I've just been re-reading through some of the old asx reports to try and make some sense as to where MAE is heading. I've detailed a few interesting observations.
The 1Q rep end Oct 2007 said Questar was unable to take their gas due to a major maintenance program, so the wells were off production from some time in Oct or earlier, till Jan 2008 when 5 wells were reportedly back on production. But as we know they produced very little, the reasons why explained in the most recent announcement.
The implication of this is that these wells haven't produced since Oct 2007 at the earliest ie 8 months. To me this explains why dewatering is taking so long. If as L2 explained dewatering is an ongoing procedure, then these wells have 8 months of water to get rid of. This explains the stable flow rate delays. Possibly the upside is that a lot of water will have been extracted making the horizon more porous & the gas flow higher (as L2 & DT explained in previous posts)
Last Q payments for "development" was $8m -what happened to this capex - with strict auditing etc they can't have p***** it up against a wall, it must have been spent on development.
Possible expenditures:
After finding oil in the last 2 wells, they reported that next summer (ie now) they would do some more exploration. They could have spent some of the money on this, after all the layer is only 1800' deep, a third of the depths of the other wells. You might say but surely they'd announce this to the market...I don't remember any announcements re drilling on the latest Helper well and they did say they'd follow it up this summer.
After drilling 8-19 the rig was to drill 7-20 from the 11-20 pad. This would have halted production from the wells on this pad so they decided not to drill 7-20. Instead the rig was to go to 2 miles south of the ASD pad to drill 2 wells. Haven't heard anything more, but this also is a possibility as to where the money was spent.
One question I've been unable to answer is why has it taken so long to frac 8-19, it reached TD in sept 07. This well was drilled to within 1/2 mile of an old prolific producing well. It also had oil shows. It was drilled after 1-30 which has been completed for quite a while.
There are many pieces to the puzzle, solve it and I'm sure the rewards will be well worth it.
MAE Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
