Ann: Gulf South Program Funding Received , page-17

I missed Paul's post but I gather he reiterated his previous comments on why the GS JV deal is bad for MAD.

Why anyone would suggest this is a bad deal for MAD is beyond me. MAD is still clearly in a growth phase, and not yet cashflow positive. Yet here is a deal which not only fully funds the drilling of a bunch of MAD's wells (i.e. at no risk to MAD) but throws in an extra $250K cash, all in return for a 50% WI share. Win/Win for MAD:

1. Fully funded wells at no risk to MAD
2. Additional cash to help MAD fund the rest of its development program (an extra $8M cash for the 32 wells - perfect considering some have been saying MAD are burning cash)

Another way to look at the extra (i.e. on top of drilling costs) $250K/well cash that GS is paying MAD is that whatever the EUR and therefore NPV per well, GS are obviously banking its more than $250K because they need that just to break even on each well - from their 50% WI share.

And would they enter into this if they were dissatisfied with the results of their original JV wells last year? I think not.

Cheers, Sharks.