Highlights:"Maverick Exploration and Drilling Limited (ASX: MAD)...

Highlights:
"Maverick Exploration and Drilling Limited (ASX: MAD) is a Texas based oil company with interests in three salt dome projects near Houston totalling ~14,000 acres. Maverick has a very large reserves position of 102 mmbbl 1P and 192 mmbbl 2P oil and its own fleet of rigs with the capability to drill 150+ wells per year at low cost. We expect current production of 600 bopd to grow to 3.5 kbd in two years and to 10-15 kbd within five years. The large reserve base and growing production outlook provide the basis for rerating and will be attractive to larger companies. We initiate with a Buy recommendation and 12 month price target of $2.40/sh."

"Our base case ($2.15/sh) assumes 1P reserves (102 mmbbl net) are produced. WTI averages $US95 /bbl real (Brent $US99/bbl real). Our bear case ($0.95) assumes ~50 mmbbl of net reserves (half of the 1P level) and WTI of $US70/bbl real. Our bull case ($4.30) assumes 2P reserves (~190 mmbbl net) and WTI of $120/bbl real, broadly corresponding with the P10 (1 in 10 chance) of DCF simulation. The Blue Sky case ($7.30) assumes projects are fully derisked."