placement, page-40

Trader,

Not all reserves are equal - would you agree?

If you made a massive find with squillions of bbls of oil but your netback after all F&D costs was $5 bblo and oil is at $80 bblo then that is not as attractive as another where the netback is say $50bbl. Liking what MAD has.

Moving from PUD reserves to PDP reserves is what it's about - especially with small acreage. Does no good to have decades of drilling - unless you want to sell off pieces like CHK/DVN and the like or get acquired. The acquirer will look at both PDP and PUD reserves and pay for that, the rest is dirt and carries an acreage $value.

So yes, anything that accelerates production helps realise the value of the company - but the reserves aren't going anywhere but out of the ground and into a pipeline and getting sold by MAD.


Do you have a favored valuation model?