Max Petroleum Share Discussion Threads

[edgein] 13/11/2014 08:19

Beau,

Thanks for that so, when it was producing 5600bopd it was valued at around £140m market cap. Next year when we hit around 5000bopd again will it still be valued at around £23m? I guess not if they get their hands on that £37m cash. I guess though that is why AGR is looking for 51% of the company at 1.64p or valuing the entire company at around £71m as they want a bargain.

Regards,
Ed.

[beaujolly] 12/11/2014 18:03

At 30 September 2011, the Company had in issue 1,011,774,748 allotted and fully paid ordinary shares of 0.01 pence each (31 March 2011: 918,133,611 allotted and fully paid ordinary shares).

[rio bravo] 12/11/2014 12:42

Ed

I don't know it's Market Cap back then, but HD might well know ! Rio

[edgein] 12/11/2014 12:23

Rio Bravo,

What was its market cap when it hit 5600bopd in Nov 11? It was 14p per share back in those days.

Regards,
Ed.

[rio bravo] 12/11/2014 11:18

Re: Post 31739

'...By next year the Co expects to be on 5000 bopd...'

That is REAL Progress considering back on 21/11/11 MXP hit it's RECORD daily Production rate of 5625 bopd !!!

[edgein] 12/11/2014 10:52

Well AGR think that 100% of MXP is worth around £71m, the market is currently valuing it at £23m :) One of these is gonna change eventually.

Regards,
Ed.

[whoppy] 12/11/2014 10:30

At least AGR are going to be running the company for the benefit of shareholders and won't be taking MAX private. Looks a good deal. Even the 5p club will get their money back. Obviously if NUR-1 strikes then there will be plenty to go around.

[hiddendepths] 12/11/2014 10:21

ouidois - no, I'm glad that AGR want 51%. It'll give them management control, which has to be a good thing IMHO.

Ed - I'll respond to that when I get a few minutes! But note that I was including Sagiz West et al as existing fields and so absorbing the entirety and more of the cash emanating from the fields with FFD. Those fields, especially ZM, clearly are cash cows when taken in isolation.

FWIW until recently I thought the most likely outcome for MXP as a whole was for it to turn into a dividend-paying cash cow, unburdened by debt, from 2017/8 on. I posted as much on many occasions way up this thread!

[ouidois] 12/11/2014 09:35

HD would you be happier if AGR weren't angling for 51% - presumably that's what sticking in the gullets of Henderson, GLG and co.

[edgein] 12/11/2014 09:31

HD,

Not strictly true that now is it, exisiting fields are already in cash cow territory from the results:

Oil sales revenue (US$'000) 100,430 93,303 50,243 8%
Export sales revenue (US$'000) 75,360 64,108 6,016 18%
Domestic sales revenue (US$'000) 25,070 29,195 44,227 (14)%

Average realised price (US$
per bbl) 73.29 75.64 50.04 (3)%
Average realised export
price (US$ per bbl) 103.49 103.51 120.32 0%
Average realised domestic
price (US$ per bbl) 39.04 47.54 46.36 (18)%

Operating cost per bbl(1)
(US$ per bbl) 39.44 39.17 17.39 1%
Production cost (US$ per
bbl) 8.87 9.42 8.22 (6)%
Selling and transportation
cost (US$ per bbl) 10.78 11.55 6.35 (7)%
Mineral extraction tax (US$
per bbl) 3.29 3.17 1.20 4%
Export rent tax/export customs
duty (US$ per bbl) 16.50 15.02 1.62 10%


Sales for 2014 of $100m! Operating cost per bbl of $39 vs export sales of $103/bbl. The capex you refer to is for just the additional production above 4000bopd of current production. So yeah they'll need some of this free cash flow to develop the likes of Sagiz west but that will add to export when it comes online. Probably which leads to the expected 5000bopd in 2015. The cost cutting measures that the board mentioned should also help on existing export oil netbacks too.

Regards,
Ed.

[hiddendepths] 12/11/2014 09:20

Ed - the problem with the debt is the capex required to develop the new fields, especially Sagiz West. So there is an inevitable net cash outflow for at least a year before the existing fields enter cash cow territory.

The possible Zhana Makat extension is very important as infrastructure is already in place and has spare capacity because the field is now some way into its decline phase. It probably falls under the Zhana Makat umbrella too, meaning that it can export straight away without going through the protracted trial and test phases with their periods of enforced non-production and low margin domestic sales.

I'm happy enough with my investment here.

[edgein] 12/11/2014 09:13

HD,

That debt is easily managable at $80/bbl, especially with a £32m cash injection that we've been waiting on completing. Of course NUR-1 completion and drilling the pre-salt, any of which could be hundreds of mmbbls is a potential game changer. The reason some of us bought these recently on this refinancing news. It'll give the company more time to get a partner in to help complete NUR-1. Sure its high risk as with all FSU oilers, perhaps too James Bond for some. But there is a strong business here, its not just all doom and gloom and debt. The cost cutting measures such as the new pipeline to get a better netback on domestic production too will hopefully be reported eventually too as well as the other cost cutting measures.

Regards,
Ed.

[richgit] 12/11/2014 09:02

dosser2

If in fact the Oil Market is being falsely rigged,and they put NUR on the menu.

Then anything can happen beyond 1.64p

IMHO

[pilkersa] 12/11/2014 09:00

Share buy back or bankruptcy if deal fails. Too risky for me.

[hiddendepths] 12/11/2014 08:59

Ed - it's just that debt overhang and unspeakably bad management which has taken the company to near bankruptcy several times. If the deal goes through, both problems will, hopefully, be much reduced.

IMHO (and I know a lot about the acreage from active involvement around the time of the company's listing) the potential of these blocks is still world class, a large multiple of the 10 million barrels Max have found over the years. Max have barely scratched the surface so far. I would suggest that they have particularly neglected the salt dome flanks and the deeps with massive "chimneys" on the seismic - Kuzbak simply has to be drilled. Furthermore, the risks are somewhat lower than one might expect from multi-billion barrel prospects.

[dosser2] 12/11/2014 08:52

Could we do a RXP? Im down 90% here after being in since the good times and bobbob etc.

[smartypants] 12/11/2014 08:50

No one read the bit about the share buyback ???

[edgein] 12/11/2014 08:47

Dosser,

It should more than be sustained for those with the patience to hold. By next year the company expects to be on 5000bopd. Around 80% of that production is exported with very very healthy netbacks. Check the companies latest results for the price and costs per bbl and the significant cash that MXP generates. The $60m invested by the Kazakh investor will put MXP in a very very healthy position to get a farmout for the completion of NUR-1. Cap is just around £25m odd for 10mmbbls approx and 4000bopd (current, to increase in 2015 as mentioned). So cheap as chips. This large investor is gonna make a big difference even though MXP had a turnover of around $100m last year. Even with the 20% drop in the $103/bbl average they received they've just announced recently that another field qualifies for export. At around $80/bbl MXP is still a cash cow.

Regards,
Ed.

[hiddendepths] 12/11/2014 08:42

A tender offer at 1.64 to shareholders within 6 months of the deal being approved. Seems to offer a nice return. In the event that the unhappy institutions remain unconvinced, they will need to come forth with an improvement on that.

Risk/reward appears to suggest holding or buying.

[stockriser] 12/11/2014 08:39

The price is where it is because of fear that they were not going to get funds. Now they have, and at a huge premium, this will go up more than a mere 48%.



Hold tight!

[dosser2] 12/11/2014 08:32

Wow, what a mover. Can it be sustained?

[topinfo] 12/11/2014 08:10

-- The Subscription is for 2,264,093,462 new Ordinary Shares, at a price of 1.64 pence per Ordinary Share, a 111.6 per cent. premium to the closing middle market price of an Ordinary Share of 0.775 pence on 11 November 2014, the last business day prior to the date of this announcement.

-- Immediately following completion of the Subscription, AGR Energy will hold 51 per cent. of the enlarged issued share capital of the Company.

[stockriser] 12/11/2014 08:06

WAKEY WAKEY 8AM RNS OUT ;-)

[whoppy] 06/11/2014 14:42

Stocky - I hope it's bottomed and starts going back up. I think USA has too much reserves stockpiled, and global slow down is creating an oversupply..then there are the Saudis who are out to make fracking in the USA uneconomical..and the strength of the dollar not being good for the op..but wtfdik..ha!