Petro Matad CEO Mike Buck confirmed that he believes the Exploitation Licence for Block XX in Eastern Mongolia is likely to be awarded in Q2. Watch the full video here.
I'm actually surprised the MATD SP hasn't taken yet another hit. It's holding up quite well considering the current market climate coupled with yesterday's news that 2020 is now essentially a write off for MATD.
Good old Mike Buck has went from pressing the government to get approvals pre end of year 19 to Q1 2020 and now admits it will take "a number of months". Read that as "there will be no well activity at Heron as approvals will take months and we've missed yet another drilling window".
I have confidence the license will come but MB is terrible at setting market expectations. This was always a big risk for those who have followed the story here and that risk has now came to fruition. Surprised the price has stayed relatively flat considering funds will be required to progress heron to production. Let's hope MB can get an RBL type facility and finally deliver some actual value to shareholders
Fair points bonum - I admire you're confidence in receiving the Exploitation License pre-Q2. I see this as MATDs biggest risk by a long shot as we currently stand. Reasons:
- MATDs previous track record of sticking to timelines
- The Mongolian Gov and MATD are going through this process (EL approval) for the first time in over a decade
- In-country elections which are known to slow everything down
- The ****storm that is coronavirus
For these reasons I am highly cautious on MATDs prospects of receiving the EL on time i.e. pre Q2. I know MB has stated he is confident, but then look back at the numerous times he was confident of sticking to drilling schedules over the years and look what happened there....
Good move for MATD yesterday continuing into today. On a technical front, MACD crossover and a clean break through the 8EMA on the back of strong and increasing volume suggests this is a buy at the moment.
On fundamentals, the clock is ticking on MB to get the Exploitation license or else MATD is going to lose an entire drilling season. A fundraise, in whatever form, will also be required if/when the Exploitation license is received.
At ~2.8p MATD was arguably always too cheap. The question now is - is this a pre-placing pump or does the increase in volume suggest we may be on for an Exploitation License in the near term. Hopefully both - then MATD transforms from a non-revenue generating explorer to a cashed up producer.
Things heating up again at PREM.
Will the EPO Gazette finally happen? I note the crocodile is in Matebeleland tomorrow... I wonder if this has any relevance? A personal pledge to the people of an EPO-enabler which will bring jobs and prosperity to the all!!!! Or something like that.
Acker, I understand your concerns with further payments but then again I didn't expect them to cough up at all yet they have delivered and funded the latest works at RHA. Both NIEEF and PREM (via RNS) have repeatedly stated that further funds will be forthcoming and I look forward with cautious optimism to the next "payment".
PREM have a legally binding contract with NIEEF which stipulates NIEEF have agreed to pay PREM USD$6m. This has not changed, you are incorrect to state the agreement has been paid in full. Z$6m has been paid, more should follow.
I can't see merging @ RHA subsidiary level due to several reasons, not least as Acker pointed out, PREM being a minority holder in the RHA sub. I also can't see why the Zim Gov would fund RHA in PREMs hour of need to then subsequently reduce/relinquish their holding in RHA. It doesn't make sense - PREM gave NIEEF the opportunity to relinquish part of their holding in exchange for a reduction in the outstanding loan account and NIEEF knocked that back in favour of funding RHA to production so they clearly want to keep a significant holding in RHA.
I'm convinced it's PREM shares in return for a greater MNH holding/complete buyout and therefore it's imperative PREM get the SP as high as possible to make this deal attractive/possible. And here lies the problem... all the good news required to propel PREM higher is reliant on 3rd parties i.e. Circum liquidity event, more funds/progress at RHA, EPO for Zulu. The inefficiency of the Zim Gov is costing us dearly in the form of continual dilution as we wait (and wait and wait) for sign offs etc.
I fully expect the share ceiling to be raised, likely alongside an offer to acquire more/all of MNH. MNH have made it abundantly clear they want to be publicly listed and PREM/GR have reciprocated by indicating they are looking to acquire all of MNH.
The most realistic way PREM can achieve this is to issue more shares and to do that they will need to raise the share cap. The big question is how high can PREM get the current share price in order to make the MNH acquisition easier i.e. less shares required to distribute.
With regards to working cap, didn't GR state revenues to PREM from MNH are currently negligible in terms of supporting PREM as a group? Any meaningful revenues from RHA are still at least 6 months + away so I do not expect PREM working cap to be covered for this calendar year.
I'd expect you know the play here Acker but in short...
Get RHA producing (6 months) -> share price appreciation -> full merger/buyout/RTO with MNH (hopefully at an acceptable level)
EPO will come when it comes, completely in the hands of The Crocodile. JV when EPO received.
Small shareholders getting p'd off with Circum and want more influence (update Q1)
Everything else is noise.
RHA eletrification works nearing completion - an absolute must if it is ever to turn a sustainable profit.
PREM have converted an upper bounded, temporary payback schedule into a significant stake in a revenue generating, growing, succesful, profitable, uncapped revenue stream - transformational indeed.
Uses of Circum payout will be put to shareholders - it is not solely for GR to decide.
Smile ACKER, it's going to be a blue day
Shout out to all the LTH diluted to oblivion here. Has there actually been almost 50% of this company traded in the past 2 sessions?!
Yesterdays volume ~1.9 billion, todays volume ~3.3 billion ????? Staggering stuff considering the average has been around 60m/day for the past 4 months. The old dogs not dead just yet.
MB sounding perky when stating red deer results next week, here's hoping its strike 2 of 3.
@Lockyer, I'd be surprised if Velociraptor gets drilled this year. It's more likely MATD will go all guns blazing to get Heron on production this year, as well as testing of Red Deer and/or Gazelle in the event of success.
My play here is to hold into Red Deer result. If its dry, knowing AIM, the SP will take a battering which will be a perfect opportunity to add more pre-Heron flow rates (approx a month away) and Gazelle result (high CoS).
Great news this morning with a strike at Heron! All signs point to this being as good if not better than the neighbouring PetroChina wells. As always, baffled by the share price reaction. Hoping flow tests kick off ASAP which should then confirm MATD will be a profitable producer in 2020. Not bad for 8.5p per share! Onto Red Deer next with results expected in a week or so. Much higher risk with this exploration drill but any success here and MATD open up an entire new play in Mongolio. Regardless of the result at Reed Deer, Heron should now underpin the success of the company going forward.
Hoping for oil at Heron next week (high CoS, appraisal). Last Operations update forecast drilling AND logging to be complete around 9th Sept so we should know exactly what we've got (a nice thick oil column) on Monday.
The volatility here has been crazy pre-results... I can see things really kicking off if the results are as expected and with a second (and third) drill following in the very near future sentiment could take this a whole lot higher. MATD has been working for years to get to this point - good luck to those who've held for the fireworks.
MATD living up to it's volatile nature once again... 20% swings are becoming common place here!
Volumes for the past 3 or 4 sessions looking very good, presuming this will only get better as we approach next week and the first of 3 well results. I'd settle for a few more +20% days from now until then :)