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Obelix..........the flow rate does not matter...........the amount of oil in the reservoir does.

Think of it like 100 pounds in a bank account.

If you can withdraw 1 pound a day its worth 100 pounds

If you can withdraw 50 pounds a day its worth 100 pounds.

The value is the value.........if Heron is 25 MMBO its worth 18p a share........if Heron is 40 MMBO its worth 32p a share..........

The flow rate will only affect the amount of money that MATD can borrow from the bank to develop it......the higher the flow rate, the quicker the cash comes, the more they can borrow.

What the share price does is all about the size of Heron.......how many barrels of oil in total in the reservoir........25 MMBO or more or less. The rate of flow is a sideshow, all we need is that it flows and is declared commercial.

The derampers and the liars are trying to dampen expectations.........they want to buy in if MATD gets 200bopd but want to buy in cheap........so they are trying to tell everyone that 200bopd would be way too low........no good........bad..........then they buy in when the news comes as those they have scared sell on 200bopd.

Make no mistake, they are trying to manipulate the success case as bad...........too little.

Below are posted pic links from MATD presentations the flow rate expectations of ANY WELL on BLOCK XX, BLOCK IV, BLOCK V. This was done at the time oil was around 90US$ a barrel, however clearly you can see the scoping economics were based on 100bopd to 200bopd per production well.

DONT LET ANY OF THESE IDIOTS TELL YOU DIFFERENTLY........... the expectation is 100bopd to 200 bopd.

Link below:

https://i.ibb.co/VxSf5bx/Annotation-2019-10-19-063458.jpg

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Gazelle is not over yet......they have the money to do a sidetrack or drill in another location at Gazelle.

Thats because Block V drill has been put on the back burner.

The question now for me is :

Is Gazelle-1 on the edge of the pinch out and so its a material discovery which may be commercial (which is backed up by them running production casing and suspending the well).

Will Heron-1 be commercial ? If it is then its a company maker for MATD and moves them straight into Test Production phase of commercial development - meaning they can immediately install a pump, produce and sell the oil.

What size is Heron ? 25 MMBO Pmean ? Thats 18p a share value. Is it 40 MMBO due to the higher location of the reservoir and also the better porosity ? Thats worth 32p a share.......

Will the company focus, in the event Gazelle post well evaluation studies prove its a significant size - get Heron on production by year end and then move Gazelle into production early next year (via a sidetrack or new well) - giving them 2 producing areas and allowing higher levels of bank debt finance, and then look later next year at drilling Block V.

If Gazelle is proven to be significant (and nobody has said its not so far - the company is running casing to prepare for the future) then what size is it ?

There are more questions, lots more.......but the main focus now is the Heron-1 flow rates, once thats done I think they will then later be giving positive news on Gazelle-1 post well evaluation studies.......

Company stated target is 200bopd after a fracture stimulation

Cash, Gazelle was nothing but a side show. They needed to drill it as a back up, in case Heron and Red Deer did not strike oil As it transpires although the main target has failed the secondary target has now proven the strat pinch out play in Block XX which leads to material upside in new proven leads. They may also sidetrack Gazelle, if the seismic reprocessing with drill data gives them good read.

The location of Gazelle one was optimal for the main target and sub optimal for the secondary, this is seen from the thin net pay, but it will be thicker in the optimal location for drilling the secondary. Gazelle is far from over.

The market is waiting to see if Heron is commercial......if confirmed flowing at 200 bopd then it is, then Heron comes into play.

25 MMBO in size is worth 18p a share. All the market wants to know is, does it flow...is it commercial.

If that is confirmed then this will rerate upwards a long way as MATD has a company maker commercial well and is then a producer......... :)

Financials

Petro Matad closed FY18 with $2.1m incash and $19.2m in financial assets, enough to cover its four-well 2019/20 exploration and appraisal campaign. It ended H119 with $16.1m in net cash. Additional funding would be required to commit to an exploration programme and to support group G&A beyond 2020.

We assume a short-term debt facility for the initial two years of development (2021–22).

Heron-1 flowing is a company maker here........turns MATD into a producer, with cash flow coming in and access to bank debt going forward.

All eyes indeed, on Heron.

Edison Flash Note out.

https://www.edisongroup.com/wp-content/uploads/2019/10/Petro-Matad-Gazelle-1-results-2.pdf

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Or Heron-1 flows oil and they will have cash flow coming in and also can take bank borrowing against Heron which is then a declared commercial asset.

They only need a placing to raise funds if Heron-1 fails to flow.

Dont lose sight of the potential prize here too......

Heron Pmean was 25 MMBO......thats worth 18p a share if commercial. Farm out 50% to PetroChina and left with 9p a share.

If Heron is larger than Pmean and moves towards 40MMBO size, that is worth 30p a share - post 50% farm out still 15p a share.

Heron-1 could still be the company maker, thats why its all eyes on Heron-1 flow test results.

200bopd target pre drill..........will it flow and if yes, how much ?

I think this is the flush of all bad, and now the good news will flow. Hence I have purchased a bag of stock at between 2.95p and 3.1p today.

Risky, but what the hell..........no risk, no reward.

I think the big question is........is this a kitchen sink job ?

We knew already by default that Block V would not be drilled this year - so why bother to say it ? Unless they wanted it out of the way so as not have to mention it again until well into next year.

Seems to be this might be a flush of all - ahead of starting the good news flow. Which of course would commence with Heron-1 flow test results being good, upgrade in size of Heron-1 then the evaluation results of Gazelle-1 and plans on that..... then a PetroChina farm in for Heron-1 or debt funding against the booked reserves at Heron.

Just seems strange the need to say Block V is not being drilled now, when in fact we all knew that anyway there was no chance of doing it in 2019.

They had a lot of gas and them 3M of net oil pay. This means that they are at the side edge of the pinch out.

Had they run into net oil pay and no gas, it would mean they are more central in the pinch out structure. Basically this tells (with the gas) that they are on the edge........which means there could be much much thicker net pay if they drill (or sidetrack) towards the main accumulation.

Pinch out looks like this:

See the pic https://i.ibb.co/56NT7vG/O-26-1-jpg.png

Looks like they drilled where the red line is......lots of wet gas and thin net oil pay.......but this means the thick part is there, just away from the current drill location a bit.

See the pic https://i.ibb.co/dm0p46y/O-26-2.jpg

Target for Heron is 200 bopd AFTER fracture stimulation is done.

Heron-1 flows, then MATD have anything up to 40 MMBO of recoverable oil in the bag. More oil than ECO have........... and production can start asap.

Hi V111JAS,

Purchased quite a few million 88E recently and looking forward to drilling now. The time will fly past..........

Dont produce, just sell it in the ground to a big player. Previous sales were 3$ a barrel in the ground but that was when oil was at 40$ a barrel.

Now the price where it is then 4$ a barrel in the ground - why not.

Purchased all I could this morning below 3.1p....... whilst the main target is dust at Gazelle the Strat trap has serious upside in Block XX. The 3M net pay may even be commercial depending on the area size.

Nothing was in the price for Gazelle, that it has proven the Strat trap upside and has 3M good net pay in the Upper is quite exciting as Mike says, this now leads to some material potential strat reservoirs in Block XX which means more potential oil which the play is now proven. Onwards now to the main event, Heron-1 flow tests.

Good to listen again to this September 2019 interview with the MD :

https://audioboom.com/posts/7373130-dave-wall-managing-director-of-88-energy-answers-shareholder-questions

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Nope......in total.......... find it and sell it at 4$ a barrel in the ground and you get 23p a share value.

Going to be a lot of churn as the recent placing shares at 0.7p are sold at 5% to 15% profits.....but once that overhang is clear the upside is staggering.

480 MMBO net potential to 88E from Charlie-1.

480 MMBO x 4$ in the ground sale value is 1.92 Billion dollars.

1.92 Billion dollars divided by 6.332 Billion shares in issue is 0.3 US$ per share value or 23 pence per share......

Current price 0.7p a share........upside from Charlie-1 well 23 pence a share....... based on sale at 4$ per barrel on success.

This ignores everything else the company has, including Shale rights, other prospect, other targets........

Alaska has infrastructure and production, all the big players are working there already Repsol, Conoco Phillips, Armstrong etc....

Is there any other stock that has this tremendous upside potential in Q1 2020 ? Nope...........not in my view.