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Gold/Mining/Energy : ARAKIS: HIGH RISK OIL PLAY (AKSEF) -- Ignore unavailable to you. Want to Upgrade?

To: g.w. barnard who wrote (7724)	2/8/1998 2:32:00 PM
From: Razorbak	Read Replies (2) \| Respond to of 9164

g.w.: I personally feel that Raymond Cej's initial focus should be at a much higher level than the financing issue. I don't disagree that financing is a major issue, and that it is fundamentally important to Arakis' future success, but it should not be Cej's initial focus as President and CEO. IMO, financing should be the first priority of Tom Milne, VP & CFO. Cej should be focusing on a much bigger picture, and he should therefore simply ensure that Milne's objectives are clear and that he is given the necessary authority and responsibility required to get the job done. FWIW, I believe that Cej should be worrying about the following types of big-picture issues: (1) Shareholder value (i.e., How do I maximize shareholder value given all of the numerous constraints that surround the company? How do I restore the company's credibility on Wall Street? How do I break through some of the paradigms that are currently limiting the company's ability to act in a way that creates the most value possible?) (2) Long-term strategy (i.e., Do I keep all of my eggs in the Sudan basket, or do I diversify into other areas to reduce the company's overall risk profile?) (3) Resource allocation (i.e., How should I marshal all of my various resources -- people, money, political contacts, etc. -- in the most effective manner possible? How can I change the company's resource allocation in order to get the most "bang for the buck"? How do I help ensure that Milne gets the best financing package possible, given the inevitable tradeoffs between the risk-averse international debt markets and shareholders' understandable desires to avoid further equity dilution?) (4) Personnel recruitment, development, retention, and work environment (i.e., Do I have the right horses in the company stable? Are they being fed well? How do I create the right type of environment which will ensure that the strongest and fastest don't jump the fence and head off to greener pastures?) (5) Organization (i.e., Is the company organized in the most effective manner possible to achieve it's business objectives at a minimum cost? Could the organizational structure be changed in a way that would improve the company's ability to meet its business objectives?) (6) Operations (i.e., Is the company conducting its operations in the most effective manner possible to achieve it's business objectives at a minimum cost? Could the operations be changed in a way that would improve the company's ability to meet its business objectives?) IMO, these are the types of issues that Cej should be focusing on, because if he doesn't focus on them, no one else will. What Arakis needs most right now is visible leadership from someone willing and able to focus on the big picture. Razorbak

To: g.w. barnard who wrote (7724)	2/9/1998 9:38:00 AM
From: lawrence smith	Read Replies (1) \| Respond to of 9164

the actual amount of money that they need is a little less than 200mm dollars. the 250mm figure includes capitalized interest costs.much of this can be paid off in the first year. arakis gets the first 100mm dollars in revenues from the pipeline. also,the sudanese gov't will owe arakis millions of dollars for their portion of funding that arakis will carry for them, plus money for the oil that is trucked on a daily basis to the refinery in sudan. lastly, the jv partners are getting all their investment back on the pipeline with interest(15-18%) . that alone is about 200mm for arakis. so the funding required is basically a bridge loan. so, you can now buy into a company( that has about a 200mm market cap) that has the potential(my opinion) to control 25% of a multi billion barrel oil reserve. i'm buying at these price levels..