Madalena Energy in ClarinMadalena Energy’s (MVN; MDLNF) plan to list its stock locally, in Argentina, was discussed today in Clarin, the largest newspaper in Argentina.
We have already received positive feedback on the story. The most significant comments are that too many local, Argentine investors want to invest in Vaca Muerta, but there are no local vehicles for such investment.
Madalena Energy will be able to hit that sweet-spot.
https://www.clarin.com/economia/petrolera-vaca-muerta-anima-entrar-merval-medio-crisis_0_PYIwOEbRO.html Google Translate (pasted below) is a bit cumbersome but you can get the gist if you can’t understand the Spanish version.
Madalena Energy
An oil company of Vaca Muerta is encouraged to enter the Merval in the middle of the crisis
It is a Canadian firm, which entered the final stage to sell shares to local investors.
Due to Argentine fluctuations, there are few companies that want to trade on the Buenos Aires Stock Exchange. However, an oil company will be encouraged to participate in the local Merval. It is called Madalena Energy, and is incorporated in Canada with shareholders of the United States.
All of your assets, income and operations are in Vaca Muerta. "We think of all the investors who want to bet on Vaca Muerta and today they do not have an action to do it," explains David Tawil, president of Maglan Capital, the firm that controls Madalena Energy. "Our current market valuation is US $ 60 million, but we believe that we can be a company worth US $ 500 million," he adds. Madalena plans to go from a production of 2,600 to 3,000 barrels per day of oil this year to 20,000 barrels, always in Vaca Muerta.
Madalena began filling out the papers to enter the Merval (and the Byma, the electronic market) a year and a half ago. And although there is no specific date for his Buenos Aires debut, it could be this month or next.
"Institutional investors can buy Madalena shares in Canada, but for 'retail' investors (those who buy shares in individual accounts), entering the Canadian market is difficult, and we saw that there is interest from individual investors in Argentina, Chile, Brazil , Paraguay, Colombia for being in a company related to Vaca Muerta, we believe they can carry this investment in our firm, "says Tawil.
The Merval rose only 2% so far this year. And the actions of the energy companies -Pampa, TGS- are punished. But the oil company YPF already accumulates a rise of 21%. Although the Argentine market is dominated by the big oil companies (YPF, Pan American Energy and the subsidiaries of global colossuses), the unconventional oil boom brought out so-called "independent" companies.
They are the "stars" in unconventional watersheds in the United States. "It is true that the Argentine moment is somewhat challenging and that
in the United States they do not know what to think about Argentina, " Tawil describes. "But the quality of the resources we are obtaining in the country is very good and there are many opportunities for growth," he adds.
Pan American Energy granted a loan of US $ 40 million to Madalena for the exploitation of Coiron Amargo Sur Este. The company has identified these wells as "oil sweet spot", which is an industry definition for high performance wells, above average.
Although unconventional resources are still not major in local oil production, gas exploitation grew by almost 300% and oil by 150%, always in unconventional formations.
"We are going to the Merval for Argentine investors, we have no capital requirements to meet, we already have the US $ 38 million expected in our Capex (capital to invest in development) and our cash flow position is solid, we have enough money "says Tawil. In Canada, Madalena is considered "penny stock", that is to say, shares that are traded below the dollar. "We want to give the opportunity to individual investors to access these 'penny stocks' but in the Merval," Tawil emphasizes.
Tawil is optimistic about Argentina, although he does not deny that on Wall Street, where he has his offices,
"there is fear of progress in some investments and then there will be controls .
" However, he believes that the political class understood that the oil and gas industry will bring foreign currency for the economy as a whole.
The electoral race seems to be the main factor that investors look at. It is likely that Madalena's action will land in the Merval before the primary elections.