tui: I think you're spot on. The catch phrase a few weeks ago is that the market moves when the obvious is publicised or made well known or something like that.
I think we were all expecting a decent reserves upgrade on Monday, and no doubt that was already built into the share price before the announcement, but it was reasonable to expect going to about 75 from about 50 and we got about 100. That was enough to make me buy 40,000 more (many people say "I am buying at these prices" but it's usually hot air). I think at the moment we're seeing lots of profit taking (not surprising in the current climate) and people playing the technicals, but I don't mind being patient and waiting for the fundamentals to catch up. If it takes a few months, fine. If it takes a year or two or even three, fine. I think the fundamentals vs. the current situation of profit taking because of this stock's recent price history makes it an excellent time to buy. Many people are reluctant to buy because of the jump from 20c to $1.30-$1.40 in the last few months, and sure, from a technical point of view it might look bad, but fundamentals win out in the big picture over long periods of time. If you're a day trader this one may be crap, but if you want to hang on I think this one is great.
We have a massive resource of very high quality liquid oil. Our already huge 1P and 2P reserves are basically guaranteed to increase with further drilling and proving - people love comparing MAD to AUT, and point out that AUT has higher production. That's because they're a couple of years ahead of us. Look what happened to AUT's new acreage's 1P and 2P reserves as they proved the land up - it increased. Being at an early stage means we have further to go in increasing out 1P and 2P reserves, while AUT has already done all that. This means the comparison is better for MAD than it looks. We have a proven, simple model of production, which is low cost.
The share price can spend the next couple of years doing whatever it likes, but it can't hide from the fundamentals forever. This is exactly how I felt when I bought at 21-22c and sat there watching it do nothing for almost a year. The market hated MAD for its own irrational reasons, but the fundamentals couldn't be ignored forever.
FDM Price at posting:
$1.31 Sentiment: Buy Disclosure: Held
