I may be wrong about this but I read that they had drilling commitments elsewhere and hence did not really do much work on production. However if they fail to show any improvement in Q1 2013 where they have a) 9 more rigs b) worked over wells c) more staff, then I agree that there are problems.
re the wells, actually I think it is sensible to drill new wells. If they were confident that those existing wells were ok then there is nothing more with finding more sources of income. Could it be this simple?
Regarding the JV, I'm not sure what you mean about it falling over. They have already executed the agreement, and under this agreement MAD would have received the funding. There is no walking away because it is a done deal.
I actually did not expect any announcements about receiving the cash either; because they have already informed the market that it is going to happen - and if they received it, this is business as usual. I don't have MAD management's emails but I would happily ask them this question to confirm this. I think Danielson might have asked them about this at some stage - at least about their cash balance.
But finally on the point of JVs, I know first hand how thorough and extensive the due diligence is on these things - and again, there is no way that Gulf would stump up that much cash if they didn't believe MAD could make a profit.
FDM Price at posting:
69.0¢ Sentiment: LT Buy Disclosure: Held
