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I have only been on board MATD for less than a year but are holding a good amount..Can anyone tell me why back in Feb 2017 SP reached as high as 37p? Surely we are in a much stronger footing now, than we ever was in the history of MATD, right??
Exxon and Shell are rather bad examples as possible farm-in candidates. Shell pulled out of Mongolia after having acquired BG Group which had farmed into Blocks IV & V – not Block XX (note). Shell recently cut its dividend for the first time in 75 years. Also, PM will be obligated to repay US$10 million to Shell in the event that PM concludes a farm-in. Exxon reported a loss in the first quarter 2020. Suffice-it-to-say, these are not good times for the oil majors and many oil companies are struggling and don’t have the budgets to consider farm-ins and new country entry, particularly in JV with a financially weak operator.
Those who have followed PM for many years will know that it took a very long time from initially opening the data-room before it secured the BG farm-in; no sooner was the ink dry on the deal, Shell bid for BG. Subsequent to Shell’s withdrawal from the BG farm-in, PM again opened up its data room to seek a replacement farminee. Eventually, nothing progressed, and the reason given by PM was reluctance of companies to new country entry, notwithstanding the low exploration costs, favourable terms and an oil price which at that time was more than double today’s oil price.
While it is possible that an interested party will come forward, it seems rather unlikely that a farm-in or JV will be concluded. In regard to Block XX, I believe that a farm-in will not be possible without a favourable offtake arrangement with PetroChina; and PetroChina has no obvious interest in a Block XX farm-in given the terms of Mongolian PSCs.
In these circumstances, I would prefer to see PM going it alone provided it has full support of the Mongolian government which apparently is currently the case. Inevitably for this scenario, there will be fund raising and dilution but not before the exploitation licence has been granted.
"..Shell, Exxon ..." --- Apologies but you are deluding yourself if you think a major decides "lets do a country entry in Mongolia" out of the blue - they strategise years ahead and go for monster developments but to date MATD discovered cca 35mbo recoverable - the discovery is immaterial for the likes of Shell and their ilk.
Notwithstanding the appointment of Envoi (doesn't mean to say they must find a classic farm-in partner - as I pointed out their rate of success has not been great last few years) - I think it more likely that MATD find a combination of alternative forms of financing (drilling contractor loan, bonds, bank loans, convertible loans, placings etc) and it will depend on the package raised if it will lead to a re-rate of our Mcap.
PC are the obvious choice as the only major player in the region but how much oil does MATD need to find first (MATD's exploratory drills were not commercially successful).
to me this is a great news. the point are: - govn and also MATD wants the best and transparent dealing, hence even if we are negotiating with PetroChina, they will have to use intermediary like Envoi. this is to avoid corruption and to proof to the govrnment that all are done in transparent and properly. this image is very important for this large scale of project and also MATD has large mongolian based investors.
- Petrochina can still be interested, but they will have to deal via Envoi as mentioned above.
- MATD wants the best deal. so by using Envoi, we can attract not only Petrochina but also other major companies such as Shell, Exxon etc etc (i just give random name, not saying they are ). Keep in mind, as some mention, Petrochina really wants oil for China, while government wants them to be processed in Mongolia. so, by using Envoi, we can ensure we have wider audience and its being done with low risk of corruption/
- MATD may at the end, have JV partner with not just one, but two companies , hence its better doing via Envoi platform in order to negotiatate the best terms.
all in all, i dont want to read too much into it. but the fact that we are already out there seeking JV, means that licence wont be far away.
That Envoi has been appointed to find a farm-in partner for Block XX, indicates to me that PetroChina is not interested in a farm-in. While PetroChina should be interested in additional supplies of crude for its refineries in China, until the Mongolian refinery is operational, PM is not in a strong negotiating position for an offtake arrangement with PetroChina. This is relevant to the prospects of a farm-in with a strategic partner as a prospective farminee will want to ensure that crude offtake is assured on acceptable terms.
I do not expect the exploitation licence to be issued any time soon but hopefully in good time for PM to plan and organise a full and exciting exploration and development programme for next year.
Yes,very interesting find but giving out mixed messages.The fact they have been engaged at all means that we are not already lined up to announce a farm in immediately after the Licence is issued which is what I had hoped for.Also no new wells to be drilled until next year but in the interim I assume we will at least extract oil from our existing well so as to produce some income. As to the Licence, I assume that we are still waiting for The Reserves Report to be approved ,at which point we will have the Plan of Development ready to submit.Presumably this is the final step leading to the issue of the Licence.So how much longer do we have to wait.Peterlee expressed the opinion that the issue of the Licence by the end of the year would be a good result but surely it can be dealt with quicker than that.
OK Hallowed. Let's put that in terms which everybody understands: - It appears (although you don't seem to like to put in words) you don't believe that matd will enter a JV in 2020; if that is your opinion then say it! - Should you be wrong: Nobody is asking you to admit your failed prediction. But maybe you would do it just as well. - If C/S was right with (and would believe in) all his predictions concerning matd (and any other of his AIM investments) he wouldn't have to waste his time on this or any other AIM board. He would be enjoying his profits on the beach or elsewhere. That doesn't seem to be the case - does it? You say "...get us back up to 4p". That sounds as if you may actually be a matd investor - interested in a SP rise. I recall that you've previously taken a completely different stance here. I don't trust your agenda - do you?
Interesting find...Envoi have many ongoing projects but their rate of closure doesn't look great...there was none in 2019, just one in 2018 and one in 2017.
Well, maybe, the unliked poster (CS) was right after all....if MATD have employed an agency to find a partner, it does seem unlikely they close a deal with Petro China, as Heron discovery is perhaps too small for them after all.
SP has been poor based on non-existent volumes....We need an official confirmation of EL to at least get us back up at 4p.