latest release from Peter Strachan; issue 7 vol 9 - another glowing confirmation of MAD
"Maverick Drilling & Exploration (ASX: MAD) is being kept very busy on its three salt dome hosted oil projects, south of Houston, Texas. Drilling of a second well on the Nash Dome has shown exceptionally strong results that have caused the company to go back to the drawing board to recalculate its reserves. Not only are reserves likely to be enhanced by this discovery, but oil production from these high quality reservoirs could jump sharply. Reservoir porosities of over 30%, equivalent to porosity seen in unconsolidated beach sands, along with very high permeability measurements (over 1 Darcy) hold promise for exceptional flow rates from the 4 separate zones of oil and two individual gas zones intersected. No doubt, the company will be conservative in its engineering of initial test production so as to conserve the reservoir quality, but depending on reservoir thickness, StockAnalysis thinks that initial oil production of over 200 BOPD could be on the agenda if the lowest zone has reasonable permeability and that could be squeezed up to over 500 BOPD, depending on early pressure measurements. By early May, Maverick should be in a position to disclose updates of its 2P oil reserve estimate and in the next week or two we should also know how the bottom most oil zone at the Nash Dome discovery is going to flow.
Recommendation: At around $1.30 per share, Maverick remains a buy for a move towards $1.50 per share.
OEL – Valuation Matrix Asset Value $ per $m Share Galoc PI 86 $ 0.072 Galoc PII 27 $ 0.023 Unissued equity 5 $ 0.004 Net Cash + (est) 38 $ 0.032 Corporate (14) -$ 0.012 Sub total 1 42 $ 0.119 Risked Exploration upside 4 05 $ 0.342 Total value 5 47 $ 0.46 Source: Strachan Corporate Pty Ltd MAD - Valuation $m $/Shr Fixed Assets 13 $ 0.03 Net Cash (est) 14 $ 0.03 1P Reserves 358 $ 0.89 2P Reserves 134 $ 0.33 Total 519 $ 1.29 Risked Exploration 81 $ 0.20 Risked Value 600 $ 1.49
FDM Price at posting:
$1.29 Sentiment: LT Buy Disclosure: Held
