An article I just came across in the RESOURCE STOCKS Magasine JUNE 2006,(almost 3 yrs ago) pg 99-100,8th paragraph (pg 99). Marion reporting a series of successful gas wells which are steadily building production and point to the company moving into positive cashflow in the second half of this year and into profit in the next financial year. Pg 100, paragraph 10 & 11, Financially Marion is in a strong position. Apart from the cash in the bank Clarke said he estimated the business heading for an annual production rate of 25mmcf/day within 12 months which, at a conservative gas price of $US5 per thousand cubic feet, represents cash flow of $US 120,000 a day. "At that point we'll be kicking off $US40 million a year in cash flow, so we'll be quite self sufficient in capital requirements. With that sort of cash you can drill alot of wells. WE will not have a dividend program, any free cash flow will be reinvested in accelerating our drilling program. My plan is to DEVELOP the assets, show that the assets are there, and then let somebody buy the company.
My point, being that you cannot show the assets are there IF YOU HAVE BEEN UNSUCCESSFUL WITH THE DEVELOPING THE ASSETS, with which Marion has been. You have to prove flow rates for success with your development of wells. They have not given us concrete proof of there 5mmcf/day milestone. There is no confirmed data at this stage.
MAE Price at posting:
37.5¢ Sentiment: None Disclosure: Held
