Re: MAD - Maverick Drilling & Exploration
this should answer some recent questions on this thread:
Article excerpt from OIL and GAS weekly, page 2
Newly listed Maverick Oil and Gas released their November drilling report this past week. The report contained detailed information on each of the nine wells drilled since its September listing in an easily readable format emphasising what it had achieved and delivered not promises of future gains.
Five of the new wells are oil producers, four have been completed for production.
Maverick sold 9,162 barrels of oil in November up 25% on October’s sales. That represents over 300 bopd, all from wells on the company’s more than 850 acres of a previously produced salt dome just outside of Houston, Texas. The area is called the Blue Ridge Salt Dome.
With its own modern top drive drilling rigs (two in operation two being prepared for work in 2011) and its own service rigs, Maverick’s cost to drill and complete a well to an average depth of 4,000 to 5,000 feet is remarkably low, around US$200,000 per well.
Each producing well and there are now some 20 of them, intersected multiple zones while drilling. So wells are completed in the lower most zones first and when that is produced they move up the hole to the next sand. Wells are choked back to an average of 25 barrels of oil a day though many are capable of more than that. But tweaking them back is good oil field practice and preserves the life of the well.
Payback is generally less than six months per well.
Maverick has independently certified 2P reserves of 25.6 million barrels at Blue Ridge where there is at least another 400 wells to be drilled. Fifty of those should be drilled in the first 12 months post IPO. And it is already on track to achieve, possibly exceed, those numbers.
There is no spacing requirement on the Dome. Maverick determines its own locations based on its assessment of the optimal position for field production.
So the company will drill a lot of wells in 2011 virtually all them guaranteed to be producers of quality premium priced light oil. Lifting costs are just $2.00 a barrel as against $22 a barrel in the Cooper Basin. Maverick has 100% working interest in Blue Ridge which is going to throw off huge revenues.
It also recently acquired 1,625 net acres in a second Texas salt dome at Boling where it expects to duplicate what it is doing at Blue Ridge.
The shares have held up reasonably well since listing particularly given there is a potential overhang of 30 to 40 million shares in institutions that acquired cheap shares prior to the listing. Trojan Equity has apparently been one seller of the stock since the IPO. That plus the fact that unlike some of its Aussie peers in the US, the company provides a monthly drilling report not share price influencing media releases well by well.
The company has a fair few shares on issue for a newly listed entity partly explained by the conversion of convertible notes into equity. It has an outstanding liability of US$7 million in the form of promissory notes owing to its Chairman Don Heinrich for the purchase of assets that went into Maverick. And a $5,000,000 loan facility for further asset acquisition.