The $550 million per year well 11,718 barrels per day multiplied by the price they are getting for their oil (Brass River Crude is $126.50 as I write, and I recall that Mart gets a premium to that, so I will use $128) multiplied by 365 days a year is nearly $550 million. Now I know that :A) the well will not pump every day as there is maintenance, B) There is no pipeline to take it all as of yet, C) Saboteurs take part of it, D) The government takes taxes, E) Production from oil wells falls off (although this field apparently is not falling off after more than a year) and, E) The partners take their share, so this is not the amount of money that will flow to Mart, but this is truly a remarkable amount of money that could flow from one oil well. $550 million a year, from one well! When one considers the payback period for the cost of drilling the well, it is just a matter of days. Did the "gusher" wells of Oklahoma and Texas in the giant oil fields do any better in the past?
I will re-ask a question that I posted previously that no one answered: What value does the market put on oil reserves? $10/barrel? $40/barrel? When Mart comes out with a new reserves report, how has this been valued in other companies and in other countries? For instance, if Mart should state that they have 100 million barrels in the ground (just a wild guess on my part), and the market generally values barrels in the ground at $10 each, that would value the company at $1 billion. Given the number of shares, that is over $3 per share, not the $1.30 currently being discussed.
Again, what is a fair value for reserves? How much does everyone think reserves will be when the number is published next month?
Bows