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Gold/Mining/Energy : PetroQuest Energy, Inc (PQUE and T.PQU) -- Ignore unavailable to you. Want to Upgrade?

To: Ronald J. Clark who wrote (348)	5/24/1999 12:49:00 PM
From: andrew r harwood	Read Replies (1) \| Respond to of 686

I am going to try and make the annual meeting and see what they say .personally i regard the production loan as very positive that someone was willing to take the risk.if petroquest had not been able to get financing to bring the well on stream they would have had to sell the well on much less favorable terms .presumably once this loan is paid off they will have the full benefit of production.with natural gas prices being high right now it should pay off fairly quickly.the lender is taking a lot of risk since i know from personal experience that things can always go wrong with these wells. a friend of mine completed a very deep and expensive well in the gulf costing more than 15million dollars had good initial flow and now they are having problems with salt water intrusion .so in the immortal words of forrest gump s--t happens .anyway it appears to me that petroquest is heading in the right direction as are oil and gas prices so i think a little patience should be very well rewarded .but this is clearly not a stock for widdows and orphans though right at this point in time it looks safer than the internet stocks arh

To: Ronald J. Clark who wrote (348)	6/3/1999 10:07:00 PM
From: Ed Ajootian	Read Replies (2) \| Respond to of 686

Ron, The lender keeps the ORRI forever. This is his booty in exchange for taking the full risk on the well. Making a non-recourse loan on a well is more akin to buying the net revenue interest subject to a call option for the seller, rather than actually being a lender. Seller can always get the well back by paying off the loan. So to make the deal worth the risk to the lender he is given an ORRI to keep no matter what happens. The lender is not related to PQUE as far as I know. Basically after backing out mineral owner royalties and the ORRI given to the lender here, PQUE now has a 29% net revenue interest in this High Island well. The connection to the High Island well has been delayed slightly and now we are looking at another week or two before it is flowing. Maybe that is the cause of the recent deadness in the stock trading.