reserves - production benchmarking, page-2

Its obvious ptolemic, you dont know much about oil and gas valuations.

Let me give you an example Azz, are producing 2500 bod from there assts, but the reserves are about 25m barrels recoverable. Those asset would be worth close to 600m, why because production comes from only a small number of wells that produce 10 times more than mads wells do. Net profit would be 50m a yr. Therefore valuation is high. High rate of return. SIMPLE

Mad on the other hand has 80 wells producing just 600 BOD, with high costs of production. The closest comparision mad has in asset location is linc engery gulf coast assets, they are only 20m reserve but pump out 4000 BOD. So how can one compare. Everybody else has runs on the board, and there share prices havent moved much, yet mad doesnt really have any runs on the board when it comes to production and running the company and it moves up for 6 months. The market has realsied this, you cant offer blue sky for ever, that what tech companies did in 2000, you need results. Which big oil comopany would buy mads assets for current share price of 400m for a 6m profit. NO ONE. The asset hasnt been proved, until they have been proved no one will


What i have outlined to you is that quality small assets are always worth more than, assets that are big but marginal. At the moment with the drilling that has taken place on mads acerage (over 80 wells in two yrs) the assets looks marginal. Whos fault is that either managment for taking there hands off the wheel, or the asset is infact marginal. I hope for everybodies sake its poor managment practices. The managers are great drillers, they need to get back to that, let the drill bit talk abit. Forget about deals, raising capital, buying new machines, looking at sismecis for new oil. Drill and complete wells