"MAD successfully listed on the ASX a couple of months ago with an interest in a Salt Dome called Blue Ridge in Texas, USA. Despite having the 5th largest 2P oil reserves on the ASX (with 25.6 mmbbl), we expect the market to judge MAD on its actual oil production. Oil rate has increased to average 300 BOPD in November, with daily production as high as 375 BOPD by the end of the month. The magical figure to keep an eye out for is 750 BOPD. At that level the company can selffund the drilling of 6 news wells per month (out of a portfolio of more than 400 drill sites), with each well expected to average 25 BOPD. A second salt dome was acquired recently and a couple of high impact exploration wells are on the cards. Our unrisked 2P reserves valuation for Blue Ridge alone is A$0.94/share."
This was written some time ago but I think it's a good reminder of the critical "750 BOPD" figure. Get to 750 BOPD on a sustainable basis and you will most likely see larger instos join the register. 2P reserves IN THE GROUND are not rated by fund managers. PRODUCTION is. Lots of forum members get frustrated when they think their favourite oil and gas stock APPEARS to be undervalued when in fact they are not undervalued at all. Reserves mean little. Production and ensuing profits are paramount.
FDM Price at posting:
17.5¢ Sentiment: None Disclosure: Not Held
