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

To: DRRISK who wrote (8841)	6/30/1998 3:35:00 PM
From: Daniel P. Dwyer	Read Replies (1) \| Respond to of 11888

SUMMARY OF AIPC ANNUAL SHAREHOLDERS MEETING HELD AT THE UNIVERSITY CLUB, NYC ON JUNE 29 A. The stock has been declining because of the Hunt's conversion of their debentures. They are in negotiations with the Hunts, who have desisted from converting their debentures over the last week, while they have been in negotiations. George Faris (GF) rejected the first two proposals out of hand. However, a third one looks very attractive. At a minimum, the Hunts will desist from future conversions for the next 60 days so that AIPN can finish its negotiations with underwriters and mutual funds. B. Conventional financing will depend to a great extent on the performance of the refinery over the next 60 - 90 days. If the refinery makes its projections, then the chances are very good that they will get conventional financing, such as high yield bonds. The positive cash flow generated by the refinery should be able to cover the debt service on $50-$75 million of high yield bonds. C. Talks with Zao-Nafta in Russia continue, but are bogged down. Z-N is no longer in compliance and as result AIPN owns 25% of the company because Z-N has not come up with $300,000 that AIPN gave them as a good faith deposit. GF indicated that there were several companies that would gladly take out this position for twice what AIPN paid. D. Phase 1 of the seisemographing of the Chikuduk area will be completed this week. Processing of data will be finished by end of July and prospectus to JVs will be delivered by end of September. Prospective JVs have been getting data piecemeal. There is considerable interest from them according to management. E. They will be drilling 3 to 5 wells in the shallow area of C-Duk, where they have recently discovered up to 8 capped wells. They have also discovered potential reserves of up to 1.1 TCF (Trillion Cubic Feet) of natural gas. This is in addition to the 1.4 B BOE (Barrels of Oil Equivalent) declared as potential in C-Duk by Huddleston. GF claims that there is a regional market for this gas, but that is to be seen. F. The oil refinery should have a positive cash flow by 3Q. They have secured sufficient supplies of heavy crude for the foreseeable future from Mexico at prices that are half what is being paid in Texas ($6.00 per barrel). The capacity of the refinery is 30,000 barrels per day. At that rate the annual cash flow from just the refinery will be in excess of $30 million. G. As for actual oil test drilling, they intend to defer deeper drilling for the JV deal, which could come later this year. In the meantime, they will do the easy thing first, which is to drill for the gas and determine the proven reserves. 1 TCF, if proven, is equivalent to approximately 200 million barrels of oil. At $3.00 per barrel that is $600 million, of which AIPN owns 70%. $420 million is approximately $7.00 per share. H. Conclusion: Everything rests on the refinery in the short term. It is up and running during a "shake out cruise," producing 3,000 barrels per day. This capacity will increase at a rate to insure safety and other concerns. In 1999 they hope to be producing 10,000 barrels of per day. If the projections and performance of the refinery during the upcoming quarter are satisfactory to underwriters, AIPN should get its financing. The board has ordered management to take out the Hunts first, before any other use of the money is considered. BTW, the Hunts are in favor of this plan too, since they intend according to GF to keep at least 1 million shares. This action should lift the weight off the stock. Secondly, this conventional financing in place will enhance AIPN's credibility with JVs, of which there are several potential partners, according to Lorrie Olivier, COO of operations. Management feels very confident about its business plan. There was some complaining at the meeting, but those who were negative could not offer any other solution than the one management eventually assumed, which was the deal with the Hunts and the termination of the warrants. Some were asking for Dennis Fitzpatrick's head, because he apparently coaxed GF into the Hunt deal. GF defendend Fitz tooth and nail, saying that the Hunt deal had been on the table since January, but they had relented in favor of the warrants. However, in the interim, Dennis and George shopped for conventional financing but were told outright that without positive cash flow, they could not get it. GF will not sack Fitz, because that would prove his disloyalty and that would make Schue and Oliver wonder if they are next...this last sentence is my interpretation of GF's remarks after meeting. He is building a team, and loyalty and hard work are key. If Fitz fails to get the conventional financing when the company produces the numbers, then that is another story. GF has great admiration for his team, Shue, Olivier and Fitz. Dan Dwyer

To: DRRISK who wrote (8841)	6/30/1998 4:12:00 PM
From: Daniel P. Dwyer	Respond to of 11888

SUMMARY OF AIPC ANNUAL SHAREHOLDERS MEETING HELD AT THE UNIVERSITY CLUB, NYC ON JUNE 29 A. The stock has been declining because of the Hunt's conversion of their debentures. They are in negotiations with the Hunts, who have desisted from converting their debentures over the last week, while they have been in negotiations. George Faris (GF) rejected the first two proposals out of hand. However, a third one looks very attractive. At a minimum, the Hunts will desist from future conversions for the next 60 days so that AIPN can finish its negotiations with underwriters and mutual funds. B. Conventional financing will depend to a great extent on the performance of the refinery over the next 60 - 90 days. If the refinery makes its projections, then the chances are very good that they will get conventional financing, such as high yield bonds. The positive cash flow generated by the refinery should be able to cover the debt service on $50-$75 million of high yield bonds. C. Talks with Zao-Nafta in Russia continue, but are bogged down. Z-N is no longer in compliance and as result AIPN owns 25% of the company because Z-N has not come up with $300,000 that AIPN gave them as a good faith deposit. GF indicated that there were several companies that would gladly take out this position for twice what AIPN paid. D. Phase 1 of the seisemographing of the Chikuduk area will be completed this week. Processing of data will be finished by end of July and prospectus to JVs will be delivered by end of September. Prospective JVs have been getting data piecemeal. There is considerable interest from them according to management. E. They will be drilling 3 to 5 wells in the shallow area of C-Duk, where they have recently discovered up to 8 capped wells. They have also discovered potential reserves of up to 1.1 TCF (Trillion Cubic Feet) of natural gas. This is in addition to the 1.4 B BOE (Barrels of Oil Equivalent) declared as potential in C-Duk by Huddleston. GF claims that there is a regional market for this gas, but that is to be seen. F. The oil refinery should have a positive cash flow by 3Q. They have secured sufficient supplies of heavy crude for the foreseeable future from Mexico at prices that are half what is being paid in Texas. The capacity of the refinery is 30,000 barrels per day. At that rate the annual cash flow from just the refinery will be in excess of $30 million. G. As for actual oil test drilling, they intend to defer this for the JV deal, which could come later this year. In the meantime, they will do the easy thing first, which is to drill for the gas and determine the proven reserves. 1 TCF, if proven, is equivalent to approximately 200 million barrels of oil. At $3.00 per barrel that is $600 million, of which AIPN owns 70%. $420 million is approximately $7.00 per share. H. Conclusion: Everything rests on the refinery in the short term. It is up and running during a "shake out cruise," producing 3,000 barrels per day. This capacity will increase at a rate to insure safety and other concerns. In 1999 they hope to be producing 10,000 barrels of per day. If the projections and performance of the refinery during the upcoming quarter are satisfactory to underwriters, AIPN should get its financing. The board has ordered management to take out the Hunts first, before any other use of the money is considered. BTW, the Hunts are in favor of this plan too, since they intend according to GF to keep at least 1 million shares. This action should lift the weight off the stock. Secondly, this conventional financing in place will enhance AIPN's credibility with JVs, of which there are several potential partners, according to Lorrie Olivier, COO of operations. Management feels very confident about its business plan. There was some complaining at the meeting, but those who were negative could not offer any other solution than the one management eventually assumed, which was the deal with the Hunts and the termination of the warrants. Some after meeting discussion re: Dennis Fitzpatrick. GF stood by him saying that Dennis is a hard worker. Both shopped for conventional financing since January, when Hunts put their deal on the table. Everyone said show me positive cash flow from refinery and we will do a deal, but not until then. When warrant holders failed to execute, GF and Dennis went back to the Hunts and cut the deal, else they could not continue with K-Stan and they could not continue discussions with JV, because they would not have had any other cash access.