To: Peter Berkman who wrote (7611 ) 1/12/1998 9:25:00 PM From: J. M. Burr Read Replies (2) | Respond to
PB: I believe we are watching a classic end-game. AKSEF cannot find financing to continue the operation in Sudan without selling off more of its concession -- something that the BOD probably would not now OK. In contrast, Sands CAN get financing. Sands is willing to buy AKSEF, and is certainly purchasing stock when, seemingly, no one in the Western Hemisphere is. This indicates to me that the Lundins love a gamble; that being said, it is unlike they would be moving to gain control of AKSEF without having received at least the nodding approval of the Khartoum government -- which wants some Western involvement in the concession. REmember, the Lundins were in Sudan before Khan was. Ironically, the Lundins, at one time or another, have implied that they were not adverse to "talking" with the SPLA, something that Khan simply cannot do. Thus, it would seem to me the Lundins now benefit from a heads I win, tails Khan loses situation. Yet, there is no reason for the Lundins to rush in right now. They are smart. The concession isn't worth a flat dime until that day the first drop of oil is pumped from the offshore terminal at Ras Numayri to a waiting tanker. That's going to be in late 99 (don't hold your breath) or in 2000. I can think of at least a dozen scenarios that could wreck that arrangement. So, the Lundins have $ to invest; they have learned patience, and the idea is to keep Arakis afloat, barely, while snapping up stock at a song and without making waves. And remember, I would wager a farthing to a kroner that both London and Stockholm principles are buying along with Sands while U.S. plungers, IMHO, are dumping their holdings. This year's annual board meeting should be a thing of beauty. Tumbleweed.
