RE: Block XX18 Sep 2018 05:07
Block XX needs a minimum spend of 20m US$ to qualify and remain viable.
For me Block XX was (and still is) the back up plan..........if Blocks IV and V have no oil (if SL-1 and Fox-1 and WH-1 all fail), then Block XX is the only hope to generate some value for MATD. And one successful small drill on XX is worth more than 8p a share. So a few successful wells on Block XX will see a very significant return and a very much higher share price than 8p.
The big game is of course Blocks IV and V.
The rejig of drilling now means :
Current drilling rig drills SL-1 and then goes to WH-1 and drills that and then is left in storage there and then drills Fox-1 in late March 2019. All 3 drills back to back with a winter in between.
As we stand now, the Block XX 3 wells will not be tendered for drilling until well into Q1 2019........ and by that time SL-1 and WH-1 will have been drilled and whatever they find will be known.
What I believe they will do, and what I would do if I was MB would be to push Block XX into Q3 2019 with a rig tender being called in late Q2.
Then drill SL-1 and WH-1 this year and Fox-1 early in Q2 2019.
In the event they all fail, proceed with Block XX rig tender.
Any success and then forget Block XX and proceed with appraisal drills on Blocks V and IV whilst at the same time agreeing the farm in deal with a Super Major for the discoveries and potential exploration.
Keep banging on...........but if Blocks IV and V have oil then there is potential recoverable resources there of over 20 Billion Barrels.
To put that into context.......
The whole of the UK (every license) has the potential for 20 Billion Barrels of as yet undiscovered recoverable oil left.
MATD license Blocks IV and V has the same potential 20 Billion Barrels of as yet undiscovered recoverable oil.
That is the simple fact why Shell and other Super Majors have been in discussion with MATD already. The potential there is mind blowing, if that potential can be proven to be real. The only way to prove it, or not, is to drill SL-1 and Fox-1 in Block V and WH-1 in Block IV.
I like the odds simply that you have massive explosive upside from Blocks IV and V, the likes of which have not been seen on any junior oil stock on AIM (even BPC could only muster 2 Billion recoverable barrels potential, this is 10 times bigger and Shell and other Super Majors have actually already been in discussion with MATD about potential farm in on any oil strike in IV and C) but you have the back up plan that if all that explosive upside does not happen, you have 3 fully funded appraisal wells to drill in Block XX which is worth multiples of the current share price. That minimizes the risk (not the share price swings in between) but the overall risk that any money invested today should give handsome returns by late Q3 2019 at the worst - whilst exposing yourself in the coming months to very significant upside on any Block IV and V success.
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