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Stocks T / Triton Energy Limited


Subject:  Re: No subject specified Date:  12/23/1997  10:52 PM
Author:  cardinalm Number:  6 of 116

I am glad someone brought this up. The stock has had a great deal of past interest. I believe much of this is due to the relatively small size of the company and the magnitude of the BOE reserves they have. Right now the stock is doing quite poorly which again, i have some ideas about. A little more than a year ago, the company became an Cayman islands company while the stock was in the high forties, low fifties. At the time, this rubbed quite a few large shareholders the wrong way due to the capital gains hit if they cashed in any stock. Now, the tables are turned, the stock is well below its value of just a year ago, and I think quite a few people are selling off the original shares to get the loss related tax break. Obviously not casual investors, if this indeed is what is occuring, these people have large amounts of capital for which this strategy makes sense.

So, why is the stock so low and what does it mean? My casual opinions are based on what most of us know. The compainies main source of revenue is the production from the Cusiana/Cupiagua fields in Colombia. Production was advertised to reach target levels of 500,000 BOPD in 1Q 98. However, this has been somewhat delayed, and the most recent production milestone has been steady at around 300,000 BOPD. As if Triton were not impacted enough by this, the political situation in Colombia has always - to my knowledge - been regarded with EXTREME caution by Wall Street investors and they are reluctant to bank on a somewhat unstable future in Colombia. Oxy's trouble with continuous rebel bombing of the Cano Limon pipeline is at the forefront of everyone's minds.

So what is different? The Cusiana and Cupiagua fields are operated by BP. BP has been in Colombia for a long time and are familiar with doing business with all parties there. Historically, they have tended to get what they want with the least damage. To be fair, BP has recently had some troubles with the government over unfavorable production terms for their Piedemonte liscense and have seemingly followed through with a threat to drop the liscense and lay off workers. This obviously does not make them anyones best friends right now, but it does not appear to be impacting the Cusiana production.

Also, the Colombian govt. needs cash badly, and have thrown in military support to ensure Cusiana crude ma