I've done some work to benchmark the reserves and production of MAD versus other ASX and international oil and gas companies. My primary benchmark for this analysis is Reserves/Annualised Production.
For obvious reasons this only includes companies with production, however the range of companies includes onshore US producers with primarily unconventional assets, to those currently constructing major international LNG projects (and hence their production is expected to increase dramatically in the near future).
Excluding MAD the average for 1P reserves/production was 12.6 years with a range of 3.4 to 23.8 years.... Assuming MAD manage to maintain their production as of the last quarter their ratio is 391 years!!!
2P metrics tell a similar story if anyone is interested in seeing the results.
Does anyone know of a precedent for such a massive extrapolation of reserves? I have used this benchmark successfully for companies, individual fields and countries (note you need to make sure you use true 1P and don't include contingent resources to get a proper like for like comparison). The highest value I came across before was ~37 years which was for a gas field (which generally have higher values anyway), in that case the peak rate was constrained by a contract and therefore the production was artificially constrained......MAD is more than 10 * higher than that!!
I'm going to do some more fundamental calculations and see what else would be required for the reported reserves to transpire.
FDM Price at posting:
89.5¢ Sentiment: Sell Disclosure: Held
