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Looks like we might be about to move up.

Mexican stand off. A question who blinks first. It looks like PQE blinked first.

Owning 100% also means that they are in charge of what happens and when.

I was just about to look at that. Next is to find out who Petrollo are.

Well hopefully they can roll this transaction for a little while and use any cash that they do have right now to fund getting the plant up to 1,000/1,500 bopd.

Completing this transaction in 3 month time with the plant at 1,000 bopd would be better.

It makes no sense to keep buying acreage at this rate unless they are going to have some more decent sized plants on line pretty soon. No point having acreage if it is going to take you 150 years to produce it.

This transaction might also be why they have said nothing about what they intend to do with PR Springs: maybe they will be a bit more forthcoming in the near future.

The plant at Asphalt Ridge took forever to get permitted, how long would it take to get a plant permitted at PR Springs or can they use the existing permits?

DYOR

https://twitter.com/zenithenergyltd/status/1118055702017335297?s=19

Not sure.

Whatever it was, it was a lot higher than now and it was being wasted.

After the next RNS giving an further update on Austin and progress at ZR.

Back end of next week should be a good time for a further RNS.

The way it works is like this

100 Working Interest (WI) means that the leaseholder pays all the costs on the well(s)
75% Net Revenue Interest (NRI) means that the leaseholder gets 75% of the revenue.

The difference goes to the landholder/mineral rights holder.

The NRI can vary because different parties have a slice of the well. So at AC we are at 75% NRI but there is an Over Riding Royalty Interest (ORRI). What that means is that we get 75% of revenue after the leaseholder and the ORRI holder have taken their cut: hence the difference between gross production and net production.

It can work the other way: if we farm out interests in new drills at ZR, it might be we sell 50% WI/ 25% NRI packages to investors. In that case we would get a 25% NRI in the well paid for by a third party.

DYOR

So CW has confirmed cash burn is $65k per month everything chucked in and he reckons that he needs 45 bopd at $62 WTI to break even.

If you work the numbers through that means at Austin the marginal cost of production is a round $14 a barrel. There are two sets of wells there: the five Austin Chalk wells and Montsanko/Morris 1. The latter two wells benefit from direct access to the Monsanko No1 SWD. The former 5 wells, the water has to be trucked. What this means is that the marginal cost of production at Montsanko/Morris 1 is significantly less than that at the 5 Austin Chalk wells.

So at M/M1 water production is not an issue, just the gross oil production matters and at the 5 AC wells we have to manage the water production a bit cutely because it is expensive to get rid of it.

I mentioned that wells can be sold for $20k/$30k per flowing barrel: if we look at the Ritchie Talley this would mean that well is worth $740k/$1.1mil based on current production. It is likely that RT will drop a bit but all 5 wells at AC cost $500k. If could do a deal to sell RT for $500k it means that we would have the other four wells for free.

One angle open to Mayan is to buy old wells, work them over and rehabilitate them and then sell in the market. RT would be an example of doing just this. If they can sort out all five wells and sell for $2mil, they would have done a fantastic job.

Next, once production has been maintained at Austin/AC for 30/45 days it opens up Reserve Based Lending (RBL).

That we have a decent result at Austin has opened up a number of ways forward for Mayan.

Still a lot to play for here.

DYOR

Can anyone of you clever gents simplify the figures for this thickco me please?
Expected production per day? On the six wells on production at Austin 72 gross 47 net to Mayan

Break even point (all the figures, oil price etc)? $65,000 per month at $62 WT and 45 bopd from Austin
Thank you :)

The above taken from the RNS

Just reread it. It does read very well.

So with progress at ZR this week plus a bit of improvement at Austin we should not just cashflow positive but profitable.

It looks like with Thom Board and Attis we have found our long term partners.

Pity about Mr Bensh but has other fish to fry now. I wonder why he was so interested in ZR.....

DYOR

Oil and gas prices were much higher then and RC wasn't the most reliable of CEOs but it shows the possibilities.

To get to that figure they will either need to perforate new zones in existing wells or do new drills.

They can probably get to 30 bopd at ZR in the new few weeks and then 100 bopd over a slightly longer period but beyond means some proper work.

There is a guy nearby who is doing very well out of the Prue formation. There is no reason we can't do the same.

DYOR

A straight conversion would be: daily production times 365 times 25 years. However, it never works out that way. Proving up includes the capex plans the company has in the near term.

There will three factors here: sub surface survey, daily production, capex plans.

On the capex front, promoting new drills into the US private investor market will be important. We should be starting with the new drill permitting process in the next month or so to be ready to drill October/November. As part of that we need to establish a relationship with a promoter who will promise the funds.

DYOR

My best guess is that they will prove up 3/4 mil barrels of oil at ZR over the next 3 months

DYOR

It is early days for all of them. Going forward it is about improving the oil cut, maximising the oil production and minimising the marginal cost of production.

The focus now switches to ZR. Let's see if TB can get production to 25/30 bopd over a couple of weeks.

Well very happy with that. The first baby steps taken, soon to be followed by giant strides (is that how a ramp is done?).

This RNS has taken a long time gestating: let's hope for more like this soon.

DYOR

That is them. As you can see an experienced operator.

No, I just read the stuff that is out there and check things out.

You must remember that we now have a practicing lawyer as our Chairman; he specialises in oil & gas and so he is on top of a lot of things that CW and EG would have little idea about. PA can't take the risk of being involved with anything underhand because he could end up losing his career over it.

DYOR