Any comments and insight appreciated from all CUX shareholders. Nice to hear from you. I have provided some answers included in your e-mail below. If you have further questions or need further clarification please let me know. Regards. Andre -----Original Message----- From: Ron (Mackers) MacDonell [SMTP:rmdonell@baynet.net] Sent: Sunday, October 08, 2000 7:21 PM To: arrataa@cadvision.com Subject: News release inquires and other developments.. Good Day Mr. Arrata: With the conversion of the notes into common stock at .77 (2.1. million) , I veiw this as being very positive for the company. I time permits would you mind a few questions: 1) What is your veiw on the conversion of the notes? [Andre Arrata] I view the conversion as positive to the company. It provides additional working capital which can be used for drilling AMZ #3 or planned drilling in Egypt. Do keep in mind that the notes which were converted were held by insiders so we know the stock is in good hands. 2) When will the next quarterly report be released? [Andre Arrata] Our next quarterly will be released November 25ish. The accounting group is getting the numbers together at present. 3) Can the shareholders expect good results with the expectation of increased oil production? [Andre Arrata] Results will be very good, based on higher oil prices than Q2 and increased production from AMZ #1. Unfortunately production from AMZ#2 will have a minimal impact as it was on production for less than two weeks. 4) Will it be cost prohibative for the company to deliver it's natural gas reserves? [Andre Arrata] I am assuming this is relating to our gas in Egypt. The projects we have in Egypt are certainly economic. We have run economics for both projects and based on our models they have an excellent return and solid NPV. The north field, El Wastani, has been declared commercial already and field development will begin in late October/early November. In the south, we will need to add some gas reserves in Abu Monkar area. Drilling is expected in December (Gelgel) to prove up possible gas reserves. As these prospects are based on bright spot technology (direct hydrocarbon indictors) we believe this drilling is low risk. After Gelgel is successfully completed, we believe that commerciality will be declared shortly thereafter. 5) How will the company fund such a project? [Andre Arrata] Great question based on current market conditions. We looked at the overall market and determined that financing would be pointless at current market prices. We need to be creative and this is our approach: seek financing through four areas - cash flow, bank loan, service companies, mid-stream companies. We are currently in advanced discussions with banks in Egypt regarding financing for our pipelines, we are awaiting bids from three service companies to drill back-to-back wells over a 12-16 month period and accept a schedule of payments from cash flow, and a US mid-stream company has approached Centurion as a way to enter the international market. They have agreed to invest 10 million in facilities in Egypt and are currently looking at purchasing our processing facilities in Tunisia. Based on these three financing sources plus our cash flow we can readily cover the proposed expenditures in Egypt. Remaining cash flow will be dedicated to exploration and development in Tunisia. 6) Is the company in talks to develop a pipe line? [Andre Arrata] Depends on what is considered big. Currently we have two pipelines planned, both of which are in Egypt. The El Wastani field development requires a 20-25 kilometer pipeline. The Abu Monkar field requires a 50 kilometer pipeline. 7) Will there be any more dilution of the stock as the company moves forward into the year 2001? [Andre Arrata] Centurion is not intending to raise capital at these prices as we believe our net asset value is much higher than our current trading price. In addition, cash flow has been strong and the requirements for additional capital are minimal. Do keep in mind the answer to question #5 which is in a sense a form of raising capital without dilution to the existing shareholders. 8) In regard to its off shore properties . Is the company in talks with any majors to develop those properties? [Andre Arrata] We have had discussions with three majors regarding the deep Triassic prospect. Interest in the deep Triassic is high. At present we are in discussions with our Tunisian government partner on how to structure a deal in the future. Regarding the Mellita Permit, we are re-processing seismic and we will shoot additional seismic to firm up some prospects. Once this is complete we will put together a farm-out package. No discussions at present. 9) Not to be out of line: But who took down the 2.1 million shares on the conversion? [Andre Arrata] The 2.1 million is held by insiders. Two directors and the president. 10) Last but not least: How much of the stock is now held by insiders and Institutions? [Andre Arrata] Insiders own approximately 11% fully diluted, Delta Oil owns 25% and a US investor owns approximately 8%. [Andre Arrata] The math on all of this plus two other larger shareholders overseas (1.7 million shares) [Andre Arrata] provides approximately 46%. Thank You for your time and patience: Good Dayyyyyyyyyyyyy Ronald > > Centurion converts notes > > Centurion Energy International Inc CUX > Shares issued 62,743,563 Oct 5 close $0.90 > Fri 6 Oct 2000 News Release > Mr. Said Arrata reports > A total of $1.6-million (Canadian) ($1.1-million (U.S.)) of convertible > notes due Sept. 30, 2000, has been converted into common shares of > Centurion Energy. > The convertible notes were converted at a price of 77 Canadian cents (52 > U.S. cents) pursuant to the terms of the notes and resulted in the issuance > of 2,115,385 shares. Centurion Energy now has 62,743,563 shares issued and > 67,051,563 shares fully diluted. Conversion of the notes has added > $1.6-million to Centurion's working capital. >