wilson update on mad

Maverick Drilling & Exploration Limited – High impact well discovery at Blue Ridge Dome

Announcement details:
• The West Schenck B #116 well discovered oil in the Jackson Formation at 5,050 to 5,153 feet and in 10 shallower formations. Preliminary tests indicate flow rates in excess of 100 bopd.
• This is the first discovery in the Jackson Formation on Blue Ridge Dome in the 100+ year history of the field.
• Testing will now be undertaken to confirm the sustainability of production flow rates.
• The Jackson Formation is the same formation that resulted in the previously reported blowout in the Zivley #100 well, 900 metres to the north east. Drilling of a replacement well for the Zivley #100 well is currently underway.

WHTM view:
• Initial analysis –
1. This is a further evidence of hydrocarbon potential in the deeper zones around Blue Ridge Dome.
2. The high flowrate potential of over 100 bopd will significantly add to MAD’s production should these rates be sustained after testing. This rate is ~5 times higher than the initial flowrates from each of the development wells on the fairway at the top of the dome (~20 bopd/well each).
3. The discovery of hydrocarbon in the Jackson Formation in two wells nearly 1 km apart points to further potential from this zone around the dome. The results from these two wells will enable MAD to refine the ability of seismic to identify potential targets, increasing the probability of success on drilling.
• Earnings implications – None.
• Investment view – Buy recommendation and price target of $2.40/share retained. Current share price $0.68/share.