New Buy Recommendation
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LUKOIL is Russia's largest oil producer and considered to have the 4th largest oil reserve in the world. The 52-week range of the listed ADR is $123 - $8.25. We hear listing on NYSE is being considered for early 99.
The major shareholders of LUKOIL at present are the Russian Government (26.6% of the issued shares), Bank of New York - as a nominee for ADR and GDR holders (28.2%), companies of the Russian NIKOIL Group (17.7%), LUKOIL-Garant pension fund (5.3%). As at June 30, 1998 the officers of LUKOIL comprised 65.5 thousand holders of ordinary shares and 52.6 thousand holders or preference shares.
On October 29, 1998, LUKOIL announced that output of oil and gas condensate was 39.67 million tons.
Everything about Russia indicates risk to the average investor type, but for us at S.A. Advisory we smell opportunity. If everything was wonderful, LUKOIL and the like would be 10x the current price. In our opinion, the real risk is not owning this issue.
Russia has stumbled, but we believe that it cannot turn back.
We believe that LUKOIL may be the cheapest non-domestic investment opportunity that we have ever seen.
We continue to buy LUKOY at current levels. We believe that it will remain volatile, but offer a double play on Russia, that is, high oil prices and greater stability in Russia. The current price indicates the worst!
Broker contact: Greg Nelson at 1-800-269-9460;
LUKOIL Investor Relations: phone (+7) 095-927-4885. e-mail: firstname.lastname@example.org
LUKOIL internet address: http://www.lukoil.com
Press service: phone (+7) 095-927-1677, e-mail: email@example.com
We intend to monitor LUKOIL within our international portfolio and also our model portfolio for percentage gain performance.
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