insider trader-stock pick of the week - 06feb, page-12

nihilism,

Yes please do send my post to the reserve certifying company. I have tried to call on a number of occasions and only get voicemail, hopefully you have better luck.

Certainly happy for you to construct the chart. Go the the Texas RRC, download data from all the leases from 1940, collect the data according to when lease production started and divide by active well count.

Oil reserves are oil reserves and are the only thing measured in bbl. Oil and gas reserves can be combined and measured in boe not bbl, look at a presentation from a major oil and gas company or better still read the SPE reserves definitions, it is never referred to as "pure oil" it is "oil" or "oil equivalent" It's a small point, silly of me to raise it, and not worth discussing further.

1.) Why bother increasing reserves with marginal targets when you apparently have so many reserves already? Surely what this company needs is production and cash flow? Drilling exploration wells when you are apparently a "development company" with a longer proved reserves life than Saudi Arabia - good management - really??

2.) As you will see MAD drilled a total of 7 wells on Boling dome, all except 1 of these encountered sandstone reservoirs, most of which were described as "cored productive" none of which is economic. True they don't refer to which sandstone reservoirs they encountered but given the TDs of some of the wells you would expect at least some of them to be the deeper conventional targets.

3.) Testing the outer limits of the fairway - nice you buy into that. What does it even mean? This is a conventional reservoir so the uncertainties are broadly fluid levels (i.e. will you encounter oil or water) and what will the reservoir quality be. When I have been involved in drilling a well that encountered water, we did not follow up with another 6 wells just to make extra sure we know where the water is. I don't agree that it is "a normal part of the process", though perhaps indeed it is "a normal part of the MAD process". In this kind of development, where you are not really optimising anything (unlike e.g. an offshore development where you have to make significant capital investment upfront and therefore size equipment etc) it makes sense to drill high certainty locations early on.

Looking at Blue Ridge Dome which is where the majority of production originates 57% of wells drilled were completed in Q4, in Q3 it was 64% so the rate is falling. Maybe they are plugging less wells in January....maybe they are drilling less wells? Who knows, lets wait until we have some actual data.

I have read the reports thoroughly, and cross checked with regulatory reporting. Forgive me for reviewing the data with a critical eye. You are happy to repeat what management want you to hear and with no back up, but that is not the way I operate.

I find it easier to read lower case text so perhaps you could help me out by keeping your posts that way - except for standard punctuation.

Short