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Gold/Mining/Energy : American International Petroleum Corp -- Ignore unavailable to you. Want to Upgrade?

To: Razorbak who wrote (9662)	4/3/1999 7:03:00 PM
From: DRRISK	Read Replies (1) \| Respond to of 11888

Razor, <<<<<<Fact: May-1999 crude oil on the NYMEX closed at $16.43/bbl on Thursday. That's approximately 82% of the $20/bbl level you referenced, yet the stock price languishes at $0.81/share, a meager 11% of its Oct-1997 peak of approximately $7/share>>>> You are ignoring the reality that OIL came from $10./bbl not less then three-six months ago and that in 97 it was coming from $25/bbl a big difference in sentiment. Secondly, you say <<<<<Fact: Shares outstanding on November 5, 1997 were 48.3 million, and shares outstanding on March 29, 1999 were 66.2 million, which represents 37% dilution. (48.3/66.2) X $7/share = $5.10/share, which is 630% higher than the closing price on Thursday.>>>>> AIPN traded at $6-$7/ share for a only a few days. The more accurate share price to calculate the effect of dilution is $4.00 which would give you $1.48/share which is very close to where Palladin would be allowed to begin their staged conversion prior to 8/99. A JV for OIL would be a whole lot easier at $20/bbl then at $16-17/bbl. Where we have traded for only the past month post OPEC reduction. The fact that other exploration outfits have suffered similarly, CHAR, HHLAF is an indication that sentiment can be as irrational on the bearish side as it is on the bullish side. I believe that the company has behaved pragmatically but not inspirationally and that is a reality of history not my speculation. If we had drilled Columbia or Peru we would be toast. <<<These are Excerpts from interview with David Hale>>>> BARRONS April5 Beware A Healing Globe Rebounds abroad could be bad news for U.S. business, says economist By LESLIE NORTON Q: What would reverse this rally? A: Ironically, the real threat to Wall Street would be when the world economy has a meaningful recovery. If, in 12 months, Europe and Japan and East Asia are enjoying good growth, commodity prices will recover significantly in 2001. OPEC right now can probably keep oil in the low to mid-teens. But by 2001, with a global economy growing 3%, it will rise to $18$20. Copper and nickel will rally 30% or 40%. We'll be in a full-employment economy without commodity deflation compensating for wage pressure. In that environment, I see the Federal Reserve probably raising interest rates at least 100 basis points in 2001. Keep in mind that Greenspan is perhaps more confident on commodities than stocks. He made a lot of money in the 1960s as a young economist trading commodities. That would set the stage for tightening, a crunch in profit margins, then a washout in equity prices. Given the role stocks now play in household wealth, you'll see more weakness in consumer spending than in previous cycles. It need not lead to a crash. But there is clearly a good case for a meaningful bear market in 2001-2002. That would also coincide with the election cycle. In the environment I describe, you would have at least 12-18 months of tightening, bond yields above 6% and profits down 15%-25%. Q: What do you think of Russia? A: It's one of the cheapest markets in the world. If you take a very long-term view, you'll make money in the better-quality Russian oil and gas, telecom and utility companies. If we had a meaningful recovery in oil prices, the Russian market could easily triple. The problem is that Russia needs a new government. Yeltsin is a spent force, a source of instability. It will be very hard to get a vigorous restructuring program until we have a new president. If Yeltsin dies in office, Prime Minister Primakov will probably win, because he would occupy the White House. If he lives till the end of the term, then Moscow Mayor Luzhkov could re-enter, because he has strong financial backing. The market would rally if Yeltsin died in office, because his successors could move decisively to implement restructuring reforms. Do you have similar companies in the OIL sector like AIPN that you would recommend or own? DrRisk