RE: Financing31 Mar 2020 12:07
Shadow makes very good points and I agree wholeheartedly with his comments.
We keep seeing many posts on various BB's that a lot of the small fish (oil / gas) companies are going to go under - including another holding I have - PMO. I will lose a bit there if it does however, HOWEVER........I actually think MANY are missing a key point here.
In these uncertain and unprecedented times I feel many of the bigger (not biggest!) to medium players will go under and not the likes of smaller companies like MATD, JSE (excellent company by the way - beautiful sweet oil), BPC, & BLOE. I think they will flourish on the other side of this nightmare. WHY - because they have less overheads; staff, gear, rigs and contracts etc etc that they're tied down to as are many of the bigger players. Those contracts have to be honoured and whilst they may be able to renegotiate on a massive rig, they still have to take the rig. Its a domino affect, everyone fighting to survive and those providing the rigs are pretty much sitting pretty.
Thanks to the idiosyncratic actions of Putin and MSM - starting an oil war in the middle of a pandemic of all things we will see many companies going to the wall. Its starting already! Just this morning BA cancelled its contract with Gatwick. They've been there since the off!!
US Shale is surely close to collapse and I don't think the Orange Anti-Christ will do anything to help them. I believe I've read somewhere that he is not a fan? Also recall one article where it stated shale was pumping BOPD at avg cost of $10 and only making $5 profit per barrel, and have been for a long time. If true that is simply not sustainable.
Another bow to MATD's arsenal at the moment are the Mongolian winters where they can literally put the site into cold storage at comparative little costs to other sites. Yes we would all like to see the site pumping 24/7 - 365 but any savvy investor coming into this would know that was never going to happen with this company, unless the World goes through a sudden massive climate change overnight. Fact is MATD has time on their hands to play with and will, in due course, be struggling to pump enough oil to meet the demands called on them, and the others listed, in a few years time. And who knows how much this company may be able to bring up in the future during the season.
MATD is a LTH and save a disaster on site, life changing for many who have the courage to step in now.
All IM VERY HO
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