Nihilism, TRRC does report monthly production data on wells less than a year old - refer to the Data section of their website and then Production Report Query. You can quite clearly see up to November 2012 the production trends as they go up and down as wells are drilled. I understand that upstream companies can seek to repress well results on frontier / discovery wells where they are acquiring open acreage so as not to let the secret out, but this is not the case for Maverick's leases which are already well developed (e.g. West Schenck B / Zivley Trust B / Gordon etc etc). These production numbers also correlate to Maverick's ASX releases (except when the character "~" is used as I explained above). One cannot simply correlate production data to Profit and Loss. The name of the game in the upstream oil and gas industry is cashflow. How much cashflow is generated for the capital invested (rather than accounting PNL which includes depreciation / amortisation etc etc). IMO the wells that are being drilled will not pay out and provide a meaningful return to shareholders. While production is going up, the cash balance is getting slaughtered to drill wells. I understand that cash balance will fall as production ramps up but the production that comes from drilling the wells is not paying out, especially due to the watering out issues. Regarding workovers, I understand the problems around access to rigs (even though the company listed with workover rigs - what happened to those???) But even with access to rigs, the company will REALLY struggle to generate commercial returns if the wells are worked over and then water out within days again (which I expect). Remember the IPO prospectus - they were supposed to be net cashflow positive and drilling wells out of cashflow within 7 months of listing from memory. Since then they've raised another $70m and the cash balance continues to plummet and the production has been horrendous (increasing now but still terrible vs prior forecasts). My scepticism will be resolved immediately when a well known consulting firm does a new report incorporating all of the data. In the meantime I intend to keep riding it down absent strong evidence that they are commercially extracting oil. The next quarterly will hopefully help us with this decision making (particularly since ad hoc reporting has all but ceased since they actually had to start getting oil out of the ground). Short.
FDM Price at posting:
65.0¢ Sentiment: Sell Disclosure: Held
