Subscribe to:
Post Comments (Atom)
Blog Archive
-
▼
2011
(121)
-
▼
December
(24)
- December 29, 2011 Edition of the Stateside Report
- December 28, 2011 Edition of the Stateside Report
- Happy Boxing Day
- Merry Christmas
- December 22, 2011 Edition of the Stateside Report
- December 21, 2011 Edition of the Stateside Report
- December 20, 2011 Edition of the Stateside Report
- December 19, 2011 Edition of the Stateside Report
- December 16, 2011 Edition of the Stateside Report
- December 15, 2011 Edition of the Stateside Report
- December 14, 2011 Edition of the Stateside Report
- Dennis Gartman says the gold bull market is over.
- December 13, 2011 Edition of the Stateside Report
- December 12, 2011 Edition of the Stateside Report
- Nevsun most likely suitor for Chalice ...........
- Just bought another 10,000 shares of Chalice
- Consider Chalice Gold Mines today
- December 9, 2011 Edition of the Stateside Report
- December 8, 2011 Edition of the Stateside Report
- December 7, 2011 Edition of the Stateside Report
- December 6, 2011 Edition of the Stateside Report
- December 5, 2011 Edition of the Stateside Report
- December 2, 2011 Edition of the Stateside Report
- December 1, 2011 Edition of the Stateside Report
-
▼
December
(24)
3 comments:
Vince - Mart is a helluva lot better value than you suggest with your back of envelope analysis.
Their Q3 numbers, while generating new record earnings and cash flow, were significantly constrained by the pipeline curtailment. Their productive capacity is roughly double what they produced in Q3. Management claims that the p/l negotiations will be resolved "soon".
Once that happens, they can ramp gross production to ~15K bopd uber high netback oil (gets a premium to Brent). MMT has 50% WI, but gets about ~65% while under cost recovery (ie when there is activity in the field as is happening now).
The wall of cash that is about to hit their balance sheet is stunning. And due to low share price, are planning a divvy (likely announced Q1) of around $0.10 annualized, rising as production rises (~15% yield at current prices).
What has held MMT back is reserves. Only $0.90 on 2P NPV10 after tax. But I'm convinced they are significantly understated. They will see a boost from the recent drilling on Umu7 and Umu8, but the currently drilling Umu9 could have big impact as it is a step out well on an adjacent high - they are also drilling significantly deeper to test new structures.
I have high confidence upper zones will be oil charged. If so, they can then start to think about filling their currently expanding Central Production Facility to the new 30,000 bopd capacity. If the lower zones show oil, then it could be a new ball game.
Simply no better value in the oil patch than Mart. Mart is trading about 1x fwd cf and with a fwd PE of 2.
There is no fundamental reason why Mart should remain so undervalued - other Nigerian plays get sector average valuations if they perform well. Addax was hugely successful, as is Afren.
The comments by Anonymous on Mart Resources are very interesting to read. Thank you for your input.
I agree about Mart and their undervaluation. That's the reason I brought it to viewer's attention. Maybe it will take another oil run to $150 to wake these juniors up again. Fundamentals sure are compelling.
Post a Comment