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Gold/Mining/Energy : International Rochester Energy Corp. (T. ROH) -- Ignore unavailable to you. Want to Upgrade?

To: gholst who wrote (242)	12/13/1997 6:24:00 AM
From: Ed Ajootian	Respond to of 934

Glen, South Turkey, that sounds awfully close to where my grandparents are from, which, many years ago, was the original Armenia. I knew I had O&G in my blood somewhere! I know nothing about the O&G potential in that area and tend to stick to the much more (geologically) mundane areas for my investing. I will take political risk (eg Colombia) more than I will take geological risk. If hyped well these types of stocks can be great hype plays though. Now watch ROH next week announce a major deal to explore for oil in Turkey!

To: gholst who wrote (242)	12/14/1997 11:12:00 PM
From: Ed Ajootian	Respond to of 934

"We have a speculative buy recommendation on Rochester because the stock sells at a significant discount to the adjusted break-up value, or net asset value, (see Exhibit I). In addition, we estimate that the break-up value could increase by 200%, or more, during the next few years. We calculate the adjusted break-up value to be $2.34 per share. Usually, the stock price for most oil and gas companies in Rochester's peer group is based on the net asset value of the firm and the quality of its exploration and development projects. Currently, the median common stock price for Rochester's peer group is 105% of the adjusted break-up value per share. By comparison, Rochester's common stock is undervalued at 62.90% of its adjusted break-up value per fully diluted share. The company has a 25% beneficial working interest in an exciting new oil discovery on the Palo Blanco Prospect in the Alcaravan association contract area in Colombia. The Estero #1 well tested 4,100 barrels of oil per day (BOPD). The production rate was limited by the capacity of the submersible pump and the surface storage facilities. Log analysis indicates two additional zones may be productive that have not yet been tested. We estimate that the size of the reserves at Palo Blanco will ultimately prove to be in the range of 50 million barrels of oil (MMBO), or approximately $2.83 in asset value per fully diluted share to the company's interests on an unrisked basis. Our risk adjusted possible break-up value for the full development of Palo Blanco and for the additional prospects on the Alcaravan block is $5.92 per share. Because of its beneficial working interest in the Alcaravan block, Rochester will not only participate in the development of the Palo Blanco discovery, but also in the drilling of future exploration prospects. There are four to six prospects identified at Alcaravan that warrant further investigation that provide Rochester and its partners the potential to add significant reserves through exploratory drilling for the next several years. Therefore we recommend purchase of the stock for investors that can tolerate the high risks that are inherent in exploration for oil and gas. We anticipate that the common stock price for Rochester will improve and move towards the median of the peer group, as investors become familiar with the company's discovery at Palo Blanco and the potential to add significant reserves in the near future. A multi-well exploration and development drilling program is scheduled to begin in Colombia by the year-end." **************************************************** From Strain report; see full report at rochester-energy.com