gulf south, page-5

Thanks for your insights there Paprika. Playing the man not the ball yet again. Well done.
This is an impressive announcement. Flow rates in the order of 60 - 65 bopd across a spread of 9 wells is impressive and these wells are likely to be economic successes.
While the farmout has focussed on MAD's best acreage (West Schenk), and also while the announcement doesn't tell us anything about decline rates on these wells, the results are likely to lead to a rally in the short term as investors extrapolate these flow rates across the shallow well inventory. I believe that extrapolating these results broadly is not an accurate way to analyse the results but I suspect the market will do this nonetheless.
It is important to note that these 9 wells are contributing somewhere in the order of half of MAD's total gross production so the decline on the other wells (must be around 100 wells) is clearly evident. That is, a large number of wells, including many drilled in the last 3 quarters, are each contributing little (~5 bopd) to total production.
I'm squaring up on the back of this announcement and will look to go short again if the price gets into the 70s pre the next quarterly.