love these 1% rises., page-11

Hi Teddy,

Hype is hard to truly discern (was (is?) Apple hype? Enron was definitely hype, and fraud).

Momentum investing(ors) is the crowd and short term trend and is difficult to swim against.

I'm in but at a price I think is high relative to past trading but represents value to where I think it is heading - based on "Real Company".

The caveat is that the info put out by MAD is real.

So as I wrote yesterday, based on 2P Reserves the investment should have a positive (very) outcome.

At 2P reserves of 73Mmbblo - assuming it is real and assuming it can be recovered economically (note no NPV10 given), will reward investors above todays SP. To date, there does not seem to be a challenge to producing the leases economically.

The other thing is that MAD is barrels of oil & not barrels of oil equivalent. That's good news when you read about valuations on boe.

When I penned my post yesterday, I talked about a Canadian oiler I hold. Today, a company (do not hold) Midway Energy, a neighbour with 24.2Mmboe of 2P reserves (about 70% oil) was taken out at $550M. If one was to adjust the boe to oil on a volume price basis it would reduce to around 18Mmbblo or so.

Gets me back to the approx $30 for 2P for a company with good reserves and good growth. Half it to be safe to a firesale $15 per bbl of 2P and its still a Billion dollars.
All good unless what the company puts out is hype (or there is another word that could be substituted).

In the end as the price of oil goes, so does the SP of MAD.

GLTA