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Gold/Mining/Energy : Panaco Corp (PANA) -- Ignore unavailable to you. Want to Upgrade?

To: Bearcatbob who wrote (108)	11/11/2000 1:38:43 PM
From: Ed Ajootian	Respond to of 115

BCBob, Key event coming up is the results of the next East Breaks well. The drilling of the first one went way over budget which suggests that they did not really understand the geology correctly at the time it was spud. This next one will be the key to determine whether or not they really learned anything from the first one. We hopefully will be told how deep this next well has gone at this point, at the conference call. They are generating cash flow at a rate of about $65 M per year. I would say a realistic drilling budget over the next year would be about $25 M, leaving them $40 M to pay down debt. Note that this is more than the current balance of their bank line, which I'm gonna guess has been paid down to about $25 M as of now. Starting 10/1 they can start making payments on their bonds, at a 5% penalty for early repayment. Not sure about status of drilling wells other than what has been announced (i.e., they have a rig going at East Breaks 109/110). Will be interesting to see if the company puts out any PR's on this subject and/or they discuss it in their conference call. Which reminds me, the best possible source of answers to your questions would be to listen in on the CC if you possibly can. Don't hesitate to ask some questions if they haven't already been answered by the initial remarks made by management. You may be feeling bummed about paying $3.375 to acquire your stock for another week or so, but once we chew through all the short-term profit takers dumping PNO on the news, it oughtta be clear sailing again and you will likely be very happy that you doubled up at the time that you did.