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Completely agree, furthermore, if the company were wise they would be in the process of negotiating capital arrangements with a caveat that the exploitation licence will be granted. This will enable them to move quickly, should we receive approval for exploitation, with news on funding and proposed 2020 drilling program to follow shortly after.
We still have a little time to iron out the finer details as the program cannot be initiated prior to Q2 2020 anyway which may work in our favor. As MB stated, the downtime will enable the company to concentrate on the planning of the next phase in preparation for next year. Based on the above, I believe the approval exploitation licence will be pivotal to the direction of the SP in the short to mid term.
GKhan - Agreed regarding funding prospects, I also believe these are most likely to be solidified upon confirmation of exploitation licence. With regards to funding, MB has stated that the current cash balance would be sufficient to take Heron 1 into production. The capital raise will only be required for the 2020 drilling program that I also anticipate will be announced in January 2020 IMO.
@Ojay - Much appreciated.
@Petertee - I wrestled with the idea that financing news would land ahead of exploitation licence but then thought that the exploitation licence could be used as further collateral during the negotiation process.
This would enable PM to negotiate a better deal as Heron 1 will be more de-risked, furthermore, at that stage the SP will most likely be at a higher level due to news of exploitation licence being granted. All IMO of course, it can still go either way...
As stated on a number of occasions by MB, the company has sufficient funds to take Heron 1 to production, however, will require funding to proceed with the 2020 drilling plan. With response to the 'Nothing to see here for another 4 months', I anticipate we will see the following within that time frame.
1. Response regarding application for Heron 1 exploitation licence (anticipated in Q1 2020)
2. Funding arrangement for 2020 drilling program, shortly followed by...
3. Proposal for 2020 drilling program
I am sure there will be additional RNS's between the above, but those are the main ones to look out for within the next four months. Any one of the above could impact the share price significantly (depending on the outcome of course). In the meantime, I am confident with my investment here and will be waiting patiently until we receive further updates, topping up along the way where I see good opportunities to do so. GLA
Production and seismic operations can continue throughout the winter period. Only drilling is impacted by the weather. MB covers this in the latest podcast at around 15:00
https://twitter.com/ValueTheMarkets/status/1188787447553024001
I think there are still some concerns regarding funding, however, MB confirmed what we already knew... The 2018 funding round raised enough capital for a 6 well programme, the company have drilled 5/6 leaving approx anything between approx. $2.5m and $2.8m.
MB also seemed to edge towards the side of a strategic partnership mentioning not only PetroChina as a prospective partner, but other neighboring potentials. Exciting times ahead IMO
LISTEN: ValueTheMarkets Podcast 027 - with Mike Buck, CEO of Petro Matad #MATD #oil
@Petro_Matad
Mike discusses testing at Heron-1 which revealed a peak flow of 821 bopd, & a well-head pressure of 250 psi at an average choked flow rate of 200 bopd
https://twitter.com/ValueTheMarkets/status/1188787447553024001
Proselenes - Completely agree, I am not sure why this is repeatedly overlooked by most posters. If the general average was $3m/drill, then they must have at least over $2.5m left from that alone even after the penalties incurred for the Heron delays. That, combined with any other cash in the bank alongside extensive alternative options for capital raising (should it be required at this stage), leaves them in a very reasonable position IMO
It looks like they are all over the social media posts...
"We are now focused on a rapid reinterpretation of Block XX and will engage with the Mongolian government to secure an Exploitation Licence to put Heron-1 on to production in 2020 #MATD"
https://twitter.com/Petro_Matad/status/1187324365098180608
Ojay - I try to 'watch from a distance' but cant help chiming in from time to time, appreciate the acknowledgement.
magicpuppy - Should have included the following extract from the same RNS to avoid further follow up 'speculation'
"Following the two successful placings in 2018, no new fund raises have been undertaken in 2019 as the Company's cash resources are sufficient to fully meet the costs of the planned 2019 drilling programme."
The outstanding results from the current programme will determine the direction for funding, should it be required, for the 2020 programme.
Tue, 3rd Sep 2019 07:00
RNS Number : 0182L
Petro Matad Limited
03 September 2019
"The Company's cash balance at 30 June 2019 was USD 16.12 million (USD 3.79 million in cash and USD 12.33 million in Financial Assets)"
I don't think having a contingency plan to avoid potential further delays constitutes as a 'concern'. Having stimulation equipment easily accessible should they require it is basic risk management and contingency.
According to the most recent RNS dated 19th September 2019, they will have more than enough time to reach TD and carry out tests should they encounter oil shows:
'In the event of a discovery at Gazelle-1, it is expected that sufficient time will remain before the winter shut down of operations in late November to allow well testing of Gazelle-1 to be carried out this year. '
I do not think it will take 30 days to complete Heron testing.
'Mobilisation of testing equipment will commence shortly and testing operations are forecast to begin in early October and to be completed during the month.'
The 30 day time frame was the testing kit mobilidation requirement. As Captain Stanley mentioned below, that would mean arrival of the test kit by 9th October 2019 at the latest.