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Gold/Mining/Energy : Harken Energy Corporation (HEC) -- Ignore unavailable to you. Want to Upgrade?

To: Zeev Hed who wrote (3130)	7/7/1998 2:41:00 PM
From: R F B, Jr.	Read Replies (1) \| Respond to of 5504

Zeev : You have tossed around the idea of there being $50mm of floorless instruments. The preferred shares were all purchased by two individuals who have had a longstanding relationship with HEC. As I understand it, they actually wanted $50 mm but HEC did not want to give that much. They settled on the $15 mm and I understand that the actual contract is much more detailed and restrictive than explained in the 10Q. There are all kinds of restrictions regarding shorting as well as sale of these shares. These preferred shares are not really floorless as they have the $4.80 option buyout for cash. Where is the other $35mm convertible which you include in your total for the floorless instruments? RFB

To: Zeev Hed who wrote (3130)	7/7/1998 3:32:00 PM
From: R F B, Jr.	Read Replies (1) \| Respond to of 5504

Zeev : According to the 10K (in part), HEC received $31.5mm from "Institutional Investors" to finance the drilling of the "initial wells on three unexplored oil and gas prospects in the Middle Magdalena Basin of Colombia.... In exchange, the Institutional Investors received the right to receive future payment from Harken equal to 6.4% of the net profits that Harken Colombia may derive from the sale of oil and gas produced from each of the three prospects if the planned drilling ....is successful". Now, beginning in October 1998, either party can force conversion for a two year period according to guidelines you mention in your post #3062. Maybe the Institional Investors are counting on their share of the profits on the wells. As I recall, at the time HEC received this $31.5 mm, it was thought that it was a great deal for the company. 6.4% for $31.5mm. IMO this is still a great deal for HEC. If the wells (prospects) do not produce, and the stock dips (tanks) to $2/S, and the investors decide to convert, HEC still has the option of paying cash. It's my hope that oil is found and then any issues raised by unclear press releases or what appear to be uncertain financing terms will all mean nothing. I'm long and as confident as ever. RFB