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FDM - Freedom Oil and Gas

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Chief Wigam

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For those interested, there is a float happening , ASX stock code MAD at 20c.

The RBS Morgans low side valuation is A$0.55/share and high side valuation is A$1.03/share.

I have attached this report.

Cheers
 

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  • Maverick Economics Presentation RBS Morgans July 2010.pdf
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Re: MAD - Maverick Drilling & Exploration IPO

For those following this stock, RBS Morgans have allocated the $10 million of stock. The float was for $5 million but due to the level of interest, $10 million has been raised.

Augurs well for 1st Sept listing.
 
Re: MAD - Maverick Drilling & Exploration

After listing at a small premium, it's settled back to the issue price. Time will tell which way it will go.
 
Re: MAD - Maverick Drilling & Exploration

I think it looks good. the amount of detail they have made public is impressive. We estimate that each well they drill will make about $500-600k (net present value). this is using slightly more conservative numbers than the ones they have provided.
 
Re: MAD - Maverick Drilling & Exploration

Regarding the Blue Ridge income, this is what Morgans have been advising the public:

Executive Summary


Blue Ridge

•
We have taken a DCF valuation approach to Blue Ridge and Maverick Drilling future income, and a
valuation metric approach to their exploration prospects
•
Our valuation summary for Maverick Drilling & Exploration is in the table below:

High Low
110 353.6 35 112.3 Total
0-1.3 0-1.3 Cost of Float
-1 -3.1 -1 -3.1 Convertible Note Interest
515.0 515.0 Funds Being Raised
411.7 00.0 Thrall
25.8 00.0 Foothold
Exploration
69 197.7 00.0 Blue Ridge -Probable Reserves
31 99.3 31 99.3 Base Business @1P Reserves
cps A$m cps A$m
• Our low side valuation is A$0.35/share and high side valuation is A$1.10/share.
3
 
Re: MAD - Maverick Drilling & Exploration

Risk:Reward from a fundamental view certainly looks good for this one.

I'll be looking for it to stay above its float/listing price of 20c in the short term. Theoretically if the IPO was oversubscribed and there's been no bad news, there should be people keen to get in at 20c and people extremely keen to get in at anything less.

The low side valuation of 35c looks to be quite conservative too.
 
Re: MAD - Maverick Drilling & Exploration

Synergy said:
Theoretically if the IPO was oversubscribed and there's been no bad news, there should be people keen to get in at 20c and people extremely keen to get in at anything less.
Click to expand...

There are always those who bought into the float simply to make whatever stag profit they can in as short a time as possible. Once they go away, we'll get some idea of how the market really values the stock.
 
Re: MAD - Maverick Drilling & Exploration

Sellers have sunk away, now outnumbered over 3:1 by buyers. Large buy orders at 20c and above, and we're seeing gradual movement up.
 
Re: MAD - Maverick Drilling & Exploration

Fundamental exploration hard facts lacking. No Australian Management /CEO. All hinging on a worn out oil field in Texas......plenty of hype - but no SP kick....Go figure....I think the gulible speculator is leaving this one alone for the time being. Better plays elsewhere me thinks!!
 
Re: MAD - Maverick Drilling & Exploration

That's a strange post. Lee Clarke is Director and is Australian.

The first 10 wells they drilled in this Texas oil field all found oil, done earlier this year.

This company actually makes money and has a senior management team who know the oil business.
 
Re: MAD - Maverick Drilling & Exploration

Had a read of the report.

drilled 2 wells, started drilling a third. this is good, they are moving ahead, not like a lot of companies that keep saying they will drill but never do.

a workover rig has been delivered to their lease - this is good too, moving ahead.

produced on average 251 bopd for the quarter - this is good to hear

The good thing is they are starting to do what they said they would do.

The best thing about this company is they actually make money rather than be purely exploration and just burn cash like thosands of other companies. Fairly low risk business model.
 
Re: MAD - Maverick Drilling & Exploration

Article "Maverick Drilling, the way of the future. Don't let it slip under your radar!" in OIL and GAS Weekly 7 November 2010 web site: www.oilers.com.au

Recently listed Maverick Drilling was higher up from $0.16 to $0.20, its IPO price. RBS Capital put out a research note on MAD on 4 November with a target price of $0.35 by the end of FY 11 based on MAD's 1P oil reserves. We visited with MAD CEO Brad Simmons in Houston this week and received a briefing on their activities at the Blue Ridge Salt Dome and upcoming drilling program at the recently acquired Boling Salt Dome. We visited the field. We came away extremely impressed and will be doing our own research piece for OGW subscribers on return to Australia. We didn't realise there were no spacing requirement s on a salt dome. MAD could drill another 600 production wells on its 1,000 plus acres at Blue Ridge. Where quite literally it is like shooting fish in a barrel. And most times you can spear several fish (sands) on the one pass. It really is quite extraordinary. And if you haven't ever seen a Walker-Neer top drive drilling rig get on the net and look them up. We have never seen a more efficient, safer piece of drilling equipment on an oil field. They make conventional rotary rigs a thing of the past. MAD owns three of them. This is clearly a stock to have on one‟s watch list. And if you have time check out its disclosure document.

One correction in the above is that MAD has 4 walker-Neer drilling rigs, not 3.
 
Re: MAD - Maverick Drilling & Exploration

Hi Chief the bopd seem a bit low, but perhaps it's due to a different geological structure of a "salt dome"? I have little to zero knowledge of oil geology, perhaps you can help a bit?

Do you know why the flow rates are so low when compared to say SEA or AUT's flow rates from wells (in the hundreds per day from the Eagle Ford shale). Is shale more efficient, or do the wells MAD are drilling cost less, basically what am I missing that's made you so confident on the stock.

Thanks!
 
Re: MAD - Maverick Drilling & Exploration

seems to be an awfull lot of shares under the 20c starting price from the word go
 
Re: MAD - Maverick Drilling & Exploration

this should answer some recent questions on this thread:

Article excerpt from OIL and GAS weekly, page 2
Newly listed Maverick Oil and Gas released their November drilling report this past week. The report contained detailed information on each of the nine wells drilled since its September listing in an easily readable format emphasising what it had achieved and delivered not promises of future gains.

Five of the new wells are oil producers, four have been completed for production.

Maverick sold 9,162 barrels of oil in November up 25% on October’s sales. That represents over 300 bopd, all from wells on the company’s more than 850 acres of a previously produced salt dome just outside of Houston, Texas. The area is called the Blue Ridge Salt Dome.

With its own modern top drive drilling rigs (two in operation two being prepared for work in 2011) and its own service rigs, Maverick’s cost to drill and complete a well to an average depth of 4,000 to 5,000 feet is remarkably low, around US$200,000 per well.

Each producing well and there are now some 20 of them, intersected multiple zones while drilling. So wells are completed in the lower most zones first and when that is produced they move up the hole to the next sand. Wells are choked back to an average of 25 barrels of oil a day though many are capable of more than that. But tweaking them back is good oil field practice and preserves the life of the well.

Payback is generally less than six months per well.

Maverick has independently certified 2P reserves of 25.6 million barrels at Blue Ridge where there is at least another 400 wells to be drilled. Fifty of those should be drilled in the first 12 months post IPO. And it is already on track to achieve, possibly exceed, those numbers.

There is no spacing requirement on the Dome. Maverick determines its own locations based on its assessment of the optimal position for field production.

So the company will drill a lot of wells in 2011 virtually all them guaranteed to be producers of quality premium priced light oil. Lifting costs are just $2.00 a barrel as against $22 a barrel in the Cooper Basin. Maverick has 100% working interest in Blue Ridge which is going to throw off huge revenues.

It also recently acquired 1,625 net acres in a second Texas salt dome at Boling where it expects to duplicate what it is doing at Blue Ridge.

The shares have held up reasonably well since listing particularly given there is a potential overhang of 30 to 40 million shares in institutions that acquired cheap shares prior to the listing. Trojan Equity has apparently been one seller of the stock since the IPO. That plus the fact that unlike some of its Aussie peers in the US, the company provides a monthly drilling report not share price influencing media releases well by well.

The company has a fair few shares on issue for a newly listed entity partly explained by the conversion of convertible notes into equity. It has an outstanding liability of US$7 million in the form of promissory notes owing to its Chairman Don Heinrich for the purchase of assets that went into Maverick. And a $5,000,000 loan facility for further asset acquisition.
 
Re: MAD - Maverick Drilling & Exploration

December monthly figures are out, 11,716, or around 400 barrels a day. The company in my eyes would be cashflow positive now. Having drilled already 12 wells and have 6 of them on production since sept, the companies is in a good position to increase production substantially next month as well, once all wells are tested.
 
Re: MAD - Maverick Drilling & Exploration

A rerating is on the cards, production profile soon is going to be hard to ignore. A roadshow from the company wouldnt be bad now
 
Re: MAD - Maverick Drilling & Exploration

trojan equity only has another 7m shares left to sell, they have sold already 15m in the last couple of months, and the share price has still managed to rise. Might have to buy some more off them. Trojan will be finished selling in the next month or so, so the ipo overhang is gone, and the shares will be rerated to the production and exporation profile. Get in while you can folks
 
Re: MAD - Maverick Drilling & Exploration

I agree with you Adds, found this gem under the radar, I will be buying some!
 
Re: MAD - Maverick Drilling & Exploration

323 million shares on issue, book value about $19 million gives me equity per share of a bit over $0.05 per share. Does anyone have any numbers on projected production and costs?
 

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