Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Canadian Oil & Gas Companies -- Ignore unavailable to you. Want to Upgrade?

To: AL R who wrote (5552)	11/8/1998 11:13:00 AM
From: Ed Ajootian	Read Replies (1) \| Respond to of 24892

AL R & Kerm/ Benz Energy/Share Consolidation The action in this stock so far is demonstrating how dangerous it is to make generalizations with respect to junior O&G stocks. In general it may be true that merely switching from a Canadian listing to a US listing is not beneficial to a stock. But when the stock otherwise has nothing to do with Canada, and is not a sexy international exploration stock, this generality is inaccurate. Benz is led by a good ol' Mississippi oil man, who has absolutely nothing to with Canada. The only officers that were from Canada (Busby & I think also Grabois) were relieved of their duties a year ago. Busby still owns a ton of the stock but most of that is tied up right now. Therefore the Canadians have absolutely no interest or connection to this stock. And as a VSE-listed company, many Americans also have absolutely no interest in this stock. Many US brokers could not place this stock with their clients even if they wanted to, due to restrictive US brokerage house rules re: dealing with VSE stocks. One point of illustration of just how different this management group is from the typical VSE crew. I have asked the Benz IR guy more than once when the usually inevitable repricing of employee stock options is going to occur, now that it appears that the stock has bottomed. Each time he has steadfastly denied that there were any plans to reprice options. Any other VSE company would have probably done this at $.50. Benz will keep theirs right where they are, most of which are at $1.95 per share! The fact that they will not reprice even though there are securities out that are convertible into 37 mm shares, at $1.70 (ie the convertible notes they issued last year), is absolutely mind-boggling to me. This is a very explicit statement that the Benz management group has the utmost confidence that they will be able to force conversion of those notes. Benz can force conversion if the stock gets over $2.12 (ie 25% over the normal conversion price). Regarding going with proven producers, I respectfully beg to differ with Kerm. Not sure about what has been going on with the Canadian companies in the past few months, but as shown by the following chart of the XNG index, the leading natural gas producers in the US have run up 30% from the beginning of September and the chart for the index is looking very toppy. Here's the XNG chart: quote.yahoo.com In any event Benz has proven that they know what they're doing. They basically went from a standing start in July '97 to 5 mmcfe a day by Dec. '97. This past July they got to 7 mmcfe a day and if these next two development wells come in at their Oakvale Dome salt play they should get at or above 15 mmcf/day of gas by the end of the year. News on both wells should be out around the end of the month. The low price of Benz stock connotes that it is a very speculative stock, and that is one reason they want to do a significant rollback of the shares. The company is not very speculative at all right now. They have a ton of debt, $12 mm of which is due in less than two months, but that is a problem that is easily solvable as the upcoming news will amply demonstrate. Nothwithstanding all of the above, I sincerely hope that folks continue to keep thinking about Benz with an attitude similar to yours, so that we will get some selling into this rally. Although I am nearly finished shooting my wad on this turkey my buddies still have a long way to go to complete building their positions. I tell you man, one of these days this thing is gonna get up there and stay up! (That's funny, my girlfriend was saying the same thing last night -- yuk-yuk). My buddies all laughed their asses off when they found out that I was the sucker that bought 6,000 shs. of this @ $1.15 a couple of weeks ago. But then the smirks wiped off their faces when I told them that as of Friday my average cost for the whole position is now down to right around the current "ask", $.87 a share. Now for them to get in under me they have to pray that folks will be dumping this on the press release news about the share consolidation, which will be out Monday or Tuesday I understand. For their sake I hope you guys are right in thinking that the overall response to this news will be negative.