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

To: Zeev Hed who wrote (3395)	8/13/1998 9:02:00 PM
From: Rod Copeland	Respond to of 5504

Zeev, Because the stock is a better deal.

To: Zeev Hed who wrote (3395)	8/13/1998 9:15:00 PM
From: Ed Ajootian	Read Replies (1) \| Respond to of 5504

Z-Man, Get a grip buddy! You're really losing it now. Earlier you had called for HEC to go to something like $2 in the next 3 months and now you have HEC paying $4 a share to buy back the stock. Which is it, or have you already waffled on your earlier call? My take on the stock buy-back is that HEC realizes that they are drilling a high-risk wildcat well in an area with huge upside, where the markets will absolutely crucify the stock if they miss. Yet when you do exploratory drilling the single most likely result on any given well is that you will hit a dry hole! (For the mathematically inclined, this is saying exploratory wells historically have less than a 50% shot at success). So HEC is simply setting the wheels in place so that if they were so unlucky as to come up dry with the Islero, they want to be able to buy some of their stock back cheap. If Islero is dry it will not be necessary to test the well. This means such an announcement would come out in two months (ie this is how long it should take to actually drill the well). I cannot see any security holder having any incentive to short HEC stock right now. No security is convertible into common stock until October. Until the security is convertible you have no arbitrage opportunities available to you by shorting. In any event since we are right at the end of the mid-month reporting period for reporting short positions it won't be long before we here what the short position is as of tomorrow's close. HEC realizes now, I think, that they went a little overboard with the latest round of money-raising and would like to trim back down their capital a bit, if given a chance to do so at rock-bottom prices. With this latest reserve report they have well in excess of $100 mm of proven reserves that they will be able to borrow against as soon as they can get the wells producing. With their existing capital plus borrowing power they should easily be able to spare the $10 -- 15 mm they would pay to buy back this amount of stock.