Gordon Stein, CFO of CleanTech Lithium, explains why CTL acquired the 23 Laguna Verde licenses. Watch the video here.
For those that are interested, there will definitely be an RNS issued before the end of June. Matd have a regulatory duty to publish their final results before the end of June which they have always complied with.
Matd normally provide a decent update on the operational side of things in their final results RNS so we should hopefully find out the current state of affairs with the EL shortly.
Have a nice day and a good weekend Yaks!
Mike Buck total shareholding 8,725,006
Bought 2,770,000 on 19/01/2018 at 6.5p per share (fundraise)…… £180,050.00p
Bought 1,000,000 on 14/02/2018 at $0.01 per share (conditional share award) …..£7,500.00p
Bought 500,000 on 14/06/2018 at 10p per share (placing) ………£50,000.00p
Bought 4,455,000 on 23/12/2019 at $0.01 per share (CSA) …….£35,000.00p
Total shares 8,725,000 at a total personal cost to him of £272,550.00p
Don’t know where the other 6 shares come from, but there you are. The CEO has invested over a quarter of a million pounds of his own money in Matd.
Mike Buck bought 2,770,000 shares at 6.5p per share as part of the January 2018 fundraising
(RNS dated 19/01/2018)
He then participated in a bonus scheme for directors where he bought a further 1million shares at $0.01 per share
(RNS) dated 14/02/2018
He then bought a further 500,000 shares at 10p per share as a result of the placing in June 2018
(RNS dated 14/06/2018)
I’m sure there’s more details in other RNS releases but I can’t be bothered looking.
The question should really be…….. Why has Mike Buck not sold any of his shares?
I think the potential value in Matd provides the answer to that question.
Have a good one Yaks!
Hamm, the RNS on 12th April stated that Matd were completing the final two stages of the application for submission to the ministry for approval…..’ We are focused on successfully completing the Exploitation Licence application procedure and submitting the application to the Minister for award of the Licence early in Q2 2021.’
Then on 10th May the RNS stated that approval will be granted once certain technical clarifications have been provided. ……..‘The Council concluded that it supports and will approve the Plan of Development once certain technical clarifications have been provided and any resulting amendments to the documentation deemed necessary have been made.’
Matd also posted a video on YouTube dated 12th April of an interview with Mike Buck https://www.youtube.com/watch?v=8lbj0mw-w-E where at just over 55 seconds in he states the licence is LIKELY to be awarded in Q2.
At no point has Matd stated that the EL would be granted in Q1 or slipping in to Q2.
Matd are saying they believe the EL will likely be granted at some point in Q2 and that period ends at the end of June.
The video also mentions the hurdles imposed by the bureaucracy adopted by the Mongolian Government and how frustrating the system has been but we are finally approaching the finishing line.
There is also confirmation around our positive relationship with Petro China and how Matd would like to take that forward as we develop.
It would be nice to have positive news shortly as we have all waited so long for it to happen but we are in the main a patient lot and are emboldened by the big picture.
Have a good one
Matd’s presentation in 2019 had a few key points that are worth revisiting.
1. Petro China and affiliates have been cooperative and willing partners and will continue their positive relationship with Matd.
2. Petro China’s processing facility is only 20km North of Heron 1 location.
3. Most of the transport infrastructure is already in place.
4. Wells can be hooked up for production immediately after drilling.
5. Minimum of 33 million barrels with potential for much more at Heron field.
The exploitation licence is granted only when certain conditions can be satisfied. These conditions would probably include that Matd as operator can finance the costs of drilling, production, transport, storage and processing of the oil.
Given that Matd will probably not be in operating profit till year two then that would mean that some other partner will be required and I think Petro China are the obvious choice.
When the exploitation licence is granted, be prepared for publication of a joint venture agreement along with a plan of field development.
I hope Ibiza is correct in his deduction of an RNS forthcoming this week but don’t be too disheartened if it doesn’t. There may still be nuances to be ironed out.
When that EL is granted though……….OMG!!!!!
Hi Mantasz, thanks very much for your input. I know that I look forward to your technical analysis as a means of a support for our belief in the fundamentals of matd.
I don’t know what we all know about the technicalities involved in obtaining an exploration licence but the key principles are the issuing government must be satisfied that we are capable of producing oil, transporting oil, storing oil and refining oil.
We need to have infrastructure in place including transportation, roads, accessible refineries etc.
We don’t have the cash to fund that at present, so the question is are Petro China funding infrastructure, transportation and refinement? Or is the Mongolian government willing to make Matd a national oil company and support their exploration and exploitation process.
In my opinion the exploration licence includes Petro China as a joint venture partner until Mongolia’s refinery is up and running.
Heron is sitting on very light sweet oil which is the easiest to extract and refine and produces the maximum profit and there is a minimum of 33 million barrels with a potential 194 million barrels. Gazelle has 13 million barrels and Matd’s investor presentation has indicated 85million barrels nearby.
That’s a total of nearly 300 million barrels which at $60 a barrel is equivalent to $18billion dollars. I don’t know what kind of value that places on us but a 25 year exploration licence equates those 18 billion dollars to $800m dollars per annum.
We are only valued at circa $50m and yet we could extract $18bn in the next 25 years and that is without further discoveries.
Minimum value here should be $500m in my opinion, but that’s my opinion and I’ll stick thanks.
Have a good week yaks :)
Apologiesto all. I posted earlier that Matd’s exploration licence would include all of block XX.
Having re-read the RNS it is obvious that the exploration licence Is specific in that “The Exploitation Area includes the entire extension into Block XX of the proven and producing Toson Uul Basin. This basin contains an estimated 2 billion barrels of in place oil.”
My personal opinion is that Petro China who operate within the Toson Uul Basin in blocks XIX and XXI will enter into a farm out agreement where they will provide previous expenses incurred in Matd’s exploration and cover costs of exploitation in return for a percentage of profit.
They may also come in with a takeover offer that may be indicative of our future worth. Petro China currently have over $22bn cash in hand and personally I would be happy to settle for a bid of over $1 billion by them, but then again that’s me
The exploitation licence is essentially a 25 year contract involving National Government, Local Government, Matd and other stakeholders.
Matd, as operator, must be able to satisfy that they are in a position to complete each component in the upstream, midstream and downstream phases.
The government must also be satisfied that Matd would be in a position to finance these phases and there is no way on earth any government would grant the licence on the basis of a placing or two.
So, on that basis, there must be at least one other stakeholder involved or even multiple stakeholders to finance the work required.
Petrovis will fund the day to day running costs of Matd in the meantime and don’t expect any money back until 2023 which provides a timeline for when Matd will be making a profit.
MRPAM are planning on issuing the licence for the whole of Block XX so when that licence is granted in the next couple of weeks, we should also have details of other stakeholders and planned operations.
Heron is “transformational for the company”. Not my words but Mr Bucks.
Have a good day yaks!
Heron - 33 million barrels recovery @$60 per barrel = $2 billion
Heron recovery based on assumption of 17% recovery of peer reviewed estimate of 194 million barrels in Heron field.
Heron situated in part of prolific Toson Uul Basin which contains an estimated 2 billion barrels of in place oil.
Near field follow up potential of 85million barrels.
Block V - Velociraptor 201 million barrels and Phoenix 230 million barrels.
Many other identified targets for exploration and exploitation.
Should receive the green light for exploitation within the next few weeks and we’ll blow that paltry mcap out the water.
There is at least $2 billion value in heron with much, much more to come.
Have a nice week yaks!
This rise is very reminiscent of 4 years ago when matd published (after extensive surveying) their estimates of between 9 billion and 23 billion barrels of potential oil contained in blocks IV and V. A lot of us were hoping for positive results of the survey but not to the extent of the massive amounts quoted.
Things got a bit giddy on here as there were also indications that multiple farm in partners were waiting in the wings to jump in and as a result the price took a steady and relatively rapid rise from 3.5p until it touched 38p during one trading day but if I remember correctly closed at 35p.
News of a farm in was not forthcoming (turns out they wanted proof the oil was there first) and the price had a steady decline to around 22p before it started to make its way back towards 30p. Then Bergen happened, the death spiral finance that many of us, including me, failed to recognise it for what it was.
Mike Buck came along, took hold of the reins and steadied the ship. Drilled block IV and hit dust...twice. The share price plummeted to 1.5p.
We went back to block XX where we knew there was oil and we found it at Heron.
And now after many, many years there is the very real possibility that Matd will become an oil producer in short order and I imagine that when that exploration licence is granted, those farm in partners will jump in with both feet now that there is money to be made.
This rise in share price is different to the previous one, for one simple reason. We didn’t have oil then......we do now and we are only awaiting a few I’s to be dotted and a couple of t’s to be crossed before we start bringing up the liquid gold from under the land of the yaks.
This time is different. Have a good one whether you sell, hold or join the fun.
Nice day today
I knew I would ramble on there lol.
Anyway, there are caveats and assumptions made regarding this post but it highlights why I believe that the current share price is a fraction of what I believe it should be.
With the granting of the exploitation licence matd could be (in the very near future) generating tens, if not, hundreds of millions of dollars profit every year and we are sitting at less than 6p per share.
Also consider that block V may have untapped billions of barrels awaiting discovery.
I’ll see you when I sober up. All the best yaks!
Apologies in advance but I feel I am going to ramble a little bit. I read something this morning on the Copl page which set me thinking about Matd’s current and future situation and valuation.
The Heron field has a mean discovery of 33 million barrels but could be as much as 194 million barrels. The area in block XX which should be granted an exploitation licence very soon could have as much as 2 billion barrels to recover.
The exploitation licence in Mongolia when it is granted will expire after 25 years and yes I know it will likely be extended if necessary in the future but my calculations are based on recovering the oil estimated to be in place over a period of 25 years and then I will post figures from the copl board which can be used as a comparison.
The 33million barrels mean estimate on Heron would indicate that matd would need to recover 3600 barrels per day to maximise the recovery during the licence period.
The upper estimate of 194m barrels would mean matd would need to recover 21260 barrels per day
And the block XX estimate of 2 billion barrels would mean matd would need to recover 220 thousand barrels per day every day for 25 years.
The following is relevant and was posted by a person called Tiburn and particular attention should be directed towards the recovery rate and cash generated by Zephyr energy
Interesting small cap oiler in North America, Zephyr Energy
Assets in Utah and Colorado -N Dakota just started production :
https://www.londonstockexchange.com/news-article/ZPHR/first-north-dakota-revenues-acquisition-paradox/14961093
"The Company is pleased to announce that it received its first monthly revenue payment for production from its interest in the Iverson well. The payment of $140,662 is related to volumes produced in the month of February, during which net production averaged 110 barrels of oil equivalent per day ("BOE")*."
12 million b reserves at 2C in Paxadox project
$148 m NPV 10 at $60/b
shares in issue 1.2 Billion
SP 3.3p
ZPHR gaining $140k per month on 110 bopd
annual revenue = $2m
no debt
MC of $58m according to LSE , high PE 28 indicated
Zephyr have an mcap of $58m and they are producing 110 barrels per day.
We were producing between 200+ and 800+ barrels per day without stimulation when we drilled Heron plus our peer review means we have 3 times the amount of oil that zephyr does.
So if 110 barrels per day can generate $140k per month profit then (based on maximum recovery) our 3600 barrels per day would generate $4.5m profit per month or $54m per annum.
The 194m barrels maximum recovery would be just over $27m per month or circa $325m per annum
and the block XX maximum recovery would be $280m per month or $3.3billion per year every year for 25 years.
So this is why the granting of the exploitation licence is crucial to realising the true value of matd and why 6p per share is completely undervaluing this company.
Of course there are caveats involv
The Exploration Licence will be granted.....fact!
Matd will extract oil from the ground .....fact!
Matd will discover more oil fields .......probably!
Matd will bring in a farm out partner ...... probably!
Matd will continue to grow their oil reserves ...... almost definitely!
Is now the time to invest? ...... that’s up to you!
If we really do have access to 2 billion barrels on block XX then our mcap equates to 1.75Cents per barrel.
1.75 cents per barrel ... not $1.75 per barrel or $17.50 per barrel but a paltry 1.75cents per barrel.
I know we have relinquished block IV but there are still massive targets left on block V, including velociraptor.
The extensive exploration data estimated between 9 and 23 billion barrels in blocks IV and V. We don’t know what the estimate on block V is but if it is the same as it is in block XX then we may well have access to 4 or 5 billion barrels of oil which means our current mcap rates our reserves at between 0.8 and 0.9 cents per barrel, that’s less than 1 cent per barrel, when it should be a lot more.
If we were valued at $1 per barrel we would have an mcap of $2 billion on block XX alone which would be equivalent to circa $3 per share. Or between $6 and $7 per share if block V has the same amount of oil as block XX.
Very undervalued.
$1 per barrel value on block XX if there is 2 billion barrels equates to circar $3 per share. $10 per barrel is $30 etc, etc. Currently a lot less. Just saying. Have a good one yaks : )
Hello Mr Bank manager, I am Mike Buck and I am in charge of a company that wants to exploit an oil field and I would like $15m to fund 4 wells.
That’s a lot of money Mr Buck, how much oil are we talking about?
At least 33m barrels and possible up to 194m barrels
So you are needing $15m to realise an asset between $2bn and $12bn? I don’t think that would be a problem Mr Buck. May I ask why you aren’t issuing any more shares to fund this venture as it seems such a paltry amount.
It appears the market hasn’t caught on yet as we are only valued at a $35m mcap.
Well that money will be in your account tomorrow Mr Buck, right after I’ve called my broker and thank you for coming in today.
That is the reality of the issuance of an exploitation licence, it opens the door for everyone.
Have a good week yaks : )
The CPR details are contained in the final results RNS of 15th June 2020.
Highlights -
1. CPR of Heron carried out by Leap Energy and found a resource potential of 194m barrels.
2. Potential for SUBSTANTIAL commercial development.
3. Reservoir stimulation specialists Fenix Consulting Delft indicate ability to improve oil recovery SIGNIFICANTLY with advanced drilling techniques
4. Mean recovery of 33m barrels with CONSIDERABLE upside potential.
This relates to the Heron site and the excerpt from the RNS is pasted below.
Matd have further targets to explore and exploit and if I could make an analogy then it is like Matd is a shop about to hold a Black Friday sale and everyone is queuing up to get in and they can’t until someone turns up with a key to open the door. In my opinion the key to that door is the exploration licence.
Competent Persons' Report (CPR) and reservoir stimulation studies
As part of the Reserves Reporting process, the Company commissioned Leap Energy to prepare a CPR for the northern part of Block XX where the Company's discoveries are located. The CPR concluded that the Heron structure has mean, unrisked in-place oil resource potential of 194 million barrels. This is 20% higher than the Company's initial internal assessment and offers the potential for substantial commercial value given the low-cost, onshore operating environment and the favourable Mongolian fiscal regime.
Fenix Consulting Delft, a specialist in reservoir stimulation, has modelled the Heron-1 well test data to assess the production and recovery potential of the Tsagaantsav oil sands found in the well and has concluded that modern stimulation techniques and reservoir pressure support through produced water re-injection can improve oil recovery significantly from the levels achieved to date in neighbouring blocks. Further enhancement by slanted or horizontal drilling to increase reservoir contact and radial drilling to enhance wellbore drainage are additional technologies under consideration to increase well productivity. These techniques have not been widely used in Mongolia to date.
The work conducted by Fenix combined with the resource numbers from the CPR support the base case submitted to the Mongolian Government of an appraisal/development programme on the Heron discovery targeting a mean recoverable reserve of 33 million barrels using a recovery factor of only 17%. This is in line with what has been achieved to date in Mongolia and there is considerable upside potential that could be realised through the application of the improved oil recovery techniques as detailed above.
Apologies folks, the red wine was rambling on last night and I got a bit giddy. I meant to type exploitation licence and not exploration licence and I don’t know if it’s valid for 30 years or not but memory tells me it is 20 years plus.
Hopefully the last few days have signalled a recovery to a more reasonable valuation of our Mongolian friend. Have a good one.
Cheers Sandy.Great to see that you’re still here. The exploration licence is valid for 30 years. Block XX has lots of oil to exploit. Blocks IV and V hopeful will reveal their treasures the more we explore but I think the market is just beginning to realise that our market value is seriously undervalued especially in comparison to others such as 88e, ukog etc. Even with the current oil recovery estimate of 48m barrels from heron 1 and gazelle we are very undervalued in my opinion. 46 million barrels at current $60+ per barrel gives a total value of $2.5billion but we are valued at less than 1.5% of that.
Current mcap is now £35m or just over 5p per share. Is it fair value or are we still undervalued?
Heron 1 discovery has proven free flowing oil with a peer review mean of 33million barrels.. Gazelle has 13 million barrels. There is significant upside to these discoveries beyond the totals given but at current declarations our Mcap represents a value of just 76p per barrel, which is less than $1 per barrel.
Heron 1 on its own has been appraised and provided that advanced drilling techniques and stimulation are used it could produce 194m barrels.
So 200m barrels plus in a specific area plus potential billions in other fields questions current mcap valuations.
200m barrels at current mcap values our discoveries at 17.5p per barrel, not per share but per barrel.
In my opinion £10 per barrel would be a fair evaluation which would make the valuation of oil recoverable as £2 billion and not £35m. Or in share price terms £2.93 v 5.15p.
Frightening, I know that’s not how oil companies are valued but I don’t think we’re currently over priced .