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

To: cooliemon who wrote (1645)	5/9/2001 1:26:11 PM
From: forecaster	Read Replies (1) \| Respond to of 2357

Cooliebayev: Kulioil Speculation and Merger Simulation. 1. Kulioil Speculation. Kazakhi government officials seem to be recently pretty annoyed with the financial performance of Kazakhoil. Everything points to a gradual transfer of power from Kazakhoil to Kulioil. So far, it is only the transportation and marketing of hydrocarbon products. But, and this is purely my speculation, it could be widened to include even some production of hydrocarbons. In that case, Nelson could share Alibekmola and Kozhasai 50%-50% and Tenge 31%-69% with Kulioil. 2.Merger Simulation. I am thinking here about a possible HHLA-NLG merger for equity. With the strike price of C$0.40 on NLG convertible debt, it appears that CAIH+Korinth could be receptive to a merger at that price. If HHLA trades at C$10 and NLG at C$0.40, the conversion would be 1 HHLA share for every 25 NLG shares. I don't know precisely the # of NLG shares that would fall under the merger, currently about 675 million, but up to 1 billion authorized. Therefore, it would mean issuance of some 27+ million HHLA shares. From this #, at least 70%, and probably more, would go to CAIH-Korinth. This would be 70% of 27 million, or 18.9 million HHLA shares. Their combined control would increase from the current 25.7 million (30.4%) of 84.6 million fully diluted shares to at least 44.6 million (40.0%) of the new 111.6 million fully diluted shares. This, I think, is a reasonable dilution that could possibly be acceptable to CAIH-Korinth, and the best for the current HHLA shareholders. In return, we would get about 300 million barrels of oil reserves, some infrastructure at Tenge and assured protection of the powerful. If we price the 27 million HHLA shares issued at C$10, the payment would mean C$270 million for 300 million barrels, or C$0.90 per barrel. Where else in the world? Forecaster