wow what a sell off, page-24

shabandri and Paul,

You re-iterate your points about 'risk' and 'sub-60c' pricing of MAD based on the fact of failure to increase production this year yet you always leave out key points which make your concerns less relevant:

-1P reserves (of which MAD has almost 100million barrels) are 95% proven and COMMERCIAL. The second word is key there and assuming the reserve calculations have been done correctly, and even allowing for conservative assumptions and failure, then the end result should be commercial production of atleast 50-60million barrels.

-Previous 'contract drillers' been selling the same story for 30 years? No they haven't, in fact MAD management have been in the area, producing oil for 30 years. The fact that other companies have come and gone (after producing) is not the same story. In fact, I explained very clearly to you why in 1996, the last attempt at profitable production was abandoned and that was the price of oil (sub $19/barrel after 4 years of profitable production at +$24/barrel) showing how tight he margins were back then.

Since that time, labour prices (in the US, major cost) have gone up by a measily 18% (they have actually dropped since 2008) , where as the price of oil has risen (as of today) over 400%. See how the economics of an operation could change in that time period?

-Fundamental issue of 450M market cap vs risks is too high risk reward ratio..

This is an interesting proposition. Going back to the 1P reserve point, lets go conservative and say 50million barrels recoverable at a $40 margin (they have been getting $65 but conservative) thats 2billion dollar project worth or using an NPV of 20 years -> 936 million dollars or in todays prices, 46.8million dollars per year profit and revenue of 140million per year (based on $100 oil prices and a discount rate of 10%, which is very high based on current inflation).

And that is based on hugely conservative figures for potential growth and reserves.. giving them 20 years to get production to 6000 bopd.

Given that they have gone from 200 -> 563 in a year (with a maximum of over 1000bopd)