placement, page-17

Hi Mupple,

E&P companies and O&G generally are capital intensive business. Capital has got to come from somewhere.

That somewhere can be summarised into 4 areas:

1. Equity raising (share placements, convertible notes, etc)
2. Cash Flow (cash generation, VPPs etc)
3. Debt Issuance (bank finance, senior notes, etc)
4. Asset Monetization

Stick with MAD. They are doing (1) and better share placement to an institution that may stick with us (better a cornerstone investor) and not sell than convertible notes issued to a capital provider. They are also doing (2) via good old fashioned cash flow and not seeking to do a VPP on the cheap.

Strengthening the balance sheet now will serve them well in future when they can take on debt on their terms (look at the larger O&G companies say around a $1B MC).

And while (4) may not be applicable to MAD, giants like CHK do a damn well out of developing assets for sale.

As was posted, MAD isn't doing a CR because they are floundering, they are strengthening the company.

GLTA