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

To: Serge Collins who wrote (6117)	2/26/1999 7:34:00 PM
From: Serge Collins	Respond to of 24892

Previous post should read -- "big writedown of US$230 million." eom

To: Serge Collins who wrote (6117)	2/26/1999 9:20:00 PM
From: J. Kerr	Read Replies (2) \| Respond to of 24892

Serge - re RGO: I think it depends on the results of asset sales over the next few months. Obviously the company's bankers are watching RGO closely as per this not so subtle reference in today's press release: <<...will be working with its bankers to reach agreement on a revised credit facility limit and terms in conjunction with the sales.>> The potential write-down of US$230 million will affect the borrowing base of the company but it really has no cash flow effect on the company,i.e. the resources are still in the ground. So, if RGO can successfully sell some assets and reduce debt to an acceptable level, they should be able to carry on and wait for the price of oil to improve. The good news is that they are going to sell natural gas assets which are more marketable than oil assets. The bad news is that they are selling natural gas assets, which leaves RGO even more dependent on oil than before. Regards. Joe