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Gold/Mining/Energy : American International Petroleum Corp -- Ignore unavailable to you. Want to Upgrade?

To: Dr. Bob who wrote (7649)	3/8/1998 12:10:00 PM
From: qdog	Read Replies (1) \| Respond to of 11888

Falling oil price and the impact that it has on production, exploration, etc. The scenarios was far different 8 month's ago for AIPN. We had numerous post suggesting JV rumours that tallied up to $600 million, remember? You think that is still the case today? AIPN isn't a deep pocket company like the major's, so their trump card is less powerful than before. The thing that folks have to realize, commodity or the price of oil isn't control by oil companies, that is a function of free market, namely commodity pit's. This samething happen in the 80's when crude top out at $33/bbl. It was a slow decline that bottom at around $10 and made it's way back to $14-16. The bottom was 85. Yet look how long it took oil to get to $20, if you remove the Iraq war about 10 years. So now you are possibly in that kind of era again where oil isn't as attractive as it was a year ago. Sure if you are major you can afford to do obigatory contractual agreements to explore. Unless it is a major find, you have years to start production, but majors have luxury of other sources of revenue, such as chemicals and downstream operations such as gasoline. What does AIPN have? Small asphalt plant and a lease that has certain requirements to fulfill. Any possible JV is in a position to wait it out now. That is of course, my opinion, but I've been through this before in this industry. Lessening demand and increase in production equals lower price for the underlying commodity. Couple that with infighting within OPEC with Venezuela, Saudi and Indonesia. Add to that the UN deal with Iraq that is dollar based and not quota based such as OPEC. Add to it the Non-OPEC discoveries and on-line addition that have occur the past few years. An ugly picture is brewing. I'm sure the usual BS will fly my way about a hidden agenda and other nonsense, but I'm not forcing the price down, the market place is. Will it turn around, I've no idea when. As to AIPN prospects, well, that depends on drilling a well that is a big producer. If it is a 1000 bbl well, that makes things unattractive at these prices for the moment. Drill a duster the first time and the party is over, IMO, without a JV to share the cost and risk.