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

To: mariner who wrote (5745)	12/17/1998 12:36:00 AM
From: Kerm Yerman	Respond to of 24900

Mariner / Wolverine Wow, didn't realize shares have fallen so low. ($0.20) At one time I liked the company. But I bailed out around $1.00/share. I think the company is in serious trouble. They had cash flow of just over $400,000 for the nine month period of this year. That was based upon production of 900 boe/d thru the same period. They just sold an interest in key properties which will reduce production back to 600 boe/d. Thus cash flow will decrease over the near term. The proceeds from the sale is approximately $10 million and will be applied against debt. That still leaves $8 million in long term debt. That's huge when compared to cash flow. I have no idea how the company plans to service their debt load on such a small amount of annualized cash flow. It would appear they need an equity offering and at today's prices, such will dramatically dilute shareholder value. If I were in your shoes, I would contact the company and present the question as to how they plan to support their debt load of $8 million with current annualized cash flow of only around $300,000. Also inquire into their 1999 capital budget program. If you do contact them, I would be interested in what they tell you.