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Gold/Mining/Energy : ABC - Abacan Resources, Nigerian Oil $$$ -- Ignore unavailable to you. Want to Upgrade?

To: Razorbak who wrote (2514)	2/21/1999 4:58:00 PM
From: FoxyLoxy	Read Replies (1) \| Respond to of 3156

Mr. Craig: I did not mean for you to think that those Cherwayko costs continued, I was just kind of kidding. However, for Mr. Rice to want costs to be REDUCED to $3 million annually, they are obviously well above that margin now! We are obviously not getting accurate financial information to detect clearly what is going on. I suspect that although they have "given-up" the IMA Field, there are a lot of costs they are on the hook for. Mr. Rice's condition of eliminating all liabilities would indicate this to be the case. The disclosure on this company is a joke. Clearly Mr. Rice has a clearer picture and is looking to get out, somehow. Now, what incentive would a creditor have to wipe their debts (some must be significant) with Abacan so that Abacan can get more money? Put yourself in the shoes of a creditor. Pretend you are Schlumberger. Pretend you are Total. I do not see how they would (or should) let go of their claims against Abacan (or its subsidiary). Too often equity holders think that creditors will just stand aside. By definition, equity stakeholders get the remaining value after repayment of debts. I am doubtful that the debt holders / suppliers care one bit about the equity holders of Abacan. They have shareholders to report to as well. As I suggested a long, long time ago, this is a debt play, not an equity play. Thus I shorted the stock. I am sure Total would rather team up with Schlumberger and get what they can from Abacan, it must be better than getting zero. They can get all the equipment and likely all the plays (whatever they are worth) in settlement if they wait. Shareholders of Abacan are only now just starting to realize this. Good luck Mr. Rice, you will need it. As far as Razor's theory of "facilitation payments", perhaps he is partially right. With oil prices down, the pressure will be even more intense for the wheels of Nigerian industry to be "greased". One does not easily win the distinction of the most corrupt nation in the world. You would have to work hard at it to beat out some very capable and well-known competitors. FoxyLoxy