It seems the tide is turning and the positives of MXP are now coming through. Ive been away a few days so i decided to skim through the iii posts by virtue of their positive votes. The usual suspects were there: Drainboy, GM and nice to see one from Dearjohn.
However reading these from a few days stepping away from the daily torture of being a mxp shareholder made me realise many of these posts, whilst entirely accurate and informational about the prospects of mxp, ignore the technical aspects to the stock.
Of course with any stock there is the fundamental value that market price insensitive investors can try to exploit. Certainly mxp has headed into this territory. Be it in terms of discoveries, impending 2P reserves (Dearjohn i suspect when they finally get to this stage the company will be long sold or SP higher), or cashflow production of 5500 average bopd for FY14 which delivers pre interest pre G&A of $80mln. Either way, the value case is clear.
This of course ignores the optionality on finishing NURS1 which is too uncertain to value but still a possibility.
However, as above i think the technicals will overtake max in the near future. On the one hand you now have a shareholder register that is dominated by investors and management that have an equity strike price of 5p give or take ( the bonds got converted at 5p; many investors in the bonds bought below this price equivalent). On the other hand you have a company that is clearly and massively undervalued on an NPV basis. This discount to NPV is unlikely to unwind as historic non bond investors in the equity are underwater and not supporting and any gains close to 5p are sold into by bond investors.
So, what does this mean? For me it means load up on shares in the near term and expect a 2-3x return from here. Any returns above this level are aspirational unless the company can magic the NURS1 hat out of the 5.6km deep hat.
Our two rigs are currently moving between fields. The ZJ-20 moving approximately 200km from ZM to Uytas and the ZJ-30 about 30km from BW to SW. Given the time between drills at ZM was about 4-6 days (let's call it 5) to strip down, move and assemble the rig on the same field, it's just a question of how long it'll take to move the rigs between fields.
If the ZJ-30 can move that 30km within 4 days, once mobile and the ZJ-20 can move the 200km within 10 days once mobile, then we could have two spud RNSs by the end of next week.
Could be news about the new Uytas rig any minute now as well. As this was meant to start drilling in May, in theory we could have three spud RNSs next week (I wouldn't hold your breath though).
Would be great to be a three rig company again.
(there's also a lot of production news waiting to come out....Eskene North, BCHW-2, 5 wells at ZM, current production now we have taps turned on at ASK and BCHW-1 for a few days...though all of this might take to get out)
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